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Nations Agree on Draft Treaty to End Illicit Tobacco Trade


Nations have crafted a draft treaty to fight a booming trade in illicit tobacco products that's costing governments around the world as much as US $50 billion a year in lost tax revenue, officials said, April 4, 2012.

Nations have crafted a draft treaty to fight a booming trade in illicit tobacco products that's costing governments around the world as much as US $50 billion a year in lost tax revenue, officials said, April 4, 2012.

After four years of negotiations, representatives of 135 nations have unanimously agreed on the text of a protocol to end the illicit trade in tobacco products. Nations are expected to adopt the protocol, the first under the WHO Framework Convention on Tobacco Control, in November.

Governments losing tax revenue

The Intergovernmental Negotiating Body, or INB, which supervised the drafting of the treaty text, estimates governments lose up to $50 billion a year in tax revenue from the illicit trade in tobacco products. It estimates that at least 10 percent of global cigarette sales result from smuggling cigarettes.

The chairman of the INB, Ian Walton-George, says the aim of the protocol is to stop this hugely profitable trade.

“The finance from this trade is very significant. It gets into the hands of organizations, which will use it to finance other crime, human trafficking, drugs trafficking, weapons trafficking and even worse,” he said.

Combating tobacco smuggling

Walton-George says cracking down on this illicit trade will protect public health because people will not be able to buy cigarettes and other tobacco products cheaply.

The protocol sets the rules for combating tobacco smuggling through control of the supply chain. Parties to the protocol will establish a global tracking system to try to ensure only legal products flow through the market.

Walton-George says if any of tobacco products escape into the illegal channels, there will be a way of tracing their origin.

“There will be identification markings on the packaging of all these products so that we will be able to find out where they were produced, who they were sold to, how they were transported and, then of course, we start asking the questions, why did it slip out of the genuine market," he explained. "How did it slip out of the genuine market and the parties to the protocol will be able to take action against people if they are failing to properly control the supply chain.”

Walton-George tells VOA tobacco smugglers target all markets, not just developing countries. In fact, he says it is more profitable for them in wealthy countries where taxes are high.

“If you get your cigarettes into the market without paying the duties and taxes, you are going to make a very big profit, even if you sell it at half price, you will make a vast amount of money…and the penalties are less than if you were smuggling drugs.”

Tobacco companies were barred from participating in the discussions because of concerns they might try to influence the negotiations.

After the protocol is adopted, as expected, at the end of the year, 40 ratifications will be needed for it to enter into force. The World Health Organization says it could then take up to five years to put the illicit tobacco tracking system into place.

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