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Hike of ‘sin taxes’ could boost illicit trade in South Africa, tobacco executive warns

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Hike of 'sin taxes'

Fears have been raised that a planned hike in so-called “sin taxes” on products such as tobacco and alcohol in South Africa could play into the hands of smugglers.

During his budget speech in South Africa’s Parliament last Wednesday, Finance Minister Malusi Gigaba announced that excise duty on alcohol and tobacco will increase by as much as 10% from April, in a move he hopes will raise an additional R1.3-billion ($111.5 million) for the country’s government.

Once the changes come into force, consumers can expect to pay an extra 8.5% in tax on a packet of cigarettes, and anything up to 10% on their alcoholic drink of choice.

Gigaba also added additional excise to “luxury goods” such as cars and mobile phones.

While some analysts suggested the price rise might be the nudge people need to give up unhealthy habits, others cautioned that such proportionality tax high increases in duty on alcohol and tobacco would only serve to fuel the black market.

Commenting on the proposed tax hikes, which are well above the current 4.4% inflation rate in South Africa, British American Tobacco South Africa (BATSA) executive Joe Heshu told Independent Online that a previous rise in sin taxes actually resulted in a decline in the amount of revenue collected by the Treasury.

“Drastically raising taxes on legally-produced cigarettes simply makes illicit products that evade tax even cheaper by comparison, and contributes to the growth of the illegal market”, he said.

“We expect the increase in tobacco excise tax announced by the minister to further stimulate the illicit trade in tobacco, which already results in a loss to the revenue of about R7 billion over the last four years.”

Earlier this month, BATSA revealed that nearly half (47%) of South Africa’s tobacco trade is controlled by illicit players, making it one of the largest markets for smuggled and counterfeit cigarettes in the world.

But while many critics observe that tobacco companies have a vested interest in keeping cigarette prices low and should not be trusted when they push evidence that suggests higher taxes boosts smuggling, evidence in some countries indicates that slapping higher duty on products such as alcohol and tobacco does drive consumers to the black market.

In November last year, the Nikkei Asian Review noted how a 40% rise in the tax paid on a pack of cigarettes had led to a massive increase in the availability of illegal imports.

Similarly, Border force officers in Australia, where the government wants to hike the price of a pack of cigarettes to A$40 (£31) a pack by 2020, seized record amounts of smuggled and counterfeit tobacco products last year.

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Canada to pardon minor cannabis possession convictions as country legalises the drug

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pardon minor cannabis possession convictions

Canadians convicted of possessing 30 grams or less of cannabis are to be pardoned, a source from Justin Trudeau’s ruling Liberal Party has said.

Speaking as Canada became only the second country in the world after Uruguay to legalise the recreational use of cannabis, the source said Ottawa will allow anybody with a criminal record that includes any such charge to apply to have it removed from their files.

Revealing that the exact process people will need to follow to apply for a pardon will be announced in the near future, the official told Canada’s Star newspaper: “For people to whom this applies in their past, we’re going to give them certainty that there will be recourse for them… in terms of exactly how it gets rolled out, the steps that we take, how much time it will take them, we’ll lay that out in the coming days and weeks.”

The announcement was made after members of the New Democratic Party lobbied the Canadian government to pardon people who had been caught in possession of small amounts of cannabis for personal use, noting how such convictions can prevent individuals from marginalised communities from accessing housing and services.

The amnesty was announced after Canada officially legalised cannabis on Wednesday after the country’s parliament voted to do so back in June.

Long queues formed outside new cannabis shops across the country on Tuesday evening ahead of the first legally-sold marijuana being purchased from a store on the eastern island of Newfoundland at midnight.

Tom Clarke, 43, who owns the shop in Newfoundland, told reporters: “I am living my dream. Teenage Tom Clarke is loving what I am doing with my life right now.

“This is awesome. I’ve been waiting my whole life for this. I am so happy to be living in Canada right now instead of south of the border,” added Clarke, who told reporters he had been dealing cannabis illegally in Canada for 30 years.

“It’s been a long time coming. We’ve only been discussing this for 50 years. It’s better late than never.”

Despite the introduction of the new law, it will remain forbidden for Canadians to be in possession of more than 30 grams of cannabis while in public, grow more than four marijuana plants per household or buy the drug from unlicensed dealers.

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Charity probe reveals true scale of brutal European puppy smuggling trade

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European puppy smuggling trade

An undercover investigation conducted by a British animal charity has revealed the scale of the brutal European puppy smuggling trade.

The Dogs Trust discovered that European smugglers trafficking canines into the UK routinely force heavily-pregnant bitches and puppies to travel hundreds of miles in poor conditions.

Investigators from the charity also found that crooked vets are providing smugglers with faked pet passports and bogus vaccination stamps for underage puppies.

They also described hearing one dealer in Hungary boast of possessing 300 bitches producing puppies for the UK market.

The Dogs Trust noted how the UK government has failed to crack down on puppy smugglers since the charity first highlighted the illicit trade four years ago, and called on British lawmakers to use Brexit as an opportunity to update and strengthen pet travel rules, which are currently regulated by the European Union.

“Puppy smugglers are only concerned with making a profit, and the UK provides an attractive market because the high demand for ‘designer breeds’ converts into fast internet sales,” said Veterinary Director Paula Boyden.

“Importers are exploiting the lack of visual checks being made at the borders, and insufficient penalties for illegally importing puppies mean there is no real deterrent for these abhorrent crimes.”

The investigation resulted in the identification of new puppy smuggling trade routes from non-EU country Serbia, finding evidence of underage puppies being sold with EU microchips and pre-filled European passports and passed off as EU-bred animals for easier entry into EU countries.

Speaking last November, UK Environment Secretary Michael Gove said Brexit will allow the UK to crack down puppy smuggling.

“Once we have left the EU there is even more we could do,” Gove said in a written statement to Parliament.

“EU rules prevent us from restricting or banning the live export of animals for slaughter.

“EU rules also restrict us from cracking down on puppy smuggling or banning the import of puppies under six months.”

Organised criminal gangs have become involved in puppy smuggling over the past few years, attracted by the large profits that can be made from the trade, and the fact that being caught trafficking canines results in less severe punishment than other illegal activities such as drug smuggling and people trafficking.

The Dogs Trust has previously called for puppy smugglers to face stiffer penalties, noting how many are willing to risk the three months they could face in jail if they are caught attempting to sneak dogs into the UK.

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Police smash crime network behind illicit trade of Bluefin tuna in Spain

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illicit trade of Bluefin tuna

A coalition of European law enforcement agencies have arrested scores of people suspected of being involved in a scam involving the illegal sale of Bluefin tuna in Spain.

Authorities from Spain, France, Italy, Portugal and Malta took part in a Europol-backed operation that resulted in 79 individuals being detained and the seizure of more than 80 tonnes of illicit Bluefin tuna.

As well as the seizure of a significant amount of fish, the operation also resulted in the confiscation of €500,000 ($576,500), seven luxury vehicles, jewellery, watches and other valuable items.

It is thought the network behind the scam trafficked 2,500 tonnes of tuna a year.

Operation Tarantelo began after officers from Spain’s Guardia Civil were alerted to a number of irregularities relating to the fishing of Bluefin tuna in the Mediterranean Sea.

This led to the discovery that large quantities of fish caught in Italian and Maltese waters were being traded illegally in Spain after being smuggled into the country via French harbours.

The members of the gang behind the scam are said to have made at least €5 on every kilo of tuna they sold, resulting in them raking in a total estimated profit of €12.5 million.

A number of people are reported to have fallen ill after eating tuna smuggled into Spain by the gang due to the unhygienic conditions in which the fish was transported and stored.

The smugglers used documentation from legitimate fish farms to illegally import their illicit tuna into Spain, where poor customs checks failed to identify the rogue Bluefin.

Illegally-caught hauls of fish were also discovered on boats in Spanish waters, on which smugglers are said to have transported the tuna in false bottoms under the deck of their vessels.

Europol supported the operation by providing analysis support, advice from environmental crime experts and by coordinating meetings for information exchange.

“The tuna business is often linked to other crimes such as food fraud or document fraud,” the agency said in a statement.

“The main risks for consumer health were due to the unsanitary conditions in which the fish was transported and stored. Sometimes the fish was hidden underwater after it was fished, awaiting transportation.”

In December last year, the Maltese Independent reported that five tonnes of Bluefin tuna were being smuggled into Malta every single week before being trafficked onwards to EU states including Germany, the Netherlands, the UK and France.

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