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#TakeBackPublicHealth: No place for Big Tobacco’s dirty schemes

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Big Tobacco is testing out a new strategy to hijack public health initiatives. Attempting to skew popular perceptions, industry body Tobacco Institute of South Africa (Tisa) is paying social media celebrities to promote the hashtag #TakeBackTheTax, in an aggressive effort to co-opt the fight against illicit tobacco trade.

Tisa’s latest campaign is timed meticulously, following South Africa’s July announcement of proposed anti-tobacco legislation aimed at curbing advertising for tobacco and smoking in public places. The stringent Control of Tobacco Products and Electronic Delivery Systems Bill also includes measures to institute plain packaging, a ban on point-of-sale advertising and displays, and the prohibition of the sale of single cigarettes. Violators of the new law, if it is passed, would face fines and up to three months in jail.

#TakeBackTheTax is far from the tobacco industry’s only weapon to derail the new tobacco control legislation. Japan Tobacco International (JTI) has already poured money into radio adverts encouraging the public to protest the proposals on freedom of choice grounds. Meanwhile Tisa has employed scare tactics for months, implying that the proposed law would be responsible for everything from investors fleeing South Africa to bankrolling organised crime syndicates.

Tisa has tried to justify its opposition to the proposed legislation by claiming that the government is using inaccurate economic impact data. The real story behind the tobacco industry’s united resistance to the legislation, however, is far more sinister. Big Tobacco’s indignation at this new bill is merely an escalation of the industry’s long-standing efforts to interject itself in government initiatives against tobacco smuggling, relying—as ever—on relentless misdirection to “paint itself as both the victim and the saviour”.

This modus operandi is a well-established staple of Big Tobacco. Indeed, the industry’s self-reported good intentions routinely threaten to derail international policy efforts against tobacco smuggling. Tobacco companies have used data they themselves have funded to overstate the size of the cigarette black market and to claim that plain packaging efforts will lead to a rise in illicit trade.

Not only has this been thoroughly debunked by a number of studies, but evidence indicates that Big Tobacco is itself complicit in the trade, with cigarette manufacturers using the black market as a means of tax avoidance. Former British American Tobacco (BAT) chairman Kenneth Clarke even admitted to producing cigarettes he knew would end up sold under the table when he brazenly claimed: “Where any government is unwilling to act [on stamping out illicit tobacco trade] or their efforts are unsuccessful, we act, completely within the law, on the basis that our brands will be available alongside those of our competitors in the smuggled as well as the legitimate market”.

Big Tobacco’s manipulative attempts to rebrand itself as an anti-smuggling crusader are particularly in the spotlight in the lead up to two key October tobacco control meetings: the COP8 and MOP1, aimed at taking stock of the progress on implementing the WHO Framework Convention on Tobacco Control (FCTC) – an international tobacco control standard signed by 168 countries.

With the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products finally coming into effect on 25 September, jurisdictions are trying to nail down the particulars of how they will track and trace (T&T) tobacco products to tackle the lucrative smuggling operations. As policymakers hash out the details of how they will follow tobacco products from factory to consumer, Big Tobacco representatives are bent on getting their fingers in the pie.

The FCTC Protocol stipulates that global T&T efforts must be wholly independent from the tobacco industry. In spite of this, tobacco giant Philip Morris International (PMI) has thus far been allowed to adapt its own tracking system, Codentify—which it licensed to three of its fellow tobacco giants at no cost— to meet T&T requirements.

The technology PMI has cooked up, rightfully described as a Trojan horse, fails basic security requirements and is open to code cloning, recycling and migration—all while compromising the confidentiality of enforcement investigations. Codentify’s true purpose, namely shielding and preserving the tobacco industry’s vested interest in the black market for cigarettes, is clear.

The FCTC Secretariat has made it clear that Codentify is not an acceptable solution. To that end, it specified that Codentify is not even strictly speaking a T&T system, but rather “a code generator system installed at the production line that creates unique codes on packs” which might conceal hidden features unbeknownst to everyone but the tobacco companies which created it. Despite the FCTC’s outspoken opposition to Codentify or similar technology, the tobacco industry’s relentless lobbying has paid some dividends: the EU is putting in place a “mixed” solution to T&T, in which some responsibilities would be entrusted to the industry.

Policymakers around the world should need no further evidence as to why the tobacco industry cannot be trusted to weigh in on the fight against cigarette smuggling, but sneaky public relations ploys like the #TakeBackTheTax campaign just emphasise how untrustworthy Big Tobacco really is.

 

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Hundreds of suspected steel smugglers arrested in China during major customs crackdown

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suspected steel smugglers arrested

Customs officials in China have detained 245 people on suspicion of being members of a scrap steel smuggling ring that is said to have illegally sold more than 2.4 million metric tons of metal to buyers across Southeast Asia.

In a statement issued this morning, China’s General Administration of Customs said investigators began a series of raids on Monday after evidence suggested a network of fraudsters was shipping large quantities of scrap metal out of the country without paying a 40% export duty.

The high tariff was put in place to encourage businesses to recycle scrap steel as opposed to selling it overseas.

The operation targeted some 65 gangs, members of which are thought to have avoided paying duty on the export of goods estimated to be worth 4.8 billion yuan ($750 million).

Chinese authorities were alerted to the gangs’ activities after observing a sharp rise in the amount of scrap steel being shipped out of the country, resulting in a nationwide investigation.

The huge probe involved 363 teams of investigators working across 10 cities and provinces.

The General Administration of Customs said the smuggling gangs, which are alleged to have worked under a Taiwanese company, bought iron and steel waste scrap in China and then shipped it to Southeast Asian countries such as Vietnam, Thailand, Singapore, Malaysia and Indonesia without paying the required hefty export fees.

Chinese customs authorities have identified waste smuggling as one of their major priorities this year, and have been cracking down on criminal gangs attempting to dodge export tariffs by sneaking high-value metals out of China, which is the world’s largest producer of steel.

In a statement, the General Administration of Customs said: “Steel scrap is the only substitute for iron ore in the manufacturing of steel products.

“The fullest use of iron and steel scrap is not only a necessity to break down resource bottlenecks and build a resource-saving and environment-friendly society, but also an important way to reduce carbon emissions and alleviate the dependence on iron ore.”

According to energy and commodities information website Platts, the two-day operation and resultant arrests could adversely impact the supply of Chinese scrap metal in Vietnam, which was the largest buyer of Chinese scrap in the first quarter of this year.

Shipments of scrap steel originating from China rose from close to nothing in 2016 to around 2.2 million tons last year after the government launched a crackdown on illegal plants using scrap to make poor-quality steel, according to customs data.

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Spanish woman charged with attempting to smuggle coke and meth worth $29.4 million into UK

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cocaine seized from boat

An investigation conducted by Britain’s National Crime Agency (NCA) has resulted in a Spanish woman being charged with attempting to smuggle cocaine and methamphetamine worth an estimated £22 million ($29.4 million) into the UK from Mexico.

The agency, the UK’s equivalent to the FBI, alleges that 32-year-old Olivia Anton-Altamirano had arranged for 250kgs of cocaine and 9kgs of methamphetamine to be shipped into Britain concealed inside a specially-made industrial fruit-processing machine.

Anton-Altamirano was arrested at her home in London last week, and was later charged with attempting to smuggle class A drugs into the UK, the NCA said in a statement.

Border Force officers discovered the haul after identifying the fruit processing machine in which the drugs were hidden as suspicious when it arrived at London Gateway Port on 17 March.

Customs officials are said to have taken several hours breaking into the part of the machine that contained the cocaine and methamphetamine.

Once they had done so, a controlled delivery of the empty machine was made to a storage facility in north London at the beginning of May.

Commenting on the success of the operation, Mark Kennedy, Border Force Deputy Director, said: “Border Force officers play a crucial role in securing our borders against drug smuggling. In this case, their professionalism has meant that dangerous class A drugs have been seized and will no longer end up in our communities where they can do so much harm.

“We continue to work with our colleagues from the National Crime Agency to do all we can to stamp out this despicable trade and bring those responsible to justice.”

Separately, UK Security Minister Ben Wallace yesterday said Britain is fast becoming the cocaine capital of Europe, a fact that is fuelling rising levels of drug-related violence across the country.

Addressing Parliament, Wallace told MPs that use of cocaine had rocketed in Britain over the past decade, thanks in part to technology making it much easier for dealers to source and sell the drug.

“In the old days, if you wanted to import huge amounts of cocaine to this country, somebody had to go to Colombia, somebody had to meet people,” he said.

“In the space of about eight years, you don’t have to do that. You can sit at home, you can deal your drugs, you can order your drugs, you can launder almost instantaneously, through Bitcoin and everything else, your money.”

Elsewhere, a senior UK police officer has said middle-class drug users are partly responsible for rising levels of drug-related violence on Britain’s streets.

Simon Kempton, Police Federation lead on drugs policy, said: “The only reason gangs are into drugs is because people want to buy them, and a big part of that is not street-level users.”

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Australia announces wide-ranging crackdown on illicit tobacco trade

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illicit tobacco trade

The Australian government has announced a crackdown on the sale of illicit tobacco that it hopes will raise some A$3.6 billion ($2.7 billion) over a four-year period.

Speaking ahead of Tuesday’s budget, Finance Minister Mathias Cormann said the plan would involve the government taking action to prevent the sale of 864 tonnes of illicit tobacco that is estimated to slip past the country’s customs officers every year.

The country’s taxation office will be handed new powers that will allow it to levy taxes on tobacco products when they enter the country, rather than when they are despatched from licensed warehouses to retailers.

In addition, importers will be required to apply for a permit if they wish to bring tobacco products into the country.

The government will also establish a new multi-agency Illicit Tobacco Taskforce, which will be led by the Australian Border Force (ABF), and is intended to boost the government’s ability to enforce the new laws and break up illicit tobacco supply chains.

The measures will be introduced after concerns were raised that organised criminal gangs are diverting tobacco products from legitimate supply chains before they are made the subject of taxation.

While some of this activity is thought to have been conducted by employees of warehouses where tobacco products are stored before being shipped to retail buyers, it is thought that a larger-scale diversion of cigarettes from legitimate supply chains is being coordinated by organised criminal networks.

Minister for Revenue and Financial Services, Kelly O’Dwyer MP, said: “These measures will shut down the avenues that organised crime syndicates have to access illicit tobacco to fund criminal activity.

“Increasing the resources for the ATO to combat illicit tobacco will continue the great work they have been able to achieve so far.

“Since July 2016, the Australian Taxation Office (ATO) has undertaken 32 seizures totalling 215 tonnes of illicit tobacco with estimated tobacco duty forgone of $179 million.”

A recent report from professional services from KPMG revealed that illicit products accounted for 15% of the overall Australian tobacco market last year, up from 14.3% the previous year.

The study found that repeated tax hikes on tobacco products in Australia is pushing an increasing number of smokers to smuggled and counterfeit cigarettes.

Rachel Elliott, from Imperial Tobacco, which commissioned the report with Phillip Morris, commented: “We believe there is no denying the link between high excise and the illicit market.

“As excise on tobacco contributes to increased prices, the attractiveness of the illicit market becomes even more obvious to serious and organised crime.”

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