Post on 12-Jul-2015
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Factors encouraging smugglingCriminal organisationSophisticated distribution No control over movementNo duty during transitIllegal sales toleratedDifficulty telling legal from illegalActive support of tobacco companies
Factors reducing smugglingProminent tax stampsSevere penaltiesAll in chain licensedTracking by serial numberDispatch only to responsible destinationLabel with destinationIncreased anti-smuggling actionAction against companies
Legal action against tobacco companies for alleged smugglingOct. 2001: UK Dept of Trade investigates BATJan. 02 Canada: Rothmans offices searched re smuggling to US, 1989-96Late 01-early 02: European Commission sues US companies for smugglingFeb. 02(?): European Union accuses US companies of violating Iraq sanctionsEarly-mid 02: US government sues PM for racketeeringOct. 02: EU Commission sues Rothmans in USA for money launderingJan. 03: German boss of Reemtsma (Imperial) held by police Jan. 03: Iraqi sues RJT over loss of (smuggling) earnings!Mar. 03: 8 JT (RJR) executives charged with C$1.2 Bn tax fraud from smuggling 1991-96
Hanoi, Vietnam 2003
Some notes from BATSmuggled sales into Vietnam are currently estimated at approximately 7 bn [billion] p.a. although prior to a crackdown in 1990 (when [it was eliminated for 18 months) it was in the region of 12-17 bn p.a.
SE [State Express] 555 is the major smuggled brand and there is no doubt it has a tremendous image and sales potential in the country.
BAT has resisted agreeing to manufacture 555 in Vietnam due both to concerns about the ability to sell the brand as a locally manufactured product and to the possible impact of a licence outside Vietnam.
Vinataba [the Vietnamese State monopoly] sees a licence of 555 as an attractive opportunity for the JV [joint venture], and believes that BATs opposition to a licence is simply to protect the smuggling trade.3
From a BAT internal document (12 May 1995):In Vietnam, smoking State Express 555 means that youve made it. Comment by Fred Combe, general manager of BAT, Vietnam, 1998: