The illicit trade in tobacco products is a serious global problem. As such, enforcement agencies must work together to tackle international organised crime groups operating outside of the jurisdiction where the tax loss occurs.
The UK has long been a primary target for the smugglers because of our well established policy of using high tobacco duty rates to increase prices and reduce smoking prevalence. Most of the tobacco criminal investigations carried out by HMRC involve some degree of cooperation with law enforcement agencies overseas, and as such, HMRC already has well-established links with enforcement agencies both in the European Union and beyond. Through these channels we are able to enhance international cross-border cooperation through the sharing of information and contributions to joint operations. We will supplement this through political lobbying to persuade our international partners to take fully effective action against tobacco smugglers and illicit tobacco manufacturers.
To a greater or lesser extent, tobacco smuggling now affects the vast majority of EU countries. For that reason, the EU and the UK are playing a prominent role in the development of an Illicit Trade Protocol to the World Health Organisation’s Framework Convention on Tobacco Control. The Illicit Trade Protocol will provide a binding legal framework for international regulation of tobacco production and distribution and for international co-operation between tobacco enforcement authorities. The proposed protocol is wide-ranging and ambitious but
among the potential measures under discussion are: the licensing and regulation of tobacco producers and machinery manufacturers; global standards on tracking and tracing of tobacco products; regulation of internet sales; administrative and enforcement co-operation and mutual
legal assistance. Parties to the FCTC are committed to seeking an agreement on the protocol by 2010.
To date, the UK has not been a party to the agreements on tackling tobacco smuggling that the European Commission and Member States have signed with Philip Morris International and Japan Tobacco International. The agreements cover many of the same issues that are addressed in
the UK’s 2006 Supply Chain Control Legislation and the Government is keen to ensure that, if the UK were to sign up to the agreements, neither the agreements themselves nor the UK legislation would be undermined. We have made good progress towards resolving these issues in discussions with European Commission lawyers and hope to make further progress in the near future, to enable the UK to be in a position to sign the agreements.