Anti-illicit tobacco trade conference tackles growing problem that funds organised crime

Taking place in Beirut, Lebanon, the conference will shed light on different experiences in combating illicit trade of tobacco products across the region.

The opening ceremony is being attended by key figures including the Lebanese Minister of Finance Dr. Mohammed Shateh, as well as customs and other government entities; and their counterparts from Jordan, Syria and Yemen as well as members of the top management team of British American Tobacco Middle East.

Over two days, the conference is looking at key issues including combating illicit trade; the impact of tax on illicit trade; country specific experiences including Lebanon, Yemen, Syria and Jordan.

British American Tobacco Middle East is sharing its experience and knowledge of tackling illicit trade in the tobacco sector, as well as facts and figures on the size and scale of the issue, how the company is combating the problem, and its views on the World Health Organisation's Framework Convention on Tobacco Control (FCTC) Protocol on Anti Illicit Trade.

In the Middle East last year 23.6 billion cigarettes or 16.3% of all cigarettes smoked were illicitly supplied last year - approximately one in every six cigarettes. British American Tobacco estimates that this equates to a loss of excise tax for regional governments of over $162.2m annually.

Legitimate tobacco companies across the Middle East are also losing some $102m in annual revenue due to illicit trade as well as associated threats to companies' brands, jobs and distribution networks.

Omar Bseiso, General Manager of British American Tobacco Levant & Yemen comments:

"This is a very important issue and it goes beyond just a loss of revenue for tobacco companies and governments. When consumers smoke smuggled or counterfeit cigarettes, they may be unwittingly helping to fund international organised crime and terrorists who are closely linked with illicit trade of tobacco according to Interpol and US Department of Justice. We fully support regulators, governments and international organisations such as the World Customs Organisation (WCO), World Trade Organisation (WTO) and World Health Organisation (WHO) in seeking to eliminate all forms of illicit tobacco trade. We would like to see all our markets free of it."

Initiatives to prevent sales to children at the retail level, like those introduced by British American Tobacco Middle East in the region under its Youth Smoking Prevention programme, or through government initiatives and laws are also undermined by illicit sales away from the eyes of the authorities.

Illicit tobacco trade is a global problem. British American Tobacco estimates that more than 330 billion cigarettes smoked in 2008 were illegal; amounting to 6% of the total world consumption. This has a huge impact on tobacco company profits amounting to approximately $5bn per year and the loss in government taxes of $20bn in 2008.

Illicitly supplied cigarettes can include genuine cigarettes supplied on the black market, driven where there are high taxes on tobacco products and lower prices in neighbouring countries. Weak criminal penalties, poor border controls, low arrest rates and corruption in some countries add to the problem.

There is also the issue of counterfeit cigarettes which sometimes can be almost impossible to tell from the genuine product. Counterfeits are unlikely to comply with the rigorous regulatory standards that tobacco companies adhere to for tar, nicotine and carbon monoxide levels and they might contain unapproved ingredients. The vast majority of fakes come from illegal operators in China, followed by Paraguay, the Middle East and to a lesser extent Eastern Europe.

Tackling illicit trade requires cooperation between governments, industry and organisations such as the World Customs Organisation and the World Health Organisation. British American Tobacco is continually working with governments and relevant organisations in the attempt to combat illicit trade. Within the region it has signed a number of Memorandums of Understanding (MoUs) which has aided information sharing and increased awareness regarding the issue of illicit trade.

They have also organised training workshops, for relevant government entities including; the Aqaba Special Economic Zone Authority (ASEZA), the Jordanian Customs, Yemeni Customs, Yemeni Tax Authority and the General Organisation for Tobacco (GOT) in Syria as well as participating in relevant conferences, for example the World Customs Organisation (WCO) Congress in Dubai in February 2008.