Customs and Tobacco Report 2010
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Publisher Date of publication [World Customs Organization [June 2011 Customs and Tobacco Report Rue du marché 30 [ B-1210 Brussels Belgium 2010 Tel. : +32 (0)2 209 92 11 Fax. : +32 (0)2 209 92 92 E-mail : [email protected] Web site : http://www.wcoomd.org Rights and permissions Copyright © 2011 World Customs Organization. All rights reserved. Requests and inquiries concerning translation, reproduction and adaptation rights should be addressed to [email protected]. D/2011/0448/7 WORLD CUSTOMS ORGANIZATION For official use only Foreword FOREWORD whether, laws are flouted, consumers’ health gling of smaller consignments showed a sig - is damaged, governments lose revenues, or nificant increase. This is partially explained legitimate businesses lose trade. by some Members not having filed finalized reports at the date of publishing, improved We have witnessed an unparalleled growth anti smuggling techniques and the introduc - in illicit trade of tobacco products over tion of stricter measures in some countries recent years and we need to step up our such as, increased penalties, and enhanced I am pleased to present the ninth issue of efforts to tackle this problem. The present seizure or confiscation provisions in relation the WCO’s Customs and Tobacco report. report makes very clear that Customs to vehicles and personal assets. This annual publication correlates and administrations worldwide are committed to rising to meet this challenge. analyses the information provided by Specific patterns of the illicit trade in tobacco Members in relation to the worldwide trade products vary from region to region. One The substantive content of the 2010 report in illicit tobacco products. interesting smuggling example however is based upon the analysis of seizure infor - mation provided by Members between1 reported during the period highlighted that Customs plays a significant role in ensuring January 2010 and 31 December 2010, by there are also some common themes. In this that global trade conforms with international spreadsheet, or by regular reports to the instance it concerned the use of empty inter - requirements and that all taxes due are paid. WCO Customs Enforcement Network mediate bulk containers (IBCs), especially Where goods are highly taxed, easily (CEN) system. constructed for concealment of illicit portable and penalties remain relatively light tobacco. This concealment method was first for trafficking, trans-national criminal organ - The report focuses on significant illicit ciga - detected by a Customs administration in izations will take advantage of any weak - rette shipments. Members’ reports indicate Europe. Information on this smuggling tech - nesses in Customs, revenue or other border that cases over the current threshold for nique was disseminated worldwide through controls to amass profits. They do not care analysis declined in 2010 whilst the smug - the RILO network and as a result further 2 WCO ANNUAL REPORT 2010 Foreword detections of a similar nature were made in sible for the Protocol’s development to Europe, Asia and the Pacific. ensure the negotiated text adequately reflects the Customs perspective. Initiatives like the expansion of Project Crocodile will enhance the dialogue In the meantime, I hope this report will between Customs worldwide and aid the assist you in the anti-smuggling efforts in a smooth exchange of information on suspi - continuously evolving environment. cious consignments of tobacco products. Cooperation between Customs administra - tions internationally and between Customs and other competent authorities at a national level is indeed the key for tangible achievements against these illegal activities. The World Health Organization’s (WHO) Kunio Mikuriya Protocol on Illicit Trade in Tobacco Products Secrétaire général is another important response to the chal - Organisation mondiale des douanes lenges encountered by the competent health and law enforcement agencies in relation to tobacco control and abuse. The potential future impact of the Protocol on Customs is significant. I encourage Members to keep in close contact with national officials respon - WCO ANNUAL REPORT 2010 3 Executive Summary EXECUTIVE SUMMARY The Report is intended to highlight current and expected trends, as well as initiatives undertaken by Members to counteract the illicit trade of tobacco products, and may include contributions by third parties. The Report is divided into two main sec - tions. a global and regional overview of the illicit trade in cigarettes, and a section on items of particular interest. The Report focuses primarily on the illicit trade in cigarettes as this appears to be the main challenge, according to the information submitted to the WCO Secretariat by its Members. The second section briefly covers items of particular interest, such as the illicit manu - facturing of tobacco products including the illicit trade in counterfeit cigarettes, progress (Photo courtesy of Bulgarian Customs) with the Protocol on illicit trade in tobacco products within the WHO Framework data remains a challenge due to various rea - Almost 90 % of the seizures were reported Convention on Tobacco Control (FCTC), sons also of a technical nature. by Members affiliated to the three European information on operations and projects RILOs. tackling the illicit trade in tobacco products, Unfortunately not all seizures over the The contraband concerned accounts for and information on other initiatives under - threshold of 100,000 pieces recorded in the around 80 % of the total quantity of ciga - taken by various entities, as a contribution territories of WCO Members were reported rettes reported to the CEN database. for Customs administrations in the fight to the CEN database. It is therefore impossi - against the illicit trade in tobacco products ble to assess the degree of variation of the Although the contribution from other at various levels. phenomenon of illicit trade over the years. regions needs to be improved in terms of input into the CEN, the figures confirm that First section However, with reference to the number of the illicit trade in cigarettes is widespread. seizures, some Members indicated that cases The analysis on illicit trade of cigarettes is over the threshold were detected less in 2010 The figures recorded in Eastern and based on a total of 3,521 pieces of informa - whilst the smuggling of smaller consign - Southern Africa are particularly noteworthy. tion on cigarette seizures with a minimum ments showed an increase instead. limit of 100,000 pieces carried out in 2009 The largest seizure in 2010 was recorded in and 2010 by sixty-seven WCO Members. As far as the amount of contraband is con - Greece. The relevant figures recorded in the CEN cerned, it has to be noted that more notable database come to a total of 2,002 seizures in seizures were recorded in 2009. With reference to the number of seizures, 2009 and 1,519 in 2010 accounting for 20 % of all seizures world-wide in 2010 were around 3.5 billion pieces in 2009 and 3.2 As a result of strict measures (increased made in the top ten locations. billion pieces in 2010. penalties, seizures or confiscation of vehi - More than one location recorded the same cles), smugglers tend to reduce the amount of remarkable number of seizures. The figures show a remarkable decrease of contraband: the cigarettes can be concealed both the number of seizures and the amount more easily and the penalties can be lower. Not surprisingly, nearly all sites are located of contraband seized in 2010 in Europe where most of the seizures were The bulk of the data is reported by European reported from. The question of the completeness of CEN Members. 4 WCO ANNUAL REPORT 2010 Executive Summary The top ten locations by quantity accounted there may be a belief that rubber could pre - Recognised for its success in combating ille - for nearly one-third of the contraband seized vent or absorb X-rays. gal cigarette trades in the Asia/Pacific Region, globally in 2010. All are European except Project Crocodile is now being considered Busia and Malaba (Kenya). 2010 data show that more cases than in the for global implementation as combating the past involved cigarettes concealed or simply illegal cigarette trade is not just a regional Half of the contraband was detected at sea - loaded in the means of transport without the concern. ports, where around 16 % of global seizures use of a cover load. were carried out. Nearly half of the seizures Given the significant impact that the future were made at inland locations, where 23 % The courier and postal system is indeed implementation of the Protocol on the Illicit of the contraband was seized in 2010 as being used to move cigarettes illegally. Large Trade of Tobacco Products will have on the compared with 35 % in the previous year. quantities are subdivided into a number of Customs activities in this particular field, the smaller quantities that are shipped individu - WCO Secretariat strongly recommends that There was a remarkable decrease in detections ally. Although each individual shipment Customs administrations maintain close of significant shipments at rail locations. This involves only a small quantity of cigarettes, contact with the competent national office is probably due to a lack of reporting the total quantity is significant. which will represent your country in the ongoing negotiations, with a view to ensur - Ukraine and Poland were the most frequent Second section ing that the negotiations on the text also source for the contraband detected in reflect the Customs perspective. Europe and destined for this region. As was the case in previous years, the figures show that more than half of the counterfeit In various occasions the alerts published by China was the source of the highest amount of contraband originated in China. The figures the WCO Secretariat led to additional contraband (21 % of the global quantity identify the United Arab Emirates as the sec - seizures by the Customs services. seized), followed by the United Arab Emirates ond source in terms of both quantity and The WCO Secretariat therefore invites all (9 %).