Every tenth cigarette consumed globally is part of the illicit tobacco trade. Illegal trade in tobacco today no longer stops with the small time, neighbourhood bootlegger. While the smuggling of contraband tobacco products across national borders has always been profitable, illegal tobacco trade is now the trademark of organised crime networks, which may also be involved in drugs, human and arms trafficking, as well as terrorism.

Cigarettes are becoming a preferred item to smuggle; they are easy to buy, easy to smuggle, and provide a good return on investment. Large quantities of cigarettes are sold on the black market at below retail cost and without tax. Besides, unlike smuggling narcotics or other hardcore trafficked products, punishment for smuggling tobacco is less severe. In addition, since tobacco products are not a high priority for enforcement agencies, this makes them attractive to smugglers.

The tobacco industry claims that high taxes drive smuggling. It also lobbies governments to keep tobacco taxes low. However, experience from many countries shows that there is no direct correlation between high taxes and smuggling. High tax margins may provide the initial incentive to smuggle, but data show that there are other motivating factors leading to smuggling.

Curbing consumption

Globally, tobacco kills nearly six million people each year. Unless we act now, the epidemic will kill over eight million people every year by 2030. More than 80 percent of these preventable deaths would occur in low- and middle-income countries.

Countries are constantly defining ways to curb tobacco consumption. Tax and price policies are widely recognised as most effective for reducing demand for and consumption of tobacco products. These measures, together with strong pictorial warnings, have brought substantial healthcare gains.

However, illicit trade undermines tobacco control policy efforts and facilitates increased uptake of tobacco by youth and adults from low-income groups by making tobacco products more affordable and accessible. And because these products are not subject to legal restrictions and effective health regulations aimed at curbing tobacco use, such as pictorial warnings or banning sales to minors, this is fueling the tobacco epidemic.

Illicit trade also causes substantial losses in government revenues, depriving the health sector from additional finances that go into the hands of criminals. Besides that, this type of illegal trade further weakens good governance.

Eliminating illegal trade

In a bid to respond to growing illegal trade in tobacco products and to make a consolidated effort to put a break in this cycle of illegal transactions, the Protocol to Eliminate Illicit Trade in Tobacco products was developed. This international treaty was negotiated by parties to the World Health Organisation (WHO) Framework Convention on Tobacco Control (FCTC), and was adopted by them in November 2012.

The Protocol is an international treaty with the specific goal of eliminating all forms of illicit trade in tobacco products through a package of measures taken by countries that sign to uphold it.

However, the Protocol will become international law only after 40 countries have ratified or acceded to it. Once the law is in force, it will enable the Protocol to establish a global tracking and tracing regime, including national and regional tracking and tracing systems, as well as a global information sharing point. It will also create provisions to ensure control of the supply chain, including licencing, record-keeping, and regulation of internet sales, duty-free sales, and international transit. Importantly, it will allow countries to strengthen their own laws to tackle related issues.

In South-East Asia, many countries have porous borders that provide easy opportunity for the smuggling of tobacco products. All South-East Asian countries have enacted stringent laws to control tobacco consumption—both on pricing and sale of tobacco products in-country as well as against import of foreign brands—and despite these efforts, there is still a thriving trade in smuggled tobacco products.

Ratify the protocol

We do not have concrete data and knowledge about the adverse health, socio-economic, and security impacts from the illicit trade of tobacco. We need to know whether this practice increases use of tobacco in children. Such data would be invaluable in mobilising government and public support against illicit trade. Since the health consequences of the tobacco illegal trade directly impact the health of populations, it is up to the health sector to undertake serious studies to obtain such data.  

Although illicit trade in tobacco products has high importance for public health, the national economy and national security, the role of health ministries is minimal in curbing this menace.  The main action lies outside the health sector, with departments in charge of customs, police, revenue, trade, and intelligence. Member states are urged to accelerate entry of the Protocol into force by advocating through forums such as the World Customs Organisation, the United Nations Office on Drugs and Crime, and the World Trade Organisation and other relevant organisations.

WHO urges all member states to speed up their process of ratifying or acceding to the Protocol.  Ratification of the Protocol is necessary to respond to the financial, legal, and health impacts of the illicit trade in tobacco products.

Khetrapal Singh is Regional Director WHO South-East Asia region