Press Release
Nations Conclude Initial Talks on Smuggling, Counterfeiting and Illicit Manufacturing of Tobacco Products as Global Tobacco Epidemic Worsens
(15 February 2008 - Geneva)

Geneva, Switzerland.  Official representatives of some 130 countries wrapped up talks in Geneva today on a new treaty, the Illicit Trade Protocol, to curb the smuggling, counterfeiting, and illicit manufacturing of tobacco products. The Framework Convention Alliance (FCA) – a group of over 300 civil society organizations – congratulates the participants on the spirit of cooperation that enabled them to make progress this week, but also urges them to continue to keep their purpose and common cause in mind as work on the treaty continues and the death toll from tobacco steadily increases.

“Illicit trade of tobacco products undermines countries’ ability to protect the health of their citizens and deprives national coffers of many billions of dollars of tax revenue,” said Laurent Huber, Executive Director of the FCA. “By agreeing to move forward on all of the key measures necessary to stop these illegal activities, the nations have made a promising start in addressing an international problem that requires international cooperation to solve.”

A recent report from the World Health Organization (WHO) predicted that one billion people will die from tobacco use this century unless current trends are reversed. The WHO also says that half the people that smoke today, about 650 million people, will eventually by killed by tobacco.

At this week’s negotiations – convened by the WHO – the FCA recommended to the participating nations that they retain important measures for addressing the illicit trade of tobacco products like cigarettes in the evolving text of the Protocol. These measures include international cooperation on investigation and prosecution of illicit trade cases, systems for tracking and tracing tobacco products, criminalization and increased penalties for illegal activity, and enhanced law enforcement.

The Protocol is being negotiated as a subsidiary agreement to the WHO Framework Convention on Tobacco Control, the international tobacco control treaty under which Parties agree to implement proven measures to address the rising global tobacco epidemic.

Tobacco products available from smuggling and counterfeiting operations undermine nations’ legitimate efforts to raise the price of these products. Raising prices of tobacco products through measures such as increased taxes is the most effective means of helping people to quit using them or keeping them from starting. Illegal trade also deprives national coffers of up to US$50 billion per year in lost tax revenue.

Earlier this week, the results of an investigation into illicit trade in the Balkan states were announced. The investigation uncovered links from the illicit trade of cigarettes to corrupt public officials and organized crime organizations.

Parties to the FCTC will meet at least once more this year to move forward in negotiations on the Illicit Trade Protocol, with further sessions planned before it is finalized and adopted in late 2010. The negotiating process for the Protocol is being conducted under the auspices of the WHO.

Mark Hurley, Framework Convention Alliance, +1 202 460 2679 (in Geneva)

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Countries launch negotiations for anti-smuggling tobacco treaty
By ELIANE ENGELER
Associated Press Writer
15 February 2008
(c) 2008. The Associated Press. All Rights Reserved.

GENEVA (AP) - About 130 countries have begun negotiations on a treaty to fight large-scale tobacco smuggling, which is blamed for encouraging smoking, officials of the World Health Organization said Friday.

An initial five-day meeting this week helped present the scope of the problem that is costing governments billions of dollars in lost taxes and undermines efforts to prevent smoking-related diseases, said Ian Walton-Georges, who chaired the gathering under the auspices of WHO.

The sponsors hope to have a treaty completed by 2010. It would be an addition to an existing anti-smoking treaty, the 2005 Framework Convention on Tobacco Control, which has 152 state signatories.

Walton-Georges said there was widespread agreement that a new legally binding treaty is needed, but countries have to work out details, including how to stop smugglers from getting cigarettes and how to impose tougher sanctions against criminals.

But campaign organizations said an exception was Japan, which insisted that any treaty had to be in line with existing international trade agreements and could not go beyond domestic laws.

Kathy Mulvey of Corporate Accountability International, a Boston-based campaign group, said she suspected that the Japanese position was related to the Japanese government's 50 percent stake in Japan Tobacco International, the world's third largest international tobacco maker.

Often "legally traded tobacco ... is diverted into the illegal channels," Walton-Georges said.

Customs authorities seize large amounts of smuggled cigarettes, but it is mostly unclear who is behind the smuggling and what transport routes are used.

Illegal tobacco trade accounts for about 10 percent of global tobacco sales and costs governments between US$40 billion (euro27 billion) and US$50 billion (euro34 billion) in lost tax revenue per year, according to the Framework Convention Alliance, a coalition of more than 300 campaign groups.

New rules should make tobacco smuggling less attractive, said campaigner Mulvey. "That would include penalties for manufacturers when they're shown being complicit in this (illegal) trade," she said.

The European Anti-Fraud Office estimates that one container load of 10 million cigarettes had an average tax value of US$2 million in the European Union last year.

Smuggled cigarettes are cheaper than legal products on the market, giving smokers less incentive to quit smoking and encouraging young people to start, campaign groups say.

The WHO in a report last week said that 5.4 million people die every year from lung cancer, heart diseases and other illnesses stemming from tobacco smoking. It warned that the tobacco epidemic could claim 1 billion lives by the end of the century unless governments dramatically step up efforts to curb smoking.

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WHO takes aim at tobacco smuggling with new pact
By Stephanie Nebehay
15 February 2008
Reuters News
(c) 2008 Reuters Limited

GENEVA, Feb 15 (Reuters) - Nearly 130 countries have taken the first steps towards a new treaty to combat tobacco smuggling, blamed for higher consumption and up to $50 billion in lost tax revenues each year, officials said on Friday.

The officials, from several international agencies, were speaking after the first negotiations under the World Health Organisation (WHO). They called for the pact to be ready for adoption by 2010, adding political will was needed.

They discussed a protocol to the WHO international treaty on tobacco control, which already bans sales to minors and tobacco advertising and sponsorship.

The United Nations agency estimates 5 million people die each year of tobacco-related diseases.

Many countries said the new pact should include a licensing system for suppliers and distributors, a "tracking and tracing regime" to monitor cigarettes through the supply chain and stronger law enforcement with stiff penalties, officials said.

"We need a protocol that is practical, effective and strong," Ian Walton-Georges, who chaired the weeklong talks, told a final news conference. "A start has been made and we will ensure momentum will be continued."

Further negotiations are expected in October and in 2009 before a draft text is presented in 2010 to the 152 countries which have ratified the Framework Convention on Tobacco Control.

Tobacco smugglers divert legally-traded cigarettes to black markets in all countries, especially rich ones, according to Walton-Georges, who works at the European Anti-Fraud Office.

"These are organised criminal gangs whose profits from illicit trade are ploughed into money-laundering, VAT fraud and other criminal activities," he said.

"Countries of Europe are particularly targeted because so much money can be made there. Last year in the European Union, we probably lost 6 billion euros or $9 billion, and that is what we know about," he added.

Illicit trade in tobacco products significantly contributes to death and disease caused by tobacco consumption and to the rise in tobacco consumption by making cigarettes "cheaper, more accessible and more difficult to regulate", according to WHO.

Activists welcomed progress, but insisted industry must be kept from influencing the negotiations and public health policy.

Philip Morris/ Altria, British American Tobacco and Japan Tobacco were among manufacturers closely following the week-long talks, they said.

"Smugglers are now on notice that their days of making vast profits with little chance of being caught, and if they are caught they are given negligible penalties, are coming to an end," said Deborah Arnott, of the Framework Convention Alliance which links 300 non-governmental organisations in 100 countries. (Editing by Matthew Jones)

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WHO wants treaty on illegal tobacco trade by 2010
15 February 2008
Agence France Presse
Copyright Agence France-Presse, 2008 All reproduction and presentation rights reserved.

GENEVA, Feb 15, 2008 (AFP) - The World Health Organisation announced Friday that it planned to adopt a new international treaty on the illegal tobacco trade by 2010.

"We have finally assessed that we want a protocol on the illicit trade of tobacco," Ian Walton-George, the world health body's top negotiator on the issue, told a press conference at Geneva.

The WHO has been meeting this week at its headquarters in the Swiss city to debate a new protocol on the illicit tobacco trade to tie in to its wider Framework Convention on Tobacco Control (FCTC).

"2010 is the date for finalising negotiations and adopting the text of the protocol," said Haik Nikogosian, who heads the WHO's anti-tobacco secretariat.

The illicit tobacco trade is estimated to make up approximately 10 percent of global tobacco sales and costs governments between 40 and 50 billion dollars (27-34 billion euros) every year.

In African countries such as Nigeria, its share is estimated to be even higher at between 10 and 16 percent, lobby group Corporate Accountability International (CAI) said earlier this week.

"Controlling this trade, controlling the prices is crucial to prevent young people to use tabacco," Deborah Arnott, European head of the Framework Convention Alliance pressure group, said Friday.

Campaigners alleged ahead of the WHO meeting that tobacco giants Philip Morris, British American Tobacco and Japan Tobacco actively collude with cigarette smugglers to gain a foothold in lucrative developing markets.

"Transnationals benefit in a number of ways from the illicit trade in tobacco," said Kathyrn Mulvey, CAI's director of international policy.

This includes establishing a brand presence in new markets, and getting more people addicted to cigarettes -- particularly children because smuggled tobacco is so cheap, she told journalists on Wednesday.

"Documents do show industry complicity in this deadly business," Mulvey added.

The WHO said last week that tobacco use could kill more than one billion people around the world this century unless governments and civil society act to reverse the epidemic.

The existing FCTC agreement, signed in February 2005, aims to rein in the estimated five million annual deaths caused by smoking, which the WHO says will double by 2020 if nothing is done.

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