Illegal pathways to illegal profits. The big cigarette companies and international smuggling

This article is part of the Tobacco portal on Sourcewatch funded from 2006 - 2009 by the American Legacy Foundation.

Illegal pathways to illegal profits. The big cigarette companies and international smuggling, a report by The Campaign for Tobacco-Free Kids. 54 pp. Undated.

Summary of published report:

This report presents key evidence about the major cigarette companies’ involvement in international cigarette smuggling, with a goal of helping readers better understand the problem and how it can best be addressed to improve the finances and public health of the world’s countries. Tobacco company documents rarely refer to "smuggled" cigarettes or use other common terms. Instead, companies refer to cigarettes that are illegally imported into a country as “duty-not-paid” or “DNP” cigarettes. Cigarettes delivered through illegal channels are also called “transit,” “general trade” or “GT” cigarettes. When searches in tobacco industry documents are done on these terms, more information is found on smuggled cigarettes.

Among other things, the examples cited in this report show that the major cigarette companies have also:

• Intentionally used small amounts of legal imports of certain brands to mask the display and sale of smuggled cigarettes in a country and to provide an excuse for their advertising and marketing efforts designed to promote the sales of the smuggled versions.
• Sent high-level executives to meetings with the middleman companies directly in charge of the smuggling efforts to discuss details of the smuggling operations, including destinations, brands, routes, quantities and prices.
• Knowingly supplied cigarette smuggling operations used by illegal drug traffickers for money laundering purposes.

The report concludes that smuggling does not have to be accepted as an inevitable, undesirable by-product of national efforts to increase cigarette taxes, and suggests a number of measures that could help eliminate large-scale cigarette smuggling.

Related SourceWatch resources

• General trade
• Turning off the tap: An update on cigarette smuggling in the UK and Sweden, with recommendations to control smuggling
• Tobacco and terrorism
• The cigarette "transit road" to the Islamic Republic of Iran and Iraq. Illicit tobacco trade in the Middle East

External resources

• International Union Against Cancer (UICC) Fact Sheet on Tobacco Smuggling
• Merriman D, Yurekli A, Chaloupka F, How big is the worldwide cigarette-smuggling problem?, Tobacco Control in Developing Countries, background paper, The World Bank Group.
• Schapiro, M. Big Tobacco, The Nation. May 6, 2002.
• Joosens, L. How can cigarette smuggling be reduced?, BMJ 2000;321:947-950 (14 October)
• Chronology of R.J. Reynolds Northern Brands cigarette smuggling in Canada, Physicians for Smoke-free Canada & Nonsmokers Rights Association of Canada, 2001.
• Tobacco companies linked to criminal organizations in cigarette smuggling: what's next?, Center for Public Integrity/International Consortium of Investigative Journalists. March 3, 2001
• Alamar B, Mahmoud L, Glantz S. Cigarette Smuggling in California: Fact and Fiction, July 30, 2003. University of California San Francisco, Center for Tobacco Control Research and Education. Tobacco Control Policy Making: United States.
• Legresley E, Muggli M. Tobacco Overlords: Systematic Smuggling of Cigarettes throughout Africa July 13, 2006, Presentation at the 13th World Conference on Tobacco OR Health, Washington, DC.