Today, Wednesday, 19 July 2017, a U.S. Government agency focused on promoting human rights, military security, and economic cooperation in Europe, Eurasia, and North America, will hold a special hearing: ‘A Hazy Crisis: Illicit Cigarette Smuggling in the OSCE Region’.
The Commission on Security and Cooperation in Europe, commonly known as the Helsinki Commission, is an independent agency of the U.S. Federal Government. For forty years it has monitored compliance with the Helsinki Accords, which were established to improve relations between the Communist bloc and the West.
If you are starting to glaze over with disinterest, please hear me out. This is not some dull, pedestrian, government committee hearing. This is a big deal. The issue of illicit cigarette smuggling in the Organization for Security and Cooperation in Europe (OSCE) region and its implications has never been the subject of a hearing of this nature.
It is widely reported that illicit trade in tobacco is a significant source of funding for terrorism and transnational organized crime, threatening global security and destabilizing key regions of the world. Having the U.S. take a more pivotal role in efforts to combat the problems of global illicit tobacco trade, and the malevolent eco-system that surrounds it, would be massive.
Illicit trade in tobacco is widespread and research suggests that it is appealing to terrorists and organized criminal groups because the product is highly profitable, easy to transport, and subject to little enforcement. Also the penalties, when applied, are usually less severe than those applicable to other illegal activities, like narcotics trafficking.
Between 10-12% of all cigarettes consumed are part of the global illicit tobacco trade, according to a 2006 report from the World Health Organization, also confirmed by a 2015 report from the U.S. Department of State. The value of the illicit tobacco trade is estimated to be greater than the illicit trade in oil, wildlife, timber, arts and cultural property, and blood diamonds combined.
That’s a sizeable revenue stream for bad guys and bad gals to fund their activities. Simply put, any serious effort to combat terrorism and transnational organized crime must tackle the illicit tobacco trade and cut off this critical funding source.
The industry has an important voice and role to play in delivering solutions. After all, we know our business better than anyone, and we have a vested interest to protect our supply chain, our shareholders’ interests and our customers. Philip Morris International’s Senior Vice President and General Counsel Marc Firestone will provide PMI’s perspective on the issue at the hearing tomorrow. He will provide insights into the scale of the problem and how PMI is working tirelessly to fight illicit tobacco trade.
You can find out about PMI’s work here.
The industry cannot do this alone. A comprehensive solution calls for robust national and international enforcement strategies to strengthen the chances of success in getting steps ahead of the criminals.
Specific actions that could strengthen united efforts against the criminals include:
I look forward to the outcome from the hearing, and I hope this opportunity is not wasted. It would be huge if the U.S. took more of a leadership role in fighting illicit tobacco trade at a global level.
Written by Alvise Giustiniani