British American Tobacco (BAT) yesterday entered into a cooperation agreement with the European Commission (EC) and the member states of the European Union (EU) to collectively tackle the problem of illicit trade in tobacco.
As part of the deal, BAT will keep a tighter on supply chain networks, introduce tracking and tracing mechanisms on its products and cooperate with law enforcement bodies, including the EU's anti-fraud agency OLAF. BAT will also make payments if any future seizures of their official products, above certain quantities, are made in the EU.
Under the legally binding deal, BAT is to pay a 10-million-dollar annual contribution to the EU's central budget and to participating member states - all 27 of them barring Spain, Sweden and Poland. Poland, Spain and Sweden have not signed the agreement for procedural reasons but are expected to join soon, EU taxation commissioner Algirdas Šemeta said.
Šemeta highlighted figures showing that illegal tobacco trafficking costs the EU EUR 10 billion in lost tax revenue each year, and that it presents unfair competition for tobacco products sold through official chains.
Previous agreements of a similar nature with Philip Morris and Japan Tobacco International caused smuggling of those brands to decrease "very significantly", the commissioner added, speaking of the value of cooperation between authorities and businesses. (pi) | 
