British American Tobacco warned that governments worldwide will this year lose around USD 20 billion (EUR 15.1 billion) in unpaid tobacco taxes due to counterfeiting.

And the company believes that a new World Health Organisation protocol to tackle the illicit tobacco trade – to be discussed this week in Geneva – needs strengthening in key areas if it is really to help governments. The predicted tax losses are based on BAT’s latest estimate that smokers globally will consume over 335 billion illicit cigarettes this year – a record high.
BAT says it firmly supports the WHO’s draft Protocol on Illicit Trade in Tobacco Products, which aims to strengthen international co-ordination and enforcement. The protocol also acknowledges that legitimate tobacco industry interests are negatively impacted along with those of governments.
British American Tobacco wants to see tougher penalties – jail, fines and other sanctions – for illicit traders. Furthermore the company criticises that free trade zones are not yet specifically mentioned in the draft protocol, but are often used as safe havens for storing illicit cigarettes, shipping them on and, increasingly, for manufacturing pirated cigarette brands. The World Customs Organisation and the Organisation for Economic Co-operation and Development say the zones play a significant role in facilitating illicit trade.
BAT also says all tobacco manufacturers should introduce effective track and trace systems for their products to keep their supply chains more secure, and that penalties should be imposed if a company is found not to have put supply chain controls in place. So that all tobacco manufacturers, both large and small, can and do take part, BAT believes it is vital for the protocol to set a standard for global tracking and tracing, rather than a prescriptive technology, allowing each manufacturer to choose and run technology that best enables it to meet that standard. (ci)