Category: Illicit Trade

  • Illicit Market Thriving After Flavor Ban: ITCAN

    Illicit Market Thriving After Flavor Ban: ITCAN

    Image: Ahmed

    One year after Quebec banned non-tobacco flavored vapes, most vapers are buying such products illegally in the province, according to Imperial Tobacco Canada (ITCAN).

    In a survey carried out by Leger, 61 percent of vapers said that they purchased non-tobacco flavored vapor products in the past 12 months. Forty percent of those respondents said that they purchased an illegal flavored vapor product from a vape shop, and 33 percent of those respondents said they purchased flavored vapor products online. Forty-seven percent of those respondents said they knew it was illegal when they purchased a flavored vapor product

    “If the government’s objective was to create an untaxed and unregulated vapor market, then well done and mission accomplished,” said ITCAN Vice President of Corporate and Regulatory Affairs Eric Gagnon in a statement.

    ITCAN attributed the problem in part to weak enforcement. “A report from the Ministère de la Santé et des Services Sociaux (MSSS) website reveals that only 150 (38 percent of all vape shops) have been inspected by MSSS,” the company wrote. “Worse yet, very few fines have been issued with reports showing only 28 of those 150 received fines, even though more than 90 percent are uncompliant.”

    ITCAN urged the government to train inspectors, issue fines heavy enough to deter illegal players and conduct an “enforcement blitz” to demonstrate the gravity of the situation, among other suggestions.  

  • Joint Operation Nets $76 Million in Illicit Vapes

    Joint Operation Nets $76 Million in Illicit Vapes

    Credit: Eduardo Barraza

    The U.S. Food and Drug Administration, in collaboration with U.S. Customs and Border Protection (CBP), announced the administrative seizure of approximately three million units of illegal vaping products.

    The products have an estimated retail value of $76 million. The seizures were part of a July joint operation to examine incoming shipments and prevent illegal e-cigarettes from entering the country. 

    “The FDA is on high alert and, in coordination with our federal partners, remains committed to stopping unauthorized e-cigarettes at our nation’s borders,” said FDA Commissioner Robert Califf. “These products too often end up in kids’ hands, and the newly formed federal task force is well positioned to collectively combat this unscrupulous activity.”

    In June, the FDA and the Department of Justice announced a joint federal task force to curb the distribution and sale of illegal e-cigarettes. Operations like these are an example of ongoing law enforcement work across federal agencies, which are now increasing in frequency with the creation of the task force. 

    “CBP’s trade enforcement mission places a significant emphasis on intercepting illicit products that could harm American consumers,” said Troy A. Miller, Senior Official Performing the Duties of the Commissioner for CBP. “We will continue to work with our enforcement partners to identify and seize unsafe and unlawful goods.” 

    In preparation for the operation, the joint team worked for several months to review shipping invoices, identify potentially violative incoming shipments, and complete other investigative work that led to this successful operation, according to a press release.

    Upon examining shipments, all of which originated in China, the team found various brands of illegal e-cigarettes, including Geek Bar and others. In an attempt to evade duties and detection, most of these unauthorized e-cigarettes were intentionally mis-declared as items with no connection to vaping products and with incorrect values.

    Products that are seized and forfeited to the government will be disposed of in accordance with CBP authorities. 

    “This isn’t the first joint seizure operation, and it won’t be the last – we will continue to relentlessly pursue those attempting to smuggle illegal e-cigarettes,” said Brian King, director of the FDA’s Center for Tobacco Products. “The $76 million these bad actors just put in the dumpster should be a sobering reminder that their time and money would be better spent complying with the law.”

  • Philippine Raids Net Multiple Illicit Vape Sellers

    Philippine Raids Net Multiple Illicit Vape Sellers

    Nationwide raids in the Philippines uncovered illicit seller 408 sellers vape products, whose operations are unregistered or whose products do not carry the appropriate revenue stamps, reports Business World.

    illicit retailers and resellers were found not only in metropolitan Manilla, but also in other places, including Ilocos Sur, Pangasinan and Benguet.

    Beginning June 1, the BIR required all vape manufacturers and sellers to affix internal revenue stamps on their products to indicate tax compliance.

    Republic Act 11900 instructs the Bureau of Internal Revenue (BIR)  to order the immediate recall, ban or seizure from public sale or distribution of vaporized nicotine and non-nicotine products or novel tobacco products not registered with the BIR, including those sold online.

    The BIR intends to conduct regulator raids on illegal vape sellers. “I have ordered weekly raids against illicit vape retailers, wherever they may be found,” said BIR Commissioner Romeo D. Lumagui Jr.

    In the first half of the year, the BIR estimated foregone revenue of around PHP7.2 billion ($124.47 million) from seized vape and tobacco products.

  • Protocol to Eliminate Elicit Trade Celebrates Year Six

    Protocol to Eliminate Elicit Trade Celebrates Year Six

    The Protocol to Eliminate Illicit Trade in Tobacco Products celebrates its sixth anniversary today.

    The international treaty, which currently has 69 parties, aims to eliminate all forms of illicit trade in tobacco products through a comprehensive package of measures to be implemented by countries in cooperation with each other. The protocol builds upon and complements Article 15 of the WHO Framework Convention on Tobacco Control, which requires parties to implement measures to counter illicit trade in tobacco products, such as supply chain control measures and cooperation in law enforcement and prosecution.  

    The protocol also addresses issues such as transnational organized crime, corruption, money laundering, national security, losses in government revenues, poverty and tobacco-related diseases. 

    According to the World Health Organization, Illicit trade accounts for about 11 percent of total global tobacco trade, and its elimination could increase global tax revenues by an estimated $47.4 billion annually.

  • UK Urged to Tackle ‘Illegal’ Disposable Vapes

    UK Urged to Tackle ‘Illegal’ Disposable Vapes

    Photo: BAT

    The U.K. government should be cracking down on illegal vapes rather than introducing redundant policies on cigarettes, according to BAT Chief Corporate Officer Kingsley Wheaton.

    Wheaton made his comments in the context of the British government’s “generational tobacco ban.” The U.K.’s previous Conservative administration announced plans to create a smoke-free generation by banning the sales of cigarettes in the future to anyone who is currently aged 14 or under. The new Labour government is continuing with the policy and is also concerned about the prevalence of disposable vapes.

    Wheaton cited a BAT analysis showing that by the time the generational ban takes force, smoking rates will have already fallen below 5 percent in that age category.

    BAT is instead pushing for licensing for retailers selling vapes. With proper enforcement, licensing will help reduce the number of underage children getting their hands on e-cigarettes and level the playing field for all companies operating in the industry, according to the multinationals.

    “We need to move on to a more mature dialog with real solutions for the problems that are out there,” Wheaton was quoted as saying by Bloomberg.

  • Thailand: Police Seize $300,000 in Illegal Vapes

    Thailand: Police Seize $300,000 in Illegal Vapes

    Credit: Natanaelginting.

    Police conducted a raid on a warehouse owned by a major online e-cigarette dealer in northern Thailand, YAI VAPE, confiscating 30,000 items valued at 10 million baht ($291,000).

    The police discovered e-cigarettes disguised as toys to evade detection. The Ministry of Public Health is advocating for legislative changes to close legal loopholes, according to media reports.

    Pol. Lt. Gen. Nirundorn disclosed that the inquiry commenced with the discovery of the website yaivapeth.com, which promoted e-cigarettes and related items and offered nationwide delivery services.

    Earlier this week, child health and rights experts in the country began calling for more awareness of the dangers of vaping around children, claiming exposure to secondhand vapor from vaping at home could be seen as a violation of Thailand’s child protection laws.

  • Two Arrested in UAE for Selling Illegal Vapes

    Two Arrested in UAE for Selling Illegal Vapes

    Credit: Creative

    Police in the United Arab Emirates city of Ajman arrested two persons of interest on charges of trading and storing 797,000 e-cigarettes without a license and tax evasion.

    Upon receiving a report, the authorities immediately formed a team and raided the site, where large quantities of e-cigarettes from several companies were seized.

    As many as 797,555 electronic cigarettes were found stored in five rooms in the villa, bearing the trademarks of hundreds of electronic cigarette manufacturing companies, according to media reports.

    The authority called on the public to be careful when purchasing goods from non-approved sales locations and not to hesitate to report them, pointing out the dangers of smoking to health and safety.

    It also added that Ajman Police will be on the lookout and will deal firmly with tax evasion crimes that tamper with national security and safety of citizens and residents.

  • PMI Urges More Collaboration Against Illicit Trade

    PMI Urges More Collaboration Against Illicit Trade

    Photo: PMI

    International collaboration, stringent regulation and enforcement are the cornerstones in the fight against illicit trade, according to Rodney van Dooren, head of illicit trade prevention at Philip Morris International.

    Speaking at a trademark and brand protection conference, held in Delhi, July 23-24, van Dooren pointed out how prohibition has not been a viable option, while regulation and enforcement would be the solution to curb illicit trade.

    “Approximately 12 percent of the global cigarettes consumed are illicit, which impacts governments across the globe to the tune of $40.5 billion in tax losses, van Dooren said.

    “According to the Euromonitor report, one in four cigarettes consumed in India is illicit which translates to close to $2 billion in tax losses. There are various smuggling routes around the world for both counterfeit and contraband products, making this challenge not a domestic but a transnational issue that requires transnational solution.”

    Van Dooren urged authorities to better leverage the existing free trade agreements and provisions within the World Trade Organization to raise awareness with transit and source countries.

    “The next recommendation is to promote harmonization of existing gold standard regulations around ASEAN, supported by implementing rules, including the law enforcement agency that has jurisdiction and the related penalties,” he noted.

    “The adoption of the regulation requires manufacturers and exporters to ensure that the goods being exported comply with the destination market regulation. Additionally, in transshipment, adopt regulation that allows for inspection of suspicious shipments and exercise jurisdiction by Customs or any appropriate law enforcement agency on IP-infringing violations. Lastly, strengthen domestic enforcement effectiveness by enhanced cooperation with the legal industry and inter-law enforcement agency cooperation.”

  • BAT Chief Says US Needs Crackdown on Illegal Vapes

    BAT Chief Says US Needs Crackdown on Illegal Vapes

    Credit: Iama Sing

    A surge of illegal vaping products originating from China is negatively impacting the sales of legal alternatives to cigarettes in the U.S., according to the CEO of British American Tobacco.

    Tadeu Marroco advocated for stricter penalties for individuals importing unauthorized vapes into the U.S. “What we are seeing with the lack of enforcement is a reduction of the legal market of vapor,” the CEO said.

    BAT is one of the tobacco producers waiting for the U.S. Food and Drug Administration’s long-delayed completion of its review of marketing applications for vaping products. BAT is a major player in the vaping industry worldwide and in the U.S. with its Vuse brand.

    The delay is leading manufacturers of illicit products to take advantage of the uncertainty by continuing to sell them, Marroco said. The FDA needs to “decide publicly what are the products that are allowed to stay in the market and the products that need to be taken out of the market,” he added, according to Bloomberg.

    The FDA and the U.S. Department of Justice have formed a federal task force spanning multiple agencies to stop the distribution of illegal e-cigarettes. As of early June, the FDA had issued 1,100 warning letters to makers, importers and distributors of unauthorized new tobacco products, including e-cigarettes, and fined more than 55 manufacturers and 140 retailers.

    BAT has launched two claims with the International Trade Commission, one related to patent infringement and another about the importation and marketing practices of illegal vapes.

    The company reported first-half results earlier Thursday, in which it said it’s unlikely to hit a £5 billion ($6.4 billion) revenue target in 2025 for vapes, heated tobacco and nicotine pouches, blaming the lack of a U.S. clampdown on illicit products.

  • FDA Warns Sellers of ‘Drug Bottle’ Vaping Devices

    FDA Warns Sellers of ‘Drug Bottle’ Vaping Devices

    The US Food and Drug Administration has sent warning letters to six online retailers for selling unauthorized e-liquid products from the Bad Drip brand that imitate prescription drug bottles.

    The retailers were also warned for selling unauthorized flavored, disposable vaping products, including those under the brand names Funky Republic and HQD, according to an FDA release.

    “It boggles the mind that someone thought it was a good idea to package a tobacco product to look like a prescription drug bottle,” said Brian King, director of FDA’s Center for Tobacco Products. “There’s no place for this gratuitous and blatantly dangerous packaging, and FDA is committed to taking action against the illegal sale of these products.”

    In a Senate Judiciary meeting yesterday, King noted that products like Elf Bar cannot legally be sold in China because the government there has banned non-tobacco flavored e-cigarettes. Outraged that brands banned in China are sold in the U.S., Texas Senator John Cornyn vowed to introduce legislation to rectify that situation.

    Jefferies analyst Owen Bennett said the Congressional testimony could spur the FDA to approve more products from British American Tobacco and Juul. “This hearing is another example of increasing political pressure for the FDA to act” against unauthorized products, he said in a research note quoted by Bloomberg.