Tag: black market

Research: Vaping Flavor Bans Boost Black Markets

Credit: Luxor Photo
Flavor bans are creating black markets that cost U.S. states a massive amount of money in lost taxes, according to the latest research.
Just go to any online consumer-to-consumer website and flavored vaping and other tobacco products are for sale in states with flavored tobacco bans. A quick search for menthol on sites such as Craigslist and OfferUp in California or Massachusetts, where flavored products are banned, will yield results for every flavor of vaping product from apple to vanilla for sale. You can also find nearly every brand of menthol cigarettes for purchase on the online black market.
New York, New Jersey and Rhode Island also have barred the sale of flavored vaping products. Massachusetts and California banned all flavored tobacco items, including flavored cigars, cigarettes and vaping goods. Since California’s flavored tobacco ban went into effect on Dec. 21, one week after the U.S. Supreme Court blocked R.J. Reynolds Tobacco Co.’s contention that the new state law conflicted with federal law, the state’s black market for flavored tobacco products has grown exponentially.
Stat News reported that in January it visited 24 California vape shops throughout Oxnard, Ventura, Pasadena, El Monte, Carson and West Hollywood—all of which have had bans on flavored vapes on the books for at least a year and most for two or more years. Seventeen of the shops, or 70 percent, were selling the products anyway. In Oxnard, where the news group visited five shops, none of the stores sold flavored vapes.
States in the proximity of states that have enacted flavor bans have some of the highest tobacco smuggling rates in the country. A report by the nonpartisan Tax Foundation found that New York has the highest inbound smuggling activity, with an estimated 53.5 percent of cigarettes consumed in the state deriving from smuggled sources in 2020. New York is followed by California (44.8 percent).
New Hampshire has the highest level of net outbound smuggling at 52.4 percent of consumption. This is likely due to the state’s relatively low tax rates and proximity to states with strict tobacco regulations and high taxes. The report said the move by other Northeast states to raise cigarette taxes and ban certain tobacco products have made cigarette smuggling a lucrative criminal initiative.
“People respond to incentives,” said Adam Hoffer, the Tax Foundation’s director of excise tax policy. “As tax rates increase or products are banned from sale, consumers and producers search for ways around these penalties and restrictions.”
Last year, JAMA Internal Medicine published a study about the impact of banning flavored tobacco products in Massachusetts. The study found that the sale of flavored tobacco decreased following the ban. However, when comparing sales in Massachusetts with sales across 27 other states, the authors found that sales had decreased more in Massachusetts than in the control states.
“Such a result would indicate that the flavor ban has been a success. Unfortunately, the study left out a very important piece of information: cross-border trade,” Ulrik Boesen, also with the Tax Foundation, stated at the time. “The end result of the ban, in fact, is that Massachusetts is stuck with the societal costs associated with consumption while the revenue from taxing flavored tobacco products is being raised in neighboring states.”
A 2022 report from the Massachusetts Multi-Agency Illegal Tobacco Taskforce found that in 2021, state police and the Department of Revenue seized more than 5,000 packs of cigarettes and more than 100,000 vapor products. It also details multiple investigations and prosecutions, including ones leading to sentences of six months to a year. Some of these were for smuggling that predate the flavor ban, but others clearly involve it.
For example, the report notes an ongoing investigation into a February 2022 seizure of more than 5,000 flavored e-cigarettes as well as a motor vehicle stop that netted “a large quantity of untaxed flavored ENDS [electronic nicotine-delivery system] products, cigars, smokeless tobacco and cigarettes” representing $21,000 in unpaid taxes. “As it happens, looking at the New England region as a whole confirms that the flavor ban did not work as intended. Sales moved around rather than disappeared, and the ban evidently did not impact consumption,” stated Boesen. “Total sales for the region decreased by slightly more than 1 percent comparing the 12 months preceding the ban to the 12 months following the ban—largely comparable to the national sales trends.”
February 22, 2023
Philippines: Group Wants Crackdown on Illegal Vapes

Credit: Tupungato
The Philippine Tobacco Industry (PTI) has called on the Philippines’ Bureau of Internal Revenue (BIR) to crack down on illicit vapor products, reports The Manilla Times.
In a letter sent recently to BIR Commissioner Romeo Lumagui Jr., the group emphasized that the full implementation of the Vaporized Nicotine and Non-Nicotine Products Regulation Act “will ensure that the public is protected against the dangers of using illicit products as well as the collection of appropriate taxes aimed at helping our economy.”
The Act, which became law in July 2022, regulates the importation, manufacture, sale, packaging, distribution, use and communication of vaping products such as e-cigarettes and heated tobacco products.
Under the laws implementing rules and regulations (IRR), e-commerce platforms, e-marketplaces and other similar online platforms are mandated to allow only Department of Trade and Industry and BIR-registered distributors, merchants or retailers of vape products, devices and novel tobacco products to sell on their website or platform.
To ensure vape products are made inaccessible to minors, the IRR also requires vapor product refill receptacles to be tamper- and child-resistant. Products packaged or labeled with flavor descriptors appealing to minors are prohibited.
“We are also hoping that the BIR will closely work with enforcement agencies such as the Philippine National Police, The Armed Forces of the Philippines as well as relevant anti-illicit trade groups from the Bureau of Customs to make sure the law and its IRR are effectively implemented,” the PTI said.
The PTI members include Japan Tobacco International Philippines, Associated Anglo-American Tobacco Corp. and Philip Morris Fortune Tobacco Co.
January 20, 2023
UK Trading Standards: Fake Vapes a Major Threat

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According to UK Trading Standards officials, shops selling illegal vapes and the sale of vaping products to children are the top threats on the country’s High Streets.
Hundreds of thousands of vapes that flout current laws have been seized, according to BBC.
UK laws limit how much nicotine and e-liquid is contained in vapes, and which health warnings are required on packaging.
But some shops are selling vapes containing 12,000 puffs of e-liquid, when the law permits only about 600. Others contain illegally high levels of nicotine.
In the north-east of England alone, more than 1.4 tonnes of illegal vapes were seized from shops in the second half of last year, while in Kent there was a dramatic rise in counterfeit vaping products seized at Channel ports in December, with more than 300,000 removed.
January 19, 2023
Luxury Cars Used to Smuggle Vapes Into Singapore

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Criminals in Singapore are not using just trucks and trailers to smuggle vaping products. They are also using luxury cars in an attempt to evade detection and capture.
Based on seizures and captures carried out by the Immigration and Checkpoints Authority (ICA) enforcement, many different types of luxury vehicles are being used for smuggling activities, namely Mercedes Benz, BMW, Audi and high-end Toyota Vellfire and Alphard MPVs (Multi Purpose Vehicles), according to media reports.
“Perhaps these syndicates feel that the ‘status’ of being perceived as being rich by driving luxury vehicles can evade detection by enforcement. This is why the syndicates choose all sorts of different luxury vehicles to carry out smuggling of e-cigarettes and vape liquid,” according to an unnamed source.
The ICA’s employs hi-tech X-Ray machines to detect smuggled items. Based on information received, the Singapore enforcement authorities recently confiscated 792 e-cigarettes that were smuggled from Malaysia using an Audi vehicle.
Also confiscated were 3,093 e-cigarette refill pods, apart from 4,000 e-cigarettes and 3,120 e-cigarette refill pods that were hidden in another luxury vehicle, a Mercedes Benz.
“On Nov 23 last year, the syndicate used an Audi vehicle to smuggle 2,700 pods filled with e-cigarette refills apart from 100 disposable e-cigarettes. The seizure also yielded 145 e-cigarette products that were concealed under the seats and floor of a Toyota Vellfire MPV,” the source said.
January 19, 2023
Australia Group Wants Harsher Rules for Illegal Sales
Credit: Alexey Novikov
Health officials in Australia are demanding a crackdown on vaping sales violators with stricter laws and stiffer penalties due to a surge in illegal vape importers, vendors and advertisers.
Australian shop keepers that have sold outlawed nicotine vapes have been fined more than $730,000 in the last 13 months, up $110,000 from the previous year, according to the Daily Mail.
New data from the Therapeutic Goods Administration shows the continuous sale of illegal e-cigarettes is taking a massive toll on health budgets. However, fighting the black market trade is a major expense as the suspected illegal e-cigarettes have to undergo laboratory testing to find traces of nicotine.
Australia took action against the growing epidemic by outlawing nicotine vapes in Oct. 2021, but the products have remained readily available on the black market.
January 9, 2023
Authorities Raid Shops, Seize E-Cigarettes in Oman

The Consumer Protection Authority (CPA) in the country of Oman raided a number of shops suspected of selling vaping products.
The Sultanate banned the sale and marketing of e-cigarettes in 2015. However, importing, use and possession are legal.
According to a statement by the CPA, during inspection field visits carried out by a CPA control team to shops and markets in the Wilayat of Shinas in the capital city of Muscat, “a number of electronic cigarettes were seized in shops selling tobacco and its derivatives.”
The Authority clarified that this behavior is in violation of its rules regarding the ban on the circulation of e-cigarettes and hookahs, according to media reports.
January 8, 2023
English Channel Ports Seeing Boost in Fake Vapes

The port town of Dover, England, with the view facing towards France. The port is used for passengers and commercial goods. (Credit: Credit ProMicroStockRAW)
The number of potentially unsafe disposable vapes being seized at English Channel ports has risen “dramatically”, according to trading standards.
More than 300,000 of the counterfeit products had been seized during December, Kent Trading Standards said, according to the BBC.
“A lot of our work has been focused on retail outlets but this is now higher up the supply chain,” James Whiddett, spokesperson for KTS, said. “We’re stopping these devices which may have about 10 times the legal limit of nicotine in them.”
He said the current legal limit on the tank on disposable vapes is 2ml, which is the equivalent of 600 puffs.
“The products which we’re seeing coming into the country at the moment have 3,500 puffs on them and some have 7,000 puffs, so they are illegal and cannot be supplied to anyone,” he said.
Whiddett said the demand for disposable vapes had risen dramatically over the last nine months.
“The flavors, the fact that people don’t have to put their own liquids in, means it’s convenient and easy,” he said. “We’re not sure where these illegal vapes were going, and our investigations are ongoing.”
Gillian Golden, CEO of the Independent British Vape Trade Association, said non-compliant vape products are also associated with non-compliant sales, “often to underage consumers.”
She said the association would continue to assist trading standards over non-compliant vaping products.
December 27, 2022
China Gives 12 Years to Heat-not-Burn Smugglers

China’s Intermediate People’s Court of Fangchenggang City, Guangxi has sentenced a number of people for smuggling the hardware and tobacco sticks used in heated tobacco products.
It’s the first time China has made a judgement in a heat-not-burn smuggling case, according to the Fangcheng Customs Anti-smuggling Branch of the Nanning Customs Anti-smuggling Bureau.
The defendants were found guilty of smuggling ordinary goods and articles (IQOS Heatsticks and hardware), and were sentenced to fixed-term imprisonments ranging from 4 to 12 years and fines ranging from ¥200,000 to ¥1 million. The exact number of people sentenced was not reported.
One defendant was found guilty of money laundering and sentenced to 10 months in prison, suspended for one year, fined ¥20,000 yuan, and more than ¥420,000 in money laundering illegal proceeds was recovered.
The investigation began on April 21, 2021, under the unified deployment of the Anti-smuggling Bureau of the General Administration of Customs, the Nanning and Hangzhou Customs Anti-smuggling Bureaus, in conjunction with the tobacco departments of Guangxi, Zhejiang, Guangdong, Hunan and other places, synchronized in Fangchenggang, Guangxi, Shaoxing, Zhejiang, and Shenzhen, Guangdong, according to the release.
The illicit goods were collected and seized, and three criminal gangs smuggling the illegal products were successfully detained, and about 4,500 heat-not-burn products were seized.

December 2, 2022
ELFBAR Investigation: Warnings About Fake Vapes

Credit: Elfbar
Potentially dangerous counterfeit disposable vaping products are flooding into the UK market, according to an investigation by ELFBAR, a Chinese manufacturer. Retailers and consumers are being warned that the illegal products are being produced in “squalid Chinese factories with no license for manufacturing and regard for product safety,” according to a press release.
Since the launch of counterfeiting action by ELFBAR in June 2021, it has cracked down on more than 120 counterfeit production and sales targets, including factories, warehouses, logistics, and foreign trade companies, seizure of more than 2 million finished counterfeit ELFBAR products, millions of packaging boxes, anti-counterfeit codes, semi-finished vaping pipes and other accessories.
Victor Xiao, the Chief Executive of ELFBAR, said consumers would be horrified if they saw the conditions in which these products are made. “The criminals behind these counterfeit products care nothing about product safety or the health of consumers and they cut every corner possible to maximize their profits,” he said. “Quite frankly, the conditions in these factories are absolutely squalid where workers man production lines in filthy conditions with no regard to hygiene at all.”
ELFBAR is clamping down hard on the illegal vape market and is building up an intelligence dossier on fake products as the counterfeiters get smarter and more efficient. While ELFBAR works hard to stop the fraudsters at source it realizes that it is impossible to stop all the fakes from getting through and is now warning retailers that they are the last line of defence to protect consumers.
“While it can be hard to tell a fake product from the real thing just by looking at it, there is no excuse for any retailer to sell a counterfeit ELFBAR product. Retailers can scan a code on the packaging to check the authenticity of the product and we urge them to do this for every product they sell,” Xiao said. “Fighting fakes is a priority for ELFBAR and we remain zero tolerance for these fake vapes right across the entire industry. The UK market is very important to us and we will continue to do all in our power to ensure that British consumers have confidence in their vapes.”
John Dunne
John Dunne, director general of the UK Vaping Industry Association (UKVIA), said he applauds ELFBAR for standing up against the counterfeiters.
“They pose a significant risk to the harm reduction reputation of the global vaping industry. It’s why we have called for a retail licensing scheme here in the UK to prevent the sale of illicit products and much higher penalties of at least £10,000 per instance for retailers who break the law in this way,” he said. “Similarly, the counterfeiters and those who trade fake vapes along the supply chain need dealing with in a way by the relevant authorities that put them off from doing it ever again.”
November 28, 2022
RELX Again Warning Consumers of Fake Goods

RELX is again warning consumers in the Philippines against buying counterfeit e-cigarettes that are being offered in markets. The use of fake vaping products may result to serious health consequences, warns the company.
Through one of its initiatives, RELX has already had more than 100,000 illicit e-cigarette products removed from the market to date, emphasizing the massive reach of these unregulated goods, according to media reports.
The e-cigarette manufacturer’s statement also comes after it successfully won a court case in China against a company which infringed on the registered design of one of RELX’s high-selling products, RELX Essential.
“Preventing the production and sale of counterfeit e-cigarette products is one of the main challenges currently facing the e-cigarette industry. Counterfeit e-cigarette products pose serious potential health risks to consumers,” said Patrick Drilon, RELX International head of External Affairs – Philippines.
“While governments and local authorities work to implement stronger enforcement methods to rid the market of these harmful products, international e-cigarette companies can and should do more to aid them in this global fight to offer consumers products that abide by safety standards by undergoing stringent quality checks.”
October 24, 2022