Illicit whites flooding Europe

| October 10, 2016

EurActiv.com has reported that illicit whites, or cigarettes manufactured specifically for the black market, are flooding Europe.

The story quoted Alvise Giustiniani, vice president of the illicit trade strategy and prevention at PMI, as saying that this segment now accounted for 35 percent of the EU’s black market.

Giustiniani said it had been the success of the policies implemented under co-operation agreements between the major manufacturers and the EU and its members that had driven criminals to move away from contraband and counterfeit into illicit whites.

The anti-illegal trade agreements between the four major multinational tobacco manufacturers, the EU Commission and member states were aimed at cracking down on the illegal trade in cigarettes by requiring the four companies to secure their supply chains through marketing and tracking-and-tracing systems, and to make two types of payment to the European Commission and the member states of the EU.

These payments comprised annual fixed sums payable from 2004 up to 2030, ranging from US$200 million to US$1 billion; and ‘seizure payments’ equivalent to 100 percent of the evaded taxes for seizures of genuine (not counterfeit), diverted products above quantities of 50,000 cigarettes in one haul, rising to 500 percent if total annual seizures exceed 150-450 million cigarettes.

The payments to the EU, which go mostly to member states but also to the Commission, are in theory for use in fighting the legal trade but they are not earmarked for that purpose.

However, the European Commission decided in July not to extend the 12-year agreement with PMI, saying that it would instead focus on provisions of its new Tobacco Products Directive and World Health Organization protocols to continue the battle against the illegal tobacco trade.

The EU has similar agreements with Japan Tobacco International, which is due to expire in 2022, and with British American Tobacco and Imperial Brands, both of which are due to end in 2030.

Category: Breaking News

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