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History has shown consistently that whenever there is substantial demand for a product, unscrupulous elements invariably spring up to exploit the market. They do this in many ways such as creating and smuggling counterfeit products into the market, circumventing laid down rules in terms of taxes, import and excise duties requirements, sale of banned products, among others. This illegal trade of the product undermines a country’s economy in many ways.
Cigarettes are the most illicitly traded products in the world. This is because the product is light, easy to conceal and easy to transport across vast distances and across international borders. Trade in illicit products also provides a good return to the actors.
Information on the website of the World Health Organisation, (WHO), reveal that governments collectively lose between $40.5 billion in revenue to illicit trade in tobacco and in some cases, illicit tobacco accounts for between 40% and 50% of the country’s tobacco market. Illicit tobacco trade is also more prevalent in low and middle-income countries than in high-income countries.
The Financial Action Task Force, (FATF), an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction reported in 2012 that illicit trade in tobacco was prone to money laundering and the illicitly generated proceeds were used to fund other crimes and terrorism.
There are several global programmes aimed at tackling the scourge of illicit trade in tobacco. WHO, through the Framework Convention for Tobacco Control, (FCTC), which is a comprehensive treaty that provides an internationally coordinated response to tobacco regulation and control and sets out specific steps for governments in addressing tobacco use, has established the Protocol to Eliminate Illicit Trade in Tobacco Products. … Read More...