Seven-hundred police officers conducted 70 raids, arresting nearly 60 people to break up a vast cross-border tobacco smuggling ring accused of using profits to purchase cocaine and launder money as far away as Europe, while defrauding the Canadian government of half a billion dollars in lost tax revenue.
The sheer size and scope of this criminal enterprise, and the police operation required to break it up, grabbed headlines across North America.
In the 30 years of my career that I have spent on global investigations — the last 10 focused exclusively on the links between tobacco smuggling and criminal groups, a common theme has emerged: If there is money to be made selling something, organized criminal groups will sell it.
Each year, more than 400 billion cigarettes are sold illegally across the globe, making cigarettes the most widely smuggled legal product in the world. Why? No other commodity is as easy to smuggle, or carries such light legal penalties in exchange for such massive profit.
This month, ‘plain packaging’ laws initiated in Australia about one year ago come into force in most of Europe. Australia was the first country to introduce plain packaging, which bans the use of all trademarks on tobacco packs and requires that all tobacco products be sold in drab, virtually identical, government-designed packaging.
The objective: Reduce smoking. The results so far: A win for criminals.
Here in Canada, after the massive police raid in March, the Trudeau government announced it will also introduce plain packaging — music to the ears of those recently handcuffed by Canadian police.
Plain packaging makes smugglers’ lives easier. The introduction of “plain packaging” for all tobacco products sold in Australia is a perfect example of a government unwittingly making the ‘easy’ crime of tobacco smuggling even easier and more profitable.
For example, a comprehensive 2014 KPMG report found a nearly 25% increase in illicit tobacco across Australia just two years after plain packaging came into force. The problem has become so serious, that the Australian government has been forced to set up a dedicated illicit tobacco strike team.
In Ireland, the Provisional IRA already rank among the world’s most prolific cigarette smugglers. Recent intelligence suggests they are studying how plain packaging — which will be implemented in Ireland this month — has caused illegal tobacco sales in Australia to soar. Nearly 30% of cigarettes sold in Ireland are illegal, depriving government coffers of 600 million euro (C$800 million) per year. Expect both figures to grow after May.
Across the Irish Sea, illegal tobacco costs the United Kingdom’s government a staggering £2 billion (C$3.71 billion) annually in lost revenue.
Naturally, products sold by criminals cannot be trusted. Illegal tobacco poses significant health risks. Criminals do not follow strict manufacturing rules, often using substances such as floor sweepings and worse. Nor do criminals care who buys their products. They have no qualms about selling cheap cigarettes to minors and there is nothing to stop them from doing so.
Plain packaging does not make counterfeiting, contraband and smuggling harder; it makes it easier. If Canada and other countries follow Australia, criminals around the world will rub their hands together with glee.
Resource: http://www.torontosun.com/2016/05/11/plain-tobacco-packing-a-boon-to-criminals
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