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Date: April 29, 2024 Mon
Time: 9:13 pm
Time: 9:13 pm
Results for contraband goods
2 results foundAuthor: Leuprecht, Christian Title: Smoking Gun: Strategic Containment of Contraband Tobacco and Cigarette Trafficking in Canada Summary: anadians think of contraband tobacco and cigarettes as a nuisance at best, or a tax-revenue problem at worst, not in terms of organized crime or terrorism. This authoritative study of the size, scope, and operations of contraband tobacco and cigarettes in Canada reveals this to be a false dichotomy. Canadian law enforcement seizures of contraband tobacco routinely include high-powered weapons, hard and designer drugs, stolen vehicles and other merchandise, and lots of cash. Indeed the week this report was released, police in Quebec carried out 70 raids and made 60 arrests against an international criminal network involved in drug and contraband tobacco trafficking, and money laundering, in the largest anti-contraband operation to date. Contraband tobacco is lucrative, it is produced and trafficked systematically alongside other illicit goods, and Canadian crime syndicates are heavily invested in its proceeds. Globally, money from contraband tobacco and cigarettes is a major source of revenue for the likes of ISIS, al-Qaeda, and Hezbollah, whose contraband fundraising activities in North America have been subject to indictments. Producers and traffickers of contraband prey on the most vulnerable population groups in Canadian society. They brazenly flaunt restrictions on procurement, manufacturing, packaging, promotion, and sale of tobacco and cigarettes. Their ranks count hardened Mafioso and notorious criminal bikers who exploit Native communities. Tobacco farmers divert crops to the illicit market; some cooperate to reap higher profits, some uncooperative ones are coerced or have their tobacco stolen. Compared to illicit drugs, materials and manufacture are readily accessible, and the market for contraband tobacco and cigarettes is huge, highly profitable and easy to reach. The loss factor is minimal because chances of detection are small, penalties lenient (if any are imposed at all), and social stigma less than for alternative illicit activities. Canada's contraband market in tobacco and cigarettes is estimated at more than $1.3 billion, which rivals the narcotics market. In Ontario alone, the illicit cigarette market is roughly $500 million annually and forgone tax revenue between $1.6 billion and $3 billion. Enforcement is hampered by entangled jurisdictional issues, collective action problems within and across jurisdictions, scarce enforcement resources, legislative gaps, and, it seems, lack of a comprehensive plan, let alone strategy. There has been some institutional learning, and worthwhile innovations at different jurisdictional levels - federal, provincial, and First Nations. This study explores and compares some of these innovations to forge a comprehensive approach to contraband tobacco and cigarettes. Although law enforcement has a role to play, like so much other criminal activity, we are clearly not going to arrest our way out of this problem. Ultimately, a comprehensive strategy needs to change the incentive structures in place on both the demand and supply sides, optimize legislative and regulatory frameworks, and improve inter-agency and inter-jurisdictional coordination. Key recommendations include: Revenue sharing with First Nations The collection and administration of an excise tax by First Nations governments promises a sustained stream of revenue for community development and infrastructure projects and a significant incentive to reduce tax evasion in cigarette sales to non-Natives. In return for greater fiscal autonomy, sales to ineligible customers would be curbed by reducing the quota allocation to First Nations. Halting diversion from legitimate growers in Ontario Ontario is the only Canadian jurisdiction where tobacco is grown. Although the transition from the Ontario Flue-Cured Tobacco Growers' Marketing Board to the Ontario Ministry of Finance has tightened monitoring and enforcement of raw leaf tobacco, three changes will hamper the ability to investigate and interrupt diversion of tobacco to illicit markets: once harvested, growers no longer need to identify the source and the final destination of raw leaf; labelling information that tracks baled raw leaf tobacco is no longer required; and reporting frequency has been loosened from weekly to quarterly. Criminalizing the unlicensed growth, sale, purchase, and/or transport of raw leaf would acknowledge the serious consequences of diverted raw leaf and empower police to reinforce the licensing regime. Federal coordination and a Tobacco Ombudsman C-10 opens the opportunity for the federal government to facilitate coordination of a unified taxation structure for tobacco and cigarettes for all Canadian peoples, across provinces and reserves. This authority could be administered and enforced by a Canadian Tobacco Ombudsman under the aegis of the Minister of Public Safety. An ombudsman could improve coordination and communication among law enforcement agencies and between law enforcement and other regulatory bodies. Enforcement: Lessons learned Ontario recently announced a Contraband Tobacco Enforcement Team that stands to draw lessons from Quebec, where Project ACCES has proven quite successful over more than a decade. Moreover, it and its outcomes come at no additional cost to government. In fact, it more than pays for itself: by reaping fines and seizures, and realizing a growing tax base due to deterring contraband without a change in smoking rates, the project has seen a return of as much as 16 times the investment. Public awareness Consumers of contraband tobacco are blissfully unaware of their habit's connection with organized crime; greater awareness might stem consumption, especially if on-reserve manufacturers associated with organized crime are clearly distinguished from those who are not. Contraband has a more pervasive impact on the public safety of Canada, Canadians, and Canadian interests than terrorism has ever had. If Canadians only knew, they would demand that government act accordingly. Now they do. It is time to act to ensure the benefits of taxation accrue to all citizens instead of organized criminals and terrorists. Details: Ottawa, ONT: Macdonald-Laurier Institute, 2016. 65p. Source: Internet Resource: Accessed September 21, 2016 at: http://www.macdonaldlaurier.ca/files/pdf/MLILeuprechtContrabandPaper-03-16-WebReady.pdf Year: 2016 Country: Canada URL: http://www.macdonaldlaurier.ca/files/pdf/MLILeuprechtContrabandPaper-03-16-WebReady.pdf Shelf Number: 145611 Keywords: Cigarette Smuggling CigarettesContraband GoodsContraband TobaccoIllegal CigarettesIllegal TobaccoOrganized CrimeTax Evasion |
Author: Zhang, Bo Title: What Effect Does Tobacco Taxation Have on Contraband? Debunking the Taxation - Contraband Tobacco Myth Summary: Research demonstrates that many factors are associated with contraband tobacco use, including: easy access, misconceptions about "legal" purchase of cigarettes from First Nations' Reserves, insufficient enforcement and penalties, and organized criminal activity. It is frequently claimed that tobacco taxes cause smuggling. For example, a 2010 Fraser Institute Report, Contraband Tobacco in Canada: Tax Policies and Black Market Incentives, concludes that "Our research identifies federal and provincial tobacco excise taxes as a primary precipitating factor in the growth of this black market" (i.e., contraband cigarettes market). Does increasing tobacco tax necessarily increase contraband? To debunk the taxation and contraband tobacco myth we provide evidence from the literature, present Ontario trend data on tobacco taxes, consumption, prevalence and contraband, compare tax and price data in Canada, and critically review the Fraser Institute Report. Key Findings: - Evidence from many countries shows that tobacco tax increases will reduce tobacco use and increase tobacco revenues, even when there is some small amount of accompanied contraband tobacco use. Many of the small proportion of smokers who might move to contraband tobacco return to legal tobacco within a short period of time. - Accompanying increased tobacco taxes with anti-contraband measures are effective in keeping leakage to contraband tobacco. - Self-reported data on purchase of contraband cigarettes based on large population-based surveys show a significant decline between 2008 and 2012 in Ontario - a period during which tobacco taxes increased moderately. - The province of Quebec has successfully decreased contraband tobacco use substantially while maintaining and now raising tobacco taxes. - The Royal Canadian Mounted Police seizure data of contraband cigarettes also show a significant decline between 2008 and 2012 in Canada. - Many factors are associated with contraband tobacco use, including: easy access, misconceptions about "legal" purchase of cigarettes from First Nations' Reserves, insufficient enforcement and penalties, and organized criminal activity. Cigarette smoking prevalence and consumption has been declining since 2007 in Ontario, while tobacco taxes and tobacco tax revenue have been relatively stable during the same period, further supporting a decreasing trend in contraband tobacco use in Ontario. - Ontario and Quebec have the lowest tobacco taxes among all provinces in Canada, yet the number of consumers of contraband tobacco is the largest in these two provinces. - The Fraser Institute Report's conclusion is not supported by the evidence cited in the report and missed substantial evidence from the literature. Our conclusion is that the benefits of increased tobacco taxes outweigh any minor increase in contraband use that might occur. Tax increases are best accompanied by more stringent anti-contraband measures. Details: Toronto: Ontario Tobacco Research Unit, 2015. 32p. Source: Internet Resource: Accessed September 21, 2016 at: http://otru.org/wp-content/uploads/2015/02/special_tax_contraband_final.pdf Year: 2015 Country: Canada URL: http://otru.org/wp-content/uploads/2015/02/special_tax_contraband_final.pdf Shelf Number: 145614 Keywords: CigarettesContraband GoodsContraband TobaccoIllegal TobaccoTaxesTobacco Smuggling |