From: Center for Regulatory Effectiveness
The Canadian Senate revealed that there are ten contraband cigarette manufacturing plants in the US. The statement in the Senate was based on a report from the Royal Candian Mounted Police.
US Food and Drug Administration regulators, in order to adhere to their mandate to “consider…information concerning the countervailing effects of the tobacco product standard…such as the creation of a significant demand for contraband…” need to evaluate the Canadian data.
(Public Law 111-31, §907(b)(2))
Below is an excerpt from the Canadian Senate debate on proposed contraband tobacco legislation.
Honourable senators, the contraband tobacco market is driven largely by illegal operations in both Canada and the U.S. The provinces of Ontario and Quebec have the highest concentration of contraband tobacco manufacturing operations, the majority of the high-volume smuggling points and the largest number of consumers of contraband tobacco.
The RCMP estimates that there are approximately 50 contraband manufacturers operating on First Nations territories in Quebec and Ontario. There are an additional 10 manufacturers on the American side of the Akwesasne Mohawk territory, which is uniquely located at the confluence of borders between Ontario, Quebec and New York State, giving rise to jurisdictional and legal challenges between federal, provincial and state laws.
Organized crime networks are exploiting First Nations communities and taking advantage of the jurisdictional and politically sensitive relationship between those communities, governments and enforcement agencies.
The 2012 National Threat Assessment on Organized and Serious Crime prepared by the Criminal Intelligence Service Canada has identified 58 organized crime groups that are involved in the contraband tobacco trade throughout Canada, 35 of which are currently operating in Central Canada. These criminal networks re-invest profits from the manufacture and distribution of contraband tobacco into other forms of criminality, including the trafficking of illicit drugs, firearms and human smuggling. Furthermore, the RCMP reports that violence and intimidation tactics continue to be associated with the contraband tobacco trade. [Emphasis added]