Intensifying the Fight against the Illicit Trade in Tobacco

On Thursday, Japan Tobacco International (JTI) signed a Memorandum of Understanding with the Luxembourg’s Ministry of Finance, represented by the “Administration des Douanes et Accises” (Administration of Customs and Excise).

Each year, large quantities of cigarettes are subject to counterfeiting and smuggling. Counterfeiting consists of producing imitations of brand cigarettes and selling them as authentic products. Smuggling concerns the selling of brand cigarettes without paying taxes and excise duties.

International trafficking
The European Union is not spared from these fraudulent actions. Each year, counterfeit cigarettes and tobacco deprive the member states of considerable tax and customs revenues and cause resellers an important loss of earnings. Furthermore, the composition of these fraudulent products is unknown as they are not subjected to quality controls.

Mr Jacques Coffeng, CEO of JTI Benelux explained “The concerned manufacturers and countries need to combine efforts and cooperate in order to efficiently battle the illegal trade of tobacco products. To stifle this phenomenon, which sullies the reputation of our company and our industry, JTI has concluded Memoranda of Understanding with several European Union member states executing the agreement with the European Union and its member states of December 2007, especially with France, Italy, Switzerland, the United Kingdom, Ireland and Belgium.” This initiative is enforced by the recent signature of a cooperation agreement with Luxembourg’s Administration des Douanes et Accises, in the presence of its director Mr Alain Bellot, signatory of this agreement.

United commitment
“For the Grand Duchy of Luxembourg, these commitments are a question of solidarity, comparable to the political and economical solidarity between the countries of the European Union,” states Mr Pierrot Reding, Division Head of the Excise Division at the “Administration des Douanes et Accises”. In this respect, the European Union member states need to be able to trust their Luxembourgish partner unconditionally. “As Luxembourg can count on its partners to guarantee the respect of the Schengen Agreements and the battle against illegal immigration, the country needs to proceed just as meticulously on its own territory and support its neighbours in the fight against cigarette counterfeiting.”

In practical terms, the cooperation agreement provides for an exchange of information. The goal is to identify possible illegal activities and to discourage them. Whereas the authorities will inform JTI of control and seizure operations on the national territory, JTI will give complete access to its database and “Track and Trace” systems, which allows for an exact follow-up of its products’ sale and distribution.

JTI will also support the training of the civil servants, notably the staff of the “Administration des Douanes et Accises”. The signature of this cooperation agreement between JTI and the Grand Duchy of Luxembourg will favour the implementation of long-term measures to fight efficiently against the illegal trade of tobacco products.

JTI is a member of the Japan Tobacco Group of Companies (JT), a leading international tobacco product manufacturer. It markets world-renowned brands such as Winston, Mild Seven and Camel. Other international brands include Benson & Hedges, Silk Cut, Sobranie of London, Glamour and LD. With headquarters in Geneva, Switzerland, and net sales of USD 10.2 billion in the fiscal year ended 31 December 2010, JTI has more than 25,000 employees and operations in 120 countries.


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