RE-EXPORT OF SMUGGLED CIGARETTES

Smuggled cigarettes have always presented a serious problem to the country’s economy, approximately 01 billion packs of cigarettes get smuggled into Vietnam every year (accounting for 20-22% of the market), causing budget loss for the country from 6,000 to 6,500 billion VND annually... Even though, authorities have increased control measures across the country but the number of arrests and confiscations has been insignificant, accounting only over 1%. 

Some local authorities have therefore proposed the idea of re-exporting these smuggled cigarettes to recover loss. While there are some agreements, many are opposed to the idea.

About 10 million packs of smuggled cigarettes get destroyed every year

In the opposing side’s opinions, while re-expot of contraband cigarettes might bring some economic gain, the difficulties in the implementation process could offset the benefits. In 2012, The Government had launched a pilot program of re-export, but after two years the result was not a success. The pilot result had highlighted many inadequacies of the re-export pratice, specifically: due to the cheap, low-end quality of the smuggled cigarettes, the amount gotten from re-export would not be signicant enough to cover any loss; the lack of storage places makes storing difficult and confisticated products are easily damaged; and since the regulations for the collecting and transporting process of contraband are still pretty lax, violations are likely to occur.

Also, the re-export does not stop smuggling but could make it worse, as showed by many cases before, in which re-exported cigarettes got smuggled back into Vietnam after just a short time. To prevent the re-exported cigarettes not coming back to Vietnam by way of smuggling, the export market should be countries with no borders with Vietnam and the cargo should be shipped via sea. But in practice, very few buyers could meet these criteria. Furthermore, finding the market for re-export is also a difficulty since there would be many technical and quality requirements in foreign markets that these smuggled cigarettes do not meet.

The Ministry of Health had also weighed in on the issue by pointing out that as per Framework Convention on Tobacco Control issued by WHO, of which Vietnam is a registered member, clearly stated that “member states shall take all appropriate steps to ensure that all means of production of contraband cigarettes, cigarettes with imitation brands and confiscated tobacco products are to be destroyed". Currently, there is no other member state of the Framework Convention on Tobacco Control allow re-export of smuggled tobacco.

In 2015, The first-year implementation of the destruction of smuggled tobacco and funding destruction expense, authorities have seized 15.064 cases, confiscated 10.754.247 packs of cigarettes and destroyed 10.147.156 packs. In addition, 33 billion VND has been mobilized and allocated to enforcement authorities and 389 local committees to finance the project.

Translated from article by Long Ha

(Source: danviet.vn)