GENEVA (Reuters) - Health officials on Wednesday provisionally agreed a global deal to combat tobacco smuggling, a trade the World Health Organisation (WHO) said makes harmful smoking too cheap and robs finance ministries of up to $50 billion a year.
The agreement requires manufacturers to be licensed and tobacco packaging to bear markings so that any goods sold illegally can be traced back through the supply chain, including to the companies that shipped them, to see where they were diverted.
Tobacco products sold in duty-free shops and over the Internet are covered by a track and tracing system.
The accord also obliges authorities to provide legal assistance to other countries investigating illicit trade channels and to extradite suspects, WHO officials said.
“Illicit trade in tobacco products is one of the most dangerous trades around at the moment in terms of public health. It’s a way of getting cheap cigarettes, illegal cigarettes, into the hands of young people, poor people, people who are in a vulnerable position,” Ian Walton-George, who chaired the final week-long negotiations, told a news briefing.
“The finance from this trade is very significant, it gets into the hands of organizations which will use it to finance other crime - human trafficking, drug trafficking, weapons trafficking and even worse,” he added.
Formally a protocol to the 2005 Framework Convention on Tobacco Control (FCTC), the world’s first public health pact, the new agreement was reached after nearly five years of negotiations, including a fifth and final round this past week.
Activists welcomed the deal, hammered out by officials from 135 countries, and it is likely to be adopted at a WHO meeting in Seoul this November. It then needs to be ratified by 40 countries to enter into force, a process expected to take two years.
Roughly one in 10 cigarettes, or 600 billion, are smuggled each year by organized gangs, experts say.
“The primary objective of the protocol is to protect public health from this deadly trade,” Corporate Accountability International, a U.S.-based advocacy group, said in a statement.
A network of civil society groups, the Framework Convention Alliance, said that illicit trade “undermines attempts to reduce tobacco consumption through price increases - which has proven to be the most effective measure to curb tobacco use.”
Tobacco kills nearly six million people a year from cardiovascular disease, cancer, diabetes and other illnesses, according to the WHO, a United Nations agency.
Walton-George, who formerly worked for the European Anti-Fraud Office, said that huge profits are made quickly on tobacco products often churned out in temporary secret factories.
“If you have a production line just operating for two or three weeks, they can be making profits of five million euros a week,” he said.
Government exchequers lose $40 to $50 billion a year to smuggling in lost duty and unpaid taxes, according to Dr. Haik Nikogosian, who heads the tobacco treaty’s secretariat.
“There has been some evidence that tobacco manufacturers themselves fuelled illicit trade,” he said on Wednesday.
Several countries in which major tobacco companies are based, including the United States and Switzerland, will not be subject to the smuggling clampdown as they never ratified the original treaty, although they do have their own measures.
Industry giants Philip Morris International and British American Tobacco have previously said they would back a pact with effective measures against illicit trade.
“We firmly believe that the only way to stop these smugglers, counterfeiters and tax evaders - who have links to weapons, drugs, people trafficking and organized crime - is for regulators, law enforcement authorities and the tobacco industry to work together,” a BAT spokesperson said on Wednesday.
Editing by Andrew Osborn