Illicit Trade: The FCTC Commitments

18 Aug 2008

Under Article 15.1 of the Framework Convention on Tobacco Control (FCTA), ‘Parties recognize that the elimination of all forms of illicit trade in tobacco products, including smuggling, illicit manufacturing and counterfeiting, and the development and implementation of related national law, in addition to subregional, regional and global agreements, are essential components of tobacco control’.

Illicit trade means any practice or conduct prohibited by law which relates to production, shipment, receipt, possession, distribution, sale or purchase, including any practice or conduct intended to facilitate such activity (Article 1).

Article 15 sets out a range of measures which Parties to the FCTC are required to implement to combat illicit trade. Each Party shall:

  • monitor, document and control trade in tobacco products, including monitoring, documenting and controlling the movement of products and their legal status (Article 15.2), monitoring and collecting data on cross-border trade, including illicit trade (Article 15.4(a)), and monitoring, documenting and controlling the storage and distribution of tax/duty suspended products (Article 15.4(d));
  • ensure that all tobacco product packages are marked to assist Parties in determining the origin of the product, and to indicate the final destination of the product or otherwise assist in determining whether the product is legally for sale on the domestic market (Article 15.2);
  • enact or strengthen legislation against illicit trade (including in counterfeit and contraband cigarettes), with appropriate penalties and remedies (Article 15.4(b));
  • take appropriate steps to ensure that confiscated manufacturing equipment and counterfeit and contraband tobacco products are destroyed or disposed of (Article 15.4(c)), and adopt measures as appropriate to enable the confiscation of proceeds derived from illicit trade (Article 15.4(e)); and
  • as appropriate and in accordance with relevant laws and agreements, cooperate internationally, including by assisting other Parties in determining the point of diversion of products into the illicit market (Article 15.2), exchanging information among customs, tax and other authorities (Article 15.4(a)), and promoting cooperation relating to investigations, prosecutions and proceedings between national agencies and relevant regional and international intergovernmental organizations (Article 15.6).

Parties must also consider or endeavour to adopt further measures to control the supply and distribution of tobacco products and to assist in prevention and investigation of illicit trade, including licensing (Article 15.7) and tracking and tracing (Article 15.2(b)).

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