With such a system, authorities would not be able to stop one of the most toxic parts of the illicit cigarette trade: smuggling.
While counterfeiting costs manufacturers more (and the consumers by having lower-grade products), smuggling illicit cigarettes has a profound effect on those who have never even touched a tobacco product. Smuggling can be defined as moving products illegally into or out of a country - meaning no tax is paid, and the product cannot be monitored. Within the tobacco industry, the most heavily smuggled products are known as “illicit whites”. According to the UK’s Tobacco Manufacturers’ Association, “Illicit Whites are cigarettes manufactured for the sole purpose of being smuggled into and sold illegally in another market.” In total, the Illicit White trade counts for nearly half of the global market.
Most illicit whites are manufactured outside the EU, and because no tax is payed, they are sold for significantly reduced prices inside Europe. Most consumers aren’t aware that paying less for a cigarette means much more than taking money away from taxpayers. In fact, without true knowledge of the subject, it’s understandable that people would equate the smuggling of tobacco with that of chocolate. But beyond the lost tax revenue, there is much higher price to pay for smuggling in the form global terror.
It should come as no surprise that many organised crime syndicates are involved in the illicit white trade, but now there is increasing evidence that links smuggled tobacco to global terrorism organisations in nearly every continent.
In Africa, a stretch of 2,000 miles which was previously known as the “Salt Road” is now dubbed the “Marlboro Connection”. It has become a hotbed of illegal cigarette trade, and one of its primary benefactors is the Al-Qaeda in Islamic Maghreb (AQIM), an Algerian-based terrorist group with close ties to Osama Bin Laden and his followers. Their lead smuggler named Mokhtar Belmokhtar is accused of kidnapping 32 European tourists and murdering 13 Algerian customs officers. In fact, many scholars believe that the smuggling cigarettes provides the majority of the terrorist group’s funding. But smuggled tobacco’s impact goes far beyond North Africa.
In the USA, 16 Palestinian men were arrested for a cigarette smuggling rig that ran across much of the Eastern Seaboard - costing taxpayers tens of millions of dollars. However, it was later discovered that the convicted men had strong ties to terrorist organisations all over the Middle East: from a radical Egyptian cleric to Hamas.
To many casual observers, these facts are startling. But according the Louise Shelley, a transnational crime expert at George Mason University, cigarette smuggling is “huge”. “Worldwide — it’s no exaggeration… No one thinks cigarette smuggling is too serious, so law enforcement doesn’t spend resources to go after it.” Such a blasé attitude to the illicit white trade is why profits from cigarette smuggling fall into hands of Hezbollah, the Taliban, the IRA and similar terrorist organisations. Lastly, according to Shelley, the illicit cigarette trade is a major part of the dynamic income of the modern monstrosity known as the Islamic State (ISIS).
Stay tuned for the next post, where we reveal the shady history of one of the Big Four Tobacco corporations and their supposed involvement in the smuggling of their own product.