ILLICIT TOBACCO: Various Schemes Are Used to Evade Taxes and Fees

U.S. Government Accountability Office (GAO), March 2011

This report examines incentives that are important for understanding the different schemes used to generate profits from cross-border and illicit trade in tobacco products. It was presented to the U.S. Senate Committee on Health, Education, Labor, and Pensions and the U.S. House Committee on Energy and Commerce.


U.S. Department of the Treasury Report to Congress on Federal Tobacco Receipts Lost Due To Illicit Trade and Recommendations for Increased Enforcement

U.S. Department of the Treasury February 4, 2010

The U.S. Department of Treasury studied the magnitude of illicit tobacco trade and the amount of Federal tax receipts lost as a result of tobacco diversion and smuggling. The report also includes recommendations for reducing such illicit tobacco trade, including the implementation of a track-and-trace system.


The Bureau of Alcohol, Tobacco, Firearms and Explosives’ Efforts to Prevent the Diversion of Tobacco

U.S. Department of Justice, Office of the Inspector General, Evaluation and Inspections Division September 2009

The Office of the Inspector General (OIG) examined ATF’s implementation of its Alcohol and Tobacco Diversion Program as a deterrent to illegal sales and smuggling of tobacco products. The report found that the ATF is only using 2% of its operating budget on tobacco efforts. The report concluded that ATF must put more of a priority on tobacco diversion – a crime that is growing increasingly lucrative, results in the loss of billions of U.S. tax dollars, and has been used to fund other more violent crimes.


How Eliminating the Global Illicit Cigarette Trade Would Increase Tax Revenue and Save Lives

Bloomberg Philanthropies and the Bill and Melinda Gates Foundation, Citation: Joossens L, Merriman D, Ross H, Raw M. Paris: International Union Against Tuberculosis and Lung Disease, 2009.

A part of a series of reports on tobacco taxation, this report presents the enormous scale of the global illicit cigarette trade, the huge sums of money that governments are losing because of it, and the significant number of lives that could be saved in the future if the illicit trade were eliminated. Specifically, the report found that if “illicit trade was eliminated, governments would immediately gain at least $31 billion, and from 2030 onwards save over 160,000 lives a year.”


Tobacco and Terror: How Cigarette Smuggling is Funding our Enemies Abroad

U.S. Rep. Peter T. King (R-NY), April 2008

This 2008 report from the Chairman of the House Committee on Homeland Security links cigarette smuggling to such terrorist organizations as Al-Qaeda, Hezbollah, Hamas, the Real Irish Republican Army (IRA) and the Revolutionary Armed Forces of Columbia (FARC).


WHO Framework Convention on Tobacco Control

World Health Organization, 2003

The WHO FCTC is the first treaty negotiated under the auspices of the World Health Organization. It requires parties to adopt a comprehensive range of measures designed to reduce the health and economic impacts of tobacco consumption and exposure to tobacco smoke, focusing on the importance of demand reduction strategies as well as supply issues.


Customs and Tobacco Report 2009

World Customs Organization

Customs’ assessment of global illicit trade in tobacco products related to revenue, health and sound economic development. The report highlights observed trends and patterns, as well as initiatives undertaken by Members to counteract the illicit trade in tobacco products, thus assisting in the anti-smuggling efforts of Customs administrations world-wide.