Customs, cigarette makers declare war on smuggling

A memorandum of understanding has been signed between the Customs Department and Central Cigarettes Ltd to jointly battle the trade of contraband and counterfeit cigarettes, which costs the government Lm1 million in lost revenue every year.

The agreement was signed by Customs director general John Mifsud, Central Cigarettes general manager Ronnie Abela and British American Tobacco (BAT) head of Customs and excise Brian Weatherburn. Central Cigarettes is a wholly-owned subsidiary of BAT, the second largest international tobacco company in the world.

BAT will be providing product analysis with the aim of establishing the source of the illicit products.

Mr Weatherburn said the majority of counterfeit and contraband cigarettes of all brands were usually smuggled from China.

Smuggled cigarettes normally entered Malta through sea channels and Mr Mifsud said the surveillance of the island's territorial waters was outside Customs control. "We are in constant cooperation with the police and the Armed Forces, who, unfortunately, have limited resources. We discuss the mutual problems and make use of the resources we have as best we can," he said.

"We need more surveillance in summer because of the increase of sea traffic in the Mediterranean. Surveillance of territorial waters is a headache we have to face," he added.

Mr Mifsud also warned smokers who bought smuggled or counterfeit cigarettes that they were being ripped off.

"Apart from the very poor quality of the product, contraband cigarettes are also being sold at very high profits. The savings made by smokers are small and just serve to make the smuggler richer," he said.

"This is a worldwide problem and I cannot but stress the fact that terrorists are financing their acts through counterfeit goods and contraband," he said.

Mr Abela said smuggled and counterfeit cigarettes severely dented government tax revenue, reduced the cigarette company's market share and damaged the reputation of its brands, putting the employees' jobs in jeopardy.

At the moment, smokers pay 74 cents in excise duty on each packet of cigarettes. Asked if this high duty could be serving to fuel the demand for contraband cigarettes, Mr Abela admitted this was a dilemma.

"On the one hand the government raises excise duty in an effort to discourage smoking, for health purposes, and on the other it also has to regulate the market. Unfortunately, when it comes to the black economy it's hard to regulate," he said.

Apart from signing the MOU, Customs this week submitted a proposal to the government for more security features to be introduced in the future on the tax bands found on cigarette packets.

Customs director for international affairs Joe Brincat said such security features could include a hologram to ensure the tax band could not be copied.

Mr Mifsud appealed to anyone having any information on this illicit trade to call Customs on 21 697769. Confidentiality will be guaranteed and people may leave a message on the answering machine.