Combating illicit trade

Experts meeting in London later this summer will outline new ways of tackling the illicit trade in alcohol and tobacco which costs governments billions of dollars a year

Global anti-counterfeiting, security and anti-smuggling specialists will join representatives from manufacturers and government agencies at the second Tax Stamp Forum (14 – 15 June) in London, organised by Reconnaissance International.

They will be discussing how excise stamps can be part of an effective strategy to combat the costly problem of excise evasion and product fraud under an overall theme of Effective Programmes to Maximise Revenues.

Excise duty on tobacco and alcohol is an important source of revenue for governments but this is continually under threat from organised criminals and others around the world who trade in illegal products.

The problems of smuggling are compounded by the explosion in counterfeit products and with the illicit trade providing a major source of funding for criminal and terrorist organisations.

In the UK, the cost to taxpayers of counterfeit cigarettes alone is estimated to be in excess of £3 billion a year, while in the US tobacco products giant Philip Morris USA has filed dozens of cases in recent times aimed at stopping the sale of counterfeit cigarettes.

Overall, it is estimated that worldwide $40-50 billion a year is lost in government revenues due to contraband and counterfeiting.

One way governments can protect themselves and excise revenue sources is advanced tax stamps combining security with unique product ID as a way of securing tax collection and proof of payment. This proof of authenticity can also protect the interests of manufacturers which have products targeted by counterfeiters, smugglers and other criminals.

The second forum will build on the success of the first one in looking at the latest tax stamp systems and the best ways to use them. Technologies and systems to help government revenues and decrease contraband and counterfeit products will be showcased while the wider debate will examine the broader socio-economic and regulatory impact of these initiatives around the world. There will also be case studies from revenue agencies and suppliers demonstrating the implementation of tax programmes around the world.

The programme includes presentations from HMRC, the US Federation of Tax Administrators, the World Economic Forum Global Agenda Council on Illicit Trade, Altria, the International Federation of Spirits’ Producers, the Tobacco Merchants Association and the European Commission (TAXUD) on topics ranging from the problems posed by the illicit trade to new regulations and legislation and enforcement initiatives.

A key feature of the event will be the case studies, which include tax stamp programmes in Mauritius, Ireland, California, Massachusetts, Ukraine and Belarus

With track and trace uppermost on the agenda of regulators and manufacturers, particularly given the failure of the parties of the Framework Convention on Tobacco Control to reach an agreement on a global tracking system for cigarettes, much of the session on technologies solutions will be dedicated to solutions that combine product authentication and fiscal verification in one solution. .

Reconnaissance International’s Astrid Mitchell said: “Continuing tough global trading conditions mean governments remain under pressure to secure tax revenue streams from alcohol and tobacco products. The forum will show governments how they can achieve this

“Manufacturers and distributors will find out how they too can benefit while suppliers of components, products and systems will be able to see how tax stamps can be tailored to provide effective, practical and affordable solutions for customers.”

Further information can be found at www.taxstampforum.com

1 April 2010 - Felicity Murray