HA NOI (VNS)— One hundred officials and representatives from relevant ministries and agencies met yesterday in Ha Noi to discuss how to implement a new Government circular on handling illegal cigarette and cigarette material trading.
Circular 36 sets out strict penalties for trading, transporting and hoarding smuggled tobacco, said Pham Kien Nghiep, general secretary of the Viet Nam Tobacco Association.
Under the circular, offenders who smuggle 1,500 to 4,500 packs will be subject to criminal prosecution and can be imprisoned from six months to three years.
Those who smuggle 4,500 to 13,500 packs will be subject to criminal prosecution and can be imprisoned from three to seven years.
And for smuggling more than 13,500 packs, the punishment will be criminal prosecution and sentences of seven to 15 years. A repeated offence can also result in criminal prosecution.
The smuggling of Jet and Hero cigarettes into the country has been going on for 15 years. The quantity of smuggled cigarettes has increased significantly year by year, threatening the tobacco industry as well as domestic consumers' health, speakers said at the seminar.
These cigarettes are produced by Sumatra Tobacco Company in Indonesia, but are rarely used by Indonesians. The cigarettes are imported legally into Cambodia due to its preferential tax policy and then exported illegally into Viet Nam.
Those illegal cigarettes fail to include import stamps or health warnings and have not been tested by the Vietnamese agency in charge of monitoring cigarette quality.
The smuggled cigarettes are also causing problems for the domestic agricultural sector as they now occupy a significant share of the cigarette market, more than 180,000 people who worked in the tobacco industry are unemployed.
Related industries such as filter cigarette manufacturing, packaging and printing and box production have also been badly affected.
In 2007, the Government issued a policy of destroying all confiscated cigarettes, raising penalty amounts and mobilising funds from the tobacco industry to directly support units and individuals who actively contribute to the anti-smuggling campaign.
"I believe that the deployment of this circular with more serious sanctions, as well as strong efforts by relevant agencies, will successfully fight smuggling cigarettes, which assures that there will be no tax loss for the Government and helps to establish a fair playing ground for legal domestic tobacco companies," said Nghiep.
Smuggled cigarettes have recently accounted for 20 per cent of the cigarette market - about 800 million packs - even though their quality is not certified, he said.
This resulted in a VND4,320 billion loss for the government budget in 2012.
Additionally, nearly all of the smugglers trade in cash, creating another loss of over US$$400 million per year. — VNS