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Cig smuggling needs snuffing out

Update: October, 20/2016 - 10:31

Custom officers in Quảng Trị central province examine smuggled goods. During the first half of this year, the province’s Board of Customs uncovered some 350 cases of smuggling with a total value of VND455 billion (US$20.5 million). — VNA/VNS Photo Trần Tĩnh

HCM CITY —The scale of tobacco smuggling has fallen but the situation remains complicated, especially in ‘smuggling hubs’ like the Southern cities and provinces of HCM City, Long An, Tây Ninh, An Giang, and the northern provinces of Hải Phòng, Quảng Ninh, Thái Bình, a conference on combating smuggling has heard.

Speaking at the conference held in HCM City on Tuesday, Deputy Prime Minister Trương Hòa Bình asked local authorities of such provinces to intensify and mobilise all forces to crack down on cigarette smuggling.

Bình said that despite the efforts of central and local governments, the battle against smuggling, counterfeit goods and commercial fraud had not been satisfactory.

At the conference, a representative from the border guard said that new jobs for residents living near the border would help reduce smuggling. Many of the smugglers are manual labourers.

He said that international cooperation in fighting tobacco smuggling was needed since neighbouring countries encouraged the activity.

According to the National Steering Committee on Combating Smuggling, Commercial Fraud and Counterfeit Goods, authorities in six Southern provinces where tobacco smuggling is reported as serious have uncovered 15,363 cases, seizing more than 11 million boxes of cigarettes.

The local authorities prosecuted 373 criminal cases and 471 people who committed violations.

In Long An Province, between October 2014 and June 2016, more than 3,780 cigarette smuggling cases were uncovered with over four million boxes of cigarettes involved.

Some 56 criminal cases were prosecuted against 79 people who were charged with violations.

Local authorities collected more than VNĐ6 billion (US$272,000) in administrative fines.

During the same period, officials in Tây Ninh uncovered more than 1,500 cases involving 1.5 million cigarette packages involving 649 people.

Some 76 cases and 139 people were prosecuted in criminal courts.

In HCM City, officials investigated 3,577 cases in which 1,398 people took part in smuggling about 2.5 million cigarette packages.

A report at the conference revealed administrative penalties totalled VNĐ17 billion ($772,000) involving about 115 people prosecuted.

The situation remains serious despite action taken to prevent smuggling in Southern provinces, the smuggling hub of the country.

Smuggled cigarettes are not displayed in broad daylight as before, but clandestine trades still take place at some restaurants, hotels and bars.

The Ministry of Public Security notes that smuggled cigarettes account for 24-25 per cent of the domestic market, while the confiscated amount accounts only for 6-7 per cent.

Smuggling causes a range of issues from potential consumer health problems and failure of tax collection, to public disorder and the corruption of officials.

Limitations and reasons

Many reasons were given for the currently complicated smuggling situation, the conference heard.

First, in domestic markets, the tax applied to cigarettes is exorbitant. Tax includes 65 per cent for special consumption tax, 10 per cent VAT, 135 per cent for corporate income tax, and a 1.5 per cent tobacco harm prevention fund tax. This, plus strict policies cause the price of cigarettes to be higher than in other countries.

Secondly, local authorities lack determination in directing the fight against smuggling. The communication between local authorities and enforcement agencies as well as the equipment and support supplied are insufficient. In some cases, officials turn a blind eye to or even collude with smugglers.

Thirdly, people’s livelihoods in remote areas are not stable; therefore, they are susceptible to persuasion from criminals into participating in illegal activities. The fines are low and not much deterrence; the main owners and ringleaders of the operation just pay up and continue smuggling.

Việt Nam is one of the first countries to participate in the WHO’s Framework Convention on Tobacco Control (FCTC). No other members of FCTC allow the re-exporting of contraband cigarettes.

According to the Deputy Manager of the Government Office, Lê Mạnh Hà, there needs to be a plan to control tobacco retailers. Raising awareness of the harm of cigarettes is also much needed, as when the demand decreases, the supply will decline.

“Leaders of provinces where smuggling persists and flourishes will be held accountable before the Government. A heavy-handed approach is needed in dealing with violators. Implementing ‘New rural’ programmes and offering vocational training to people in border areas to help them get secure livelihoods would also help,” the Deputy Prime Minister said. – VNS

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