This is one of six geographic regions of the World Health Organization (WHO). This region includes 22 countries, with a total population of nearly 679 million people.¹

Smoking in the Eastern Mediterranean Region

The latest WHO tobacco trends report, 2019, projects a smoking rate (properly called tobacco prevalence) of 18.6% in the EMR in 2020. The report expects a tobacco prevalence decrease in the region from the estimated 20.5% in 2015 to 17% in 2025. This decrease will however mean an increase in numbers of tobacco users from the estimated 90 million in 2015 to 94 million in 2025 because of population growth.²

The report also shows a huge difference in tobacco prevalence according to gender with 33.3% tobacco prevalence among males but just 3.9% among females. Another remarkable difference is the tobacco prevalence across different countries in the region. It starts at 9.6% in Oman and reaches 42.6% in Lebanon.²
The EMR has the highest waterpipe use as compared to any other region. Waterpipes are a particular method of consuming tobacco with it heated and drawn through water in inhaled via a pipe., It is estimated that schoolchildren aged 13–15 use waterpipes more frequently than cigarettes.³ Studies indicate mean prevalence estimate of ever use of waterpipe of 31.9% among adults in the EMR.⁴

Tobacco in the Eastern Mediterranean Region

Out of the 22 countries of this region, at least 14 countries grow tobacco and at least seven countries manufacture it. The following table shows a summary of agriculture and production of tobacco in the EMR (table 1). This table is based on fact sheets prepared jointly by WHO and the United Nations Conference on Trade and Development in 2015. However it is believed that both agriculture and production are much higher now.⁵

Table on agriculture and production of tobacco in the EMR

Who dominates the market?

The tobacco products that destroy so many people’s lives are the result of the activities of a number of companies around the world. The Tobacco Supply Chain Database enables tobacco control researchers and advocates to understand what the supply chain is, where it is located and who is involved. For more information, access the database here.

The cigarette market in the EMRO region is dominated by international and multinational companies, with their brands being the most sold cigarette in at least 12 countries. Locally produced cigarette brands are still the highest sellers in at least four countries. The waterpipe market shows a growing presence from multinational companies.⁶⁷

Table showing countries with most sold cigarette brand owned by international and multinational companies

Table showing the countries with most sold cigarette brand owned by local companies

Table giving examples of the dominant brands of waterpipe in the region

Links to governments

The industry aims to make sure it is well-represented

The industry has an established strategy in the region to lobby political figures and governments to serve its benefits. This strategy indicates links between tobacco industry and senior officials in the region trying to influence their decision making process.¹⁹
It is reported that the tobacco industry used corporate social responsibility activities as a strategy to access officials in Egypt, Jordan, Lebanon, Morocco, Pakistan, Tunisia and the United Arab Emirates. An example of the industry lobbying in the EMR is in trying to influence the countries’ selection of their representatives to the Conference of Parties (COP) of the WHO Framework Convention on Tobacco Control (WHO FCTC). Tobacco industries have pushed countries to send representatives from non-health sectors, who may see tobacco as a business rather than a health hazard.²⁰

There are state-owned and state-supported companies in number of EMR countries such as the Eastern Company in Egypt, Iran Tobacco Company in Iran, National Tobacco and Matches Corporation in Tunisia, Regie Libanaise des Tabacs et Tombacs in Lebanon, Régie des Tabacs in Morocco, and Kamaran Industry and Investment in Yemen. Most of these companies are a monopoly in charge of production, importing, and exporting tobacco products.²¹

Examples of good practice

Iran, one of the leading tobacco control countries in the region, is reported to be a successful country in resisting tobacco industry interferences by adherence to the WHO FCTC Article 5.3 guidelines. Iran bans corporate social responsibility activities by the tobacco industry and does not accept any support from or presence of the representatives of the Iranian Tobacco Company, a state monopoly, in its tobacco control policy making process.²²

Saudi Arabia, another leading tobacco control country in the region, has issued a policy to regulate communication and interaction, if required, between the government officials and tobacco industry. The policy reflects the principles and recommendations of Article 5.3 of the WHO FCTC. ²³

Roadmap to tobacco control

Most countries of the EMR are parties to WHO FCTC with 19 out of 22 countries have ratified joining the treaty.²⁴ Additionally, six countries of the region are parties to the Protocol to Eliminate Illicit Trade in Tobacco Products.²⁵ Most countries of the EMR have tobacco control laws.²⁶ However, the strength of such laws varies dramatically from a country to another.²⁷

The WHO Report on Global Tobacco Epidemic 2019 shows that out of the 22 EMR countries there are six countries that have recent, representative and periodic data on tobacco prevalence for both adults and youth; seven countries that have legislation banning smoking in all public places; three countries that have national quit line and both nicotine replacement therapy and some cessation services cost-covered; five countries that have large pictorial warnings on tobacco packages; four countries that have conducted national tobacco control campaign aired on television and/or radio; ten countries that have legislation banning all forms of direct and indirect advertising; and three countries that have a tax on retail price on the most popular brand of cigarettes higher than 75%.²⁸

Although the number of countries having such powerful tobacco control measures is not high, most of the EMR countries have at least some tobacco control measures. Most have implemented measures that puts them in the middle of their way to meet the comprehensive and recommended measures of tobacco control by the WHO FCTC. The report also shows that despite the existence of tobacco control laws, the compliance to such laws is challenging. For example, the report puts only one country in high compliance category out of the seven countries that have legislation banning smoking in all public places, and puts only five countries in high compliance category out of the ten countries that have legislation banning all forms of direct and indirect advertising. This compliance assessment highlights a huge gap in enforcement of existing legislation.²⁷

Stakeholders of tobacco control in the EMR includes governments, international intergovernmental organizations, non-governmental organizations, and academic institutes. Most countries of the EMR have a tobacco control unit within their ministries of health. Most international intergovernmental organizations that are accredited as observers to the COP are present in the EMR including the Arab League that 19 of the EMR countries are included in its members.²⁹ However the presence of non-governmental organizations accredited as observers to the COP is less noted in the EMR.³⁰³¹

Some academics in the region work in the field of tobacco control research with an example of the American University in Beirut hosting the Knowledge hub of FCTC on waterpipe.³² The WHO is present in the region through the Tobacco Free Initiative Unit in their office for the EMR, in addition to tobacco control focal point in the organization’s country offices.³³

Industry interference

Published literature shows that the EMR has been suffering from tobacco industry interferences for many decades. Such interferences undermine efforts of tobacco control in the region leading to continuous high prevalence of tobacco use. ³⁴ The following are themes and examples of tobacco interferences in the EMR.

Illicit trade

The tobacco industry claims to combat illicit trade but that contradicts their overproduction in some markets and oversupplying to others and in the knowledge that excess tobacco will end up on the illicit market. In the region, the tobacco industry continued to supply the contraband trade despite appeals by the government to cease undermining its revenues.³⁵ The magnitude of illicit trade in both cigarettes and waterpipes is huge within the EMR with studies referring to the tobacco industry involvement either through the producers or the distributers of tobacco, using various routes to, from and across the region. ^363738394041

Hijacking public health policies

The industry aims to undermine tobacco control efforts through their links to governments in the EMR.¹⁹ For example the tobacco industry manoeuvrings to hijack the track and tracing systems of tobacco products in the EMR. Although, as discussed earlier, the links between the tobacco industry and illicit trade are studied and observed, there is still an ongoing process of signing memorandums of understanding between them and the governments in many of the EMR allowing the industry to have links with customs and giving them the opportunity to influence the new track and tracing systems.⁴²

Influencing taxation policies

Internal documents of the tobacco industry show their efforts in delaying the establishment of unified tax increases across the Gulf Cooperation Council’s countries that consists of six of the EMR countries; Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates.⁴³ An internal Philip Morris memo showed how they work strategically to influence the tobacco taxing system in Egypt through range of interferences including lobbying at all levels of the authorities.⁴⁴ In Pakistan, the tobacco industry did changes in cigarette prices at their advantage by shifting some of their most sold brands to the lowest tax slab allowing itself to manipulate the market by price setting.⁴⁵

Expanding of multinational companies

The expansion of multinational companies in the region as part of the industry’s strategy to shift from developed markets, where tobacco control policies are strong and smoking prevalence is declining, to emerging markets where demand for tobacco is higher and tobacco control legislations are weaker. Additionally, local companies such as Eastern Company in Egypt are expanding as well.⁴⁶ A prominent example for the expansion of multinational companies in the EMR is the increasing investments of Japan Tobacco International in the region. The company bought two major tobacco manufactures in the EMR: the Egyptian waterpipe company Nakhla and the Sudanese cigarette manufacturer Haggar, which gives Japan Tobacco access to export its products to 85 countries, mainly in the EMR and Africa.⁴⁷⁴⁸

Promoting Next Generation Products

The tobacco industry is aggressively promoting electronic nicotine/ non-nicotine delivery systems and heated tobacco products in the region and has already launched them in number of countries such as Kuwait.⁴⁹ It is also expected that an international “vaping expo”, first of its kind, will be held in the United Arab Emirates in 2020 to frame the future of such products connecting manufacturers, distributors, and users of the products.⁵⁰ Although these products are being promoted globally by the industry, the case in the EMR is unique as electronic cigarettes were already banned in 11 out of the 22 countries of the region in 2017.⁵¹ However, the situation is dramatically changing with Saudi Arabia, one of the leading tobacco control countries in the region, reverting its legislation and allowing electronic cigarettes, raising fears that a domino effect will take place allowing the product in the rest of EMR.⁵² The industry is using number of interferences to promote these products such as lobbying policy makers and targeting youth with false information and by adding favourable flavours to its products.⁵³

Corporate social responsibility activities

Tobacco industry maneuvers to manipulate public opinion to gain the appearance of respectability happen across the countries in the EMR. For example, funding the education of women from Afghanistan in western universities by British American Tobacco;⁵⁴ donating to cancer screening and treatment hospital in Egypt by Eastern Company for Tobacco;⁵⁵ and funding projects for education in Pakistan, Jordan, Lebanon, Morocco, and Palestine by Philip Morris International.⁵⁶ Additionally, the industry sponsor popular sports such as the Egyptian Eastern Company for Tobacco sponsoring a football team carrying its name and playing in the Egyptian football league.⁵⁷Multinational companies also sponsor sport teams to brand their products such as British American Tobacco branding their electronic cigarette on McLaren cars (motorsports team) in the Bahrain Grand Prix, and Philip Morris International using Ducati (motorcycle team) for branding at the Qatar MotoGP.⁵⁸

Use of influencers and allies

A clear example of this well-practiced tactic is the visit of prominent doctors from number of Egyptian medical schools to a Philip Morris International factory in Switzerland, and then posting on social media about the visit claiming that it was supported by the WHO to check a new product of the company that has no side effects. The WHO issued a press release to condemn the incident and to deny any support to such tobacco industry maneuvers. The doctors removed the post from social media after the WHO press release.⁵⁹The industry is also active in approaching universities to keep its presence among youth and to recruit best qualified graduates in the region to keep growing. For example, British American Tobacco is listed as partner to the American University in Cairo in conducting employment fairs, After conducting such meetings, BAT publish news about it, which gives the impression that they are linked somehow to this prestigious university.⁶⁰⁷

Generating industry-funded science

The tobacco industry use of research and policy forums is a well-known strategy to influence policy-making processes. In the EMR there is an example of funding research institute in Pakistan with thousands of dollars to conduct studies in the field of tobacco. This fund from the Foundation for a Smoke-Free World, which is a Philip Morris International funded organization. There are also examples of think tanks in the EMR that are allied with the tobacco industry which are the Egyptian Center for Public Policy Studies and the Pakistani Policy Research Institute of Market Economy. Both think tanks opposed plain packaging of tobacco products despite the fact that it is an evidence based public health tobacco control intervention.⁶¹

Benefiting from emergencies and political instability

Tobacco industries look to use political instability as an opportunity to increase illicit trade and shape tobacco control policies in their favour. A number of countries in the region requested that tobacco control in protracted complex emergency situations should be an item for discussion during the COP of the WHO FCTC.⁶² As a result of such discussion, the COP made a specific decision in this regard aiming to providing technical and financial assistance to countries in protracted complex emergency situations, and requesting countries to pay special attention to Article 5.3 of the WHO FCTC and related Guideline.⁶³

Tobacco Tactics resources

• JTI Involvement in Smuggling
• Gallaher Versus its Cypriot Distributor
• CSR Strategy
• Motorsport Sponsorship
• Foundation for a Smoke-Free World
• Think Tanks

References

The post Eastern Mediterranean Region appeared first on TobaccoTactics.

Background

TRACIT was established in April 2017 and formally launched in New York in September 2017. It received endorsements from representatives of the American Department of Homeland Security, the UN Office of Drugs and Crime and the OECD.⁶⁴

Its first public event appears to have been a two-day conference in London on combatting illicit trade sponsored by the Financial Times and the Philip Morris campaign on illegal trade Impact.⁶⁵ As well as Tracit Director General Jeffery Hardy, the were several members of the PMI Impact panel: Suzanne Hayden, Alain Juillet, Paul Makin, Luis Moreno Ocompo, Navi Pillay and Jurgen Storbeck. PMI CEO Andre Calantzopoulos was also a guest speaker.

Membership

TRACIT’s website has fluctuated between disclosing and not disclosing its membership. As of July 2021, TRACIT’s membership page listed Philip Morris International (PMI) while British American Tobacco (BAT) and Japan Tobacco International (JTI) have been listed as members on a previous version of the webpage. Also previously listed as a project partner is Crime Stoppers International, which has tobacco company support.⁶⁶⁶⁷

Partners

TRACIT is partnered with several other similar organisations including the Anti-Counterfeiting Group and is part of the UN Global Compact (UNGC).⁶⁸

Activities

Overview and tobacco funding

The organisation breaks its focus down into 12 sectors, of which one is tobacco. It says:

“Overall, for the tobacco industry the illicit trade in cigarettes results in lost revenue, reputational damage and loss of consumer trust, and increased costs in supply chain monitoring and the implementation of technologies that enable companies to track and trace their products.”⁶⁹

TRACIT accepts sponsorship from tobacco companies to help in the production of reports and quotes uncritically from industry documents as part of its analysis. In its lobbying it will often share platforms with industry officials and their allies. For instance, in its introductory analysis of the the tobacco sector, TRACIT quotes from a KPMG report called Project Sun which was produced in 2015 and looks at the illicit cigarette market in the European Union, Norway and Switzerland. The report was produced on behalf of BAT, Imperial, JTI and PMI.⁷⁰ Nowhere does TRACIT reference the multiple reports, supported by evidence, of the involvement of tobacco companies in the illicit trade.

In March 2019 TRACIT was awarded funding from PMI IMPACT – a $100 million initiative from Philip Morris International to support projects against smuggling. The award, one of 31 in a second round of funding worth $21 million in total, was for the:

“Development of a Global Illicit Trade Business Report, drawing upon private sector experiences and identifying solutions to supply chain vulnerabilities common to all forms of illicit trade. It examines transportation modalities, customs, free trade zones, human trafficking, criminal activity, financial fraud, and regulatory gaps. Findings will be shared with all stakeholders in response to their calls to significantly upgrade the availability and exchange of information.”⁷¹⁷²

Work programmes

Global Illicit Trade Environment Index

The Global Illicit Trade Environment Index, released in June 2018, was produced by the Economist Intelligence Unit and evaluates 84 countries on their “structural capability to guard against illicit trade, highlighting specific strengths and weaknesses”. The objective is “to improve the knowledge and understanding of the regulatory environment and economic circumstances that enable illicit trade.⁷³ It is a key report which, with its regional and country subsets and recommendations, is the foundation for TRACIT policy proposals and lobbying. The report’s sponsors include Philip Morris International (platinum sponsor), British American Tobacco, Japan Tobacco International and Crime Stoppers International (bronze sponsors).

Mapping impact of illicit trade and sustainable development goals

In an area which has seen increasing interest by tobacco companies, TRACIT maps the impact of illicit trade against the UN sustainable development goals. It released a report in July 2019.

The report has chapters for each of its sectors and how illicit trade has a negative impact on specific goals. For tobacco it lists the goals of good health and well-being; decent work and economic growth; peace, justice and strong institutions and partnerships for goals as being affected. Again, no mention is made in the chapter on any culpability that tobacco companies have for the illicit trade.⁷⁴

Involvement with UNCTAD

In July 2019, as part of its launch on the report, TRACIT co-hosted a meeting on illicit trade and the UN’s Sustainable Development Goals (SDG) in partnership with the United Nations Conference on Trade and Development (UNCTAD).⁷⁵ TRACIT Director General Jeffrey Hardy addressed the meeting with contributions from UN officials.⁷⁶TRACIT’s engagement with the UN organisation reflects the attempts of tobacco companies to use third parties to ingratiate themselves with governments as partners in reducing illicit trade. Other UN organisations have been targeted by groups with close tobacco company affiliations such as Concordia and the International Chamber of Commerce.⁷⁷

Regional and Country Activities

TRACIT has been active in a number of countries representing industry interests at governmental level backed by its own reports. The principal report is the Illicit Trade Environment Index from which various regional versions have been produced.

Asia

• Produced regional policy recommendations in 2018 for the region which in summary were: ⁷⁸
• Association of Southeast Asian Nations (ASEAN) and Asia Pacific Economic Cooperation (APEC) play leadership roles on combatting illicit trade
• Establishing an antic-illicit trade coordinator and inter-agency task force
• partnerships with the private sector
• Protect Free Trade Zones from illicit traders
• Launch public awareness campaigns
• “rationalize tax policies and subsidies to ensure that they do not incentivize illicit trade, smuggling, adulteration and theft, by adopting simple, single tier specific tax structures, and accounting for various demand-related factors including overall consumption, price, income levels and the ensuing affordability of products.”⁷⁸ The tobacco industry often uses these types of arguments regarding taxes, to prevent raises and further regulations. See Tobacco Tactics Price and Tax for more details on this aspect.
• Establish joint investigations on illicit trade/trafficking and criminal organisations
• Study the patterns of illicit trade flows
• Produced a regional version of its Global Illicit Trade Index.⁷⁸ Among those who were interviewed for the Asia report were:
• Ali Salman, director of research, at Institute for Democracy and Economic Affairs (IDEA). The Malaysia-based think tank has lobbied against tobacco control measures and has received funding from tobacco companies
• Etienne Sanz de Acedo, CEO, International Trademark Association, which has Barry Gerber from Philip Morris International on its board.⁷⁹
• Seth Hays, chief representative—Asia-Pacific, International Trademark Association

Myanmar

• Produced regional policy recommendations in 2018:⁸⁰ The recommendations were similar to the report for Asia but also included:
• Tackle pervasive corrupt practices
• “Increase effectiveness of customs procedures to block the flow of illicit and parallel (grey) market products”
• Partnerships with international organisations such as World Customs Organization, Interpol and the European Anti-Fraud Office.
• Produced a regional version of its Global Illicit Trade Index.⁸¹

Latin America

• Produced regional policy recommendations in 2018:⁸². The recommendations were similar to the report for Asia but also included:
• Pursue law enforcement and customs cooperation through expanding the Pacific Alliance (Alianza del Pacifico) or “through projects sponsored by Ameripol, the InterAmerican Development Bank (IDB) or the World Customs Organization (WCO).”
• Intensify public-private coordination and uses examples from Argentina and Costa Rica (see below)
• Strengthen copyright protection enforcement
• fully adopt anti-money laundering regulations
• raise public awareness about the threat of illicit trade “to help shift public perception … that contraband is not a minor issue but a national security problem, with links to organized crime.”⁸²
• In September 2019 TRACIT participated in the 7th INTERPOL Global Conference on Human Trafficking and Migrant Smuggling, in Buenos Aires.⁸³ This had 750 people attending from 97 countries.
• In June 2019 TRACIT was in Buenos Aires at the Regional Summit on Security and Illicit Trade hosted by the business newspaper’ “El Cronista”. The panels included discussions on public-private cooperation and the vulnerabilities of Free Trade Zones.⁸⁴ Director-General Jeffrey Hardy particularly highlighted the need to curb illicit trade in Free Trade Zones. Philip Morris International had a strong presence at the event with representatives from its PMI Impact anti-illicit project as well as providing media support.⁸⁵

Argentina

• In June 2019 TRACIT highlighted how fighting illicit trade is essential for attracting investment and creating growth opportunities during a National Roundtable for Fair Trade hosted by the Argentina Medium Business Confederation (CAME). A press release from TRACIT said that Director-General Jeffrey Hardy “called on Latin American governments to rationalize tax policies that can incentivize illicit trade”.⁸⁶

Colombia

• Produced policy recommendations which repeated many of those from the Latin American policy report (see above).⁸⁷ In particular it says “Colombia should simplify its current structure following OECD standards + VAT and reduce the tax burden to decrease the current high incentives for the illicit market.”⁸⁷

The Ministry of Health of Brazil and the National Commission overseeing the implementation of the Framework Convention on Tobacco Control have provided solid arguments on this issue of taxation and these have become useful for the rest of the countries in the region, as well as Colombia.

“There is solid evidence that reducing tobacco tax is an inappropriate initiative to reduce illicit trade. Studies, including a recent World Bank review, point out that the main determinant of the illegal tobacco product market is not the difference in taxation of tobacco products between countries but the dominance of this market by organized crime factions, attracted by profitability and impunity, resulting from the soft penalties applied to this offense. In addition, countries that have reduced tobacco taxes to try to reduce illicit trade have experienced reduced tax collection, smoking growth, especially among young people, and no positive effect on smuggling. This was the case of Canada and Sweden in the 1990s. In Brazil, also in the 1990s, the Federal Revenue Service lowered taxes on cigarettes to limit smuggling. However, tax revenues fell, and illicit trade continued to grow”⁸⁸

• In October 2018 at a meeting in Bogota, TRACIT urged Colombia to work with the private sector to develop a comprehensive and effective anti-illicit trade program to curb illicit goods that harm legitimate businesses, workers, consumers and governments. Colombia ranks 43 out of 84 on TRACIT’s Global Illicit Trade Environment Index, primarily because of issues around transparency and governance of its Free Trade Zones (FTZs).⁸⁹

Costa Rica

• Produced policy recommendations which repeated many of those from the Latin American policy report (see above).⁹⁰ In addition it recommends strengthening the Comision Mixta de Lucha Contra el Comercio Ilicito, composed by representatives from the Ministries of Health, of Finance, of Home Affairs, from the Customs Office and the Police force. This Commission was created in 2014 and later on, representatives from the chambers of commerce and industry were added as members as well. ⁹¹ Costa Rican Civil Society have exposed the conflict of interest of this Commission and made a formal claim to the government in 2016, given that the representatives of the industry come from the Costa Rican-American Chamber of Commerce (AmCham), whose members include British American Tobacco and Philip Morris International.⁹²
• In August 2018 TRACIT addressed government officials and industry stakeholders during a conference on Illicit trade, hosted by AmCham, which has tobacco industry members.⁹³ The conference featured a presentation on TRACIT’s Global Illicit Trade Environment Index, which ranks Costa Rica 46th of 84 countries evaluated on the extent they enable or prevent illicit trade. Gerardo Lizano, AmCham’s representative to the Comision Mixta de Lucha Contra el Comercio Ilicito, and Nogui Acosta, vice minister of income in the Ministry of Finance, spoke at the event.⁹⁴

Dominican Republic

• Produced a country briefing based on its Global Illicit Trade Environment Index (see above).⁹⁵ The report quoted Manuel Cabral as an expert on local markets for alcohol and tobacco products as saying “frequent and piecemeal changes in tax policy create distortions that ultimately the use of illegal products”. Cabral worked for Philip Morris International from the country from 2011 to 2017, ending up as director of corporate affairs for the Dominican Republic and Caribbean⁹⁶ Among those listed as sponsors and contributors to the country report were British American Tobacco, Crime Stoppers International, Japan Tobacco International, and Philip Morris International
• Produced policy recommendations which repeated many of those from the Latin American policy report (see above).⁹⁷
• In May 2019 TRACIT addressed government officials and industry stakeholders during a conference on Illicit trade. It was hosted by the Association of Industries of the Dominican Republic, the British Embassy and the British Chamber of Commerce of the Dominican Republic. The Chamber of Commerce has BAT subsidiary BAT Republica Dominicana and Imperial Tobacco subsidiary Tabacalera De Garcias.⁹⁸
• TRACIT’s Director-General, Jeffrey Hardy, called for more public-private partnerships saying they are “essential to the design and implementation of effective programs to prevent illicit, contraband and counterfeit products.”⁹⁹ Such partnerships could provide a means for tobacco companies to engage with governments and circumvent the Framework Convention on Tobacco Control article 5.3.

Ecuador

• Produced policy recommendations which repeated many of those from the Latin American policy report (see above).¹⁰⁰ It highlighted the need for “strong and proactive measures” in strengthening the protection of Free Trade Zones
• In November 2018, TRACIT addressed government officials and industry stakeholders during a conference on Illicit trade, hosted by Cámara de Industrias y Producción (CIP). The current vice- president of CIP worked previously as Corporate Affairs Director for Ecuador and Peru at Philip Morris International for 2 and a half years, before taking on her current position at CIP. ¹⁰¹ The conference featured a presentation on TRACIT’s Global Illicit Trade Environment Index, which ranks Ecuador 60th of 84 countries evaluated on the extent they enable or prevent illicit trade. “The country serves as a major transit point for illicit goods in the region, including … illicit trade in tobacco…”¹⁰²

Panama

• In 2017, Ulrike Bonnier from TRACIT participated in a session exploring actions to combat human trafficking and other forms of illicit trades at the 38th Annual Crime Stoppers International Conference.¹⁰³ Crime Stoppers International regularly engages with the tobacco industry. Among the speakers at the Panama conference were Nicholas Otte and Arturo Fernandez from Philip Morris’s Illicit Trade Strategies and Prevention for Latin America and Canada region. The silver sponsor for the event was British American Tobacco.¹⁰⁴

Europe

• Produced a regional briefing based on its Global Illicit Trade Environment Index (see above).¹⁰⁵ Among those listed as sponsors and contributors to the country report were British American Tobacco, Crime Stoppers International, Japan Tobacco International, and Philip Morris International
• Produced policy recommendations for the region including rationalising tax policies, subsidies and tax exemptions, encouraging partnerships with companies and have stronger criminal penalties. It highlighted the 2016 Administrative Cooperation Arrangement between the European Anti-Fraud Office (OLAF) and the State Customs Committee of Belarus aimed at helping investigative cooperation between them, specifically on the illicit trade in tobacco products.¹⁰⁶

Serbia, Bosnia and Montenegro

• Produced a regional briefing based on its Global Illicit Trade Environment Index (see above).¹⁰⁷ Among those listed as sponsors and contributors to the country report were British American Tobacco, Crime Stoppers International, Japan Tobacco International, and Philip Morris International
• Produced policy recommendations for the region which echoed much of those in the Europe report (see above).¹⁰⁸

Middle East

• Produced a country briefing based on its Global Illicit Trade Environment Index (see above).¹⁰⁹ The report says:
  

  “illicit tobacco trade has steeply increased due to high excise taxes (accounting for about 27% of the market) and new regulations that standardize tobacco packaging can further increase the demand for counterfeit and illicit products.”

  This echoes industry arguments against plain packaging and tax increases. The evidence used to support this is a news story which is itself based on a PMI-funded study.¹¹⁰

• Produced policy recommendations for the region which echoed much of those in the Europe report (see above).¹¹¹

United Arab Emirates

• Produced a country briefing based on its Global Illicit Trade Environment Index (see above).¹¹²The report recommends the UAE sign and ratify the five illicit trade treaties including the WHO Protocol to Eliminate Illicit Trade in Tobacco Products. Among those listed as sponsors and contributors to the country report were British American Tobacco, Crime Stoppers International, Japan Tobacco International, and Philip Morris International
• Produced policy recommendations for the region including strengthening co-operation in the region, having tougher oversight of free trade zones, rationalising tax policies and subsidies and improving public awareness. ¹¹²

Africa

Tunisia

• Produced a country briefing based on its Global Illicit Trade Environment Index (see above).¹¹³The report says
  

  “Stopping tobacco smuggling, in particular, must be a top priority for policy makers given the significant fiscal leakages and the large profits that organized crime and armed militias in the region amass from the illicit tobacco trade.”

• Produced policy recommendations for the region including strengthening co-operation in the region, having tougher oversight of free trade zones, rationalising tax policies and subsidies and improving public awareness. On the issue of taxation the report says:
  

  “excessive tax levels can reduce affordability of legitimate products and drive demand for illicit substitutes. Organized crime groups also may practice “tax arbitrage” to gain profits by smuggling products from relatively lower to higher taxed markets.”¹¹³

  As in other TRACIT reports there is no mention of the involvement of tobacco companies in illicit activity.

South Africa

• In October 2019, TRACIT’s Director General Jeffrey Hardy addressed the 12th International Law Enforcement Intellectual Property Crime Conference in Cape Town. The conference was organised by INTERPOL, the International AntiCounterfeiting Coalition and South African Police Service.
• TRACIT used the conference to launch its policy recommendations for South Africa, including tackling illict tobacco which, according to a paper in Tobacco Control, is estimated to compromise a third of the market.¹¹⁴.¹¹⁵ TRACIT’s recommendations echoed those for its other country reports including tying activiy to achieve Sustainable Development Goals, tackling corruption, “rationalize tax policies”, promoting track & trace and similar technology and promoting private-public partnerships.¹¹⁶ As examples of “valuable partners” it offers the American Chamber of Commerce in South Africa and the Consumer Goods Council of South Africa. The former has Philip Morris SA as a member,¹¹⁷ while the latter has Soraya Zoueihid, the Area Director for British American Tobacco in Southern Africa, as a board member.¹¹⁸

Staff

Senior Management

The senior management team is made up of the following people:¹¹⁹

• Jeffrey P Hardy – Director-General. Hardy previously served as the Director of the International Chamber of Commerce’s Business Action to Stop Counterfeiting and Piracy. The group has consistently produced reports sympathetic to its tobacco industry members and lobbied against Plain Packaging measures. Hardy is founder and managing director of IDA Consulting, a management consultancy.¹²⁰ Hardy is listed in the EU lobbying register.¹²¹
• Stefano Betti – Deputy Director General
• Louis Bonnier – Director of Programs. Co-author of the report on illicit trade and SDGs
• Ulrika Bonnier – Director of Programs. Co-author of the report on illicit trade and SDGs
• Suriya Padmanaabhan – Director of Programs
• Cynthia H Braddon – Head of Communications and Public Policy
• Esteban Giudici – Senior Policy Advisor

Directors

TRACIT gives its mailing address as One Penn Plaza in New York City, but it is registered in Fort Myers, Florida, as not-for-profit organisation under US tax code 501(c)(6). Its corporate filing on 19 April 2019 listed three directors: ¹²²

• Jeffrey Hardy
• David Benjamin
• Shelley Duggan. UK-based trademark lawyer who is a director at Proctor & Gamble. Duggan is chair of the Anti-Counterfeiting Group (ACG), a not-for-profit global trade association which tackles counterfeiting and is partner of TRACIT.¹²³ One of the founders of the ACG was British American Tobacco. It is no longer listed as a member but Philip Morris, Japan Tobacco International, Imperial Tobacco and the Tobacco Manufacturers’ Association all are.¹²⁴

Advisory Council

The organisation’s Advisory Council is made up of independent experts providing advice in a personal capacity.¹²⁵ Among its members are:

• Karl Lallerstedt, from the Confederation of Swedish Enterprise, contributed a chapter to a book on organised crime which grew out of a BAT-funded project.¹²⁶.
• Leonard McCarthy, founder of integrity and risk management firm LFMcCarthy Associates, prior to that an investigator at the World Bank.¹²⁷ McCarthy came to prominence as the head of South Africa’s Directorate of Special Operations, or so-called Scorpions, which investigated organised crime, including tobacco smuggling. The unit was disbanded in 2009.¹²⁸

Relevant Links

TRACIT homepage: https://www.tracit.org/

TobaccoTactics Resources

• Tobacco Smuggling
• Protocol to Eliminate Illicit Trade in Tobacco Products
• Tobacco-funded group TRACIT tries to influence tobacco control policy, 28 July 2020

References

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