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Supt. Derek Simmonds, Director Customs and Excise Branch RCMP Headquarters

Supt. Derek Simmonds, Director Customs and Excise Branch RCMP Headquarters. Contraband Tobacco Enforcement Strategy. “A Taxing Issue” Public Health and Contraband Tobacco Buffalo, NY, February 4 th , 2008. Outline. Current Situation Trends Strategic Direction. ILLICIT TOBACCO.

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Supt. Derek Simmonds, Director Customs and Excise Branch RCMP Headquarters

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  1. Supt. Derek Simmonds,DirectorCustoms and Excise BranchRCMP Headquarters

  2. Contraband Tobacco Enforcement Strategy “A Taxing Issue” Public Health and Contraband Tobacco Buffalo, NY, February 4th, 2008

  3. Outline • Current Situation • Trends • Strategic Direction

  4. ILLICIT TOBACCO • Approx 30% of cigarettes smoked in Ontario & Quebec are from an illicit source • Unbranded (baggies) illicit cigarettes are the most prominent packaging format • Price is the main motivation for purchasing discount cigarettes • Perception of legality • Counterfeit tobacco and Cultural specialty tobacco also present

  5. Canadian Pricing per Carton Legitimate vs Contraband Range $70 to $90. Legitimate Contraband As Low as $ 5 per Carton / Carton Equivalent

  6. 348,134 200 Gm Units … 69,627 KG (152,501 Lbs or 76.75 Tons)

  7. Illicit Trade: Sources • Domestic Illicit Manufactured • U.S. based Illicit Manufactured and Smuggled into Canada • Other Foreign manufactured tobacco products smuggled into Canada (legitimate & Counterfeit) • Stolen (e.g. thefts, hijackings)

  8. Illicit Manufacturing Concentration

  9. Jurisdiction Complexity

  10. Illicit Trade: Consequences • Compromised Public Safety • Contributes to growth of organized crime • Erodes respect for society and its laws • Funds other criminal activities • Impacts efforts to reduce tobacco related disease • Reduces pubic revenues • Unfair competition

  11. Trends • Illicit tobacco at a historical high • Organized crime involvement • No longer a market of diversion • Re-sealable bags of 200 cigarettes • Illicit manufacturing in Canada and U.S. • Proliferation of Smoke Shacks • Emergence of counterfeit cigarettes

  12. RCMP Contraband Tobacco Enforcement Strategy • To Reduce the Availability of, and Demand for, Contraband Tobacco On line: http://www.rcmp.ca/fio/tobacco_strategy_2008_e.htm

  13. Meeting the Challenge • Disrupt Organized Crime and the Supply Chain • Coordination, Collaboration and Partnership Development • Outreach • Effective Use and Allocation of Resources

  14. Meeting the Challenge • Impact Crime through Education and Awareness • Contribute to the Development of Legislative and Regulatory Tools • Conducting Research • Employee Selection and Development

  15. Imperial Tobacco Canada Ltd (ITCL) & Rothmans Benson and Hedges (RBH): GuiltyPlea (July 2008). Charges relate to illegalactivitiesbetween 1989 & 1999: Diversion of tobaccoproducts to the USA and smuggled back to Canada. Settlements

  16. RBH: Fine: $100,000,000. Civil settlement: $450,000,000 ITCL: Fine: $200,000,000. Civil settlement: $400,000,000 Settlementincludes compensation and participation in the Tobacco ComplianceMeasures Program, from Canada Revenue Agency. Settlements

  17. Supt. Derek Simmonds Director Customs and Excise Branch RCMP Headquarters

  18. Wednesday-Thursday February 4-5, 2009 Center for Tomorrow University at Buffalo Buffalo, New York

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