Anti-contraband

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Contraband is the trade of goods or merchandise counter to national legislation that controls their production, importation, exportation, purchase, sale or possession. Common terminology used to describe contraband activities includes:

Smuggling: the illegal trade in goods to evade taxes
Counterfeiting: the illegal production and sale of goods which are intended to pass as real product
Piracy: the illegal production and distribution or sale of intellectual property without consent.

Many products are affected by contraband including alcohol, agricultural products, petroleum, motor vehicles, computer hardware and software, designer and luxury goods, cosmetics and pharmaceuticals. However, cigarettes are a particular problem as they are highly taxed, easy to transport and easily sold.

Read more: Facts & Figures About Contraband

The key incentives behind cigarette contraband are high taxes, the unforeseen consequences of trade and regulatory controls, and inadequate law enforcement. It is a fact of economic life that governments will tax and regulate. However, it is also in the interests of governments to ensure that their policies do not, unwittingly, promote contraband and adversely affect revenues.

Read more: What Drives Contraband?

JTI's position is clear and unequivocal. Contraband damages our business and undermines our brands. JTI is not, and will not be involved in the illegal sale of its products. However, we certainly have a role to play in eliminating contraband because it is our products, amongst others, that are being smuggled and counterfeited. JTI is committed to do everything possible to prevent its products ending up on the illegal market and we undertake the following steps:

We co-operate fully with governments, regulators and law enforcers in the fight against contraband. We consult with governments on effective ways to prevent or eliminate cigarette smuggling and counterfeit in their jurisdictions.

We have a duty free sales policy with strict criteria for the selection and supply of our customers to whom we sell our products for onward resale. We have a customer policy which our international duty free customers must accept, and sign. We monitor compliance and terminate the contract of any customer who, to our knowledge, does not comply. All our employees must meet and comply with the strict requirements of our duty free sales policy and code of conduct. We terminate the employment of any employee who is knowingly involved in the illegal sale of our products.

The fight against contraband requires the cooperation and involvement of all parties, but Government and regulators must recognize that it is first and foremost a tax policy and law enforcement issue. We encourage Governments to develop specific programmes to address the problem. These should include a review of tax policy, the enactment of appropriate regulatory legislation, and the commitment to fund the training of enforcement bodies so that they gain the expertise required to deal effectively with the organized crime groups behind this illegal trade. JTI is committed to being part of the solution.