• Tightening laws and banning products can create parallel markets and legitimate channels for trading alternative tobacco products is a must

The illicit cigarette trafficking problem has intensified globally, according to a new study by Nielsen. The study reveals a staggering 92.1% increase in Panama compared to 87.9% in Q3 2021 and 79.9% in Q4 2021. Panama serves as a representative example of the global trend.

Alejo Campos, Regional Director of Crime Stoppers in the Caribbean, Bermuda, and Latin America, said that cross-border cigarette smuggling has negative economic, health, and security impacts. He stressed the urgency of taking action to eradicate the illicit tobacco trade. Despite Panama's efforts to strengthen tobacco control laws and regulations, Campos noted that the country is facing a rise in tobacco consumption due to cigarette smuggling.

Campos added that e-cigarettes in Panama are sold in gyms, on social media, and through other channels. This contributes to the increase in illicit tobacco trade activities, not only in Panama but across the continent. He also pointed out that tightening laws in the formal market often creates parallel illegal markets.

On the economic front, Campos stated that Panama loses over $100 million annually in tax revenue due to these illicit businesses. From a security perspective, illicit trade involves money laundering and corruption. Campos stressed that these operations fall under the framework of "transnational criminal convergence,” which is linked to terrorist organizations using cigarette smuggling as a low-risk means to finance their operations and terrorist activities.

He explained that reducing the number of smokers requires the development of comprehensive public policies to combat tobacco. These policies go beyond simply increasing taxes on tobacco manufacturers and distributors. He added that in the absence of such comprehensive policies, it will be easier to obtain smuggled cigarettes, leading to an increase in consumption in the illicit market.

Campos continued to highlight the health impact of the proliferation of smuggled cigarettes. Studies analyzing these types of products have revealed that 75% of them contain wood pieces and fail to meet quality or control standards during manufacturing and distribution. The distribution of smuggled cigarettes operates through covert networks beyond official channels, often concealed in vehicles transporting other goods or hidden inside damp warehouses, increasing exposure to pollution and leading to various diseases.

According to a 2020 report by the United Nations Conference on Trade and Development (UNCTAD), the global economy loses up to $2.2 trillion annually due to illicit trade, which is equivalent to around 3% of the global economy. The report noted that if illicit trade was a country, its economy would be larger than that of Brazil, Italy, or Canada, and the size of the economies of Mexico and Indonesia combined. The report also found that illicit trade in tobacco accounts for 10% to 12% of global tobacco consumption and is estimated to be worth up to 600 billion illegal cigarettes.

Crime Stoppers' Regional Director has called for a united effort to combat the spread of the illicit trade in tobacco products. This includes tightening the pursuit of criminals, confiscating their assets, and increasing penalties and fines. Creating legal channels for the distribution of low-risk tobacco products like e-cigarettes can help address this issue effectively.