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Investigative Reports Find Growing Ties Between Cigarette Smuggling and Terrorist Organizations, Underscore Need for Strong Treaty to Combat Problem

June 30, 2009

GENEVA, Switzerland — As nations meet in Geneva this week to negotiate an international treaty to combat cigarette smuggling, new investigative journalism reports released today find an increasing link between the illicit tobacco trade and funding for terrorist organizations. The investigations, which also detail the world's largest tobacco smuggling hubs, underscore the vast scope and seriousness of the illicit tobacco trade and the urgent need for the nearly 150 nations meeting in Geneva to quickly negotiate the strongest possible treaty to combat this problem.

The investigation, part of a series titled 'Tobacco Underground', was conducted by the International Consortium of Investigative Journalists.

The investigation found that approximately six terrorist groups, including al-Qaeda, the Taliban, the Real IRA and the Columbian FARC, are using tobacco smuggling to fund their activities. Due to the small size and weight of cigarettes, and the high profit margins they bring, cigarette smuggling is a highly appealing business to criminal networks and terrorist groups.

'This report shows that curbing illicit trade is crucial not only for health and economic reasons, but also to protect national and international security,' said Matthew L. Myers, President of the Campaign for Tobacco-Free Kids. 'Illicit trade undermines efforts to reduce tobacco use and save lives and costs governments billions of dollars in revenue. This investigation showcases the need for strong international cooperation to reverse the increasing flow of smuggled and counterfeit cigarettes.'

Additionally, the investigation found that China is the largest source of counterfeit cigarettes in the world, producing more than 400 billion counterfeit cigarettes annually. 99 percent of U.S counterfeit cigarettes are believed to originate in China. Paraguay and Ukraine are close behind, with each country producing and importing staggering numbers of cigarettes far beyond what could ever be used by each country's legitimate markets.

The illicit trade treaty being negotiated this week, the Protocol on Illicit Trade in Tobacco Products, is a supplementary treaty to the World Health Organization's Framework Convention on Tobacco Control (FCTC). The FCTC obligates nations to implement scientifically proven measures to reduce tobacco use such higher tobacco taxes, smoke-free air laws, large graphic health warnings and bans on all tobacco advertisements, sponsorships and promotions.

With a tobacco death toll of 5.4 million per year, projected to rise to eight million by 2030, the FCTC measures are critical in reducing the toll of tobacco. Yet illicit trade undermines the effectiveness of these tobacco control measures by making cigarettes cheaper and easier to buy. It also costs governments as much as an estimated US $40 billion to US $50 billion a year in tax revenues, with counterfeit trafficking stealing billions more.

Another new report released at the illicit trade negotiations, titled 'How Eliminating the Global Illicit Cigarette Trade Would Increase Tax Revenue and Save Lives,' found that 11.6 percent of the global cigarette market is illicit, equivalent to 657 billion cigarettes a year. The report also states that if the global illicit trade of tobacco were eliminated, governments would gain $31 billion. Additionally, in just six years, more than one million lives would be saved. This report was authored by Luk Joossens, Framework Convention Alliance; Hana Ross, American Cancer Society; Martin Raw, University of Nottingham and David Merriman, University of Illinois.

Together, these reports underscore the need for nations to take strong, swift and coordinated action to combat illicit trade and protect all citizens and governments from the harmful effects of tobacco.