VietNamNet Bridge – The Viet Nam Tobacco Association (VTA) has called for changes to the law to enable authorities to combat the increasing incidence of cigarette smuggling.

Tobacco industry wants tougher laws to check smuggling. — Photo cand.com.vn

"We suggest the Government should amend the law to reduce the number of cigarettes that can be smuggled without attracting criminal charges from 1,500 to 500 packs," Pham Kien Nghiep, general secretary of VAT, told Viet Nam News.

According to VTA, things have taken a turn for the worse this year with smugglers recently attacking and killing an anti-smuggling official to retrieve contraband he had seized.

A 2009 Government decree, the 2012 Tobacco Impact Prevention Law and 2014 Investment Law all prohibited sales of smuggled cigarettes.

But amendments to the Criminal Law last year diluted many provisions, causing difficulties in the fight against smuggling.

For example, before being amended the Criminal Law had regulated that smuggling 1,500 packs was a crime.

But the amendments increased the number to 6,500 packs or VND100 million worth (US$4,500).

In 2014 the Government released a directive to fight the growing incidence of smuggling, pointing out that the “rise in cigarette smuggling was because of the paltry fines” and urged lawmakers to reduce the number of packs of contraband that would constitute a crime.

“Related authorities must sit together and change the laws immediately to boost the fight against smuggling,” an expert said.

Economic impact

The smuggling of cigarettes into Viet Nam is thought to be far worse than most people realise.

In a survey done by the Oxford Economics Department and the US-based International Tax and Investment Centre, the country ranks second in Asia in the number of cigarettes smuggled in.

In the three years from 2012 to 2014 the number smuggled into Viet Nam stood at very high levels - 20.1 billion, 21.3 billion and 19.8 billion and accounting for over 20 per cent of the country’s cigarette consumption.

Viet Nam produces 4.5 billion packs a year and exports 20 per cent of them.

The situation could worsen since the special consumption tax on cigarettes will rise from 70 per cent now to 75 per cent in 2019.

Smuggling is believed to cause the tobacco industry losses of VND10 trillion ($450 million) a year.

"It is hard to refuse a 30 – 50 increase in profits. There are too many unemployed people all too ready to transport illegal cigarettes despite the risks," Nghiep said.

Smuggled cigarettes lack information about tar and nicotine levels and could potentially cause serious health problems.

But smugglers prefer them just for this reason.

The smuggling linchpins often bribe authorities and hire people living on the Cambodian border to smuggle cigarettes by boat and motorbike.

Ninety per cent of the smuggled packs are Jet and Hero cigarettes, which have been available in Viet Nam for more than 30 years and are sold mostly in the southern and central regions.

They are produced by Indonesia’s Sumatra Tobacco Trade Company, which sells them among others to Laos, Thailand and Cambodia.

They are smuggled into Viet Nam via border gates such as Svayrieng in southern Long An Province and Bavet, Xa Xia and Moc Bai in southern Tay Ninh Province.

Ninety per cent of contraband cigarettes pass through these border gates.

VNS