NS6511: Illegal Tobacco, Crime, and Terrorism - A Comprehensive Report

This report delves into the multifaceted relationship between illegal tobacco, crime, and terrorism, focusing on the UK context. It defines key terms such as 'crime,' 'terrorism,' and 'illegal tobacco,' explaining how illicit cigarettes are manufactured, smuggled, and distributed, often originating from countries like Russia and Eastern Europe. The report highlights the consequences of this illegal trade, including lost tax revenue, corruption, and easier access to tobacco for minors, and undermines legitimate businesses. It explores the criminal and terrorist connections, illustrating how the profits from illegal tobacco sales fund organized crime and terrorist activities. The report also touches on the relevant legal and enforcement frameworks in place, providing a comprehensive overview of the issue.

Illegal Tobacco

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
What is crime?.............................................................................................................................3
What is terrorism?.......................................................................................................................3
What is illegal Tobacco?.............................................................................................................4
Illegal Tobacco Trade.................................................................................................................4
Consequences of Illicit Tobacco Trade ......................................................................................6
Illegal Tobacco and Crime..........................................................................................................6
What attracts criminals to illegal cigarettes?..............................................................................7
Illegal tobacco and Terrorism.....................................................................................................8
Relevant Legal and Enforcement Framework.............................................................................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
A crime in a act of harming someone deliberately either physically or psychologically.
Act act can also be related to damage or loss of property. These all acts must be against the law
to form crime. There many many types of crime which are defined in United Kingdom which are
categories in two different categories i.e. violent and non violent crime. The law which governs
such activities in UK is the Criminal Law Act 1977. the law of criminal sets out meaning of the
offences related to crime. It also sets out rules and procedure which are to be applied by the
police while investigating any matter. This act also impose punishment when a person is found
guilty. Punishment can any punishment like: fine, imprisonment and community order (Franssen
and Claes, 2020). Crime and illegal activities is the very own reason for the terrorism.
This report consist of illegal activities that relates to selling, manufacturing and
distribution of smuggled cigarettes. This report also explains the increase in the crime rate and
terrorism due to the illegal tobacco. This report also explain Illegal tobacco and crime & Illegal
tobacco and Terrorism.
MAIN BODY
What is crime?
A crime is an act of harming someone or an omission which leads to cause harm. Such an
harm is deliberately caused to affect someone physically or psychologically. A crime can also be
related to any damage cause to the property of someone or loss of any property. Any such act
which is against the rule of law or is prohibited by the law, constitutes crime. Crimes in UK are
governed by the Criminal Law Act 1977. The crime is a very wide term and many types of it are
included which are all explained in the act (Laundering, 2019). The act do not only provide with
the offences but also explains the procedure of its investigations and the punishment related to it.
What is terrorism?
Terrorism is violence or using force unlawfully against any person or property either to
terrify or pressurise the government of the state and its citizens to achieve political or social
agendas. People involved in terrorism are called as terrorist. The terrorism is categorise into two
different categories. They are: domestic or international terrorism. It totally depends on the
objectives of the terrorist that in which category do they fall. Domestic terrorism is when the
terrorism is affecting the domestic country, its people and the government. International

terrorism is when the actions of the terrorists are affected the whole world or different parts of
the world.
What is illegal Tobacco?
Illegal tobacco is trading of illicit or cheap white cigarettes in the market of UK without
them being manufactured, sold or distributed in UK. These cigarettes are manufactured in the
factories of Russia, Eastern Europe, etc. and are illegally transported to UK for its sale. These
cigarettes importers do not pay tax to the government and also there is no warning images
present or any stamp to warn consumers before its consumption (Kleiman and DeFeo, 2017).
Illicit tobacco is also known widely by other few names. They are: Illicit white, Counterfeit
cigarettes, Genuine cigarettes and many more.
“Illicit white” Cigarettes do not have any legal market in UK. These cigarettes are mass
manufactured and there is no warning sign or image on the packet. These are illegally imported
in UK and taxes are not paid on them.
Counterfeit Cigarettes are also illegally manufactured and are sold by someone who is
not an original manufacturing parties. .
Genuine cigarettes or Non-Duty paid cigarettes are those which are smuggled illegally
in UK without paying duty. These duty free cigarettes are further exported form UK to another
country for selling instead of keeping them for personal use by the parties.
Illegal Tobacco Trade
Illegal trade in tobacco is increasing and is giving rise to dangerous and inhumane
organisations. Every cigarette packet a person buys from any illegitimate source directly or
indirectly funds criminals and terrorists indulge in destructive and dangerous activities. Illegal
trade is not the only which is a concern for UK but as there is involvement of crime and terrorist,
the country is worried about the safety of different communities and its people. These criminal
gangs operates on an industrial scale to smuggle. They finance illegal activities by selling the
smuggles cigarettes with the revenues generated by them.
Illicit tobacco trade is not a trading of some new product in the market. It is similar to the
other illicit product. This illicit trade started with the introduction of tobacco in the industry and
when the demand of it was noticed in the market (Geldenhuys, 2019). The illicit tobacco trade is
the result of the demand and supply of tobacco in the market in UK. All the consumers
irrespective of their status wishes to save money. This increased the demands of cheap cigarettes

in the market. The suppliers and manufacturers of the tobacco also wanted to earn money and
generate profit which resulted in the smuggling tobacco to make larger sales of tobacco by
meeting the demands of the consumers. The only way in which all these illicit activities can be
stopped is by the combination of the policies and the laws which government makes in order to
stop the illicit activities which are increasing daily. There are many laws and policies
implemented by the United Kingdom (UK) to stop the trading of illicit tobacco. From illicit
domestic production and illicit importers, illicit tobacco is derived.
The production of illicit tobacco is termed as Illicit domestic production when the
tobacco is being produced or manufactured in the same jurisdiction where it is to be consumed
(Bancroft, 2020). This production is not declared to the authorities of taxation. Products are later
sold without paying taxes on them to the consumers or sellers. Illegal manufacturing can also be
done in factories which are approved to manufacture as a part of it.
When the illicit tobacco products are unlawfully moved from one place to other having
different jurisdiction and no taxes are paid on them to the government then they are termed as
Illicit Importers. This is breach of law that prohibits import and export for illegal tobacco.
Not all production of tobacco is termed as illicit, some are also licit products. For e.g.:
UK do not produce tobacco leaf and also the domestic cigarettes manufacturing is marginal.
They had only two factories earlier in UK which was closed. They had no domestic production
left and therefore they import licit tobacco from other countries. UK have five top sources from
where they import products of tobacco. They are: the Netherlands, Poland, Germany, Belgium
and Romania.
An operation was planned to find illicit tobacco trade. The operation was well known as
“Operation Black Poseidon”. This operation targetted the trade of illicit tobacco which lead to
the discovery of a factory which was involved in Sumy, Ukraine. They had hidden complexes
underground. The per day manufacturing of the tobacco product was estimated to be 1,00,000-
1,25,000. ready to sell cigarettes and tons of tobacco were found with the minimum value
estimated to be $560,000.
The illicit tobacco trading is badly impacting the businesses who are legitimate and legal.
All the people related in the legal business such as: manufacturers, suppliers, distributors.
Wholesaler, retailers, etc. Financial losses were faced by the manufacturers (Shelley, 2018). The
most important of all is the reputation which was badly affected and the brand name was

damaged too. The sellers, retailers, etc. were at loss due to the decrease in the demand of
tobacco from them. The sellers do not only get impacted with the reduction in sales but this also
impacted the sales of other products which are kept for sale along with the tobacco and
cigarettes. The decline in sale of those products were also impacted. In short, the whole industry
who were legally running their business were impacted badly.
Consequences of Illicit Tobacco Trade
The destructive consequences of the illicit tobacco is illustrated below- Robs tax revenue of the government- When the illicit tobacco is traded indifferent parts
of the country or world, it results in robbery of tax revenue as licit tobacco requires to pay
heavy revenue to the government and illicit tobacco will lead to no payment of tax
revenue which is a loss for the government (Soneji and Wills, 2019). Encourages corruption- The illicit trade of tobacco raises the corruption in the country
and leads to money laundering. This trading threatens the rule of law of the nation which
prohibits corruption. Reduces effectiveness of public policies- As policies prohibit illicit trading, the
continuous practice of illicit trading of tobacco leads to breach of government policies
which are made for the benefit of the general public. Easy access to minors- The illicit tobacco is easily catchable for the minors as they
cannot get access of legal tobacco in the market so they move towards the illicit one so
that they can easily consume it. The illegal trading increases the harsh consequences to
the minor and affect their health as well.
 Undermines legitimate business- The illegal trading of tobacco affects the legal business
which are operating in the market with requisite licenses (Barrett and Hannah, 2020). The
illegal trading affect their business and profits which also affect their long term brand
image. The small businesses loose their sales also.
Illegal Tobacco and Crime
Selling Illegal tobacco is a well organised crime. The selling of tobacco is an add on to
the crime rate happening in the world. The cigarettes after they are smuggled are sold to the
sellers to further sell them to the consumers at the rate which is below the market rate. The
smuggled cigarettes are duty free and thus by selling them to the consumers they are generating
profit. This profit then is send to the terrorist and criminal gangs involved in the smuggling. The

profit is used by them in planning and implementing criminal activities (Lallerstedt, 2019). Law
enforcement agencies have worked hard and they have found direct links of the parties that are
involved in illicit tobacco and its smuggling.
Illustration 1: Examples of criminal markets impacting the UK
Smuggling or trafficking of tobacco is a business of multibillion dollar. It increases the
rate of crime and corruption in the country. It also steal the money from government by not
paying taxes on the illicit tobacco which expands the illegal global economy and also helps
terrorist by financing them in their illegal activities and operations. When cigarettes are
smuggles, the government lost most amount of tax which will be helpful in paying for health and
education programs. Other government services and enforcement of the law needed to minimise
the rate of crime including smuggling and trafficking.
Smuggling of cigarettes is a form of Transactional Organised Crime i.e. (TOC). This is a
serious threat on all the national and international securities. The threat is on the safety of public
and their healths and other various institutions. The whole process under this smuggling is
carried out perfectly and in an organised manner. It is done with full planning and the routes to
smuggle the product from one jurisdiction to other is also well proofed.
What attracts criminals to illegal cigarettes?
 The punishment for selling of illegal cigarettes or tobacco is not vigorous as compared to
the other activities that are illegal (Cromwell, 2018). So the criminals gets attracted by it
as this is considered as the low risk activity to raise funds for criminal offences.
 The cost to manufacture or produce counterfeit cigarettes is very less as compared to
others. The factories in Russia, middle east, etc. are manufacturing them just for cents as
these cigarettes are smuggled so the parties don't even have to pay duty on the product.

This helps criminal to raise extra profit. The minimum profit earned by the criminals on
every container is between $3 million dollar to $4million dollar (Brits, 2018).
 It is easy to smuggle tobacco due to its size. Smuggling of other product gets difficult for
the parties.
 Many provisions of the government are related to selling of cigarettes in which they have
prohibited shops to not keep tobacco on shelf to display. For the criminals now it gets
very easy to sell the smuggles tobacco as there will be no advertisement and they will not
be caught.
Illegal tobacco and Terrorism
The selling of Illegal tobacco is increasing and many mafias, criminal groups and
terrorists are involved in the smuggling and selling tobacco. These criminal groups raise lots of
funds from earning profit by selling illegal tobacco in the market. The funds are used for buying
dangerous weapon and planning of criminal activities. These activities are always planned with
an object to be achieved by the criminals. The implementation of these activities results in the
risk to the country and its people. The terrorist are least concerned with the fact that their
activities are hurting or harming another person. All the people who are part of the terrorists
group are given proper training for the implementation of the dangerous activity planned in order
to achieve an object.
The trading of illicit tobacco is considered as the main source of income and revenue
generation for the organised crimes and terrorism. In Europe there was new agenda which was
adopted by the commission to recognise importance of fighting the smuggling and trafficking of
cigarettes. This fight will help in cutting revenue sources of criminal groups and terrorists. This
illicit trade of tobacco is a threat on national security of the country. There are various cases
which have proved that there exist direct link between the cigarettes smuggling and the criminal
and terrorist activities (Tsighe and Hailemariam, 2018). In one of the example of United States
(US), bombers in the first attack at the world trade centre got there funding from illicit cigarettes
tax stamps. From this case intense investigation. From all the investigations done it was
concluded that all the profit and income generated from the smuggling of the cigarettes and
tobaccos are helping terrorists and their activities which is causing serious threat to the nation
domestically and internationally.

Relevant Legal and Enforcement Framework
The market of tobacco is strictly regulated as the consumption of it causes health related
issues and problems that affect the society and its economy. The first comprehensive policies
was released in the documented form in 1998 with a title that says “Smoking Kills”. Later the
policies were set to control tobacco (Betti, 2017). The Tobacco control policy, UK had the main
aim to stop and tackle the illicit trade of tobacco in the market. After implementing many
policies laws and regulations there was reduction in the illicit trading of tobacco. Irrespective of
the outcome of Brexit in UK, tackling of illicit trade of tobacco remains priority.
There was a policy which came into force in 2015, which was jointly presented by the
HMRC i.e. Her Majesty's Revenue and Customs and UK border Force named: “Tackling illicit
tobacco: From leaf to light”. The aim of this is to minimise the shares to 10% or below of the
illicit market in UK that are indulge in illicit tobacco trading. To properly assess the impact of
Brexit in the control of trading of illicit tobacco it is important to know the specific measures,
legal frameworks and also the initiatives taken by the government for the same. Fiscal Measures: Increasing tax on tobacco is the most effective way to control and
reduce the consumption of cigarettes by the consumers. It will be helpful health wise for
the society and later this will lead to tobacco free society. The result of this was that there
was less consumption of the tobacco the smokers switched themselves to the illicit
tobacco as the prices got too high for the consumers to pay for tobacco. Import Duties: the tobacco is subject to Import duty before the payment of excise duties
and VAT. The UK do not levy import duties on the import off tobacco from the member
states of EU. The rate of tariff to be imposed is totally dependent on the origin of the
product from where it is imported (Comolli, 2018). Currently, UK is imposing import
tariffs from the third countries other than EU on the products of Tobacco.
 Tobacco Regulations: Besides applying taxes and imposing import duties on Tobacco
products, legal framework also includes regulations which relates to the manufacturing of
tobacco, machinery licensing of tobacco, raw tobacco, etc. Though the manufacturing of
the tobacco product is ceased in the UK, but still if there is in future any manufacturing in
UK then the factory or the organisation must comply with the provisions and rules that
are set out by the government of UK (Hureau and Braga, 2018). It is made mandatory by
the law in UK that if there are any machines that produce or manufacture tobacco, they

have to be licensed and the amount is to be paid to the government according to the
licensing scheme regulation act of UK.
CONCLUSION
This is concluded from the report that illicit trading of tobacco results in the increase in
crime rates and corruption in the country. The criminal activities and the members of the gang
when forms a motive or an object to be achieved, this takes form of terrorism. This is because the
illicit trading of tobacco is another form for generating money and profit for the smugglers and
traffickers of the tobacco. This amount is then invested in buying dangerous items and weapons
which will be helpful for the terrorists in order to carry out and implement their motive.
Indulging in illicit tobacco trading is proved to be easier for the criminals to enter into as the
punishment is less in comparison to other illicit trading. There are many policies and regulations
made by the government in order to stop and minimise these activities as it directly and
indirectly increases crimes, corruption and terrorism in the country. This impact the economy
and growth of the country. This also imposes danger on the security of the nation.

REFERENCES
Books and Journals
Bancroft, A., 2020. Illicit Trades Are Political Economies. In The Darknet and Smarter
Crime (pp. 65-84). Palgrave Macmillan, Cham.
Barrett, D. and Hannah, J., 2020. Human rights and tobacco control: lessons from illicit drugs.
In Human Rights and Tobacco Control. Edward Elgar Publishing.
Betti, S., 2017. Key global enforcement issues on illicit trade in goods. In Handbook of Research
on Counterfeiting and Illicit Trade. Edward Elgar Publishing.
Brits, M., 2018. Tobacco: a crucial industry under threat: current affairs. FarmBiz, 4(4), pp.10-
11.
Comolli, V. ed., 2018. Organized Crime and Illicit Trade: How to Respond to This Strategic
Challenge in Old and New Domains. Springer.
Cromwell, J., 2018. The Smugglers' World: Illicit Trade and Atlantic Communities in
Eighteenth-century Venezuela. UNC Press Books.
Franssen, V. and Claes, A.L., 2020. Illicit Trade in Tobacco Products. In Search of Optimal
Enforcement.
Geldenhuys, K., 2019. The illegal trade cigarette is funding criminals. Servamus Community-
based Safety and Security Magazine, 112(6), pp.10-15.
Hureau, D.M. and Braga, A.A., 2018. The trade in tools: The market for illicit guns in high‐risk
networks. Criminology, 56(3), pp.510-545.
Kleiman, M.A. and DeFeo, M.L., 2017. Enforcing the Law Against Illicit Traffic in Tobacco
Products: Organizational Problems and Potential Solutions. Available at SSRN 3025138.
Lallerstedt, K., 2019. Illicit financial flows: Illicit trade in counterfeit, pirated and substandard
goods in Ghana.
Laundering, T.B.M., 2019. The illegal cigarette trade is funding criminals.
Shelley, L.I., 2018. Dark commerce: How a new illicit economy is threatening our future.
Princeton University Press.
Soneji, S. and Wills, T.A., 2019. Challenges and Opportunities for Tobacco Control Policies in
the 21st Century. JAMA pediatrics, 173(8), pp.723-725.
Tsighe, Z. and Hailemariam, S., 2018. Tobacco smuggling in Eritrea. MOJ Public Health, 7(6),
pp.381-391.