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The Warsaw Voice » Business » December 21, 2011
Business & Economy
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Smoking Out the Smugglers
December 21, 2011   
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Agnieszka ¦wiergiel, CEO and general manager of Imperial Tobacco Polska SA, talks to Bożena Osucha.

The tobacco industry is regarded as highly controversial these days. What do you do to maintain a positive image on the market?
As part of its corporate social responsibility policy, Imperial Tobacco Polska has been carrying out a number of campaigns and projects designed to benefit our employees, local communities and the environment and we also commit ourselves to measures aimed at combating crime on the market for tobacco products. For example, we have for years held professional training courses for customs officers and police officers from economic crime departments across Poland. During the sessions, the officers study the latest data on the volume of tobacco products smuggled into Poland and where these come from, and they also learn the best ways to tell the difference between legal and illegal goods. We work with Customs and Police services to help them fight smuggling, which also includes tracking down illegal cigarette factories. We have conducted a campaign called “Stop Fakes” twice. The first time around, the campaign drew the attention of the public and decision makers to illegal, counterfeit cigarettes. The other campaign dealt with forged and illegally marketed loose tobacco for roll-your-own cigarettes.

We always stress that illegal trade in cigarettes and other tobacco products jeopardizes legally operating enterprises and people who work there as well as causes losses to the state budget. The excise tax policy should be reasonable and responsible, and so I am surprised by the excessive tax on loose tobacco, which after all is an alternative to smuggled cigarettes. Since 2004, a total of 43 illegal factories have been shut down in Poland and since Poland’s eastern border has become tighter, illegal production of tobacco products is being moved into the country.

What are the measures that Imperial Tobacco Polska proposes to contain the illegal tobacco market in Poland?
When you want to combat illegal production and sales of tobacco products, it is vital to introduce legal regulations necessary to control sales of equipment used to manufacture tobacco products. There also need to be efficient mechanisms to control tobacco sales and you have to make sure penalties are more severe.

Tobacco manufacturing equipment seized at illegal factories is now back on the market, as the Treasury sells it off through bidding procedures after a court orders confiscation. We believe such equipment should be physically destroyed. Regulations that we propose include the following:
- a ban on the possession of equipment to manufacture tobacco products by unauthorized businesses.
- tough sanctions, including confiscation of manufacturing equipment and annulment of purchase transactions, for those violating this ban;
- it is necessary to introduce a formal definition of tobacco manufacturing equipment;
- new and efficient mechanisms are needed to identify tobacco manufacturing equipment.

As for controlled sales of tobacco, we propose the following:
- a register of tobacco growers,
- closure of illegal tobacco farms,
- a new requirement for tobacco growers to annually report to supervisory authorities the real volume of their tobacco production and contracts they signed on tobacco sales in the previous year.

We also propose stricter penalties, including:
- raising minimum fines for excise tax-related offenses and crimes;
- increasing the maximum prison term for crimes of this kind;
- obligatory confiscation of vehicles used for committing a crime, regardless of whether the perpetrator owns the vehicle or not.
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