Understanding the U.S. Illicit Tobacco Market Characteristics, Policy Context, and Lessons from International Experiences (2015) / Chapter Skim
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6 Interventions in the Illicit Tobacco Market: Law Enforcement
6 Interventions in the Illicit Tobacco Market: Law Enforcement
Pages 139-160
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From page 139... ...
With these limitations in mind, the first two sections in this chapter discuss the enforcement efforts in the United States at the federal level and for two key states in the illicit tobacco trade, Virginia and New York. The third section analyzes the risk, and the perception of risk, associated with participating in illicit tobacco markets.
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From page 140... ...
With regard to tobacco, ATF seeks to curtail illicit cigarette trafficking by enforcing the CCTA and divesting criminal and terrorist organizations of money derived from this illegal activity. ATF does not often pursue investigations internationally, and its cigarette smuggling investigations usually involve interstate smuggling activities (U.S.
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From page 141... ...
of ATF's total budget each year: in contrast, the Fire 160 140 120 Number of Investigations 100 80 Number of invesƟgaƟons iniƟated 60 Number of invesƟgaƟons closed 40 20 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Fiscal Year FIGURE 6-1 Number of ATF tobacco investigations initiated and closed, 1998 through 2014. Figure 6-1 NOTE: Data for 2014 are for 6 months, through July 15.
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From page 142... ...
. ATF, along with other participating law enforcement agencies, keeps a small percentage of seizures through forfeitures: see Table 6-1.
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From page 143... ...
. The low priority given by ATF to tobacco smuggling relative to firearms, arson, and explosives is consistent with DOJ's broader prioritization of terrorism and violent crime over other areas of legal enforcement and is consistent with the fact that criminal prosecutions of those involved in the illicit tobacco trade appear to be an especially low priority for prosecutors.
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From page 144... ...
. This chain of events suggests that training law enforcement officials and dedicating tobacco-specific enforcement resources could have an impact on the illicit tobacco trade.
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For that reason, Virginia has become the primary source state for illicit cigarettes (Virginia State Crime Commission, 2013a, 2013b)
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,5 Virginia has demonstrated some interest in reducing the illicit trade in tobacco. In 2012, Virginia was the first state to pass a criminal statute to specifically deal with interstate trafficking (Virginia State Crime Commission, 2013a, p.
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2. The Northern Virginia Cigarette Tax Board is responsible for ensuring the payment of local excise taxes in 17 jurisdictions6 in orthern Virginia, and it performs approximately 3,000 in N spections of retail establishments each year (Virginia State Crime Commission, 2013a, p.
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From page 148... ...
Data from the Virginia Criminal Sentencing Commission indicate that very few charges are filed, and even fewer convictions are obtained, in Virginia courts under any of Virginia's relevant criminal statutes (Virginia State Crime Commission, 2013a, pp.
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From page 149... ...
A third reason (Virginia State Crime Commission, 2013a) is that while traffickers now get their cigarettes from Virginia suppliers, organized traffickers looking for sources of cheap cigarettes could look abroad for alternative sources of inexpensive cigarettes to make even more money.
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This shift in the supply of illicit cigarettes led to a change in New York City's enforcement efforts. A representative from the New York City Sheriff's Office informed the committee that in August 2011 it launched the Tobacco Task Force (TTF)
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From page 151... ...
In other locations as well, enforcement efforts targeted at illicit cigarette retailers or other sellers of illicit cigarettes may be constrained by concerns about perceived fairness and legitimacy and the costs to the community of frequent or high-profile enforcement efforts. At the same time, the recent NYPD policy of targeting the supply side of the illicit tobacco market has come under serious public scrutiny after the death of Eric Garner, who was known to police as a habitual dealer of "loosies" (Marzulli et al., 2014)
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From page 152... ...
Risks of Detection Arrest and prosecution have to be preceded by detection. A recent report on the illicit tobacco industry in Canada estimated that at the height of the law enforcement efforts to detect and seize illicit tobacco products, "one out of every 27 packs of illicit cigarettes bought in Canada was seized by law enforcement authorities" (Daudelin et al., 2013, p.
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cThe sum of columns 2 and 3. dTotal of seized cigarettes from column 4 and total illicit cigarettes consumed from Physicians for a Smoke-Free Canada (2011)
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market. In 2010, the Northern Virginia Tobacco Control Board and law enforcement agencies in Maryland seized a total of 328,925 packs of Virginia cigarettes that were being smuggled out of the state, roughly 6.6 million individual cigarettes.
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estimated that close to 11 percent of the marijuana produced in Quebec in 2002 was seized by law enforcement agencies. The proportion of illicit cigarettes seized is only one measure of risks.
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From page 156... ...
And although the social networks that can prop up illicit markets are time consuming and difficult to establish, they may be particularly resilient to government regulation. ENFORCEMENT CHALLENGES AND OPPORTUNITIES Policing the illicit cigarette trade depends on the capacity of law enforcement to take advantage of the available opportunities to intervene in that trade.
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From page 157... ...
. Moreover, as noted in Chapter 2, the illicit trade in tobacco can be affected by changes in law enforcement against other crimes, such as intellectual property theft and drug crimes.
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From page 158... ...
For traditional local law enforcement, tobacco looks like an economic rather than a criminal problem, especially while the trade remains nonviolent, and without training or an easily observable tax stamp or track-and-trace marker, the illicit trade may be hard to detect. Law enforcement efforts attempting to detect and investigate the illicit trade tend to be weak and uneven, and (as discussed above)
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From page 159... ...
demonstrate that collaboration across and within jurisdictions, as well the dedication of tobacco-specific enforcement resources, can help to combat the illicit trade, but enforcement efforts need to be able to adapt as the illicit market changes. SUMMARY AND RECOMMENDATIONS Enforcement against the illicit tobacco trade faces familiar problems: the dynamic and adaptive nature of the illicit tobacco markets; the need to coordinate across various agencies, participants, and levels of government; and the fact that the illicit tobacco trade has often been a low enforcement priority for the federal, state, and local governments, particularly when it comes to prosecution.
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From page 160... ...
The federal government should also consider developing a voluntary reporting system by state and local governments. RECOMMENDATION 6-2 Systematic evaluations should be con ducted of existing and future enforcement interventions in the illicit tobacco trade in the United States.
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