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2008 Contraband Tobacco Enforcement Strategy The contraband tobacco market is complex and continually evolving. The development of an RCMP Contraband Tobacco Enforcement Strategy is the first step in what will be a strategically driven process to tackle the growing illicit contraband tobacco market in Canada. The RCMP key concern is the increased involvement of organized crime implicated in illegal tobacco activities for monetary gain. The public needs to be aware that profits from illegal tobacco products are also funding other criminal activities, such as drug and gun trafficking. Furthermore, some of these organized crime groups are known to use violence to ensure profit. Be aware that you are funding criminal activity if you are purchasing products that are not sold legitimately. We all have a role to play in combating the contraband tobacco market. Another disconcerting trend related to the illicit tobacco market is the increasing involvement of youth in contraband tobacco activities for organized crime groups. The lure of easy money and minimal risk is a situation that some can resist. It is important that we not only address the supply of, but also, the demand for contraband tobacco. Combating the illegal tobacco market includes targeting those who purchase the illegal products. As such, the overall goal of the Strategy is to nationally reduce the availability of and decrease the demand for contraband tobacco, in turn supporting government health objectives. Given the broad interest in tobacco related enforcement, we have spoken with a variety of federal, provincial and Aboriginal partners, non governmental organizations, academia, industry and key police services. I would like to thank those that participated in the consultation process. While it is always difficult to draw the line at the number of individuals and groups to speak with, the RCMP feels that it has developed its first Contraband Tobacco Enforcement Strategy from a sampling of diverse views across the country. In closing, the solutions to achieving our goal will not come easily or quickly, but the RCMP is dedicated to ensuring that Canadians continue to enjoy safe and secure communities. ElliottRoyal Canadian Mounted Police I. Executive Summary Illicit sales of contraband tobacco contribute to an underground economy worth hundreds of millions of dollars. Traditionally seen as a victimless crime, tobacco trafficking is now regarded as a significant source of income for all levels of organized crime, who reinvest the substantial profits to support other criminal activities. The linkages between the illicit tobacco market and organized crime have increased exponentially over the last six years. While tobacco is a legal substance that is consumed by approximately 5 million Canadians, a growing number are purchasing contraband tobacco without realizing the negative impact it is having on Canadian communities and Canada economic integrity. By definition, contraband tobacco is any tobacco product that does not comply with the provisions of all applicable federal and provincial statutes. This includes importation, stamping, marking, manufacturing, distributing and payment of duties and taxes. Contraband tobacco originates from both domestic and international activities. The current trend of manufacturing, distributing and selling contraband tobacco products, which has developed exponentially over the last six years, involves organized crime networks exploiting Aboriginal communities. The expansion of the contraband tobacco distribution networks to the east and west coasts signify that the illicit tobacco market is a burden on all Canadians. Through the implementation of the Contraband Tobacco Enforcement Strategy, the RCMP strategic outcome is to reduce the availability of and decrease the demand for contraband tobacco nation wide, as well as support government health objectives. In an effort to ensure that the Strategy is effective, regular reviews and updates will be conducted as the illicit market evolves, including reviews of enforcement efforts. Aboriginal participation in public safety and anti organized crime efforts is fundamental in achieving successful long term outcomes for all communities. inter Nation, inter Tribal) and jurisdiction. The group ran a multimillion dollar cigarette traffick ing ring out of Dearborn, Michigan. The group also transported stolen property, laundered money, and solicited money for Hezbollah support of families of those killed in suicide bombings and other terrorist operations. Read the full story The illicit trade in tobacco products presents a serious threat to public safety and health in Canada. According to recent threat assessments, approximately105 organized crime groups 1 of varying levels of sophistication are currently known to be involved in the illicit tobacco trade. Compounding the problem is that 69% are also involved in drug trafficking, mainly marihuana and cocaine, and/or weapons trafficking. Furthermore, 30% of these groups are known to have violent tendencies. The increasing trend of organized crime involvement in the illicit tobacco market is a growing concern for the RCMP because it undermines Canadians expectations of community safety, public health and economic integrity. The sale of contraband tobacco contributes to a major underground economy worth hundreds of millions of dollars, and growing. While in the past, many individuals benefited from the illicit tobacco trade, this practice is regarded as a significant source of income for all levels of organized crime, income that is often reinvested to support other criminal activities. An illegal tobacco manufacturing and distributing operation evading all federal and provincial duties and taxes can sell its product for as little as $6 for 200 cigarettes (equal to one carton), while legitimate tobacco products are sold for $75 90 for one carton. While extremely difficult to methodically estimate, losses to the federal and provincial governments could be in the order of hundreds of millions annually from the contraband tobacco market. Even more concerning are the potential links between the illicit trade in tobacco products and the funding of terrorist activities as documented in recent foreign investigations. Canadian smokers are not making the connection between cheap/illicit tobacco products and criminal activity. The Canadian tobacco industry contracted a third party research company, GfK Group, to assess smoking trends in Canada. In June 2007, their research indicated that 22% of smokers are consuming illegal tobacco products. This estimate is up from 16.5% in 2006 2 . Based on the growth of the illicit tobacco market in recent years, it is evident that current deterrent efforts need to be enhanced and expanded. Presently, individuals who are prosecuted for tobacco related offences are often the low level who smuggle and distribute contraband goods. According to individuals regularly involved in the judicial process, the majority are low income earners and repeat offenders who rarely pay their fine in full, creating an added burden on our court systems, primarily the Fine Recovery Units. For the most part, current enforcement efforts are focused on the trafficking and smuggling networks. penalties) are creating a low risk high profit opportunity for criminal organizations.