NASSAU, Bahamas — There’s a “tangible” link between the smuggling of tobacco products and organized crime. That’s the view of Rhys Campbell, head of corporate and regulatory affairs for Carisma Marketing, a subsidiary of British American Tobacco (BAT).Speaking during a break in a two-day smuggling and counterfeit workshop in Nassau, Campbell told reporters that smugglers were likely to sell at 50 percent below legitimate vendors as they are not paying taxes.
Campbell said smuggling and counterfeit goods were a big issue, not only for The Bahamas but the entire Caribbean.
“One of the things that The Bahamas Customs Department and the Ministry of Finance have done is the implementation of a tax Stamp system, and we are working with them to see how seamlessly we can transition the products that are existing in the market into the new stamp regime” Campbell said.
“The hallmark of our operations has been partnership to really get this done and really ensure that we can identify products that have paid their taxes coming into The Bahamas, to ensure that there are no revenue losses.”
“When you look at our biggest risk in terms of loss of government revenues, in terms of loss of industry volumes, our biggest impact has been from tobacco products that have not paid duty and are counterfeit.”
“They have used our brand equity we have established to mark their products and they are probably cutting half of the cost because they are not paying the taxes alone, so it has significant impact in The Bahamas as well as the wider Caribbean.”
“The only way to tackle this problem is to not look inward but to also focus on our Caribbean partners.”
Panama, he said, is one of the key transshipment points for all products coming into the Caribbean. “So it’s very important that we have a joint strategy with our partners in Panama so that they share information on products that are coming into the region. It will help Bahamas Customs in terms of being able to predict, preempt and prevent those smuggled cigarettes from coming into the island.”
Campbell added that there was a significant link between tobacco smuggling and organized crime.
“It’s very concerning to us in the Caribbean,” he said. “Given the increased anti-drug efforts in the United States, it has become a lot harder to ship drugs and substances through the country, and they have instead turned to tobacco on which the margins are high, especially if you erode the taxes.”
“What our experience has shown is that it is a very important thing and it is funding organized crime.” Campbell observed.