UAE
According to Middle East experts in the black market trade, UAE’s landmark 100% tobacco tax has led half the smoking population to turn to cheaper, illicit cigarettes.
The experts say that many of these illicit cigarettes are either manufactured in UAE’s free zones or smuggled in to avoid government regulations and excise duties. They also said that there are 77 tobacco-related operations in Dubai free trade zones (FZE), including 22 manufacturers of cheap whites.
Speaking at the third global illicit trade summit hosted by The Economist in Abu Dhabi, Brendan Lemoult, industry investigator and vice president of global compliance and anti-illicit trade training at Japan Tobacco International, said, There are not a lot of regulations in these free zone areas, such as the standard of paper used or the quality of tobacco.
A report from The Gulf Research Center think tank on the region’s illicit tobacco trade this year to assess the effect of the tobacco tax implemented across GCC in 2017 said that smugglers were taking advantage of simplified customs procedures and lack of governance to disguise the origin and nature of products by mis-declaring goods, declaring goods in transit and manipulating accompanying documents.
Tamer Shabana, director of illicit trade Prevention at Philip Morris Middle East, said, “Manufacturing facilities in UAE free zones are producing cheap whites without the packaging health information that 98% of countries have.”