How Plain Packaging Will Help Spread Terrorism

by on 24 May, 2011

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Tim Andrews discusses the overwhelming evidence that tobacco smuggling funds terrorist groups, and how Julia Gillard's plain packaging proposal will accelorate this:

There are many reasons to oppose Julia Gillard’s stunt calling for “plain packaging”: The fact that there is no credible evidence that plan will lead to a decrease in smoking (if anything, by forcing tobacco companies to compete on price alone, will lead to a reduction in the price and will drive up smoking rates). That it is a violation of intellectual property rights. That it breaches our international agreements. That it’s yet more unnecessary big government nanny-state intervention. That it will cost taxpayers up to a staggering $3.4 billion dollars.

Yet one fact hasn’t yet been addressed by the Australian media: The undisputed fact that it will help fund terrorists.  

This may seem silly and alarmist at first glance. Terrorism financed because of plain packaging? This must just be crazy fearmongering, right? I'm being ridiculous! I mean, drugs, sure, but tobacco smuggling?  Surely I've gone mad!

Unfortunately, no. The evidence is crystal clear and beyohnd any doubt that this is not the case: there is not a shred of doubt terrorist groups are moving out of high-risk drug smuggling, and into relatively low-risk smuggling and manufacture of tobacco, and removing the protection that trademarks offer will accelerate this process considerably.

Make no mistake: tobacco smuggling is no joke. According to the World Health Organization Framework Convention on Tobacco Control, there are an estimated 600 billion counterfeited and smuggled cigarettes crossing national borders each year (over 10% of all cigarettes consumed). More importantly, this has been directly proven to finance terrorist activities. Trademarks are one of the strongest protections we have against counterfeit goods, and by violating them we are giving a green light to tobacco smugglers who now have a proven history of bankrolling terrorist organsiations. 

The link between tobacco smuggling and crime is not a new one.

In the early 1990’s, the smuggling of cigarettes in Berlin caused “a surge in gangland-style executions and turf wars that made Berlin streets more dangerous than at any time since World War II.” The USA Today went on to note that in 1996 “Turf battles between the Vietnamese gangs that control street-level sales have been blamed for the deaths of 40 Vietnamese, 15 in Berlin alone. These killings are the latest episode in a bloody gang war over Berlin's lucrative trade in smuggled cigarettes.” In the Balkans, “high-profile killings connected to illicit tobacco networks have claimed journalists, intelligence officers, politicians and the criminals themselves”. Some of the victims included Goran Zurgic, a security advisor to then President Milo Dukanovic who was working with western intelligence agencies investigating tobacco smuggling; Momir Gavrilovic, the former Deputy Chief of Serbian Intelligence for a file he had put together on cigarette smugglers’ connections to governments; and the Editor of Dan, the Montenegrin Daily, who was gunned down in 2004 outside his office shortly after publishing a series of articles on the illicit tobacco smuggling activities of underworld kingpins. In 2009, police just outside Washington DC arrested 14 members of a countraband cigarette ring for attempting to murder their competition.

More troublingly, and of direct relevance to Australia, is the fact that, in recent years, the proceeds of tobacco smuggling are flowing to finance terrorist groups. A 2003 report by the non-partisan Cato Institute concludes thata wide range of terrorist groups are known to use the proceeds from cigarette smuggling to fund their operation. For example, counterfeit cigarette tax stamps were found in an apartment used by members of the Egyptian Jihad cell that carried out the 1993 bombing of the World Trade Center”.

In 2008, a U.S. House of Representatives Homeland Security Committee report concluded that “Law enforcement officials in New York State [alone!] estimate that well-organized cigarette smuggling networks generate between $200,000-$300,000 per week. A large percentage of the money is believed to be sent back to the Middle East, where it directly or indirectly finances groups such as Hezbollah, Hamas, and al-Qaeda.” 

Examples of terrorism being financed by tobacco smuggling are numerous. In 2001, Aref Ahmed was convicted of smuggling tobacco to finance the infamous “Lackawanna Six” Islamic-terror cell attend al-Qaeda’s al Farooq training camp in Afghanistan.

In 2002, 26 Hezbollah terrorist cell agents in North Carolina were convicted for selling $7 million worth of bootleg tobacco, planning to use the funds to buy advanced aircraft analysis and design software, blasting equipment, ultrasonic dog repellents, munitions and other military hardware. At least $1.5 million dollars in tobacco smuggling proceeds was directly forwarded to Hezbollah by Mohamad Hammoud, along with laptops, night-vision goggles, stun guns, blasting equipment, and more.

Just last year, Hazam Ali Ahmed pled guilty for raising approximately half a million dollars through tobacco smuggling, while an FBI Joint Terrorism Task Force wiretap caught Ahmed recruiting for al-Qaeda and discussing blowing up a shopping center.

The list goes on.

Australia’s close proximity to South East Asia, where tobacco smuggling is particularly rife, combined with the rapid increase in online-based cigarette smugglers (where cartons can be bought for under $20AUD), make it guaranteed that if this legislation goes ahead, and we lose the anti-smuggling protection that trademarks provide, smuggling rates will soar, and terrorists who want to kill us will directly profit. The sale of illicit cigarettes to Australia has already increased by 25% in the last year alone, at a time that Europol’s 2011 Organized Crime Threat Assessment notes that tobacco smuggling is significantly increasing, particularly through fake brands from China (which, obviously, have an easy entry into Australia). Obviously I am not arguing that if this plan is to go ahead, it will directly result in a terrorist attack against Australians or anything like that. But the fact that it will help tobacco smugglers, who are proven to directly finance terrorists, can not be denied. As such, to proceed with such a plan at this time is simply madness.

Plain packaging is a bad policy any way you look at it. It will not achieve its aims, it will hurt our economy, and it violates our international obligations. Add to this the fact that it may be used to fund the next Bali bombing, and the decision for our politicians is clear: This policy MUST be rejected. 

Tim Andrews is Managing Editor of Menzies House, and co-author of a submission into the Senate Inquiry into Plain Tobacco Packaging on behalf of the Property Rights AllianceHe has written about plain packaging before on Menzies House here,  here and here, and was interviewed on the matter in 2010 on 2GB Radio

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