Shortcomings in the handling of smuggled tobacco

	Perpetrators arrested transporting 2,500 packs of smuggled cigarettes
	Mong Cai : detects new smuggled cigarettes
	More than 37 tonnes of suspected smuggled tobacco discovered in Lao Cai

Customs officers checked exhibits of smuggled cigarettes. Photo: Q. H

“1 in 4”

There are four laws and decrees detailing the enforcement of laws with contents directly relating to acts of trafficking, stockpiling and illegal transport of smuggled cigarettes. They are: Commercial Law 2005 and Decrees detailing the implementation of the Law; Law on Investment 2014; Decrees detailing the implementation of the Law on the handling of the administrative violations 2012; and Penal Code 1999.

Implementing Commercial Law of 2005 (at Article 25, paragraph 1), the Government issued Decree No. 43/2009/ND-CP amending and supplementing the list of goods and services banned from business of Decree No. 59/2006/ND-CP dated 12/6/2006 guiding the implementation of the Commercial Law 2005 on goods and services banned from business, subject to restriction of business and conditional business. Accordingly, adding cigarettes, cigars and other types of smuggled finished tobacco into the list of goods and services banned from business.

Also, under the section 51, annex 4 issued together with the Law on Investment 2014, stipulating the sale of tobacco products, tobacco materials, machinery and equipment for tobacco industries being conditional business lines. From this provision, it was suggested that smuggled tobacco is no longer regarded as banned goods as stipulated in Commercial Law 2005 and Decree No. 43, and only subject to conditional business, so there is no basis for investigation, prosecution and trial for violations on trading in banned goods under the provisions of the Penal Code.

Additionally, under Clause 22 in Article 1 of Decree 124/2015 / ND-CP mentioned above: For acts of trading in banned goods as smuggled cigarettes with more than 500 packs, the competent official who is handling the case must immediately transfer the case to the criminal proceedings agency for criminal prosecution as prescribed in Article 62 of the Law on Actions against administrative violations

Concerning handling of trafficking, hoarding, and illegal transport of smuggled cigarettes, the Penal Code 1999 defined three crimes: Smuggling (article 153); Illegal cross-border transportation of goods and/or currencies (Article 154); Manufacturing, stockpiling, transporting and/or trading in banned goods (Article 155). All 3 Articles prescribe quantitative indication of banned goods (including smuggled cigarettes): large amounts, very large amounts and extremely large amounts.

To unify the application for acts: smuggled cigarettes in large amounts, very large amounts and extremely large amounts as the basis for criminal prosecution, on 7 December, 2012, the Ministry of Industry and Trade, the Ministry of Public security, the Ministry of Justice, the Ministry of Health, the Supreme people's Court, and the Supreme People's Procuracy issued joint Circular No. 36/2012/TTLT-BCT-BCA-BTP-BYT-TANDTC-VKSNDTC guiding the handling of violations on trading in smuggled wines, smuggled tobacco products and tobacco materials; the handling of exhibits and means used to carry out the violating acts. Accordingly, the amount of smuggled tobacco from 1,500 to 4,500 packs is considered as a large amount; from 4,500 to 13,500 packs is considered as very large amount and from 13,500 and over is considered an extremely large amount. From 2012 until the effective date of Law on Investment on 1 July, 2015, the judicial authority to applying Directives in the Joint Circular No. 36 for investigation, prosecution and trial of acts of trafficking, transports and hoarding of smuggled tobacco. Thus, until the effective date of the Law on Investment, acts of trafficking, hoarding or illegal transport of smuggled tobacco could be fined for administrative violations or prosecuted for criminal liability depending on the amount of illegal transported goods.

Shortcomings in handling

Are smuggled cigarettes considered as banned goods? The Ministry of Justice stated that it must stem from the scopes of regulation of the Law on Investment and Commercial Law. Accordingly, the scope of regulation of these two Laws relating to trading in tobacco products are different. The Law on Investment stipulates the investment activities in Vietnam and investment activities from Vietnam to foreign countries. According to the Law on Investment, investors invested to implement the business activities through establishing economic organizations; and invested according to form of contracts or implementation of invested projects. Therefore, the Law on Investment does not regulate the acts related to trading in smuggled tobacco. Besides, the Commercial Law regulates commercial activities, including the sale of goods or supply of services, investment and trade promotion activities and other activities for profitable purposes. On the other hand, according to the Law on Prevention and Control of Tobacco Harms (Clause 1, Article 9), the sale, stockpiling and transport of smuggled tobacco materials and tobacco products are prohibited acts. Thus, the handling of smuggled cigarettes need to be based on the provisions of the Commercial Law and the Decrees detailing this Law and the Law on Prevention and Control of Tobacco Harm to handle, so it is required to identify smuggled cigarettes as banned goods. Notably, the commercial law only regulates smuggled cigarettes as banned goods from business; legal imported cigarettes are not subject to banned goods from business.

Also according to the Ministry of Justice, regarding the determination of the amount of smuggled cigarettes as a base to prosecute criminal liability, now, there are 2 existing different law documents, causing inconsistencies in the application to handle. To overcome this, the Penal Code 2015 stipulates the acts of manufacturing, trading, stockpiling, transporting of banned goods in accordance with the value of illegal goods worth 100 million vnd and over or below 100 million vnd which were handled for administrative violations for one of the acts in line with the provisions of the Penal Code (not in accordance with the provisions of amount as described in former guidelines).

Tobacco Smuggling more and more reckless VCN - Cigarette smuggling situations in the southern border provinces are complicated, magnates are extremely vulnerable while the ...

However, the provisions on the value of illegal goods worth from 100 million or over leads to shortcomings when the minimum quantity to be prosecuted for criminal liability for acts of trafficking, stockpiling, transport of banned goods as cigarettes is 4 times higher (approximately 50,000 packs of cigarettes) than the quantity in the current guidelines. This potentially increases the trafficking of smuggled cigarettes into the Vietnam market. Therefore, the draft Law amending and supplementing some articles of the Penal Code 2015 submitted by the Government to the National Assembly (October, 2016) has proposed to regain the method which specifies the amount of smuggled packs of cigarettes as the basis for criminal prosecution (from 1,500 packs of cigarette packs and over).