The legal gap for new generation tobacco and its consequences

The Hanoi Market Surveillance Force inspected the infringing batch of e-cigarettes.

Mostly smuggled

Recently, on August 17, Market Surveillance Team No. 12, Ho Chi Minh City Market Surveillance Department coordinated to inspect a business location, and discovered 317 product units of disposable e-cigarettes and e-liquids used for electronic cigarettes of all kinds, without receipts, unused, containing 5% nicotine content, made in China. The leader of the Market Surveillance Team No. 12 has issued a decision to temporarily seize all of the above goods for handling according to regulations.

The situation of trafficking in new generation cigarettes, most commonly e-cigarettes, is complicated and is increasing in scale and severity. Mr. Kieu Duong, Director of the Policy and Legal Department (General Department of Market Surveillance) said that the demand for new generation cigarettes is increasing at an exponential rate. In Hanoi city alone, in the first 6 months of 2023, there were 81 cases related to new generation tobacco products, the fine amount was over 1 billion VND, and nearly 20,000 exhibits were collected.

At the Seminar "Legal framework for the management of new generation tobacco" held recently, Mr. Dau Anh Tuan, Deputy Secretary General and Head of Legal Department, Vietnam Confederation of Trade and Industry (VCCI) said: Vietnam is one of the 15 countries with the highest smoking rate in the world and is the third country in the ASEAN region with the highest number of adult smokers after Indonesia and the Philippines. Recently, the emergence of new generation cigarettes, mainly e-cigarettes and heated cigarettes, has changed the landscape of the tobacco market in Vietnam. All of these products are smuggled or hand-carried products, because currently there is no legal framework, so this item is not allowed to be circulated.

“The above fact shows that the emergence of new generation tobacco products is posing new challenges for State agencies in the management and control of this product group”, Mr. Dau Anh Tuan emphasized.

Bringing new generation tobacco into the framework

The current Tobacco Control Law defines tobacco in an open way. That includes traditional cigarettes made from the tobacco plant. In addition, the concept of tobacco in the law also includes other alternative ingredients and is processed in a different form. However, it is not clear at this time whether the phrase "alternative materials" includes new generation cigarettes.

According to Mr. Dau Anh Tuan, the Ministry of Industry and Trade is still in the process of amending Decree 67/2013/ND-CP detailing a number of articles and measures to implement the Law on prevention and control of tobacco harms on tobacco business (Decree 67). Currently, there are many views on how to manage new generation tobacco, should it be included in Decree 67, if so, what content should be included?

In addition, the Ministry of Finance is also proposing to add new generation tobacco products to special taxable objects, so which specific products are being proposed to be added to the taxable objects is also a point which receive many different opinions, need to be identified and agreed upon.

According to Mr. Dau Anh Tuan, at present, there is still a legal gap on new generation cigarettes, causing many social consequences such as: not ensuring product quality, causing risks to consumers' health, affecting the health of consumers, development of children, causing loss of state budget revenue. Therefore, with the current situation of using new generation cigarettes, the introduction of a legal framework for this product should be done immediately. A comprehensive legal framework needs to be synchronized, covering from the regulation of quality standards, product standards, regulations on business, production, import, export and distribution of products, tax policies, and regulations on goods labeling, advertising, promotion, etc for both e-cigarettes and heated cigarettes.

Mr. Le Dai Hai, Deputy Director of the Department of Civil and Economic Law (Ministry of Justice), said that according to the recommendations of the World Health Organization (WHO), heated cigarettes and new generation cigarettes should be regulated under applicable law as applicable to regular cigarettes in the host country.

In Vietnam, the Law on Prevention of Tobacco Harms 2012 clearly stipulates that tobacco-containing products need to be controlled under the law. In addition, there is the Investment Law 2020, Decree No. 67/2013/ND-CP detailing a number of articles and measures to implement the Law on Prevention and Control of Tobacco Harms on tobacco trading as a legal basis for the management of heated tobacco.

Therefore, in order to manage these new types of tobacco, it is necessary to have strict measures and regulations on management, regulations such as product quality standards, production and import regulations, regulations on tax collection, regulations on responsible business principles of manufacturers and suppliers.

According to Ms. Nguyen Thi Cuc, President of the Vietnam Tax Consultants Association, placing new tobacco products in the appropriate regulatory framework also helps to ensure that users have access to legitimate and quality- controlled products, avoid smuggled goods of unknown origin, quality standards, as well as ingredients inside the product.