January 19, 2019

Stanton A. Glantz, PhD

New paper describes how tobacco companies use memoranda of understanding to undermine policies to block illicit tobacco trade

Eric Crosbie, Stella Bialous, and I just published “Memoranda of understanding: a tobacco industry strategy to undermine illicit tobacco trade policies” in Tobacco Control.  This paper expands our understanding of how tobacco companies have worked for decades to co-opt governments to undermine effective control of illegal cigarette smuggling.  It reinforces the importance of FCTC Article 5.3 and ratification and effective implementation of the new Protocol to Eliminate Illicit Trade in Tobacco Products.

Here is What This Paper Adds:

What is already known on this subject

  • For decades, transnational tobacco companies (TTCs) have promoted voluntary self-regulation agreements to avoid stricter tobacco control regulations.
  • TTCs have been directly or indirectly involved with and benefiting from illicit tobacco trade for decades.
  • TTCs have promoted their own tracking system (Inexto Suite, previously known as Codentify) to displace government action to monitor the supply side of illicit tobacco trade.

What important gaps in knowledge exist on this topic

  • There has been little research on memoranda of understanding (MoUs), voluntary partnerships with governments to nominally address illicit trade.

What this study adds

  • TTCs use MoUs to avoid stricter government regulations regarding illicit tobacco trade.
  • MoUs are non-transparent, violate Framework Convention on Tobacco Control (FCTC) Article 5.3 on protecting tobacco control policy from tobacco industry interference, and, based on limited available information, do not establish an enforceable accountability system for seizures or for non-compliance.
  • MoUs leave TTCs in control of key information sources and enforcement and rely on voluntary industry commitments rather than measurable outcomes.
  • Governments should reject TTCs partnerships through MoUs as there is no evidence that they are effective in reducing illicit tobacco trade and instead ratify and implement the FCTC’s Protocol to Eliminate Illicit Trade in Tobacco Products.

Here is the abstract:

Objective Analyse the transnational tobacco companies’ (TTCs) memoranda of understanding (MoUs) on illicit trade and how they could undermine the WHO Framework Convention on Tobacco Control (FCTC) and the Protocol to Eliminate Illicit Trade in Tobacco Products (Protocol).

Methods Review of tobacco industry documents and websites, reports, news and media items using standard snowball search methods.

Results Facing increasing pressure from governments and the FCTC to address illicit tobacco trade during the late 1990s, TTCs entered into voluntary partnerships embodied in MoUs with governments’ law enforcement and customs agencies. One of the earliest known MoUs was between Philip Morris International and Italy in 1999. TTCs agreed among themselves to establish MoUs individually but use the Italian MoU as a basis to establish similar connections with other governments to pre-empt more stringent regulation of illicit trade. TTCs report to have signed over 100 MoUs since 1999, and promote them on their websites, in Corporate Social Responsibility reports and in the media as important partnerships to combat illicit tobacco trade. There is no evidence to support TTCs’ claims that these MoUs reduce illicit trade. The terms of these MoUs are rarely made public. MoUs are non-transparent partnerships between government agencies and TTCs, violating FCTC Article 5.3 and the Protocol. MoUs are not legally binding so do not create an accountability system or penalties for non-compliance, rendering them ineffective at controlling illicit trade.

Conclusion Governments should reject TTC partnerships through MoUs and instead ratify and implement the FCTC and the Protocol to effectively address illicit trade in tobacco products.

The full citation is Crosbie E, Bialous S, Glantz SA.  Memoranda of understanding: a tobacco industry strategy to undermine illicit tobacco trade policies.  Tobacco Control Published Online First: 18 January 2019. doi: 10.1136/tobaccocontrol-2018-054668 and the paper is available here.

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