by: Michael DeFeo and Mark A.R. Kleiman
The illicit trade in tobacco products (ITTP) is substantial and growing. The federal government does not now have adequate capacity to control that traffic; other urgent priorities have compelled the responsible agency to substantially abandon enforcement efforts. Since the economic motivation for ITTP is high and unlikely to decrease under any currently probable scenario, the volume of ITTP is likely to grow. The resources required to bring any illicit market under control are roughly proportional to the size of the market. Thus, current neglect increases the future difficulty of the problem.
The incoming administration will have the opportunity to bring the illicit tobacco market under better control, thus contributing to the prevention of smoking-related harm while also reducing tax losses at the federal, state and local levels. Several options for improving the effectiveness of enforcement and compliance exist, some with minimal budgetary implications. However,some of them involve reassignment of responsibilities among federal agencies, in particular the transfer of criminal enforcement power over tobacco from the Justice Department’s Bureau of Alcohol, Tobacco, Firearms, and Explosives (BATFE), whose current policies lead it to neglect ITTP, to the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (ATTTB). Such a reorganization would involve substantial administrative effort and might encounter substantial resistance.
The tobacco industry should offer all feasible support to the most effective and efficient option for improved control. The industry’s self-interest in supporting increased control of ITTP should be publicly acknowledged, balanced by the fact that reducing ITTP is also in the public interest for reasons of tax, health and criminal policy.
The full report can be found here: Organizing the Federal Enforcement Effort Against Illicit Traffic in Tobacco Products:An Agenda for a New Administration