The Associated Press March 27, 2012, 08:33AM ET

Countries near treaty on cigarette smuggling

A large chunk of the world is closing in on a treaty to crack down on tobacco smuggling, a practice that is estimated to cost governments up to $50 billion in tax revenue each year, the World Health Organization said Tuesday.

Diplomats from 174 WHO members states are expected to have a draft treaty by the time they meet in South Korea later this year, the global body said. A handful of countries including the United States, Indonesia, Argentina, Switzerland and 15 others are not participating in the negotiations, meaning the treaty wouldn't apply there unless they join later.

"A good part of the protocol is already agreed," said WHO's Dr. Haik Nikogosian.

Negotiators meeting in Geneva on Thursday still need to bridge differences on issues such as duty free and Internet sales, supply chain tracking and extradition of alleged smugglers. If those issues are resolved, a draft will be put to countries meeting in Seoul on Nov. 12-17.

A key part of the treaty is a planned tracking system that will require all cigarette packages to be marked in such a way that customs officials can trace their origin.

Nikogosian said this would help law enforcement authorities determine the route by which tobacco products are smuggled, something he said often happens with the consent of cigarette manufacturers themselves.

"Many criminal activities are fueled and organized by the industry," he told reporters in Geneva. At least 10 percent of worldwide cigarette sales are estimated to result from smuggling, which is becoming increasingly lucrative as cash-strapped governments raise duties on tobacco products.

Cigarette companies were barred from a 2009 WHO meeting on tobacco smuggling over concerns they were trying to influence delegates.

"They use all the means they have to derail this protocol," said Nikogosian.

The United States has signed but not ratified the 2005 Framework Convention on Tobacco Control, which is the basis for the current negotiations on smuggling.


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