What is it?
Non Duty Paid is the term used to describe tobacco products on which no tax is collected in the country in which it is consumed. This includes product that may be imported legally, for example by holiday makers returning from lower tax countries overseas. It also includes product smuggled into Ireland in bulk from countries where tobacco tax is significantly lower than it is in Ireland, and includes counterfeit product manufactured in backstreet factories in the Far East and elsewhere which is then smuggled into Ireland and sold illegally.
According to industry figures, 28% of all tobacco consumed in Ireland in 2012 was Non Irish Duty Paid of which 18%-19% was illicit. Revenue records a 20% Non Duty Paid figure in 2012 of which 13% is illicit. Revenue surveys do not measure rolling tobacco consumption.
What is Illicit Trade?
Illicit Trade is the supply, distribution, and sale of tobacco products on which applicable taxes in the country of consumption are not paid.
Illicit trade includes smuggled genuine product and all counterfeit products.
Genuine cigarettes can be categorised as illegal / illicit when they are supplied or sold without complying with applicable customs and excise regulations in the country of sale. An example of this would be criminals buying large quantities of cigarettes in the Ukraine where cigarettes are cheap but where excise and tax has been paid on them, and bringing them for sale in countries like Ireland where the price of cigarettes is more expensive but they haven’t paid any Irish excise duty.
What is Smuggling?
The movement of tobacco product (either genuine or counterfeit) from one jurisdiction or excise regime to another in circumstances where it is unlawful to do so, because it is done without payment of applicable taxes in the relevant jurisdiction, or in breach of laws prohibiting its import or export.
What is Counterfeit?
Product which is an identical copy of a branded product and packaging which is manufactured by parties that do not have the relevant intellectual property rights authorising them to manufacture such branded products. Counterfeit (or fake) cigarettes are illicit at the point of production because they have been manufactured without the authorisation of the legal brand owner.
It must be remembered that even though the product looks like the real cigarette, it will not be made to the same strict regulatory standards applicable to the legitimate tobacco industry. We regularly test our product against government-agreed benchmarks and we provide the results of those tests to government. The counterfeiters do not and there is no control over the contents of fake cigarettes.
What is Cross-border trade?
Genuine product that has been purchased in one country, duty paid or duty free, and then brought into another country and consumed without payment of taxes in that country. This is only illicit trade if the volumes involved are for commercial use or, if for personal use, are in excess of personal allowances.
Please note that if a tobacco product is being offered for sale at less than the legal retail price, then it is likely to be a fake (counterfeit) or smuggled tobacco product.