Title

A Hazy Crisis: Illicit Cigarette Smuggling in the OSCE Region

Wednesday, July 19, 2017
9:30am
Dirksen Senate Office Building, Room 106
Washington, DC
United States
Members: 
Name: 
Senator Roger Wicker
Title Text: 
Chairman
Body: 
Commission on Security and Cooperation in Europe
Name: 
Representative Chris Smith
Title Text: 
Co-Chairman
Body: 
Commission on Security and Cooperation in Europe
Witnesses: 
Name: 
Louise Shelley
Title: 
Director, Terrorism, Transnational Crime, and Corruption Center
Body: 
George Mason University
Name: 
David Sweanor
Title: 
Adjunct Professor of Law
Body: 
University of Ottawa
Name: 
Marc Firestone
Title: 
Senior Vice President and General Counsel
Body: 
Phillip Morris International

On Wednesday, July 19, 2017, the U.S. Helsinki Commission held a hearing on illicit cigarette smuggling in the OSCE region. Helsinki Commission Chairman Sen. Roger Wicker (MS) presided over the hearing. Witnesses included Dr. Louise Shelley, Director of the Terrorism, Crime, and Corruption Center and George Mason University; Professor David Sweanor, adjunct professor of law at the University of Ottawa; and Mr. Marc Firestone, Senior Vice President and General Counsel at Phillip Morris International (PMI).

In his opening statement, Chairman Wicker outlined the significant threat to global security and economic prosperity the illicit cigarette trade poses.

“Ongoing illicit [cigarette] trade helps fund terrorist activities, it fosters corruption, and it undermines the rule of law,” Chairman Wicker said.

He continued his remarks by discussing how the illicit cigarette trade affects both hard security and economic issues in the OSCE region: two of the Helsinki Final Act’s three principal dimensions.

Dr. Shelley, the first of the witnesses to testify, reiterated the Chairman’s assertion that the illicit cigarette trade represented a serious national security threat, and highlighted the impunity of cigarette smugglers as a core concern.

“There has been a problem of a culture of impunity ... It’s not just criminals, it’s not just terrorists, but it’s high-level officials that are not just in policing or in the borders, but at the heads of national governments that are involved in this,” she said.

She also lamented the lack of an organized legal response to these crimes and argued that there must be more cooperation between private companies and national governments to curb this illicit trade.

Professor Sweanor focused on the economic aspects of illicit cigarette smuggling. He argued that governments should venture to undercut the economic viability of the illicit cigarette trade, by targeting demand for cigarettes.

“Give people alternatives to the sorts of illicit products that they’re buying now,” he said, “if you don’t give people alternatives to cigarettes as a product, the alternative they’re going to find is illicit cigarettes.”

The third witness, Mr. Firestone, echoed Dr. Shelley’s recommendation for greater public-private collaboration and reaffirmed Phillip Morris International’s commitment to combat illicit cigarette smuggling.

“PMI doesn’t make or enforce anti-smuggling laws. We don’t police borders. We can’t tell other companies what to do…There has to be an integrated, cooperative, comprehensive approach,” he said.

Answering a question about the role of new media companies in the illicit cigarette trade, Dr. Shelley argued for greater cooperation between U.S. government agencies and these new media firms in order to curb the illicit trade of cigarettes.

Chairman Wicker and the witnesses also discussed the process of buying illicit cigarettes and what strategies EU and OSCE national governments can follow to further stem this market.

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TRENT LOTT Majority Leader United States Senate Washington, DC Dear Senator Lott: I am pleased to report to you on the work of the bipartisan congressional delegation which I co-chaired that participated in the Eighth Annual Session of the Parliamentary Assembly of the Organization for Security and Cooperation in Europe (OSCE), hosted by the Russian Parliament, the Federation Council and the State Duma, in St. Petersburg, July 6-10, 1999. Other participants from the United States Senate were Senator Hutchison of Texas and Senator Voinovich. We were joined by 14 Members of the House: Rep. Smith, Rep. Hoyer, Rep. Sabo, Rep. Kaptur, Rep. Cardin, Rep. Sawyer, Rep. Slaughter, Rep. Stearns, Rep. Tanner, Rep. Danner, Rep. Hastings of Florida, Rep. Salmon, Rep. Cooksey, and Rep. Tancredo. 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    Hon. William Proxmire, Chairman of the Subcommittee on National Security Economics, presided the hearing on the allocation of resources in the Soviet Union and China. The first section of the hearing was devoted to the Soviet Union, because of the many changes and substantive developments in this region. Since coming to power in March 1985, Mikhail Gorbachev had put forward the most ambitious program for economic, political, and social change since Nikita Khrushchev, often linking the URSS's ability to mantain its status as a military "superpower" to the success of his efforts. This hearing provided an initial evaluation of Gorbachev's program. It began by describing Gorbachev's policies and assessing their impact on the economy's performance in 1986. The witnesses, then, analyzed the future direction of his economic modernization program in light of the 1987 Plan and the demands for continued military force development. Finally, they evaluated the Soviet external relations, including the trade initiatives and the effect of changes in Soviet-China relations. Senator Proxmire was joined by Douglas MacEachin, Director of Soviet Analysis for Central Intelligence Agency and Rear Admiral Robert Schmitt, Deputy Director of Defense Intelligence Agency.  

  • List of Organizations Involved in Exchange Programs with the Soviet Union and Eastern Europe

    The Commission developed this report to help in­terested persons and organizations participate in exchange pro­grams with the Soviet Union and the countries of Eastern Europe: Poland, East Germany, Czechoslovakia, Hungary, Romania, and Bulgaria. It lists organizations which conduct exchange programs and other contacts with these countries. The parties to the Final Act of the Conference on Security and Cooperation in Europe declared their intention to expand cooperation in security, economic, humanitarian, information, culture, and education affairs and to respect and put into practice certain basic principles, including those of human rights. The Final Act was signed in Helsinki on August 1, 1975, by 35 heads of state or govern­ment, including the United States, Canada, and every state in Europe except Albania. The Commission on Security and Cooperation in Europe (Helsin­ki Commission) was created as an independent government agency in 1976 to monitor compliance with the Final Act and to encourage U.S. governmental and private programs to expand East-West eco­nomic and cultural cooperation and exchange of people and ideas. In the Final Act, the signatories express the view that cultural exchanges and development of relations in education and science contribute to the strengthening of peace, better mutual under­ standing, and enrichment of the human personality. In the Com­ mission's view, exchange programs with the Soviet bloc countries break down barriers and lessen distrust. They help Americans learn about the views and goals of these societies. Such programs help expose the peoples of these countries to the values and goals of our pluralistic society. Critical to such programs is that Americans are given the opportunity to tell the Soviets and their allies on a personal level about their concern for human rights and fundamental freedoms.

  • Soviet Involvement in the Polish Economy

    Commissioner Dante B. Fascell chaired this hearing, the purpose of which was to review the record of Soviet involvement in the planning, direction, and operation of the Polish economy. Before the time of this hearing, Soviet involvement in the Polish economy had been the source of much speculation. More specifically, Poland’s economy was functioning poorly, but it was debated whether the fault of this lay more with Poland itself or more with the U.S.S.R. What was hoped to be achieved in the hearing, then, was to shed light on the issue of how Soviet involvement affected the Polish economy, specifically based on the personal experience of one of Poland’s leading economists and a former government official, Ambassador Zdzislaw Rurarz.

  • East-West Economic Cooperation-Basket II-Helsinki Final Act

    Our immediate business is to look at Basket IT, whose scope is greater than mere questions of trade and commerce, because in many ways politics is economics. Basket IT was designed to enhance economic cooperation among CSCE states in a way to loosen restraints inhibiting dealings between the Soviet bloc and the West. The hearing will offer suggestions on resolving problems of trade with eastern CSCE states; and how the U.S. Government deals with Basket II problems and how it can improve the overall trade picture by exploiting Basket II provisions in order to bolster East-West trade initiatives.

  • Our Impact by Country

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