JTI's Cooperation With Governments and Customs

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JT International believes that contraband and related counterfeit trade is an issue that needs to be addressed through constructive partnerships with Governments and public authorities.

JTI believes cooperation is critical in that neither the tobacco industry nor governments can solve the problems associated with illicit trade of tobacco products on their own. JTI has always offered its full cooperation to government agencies in the battle against smuggling, and participated in a number of public and industry programs aimed at preventing all types of contraband and counterfeit. JTI works on a technical and an executive level with government authorities to fight contraband and counterfeit. JTI is committed to further establishing mutually beneficial cooperation arrangements with governments across the world.

As part of the aforementioned efforts, JTI signed a 15-year agreement with the European Commission and 26 Member States of the European Union on December 14, 2007. The agreement defines our cooperation to combat the illegal trade of cigarettes in the European territory. The United Kingdom has decided not to participate. Nevertheless, JTI will continue to honor its commitment through the existing Memorandum of Understanding with the UK authorities.

The Agreement builds upon and reconfirms a number of initiatives underway at JTI and include but are not limited to the following:

A Know-your-Customer policy designed to ensure that JTI sells products to customers only who have integrity, fully comply with all local laws - as well as JTI's own stringent standards.
A Code of Conduct setting forth high standards of business conduct.
Compliance programs that address the manufacture, sale, distribution and storage of cigarettes.
Transparent payment procedures for all transactions.

Additionally JTI, and in full compliance with the Agreement will

Implement various programs which will further facilitate investigations, reporting of breaches of internal and external regulations and suspicious transactions.
Work with the authorities to establish clear processes around seizures, including measures aimed at getting to the root cause of such.
Implement a state-of-the-art Track and Trace system over the next few years. The system will allow for the tracking of products via Master Cases and Cartons and if appropriate, and in the longer term cigarette packs.

Overall, the track and trace system coupled with other efforts as noted above, will allow JTI and the authorities to tackle illicit trade at its sources of origin.

Click to download the full text of the agreement

Here are some other examples of JTI's active cooperation with governments:

In China, today's center of counterfeit cigarettes, JTI and the industry built an unprecedented level of cooperation with the Chinese authorities. A Memorandum of Understanding (MOU) has been formed with the State Tobacco Monopoly Administration (STMA), and regular meetings are held with the STMA to formulate tactical and strategic objectives. JTI has also cooperated in hundreds of raid actions against illegal manufacturing sites.
In Malaysia, together with BAT and PMI, JTI organized in June 2002 the inaugural Seminar on Illegal Cigarettes in Malaysia. The event gathered some 90 high-ranking customs personnel from the Malaysian peninsular to address the growing problem of contraband . In addition, the Confederation of Malaysian Tobacco Manufacturers (CMTM) proposed to the government the use of invisible codes on packs of cigarettes produced locally instead of implementing banderoles, which can be counterfeited easily.
In Germany, in 1994, the German cigarette manufacturers association of which JTI is a member, signed a Memorandum of Understanding with the Federal Customs Authority to extend its co-operation in the fight against contraband.
In Hong Kong, the tobacco manufacturers' association recently renewed its agreement with Customs & Excise to offer rewards for intelligence on contraband activities. The annual commitment of the industry rose from HK$1 million in 2001 to HK$1.2 million (US$128,000) in 2002. This award plan has been going on for several years and has been successful in attracting useful information to crack down on contraband. Furthermore, a substantial reduction in the quantities smuggled and the rising street retail price of contraband product provide evidence of the scheme's success.
In Kosovo, JTI's local subsidiary signed a formal Memorandum of Understanding (MOU) with the Customs Administration of the United Nations Mission in Kosovo (UNMIK) in July 2002 addressing the issues of contraband and committing JTI's full support.
In Dubai, close cooperation between local law enforcement authorities and JTI, during a year-long investigation across more than seven countries led to the seizure in March 2003 of 3.8 million counterfeit cigarettes. Cigarettes were illegally produced in Greece and Bosnia. Packaging was made in Italy. The Dubai police eventually arrested the owner of the counterfeit factory.