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JTI supports the decision of the Government of MNE to prohibit the storage of tobacco in Port of Bar and the destruction of the seized quantities

“Japan Tobacco International (JTI) supports the successful operations of MNE and BiH governments in the fight against cigarette smuggling. Seizure of 1.5 billion cigarettes in Port of Bar recovered enormous funds for the budgets of the two countries, as well as countries in the region, and we strongly support the decision to permanently close the port for storing cigarettes,” said Goran Pekez, Head of Corporate Affairs and Communication at JTI Adriatica at the Summit of Finance Ministers, Governors, and Tax Administration Directors of Countries in the Region, and added:

“The crucial next step for the success of this campaign is to continue this fight every day, and for seized cigarettes to be destroyed, so they can never return to criminal channels. JTI supports the efforts of the region’s governments in the decisive fight against illicit trade in tobacco and tobacco products and urges all countries in the region to persevere in this fight, by working together and with the stakeholders in the industry, for the benefit of its citizens, tax revenues and stability of the cigarette market,” Pekez stated.

Closure of Port of Bar – positive impact on regional and EU markets

Closure of Port of Bar has multiple direct benefits for the entire region, as well as EU markets. Namely, it is estimated that Port of Bar “supplied” about 20% of EU markets with so-called illegal whites (cigarettes legally produced in one country, but then smuggled to other markets, earning smugglers a profit from the difference in price).

The 1.5 billion cigarettes seized is equivalent to a two-year turnover in the legal market in Montenegro. Closure of Port of Bar is the best example of how much the budget, citizens and the market can benefit from the fight against illicit trade. Namely, it is estimated that because of this seizure, the legal market in BiH recovered 24% and Montenegrin market recovered 33%. Tax revenues from excise duties rose by EUR 70 million in BiH, considering that, concluding with August this year, the number of issued excise stamps increased 32% year on year. At the same time, tax revenues from legal sale of cigarettes in Montenegro rose by 40%, or EUR 15 million from May to August 2022. This is a direct result of the closing of Port of Bar and the Stop Smuggling campaign, which has been promoted in BiH for the last two years.

Serbia: The fight against online illicit tobacco trade and in field

The efforts put forward by the respective state authorities in Serbia in the fight against the illegal trade in cut tobacco where it starts – in the field, as well as preventing sales over the Internet, have yielded results.

As a result of the intercepted online smuggling and the destruction of illegal tobacco in the field, in 2022, the illegal tobacco was reduced by 91.7%. JTI contributed to this fantastic result through the project “Satellite” conducted in cooperation with the Ministry of Internal Affairs and the Ministry of Finance.

Satellite

The goal of the Satellite project is satellite imaging and identification of plots of land where tobacco is grown illegally, and then its destruction to prevent it from ending up on the market.

Within a five-year period, more than 792 tons of illegally grown tobacco were destroyed, of which 172 tons of illegal plantations were destroyed in 2021 alone. The financial effects speak for the success of the Satellite project – the estimated avoided damage to the state budget in a period of 6 years amounts to EUR 453 million, calculated through illegal cigarettes that did not end up on the black market. Thanks to satellite imaging, the amount and scope of illegal tobacco plantations has been reduced by 90%: from 3,140 tons identified in 2016 to 309 tons identified in 2021.

Last year, JTI donated four drones and accompanying equipment worth RSD 1.2 million to the Phytosanitary Inspection of the Ministry of Agriculture, Forestry and Water Management of the Republic of Serbia, which will be used to combat illegal tobacco production.

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