Global fund to counter illegal trade invites new applications as new figures reveal illegal cigarettes now make up 17% of all consumption in the UK 

Philip Morris International (PMI) is calling for new applications for PMI IMPACT, the $100m global initiative to support projects dedicated to fighting illegal trade in all forms, ranging from illicit tobacco products and other consumer goods to counterfeiting of pharmaceuticals and electronics.

The PMI IMPACT announcement comes in the wake of a new annual KPMG report, commissioned by PMI, examining the consumption of illegal cigarettes. The report showed that in the UK:

  • In total, there were 30.6bn cigarettes consumed in 2020, down nearly 7% on 2019
  • The proportion of illegal counterfeit and contraband cigarettes rose to 17.1% or 5.2bn cigarettes (an increase of 230m in 2020)
  • Counterfeit cigarettes are at a five-year high, up 9% on 2019
  • £2.2 billion in tax revenue is estimated to have been lost due to illicit cigarettes (up £35.6m from 2019)
  • The highest levels of counterfeit and contraband cigarettes were found in North East England, followed by Yorkshire and the Humber.

The KPMG report, which analysed cigarette consumption throughout the UK, EU, Norway and Switzerland, showed the impact of lockdown on the volume of illicit cigarettes arriving into the UK from other countries in 2020.

Cigarettes brought into the country legally by consumers declined by 66%, linked to border closures and travel disruption from the Covid-19 pandemic. Similarly, duty free cigarettes declined significantly – at 52%.

According to the KPMG Report, a growing proportion of illicit whites and counterfeit cigarettes are believed to be manufactured in illegal factories within the European Union. Interviews with law enforcement agencies indicate that organised criminal groups continued to move their operations inside the EU borders.

As lockdown restrictions have eased over the past few months, Philip Morris has resumed sending teams across the UK to gather intelligence that assist local authorities and law enforcement with their efforts to clamp down on illegal trade.

Cem Uzundal Head of Field Force Sales from Philip Morris Limited (PML – PMI’s UK affiliate), said: “To increase profits, illegal tobacco is produced with cheap materials, and with little regard for health and quality controls. Seized counterfeit cigarettes have even been found to containing mites, insect eggs, fungi and even faeces.

“Illicit products are also completely unnecessary. Smoke-free alternatives are widely available to legal-age smokers, such as heated tobacco products, which are both affordable and less harmful than continued smoking.”

Investing to tackle illicit trade

PMI IMPACT funds initiatives which reduce or prevent illegal trade in various sectors, aiming to counter its negative consequences for individuals, their families, and communities.

Since its launch in 2016, PMI IMPACT has allocated $48m (£34m) to 60 projects, including in the UK. The projects are selected through an open and defined evaluation process, led by an Expert Council.

PMI IMPACT welcomes applications from public, private, or non-profit organisations, including governmental organisations, international organisations, associations, academic institutions, and private companies, are encouraged to submit their project proposals.

In the UK, PMI IMPACT has funded research projects by bodies such as Oxford Economics, Royal United Services Institute and Euromonitor International, with work examining consumer motivations for buying illicit goods, the financing of terrorism, the criminal risks posed by Free Trade Zones and cross-sector policies to counter illegal trade.

Applicants to PMI IMPACT can be based anywhere in the world; however, all proposals must address the funding round theme and focus on one of the following topics:

  1. Border control
  2. Capacity building
  3. Restorative justice and victims’ protection
  4. Network engagements, awareness building, and international cooperation
  5. COVID-19 and the threat of illicit trade

Interested third parties can apply for the third funding round before one of the following deadlines for the submission of applications:

  • First submission deadline: 15 February 2022
  • Second submission deadline: 15 August 2022

To put forward a proposal for PMI IMPACT’s third funding round, please contact the project office of PMI IMPACT at impact@pmi.com. To find out more information on how to apply, please visit www.pmi-impact.com.

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