Russia: Smoking Laws Help Black Market

Mujtaba Ali

Russia took its first steps towards tackling its tobacco addiction problem when new anti-smoking legislation went into effect on June 1. The World Health Organization estimates that over 40 percent of Russians smoke cigarettes, compared to 29 percent in the US and 24 percent in the UK. When it comes to life expectancy, the average Russian can expect to live around 10 years less than his or her American counterpart.

While the legislation may be a legitimate attempt by the Russian government to tackle a serious health concern, it may not have the desired effect. In the short term, Russia’s anti-smoking regulations are less likely to effectively reduce the number of smokers than they are to hurt the legitimate tobacco industry in the country and strengthen the black market trade in tobacco and its culture of corruption.

The restrictions ban smoking in many public spaces, including schools, museums, hospitals, and on public transport. Smoking in many of these areas had already been limited or banned, but the new legislation sets a nationwide standard, Reuters reported on Saturday. The hardest pill to swallow for the Russia’s smokers will be the new minimum cigarette price scheduled for January 2014. Cigarettes, which can currently be bought for less than $1, are likely to become far more expensive, further opening the market for tobacco smugglers and black market dealers.

Cigarettes are the most heavily smuggled legal commodity in the world. Countries with high prices contend with smugglers who sneak in cigarettes from nations where the prices are sometimes five to ten times cheaper. There is also the problem of counterfeit cigarettes, with factories in Russia and China copying brand-name cigarette packaging to perfection while using lower quality tobacco and higher levels of dangerous chemicals. OCCRP published a series of stories on the illegal tobacco trade in conjunction with the International Consortium of Investigative Journalists (ICIJ).

Higher domestic cigarette prices will mean that Russia’s role in the global illicit tobacco trade will change from producer and supplier to a burgeoning market for smugglers. Among the biggest losers will be smokers who turn to the cheaper counterfeits, shortening their lives, and the Russian Government, who will lose out on millions of dollars worth of taxes

The new laws could also serve to perpetuate the corruption pervasive in Russia’s public sector. The legislation calls for fines if individuals break the rules concerning appropriate smoking areas, but Russian law enforcement is infamous for bribe taking and abuse of power.

On paper, the law may seem to be a solution to a serious health concern -- Prime Minister Medvedev said cigarette smoking caused 400,000 deaths last year in Russia. But without appropriate enforcement of  legislation and due diligence regarding smuggling, both of which would require a new approach to law enforcement in Russia, this latest law merely gives the corrupt another tool.