ABSTRACT
This chapter considers the issue of smuggling of tobacco products in general and cigarettes in particular. It provides some theoretical and empirical analyses of smuggling, and discusses policy issues. Tobacco smuggling can take various forms. L. W. Joossens classify the smuggling of cigarettes into three categories: Legal smuggling, Quasi-legal smuggling, and Illegal smuggling. Smuggling of cigarettes across states is significant in the USA. Casual smuggling takes place when individuals take merchandise across jurisdictions for their personal use, while organized smuggling involved goods transported across several jurisdictions for the purpose of sale to others. The legislation also created a federal agency that was in charge of checking cigarette smuggling, the Bureau of Alcohol, Tobacco and Firearms. In Europe, cross-border sales are estimated to constitute about three percent of domestic consumption. The recent proliferation of the Internet, where Internet sites hawking low-tax or no-tax tobacco products, pose additional problems for regulators trying to curb cigarette smuggling.
