uk bat.com - How we tackle illicit trade

How we tackle illicit trade

We continue to do all we can to tackle the illicit trade in tobacco products

Tackling illicit trade requires co-operation and understanding between legitimate tobacco companies, governments and organisations such as the World Customs Organisation, World Trade Organisation and World Health Organisation.

For our part, we specifically require our companies to ensure that their business practices are directed at supporting only the legitimate trade in their products, and our companies are committed to doing everything they reasonably can to minimise the risk of their products being diverted into illicit trade channels.

Our internal controls

Our Standards of Business Conduct prohibit employees from knowingly engaging in unlawful trade.

The Standards also require our companies to have effective ‘Know Your Customer’ controls - tight controls over whom they will sell to – and controls over quantities they sell to ensure these are commensurate with legitimate demand.  Our companies will also cease supply to customers who are knowingly or recklessly involved in illicit trade activities.

Our companies continued to report actions in 2012 to prevent illicit trade activity amongst customers, including ceasing supplies.  Find out more in Group companies’ anti-illicit trade activities.

Our companies are supported by an anti-illicit trade unit at our headquarters and a Group Head of Anti-Illicit Trade who reports to a member of the Management Board.

Fighting illicit trade

BATMark is a specialist Group company that protects our intellectual property rights, including some 100,000 trademarks, one of the biggest portfolios in the world.  The team responds to a constant stream of information from around the world and has developed one of the most sophisticated computer systems of its kind to support it.

Our products carry an authentication device enabling counterfeits to be identified so that enforcement agencies can confiscate them.

Our Anti Illicit Trade Intelligence Unit works hand-in-hand with law enforcement agencies worldwide to gather and share intelligence, monitor the destruction of seized products and machinery and analyse suspect fakes in our laboratories.

Destroying used machinery:  We destroy our used manufacturing equipment to ensure that it can’t find its way into illegal manufacturers’ hands.

You can read more about how we enhance supply chain security in our brochure.

Enhancing supply chain security and fighting the illicit trade in tobacco products (3.3 mb)

Our suppliers

We expect our suppliers of materials such as machinery, paper and card to only do business with other reputable firms, not criminals.

Criteria on tackling illicit trade are included in our Business Enabler Survey Tool (BEST), which establishes the standards we expect of our materials suppliers.  Our regular BEST assessments of suppliers include obtaining assurance that they have adopted rigorous ‘Know Your Customer’ due diligence controls similar to our own, with the aim of ensuring that sales are made only to reputable customers.

Directors and General Managers within the Group have backed up BEST by writing to global, regional and local suppliers, asking them to verify adoption of these controls. For more about BEST, visit Working with our suppliers.

European Union

In 2010, we entered into a cooperation agreement with the European Union (EU) to collectively tackle the problem of illicit trade.

We work alongside the European Commission’s Anti-Fraud Office (OLAF) and the law enforcement agencies of EU Member States, and are helping to fund the fight with contributions of $200m (EUR134m) over 20 years.

• News release: British American Tobacco signs cooperation agreement with European Union to tackle illicit trade in tobacco
• Read the speech made by Jack Bowles, Director, Western Europe at the signing ceremony

International efforts

We are actively involved in the International Trademark Association, the International AntiCounterfeiting Coalition and the Quality Brands Protection Committee, an alliance of over 100 multinational companies in China.

We were a founder member of the Global Business Leaders Alliance Against Counterfeiting (GBLAAC), working with companies in many other business sectors to raise political awareness about the damage caused by counterfeiting.  The organisation has now merged with Business Action to Stop Counterfeiting and Piracy (BASCAP).

Our former Chief Executive Paul Adams spoke at the first Global Congress on Combating Counterfeiting, at the World Customs Organisation Headquarters in 2004.  Read his speech.

We have helped to form Business Action for Improving Customs Administration in Africa (BAFICAA) , after leading a workstream on customs reform within the Commission for Africa business forum.

Our companies belong to several local brand protection groups that seek to lobby governments on combating illicit trade and protecting intellectual property rights.

Working with customs

Our companies have signed Memoranda of Understanding (MoU) and industry agreements with customs authorities in some 35 countries to tackle illicit trade, based on joint action and shared intelligence.  For example, following an MoU with UK Revenue & Customs in 2002, we signed this further MoU in 2006.

2006 Memorandum of Understanding

We support efforts aimed at streamlining customs procedures and urge governments to continue to seek ways to harmonise their customs procedures so that companies can trade efficiently across international borders.  In several countries, we provide training for customs officers in tackling illicit trade.

Getting it right in the fight against fakes

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