Thursday, June 14, 2012

Fake goods trade booms

Illicit trade worth millions of kina continues to flourish in PNG because of the lackadaisical attitude of law enforcement agencies, government, consumers and the general public, according to British American Tobacco, The National reports.
BAT, which is involved in tobacco business, said this was a problem that affected the whole country with the smuggling of illicit goods through the border post at Wutung, West Sepik.

Vanimo roadside stall selling illicit items smuggled over from Indonesia.

“There continues to be a lack of awareness about the impact of illicit trade on a country’s socio-economic health,” it said in a document highlighting the seriousness of the problem.
“The current situation is further inflaming the problem by providing a stable environment for illicit trade to thrive.”
BAT said in the event that a smuggler was caught in the act, the penalty was a K10, 000 fine or minimal years imprisonment.
“This is a slap on the wrist compared to millions being made from the sale of illicit products,” it said.
“Despite the risks of imprisonment, more people continue to delve into smuggling as a means to earn a living.
“The tendency is to pick products that are usually highly taxed.
“Such consumer goods tend to be more expensive as the cost is usually passed to the consumer.
“ So when a smuggled product that is sold without the tax being factored in, consumers are likely to be lured by the advantage of ‘saving’ money for a product that is similar or a copy of the same, sacrificing quality in the process.
“Sometimes, illegal goods brought are those that are not readily available locally, but a demand for them exists.
“This includes brand name consumer goods like sporting shoes or clothing.
“The smuggled human cargo is usually desperate people wanting to start a new life in a new land.
“Smuggling operations are usually run by criminal organisations with intricate networks that allow them to ply their trade without regard for the laws of the land.
“There is also the small time local operator wanting to make a quick buck and get out of paying revenue to the government.
“Tobacco is usually a lucrative venture targetted by smugglers.
“Because it is lightweight and highly mobile, it fetches a high rate on investment.”
BAT said possible deterrents included:

• Customs and enforcement agencies needed to get government backing;

• Smugglers to pay full tax for the product;

• Increased prison sentences;

• Immediate deportation of foreigners;

• Building national loyalty to PNG-made products; and

• Concentrated stakeholder effort. Affected stakeholders in business such as music producers, fast-moving consumer goods manufacturers (food items, drinks and music) should make a combined effort in education and a partnership approach to drive the message home.

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