Cigarette Smuggling Into Vietnam on the Rise

The smuggling of illegal cigarettes from Cambodia into Vietnam is on the rise, according to recent Vietnamese media reports, which names one of the most-smuggled brands as Hero—distributed in Cambodia by prominent CPP lawmaker Ly Yong Phat.

On Monday, VietnamNet, an online news site in Vietnam—where media outlets are strictly regulated by the communist government—quoted Pham Kien Nghiep, the secretary-general of the Vietnam Tobacco Association, as saying that the number of smugglers along the Cambodian-Vietnamese border has risen drastically this year. 

Hero cigarettes are displayed without tax stickers or health warnings at a stand in Phnom Penh. (Siv Channa/The Cambodia Daily)
Hero cigarettes are displayed without tax stickers or health warnings at a stand in Phnom Penh. (Siv Channa/The Cambodia Daily)

“There are too many unemployed people, all too ready to transport illegal cigarettes, despite the risks,” Mr. Nghiep is quoted as saying.

According to a report by Oxford Economics and the International Tax and Investment Center released in September, 21.9 billion untaxed and illegal cigarettes were smuggled into Vietnam last year. The Vietnam Tobacco Association estimates that 90 percent, or 19.7 billion, of those cigarettes are made up of just two brands—Hero and Jet.

Both brands are produced by the Indonesian Sumatra Tobacco Trade Company and many are smuggled into Vietnam from Cambodia, according to the VietnamNet article, which is accompanied by a photos of recently arrested smugglers with Hero and Jet cigarette packs still strapped to their chests.

In Cambodia, Hero cigarettes are imported by a company called Hero King Co. Ltd., whose website lists its parent company as LYP Group, owned by Mr. Yong Phat, a CPP senator.

Neither Mr. Yong Phat nor LYP Group could not be reached on Thursday.

Choeng Vann Thor, head of the General Department of Taxation’s branch office in Phnom Penh’s Chamkar Mon district—where the LYP Group headquarters are located—said Hero cigarettes are not sold in Cambodia.

“As I know, Hero cigarettes are not sold in Cambodia, but exported to Vietnam,” he said.

However, the brand is widely available across the country.

Officials also said on Thursday that by law, packages of cigarettes must display both a tax sticker and health warning, neither of which is found on packs of Hero.

“If cigarettes are sold in Cambodia, it is necessary to put a tax payment stamp on their packs,” Mr. Vann Thor said. “If cigarettes just pass through Cambodia…it is not necessary to put a tax payment stamp on their packs.”

Health Minister Mam Bunheng said packs of cigarettes sold domestically must also display a health warning from his ministry.

“It’s a sub-decree that was issued by the government a long time ago,” the minister said of the regulation that mandates the warning.

Long Sreng, deputy director of the Interior Ministry’s anti-economic crime police department, said he was not aware of any cigarette smuggling between Cambodia and Vietnam.

“I don’t know about this. I am not the director, but just the deputy director,” he said.

According to a September 18 article in Thanh Nien News, a popular Vietnamese- and English-language newspaper in Vietnam, tests conducted by the Vietnamese Tobacco Association found that Hero and Jet cigarettes were more dangerous than other brands. The tests show that the nicotine levels of the brands’ cigarettes exceed those permissible in Vietnam.

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