The illicit cigarette trade is defined as ‘the production, import, export, purchase, sale or possession of tobacco goods which fail to comply with legislation’ (FATF 2012). Illicit cigarette trade activities fall under 3 categories:

Contraband: cigarettes smuggled from abroad without domestic duty paid.

Counterfeit: cigarettes manufactured without authorisation of the rightful owners, with the intent to deceive consumers and to avoid paying duty.

Illicit whites: brands manufactured legitimately in one country but smuggled and sold in another without duties being paid.

Cigarette smuggling, also informally referred to as ‘buttlegging’, is the illicit transportation of cigarettes or cigars from an administrative division with low taxation to a division with high taxation for sale and consumption.

Ababil conducts business on the basis of the applicable national and international laws and regulations. For the cigarette and tobacco industry in particular, counterfeiting and illicit trade are a matter of worldwide concern and can result in significant financial damage due to unfair business practices. As a supplier for the tobacco industry, Ababil has established an anti-counterfeiting policy that is known to the industry.

Ababil is aware that illicit trade is a major issue around the globe. In order to demonstrate the willingness to combat illicit trade and to ensure fair business practices, Ababil urges its buyers and suppliers to consider terms and conditions below:

• The tobacco, NTM or cigarettes sold under any contract will only be used to produce tobacco products that are destined to be sold via legally correct trade and/or export channels and that thus comply with all applicable laws and regulations.
  
  
• All buyers and suppliers are aware that the tobacco products are beyond the control of the manufacturer once they are in an independent national or international distribution system. Buyers and Ababil will work closely together in order to resolve any matter concerning illicit tobacco product trade.
  
  
• Should there be any proven evidence that the buyer or supplier is involved in counterfeiting or illicit trade, Ababil reserves the right to discontinue the business relation.