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Kenyan multinationals fight smuggling of industrial products

The British American Tobacco (BAT) Friday launched a dri ve for the eradication of illegal trade and smuggling of manufactured industrial products, seeking a clear linkage between the prosecutors, lawyers and judges to end the trade.

“This is the largest ongoing theft of government revenue. It is a massive theft of government money that should be used to support social and economic programme s …the scale of criminality is massive,” said Colin Denyer, senior investigations m anager, BAT.

Kenyan authorities lose an average Ksh100 billion (US$ 12.5 million) through the diversion of revenue in the forms of taxes due on tobacco products, one of the m ost taxed products, as a result of smuggling of fake products and forgeries of t a x stamps.

BAT estimated that at least 30 per cent of all tobacco products sold in Kenya ar e counterfeit products and on which taxes have not been paid to the government.

“We have come together with the investigators, the judiciary and the police, to seek ways of collaborating on how to end these illegal acts. The criminals are v e ry innovative and are able to exploit opportunities,” Denyer told journalists.

“This is a high stakes game. A lot of money is involved,” Denyer said.

Experts said the smuggling of fake products is to blame for the increasing cases of fire incidences at premises, leading to loss of lives and injury.

The key products targeted by the illegal traders include software, music, comput er products and accessories, soap and detergents, processed goods, dry cell batt e ries, stationery, electrical fittings, medicine, shoe polish, cosmetics and othe r pharmaceuticals.

Kenyan parliamentarians passed an anti-counterfeit products law in late 2008 and the East African countries have also been working on a regional pact to stem tr a de in illicit products, blamed for the failure of the region to benefit from ind u strial trade.

Denyer said the issue of counterfeit products started in China, where the smuggl ers have developed high technologies that they use to produce fake goods, which t hey sell them into the market at cheaper prices as genuine products.

“This is not a minor issue. The consumers of illicit goods face possible injurie s and death, there is a loss of product value because some of the fake products a re sold at very low values compared to the genuine ones,” said Steve Smith, Mana g ing Director, Ever Ready East Africa.

The manufacturers said the fight against illicit trade and counterfeit products is increasingly becoming problematic because the consumers do not know which pro d ucts are fake and which ones are genuine.

Industrialists suspect government law enforcement agents collude with the smuggl ers to allow these illicit traders to get free tickets to import their products.

“There is big money at stake. Sometimes, you wonder how some products get their way into a country. It takes two to tango but we are not here to exchange blame, ” Smith said.

Meanwhile, the Kenyan police have played down the extent to which illegal trade is becoming more rampant, saying the issue is still under control in Kenya.

Kenya’s Police Spokesman Eric Kiraithe said illegal trade has become a “major ne gative” for commerce and trade and is stifling trade within the East African reg i on.

“It is a negative for employment creation. But it is not yet a big challenge, bu t if not checked, it might become a major challenge in future,” Kiraithe told PA N A.


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