Montenegro wants to resell tobacco from illicit trade

Montenegro's Finance Minister Aleksandar Damjanovic has announced that he would like to propose a law allowing the state to resell tobacco products confiscated as part of operations to combat illicit trade. This proposal comes in the context of Montenegro's fragile public finances. However, it shows a lack of awareness among the public authorities of the impact of tobacco consumption on the budgetary balance. Such a provision is opposed tothe WHO protocol to eliminate illicit trade in tobacco products.

Montenegro's Finance Minister announced on Friday, July 22, that he would soon propose a law allowing the recovery of tobacco products confiscated at the port of Bar. The latter, located in the south of the country, is a hub of the European illicit trade.[1].

Tax revenue estimated at between 15 and 20 million euros per year for Montenegro

The bill will establish deadlines for the recovery of tobacco products, and make offers to the former owners of the seized products. If the former owners do not take back their products, they could be resold at auction. Thus, according to the Minister of Finance, this measure could generate between 15 and 20 million euros in tax revenue.

A proposal not in line with the fight against illicit trade in tobacco products

However, there are many problems with such a proposal. British Ambassador Karen Maddocks says it goes against good practice and international protocols. According to her, goods that may pose problems due to their quality, compliance with health standards and intellectual property rights should be destroyed, not sold. The WHO Protocol to Eliminate Illicit Trade in Tobacco Products, ratified by Montenegro, reiterates the need to destroy tobacco products. The protocol stipulates that: "all confiscated tobacco, tobacco products and manufacturing equipment shall be destroyed using environmentally friendly methods to the greatest extent possible, or disposed of in accordance with national law " (Article 18).[2].

A proposal that removes the role of manufacturers in illicit trade

In the case of smuggling, this measure removes the role of manufacturers, who are responsible for two-thirds of global smuggling. For this reason, a 2004 agreement between the European Commission and Philip Morris International obliges the cigarette manufacturer to make payments in the event of significant seizures of its products in smuggling networks. Such an agreement is based on the principle that the manufacturer has a responsibility for the proper control of its own products. Here, Montenegro, not being part of the European Union, is offering manufacturers the chance to resell its own products, even though they could have helped to get them out of the legal network.

Montenegro lags behind in tobacco control

Illicit trade is in fact a loss of tax revenue for the public authorities. However, the proposal of the Minister of Finance amounts to considering the sale of tobacco as a solution to generate tax revenue. However, tobacco consumption represents a real burden for the public authorities. This statement is verified even in countries applying high levels of taxation. The fight against illicit tobacco trade involves the fight against smoking itself. In this respect, Montenegro is lagging behind. Indeed, 36% of men and 27% of women were daily smokers in the country in 2016[3].

[1] Balkan Insight, Montenegro Mulls Filling Budget by Selling Confiscated Tobacco, 07/22/2022, (accessed 07/26/2022)

[2] World Health Organization, Protocol to eliminate illicit trade in tobacco products, (accessed 07/26/2022)

[3] World Health Organization, Tobacco control fact sheet: Montenegro, 2016, (accessed 07/26/2022)