Five Dollar Guys and Millionaire Babushkas

For an ex smoker, I spent a lot of time reading about cigarettes this summer.  Well, I should say, I spent a lot of time reading about illegal cigarettes and black market cigarettes this summer.  Worldwide, cigarettes are the largest otherwise legal product sold on the blackmarket.  There are a lot of reasons for this-- supply, demand, high taxes, relatively easy means of transport, rationalized low risk of being caught, etc-- and a person could easily write a report several times over explaining it.  I, however, spent most of my time comparing the legal structure of laws after the choice to enter the black market has been made.  And while I’d love to talk about all of that research, it might be easier to narrow in on a more specific project I worked on-- namely, a comparison between US and Lithuanian laws on sanctions.

Now, off the bat, you may be wondering why the US and Lithuania, and for awhile I wondered the same things.  The obvious choice appears to be a comparative study between the laws in Lithuania and other countries in the EU.  However, Lithuania’s problem with illegal cigarettes is somewhat unique in the EU because no other country is located so near as large of a supply of cheap, illegal cigarettes.  But, still, the US?  Well, as a whole, the countries don’t have much in common in the way of illegal cigarette markets, but because of drastic differences in excise taxes among the states, some states actually have rather large illegal cigarette markets.  My research then began by trying to figure out which states’ illegal markets most resembled Lithuania’s and focusing a comparative study between those five states -- New York, New Jersey, Rhode Island, Illinois, and Michigan-- and Lithuania.  And thus, the comparison of five dollar guys and millionaire babushkas, or rather, the legal ramifications for illegal cigarettes in the US compared with Lithuania.  

The comparison between five dollar guys and millionaire babushkas focused on the laws surrounding minimum and maximum sanctions for general violations of illicit tobacco trade products (ITTP), illegal selling, illegal smuggling, counterfeiting cigarettes and excise tax stamps, possession, as well as sentencing.  There were, of course, a lot of precise differences and similarities between all the laws for the illegal cigarette market, but because this is a blog, I’m going to attempt to compress those details into some general themes.  If you want any of those details, you’ll have to ask me and I’ll be more than willing to bore you for a couple hours with them.  I should note, not to brag too much, but I also made some spectacular maps showing my predictions of drivers of the illegal cigarette markets in the US.  Now, onto the trends!  

The laws in Lithuania differ most significantly from the laws in the US on maximum sanctions assigned-- with Lithuania’s being consistently and sometimes drastically lower-- and the way sanctions are calculated -- with most US jurisdictions assigning sanctions directly proportional to the number of illicit cigarettes involved.  In addition, major differences in counterfeiting laws indicate that Lithuania and the US place different emphasis and priority on different criminal acts.  To put it plainly, Lithuania’s laws really do reflect a problem with millionaire babushkas (elderly women who are frequently offenders of the law and sell cigarettes illegally at outside any legal marketplace) while the US is equally concerned with five dollar guys (people who sell cheap cigarettes on street corners or other non-licensed areas) and otherwise legal stores that sell illegal cigarettes.  Thus, the US’s emphasis on cracking down on counterfeit stamps, fraudulent tax documents, counterfeit packaging, and other attempts to camouflage illegal cigarettes represent a stark difference between where illegal cigarettes enter the consumer marketplace in both countries.  There were also major differences in the scope of what crimes were sentencable offences, as expected-- with the US consistently having a broader range of crimes that would be criminally sentenced.  But surprisingly, my research revealed that all jurisdictions studied had similar maximum criminal sentences.  Although, major differences in the way that Lithuania allows for the aggregation of criminal sentences and sanctions compared to the US will result in dramatically different sentences once all is said and done.  

The research overtuned some fascinating results and while there is a large difference in how five dollar guys and millionaire babushkas are sanctioned, the problems resulting from their behavior are largely the same.  And as the research of the Lithuanian Law Institute moves forward without me, they'll thankfully continue trying to find ways to combat these problems.  All in all, a really interesting problem facing the modern world as we try to target the public health epidemic that is smoking.