1 Countering Contraband: the 2 nd Bi-National Conference on the Illicit Tobacco Trade Presentation by André-J. Santerre, Attorney Direction principale des lois sur les taxes et l’administration fiscale et des affaires autochtones Revenu Québec February Toronto

2 Recent Initiatives to Counter Tobacco Smuggling  Bill 59  Assented to on November 19, 2009  Act to amend the Tobacco Tax Act and other legislative provisions primarily to counter tobacco smuggling  (2009, chapter 47)

3 Recent Initiatives to Counter Tobacco Smuggling 1. Moratorium on the issue of manufacturer’s permits 2. New conditions for the issue of permits 3. New control measures for tobacco manufacturing equipment 4. New fiscal penalties 5. Partnerships with municipalities 6. Suspension of drivers’ licences

4 Moratorium on the Issue of Manufacturer’s Permits  Moratorium in effect since October 28, 2009  For an unspecified period  No permits issued by Revenu Québec  Applies only to permits for the manufacture of tobacco products

5 New Conditions for the Issue of Permits New Conditions for the Issue of Permits  New discretionary powers granted to the Minister of Revenue of Québec  Conditions for the issue of permits include the obligation to: provide certain documentsprovide certain documents sign an agreementsign an agreement provide securityprovide security

6 New Control Measures for Tobacco Manufacturing Equipment New Control Measures for Tobacco Manufacturing Equipment  New requirements for persons in possession of tobacco manufacturing equipment  Such persons are required to hold a manufacturer’s permithold a manufacturer’s permit keep a register of the origin and destination of tobacco manufacturing equipmentkeep a register of the origin and destination of tobacco manufacturing equipment

7 New Fiscal Penalties New Fiscal Penalties  Additional fiscal penalties Allow wrongful conduct to be penalized without having to go to courtAllow wrongful conduct to be penalized without having to go to court Penalties ranging from 3 to 5 times the amount of tobacco taxPenalties ranging from 3 to 5 times the amount of tobacco tax  Examples of offences Manufacturing tobacco products without a permitManufacturing tobacco products without a permit Purchasing tobacco from a person who does not hold a permitPurchasing tobacco from a person who does not hold a permit Selling tobacco in an unidentified packageSelling tobacco in an unidentified package Transportation or storage of raw tobacco without a permitTransportation or storage of raw tobacco without a permit

8 Partnerships with Municipalities Partnerships with Municipalities  New powers granted to municipalities  Power to institute penal proceedings before municipal courts before municipal courts for offences involving consumers of contraband tobacco for offences involving consumers of contraband tobacco  Municipalities can keep the fines and costs collected relating to offences committed on their territory.

9 Thank you for your attention. Questions?