Harsher penalties to support a just growth economy

• Illicit tobacco smuggling underlines shortfalls in penalties to curb crime

 By Ajith Perera

The business of improving law and order, combatting crime and consequently boosting Government revenues needs a shot in the arm by means of increased fines and tougher sentences. Our current regime of archaic and lenient punishments do little to deter criminals or minor offences, and has given rise to a culture of impunity that has pervaded every aspect of Sri Lankan life. 

Smuggling presents one of the finest examples, in particular the smuggling of illicit tobacco. Just over a month ago, Customs officials seized a stock of illicit cigarettes worth Rs. 1.2 million at the International Airport, smuggled into the country from Kuwait. The trader was slapped with a dizzying fine of Rs. 25,000. During May this year, another haul of illicit fags from Kuwait worth over Rs. 1.8 million was detected at the airport, and in this instance the suspect was fined Rs. 100,000. 

Whilst I did not venture to establish if the culprits were one and the same on both occasions, Customs officials inform that there are very many repeat offenders – and why wouldn’t they? Had the trader succeeded in smuggling his consignment into the market his earnings are well over Rs. 1 million from this criminal activity, whilst the risk of getting caught can be a mere Rs. 25,000. 

There is no fear or any real challenge posed to such perpetrators in terms of getting caught by the law. This is the sorry state with respect to financial crimes, smuggling, traffic offences, burglary and a myriad of other corruptions. Citizens must be made afraid and ashamed to break the law, and this transformation can be the outcome of a stringent, aggressive, decisive and well-planned programof action by the Government, which would no doubt receive the support of the wider public. The Government’s initiative to increase fines on a number of road traffic violations last year was one such move, but it lacks the machinery and political will power to see it through effective implementation. 

In the name of development, in politically and culturally sensitive regions such as South Asia, governments must learn to play smart to design and effect productive policy. Over here, in situations where governments need to be ‘politically correct’, it is prudent to tinker with the bigger picture. 

For instance, with tobacco, excessive price through taxation has made Sri Lanka a hot spot for smugglers globally. During the first six months of this year, Customs data reveals over 40 million illicit sticks have been confiscated at ports of entry and other locations in Sri Lanka. However, as per the WHO, one in every 10 cigarettes globally are illicit; whereby in Sri Lanka this then amounts to 400 million illicit sticks with over Rs. 16 billion in losses to Government. The above are the official estimates, and ground realities coupled with the rate of efforts and penetration are likely to put that figure well over Rs. 30 billion. 

In a recent interview with a reputed publication, the Deputy Director of Customs pointed to the rising incidence of illicit cigarette smuggling, and also attributes this to the growing Chinese population in the island. He added: “We noticed that by December last year it was gradually expanding, hence we have put in place new surveillance plans to curb this situation. It was noted that due to the extremely high demands the smugglers tend to continue even at a higher risk and hence more stringent rules must be in place in order to tackle this situation.”

The points I wish to make are applicable to tobacco and many other sectors, as it raises many questions as depicted by the above. When designing policy, we need to get the balance right. Whilst it is important to satisfy the health objectives, plus, politically motivated and cultural sensitivities; we must not impose tax or regulation that is widely counterproductive in the longer term. 

The influx of illicit tobacco products, with no marked reduction in smoking incidence amidst loss of Government revenue is one fine example, as there also doesn’t exist any effective deterrents to smugglers or consumers of illicit products. Our system of fines does not even constitute ‘a slap on the wrist’, and this is the same for a wide number of offences. The penalty for smuggling should be fixed at least twice the landed value of seized goods to become an effective deterrent. 

Also, as the Deputy Director of Customs noted, there must be more stringent rules and checks to deter their entry. Lending evidence to warrant the WHO’s claim and beyond, two weeks ago a man was arrested in Colombo as he prepared to trade 1,000 packs of smuggled cigarettes. However, if the fine for cigarettes worth Rs. 1.2 million was just Rs. 25,000, it is hard to imagine that this event would draw a penalty more severe – wherein lies the problem. 

To build a law-abiding and just society, we must arm our citizens with pragmatic long-term policy that encapsulates all aspects of a development agenda. To strengthen such policy with a string of rigorous and harsh punishments for violations does not a signal our descent away from democracy or being community-minded as some would make it out to be. Instead it provides the safety net to grow within a just and law-abiding society. 

Once again it boils to down to getting the balance right, and a Government with selfless resolute courage to see such changes through. Or else we are in for a ‘Perpetual’ fix.

The writer is a retired marine security services director, who was attached to shipping services in Sri Lanka and the Middle East, with extensive experience in engaging the shipping industry and authorities on regulation and anti-smuggling operations.