04/04/2012 10:31 am ET Updated Jun 04, 2012

World Health Organization Aims To Fight Tobacco Smuggling With New Regulations

* WHO accord would set up track and tracing system for cigarettes

* Smuggling robs states of up to $50 bln in lost taxes annually

* Governments still have to adopt new treaty in November

By Stephanie Nebehay

GENEVA, April 4 (Reuters) - Health officials on Wednesday provisionally agreed a global deal to combat tobacco smuggling, a trade the World Health Organisation said makes harmful smoking too cheap and robs finance ministries of up to $50 billion a year.

The agreement will require manufacturers to be licensed and tobacco packaging to bear markings so that any goods seized on illegal markets can be traced back through the supply chain, including the companies that shipped them, to see where they were diverted.

Tobacco products sold in duty-free shops and over the Internet are covered by the accord, which obliges authorities to provide legal assistance to other countries investigating illicit but highly lucrative trade channels, WHO officials said.

Formally a protocol to the 2005 Framework Convention on Tobacco Control (FCTC), the world's first public health pact, the new agreement was reached after nearly five years of negotiations, including a fifth and final round this past week.

"The primary objective of the protocol is to protect public health from this deadly trade," the U.S.-based advocacy group Corporate Accountability International said in a statement issued at the conclusion of the closed-door talks.

Tarik Jasarevic, WHO spokesman, told Reuters: "The text has been agreed by consensus."

Tobacco kills nearly 6 million people a year from cardiovascular disease, cancers, diabetes and other illnesses, according to the United Nations agency.

The text, hammered out by 800 officials from 135 countries, is likely to be adopted at a WHO meeting in Seoul this November. It then needs ratification by 40 countries to enter into force, a process expected to take two years.

"It will be mandatory, an international requirement for all cigarette packages, every single package will have that mandatory mark," Dr. Haik Nikogosian, who heads the tobacco treaty's secretariat at the WHO, told a news briefing last week.

Nikogosian said in total, government exchequers lost $40 billion to $50 billion a year to smuggling in lost duty and unpaid taxes.

"If you bring even half of that back to the governments by enforcing a strong protocol, imagine what the effect is for governments, particularly for the developing countries," he said.

Several countries in which major tobacco companies are based, including the United States and Switzerland, will not be subject to the smuggling clampdown as they never ratified the original treaty, although they do have their own measures.

"For nearly five years, Big Tobacco has fought tooth and nail throughout these negotiations in an effort to undermine progress, thwart public health policy and police itself with regards to illicit trade," said John Stewart of Corporate Accountability International.

"But the text of the final Protocol reflects delegates' resolve ... to stand together for public health and against Big Tobacco," he said.

Tobacco giants Philip Morris International and British American Tobacco have previously said they would back a protocol with effective measures against illicit trade.