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AYFB Names Main Defects in Law on Tobacco Products

Association of Young Financiers and Businessmen – AYFB has released a repeated statement on the Tobacco bill and exposed the gaps within the document.

The bill lacks for due financial analysis. The document only says that the Authorities do not plan to take additional expenditures, but the draft law says nothing about businesses and companies that will have to bear losses after the document enactment. These expected losses will make negative affect on the state budget’s fiscal aspects and the whole economy and social background in the country. Moreover, it is unclear what mechanisms will be used by various departments for the law enforcement amid the existing resources, while the current applicable law is far simpler and state officials fail to valuably enforce even this simple law.

Economic Part

Licensing/authorization mechanisms for tobacco sales outlets creates serious threats to business, because neither licensing type nor criteria are specified, nor the purpose of establishing this norm in the country. If the Authorities introduce complicated licensing conditions, this signifies a major part of small entrepreneurs will not be able to satisfy them (the issue is of small supermarkets and stores) and they will just be bankrupt. As a result, only major entrepreneurs will be able to get licenses and make a use of extreme contraction in market competition. On the other hand, if the Authorities introduce simple licensing conditions so as everybody  obtain them, introduction of similar regulations will be nonsense. This will be an additional mechanism for stealing money from population by imposing useless licenses.

One of the articles of the bill poses destructive threat to the small business. Under the mentioned article, tobacco products must not placed in visible places, within or outside of trade outlets. The point is that tobacco industry representatives pay monthly fees to trade outlets for placement of tobacco stands. Therefore, the  small business (markets, booths) will bear serious losses without these incomes.

One more regulation threatens both business sector and the whole economy, because it restricts  participation of tobacco industry representatives in discussions of healthcare or any related issues.

Moreover, under the bill, representatives of this business sector are banned to keep any communication with state officials and this, on the one hand, will make negative influence on business environment and, on the other hand, it violates article 19 of the state constitution, under which every person has the right for freedom of speech, opinion, conscience, confession and religion.

Technical Part

As to the enforcement part, the bill is invaluable and imperfect in this respect too. To be precise, the bill does not contain real control and enforcement mechanisms. For example, sales of tobacco products, tobacco accessories or/and accessory for its use, in the facilities, where these activities are banned by the law, will result in a fine imposition, but the bill does not determine, who will control and who will execute the law-determined norms.

One more serious gap of the bill is related to the issue of  control of smokers (facilities, entertainment centers, conference halls, restaurants, cafes, public food outlets, clubs, casinos, banquet halls). Under the initial version of the bill, it was the responsibility of Interior Ministry to control smokers in the mentioned facilities, but according to arguments of the latter version, it is difficult to administer and it is impossible, in practice, to control smokers in the mentioned facilities.

After the Interior Ministry released this statement, amendments were made to the bill and the control issue was redirected to Ministry of Finance, but because of lack of resources, this instance will also face difficulties in monitoring and administering law-breaching smokers.

It should be also noted that after discussion of the first version of the bill, which was rejected by all Ministries, including Interior Ministry, no essential changes were made to the revised variant.

As to responsibility of Interior Ministry, the Ministry is responsible for control smokers at buses, minivan taxis and taxis. In this respect the bill contains many shortcomings and is of only formal character.

Unconstitutional and Technically Impossible Regulations

The bill introduces such absurd amendments that cannot be implemented in practice and are unconstitutional. To be precise, tobacco importer, manufacturing companies are obliged to remunerate treatment costs to anybody if they think that smoking has damaged their health conditions.

The bill also bans any involvement of state officials or tobacco industry representatives in the process of preparing healthcare decisions. This norm restricts parties to fix their positions and discuss issues by both parties.

One more inflexible initiative calls for suspending licenses to the facilities if someone smokes  on the due territory. To be precise, the facility, where smoking is banned, may be stripped of license if anybody violates smoking restrictions on its territory. This initiative is so unclear and unjust that its enactment will create threat to valuable operation of many facilities and enforcement mechanisms will be also questionable.

AYFB asserts that serious attention should be paid to these shortcomings, otherwise the bill will bring many problems to the tobacco industry and the whole economy.