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THE TWO ROW TIMES TOBACCO SERIES By the Anti-Colonial Committee of the Law Union of Ontario The Federal Government introduced Bill C-10 in Parliament through Jus- tice Minister Peter MacK- ay on November 5, 2013, and it was discussed at the Parliamentary Com- mittee on Justice and Hu- man Rights on Dec. 3, 5, 10, and 12, 2013. The Bill will amend the Criminal Code to include a section on the possession and trafficking of contraband tobacco. Contraband tobacco is defined as any tobac- co product that does not comply with the rele- vant federal and provin- cial statutes. Importing, stamping, marking, man- ufacturing, distributing and paying duties and taxes on such products are all regulated by stat- ute. The RCMP considers the definition of contra- band tobacco to include product to be sold on First Nations' reserves that has been diverted to the wider market. The RCMP believes that certain businesses on reserve are major distributors of con- traband tobacco and that considerable amounts of contraband cigarettes are manufactured on re- serve in unlicensed fac- tories. Committee testimo- ny from anti-smoking advocates stated that "based on reports from the RCMP and others, on Kahnawake near Mon- treal, there are about ten [cigarette factories]; there's one on Tyendina- ga, near Belleville; and there are maybe a dozen or so on Six Nations near Brantford. Those are in Canada. On the U.S. side of Akwesasne, there were 10 a couple of years ago, but it may be slightly less than that now. These are the primary sourc- es. Well over 90% of the contraband in Canada originates from these un- licensed [cigarette] facto- ries." Committee testi- mony from the OPP also noted that "in addition to the Cornwall area within our east region, the area of Ontario where OPP highway enforcement teams have laid the most charges relating to con- traband tobacco has been the southwestern part of the province. The con- traband cigarettes con- fiscated in many of these stops were worth tens of thousands of dollars. In several cases, the con- traband cigarettes were manufactured within the Six Nations of the Grand River community south of Hamilton, the vehicles being registered to busi- nesses located in this first nations community. Southwestern Ontario has also seen the phe- nomenon of smoke shacks progressively develop in recent years, mostly on the Highway 6 corridor, which borders the Six Na- tions community." While anyone can smuggle or sell contra- band cigarettes, the ac- tivity in Ontario is often tied to residents of vari- ous first nations commu- nities. This can compli- cate enforcement, as the issues can be compound- ed with claims related to treaty rights and tradi- tional native practices. The police and gov- ernment allege that a significant amount of the trade in contraband tobacco occurs in and around certain First Na- tions reserves, for a num- ber of reasons: ' J • I I • First Nations such as the Mohawk of Ak- wesasne and Saint Re- gis have territories that straddle the border with the United States, which can facilitate smuggling. • Certain First Na- tions believe that the use and trade in tobacco, in- cluding between differ- ent First Nations across the country, is an inher- ent right that should be constitutionally recog- nized under section 35 of the Constitution Act, 1982. • As such, some First Nations individuals and communities do not rec- ognize certain federal or provincial laws limiting their rights in relation to tobacco • In addition, prices of tobacco products are usually lower on reserve because provincial taxes and sales taxes (both fed- eral and provincial) are not included in the prices of these products when purchased by customers who are Status Indians • Though anyone oth- er than a Status Indian is supposed to pay all taxes if they purchase tobacco products on reserve, this does not always occur and certain businesses on reserve are major dis- tributors of contraband tobacco. THE CURRENT LEGAL FRAMEWORK Currently, prosecutions for contraband tobac- co-related offences can be conducted either under the Excise Act, 2001,or under a number of general provisions in the Criminal Code. Under the Excise Act, 2001, cer- tain contraventions are already subject to fines and imprisonment for up to five years. Currently, no spe- cific offence relating to "contraband tobacco" is found in the Criminal Code. Prosecutors have an array of offences at their disposal to assist in the prosecution of some tobacco smugglers, in- cluding fraud, conspir- acy, money laundering, etc. Currently, police and prosecutors complain of unpaid Excise Act fines being ignored by offend- ers. IMPACT OF C-10 Criminal enforcement un- der the Excise Act, 2001 may be carried out by "any police force in Can- ada" that is designated according to certain con- ditions. It appears that the RCMP is the force des- ignated to fulfill this role. In comparison, all police forces may enforce Crim- inal Code provisions. By creating specific provisions on contraband tobacco in the Criminal Code, similar to the ones found in the Excise Act, 2001, the amendments proposed in Bill C-10 en- sure that all police forc- es - including provincial forces like the OPP and SQ - are mandated to pursue these new specific tobacco offences. According to the news release that accom- panied the introduction of Bill S-16, the precursor to Bill C-10, a new SO-of- ficer RCMP Anti-Contra- band Tobacco Force will be created to "target organized crime groups engaged in the produc- tion and distribution of contraband tobacco, to reduce the contraband tobacco market, and com- bat organized crime net- works." At this point, it is not known where the new force will focus its attention. According to OPP Chief Superintendent Gary Couture: "This proposed act will give us more tools. It will allow our officers to act differently. Now that it will be considered a criminal offence, they will be able to investigate further than they can at the moment any time they pull someone over. At the moment, provin- cial law does not allow us to become involved unless we have probable cause. With the bill, they will have more power along those lines. Now that it will be considered a criminal offence, there may be arrests." According to the De- partment of Justice, the bill proposes amend- ments to the Criminal Code in order to provide for a new offence of traf- ficking in contraband tobacco. The particular activities that are prohib- ited include the offer for sale, possession for the purpose of selling, as well as distributing and trans- porting of such tobacco. Upon indictment the maximum penalty is up to five years' imprison- ment, and on summary conviction it is up to six months. The bill provides for mandatory minimum terms of imprisonment for individuals who have been convicted of this particular offence for the second or subsequent times. For a second con- viction it's up to a min- imum of 90 days. For a third conviction it's up to 180 days of minimum im- prisonment, and then for - a fourth or subsequent conviction it's up to two years less a day. In order to have these penalties imposed re- quires the presence of or the involvement of 10,000 cigarettes or more of con- traband tobacco, or 10 ki- lograms of raw leaf tobac- co, or 10 kilograms of any other tobacco product. Under the 2001 Ex- cise Tax Act, only the federal government may prosecute this offence, whereas under Bill C-10, the federal government and the provinces may do so. So practically speak- ing, it's likely that the RCMP will lay charges and the federal prosecu- tion service will prose- cute in many cases, and in other cases, either form of law enforcement will lay a charge and then the provincial prosecutors will prosecute. LEGAL ISSUES ARISING FROM THE CHANGE A broad new series of Criminal Code contra- band tobacco offenc- es will be created with mandatory minimum jail sentences for repeat of- fenders. The bill will al- low the Crown to proceed by indictment (leading to mandatory minimum sentences being trig- gered) where it decides to. The OPP and Surete du Quebec will become much more actively in- volved in investigating and prosecuting contra- band tobacco offences. Criminal matters pro- ceeding by indictment are much more likely to qualify for the issuance of a warrant to search a premises under the search warrant sections of the Criminal Code. Expanded search powers of vehicles or oth- er locations will be per- mitted in cases where tbl police have reasonable grounds to suspect tbl possession of contraband tobacco for the purpoll of trafficking, for exam- ple, in the case of the