In March 2000, the UK Government announced a package of measures designed to curb smuggling. These included the deployment of 1000 additional Customs officers; additional specialist investigators and intelligence staff; additional x-ray scanners; tougher sanctions and penalties; and a public awareness campaign. In addition, packs of cigarettes and hand-rolling tobacco sold for consumption in the UK are now required to carry a duty-paid mark. Through this campaign, Customs & Excise succeeded in breaking up 43 smuggling gangs and reduced Cross-Channel smuggling by 75% in 2000/2001. In 2003-04, the illicit market in cigarettes fell to 16%. The current Government target is to reduce the illicit share of the market in cigarettes to 13% by 2007-08.

In the 2006 Budget the Chancellor announced new measures to further strengthen the anti-smuggling strategy. These include working with tobacco manufacturers to tighten controls along the supply chain. Specifically, the companies have signed new Memoranda of Understanding (MoU) with government which requires them to cease supplying customers where they fail to demonstrate product control; to put in place controls of raw materials and machinery to prevent them becoming available to counterfeiters; and to share information with Revenue and Customs. The tobacco companies will be obliged to comply with these measures and will be penalised if they do not comply.

Despite the tighter measures of the new MoUs, the UK companies are not legally bound by them. By contrast, Philip Morris has signed a legal agreement with the European Union to stop its products being illegally imported into the European Union. This agreement arose out of a lawsuit filed by the European Commission against Philip Morris over the smuggling of cigarettes into the European Union. Philip Morris International agreed to abide by the new agreement in return for the EC dropping the legal action.

The agreement requires the company to approve contractors and provide customs with online information so that Customs can directly trace back any PMI smuggled cigarettes to the purchaser who originally bought them from PMI. In addition, Philip Morris will be required to pay 100% of all taxes due on any genuine products that are seized by customs.

Because smuggling is a global problem, concerted action at the international level is also required. This will be achieved through a protocol under the Framework Convention on Tobacco Control. At the first Conference of the Parties (i.e. the meeting of countries that have ratified the global treaty) it was agreed that an expert group be set up to tackle international tobacco smuggling. In its submission to the FCTC negotiations, ASH recommended that the smuggling protocol include: labelling every pack with its origin (manufacturer) and destination (country); require health warnings on packs to be printed in the language of the destination market; ban duty free sales; require manufacturers to mark packs and to be able to identify which wholesaler they sold a particular pack to on the basis of the marking; require co-operation between law enforcement bodies; and commit to meaningful penalties to introduce a disincentive to smuggling.