Manila Bulletin
Philippines
National
Consumer groups ask DTI to file charges vs. Shopee, Lazada over continuous sale of illicit vapes
Philippines
National
Consumer groups ask DTI to file charges vs. Shopee, Lazada over continuous sale of illicit vapes
Consumer groups ask DTI to file charges vs. Shopee, Lazada over continuous sale of illicit vapes
Published Jul 17, 2023 05:21 am
Two consumer groups appealed to the Department of Trade and Industry (DTI) to file administrative sanctions or court cases against e-commerce platforms Shopee and Lazada over the continuous sale of illicit vapes that do not comply with the law and avoid tax payments.
In separate letters to Atty. Fhillip D. Sawali, Director of the DTI's Fair Trade Enforcement Bureau on 21 June 2023, the Consumer Choice Philippines (CCP) and the Nicotine Consumers Union of the Philippines Inc. (NCUP) noted the continuing violation by the e-commerce platforms of Republic Act No. 11900, or the Vaporized Nicotine and Non-Nicotine Products Regulation Act.
"We hope that you will heed our call and act swiftly to protect the public interest and welfare from these illicit online activities by filing the necessary administrative or court cases against these erring online platforms," Consumer Choice Philippines president Luis Gregorio B. De La Paz said in his letter. NCUP president Antonio P. Israel said it raised the issue directly with Lazada and Shopee as early as 16 December 2022 and sent letters to the DTI on 15 February 2023 and 23 March 2023, respectively.  "Unfortunately, as of to date, we have yet to receive any response from Lazada and Shopee nor observe substantial removal of illicit VNNPs from their online platforms," Israel said.
The two groups presented evidence, in the forms of screen shots of illicit vape listings in the two online marketplaces, to support their claims.
De La Paz also expressed grave concern over the rampant sale of illicit vaporized nicotine products in online marketplaces and recommended the filing of the necessary administrative or court cases against them.
Israel said to validate his group's claims and monitor compliance by the e-commerce platforms, it has regularly checked various sites to determine compliance with the directive of the DTI. Â "Sad to note, however, that several listings of illicit VNNPs remain available and accessible online," said Israel, while presenting a compilation of illicit VNNPs advertised and sold on Lazada and Shopee as of 13 June 2023.
"We respectfully reiterate that the continuous violation of e-commerce platforms is a disservice to the Philippine government particularly the Congress which carefully deliberated and enacted the VNNP Law and the DTI--the primary government agency tasked to regulate vaporized nicotine and non-nicotine products," he said.
"Despite several opportunities to comply with the VNNP Law and its implementing rules and regulations, the continued defiance of Shopee, Lazada and other e-commerce platform providers should not only be called out but should also be formally charged by this Honorable Office through the Fair Trade Enforcement Bureau so that they may be held fully accountable," said Israel.
He said the illicit VNNPs do not comply with the requirements of the VNNP Law, particularly Section 8 which provides "that the products being sold and advertised online shall be compliant with the health warning requirements indicated herein, as well as other BIR requirements including tax stamp, minimum or floor price or other fiscal marks."
"Based on my experience in purchasing vapor products on Lazada and Shopee, the products I receive do not have graphic health warnings on their packaging. These e-commerce platforms, when accessed via website/browser, also do not bear the signages (i.e., point-of-sale) required by the VNNP Law when searching for vapor products or e-cigarettes. We also note that the products we cited in Annex A are also not included in the list of registered brands with the Bureau of Internal Revenue (BIR) per Revenue Memorandum Circular No. 57-2023 and may, therefore, be not compliant with the excise tax laws and regulations," said Israel.
He said Section 23 of the VNNP Law states that online platforms which are non-compliant with Section 8 of the Law should be ordered by the DTI to immediately suspend trading of such products and should be liable for the fines and penalties imposed under the same section.
"Having said these, we humbly urge your Honorable Office to continue its good work in curbing illicit vaporized nicotine and non-nicotine products, online and offline, and to put its foot down by formally charging Lazada and Shopee for violation of the VNNP Law to hold them accountable for the benefit of the consuming public," Israel said.
De La Paz said the online marketplaces were also violating Sec. 83 of the VNPP law because some of their products have no graphic health warnings, were not registered with the Bureau of Internal Revenue based on Revenue Memorandum Circular No. 57-2023 and were posted on websites/platforms without the required signages mandated by the law.
"It is not surprising that illicit VNNPs are prevalent in various online platforms, primarily on Shopee and Lazada. It is apparently easy to become a seller of vape products in the platforms," he said, adding that it is "a breeze to be a seller with very low barriers for seller documentations," said De La Paz.
"E-commerce platforms should conduct their own due diligence, perform adequate know-your-client (KYC) standards, and strictly implement requirements accorded by relevant laws and rules and regulations, especially regarding the sale and distribution of regulated products, for the ultimate protection of the public," said De La Paz.
"The negative impacts of illicit VNNP go beyond public health concerns. The Philippine government also suffers from significant revenue loss due to the proliferation of these non-compliant products. By cracking down on the sale of illicit VNNP, the government can ensure that legitimate businesses comply with regulations, contribute to the revenue stream, and foster a level playing field in the market," he said.
The Philippine Medical Association earlier appealed to the Senate and other relevant government agencies to combat illicit cigarettes and vaping products on popular online platforms. Â The PMA said these products are non-compliant, unregistered and possibly non-tax paid, and that they do not bear the required graphic health warnings, internal revenue stamps or packaging and labeling requirements.
"We hope that you will heed our call and act swiftly to protect the public interest and welfare from these illicit online activities by filing the necessary administrative or court cases against these erring online platforms," Consumer Choice Philippines president Luis Gregorio B. De La Paz said in his letter. NCUP president Antonio P. Israel said it raised the issue directly with Lazada and Shopee as early as 16 December 2022 and sent letters to the DTI on 15 February 2023 and 23 March 2023, respectively.  "Unfortunately, as of to date, we have yet to receive any response from Lazada and Shopee nor observe substantial removal of illicit VNNPs from their online platforms," Israel said.
The two groups presented evidence, in the forms of screen shots of illicit vape listings in the two online marketplaces, to support their claims.
De La Paz also expressed grave concern over the rampant sale of illicit vaporized nicotine products in online marketplaces and recommended the filing of the necessary administrative or court cases against them.
Israel said to validate his group's claims and monitor compliance by the e-commerce platforms, it has regularly checked various sites to determine compliance with the directive of the DTI. Â "Sad to note, however, that several listings of illicit VNNPs remain available and accessible online," said Israel, while presenting a compilation of illicit VNNPs advertised and sold on Lazada and Shopee as of 13 June 2023.
"We respectfully reiterate that the continuous violation of e-commerce platforms is a disservice to the Philippine government particularly the Congress which carefully deliberated and enacted the VNNP Law and the DTI--the primary government agency tasked to regulate vaporized nicotine and non-nicotine products," he said.
"Despite several opportunities to comply with the VNNP Law and its implementing rules and regulations, the continued defiance of Shopee, Lazada and other e-commerce platform providers should not only be called out but should also be formally charged by this Honorable Office through the Fair Trade Enforcement Bureau so that they may be held fully accountable," said Israel.
He said the illicit VNNPs do not comply with the requirements of the VNNP Law, particularly Section 8 which provides "that the products being sold and advertised online shall be compliant with the health warning requirements indicated herein, as well as other BIR requirements including tax stamp, minimum or floor price or other fiscal marks."
"Based on my experience in purchasing vapor products on Lazada and Shopee, the products I receive do not have graphic health warnings on their packaging. These e-commerce platforms, when accessed via website/browser, also do not bear the signages (i.e., point-of-sale) required by the VNNP Law when searching for vapor products or e-cigarettes. We also note that the products we cited in Annex A are also not included in the list of registered brands with the Bureau of Internal Revenue (BIR) per Revenue Memorandum Circular No. 57-2023 and may, therefore, be not compliant with the excise tax laws and regulations," said Israel.
He said Section 23 of the VNNP Law states that online platforms which are non-compliant with Section 8 of the Law should be ordered by the DTI to immediately suspend trading of such products and should be liable for the fines and penalties imposed under the same section.
"Having said these, we humbly urge your Honorable Office to continue its good work in curbing illicit vaporized nicotine and non-nicotine products, online and offline, and to put its foot down by formally charging Lazada and Shopee for violation of the VNNP Law to hold them accountable for the benefit of the consuming public," Israel said.
De La Paz said the online marketplaces were also violating Sec. 83 of the VNPP law because some of their products have no graphic health warnings, were not registered with the Bureau of Internal Revenue based on Revenue Memorandum Circular No. 57-2023 and were posted on websites/platforms without the required signages mandated by the law.
"It is not surprising that illicit VNNPs are prevalent in various online platforms, primarily on Shopee and Lazada. It is apparently easy to become a seller of vape products in the platforms," he said, adding that it is "a breeze to be a seller with very low barriers for seller documentations," said De La Paz.
"E-commerce platforms should conduct their own due diligence, perform adequate know-your-client (KYC) standards, and strictly implement requirements accorded by relevant laws and rules and regulations, especially regarding the sale and distribution of regulated products, for the ultimate protection of the public," said De La Paz.
"The negative impacts of illicit VNNP go beyond public health concerns. The Philippine government also suffers from significant revenue loss due to the proliferation of these non-compliant products. By cracking down on the sale of illicit VNNP, the government can ensure that legitimate businesses comply with regulations, contribute to the revenue stream, and foster a level playing field in the market," he said.
The Philippine Medical Association earlier appealed to the Senate and other relevant government agencies to combat illicit cigarettes and vaping products on popular online platforms. Â The PMA said these products are non-compliant, unregistered and possibly non-tax paid, and that they do not bear the required graphic health warnings, internal revenue stamps or packaging and labeling requirements.