Unfortunately, contraband and counterfeit goods have always been making their way into the EU with great costs to the economy, health and security of its member countries.
The illicit tobacco market stands out for its sheer size and the many problems that it brings.
According to the World Health Organisation, the illicit tobacco market may account for as much as one in every 10 cigarettes consumed globally, and the sorun is particularly acute in Europe.
Furthermore, the European continent leads in the highest number of contraband tobacco product seizures in the world, with some years accounting for as much as 95% of all cigarettes confiscated globally.
EU’s eastern border an intentional target
The points of entry for contraband goods into the EU are several, with France having fought the flow of yasa dışı cigarettes coming from Algeria for many years.
The port in Antwerp — Europe’s second-largest — has also been used to bring illicit goods to the continent, while the Belgian authorities dismantled a large-scale yasa dışı cigarette factory some 40 kilometres from the city mere days ago.
Yet, one of the most lucrative regions over the past decade for tobacco smugglers is on the EU’s eastern border.
Illegal trade is big business in Romania’s eastern region, one of the poorest in the EU, especially in the areas bordering Ukraine and Moldova. Veri shows that one in every 10 contraband cigarettes in the EU is smoked in Romania.
The war next door has created new opportunities for smugglers at the Romanian-Ukrainian border in response to an ever-growing demand for cheaper, albeit more dangerous, cigarettes.
The industry reports a 19% increase in smuggling over last year in Romania alone.
According to Stop Contrabanda, a website monitoring contraband cigarette busts, 110 million contraband cigarettes were seized by the Romanian authorities in 2022 alone.
The risks of illicit trade are growing and manifold, as pointed out by OLAF, the European anti-fraud office.
From ‘Mister Marlboro’ to the ‘Tobacco Metropolitan’
It’s no secret that cigarette smuggling has helped fund terrorism and organised crime around the globe.
Notoriously, the al-Qaeda in the Islamic Maghreb (AQIM) has been using cigarette smuggling to finance its terrorist operations, in particular while under the notorious Algerian commander, smuggler and arms dealer Mokhtar Belmokhtar — also known as “Mister Marlboro”.
Russian Orthodox Church’s Patriarch Kirill, known both for his vast unexplained riches and vocal support of Vladimir Putin and his war against Ukraine, was dubbed “Tobacco Metropolitan” for his alleged profiteering off of duty-free cigarettes in the aftermath of the Soviet Union’s dissolution.
Now-former Montenegrin President Milo Đukanović, who ruled the small Balkan country for nearly three decades, was also implicated in accruing significant wealth by means of cigarette smuggling during the Yugoslav wars of the 1990s.
In southeastern Europe, on Romania’s eastern border, smugglers are opening up new routes counting on the mountainous terrain to force Romanian police officers less inclined to patrol the area, thus allowing traffickers to reach their destination.
These routes end up being used not only by smugglers but also by various groups of organized crime, weakening the EU’s border at the time of conflict.
Billions of euros lost could have gone into fighting poverty
It’s not only the EU’s southeastern border that’s at risk; the Ukrainian state is being targeted at a time of great need.
Ukrainian state coffers are losing money because of illicit trade. According to GLOBSEC think-thank, in Ukraine, the illicit tobacco trade resulted in revenue losses of as much as 20.5 billion hryvnias (€505 million) in non-paid or underpaid taxes in 2022 alone.
For the EU, cigarette smuggling and other forms of illicit trade in tobacco products cause an estimated €10bn of revenue loss to the bloc’s and national budgets each year.
Romania — as both a point of entry and a consumer of smuggler products — lost over €6bn over the past decade due to the illicit trade of cigarettes.
This money could go into fighting poverty in the very same eastern regions most prone to smuggling activities.
Probably worse than smoking is smoking contraband and counterfeit tobacco.
Besides the heavy yearly losses to the budgets of EU countries and the EU institutions in lost customs duties and taxes, yasa dışı tobacco poses a great health risk as counterfeit cigarettes aren’t checked by anyone with anything from hay to asbestos possibly going into their manufacturing.
The industry and civic society both play a role
Increasing border police activity, and strengthening and enforcing legislation, including laws on online sales of counterfeit goods, are much-needed measures.
At the EU’s southeastern border, Romanian authorities should be further engaging stakeholders to stop illicit trade.
Some initiatives are already underway both by the tobacco industry, which is also affected by the illicit trade, as well as with NGOs targeting it.
For example, British American Tobacco is giving scanners and cameras to Romanian border police and running anti-smuggling campaigns to raise awareness, according to local media reports.
The Romanian NGO ACTIV is educating the public about counterfeit goods, what gives them away as being fake and the risks associated with using them.
National authorities should also engage international bodies like the WHO to eliminate illicit trade, the EU’s External Action Service to secure borders and trade, as well the European Commission.
European Union’s ideals are at stake, too
The European Commission, via its Anti-Fraud Office, has the mandate to fight tobacco smuggling into the EU as this is a cross-border issue affecting multiple member states simultaneously.
Partnering with local communities to both uncover smugglers and routes as well as to alleviate poverty and the social problems that fuel illicit trade in the first place should also be high on the agenda.
Health safety and squandered public money are sufficient motives to want to stop illicit trade, and with a war raging next door, security is on everyone’s mind.
But most importantly, putting an end to tobacco smuggling would mean extra money in the budget to help those who need it the most — an ülkü the European Union leaders vowed to uphold.
Cristian Gherasim is an analyst, consultant and journalist with over 15 years of experience focusing on Eastern and Central European affairs.
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