EU targets cigarette smugglers and organized crime, but who’s winning?

The problem of illicit trade, tobacco smuggling and organized crime enjoys unprecedented attention at the top European level in these days, especially in Brussels, where European governments say they’re going to fight back harder than ever. Why? The illegal trade in tobacco robs EU countries of nearly 10 billion euros ($14.78 billion of potential profits, and the return on investment in smuggling tobacco for the criminal gangs is more than 370 percent. “This problem cost my company 120 million euros ($179.728 million) across the EU last year. But it is in the interest of all European citizens that this illegal activity is tackled because it cost European shopkeepers and small businesses around 700 million euros. This is money that should be going to fund social services and is instead going to criminal gangs,” Michael Kraushaar, Head of Corporate and Regulatory Affairs for cigarette maker BAT’s western European operation told New Europe.
Twilight or smugglers’ New Moon?
Three leading Members of the European Parliament (MEPs) took the initiative to gather together some of the top officials in law enforcement and politics to discuss the problem of organized crime and put together a new game plan for fighting it. “One of the key factors that enhance the illicit activity of the organized crime groups is the huge return on investments. For instance in the market of counterfeit medicine, one US dollar generates a profit of up to 1000 dollars,” said Carlo van Heuckelom, Head of the EUROPOL Financial and Property Crime Unit during his presentation on the second forum on illicit trade organized by European Parliament on 17 November.
UK Liberal Democrat MEP Bill Newton Dunn, Hungarian S & D Edit Herzog and German EPP member Andreas Schwab said they helped organize the event to raise awareness and educate EU institutions and the public about the impact of illicit trade across society. Herzog emphasized that bringing up the topic of organized crime to the forums was designed to push lawmakers toward becoming more active in the battle.
“I believe there is a growing awareness of the problem at the European Parliament and we hope this continues. A number of senior European politicians have realized how politically and economically serious this problem is and they are working in the EP to educate Members. European citizens need to realize that the trade in smuggled tobacco is not a victimless crime but is in fact a crime that leaves us all worse off,” said Kraushaar.
New attention has been paid, especially in the media, to the problem of tobacco smuggling raised after authorities in Ireland on October this year announced that they had confiscated more than 120 million contraband cigarettes, considered to be the largest single seizure ever made in the EU. Ireland, together with Germany and UK, is the main destination for contraband cigarettes, where profits from illicit sales are greatest. Irish MEP Gay Mitchell told the European Parliament (EP) that 97 percent of illegally trafficked cigarettes are “evading the legitimate tax net to the cost of the European taxpayers.” Mitchell also opened the topic of the health implications from smoking, saying that “The health risks are extraordinary and half of all patients in the largest hospital in Ireland are admitted with smoke-related illnesses. If you check in all European Member States, you will find that the situation is the same,” added Mitchell. Where’s the solution?
EU anti-fraud commissioner Siim Kallas of Estonia, in reaction to appeals from the Parliament for a more active policy on tobacco smuggling and organized crime, acknowledged that it is a “really huge issue, which hurts the budgets in the EU Member States and said the fight against cigarette smuggling is clearly very important priority.” But, he added that, “We can only facilitate and provide intelligence. We have special possibilities to help Member States but to ‘catch the cigarettes’ is a duty of Member States.”
On the other side, as Kraushaar said, industry actors see a lack of the coordination on the EU level. “We appreciate the efforts the EU institutions are making to tackle the illicit tobacco trade. But ideally, we would like to see increased coordination on an EU level and also to see the new Commissioner responsible to take a lead in the fight.” The same point was stressed by the co-organizer of the forum on the illicit trade, Newton Dunn, who told New Europe there is a weakness in cross-border policing in Europe. “Crimes which are committed across open borders can only be effectively countered if law enforcement is given the same facility. The member states of the EU will never be willing to totally share their national police intelligence and resources. So, weakness in cross-border policing in Europe will remain - until a federal police force with cross-border powers is created for the EU,” he said.
A new approach and solution has been offered by EUROPOL office, which sees the priority in preventing the trade in counterfeit goods at its source. “Modern and organized crime is evolving, with business-mid approach and links to many other illegal activities, such as money laundering, illegal employment, illegal immigration, drugs trafficking. The main challenging issue is to stop the trade in counterfeit goods at its source. Internet evolves as a huge source of counterfeit products, therefore this problem needs to be addressed urgently by Law Enforcement,” added Heuckelom.
The possibility of creating a European version of the American Federal Bureau of Investigation (FBI,) has been brought up for the discussion. Newton Dunn said sees Europe in the same position today that US states were in 70 years ago. “With open state borders they had to develop a FBI. The EU’s member states will eventually realize that they have to do the same; the longer they drag their feet, the greater the success of the cross-border criminal gangs,” he said.