The EU Court of Auditors warns about the rise of illegal tobacco production in Europe

The Court of Auditors of the European Union has warned this Tuesday of the strategic relocation of a large part of the illegal production of tobacco on European Union soil to shorten smuggling routes and take advantage of the lack of cross-border cooperation, which favors an illicit business that costs European coffers each year about 13 billion euros in uncollected taxes, according to Europa Press.

"If we really want to safeguard the health, pocketbooks and security of citizens, the European Commission and Member States must intensify their efforts to fearlessly fight this criminal activity," warned Petri Sarvamaa, member of the EU Court of Auditors.

In a meeting with the press, Sarvamaa also explained that with these changes in the way organized crime operates, smugglers manage to "get closer to consumers" and "exploit the differences in the application of the law and sanctions across the Union." The consequences of this push for the illegal tobacco trade, European auditors warn in the report presented this Tuesday, "goes beyond losing tax revenue," since this business also harms public health policies because they make products more accessible and cheaper, especially for the younger population.

"It fuels organized crime, finances illegal activities and represents unfair competition for legitimate business," concluded the member of the EU Court of Auditors during the presentation of the document. Among the examples presented of the increase in illegal production, community experts point to the case of a large dismantled factory in Spain in which the authorities seized three million packages of counterfeit cigarettes that "stacked one by one would reach a height fifty-six times higher than that of Mount Everest."

Thus, the EU Court of Auditors denounces that the European Commission does not have reliable and independent data on the scale of fraud or the illicit tobacco market created within the European Union, although external data estimate losses in tax collection each year at 13 billion euros.

Having reliable data is "fundamental" to gauge the seriousness of the problem and to design an effective response, says the report, which warns that the figures that Brussels is considering are basically limited to the quantities seized and do not have a complete view of the volume of illegal production. The document also points out as another of the problems that hinder the fight against smuggling the lack of harmonization between Member States on the matter and the differences in regulation, for example, of key production inputs, the machinery necessary to manufacture cigarettes or new products such as heated tobacco or electronic cigarettes.

Likewise, the document warns, the flexibility that Community regulations allow Member States when applying countermeasures generates execution gaps that can be exploited by organized crime groups, for example due to divergences when defining crimes and the severity of the sanctions.