Publication: Combatting Illicit Trade in Tobacco Products – in search of optimal enforcement

In a three-year study, experts in criminology and comparative law, from Utrecht University and countries across the EU, have analysed the organisation of the illicit trade in tobacco products and how different EU countries legally address the problem. They aimed to identify obstacles to effective and optimal enforcement, and to provide recommendations on how to overcome them. "There is plethora of laws and agencies dealing with illicit tobacco trade, but two kinds of problems – nationally, a lack of resources; internationally, flawed cooperation – limit their impact", conclude researchers Dr. Stanisław Tosza and Professor John Vervaele (editors of the resulting book). The results of this project will be presented at the conference on 20-21 June 2022 in Utrecht (see below).

The illicit trade in tobacco products (ITTP) has numerous negative, often detrimental effects on our society. Not only does it undermine anti-smoking and public health campaigns, but in the form of tax, customs and excises evasion it inflicts significant economic harm. On top of that, it foments organised crime, as tobacco contraband and counterfeiting provides relatively easy money. Although hard to quantify, ITTP is very common both within the EU and emanating from third countries, such as Belarus.

The WHO sets the standard

Internationally, the World Health Organisation's Framework Convention on Tobacco Control and its accompanying Protocol to Eliminate Illicit Trade in Tobacco Products, sets the regulatory and enforcement standard for the tobacco market worldwide. The Protocol defines unlawful forms of conduct which should be addressed by State Parties (although not necessarily by means of criminal law), procedural rules on investigation and international cooperation, and as such is of key importance. However, since the Protocol is a recent addition (the Netherlands subscribed to it only in 2020) it is still too early to assess its full impact. 

Sketch of the problem

While the extent of ITTP is hard to estimate (with most of our data still relying on private sector and/or tobacco-funded research, which may be questioned), without doubt the production and trade in illegal cigarettes is a very profitable business. The costs of setting up an illegal cigarette factory are relatively quickly recovered; a recent phenomenon is the transferral of production locations to the Netherlands and Belgium. Next to the counterfeit of major-brand cigarettes, ITTP also comes in the shape of smuggling so-called 'cheap whites' (cigarettes produced legally in state factories in Russia, Belarus and Ukraine) into the EU. Nowadays, many specialised criminal networks have set up highly flexible smuggling patterns and local production units and offer what the local black markets are demanding.

There is plethora of laws and agencies dealing with illicit tobacco trade... We have discovered many instances of excellent cooperation, that are not necessarily systemic, but result for instance from personal contacts between enforcement agents

Enforcement issues

At the same time, enforcement efforts against ITTP are insufficient. While consignments of illegal cigarettes are confiscated on a regular basis in the EU, relatively few cases are properly investigated, prosecuted and sanctioned. The EU's Anti-Fraud Office (OLAF) plays an important role in enforcement by coordinating or conducting administrative investigations. However, OLAF does not have the capacity to investigate all cases and most of them are dealt with at the national level. Also, OLAF’s powers are limited and dependent on cooperation with national authorities. Often, OLAF’s investigations conclude with a report that is transmitted to the national authorities. 

Overview of the research

Against this background, the book starts with a criminological study of the occurrence of ITTP in the EU. For the qualitative part of the research, the team conducted so-called ‘instant’ ethnography, focusing on the moments that the illicit behaviour actually takes place, in order to obtain an in-depth understanding of the process. The following chapters contain a comparative analysis of legal enforcement systems combatting ITTP in six EU member states: Belgium, Germany, Italy, Latvia, the Netherlands and Poland. Together, these six form an excellent cross-section, not only regarding differences in enforcement mechanisms and adherence to the Protocol, but also regarding their legal history, economic and geographical conditions and cultural attitudes towards smoking. Finally, there is a chapter examining how the EU can enhance enforcement efforts in its neighbouring countries to the east, such as Ukraine, Belarus and Moldova. 

Policy relevance

The objective of this research is to help the policy assessment by the EU and the Member States of the enforcement of measures to prevent ITTP. Another aim is to provide inspiration towards answering further questions in this field. How can administrative and criminal enforcement be improved? How can we come to a EU-wide comprehensive enforcement policy aiming at countering and dismantling the organised criminal networks? Should the newly-instituted European Public Prosecutor’s Office, in cooperation with European enforcement agencies (like Europol and Eurojust) and the national enforcement communities, establish a new strategy for combating ITTP? Should the countering of ITTP become an integral part of European integrated border management by Frontex?