Tobacco smuggling causes heavy yearly losses to the budgets of EU countries and the EU institutions in lost customs duties and taxes. Furthermore, illegal tobacco:
- poses great risks to consumers and businesses
- undermines anti-smoking and public health campaigns
- is a significant source of organised crime
- violates the strict rules that the EU and its member countries have on manufacturing, distribution and sale.
It is difficult to estimate the size of the illegal tobacco market accurately. This is because - as with other illicit practices - tobacco contraband and counterfeiting are clandestine activities in constant fluctuation and change. Fraudsters go to great lengths to conceal and change their patterns to escape the law.
What is OLAF's role?
OLAF has an explicit mandate to fight cigarette smuggling. We do this in 2 ways:
- helping the EU institutions and national governments shape policies to combat smuggling
- through our investigative work, in close cooperation with national law enforcement agencies, judicial authorities and customs services both inside and outside the EU
OLAF carries out investigations into allegations of tobacco smuggling. We can also bring significant added-value in complex cross-border cases, by helping coordinate anti-smuggling operations carried out by law-enforcement agencies across Europe.
Recent examples of such operations include:
- February 2022 – In 2021, world-wide operations involving OLAF resulted in the seizure of hundreds of millions of illicit cigarettes. Press release
- January 2021 – International operations involving OLAF led to the seizure of nearly 370 million illegal cigarettes in 2020. Press release
- December 2020 – OLAF-coordinated trans-European operation sees over 200 suspects in illegal cigarette trade - Press release. 17 arrests and 67 million cigarettes seized in a joint operation supported by OLAF and Europol - Press release.
- May 2020 – Officers from Italy’s Guardia di Finanza have arrested nearly 40 people on charges of corruption, embezzlement and smuggling thanks to information supplied by OLAF. Press release
You can find many more stories of success in tackling cigarette smugglers in our press releases.
Coordination of joint customs operations
OLAF also organises joint customs operations (JCO), which bring together law enforcement authorities from EU countries and, increasingly, non-EU countries – as well as other bodies like the World Customs Organisation or Europol.
These operations are targeted actions of limited duration that aim to combat fraud and the smuggling of sensitive goods in certain risky areas and/or identified trade routes.
We recently coordinated a number of successful joint operations:
- 2020 – As a result of Operation HANSA, some 67 million cigarettes and 2.6 tonnes of tobacco were seized, the vast majority produced in Belarus. Some 17 suspects were arrested and 10 vehicles used to transport the illegal cigarettes were also seized in eight of the participating countries. Press release
- 2019 – during Operation HYGIEA, 77 million cigarettes and 44 tons of counterfeit water pipe tobacco were seized by Asian and EU customs authorities in an ASEM-led operation coordinated by OLAF. Press release
- summer 2017 – over 19 million cigarettes were seized during a joint customs operation coordinated by the OLAF and the Estonian customs, involving 14 EU countries, FRONTEX and EUROPOL. Press release
In 2020, OLAF and its partners seized a total of 368,034,640 cigarettes destined for illegal sale in the EU; of these 132,500,000 cigarettes were seized in non-EU countries (primarily Albania, Kosovo, Malaysia and Ukraine) while 235,534,640 cigarettes were seized in EU countries.
The vast majority of these cigarettes came from outside the EU: some 163,072,740 originated in the Far East (China, Vietnam, Singapore, Malaysia), while 99,250,000 were from the Balkans/Eastern Europe. A further 84,711,900 originated in Turkey, while 21,000,000 came from the UAE.
Other counterfeit goods
Following a reorganisation in 2012, OLAF's activities were extended to cover investigations into fraud related to intellectual property rights.
OLAF has long been investigating the illegal trade in counterfeit cigarettes and tobacco products but its scope now also includes other counterfeit goods entering the EU through its external borders.