Smuggling of excise goods

The smuggling of tobacco is a lucrative ille- gal activity due to increasing price differen- tials between Member States of the EU and countries neighbouring its external borders. The contraband of cigarettes across the EU

VW 35% BMW 20% Audi 12% Fiat 4% Ford 3% Renault 8% Mercedes 18%

Main routes of stolen vehicles

Sources: JORA data

Eastern borders routes

Balkan route

Northern African route Northern branch Southern branch

Figure 23. The main routes for stolen vehicles across the EU borders in 2012 based on information on stolen vehicles’ country of origin and place of detection collected during JO Focal Points

external borders flourished in 2012 in face of rising excise taxes on tobacco in many EU countries. In general, cigarette smuggling is perceived as a low risk business, since in many countries it is treated as a misdemeanour – compared to the tough criminal sanctions imposed on drug traffickers.

On a daily basis, cigarettes are smuggled on a small scale – by travellers or migrant workers returning home to the EU, or by per- sons residing in the border regions. Criminal organisations make use of both ‘ant tech- niques’ and large-scale operations includ- ing hundreds of thousands of cigarettes. In 2012, most detections of contraband ciga- rettes were made along the borders to the Russian Federation, Belarus, Ukraine, Mol- dova and Turkey.

In July, the cheapest pack of 20 cigarettes cost 41 cents in the Russian Federation, while Lithuanian citizens paid an amount five times and Finnish citizens ten times as high. Spe- cifically, the situation around the Kaliningrad region was made worse by the fact that sev- eral cigarette factories within the exclave solely produce for export purposes. The dif- ficult economic situation in Kaliningrad and its neighbouring countries shapes an envi- ronment that additionally encourages ciga- rette smuggling.

The largest smuggling operation that was uncovered in 2012 revealed a tunnel built between Uzhgorod in Ukraine and Vysne Nemecke in Slovakia. The smugglers used ad- vanced mining technology to build the 700 metres long construction and equipped it with its own narrow-gauge train.

A very frequent modus operandi detected dur- ing JO Focal Points Land was to leave unat- tended amounts of tobacco in trains, from where they are picked up upon arrival at their destination. Larger amounts of cigarettes have been hidden in hollow cavities of cars and double walls or floors of lorries. In several cases, cigarettes were smuggled across the river Uh, which originates in Ukraine and for a short section draws the border with Slovakia. While cigarettes where increasingly smug- gled from Morocco to Spain and detected through JO Minerva and Indalo, also the East- ern Mediterranean showed to be an emerging hub for trafficked tobacco. One of the larg- est detections made in the context a Frontex Joint Operation consisted in the detection of around 53 760 000 Egyptian-produced ciga- rettes on the vessel ‘Noah’ under Moldovan flag. The ship attracted the attention of the authorities in December 2012 close to Cha- nia on the Greek island of Crete.

Figure 24. Cigarettes smuggled in a train transporting rape seed from Belarus

© P ol is h B or der G ua rd

Figure 25. Smuggling of 800 litres of petrol products detected at the Polish-Ukrainian border in December 2012 © P ol is h B or der G ua rd

Trafficking of petroleum products is mainly reported at the eastern European borders with the Russian Federation, Belarus and Ukraine, as well as with the Balkan countries. Petrol price differentials between Member States and third countries made the smug-

gling of petrol a profitable enterprise along these border sections. Anecdotal evidence suggests that petrol smuggling occurs fre- quently and often involves individual smug- glers transporting smaller quantities for their own consumption or sale to acquaintances.

Economic situation in Europe remains difficult

The EU continues to deal with a difficult eco- nomic crisis, which bears heavily on labour demand and employment performance in the EU. The differences between Member States in economic activity and labour mar- ket dynamics have increased significantly throughout 2012. According to the Euro- pean Commission, the already high unem- ployment rate is likely to rise further in 2013, both in the EU and the Euro area. More im- portantly, the situation in more vulnerable Member States will progressively affect the remainder of the EU.

The EU economy is expected to grow at a subdued rate of 0.5% in 2013. However, the European Commission warns that this out- look is still marked by high uncertainty and subject to substantial downside risks.

Home Affairs in the next MFF

According to the European Commission’s proposal, the number of funds in home af- fairs during the new Multi-annual Financial Framework (period 2014–2020) will be re- duced from the current four to only two: the Asylum and Migration Fund (AMF) and the Internal Security Fund (ISF). While the num- ber of the funds will be smaller, the availa- ble founding should increase by almost 40% compared to the total budget for the previ- ous period 2007–2013.

Both funds will have an external dimension ensuring continuity of financing, starting in the EU and continuing in third countries. There will also be a common regulatory framework for both funds.

The new arrangement should allow for a bet- ter management, either shared or central- ised, of available resources. Member States will be entitled to basic amounts and could

4. Environmental scan

Common regulatory framework

(principles of assistance, programming & reporting, financial management & controls, monitoring & evaluation)

Asylum and Migration Fund (AMF)

Internal Security Fund (ISF)