MADRID Aug 11 (Reuters) Organised crime gangs may be smuggling cigarettes from Gibraltar to Spain, EU investigators have concluded following a dispute last year over tougher controls that Madrid imposed on its border with the British overseas territory.

A year long investigation by the European Union anti fraud office (OLAF) conducted at the request of Spain found potential links between an increase in the size of the Gibraltar market for cigarettes between 2009 and 2013 and a rise in smuggling and a larger illicit market in southern Spain.

“The concerns include indications of the involvement of organised crime,” OLAF’s press department said in a statement on Monday, stating it had sent findings to both the Spanish General State Prosecutor and the Gibraltar Attorney General.

“As OLAF can carry out only administrative investigations, it is for those authorities to decide what further actions may be necessary,” said the statement emailed to Reuters.

Britain has run Gibraltar, a rocky outcrop off Spain’s southern coast, since Madrid ceded the land 300 years ago. But Gibraltar, and the waters surrounding it, remain a disputed territory with Spain claiming it as its own.

A Spanish court official said a High Court investigation would be opened in response to the OLAF report.

No one was immediately available at the Gibraltar Attorney General’s office to comment on OLAF’s conclusions.

Gibraltar authorities accused Spain last year of using heavy handed border controls to disrupt day to day traffic across the frontier in reaction to an artificial reef they erected in the bay.

But Spain said the extra checks were necessary to root out tobacco smuggling and that Gibraltar does too little to stem what it calls an increasing flow of contraband cigarettes out of the territory, which has a low sales tax.

Cigarettes are about 40 percent cheaper on “the Rock” Gibraltar’s nickname than in Spain.

In November, European Commission inspectors, sent to Gibraltar to investigate the dispute, urged Britain to improve safeguards against tobacco smuggling and said both sides should exchange intelligence on the problem.

Britain has said it is working to help prevent cigarette smuggling. Spain has kept up the strict frontier checks although traffic tailbacks have eased with people trying to avoid rush hour trips and making fewer journeys in general. (Reporting by Paul Day Editing by Mark Heinrich)

European parliament refuses to classify e-cigarettes as medicines

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The European parliament has strongly backed moves to make smoking less attractive to young people but has rejected the health commissioner s call to have electronic cigarettes classified as medicines.

The MEPs vote in Strasbourg on Tuesday 8 October came after months of lobbying by major tobacco manufacturers to try to water down and delay the European Union s attempts to strengthen the existing legislation on tobacco products.

MEPs agreed that in future clear health warnings should cover at least 65% of both sides of a pack of cigarettes. At present they must cover at least 30% of the front of a pack and 40% of the back. The warnings would be placed at the top of the packet, with the brand name at the bottom. Packs of fewer than 20 cigarettes would