Dow Jones Newswires A pack of Jin Ling cigarettes.

Millions of illegally imported cigarettes, many made specifically for smuggling in the Russian enclave of Kaliningrad, are distributed within the EU every year after passing Poland’s northeastern borders. The point of entry isn’t accidental Kaliningrad is surrounded by the European Union’s passport free Schengen zone.

Cigarette smugglers try their luck on border crossings with Russia and Belarus, and the open border with Lithuania, where customs officers use increasingly sophisticated X ray machines and sniffing dogs to stop them.

“The majority of those crossing the Polish Russian border are smugglers,” says the regional customs office based in Olsztyn, in northern Poland. The region borders with the region of Kaliningrad, where Baltic Tobacco Factory produces Jin Ling, a brand not available through legal channels in the EU. The company hasn’t returned calls for comment.

Its cigarettes cost $3.20 for a carton of 10 packs in Russia. On the Polish side, they cost almost $2 per pack and around 3 pounds in Britain, Polish authorities say. Varying tax rates are a major factor behind the price differences.

According to British American Tobacco estimates, 20% 25% of smokers in England smoke illegally imported cigarettes, with the proportion rising to 50% 70% in poorer regions there.

An attempt to smuggle certain amounts above limits is a minor infraction under Polish law, punished with fines. Three years ago, a smuggler attempted to bring in 7,000 packs. He was given a fine of 10,000, which he paid in cash, Polish customs officials said. No surprise there, even including the fine, the smuggler would have made a profit of thousands of dollars had he been able to sell the ware in Poland. No small sum for someone living in a country where the average net salary is just over $1,000 a month.

More than three years after Poland and Lithuania joined the European Union’s passport free Schengen area, cigarettes smuggled through the EU’s external borders with the Baltic States pour into the rest of the EU through the open border between Poland and Lithuania. Customs in the region of Podlasie, which borders Lithuania and Belarus, last year seized about 110 million cigarettes, about 60% on the freeway border with Lithuania where customs officials stop selected trucks for inspection.

Smugglers, trying to avoid customs officers who stand at the roadside of the former border checkpoint, use roads through the forests, which reopened as barbed wire was removed when Poland and Lithuania joined the Schengen zone.

Smugglers also use the border with Belarus, where not every truck is X rayed. Last year, authorities seized a truck full of cigarettes, declared as wooden boards. The smugglers used 12 tons of steel sheets to make the vehicle’s weight correspond with the weight of the declared payload, said Maciej Czarnecki, spokesman for the customs office in the Podlasie region.

See a video report here.

Illicit cigarettes and hand-rolled tobacco in 18 european countries: a cross-sectional survey — joossens et al. — tobacco
control

1. Luk Joossens1,
2. Alessandra Lugo2,
3. Carlo La Vecchia2,3,
4. Anna B Gilmore4,
5. Luke Clancy5,
6. Silvano Gallus2

1. 1Association of European Cancer Leagues, Foundation against Cancer, Brussels, Belgium
2. 2Department of Epidemiology, Istituto di Ricerche Farmacologiche Mario Negri, Milan, Italy
3. 3Department of Clinical Sciences and Community Health, Universit degli Studi di Milano, Milan, Italy
4. 4Department for Health, University of Bath, Bath, UK
5. 5TobaccoFree Research Institute Ireland, Dublin, Ireland

1. Correspondence to Luk Joossens, Foundation against Cancer, Chauss e de Louvain 479, Brussels B 1030, Belgium LJoossens at

• Received 18 June 2012
• Accepted 10 October 2012
• Published Online First 10 December 2012

Abstract

Objective Little evidence, other than that commissioned by the tobacco industry, exists on the size of the illicit tobacco trade. This study addresses this gap by examining the level and nature of illicit cigarettes and hand rolled tobacco in 18 European countries.

Design Face to face cross sectional survey on smoking.

Setting 18 European countries.

Participants For each country, around 1000 subjects representative of the population aged 15 and over were enrolled. Current cigarette smokers were asked to show their latest purchased pack of cigarettes or hand rolled tobacco.

Main outcome measure A comprehensive measure called an Identification of an Illicit Pack (IIP) was used to study the extent of illicit trade, defining a pack as illicit if it had at least one of the following tax evasion indicators (1) it was bought from illicit sources, as reported by smokers, (2) it had an inappropriate tax stamp, (3) it had an inappropriate health warning or (4) its price was substantially below the known price in their market.

Results Overall, the proportion of illicit packs was 6.5%. The highest prevalence of IIP was observed in Latvia (37.8%). Illicit packs were more frequent among less educated smokers and among those living in a country which shared a land or sea border with Ukraine, Russia, Moldova or Belarus. No significant association was found with price of cigarettes.

Conclusions This study indicates that IIP is less than 7% in Europe and suggests that the supply of illicit tobacco, rather than its price, is a key factor contributing to tax evasion.

• Taxation
• Globalisation
• Illegal tobacco products