final tobacco english 2003

Customs and Tobacco2003

WORLD CUSTOMS ORGANIZATION

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03Content

Content1 FOREWORD 2

2 EXECUTIVE SUMMARY 4

3 AIM OF THE PROJECT 6

4 APPROACH 74.1 GENERAL REMARKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.2 SCOPE AND SOURCE OF INFORMATION - NATURE OF ASSESSMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.3 INCOMPLETE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.4 NOTABLE SEIZURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

5 REVIEW OF THE LEGITIMATE CIGARETTE TRADE 95.1 GLOBAL PRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.2 GLOBAL TRADE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.3 GLOBAL EXPORTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.3.1 EUROPEAN EXPORT MARKETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115.3.2 ASIAN EXPORTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145.3.3 MIDDLE EAST EXPORTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175.3.4 UNITED STATES EXPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185.4 SUMMARY FOR THE LEGITIMATE CIGARETTE TRADE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

6 GLOBAL OVERVIEW OF CIGARETTE SMUGGLING 196.1 NUMBER OF SEIZURES AND QUANTITIES SEIZED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196.2 PLACE AND TYPE OF LOCATION OF INTERCEPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206.3 COUNTRY OF DEPARTURE AND COUNTRY OF DESTINATION: MAIN ROUTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

7 REVIEW OF CIGARETTE SMUGGLING UNDER 100,000 PIECES 23

8 REGIONAL OVERVIEWS OF CIGARETTE SMUGGLING 258.1 NORTH AMERICA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258.2 CENTRAL AND SOUTH AMERICA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258.3 NORTH AFRICA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268.4 WESTERN AFRICA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278.5 CENTRAL AFRICA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278.6 EASTERN AND SOUTHERN AFRICA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278.7 MIDDLE EAST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288.8 ASIA & PACIFIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308.9 WESTERN EUROPE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328.10 EASTERN AND CENTRAL EUROPE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398.11 COMMONWEALTH OF INDEPENDENT STATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

9 SMUGGLING AND TRADE IN COUNTERFEIT CIGARETTES - ILLICIT PRODUCTION 449.1 SMUGGLING OF COUNTERFEIT CIGARETTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449.2 ILLICIT PRODUCTION OF CIGARETTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 459.3 TRADE IN COUNTERFEIT CIGARETTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

10 REVIEW OF SMUGGLING OF SMOKING (HAND-ROLLING) TOBACCO 47

11 THE WCO, CEN TEAM AND THE RILO NETWORK 4811.1 ROLE OF THE SECRETARIAT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4811.2 TASKS OF THE RILOs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4911.3 TASKS OF THE NATIONAL CONTACT POINT (NCP). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

WCO RILO NETWORK 52FOOTNOTES 53ANNEXES 54WCO MISSION STATEMENT 59WCO VISION STATEMENT 59ACKNOWLEDGEMENTS 59©

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It is with great pleasure that I present thethird global Report on the illicit trade in

tobacco products. The Report shows thatthe illegal trafficking in cigarettes continuesto erode Government revenues and harmsociety. The Report includes many facts andfigures and detailed statistical analyses oftrends and methods of smuggling. Theoverall analysis demonstrates that tobaccoand cigarette smuggling remains a globalproblem, which continues to increase inspite of Government enforcement strategies.Cigarettes are of high value, highly taxed,readily portable and ideal commodities tobe traded illegally. This Report will providevaluable information to policy-makers andofficials who are involved in the difficulttask of combating cigarette smuggling.

Cigarette smuggling appears to have devel-oped by organized crime groups as a globalcriminal business and generates huge profitsfor those involved. During the past year,there has been a growing concern within theinternational law enforcement communitythat the transnational criminal organizationsinvolved in this illegal smuggling may be

linked with international terrorism organi-zations which are seeking means of fundingtheir activities.

This Report is based upon an analysis ofboth legal and illegal trade in tobacco andcigarette products. It takes account of dataon the legitimate trade in cigarettes obtainedfrom the United Nations Statistics Division,and an analysis of the Customs cigarette andtobacco seizures contained in the databaseof the World Customs Organisation’sCustoms Enforcement Network (CEN).

The analysis of cigarette smuggling is basedon the contributions of 62 WCO Members,which provided details of 4,381 seizures,made in 2002 and 2003. I am pleased to re-port that, due to improvements in reportingand an increased number of detections, ithas been possible in this year’s report to re-view the data in a more complete manner atregional level.

Legal production of tobacco products dur-ing 2002 decreased by 1.14%; this trend isexpected to continue in 2003, when a fur-

ther reduction of 0.65% is predicted. Thegap between declared exports and imports,without adjustment for legitimate duty-freesales, increased from 23% in 2000 to 32%in 2002. Europe and Asia are the major ex-porters.

In 2003, the total number of seizures in-creased by 28% compared to the previousyear. It seems, however, that organized crimegroups are diversifying their smugglingmethods in some regions and are shippingslightly smaller quantities in each shipment.This explains the fact that overall the numberof cigarettes seized decreased by 6%.

This Report also includes a chapter concern-ing the smuggling of smoking tobacco. Ofparticular significance is the major increasein the quantity of smoking tobacco seized inWestern Europe, a development whichseems to reflect a growth in illegal produc-tion of cigarettes in this region. This is cor-roborated by the fact that in 2003 Belgianand German authorities, both dismantled il-legal cigarette factories. This gives an im-p o r t a n t i n s i g h t o f t h e s c a l e o f t h e

Foreword

1. Foreword

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phenomenon considering that the estimatedproduction capacity of one factory is 2,500cigarettes per minute or 538 million ciga-rettes per year.

As outlined in last year’s Report the problemof counterfeit cigarettes continues to grow.In 2003, almost 10% of the cigarettes seizedworld-wide were identified as counterfeitand the real figure may well be much higher.This presents a complex set of problems forGovernments in controlling production andin detecting counterfeit shipments at export,import and in transit. Customs also needsto protect the intellectual property rights ofthose businesses involved in legal produc-tion, which makes the combating of coun-terfeit cigarettes a multifaceted challenge.The People’s Republic of China has thelargest production of tobacco world-wideand has therefore been affected by criminalgroups wishing to exploit the trade in coun-terfeit cigarettes. The Chinese authoritieshave made great efforts in identifying andclosing down a large number of illegal facto-ries in recent years and China Customs hasalso been extremely active in the control of

exports as part of the overall Governmenteffort, nevertheless the lucrative trade con-tinues to grow.

Within the overall problem of counterfeitcigarettes, a relatively new major criminaltrend is emerging. This involves the pro-duction and shipment of counterfeit ciga-rettes, which are declared to Customs asgenuine at the point of entry. In this way,counterfeit cigarettes are introduced into thelicit market and, even though duties and ex-cise are paid, a substantial profit is still madeby the criminals who no longer incur theadditional costs associated with concealingthe cigarettes. This is a rapidly growingglobal problem.

Finally, I would like to commend all thosewho through their professionalism and vigi-lance have enabled seizures to be made andhave identified the new trends in smugglingthat are reflected in this Report. I am surethat this analysis will be helpful to all thoseofficials endeavouring to develop interna-tional, regional and national strategies tocombat the problem.

I thank all those who have contributed to thisReport. We have once again shown the greatpotential of the CEN database. Such a tech-nical report is only as good as the data it hasto analyse. I would therefore urge all admin-istrations to provide information and reportsof seizures to the CEN and the team responsi-ble for carrying out studies and analysis in or-der that more and more intelligence data canbe produced for the benefit of all govern-ments and Customs administrations.

Yours sincerely,

Michel DanetSecretary General,

World Customs Organization.

Foreword

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Sixty-two Member countries recorded infor-mation on the Customs EnforcementNetwork (CEN) database in respect of a to-tal of 4,381 cigarette seizures carried out in2002 and 2003. There has been an increasein Members reporting seizure data, with allRILO regions being represented. Additionalmaterial on tobacco smuggling was receivedfrom two RILOs and a number of Customsadministrations, which proved extremelyuseful in compensating for the absence ofsome information. The resulting widerspread of the available data has made it pos-sible to analyse cigarette smuggling at a re-gional level. The Report also includesoverviews of smuggling of smoking (hand-rolling) tobacco and on the illicit trade incounterfeit cigarettes as well as includingupdated information on the illegal produc-tion of cigarettes.

An overview of the legitimate cigarette tradehas also been provided, based on data ob-tained from the United Nations StatisticsDivision. The updated information for 2002has been used. The analysis focuses on thetop five countries emerging worldwide interms of the production, import and exportof cigarettes.

The global cigarette trade decreased from899.4 billion in 2000 to 828 billion in 2002.The 2001 figure shows a total of 963.3 bil-lion. Imports fell from 692.3 billion in 2000to 565.3 billion in 2002.

Europe and Asia are the two major ex-porters. In both regions, a large number ofcigarettes are exported to another countrywithin that region. Exports to specific coun-tries did not remain constant during the pe-riod under analysis, and the destinationsoften changed.

Europe was the main exporter to the Asianregion, with over 26.4 billion items. Thelargest number of cigarettes was exported

from the United Kingdom to the Republic ofKorea, accounting for more than 10.5 bil-lion items or 16.5% of its total exports. TheRepublic of Korea exported an equivalentamount to the United Arab Emirates, name-ly 10.7 billion.

In comparison with the figures for 2000 and2001, overall exports to the United ArabEmirates rose from 24.5 billion to 42 bil-lion, an increase of more than 71%.

In the analysis of cigarette smuggling, thehighest common limit of 100,000 units perseizure has been considered for reasons ofconsistency, since reporting limits are notthe same for every RILO region. Despite thehigh number of seizures under the de mini-mum limit, the selection did not compro-mise the analysis , s ince the quanti tyinvolved was not significant within the over-all total. Countries in the Eastern andCentral European region reported the high-est number of interceptions under the deminimum limit.

The analysis considered 965 seizures report-ed in 2002 and 1,239 in 2003, correspon-ding to a quantity of around 2.7 and 2.5billion cigarettes respectively. Globally, thenumber of interceptions increased by 28%,while the total quantity decreased by 6%.The huge contribution of one single countryin 2003 (Brazil) must be emphasised, sinceit affects the figures, particularly in terms ofthe total quantity seized, which would oth-erwise be much lower, accounting for 904cases and fewer than 2 billion items.

The global extent of cigarette smugglingclearly emerges from the analysis. TheNorth African and Middle East regions re-ported fewer seizures with less contrabandseized, but they still play an important part.In North America, Canada recorded a hugeincrease in detections and in the quantity ofcounterfeit cigarettes, almost exclusively

originating in China.

The generally decreasing trend in the num-ber of seizures and quantity recorded in re-cent years by the leading regions (WesternEurope, Eastern and Central Europe andAsia/Pacific) was not so significant whencomparing 2003 with 2002. There was,however, a notable decrease in the quantityseized in the Eastern and Central Europeanregion. By contrast, the western Europeanregion shows a general stability both interms of the number of seizures and of thequantity. This means that the same regionstill dominates the scene.

Half the total seizures and contrabandseized was concentrated in thirty-one loca-tions, spread over all continents. In terms ofthe number of cases, land frontier locationswere predominant, but the bulk of thequantity was seized at seaports.

More than 70% of the contraband originat-ed in fifteen countries, mainly located in theEuropean and Asian regions. China was themain source country for consignmentsshipped all over the world. Other Asiancountr ies as wel l as the United ArabEmirates were also of significance.

Paraguay was the main source country forthe cont raband des t ined fo r Braz i l ,Zimbabwe for South Africa and Niger forNorth Africa.

Countries in Western Europe and Easternand Central Europe were also said to be thesource for contraband destined for theEuropean region, mainly for the UK market.The true source country is, however, inmost cases unknown, although the phe-nomenon of the illicit production of ciga-rettes which has been detected in variousEuropean countries is noteworthy.

Despite the high number of cases entered

Executive Summary

2. Executive Summary

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i n to CEN by Member s in the Sou thAmerican region, the data are not sufficientto allow a greater in-depth analysis of themethods of smuggling.

In Western Europe, the detection of brandsdestined for the UK market is still domi-nant, although there are increasing quanti-ties of brands popular in Germany. Whilethere was a decrease in the use of land vehi-cles and sea vessels as the mode of con-veyance in the region, the contrabandsmuggled by vessels (mainly containerships) significantly increased. The cigaretteswere mostly concealed inside or among acover load. Larger amounts of contrabandare concealed within legitimate consign-ments, making the detection of the ciga-rettes more difficult. Foodstuffs are still themain type of product used to cover an illicitconsignment, but there was recorded an in-creasing use of suitcases and vacuum clean-ers. The use of paper rolls decreased, but itis felt that attention should still be paid toconsignments of goods packed in rolls.

Especially consignments declared as blocksof glass sheets, which were detected particu-larly in Europe, should be considered asvery high-risk goods. These are crates ofglass and wood purposely constructed forcigarette smuggling.

In Eastern and Central Europe, the decreasein the number of detections in general is re-flected in the decrease in seizures of brandsfor the UK market. The bulk of interceptedcigarettes features brands for the regionalmarket and for Germany. Detections of ciga-rettes in the structure of the means of trans-port (mainly road vehicles) were higher thanin 2002, while there was a decrease in theinterception of contraband inside or amonga cover load. This was nevertheless the mainmode of concealment in the region. InWestern Europe, detections of cigarettes incover loads of furniture decreased, which

was, however, not the case in Eastern andCentral Europe. The use of ovens, with con-traband concealed inside them, was com-monly detected in both of these regions.

The CEN database contains 40 records relat-ing to smuggled cigarettes which werefound to be counterfeit. They represent3.2% of all reported seizures in 2003 overthe de minimum limit and 9.7% of the totalquantity seized. The recorded figures still donot appear to be in line with the true situa-tion. The bulk of consignments seized inCanada were of counterfeit brands for thedomestic market originating in China,which was the main reported source coun-try for smuggled counterfeit cigarettes.

The CEN database has been fed particularlyin 2003 with information on various detec-tions of counterfeit cigarettes which havebeen seized, since they were shown to be in-fringing products (IPR commodities). Thefew seizures reported do not permit anyanalysis of the phenomenon of the trade incounterfeit cigarettes for the time being. Animportant indication is provided by the sta-tistics published by the U.S. Customs andBorder Protection, showing that both in2002 and 2003 the principal counterfeitcommodity seized was cigarettes, mainlyoriginating in China.

In 2003, the illicit production of cigaretteswas identified in Europe in particular, withthree detections of illicit factories having

been reported. It has been calculated that, atmaximum capacity, a factory could produce538 million cigarettes a year and that theduty evaded could amount to 45,000 eurosper hour.

Seizures of smoking (hand-rolling) tobaccoin 2003 showed a 15% global decrease interms of the number of cases but a 40% in-crease in quantity. There was a large increasein the quantity seized in Western Europe.This is not surprising if the information onthe illegal production of tobacco products inthe European region is also considered.

Executive Summary

� 2.8 million Superking brand cigaretteswere seized in Halifax/Canada in ashipment of synthetic sofas and armchairsarriving by marine container from HongKong, China. Though the shipment wasdestined for Vancouver, it was re-manifested for export to the UnitedKingdom.

(Photos courtesy of Canadian Customs)

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For the last two years, the WCO has pre-sented an annual report analysing all ciga-rette and tobacco seizures notified by itsMembers. A number of factors have con-tributed to the continuing importance ofcigarette smuggling on the part of manyCustoms administrations: the level of ciga-rette smuggling globally remains high, thereappears to be an increasing involvement oforganized crime in this traffic, clearly at-tracted by the huge profits generated by theillicit trade. There is also a possibility that il-licit cigarette trafficking is used as a sourceof finance by terrorist organisations.

For these reasons, it has been decided toproduce a third analysis of global seizures,carried out by WCO Members in 2003 andreported through the CEN system. As withboth the previous analyses, this analysis hasbeen carried out by RILO Western Europe.

The aim of the project is:to produce a situation report and analysisreviewing cigarette smuggling and diversionto illicit market activities on a worldwidebasis in order to support risk analysis for thepurpose of assisting anti-smuggling effortson the part of Customs administrationsworldwide.

Aim of the Project

3. Aim of the Project

� Austrian Customs seized 3.7million Sovereign cigarettesconcealed inside planks of wood.A similar method of concealmentwas detected in Sweden wherenearly 28 million counterfeitcigarettes of the brand Prince,Marlboro and Superkings wereseized.

(photo courtesy of Austrian Customs)

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4.1. General remarks

The Report contains two main general sec-tions: a review of the legitimate cigarettetrade and a review of tobacco smuggling.The first section contains an analysis of themost recent data concerning the legitimatetrade in cigarettes, and it was drafted follow-ing the principle that “to know the legal is tounderstand the illegal”. This section pro-vides interesting information and points forconsideration in respect of the general fig-ures for production, import and export. It islargely based on the United Nations StatisticDivision database. As was the case with the2002 data used in last year’s Report, com-plete data for 2003 were not available whendrafting this Report.

This first section was produced by theCentral Excise Unit (CPA) located inRotterdam (NL) within the NetherlandsCustoms Administration.

The second section is mainly based on theinformation provided to the CEN database,including a special chapter dedicated to thecounterfeit and illicit production of ciga-rettes. This section was produced by RILOWE located in Cologne with a contributionmade by RILO A/P located in Beijing.

4.2. Scope and source of information -nature of assessment

The Report covers all relevant records avail-able in the CEN database. The additional in-formation provided by some Member Statesin the form of reports has also been consid-ered when necessary for a better under-standing of the subject, especially when nodata were available on CEN. When the addi-tional information is, exceptionally, used asthe basis of the analysis, it is specified in theReport.

The annexes provide all information enteredinto the CEN database by the Member Statesin respect of the number of cases and the

quantity of cigarettes seized.

For the purpose of consistency, onlyseizures of 100,000 items or more havebeen taken into consideration in the globaland regional analysis, as the reporting limitsare not the same in all RILO regions.However, a special chapter has been dedi-cated to seizures below that limit.

The following table shows the different re-porting limits.

Only seizures carried out by Customs, jointCustoms and Police units or by other law en-forcement agencies having Customs powersare included in the analysis. More informa-tion from different regions has been reportedin 2003. To provide a more consistent pic-ture of the phenomenon, the analysis is de-tailed by region after a global overview. Theregions correspond in principle to theRILOs, where established. In this context,however, Israel has been considered as partof the Middle East region. North America in-cludes the USA, Canada and Mexico, whileCentral and South America comprises thecombined geographical region covered bythe RILOs of South America and theCaribbean. Within that region, it is of note

Approach

4. Approach

� In 2002 Hungarian Customs and FinanceGuard seized nearly 500,000 Superkingscigarettes concealed in the structure of atank trailer registered in the Ukraine. Tankand silo trailers are still commonly used bysmugglers.

(photo courtesy of Hungarian Customs and FinanceGuard)

Asia and Pacific No limitCaribbean No limitCentral Africa No limitCommonwealth of Independent States 400 itemsEastern and Central Europe 50,000 itemsEastern and Southern Africa 200 items Middle East No limitNorth Africa No limitSouth America No limitWestern Africa No limitWestern Europe Cigarettes/cigars:100,000;

Smoking tobacco: no limitNorth America (Canada) No limit

REPORTING LIMITS(Tobacco commodity) by region

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that the Cuban Customs made available de-tails of tobacco smuggling in their country,where the principal risk is the illicit export ofcigars.1 This commodity is not otherwisecovered in the present report.

4.3. Incomplete information

It is unfortunate that some Members do notreport all the cigarette seizures which theyhave carried out, while others do not reportany. The WCO, in co-operation with RILOWE, has already launched initiatives to in-clude in future reports the informationwhich is not available from CEN. As a gen-eral comment on those seizures which arereported, details of brand, departure anddestination country, mode of transport, cov-er load and mode of concealment are, againunfortunately, often absent or incorrectly re-ported. Very few records in the database in-dicated the use of detection equipment. Thenumber was not sufficient to permit any re-liable further analysis on this point.

No seizures have been reported from the re-gions of the Caribbean and Central AfricanRILOs in 2003. The latter, however, madeavailable a report on tobacco smuggling, asdid RILO CIS. These are mentioned in therelevant chapters.

4.4. Notable seizures

Because exceptionally large seizures mightdistort the analysis, this paragraph draws at-tention to the largest seizures reported tothe CEN database, all of which exceed 20million cigarettes.

The figures indicate that the above-men-tioned seizures do not distort the analysisglobally.

When the individual regions are considered,these seizures should, however, be borne inmind so that the picture that develops is ac-curate.

It should also be said that single seizures ofmore than 20 million cigarettes were report-ed by Brazil. They were, in fact, aggregatedfigures from seizures carried out on thesame day or over a very short period of time.

Approach

CEN ID Quantity Date Year Country Location Location type Route

51618 28,840,000 22-Feb-02 2002 China Shi Shi Inland UN-CN32127 80,500,000 08-Apr-02 2002 Lebanon Beirut Seaport CY-TR-LB35586 62,930,000 12-Apr-02 2002 Belgium Courtrai/Kortrijk Inland FR-BE51589 21,970,000 09-May-02 2002 China Qingdao Inland KR-CN34757 25,000,000 12-May-02 2002 Ireland Dublin Seaport US-NL-IE37706 30,610,000 25-Jul-02 2002 Lithuania Salociai Land frontier EE-LT-PL72770 31,900,000 09-Sep-02 2002 Greece Piraeus Seaport EG-GR45143 20,000,000 05-Dec-02 2002 Israel Ashdod Seaport UN-IL58816 24,810,000 10-Apr-03 2003 Italy Genoa Seaport EG-IT-LY55792 27,304,000 23-Jun-03 2003 Sweden Stugsund Seaport RU-SE77474 64,728,000 12-Nov-03 2003 China Dandong Seaport KP-CN

� In December 2003 boxes of RemingtonGold were seized in a truck in the Gautengregion (South Africa). The cigarettes wereconcealed amongst the consignment ofpaprika arriving from Zimbabwe anddestined for Durban.

(Photos courtesy of South African Customs).

Notable seizures

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This section is largely based on dataobta ined f rom the Un i ted Nat ionStatistics Division (UNSD).

This review will provide a summary ofthe legitimate cigarette trade for theyear 2002, comprising data on the pro-duction, import and export of cigarettesfor that year. Export data wil l takeprecedence in the summary. The full setof data for 2003 is not yet available. Thedata in the UN database covers morethan 140 countries, and this reviewhighlights the most important countriesin terms of the cigarette trade. The se-lection criteria are the top 5 countries interms of production, imports and ex-ports. The selection pinpointed elevencountries whose exports account forover 75% of global trade. In addition tothe countries selected, eight morecountries have been taken into accountas their 2002 figures differ significantlyfrom previous years. China’s resultscannot be compared to those for 2000and 2001, as no detailed data is avail-able for 2000.

SelectionThe eleven countries shown in the following graph represent the top 5 producers, importersand exporters of cigarettes. The number allocated shows the country’s position within thetop 5.

Additional countriesThe figures also highlight the next eight countries in terms of production, imports and exportsand the reasons for their selection.

Review of the legitimate cigarette trade

5. Review of the legitimate cigarette trade

1

1

4

4

5

3 3

3

5

2 1 5 4

2

2

Chin

a

Japa

n

Sing

apor

e

Rus

sian

Fede

ratio

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Fran

ce

Ger

man

y

Ital

y

Net

herl

ands

Spai

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Uni

ted

King

dom

Uni

ted

Stat

es

Croatia25% increase in exportsHong Kong, ChinaAdministrative area of ChinaMacau, ChinaAdministrative area of ChinaIndonesiaDecrease in production, increase in trade by over 15%Republic of Korea100% increase in exports Malaysia25 % decrease in exportsPhilippinesIncrease in production and importsTurkeyIncrease in production and exports

Imports

Exports

Production

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5.1. Global Production

Global cigarette production for 2002 waspredicted to fall to 5,612 billion pieces. Theactual figure for 2002 shows a total of 5,572billion, a 1.14% decrease from 2001. Theforecast for 2003 is a further 0.65% decreaseto 5,536 billion pieces.(Source: Foreign Agricultural Service. USDA)

5.2. Global Trade

Total global cigarette exports decreased from899.4 billion in 2000 to 828 billion in 2002.The 2001 figure shows a total of 963.3 bil-lion. Imports fell from 692.3 billion in2000 to 565.3 billion in 2002. It should benoted that some of the cigarettes exportedwere legitimately sold duty-free to travellers,diplomats and military personnel, and thismust account for a significant proportion of

the difference between the two figures. Thestatistics for 2000-2002, without adjust-ment for legitimate duty-free sales, highlightsome noteworthy points. The difference ex-pressed as a percentage of declared exportshas increased appreciably over the threeyears.

Based on the data from selected countries, thissection of the chapter will describe the variousexport markets and attempt to give a pictureof the main routes used in the global cigarettetrade. The following table provides data for2002, for selected countries and regions, interms of the quantity and percentage of the to-tal world trade (sorted by exports).

5.3. Global exporters

An exporter zone is the geographical regionwhence the exports originate. According tothe chart below, Europe is the world’s largestexporter zone, followed by Asia. These tworegions account for over 77% of the nine-teen countries’ export figures. The chart be-low illustrates the main exporter zones.


In millions 2000 2001 2002

Exports 899,430 963,337 828,055Imports 692,280 677,668 565,249Difference 207,150 285,669 262,806Percentage 23% 29% 32% Region In million pieces

Europe 350,293Asia 129,265America 127,383Middle East 15,330

622,271

In million pieces Region Production Imports Exports

Netherlands Western Europe 126,292 21,689 135,831United States America 532,000 27,013 127,383Germany Western Europe 212,500 35,895 118,166United Kingdom Northern Europe 133,014 10,272 63,987Rep. of Korea Asia 93,750 20,172 28,511Indonesia Asia 200,358 41 25,802Singapore Asia 12,875 15,731 20,887Japan Asia 229,000 83,466 20,160France Western Europe 39,400 63,751 17,829China Asia 1,709,505 1,370 16,194Turkey Middle East 130,830 10 15,330Croatia Southern Europe 14,750 27 7,387Malaysia Asia 26,100 2,113 6,917Hong Kong, China Asia 12,554 20,560 6,888Spain Southern Europe 62,752 41,396 4,048Philippines Asia 81,000 9,333 3,000Russian Federation Eastern Europe 375,000 6,736 2,623Macau, China Asia 7,000 1,112 906Italy Southern Europe 37,989 64.793 422Total 4,036,669 425,480 622,271World total 5,572,010 565,249 828,055Percentage 72 75 75

Exporter zones

56.29% Europe

20.77% Asia

20.47% America

2.46% Middle East

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European regionThe European region is divided intoNorthern, Eastern, Southern and WesternEurope. Over 95% of European exports arebound for another region within Europe.

Northern EuropeIn 2002, the United Kingdom exported cig-arettes to 32 different European countries.Spain, Belgium, the Netherlands, Germany,France and the Russian Federation were thedestinations for more than 85% of theUnited Kingdom’s total cigarette exports.

Eastern EuropeIn 2002 the Russian Federation exported ciga-rettes to 5 European countries, namelyGermany, Spain, Moldova, Lithuania andUkraine.

Asian regionAsia was a major destination for Europeanexports, and over 26,478 million cigaretteswere exported to 27 countries. In additionto this figure, the data showed that some7,494 million cigarettes were exported to aregion described as “Asia n.e.s.” (n.e.s.= notelsewhere specified). Exports by Germanyequated to 5,473 million and those by theUnited Kingdom to 2,021 million. Boththese countries were also the main exportersto the 27 countries mentioned, with the

Southern EuropeIn 2002, Italy, Spain and Croatia exportedcigarettes to 26 European countries. Croatiaexported to Bosnia Herzegovina (4,476 mil-lion pieces) and to Serbia and Montenegro(2,300 million pieces).

Western EuropeThe main export destination for WesternEurope was that same region and SouthernEurope. The Netherlands was the major ex-porter to Europe and the world. Over134,000 million cigarettes were exportedfrom the Netherlands, mainly to France(50,168 million pieces) and Italy (49,915million pieces). Out of the remaining 33destination countries, the top ten were asfollows.


Destination Million pieces

Germany 7,781Belgium 7,316Spain 7,065Greece 5,115Sweden 2,084Luxembourg 1,411Portugal 701Bulgaria 624Switzerland 513Ireland 427United Kingdom 403Finland 341Denmark 275Estonia 161Austria 105Total 34,322

Exporter In million Northern Eastern Southern Westernzone/market pieces Europe Europe Europe Europe

Northern Europe 18,525 404 1,355 7,685 9,081Eastern Europe 1,265 101 1,144 20 0Southern Europe 9,679 1 301 8,050 1,327Western Europe 246,076 15,291 6,277 120,426 104,082

275,545 15,797 9,077 136,181 114,490

Destination Millions United Germany Share de pieces Kingdom (UK+GER)

Rep. of Korea 11,946 10,581 1,191 11,772Hong Kong, China 5,120 4,297 751 4,348Singapore 3,868 3,445 391 3,836Japan 3,040 402 2,456 2,858Total 23,974 18,725 4,789 23,514

5.3.1 EUROPEAN EXPORT MARKETS

United Kingdom exporting 19,200 millioncigarettes and Germany 5,007 million.

The following table shows the major coun-

tries of destination and the important rolep l ayed by the Un i t ed K ingdom andGermany, which together accounted for98% of the exports.

Destination Million United Germany Share pieces Kingdom (UK+GER)

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Middle East regionThe second largest destination region forEuropean exports was the Middle East, andmore than 22,319 million cigarettes wereexported to 16 countries. The followingtable shows the most important countries ofdestination. The United Kingdom, Germanyand France together accounted for almost100% of the exports.

African regionOver 15,022 million cigarettes were exportedto 43 countries within this region. The fol-lowing table shows the main countries of des-tination. The United Kingdom accounted fornearly 90% of these exports, with Germany,Spain and the Netherlands accounting for theother 10%, mainly to Djibouti.

American regionNorth America is the most important mar-ket in this region. Exports to the UnitedStates amounted to over 1,921 million ciga-rettes, or slightly over 78% of the total of2,458 million cigarettes exported to theAmerican continent as a whole. The UnitedKingdom exported some 572 million ciga-rettes to the United States, and Spain some1,128 million.In addition to the United States, two othermajor markets in this region, namelyCanada and Panama, imported 145 millionand 276 million cigarettes respectively.

Summary for Europe The following table shows the totals for theexport destinations of selected Europeancountries. In this summary, the figures for anumber of European countries that are ma-jor exporter countries and the countries towhich they export will be compared tothose for 2000 and 2001.


United Arab Emirates 5,471 1,570 3,591 296 5,457Saudi Arabia 3,544 346 3,158 40 544Bahrain 2,273 290 1,984 2,274Turkey 2,151 1,117 724 188 2,029Lebanon 2,022 932 318 773 2,023Total 15,461 4,255 9,775 1,297 15,327

Benin 2,735 2,714Djibouti 1,603 631Nigeria 5,172 5,169Guinea 1,432 1,127Mali 1,019 1,006Total 11,961 10,647

Country Europe Africa America Asia Middle East Other Total

Netherlands 134,614 248 115 650 70 98 135,795Germany 98,784 816 318 10,480 7,699 64 118,161United Kingdom 18,525 12,705 634 21,311 10,518 295 63,988France 12,678 572 205 578 3,514 281 17,828Croatia 7,337 1 40 9 7,387Spain 2,116 681 1,143 24 15 68 4,047Russian Fed. 1,265 1 914 442 2 2,624Italy 226 2 6 60 128 422Total 275,545 15,023 2,458 33,972 22,318 936 350,252

2002 situation

Europe Belgium Africa BeninBosnia Herzegovina DjiboutiCzech Republic GuineaFrance MaliGermany NigeriaGreece Asia Asia n.e.s.Italy Hong Kong, ChinaLithuania JapanMoldova Republic of KoreaNetherlands SingaporeRussian Federation America United StatesSerbia and Montenegro Middle East BahrainSpain LebanonUkraine Saudi ArabiaUnited Kingdom Turkey

Africa Benin United Arab Emirates

Breakdown of the destination regions

Destination Million Germany United France Share pieces Kingdom (GER+UK+FR)

Destination Million Unitedpieces Kingdom

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The exports by selected European countriesto their main countries of destination haverisen by some 40 billion cigarettes, or 18%in numerical terms, since 2000. There was a10% increase in 2001. The Netherlands ac-counted for over 26% of this increase.Exports to Italy and France have risen tonearly 50 billion cigarettes per country since2 0 0 0 . C i g a r e t t e p ro d u c t i o n i n t h eNetherlands has increased from 120.4 bil-lion to 126.5 billion pieces, and importsfrom 19 billion to 21.6 billion.

Germany took second place, with its overallexports increasing by more than 17% overthe same period, although there was a 2.7%downturn in exports in 2002.

The most significant growth area was in ex-ports to Spain, rising from 21.9 billion to34.2 billion, or 56% in numerical terms.Exports to the Netherlands and Greece werealso on the increase, while exports to Franceand the United Kingdom fell sharply. Therewas a 50% downturn in exports to Franceand a 20% downturn in exports to theUnited Kingdom, equating to 9.6 billionand 1.8 billion pieces respectively.

A rapidly growing market is the MiddleEast, including Saudi Arabia, Lebanon andthe United Arab Emirates. Exports to thesecountries increased from 1,964 millionpieces to 2,406 million in 2002. Cigaretteproduction in Germany for the period2000-2002 equated to approximately 135billion pieces and imports increased from33.2 billion to 35.8 billion cigarettes.

The United Kingdom exports to the largestnumber of countries, namely 117. Twenty ofthese countries accounted for 83% of theUnited Kingdom’s exports. Total exports in-creased slightly from 53.2 billion to 55.1 bil-lion, with changes in the different regions.

The following table shows cigarette exports(in million pieces).

Changes have taken place not only betweenthe regions, but also within them. InsideEurope, exports to Germany increasedsharply from 1,551 million to 2,930 millionpieces, while exports to Belgium and theNetherlands decreased sharply from 8,781million to 4,642 million pieces.

In the Asian region, exports to the Republicof Korea rose by 6,554 million pieces from4,027 million to 10,581 million, and lookset to overtake Singapore. Exports to the lat-ter destination fell from 10,380 million to3,445 million pieces in 2002. Hong KongChina dropped to 1,513 million pieces,while the not elsewhere specified destina-tions in Asia (Asia n.e.s.) accounted for2,021 million pieces.

Cigarette production in the United Kingdomhas increased since 2000 to 130 billion ciga-rettes. Imports have risen to 2.3 billionpieces, or by 29% in numerical terms.


Region 2000 2001 2002 Difference Percentage

Europe 16,770 15,894 13,947 - 2,823 - 16,8 %Africa 6,227 7,628 10,647 + 4,420 + 70,9 %Asia 21,127 20,633 20,746 - 381 - 1,8 %Middle East 9,095 9,618 9,775 + 680 + 7,5 %Total 53,219 53,773 55,115 + 1,896 + 3,5 %

� More than 2 million cigarettes ofthe brands Player’s andDuMaurier were seized inVancouver by CanadianCustoms. The illicit consignmentoriginated in China and wasconcealed among markers andpens.

(Photos courtesy of Canadian Customs)

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With total exports of 129,265 million ciga-rettes, based on the nineteen countries se-lected, the Asian region is the second largestexporter. Just like the European region,most of the exports were to another countrywithin the region. Exports outside the re-gion were mainly to the Middle East. Thefollowing table shows the different regionsand the number of cigarettes exported to themost important countries of destination.

Asian regionExports within the Asian region accountedfor more than 68% of Asia’s total exportsand for more than 76% for the selectedcountries. The following graph shows thebreakdown by country.

IndonesiaIndonesia was the Asian region’s major ciga-rette exporter (24 billion of its total of 25.8billion cigarettes exported went to four coun-tries). Exports were made to 17 countries, ofwhich the four most important were: see chart.

SingaporeSingapore was the second largest Asian ex-porter (15.8 billion of its total of 20.8 billioncigarettes exported went to four countries).Exports were made to 23 countries, of whichthe four most important were: see chart.

Republic of KoreaThe Republic of Korea exported 13.9 billioncigarettes within the Asian region, account-ing for 48.7% of its total cigarette exports.Its exports went to 16 countries, including9,220 million pieces to Afghanistan and4,711 to Turkmenistan.

ChinaChina, the world’s largest cigarette producerand consumer, exported 9.794 billion ciga-rettes within the Asian region out of its totalglobal exports of 16.1 billion. It exportedcigarettes to 15 countries, of which the fivemost important were: see chart on page 15.

JapanThe last of the five major exporter countriesis Japan, which exported 8 billion cigarettesto the Asian region out of its 20.1 billion to-tal global exports. It exported cigarettes to 7countries, of which the Republic of Korea(3,870 million) and Singapore (2,965 mil-lion) were the most important markets.Japan also exported over 10.3 billion ciga-rettes to Asia n.e.s.


Asia 88,498 millionsMiddle East 14,627 millionsAmerica 9,123 millionsEurope 1,786 millionsAfrica 1,481 millionsTotal 115,515 millions

Country Million pieces

Macau, China 906Philippines 985Hong Kong, China 3,717Malaysia 4,783Japan 7,999China 9,794Rep. of Korea 15,678Singapore 20,133Indonesia 24.503TOTAL 88,498

1 % Macau, China

1 % Philippines

4 % Hong Kong, China

5 % Malaysia

9 % Japan

11 % China

18 % Rep. of Korea

23 % Singapore

28 % Indonesia

Indonesia’s exports to (in millions)

Total of 24 billion (24,004 million)

9,303

Cam

bod

ia

Thai

land

Sin

gap

ore

Mal

aysi

a

8,146

3,4043,151

Singapore’s exports to (in millions)

Total of 15.8 billion (15,833 million)

5,767

Phi

lipp

ines

Mal

aysi

a

Viet

nam

Cam

bod

ia

4,172

3,480

2,414

5.3.2 ASIAN EXPORTS

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Other Asian regionsThe other four selected Asian countries(Malaysia, Hong Kong China, Macau Chinaand the Philippines) exported a total of 10.3billion cigarettes within the Asian region out oftheir 15.3 billion total exports. Exports weremade to 53 countries in the Asian region.

Middle EastThe second region of destination for Asia isthe Middle East. The selected Asian coun-tries exported over 14 billion cigarettes to13 countries. The following table shows thequantity per exporting country and themain destinations.

EuropeEurope is a minor destination region for ex-ports from the Asian region. 1,786 millioncigarettes were exported to Europe from 27countries. Each country exported less than0.4 billion cigarettes.The following table shows the main coun-tries of destination.

AfricaExports to the African region are rather low.1,481 million cigarettes were exported to 30countries. China and Hong Kong, China we-re the main exporters, with a total of 1,441million pieces. The following table shows themost important countries of destination.


China’s exports to (in millions)

Total of 7.9 billion (7,908 million)

4,499

Hon

g K

ong

, Chi

na

Mya

nmar Sin

gap

ore

Mal

aysi

a

1,277 823 737

Jap

an

572

Republic of Korea 10,779 United Arab Emirates 10,777Hong Kong, China 1,528 Cyprus 740

Georgia 570United Arab Emirates 160

China 1.007 United Arab Emirates 828Cyprus 101Jordania 78

Indonesia 498Japan, Malaysia and the Philippines 445

Country of destination Million pieces Exported by

Niger 396 ChinaSouth Africa 258 ChinaEquatorial Guinea 115 Hong Kong, ChinaNigeria 105 Hong Kong, ChinaGambia 71 Hong Kong, ChinaBenin 67 Hong Kong, China

Country of destination - In million pieces

374 Russian Federation

223 Netherlands

184 Italy

116 Germany

88 United Kingdom

56 France

Exported by Million Main Million pieces destination pieces

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AmericaExports to the American region accountedfor over 9.1 billion cigarettes sent to 16countries. The following table shows themain exporting countries and their destina-tions in million pieces.

Summary for AsiaThe following table gives an overview ofAsian exports for the selected countries.In the review, a number of Asian countriesplaying a significant role as exportingcountries and their countries of destinationwill be compared with the figures for 2000and 2001.

A full comparison with data for 2000 and2001 could not be made due to a lack of in-formation about China’s exports in the data-b a s e c o n s u l t e d . A c o m p a r i s o n w a sconsequently made without taking accountof the Chinese figures. Exports to the remain-ing eight countries in the Asian region in rela-tion to their main countries of destinationincreased by 13.7 billion pieces in 2001, butthen decreased by 18.2 billion in 2002.Overall exports decreased by 4.5 billionpieces, or 5.4% in numerical terms. Totalglobal exports decreased by 5.5%.

Over 31% of cigarette exports were made toIndonesia. Although there was an increase of8,7 billion pieces (or 38.7%) in 2001, 2002exports dropped to 25.3 billion. However,there was still an overall increase of 3.3 bil-lion pieces or 15%. The Asian region is themost important region with more than 24.3billion pieces. Cambodia and Singapore werethe main destinations in 2002. A summary ofthe countries of destination would not beparticularly meaningful as the order of im-portance of the countries changes every year.

The following table therefore shows exportsin million pieces for the period 2000-2002.


United States Canada Panama Chile Total

China 2,620 333 307 213 3,473Republic of Korea 1,628 13 1,641Philippines 1,490 1,490Malaysia 289 29 10 328Indonesia 347 95 442Hong Kong, China 23 19 9 51Singapore 120 120Japan 1,402 1,402Total 7,919 428 368 232 8,947

Country Asia Middle East America Europe Africa Others Total

China 9,802 1,007 3,536 382 752 716 16,195Korea 15,722 10,779 1,666 282 1 66 28,516Japan 18,323 109 1,423 279 1 28 20,163Indonesia 24,506 498 477 254 61 9 25,805Malaysia 5,902 133 336 84 54 411 6,920Singapore 20,200 372 120 175 17 5 20,889Philippines 987 203 1,504 270 6 31 3,001Hong Kong, China 4,621 1,528 61 60 589 37 6,896Macau, China 906 0 906Total 100,969 14,629 9,123 1,786 1,481 1,303 129,291

2002 situation

Europe France Asia CambodiaGermany Hong Kong, ChinaItaly JapanNetherlands Macau, ChinaRussian Federation MalaysiaUnited Kingdom Myanmar

Africa Benin PhilippinesEquatorial Guinea Republic of KoreaGambia SingaporeNigeria ThailandNiger VietnamSouth Africa America Canada

ChilePanamaUnited States

Middle East CyprusGeorgiaJordanUnited Arab Emirates

Breakdown of the destination regions

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The table shows that cigarette exports byJapan and the Republic of Korea increasedsignificantly. Exports from Japan to Singaporeincreased from 735 to 2,965 million pieces.The Republic of Korea’s exports to the UnitedStates increased from 404 to 1,628 millionpieces. The greatest leap was made in termsof exports to the United Arab Emirates, risingfrom 2,739 million to 10,777 million pieces.

The Middle East (Cyprus, Jordan and theUnited Arab Emirates) is a rapidly growingmarket. Exports to the United Arab Emirateshave increased exponentially over the pastthree years by nearly 300%.

5.3.3 MIDDLE EAST EXPORTERS

The Middle East region is the third biggestexporter. Turkey, the only country singledout, exported more than 15.3 billion ciga-rettes. Within its own region, it sent morethan 7.3 billion pieces to the United ArabEmirates. Europe is the other main region ofdestination, accounting for the following ex-ports as shown in the table.

The only exports made to the Asian regionwere to Afghanistan (728 million) and Iran(797 million). Turkey also exported 180million pieces to the United States.

Summary for the Middle EastIn comparison with previous years, Turkey’sexports increased from 12.2 billion pieces to15.3 billion pieces, or by 25%. Exports tothe United Arab Emirates increased sharplyfrom 5,954 million pieces to 7,372 millionpieces, or by 24%.


Country 2000 2001 2002 2002 %

Hong Kong, China 24,044 23,410 4974 6,29Indonesia 22,002 30,538 25,304 31,98Japan 2,238 5,397 9,727 12,29Korea 3,402 7,544 12,668 16,01Malaysia 8,144 7,437 4,678 5,91Philippines 2,982 3,180 2,705 3,42Singapore 19,862 18,923 18,258 23,08Macau, China 961 907 800 1,01Total 83,635 97,336 79,114

Country Millionpieces

Belgium 4,383Slovenia 1,010Latvia 416Greece 215Serbia and Montenegro 84Romania 29Lithuania 9Bulgaria 8Germany 6Netherlands 4Total 6,164

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In 2002, the United States exported morethan 127.3 billion cigarettes globally.Exports to other selected countries amount-ed to 97.6 billion pieces.The following table shows exports in mil-lion pieces to the various regions and themain countries of destination, including thedata for 2000 and 2001.

Summary for AmericaUnited States exports remained stable forthe period 2000-2002. Exports to the Asianregion rose by 1.3%, while those to theEuropean region fell by 50%.Exports to the Middle East region increasedby 6.4% and this is still the second region ofdestination after the Asian region (in whichIran is a new destination). The United Statesis the only one of the selected countries thatexports a significant number of cigarettes tocountries such as Syria, Kuwait, Israel andSaudi Arabia.

Exports to Japan increased slightly to 90 bil-lion pieces.

5.4. Summary for thelegitimate cigarette trade

Europe and Asia are the two major ex-porters. In both regions, a large number ofcigarettes are exported to another countrywithin that region. Exports to specific coun-tries did not remain constant during the pe-riod under observation, and the destinationsoften changed.

Europe was the main exporter to the Asianregion, with over 26.4 billion pieces. Thelargest number of cigarettes was exportedfrom the United Kingdom to the Republic ofKorea, and equated to over 10.5 billionpieces or 16.5% of the United Kingdom’s to-tal cigarette exports. The Republic of Koreaexported an equivalent amount to theUnited Arab Emirates, namely 10.7 billion.

It is worth noting that in 2002, overall ex-ports to the United Arab Emirates amountedto 42 billion cigarettes. Countries not selected

exported over 17.3 billion pieces to theUnited Arab Emirates. These includedAustralia, which was the main exporter withapproximately 9.9 billion pieces.

In comparison with the figures for 2000 and2001, exports to the United Arab Emiratesincreased from 24.5 billion to 42 billion, orover 71%. In those two years, Cyprus wasthe main exporter to the United ArabEmirates with a total of 15.2 billion pieces.

During the period 2000-2002, the UnitedArab Emirates exported 90% of its cigarettesto Oman. In 2002, only 7% were exportedto Iran, but at the same time Iran was themain export destination country for Oman’scigarette exports. The table below shows theexport data for Oman to Iran in millionpieces. Detailed and reliable data for Iran’sexports is not available.


Destination 2002 2001 2000

Asia Japan 77,945 75,464 77,798(12 countries) Republic of Korea 3,601 6,233 4,681

Hong Kong, China 2,783 2,830 3,164Singapore 2,469 2,483 3,396Iran 1,527Asia n.e.s. 1,901

90,226 87,010 89,039Middle East Saudi Arabia 11,675 11,269 10,637(16 countries) Israel 4,567 4,560 4,437

Lebanon 3,912 5,716 4,227Kuwait 1,771 2,013 1,750Syria 1,000 906 498

22,925 24,464 21,549Europe Belgium 2,570 2,663 6,691(20 countries) Netherlands 913 1,887 226

3,483 4,550 6,917Total 116,634 116,024 117,505America(16 countries) Total 1,453Africa(16 countries)

Total 48

2000 2001 2002

Exports from UAE 30,517 34,170 34,181Oman 30,072 32,892 26,051Iran 6,948Exports from Oman 11,590 27,905 24,828Iran 10,937 27,378 24,613

5.3.4 UNITED STATES EXPORTS

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6.1. Number of seizures andquantities seized

The analysis of cigarette smuggling activityis based on a total of 4,381 seizures carriedout in 2002 and 2003. Sixty-two WCOMembers contributed to the project.2

The tota l number of cases below the100,000 limit is 1,056 for 2002 and 1,121for 2003. Despite the relatively high numberof seizures below the de minimum level,they are not significant within the total. Therespective quantities are: 38,149,134 in2002 and 30,889,318 in 2003, correspon-ding to 1.4% and 1.2% of the total quanti-t ies reported in the two years. In thefollowing, only seizures exceeding 100,000cigarettes are taken into consideration.

The seizures recorded in the CEN databasecome to a total of 965 in 2002 and 1,239 in2 0 0 3 . T h e q u a n t i t i e s s e i z e d a r e2,724,921,590 and 2,559,483,371 respec-tively. Globally, the number of interceptionsincreased by 28%, while the total quantityseized decreased by 6%. The 2003 figuresfrom Brazil should be emphasized, sincethey affect the figures.

The graphs show the numbers and quantitiesreported by each WCO RILO region.

The graphs show the global extent of ciga-rette smuggling. Despite a decrease in thenumber of cases and quantities reported bythe North African and Middle East regions,these continue to have an important role.The figures for North America are of note inthat Canada is the only country in that re-gion which records seizures on the CENdatabase. It is pleasing that there has beenan increase in Members reporting seizuredata. This increase has certainly affected thecomparative picture between 2002 and2003: Brazil, for example, in the Central andSouth American region. If the Brazilian datahad not been reported, the number of casesin 2003 would have been 904 and the quan-tity nearly 2 billion cigarettes.

Global overview of cigarette smuggling

6. Global overview of cigarette smuggling

2002 – Number of cases

74 Asia and Pacific

38 Middle East

48 North Africa

0 Western Africa

14 Eastern and Southern Africa

1 North America

264 Eastern and Central Europe

44 CIS

477 Western Europe

5 Central and South America

2003 – Number of cases

67 Asia and Pacific

13 Middle East

26 North Africa

2 Western Africa

24 Eastern and Southern Africa

11 North America

288 Eastern and Central Europe

5 CIS

461 Western Europe

342 Central and South America

2002 – Quantity

305,259,740 Asia and Pacific

295,765,660 Middle East

0 Western Africa

5,440,000 North America

28,068,800 Central and South America

42,153,400 Eastern and Southern Africa

594,730,976 Eastern and Central Europe

46,822,120 CIS

1,271,018,294 Western Europe

135,662,600 North Africa

2003 – Quantity

247,359,703 Asia and Pacific

52,445,340 Middle East

612,800 Western Africa

54,422,820 North America

603,343,600 Central and South America

51,201,240 Eastern and Southern Africa

284,353,409 Eastern and Central Europe

17,010,000 CIS

1,196,867,859 Western Europe

51,866,600 North Africa

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6.2. Place and type of location ofinterceptions

The tables show the leading locations bynumber of cases and by quantities seized.

Both in terms of number and quantity, halfof the total global seizures were made inthese locations. Although most of the loca-tions are situated in the European region,the fact that they collectively cover three dif-ferent continents underlines the global na-ture of cigarette smuggling.

A total of twenty-seven locations entered thefifteen highest numbers of seizures record-ed. Twelve are land borders, eight are sea-por ts and four are in land locat ions .Dorohusk in Poland is a railway station andColombo in Sri Lanka is varyingly reportedas a seaport and an airport.

By quantity the majority (nine cases) areseaport locations, four are inland locationsand the remaining two, including the lead-ing location of Foz do Iguaçu in Brazil, are

In comparison with 2001, the data for 2002showed a generally decreasing trend, princi-pally due to lower figures reported by theleading regions (Western Europe, Eastern andCentral Europe and Asia/Pacific). In 2003,there has been a further decrease, at least interms of the quantity seized, with that of theEastern and Central European region beingparticularly notable. The Western Europeanregion, however, shows remarkable consisten-cy both in terms of the number of cases re-ported and the quantity seized. WesternEurope continues to dominate the globalscene, with some 37% of the number ofseizures and 46% of the total quantity seized.

The average of the total quantity seized inthe different regions is shown in the table.

The figures for the Middle East in 2002 aresignificantly affected by one single seizure ofmore than 80 million items.

on land borders. That apart, the locationswhere the largest seizures were carried outwere, not surprisingly, seaports. These werepredominantly container ports, with the on-ly exceptions being Ancona and Venice (IT)where the contraband was exclusively de-tected on lorries that arrive by ferry fromGreece.


Foz do Iguaçu (BR) 292Dorohusk (PL) 35Swiecko (PL) 32Ancona (IT) 26Przemysl (PL) 24Antwerp (BE) 22Frankfurt/Oder (DE) 17Valencia (ES) 14Gauteng (ZA) 12Lok Ma Chau (HK) 11Calais (FR) 11Colombo (LK) 11Beitbridge (ZA) 10Vienna (AT) 10Coquelles (FR) 10Teresina (BR) 10Barcelona (ES) 9Bremerhaven (DE) 9Vitoria da Conquista – Bahia (BR) 9Dublin (IE) 8Vaalimaa (FI) 7Venice (IT) 6Pomellen (DE) 6Gubinek (PL) 6Le Perthus (FR) 6Gravelines (FR) 6Vancouver (CA) 6Total 625

Foz do Iguaçu (BR) 414,949,860Antwerp (BE) 110,533,580Valencia (ES) 103,146,200Ancona (IT) 74,328,920Bremerhaven (DE) 69,410,000Barcelona (ES) 66,198,960Dandong (CN) 64,728,000Vienna (AT) 53,513,840Vancouver (CA) 46,674,020Vitoria da Conquista – Bahia (BR) 46,220,800Gauteng (ZA) 42,000,000Lok Ma Chau (HK) 39,446,920Hamburg (DE) 34,035,980Santo Angelo – RS (BR) 33,273,980Gioia Tauro (IT) 32,705,800Grand total 1,231,166,860

2002 2003

Asia and Pacific 4,125,132 3,691,936Middle East 2,826,304 4,034,257North Africa 2,826,304 1,994,869Western Africa 0 306,400Eastern and Southern Africa 3,010,957 2,133,385North America 5,440,000 4,947,529Central and South America 5,613,760 1,764,163Eastern and Central Europe 2,252,768 987,338CIS 1,064,139 3,402,000Western Europe 2,666,705 2,596,243Grand total 2,823,753 2,068,610

Average of quantities seized

Quantity seized

Main place of seizures

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6.3. Country of departure and countryof destination: main routing

The information regarding the country ofdeparture and country of destination is ob-tained from the section of the CEN databaserelating to the routing of detected illicit con-signments. In some records, this informa-tion is not available, while in others it isincorrectly entered and does not correspondto the real country of departure and destina-tion of the cigarettes seized.

Since this information is quite often unavail-able, the country of seizure could be report-ed alternatively as the country of departureor destination, depending on whether theconsignment is an export or import. For thisreason, the brands seized are also analysed,as they are likely to give an indication of thecountry or area of destination.

More detail on this point is included in thefollowing regional analysis.

The tables show the fifteen most reportedcountries in 2003 in terms of the number ofcases and the quantity that have originatedthere and include comparative figures for theprevious year. In 2003, the origin is recordedas “unknown” in 159 cases (293 million cig-

arettes). The relative figures for 2002 were122 cases and 313 million cigarettes.

In terms of the number of cases, the selectedcountries account for 67% of the worldwidefigures in 2002 and for 73% in 2003. If thequantity is considered, the figures are 53%and nearly 74% respectively. The map re-flects these data. These countries representvarying regions of origin. Considering the


Country 2002 2003Paraguay 1 294Ukraine 49 144Poland 138 131China 79 98Russian Fed. 111 50Greece 73 46Spain 18 24Germany 14 19Belgium 13 18Zimbabwe 10 17Hungary 71 16UAE 15 13Netherlands 11 13Turkey 9 13Lithuania 34 12Total 646 908

The 15 most reported countries in 2003No. of cases

countries emerging by number of cases re-ported, the breakdown is the following:South America (1), Africa (2), Middle East( 1 ) , A s i a ( 1 ) , E a s t e r n a n d C e n t r a lEurope/CIS (7) and Western Europe (4). Inrespect of the quantity seized, the number ofcountries representing the different regionsis: South America (1), Africa (none), MiddleEast (1), Asia (5), Eastern and CentralEurope/CIS (5) and Western Europe (2).From the Asian region, for example, onlyone country (China) thus features in terms ofthe number of cases, but there are anotherfour countries involved if the quantitiesseized are considered. Paraguay stands outboth in terms of the number of cases and thequantity and was reported in the SouthAmerican region solely by Brazil andUruguay, which were the countries of seizureand intended destination. Zimbabwe was themain source country for the East andSouthern Africa region. All the cases were re-ported from South Africa, which was also thecountry of destination.

The Western European countries appearingin the CEN database as countries of origin ofcontraband should really be considered moreas countries of transit or secondary distribu-tion. This is because, frequently, cigaretteshad previously been illegally imported from

Departure

Destination

Transit

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elsewhere, and this point is not shown inCEN. The fact that many detections weremade at inland locations, particularly inGermany, points toward this assumption.Nevertheless, it is not possible to rule out acertain number of cigarettes originating fromthe area of Belgium and Germany, especially ifthe phenomenon of illegal production is con-sidered3. Of the 56 seizures in which Spain,Germany, Belgium and the Netherlands werereported as departure countries, 44 seizureswere carried out in France, the main finaldestination being the UK.

In general, all the countries belonging to theEastern and Central European region, in-cluding Russian Federation and the CIS,were shown less often as countries of depar-ture in 2003, and also the amount of contra-band originating in that region was subjectto a more or less dramatic decrease. The on-ly exception was Ukraine, where the numberof cases nearly tripled, although the relatedquantity showed an increase of only 15%. Itis of note that the consignments seized inthis region were destined mainly for thesame region. This contrasts with 2002, whenthe main final destination was the UK. Itshould, however, be taken into account thatthe brand was not stated for 24% of the con-traband originating in Ukraine.

A similar trend may be noted for Poland,where the majority of seizures state Germanyas final destination in 2003. This contrastswith 2002, when the UK was stated.

There were considerably fewer seized con-signments shown as originating in theRussian Federation, which was representedby a smaller number of cigarettes destinedfor Germany and other European countries,while the consignments destined for the UKremained quite stable. 82% of the seizureswhere Greece is stated as the departurecountry were made in Italy, a neighbouringcountry. It is unlikely that Greece was thetrue country of origin of the contraband.4

The largest number of smuggled cigarettesoriginated in the Asian region and from

China in particular. Many countries in allcontinents were targeted: Canada and theUSA, Israel and Lebanon, South Africa,Algeria, Hong Kong (China) and India,Australia and fourteen European countries.5

Insofar as Hong Kong, China is the destina-tion of the contraband from China, it is veryimportant to highlight the fact that all theconsignments were seized in Hong Kong,China. The only one destined for the USAwas also seized there. Unfortunately, thebrands seized were not recorded, making itimpossible to assess where the cigaretteswere finally destined. This additional infor-mation is crucial, as Hong Kong, China is al-so listed among the significant sourcecountries. Shipments originating in HongKong, China reached Australia, Canada,Western European countries and evenChina. Singapore was the source country forconsignments dest ined for Malaysia,Indonesia and Spain.

In April 2003, a huge number of illicit ciga-rettes of the Riadi brand were detected inItaly. The consignment originated in Egyptand was en route to Libya. This was not thefirst time in which Libya was believed to bethe target of contraband, as there had been aprevious occasion in April 2002. It is, how-ever, the first time in which it was positivelyconfirmed as the final destination of thecontraband.

The Democratic People’s Republic of Koreaappears among the first fifteen countries interms of quantity in 2003 as a result of alarge consignment (64.7 million cigarettes)

detected in China, for which the brand wasnot reported.

A large shipment of more than 18 millionRegal cigarettes was seized in Singapore enroute to Germany. This seizure is responsiblefor the remarkable increase in the amount ofcontraband originating in Vietnam, althoughconsignments have previously been detectedin some European countries (Belgium,Bulgaria, France and Spain), the final desti-nation being mainly the UK.

Cyprus was reported as the departure coun-try only once in 2003, in a shipment ofRaquel cigarettes detected in Belgium. Thiscontrasts with 2002, where it was the depar-ture country in the case of ten seizures andthe total amount of contraband, detected inand destined for Lebanon, was relativelyhigh (more than 114 million units).

Consignments for which the UAE arerecorded as the source country were mainlydestined for Europe (UK), Lebanon and theneighbouring countries and, to a lesser ex-tent, Asia (LK). The execution of OperationHydra, conducted in Europe in November20036, provided confirmation of large con-signments originating mainly in China andincreasingly from the UAE. In relation to theUAE, there is a seizure carried out inBulgaria in July 2003 of note. Four contain-ers originating in the UAE were interceptedat the port of Bourgas, with some 13 millionSuperkings and 6 million Winston cigarettesbeing seized. The fraudsters attempted to re-export the four containers from the port ofBourgas back to the UAE.


Country 2002 2003

China 552,572,680 634,153,600Paraguay 388,200 415,849,860Greece 245,530,360 152,363,120Poland 133,135,267 100,418,516Ukraine 65,167,540 75,772,145UAE 92,359,200 74,470,200Russian Fed. 125,845,936 70,426,085Dem. Rep. of Korea 3,000,000 64,728,000Egypt 75,834,480 62,290,959Singapore 32,560,000 55,259,400Spain 25,338,200 42,349,140Germany 14,023,676 39,894,220Hong Kong, China 26,519,200 35,514,800Latvia 43,436,960 35,193,140Vietnam 14,165,600 30,634,200Total 1,449,877,299 1,889,317,385

The 15 most reported countries in 2003Quantity seized

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The annexes report the complete dataregarding seizures under the limit of100,000 cigarettes in terms of region andcountry of seizure. The table below givesa general overview for each region.

Seizures under the limit of 100,000 ciga-rettes were principally reported by the tworegions of CIS and Eastern Europe in 2002.In 2003, there is no data available from theCIS, and Eastern Europe stands out both interms of the number of seizures (87%) andthe quantity (85%) reported. Within that re-gion, Poland and the Czech Republic en-tered almost all of the cases reported in both2002 and 2003.

However, whereas Poland reported 50% ofthe total cases in the region in 2002, its con-tribution rose to 74% in 2003. Of the quan-tity reported in 2003, 87% relates toseizures made in Poland.

Within Poland, 30% of the seizures weremade at the frontier with Ukraine, mainly inthe area of Przemysl, which was reportedboth as a land frontier and a rail location.The illicit importation into Poland of morethan 8 million cigarettes, 34% of the totalquantity reported in 2003, were detected atPrzemysl. This represented nearly an eight-fold increase over seizures carried out therein 2002, accounting for half the seizurescarried out in rail shipments.

Throughout Poland, the majority of seizures(77% in terms of number and 75% in termsof quantity) carried out were made at borderlocations. Gronowo and Bezledy, located onthe Russian border, were also important landfrontier points, the number of detections andquantity seized rising considerably in com-parison with the previous year. Rail ship-ment was the means of transport in 12% interms of number and 15% in terms of thequantity seized in the year. These figuresrepresent six-fold and eight-fold increasesover the figures for 2002 respectively. Theorigin of the illicit consignments was mainlyRussia and Ukraine while the main destina-tion was the same country of seizure.

In the case of 46 Polish seizures, accountingfor 1.5 million cigarettes (Marlboro, Westand Pall Mall), the consignments were des-tined for Germany and mainly arrived inPoland from Ukraine, Lithuania and Latvia.The cigarettes were mainly transported onboard road vehicles (75% of all cases and73% of the total quantity), which involved acar/passenger van in the majority of cases.

The cigarettes were usually concealed in the

Review of cigarette smuggling under 100,000 pieces

7. Review of cigarette smugglingunder 100,000 pieces

WCO RILO region Quantity No. of cases Average Quantity No. of cases Average2002 2002 2002 2003 2003 2003

Asia/Pacific 289,473 11 26,315 1,156,400 21 55,066Middle East 16,277 2 8,138 41 1 41North America 0 0 0 357,800 6 59,633Central and South America 151,135 7 21,590 1,091,560 24 45,481North Africa 410,180 64 6,409 237,420 4 59,355Eastern and Southern Africa 1,246,540 38 32,803 312,380 16 19,523CIS 25,203,561 461 54,671 0 0 0Eastern and Central Europe 9,359,813 400 23,399 26,464,480 976 27,115Western Europe 1,472,155 73 20,166 1,269,237 73 17,386Grand total 38,149,134 1,056 36,126 30,889,318 1,121 27,555

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structure of the vehicles (almost 85% of allcases and of the total quantity).

The most seized brands were, in descendingorder of quantity: Pall Mall, Prima, LM,Saint George, West and Marlboro. Marlborowas the most frequently detected. Of theless frequently reported brands, some werereported for the first time in 2003: Brillant,North Star, City and Three Kings, whichwere normally detected in conjunction withother main brands, in particular SaintGeorge and Monte Carlo.

In the Czech Republic, 60% of seizures weremade at land frontier locations, although thequantities seized were evenly split betweenthese and inland locations (1.5 millionunits). The reports showed that inlandseizures rose five-fold in comparison with2002, the related quantity almost six-fold.The most common means of transport was aroad vehicle, usually a car/passenger van,with the contraband concealed in its struc-ture. The illicit consignments departedmainly from Poland and were destined forthe Czech Republic itself. The most detectedbrands both in terms of the number of cases

and quantity were, in descending order: LM,Pall Mall and Marlboro.

A special report provided by the CzechCustoms shows that the attempt at smug-gling is invariably taken on an individual’sinitiative, mainly by Polish and Ukrainiannationals, who transport the unlabelled ciga-rettes in specially made secret places of con-cealment in private cars, trucks and trains.The traffic features a high frequency of tripsand a relatively low number of cigarettes –around 15,000 on average – per trip. Morethan 50% of offenders are unemployed.When goods are transported by rail, they areconcealed in wiring sections, ceiling cavitiesand within the chassis, or inside the stuffingof passenger seats. For smuggling in cars, theplace of concealment involves manufacturer-designed cavities, inside adapted fuel tanksor in the spare wheel. Vehicles are normallymore than ten years old.

In Western Europe, information on seizuresof fewer than 100,000 cigarettes was report-ed from Andorra, Iceland and Denmark.Andorra and Iceland did not report anyseizures above the de minimum limit, either

in 2002 or 2003. In the case of Andorra, thisis due to the fact that the Customs are re-sponsible only for administrative cases inwhich the value of the goods is not greaterthan 6,010 euros, while the police are com-petent in more serious cases, designated‘criminal’.

Seizures of under the 100,000 level were al-so reported in the Asia/Pacific region, wherethe number of cases doubled and the quan-tity seized rose four-fold. This was thanks inparticular to the contributions on the part ofSri Lanka, Brunei and Singapore.

Review of cigarette smuggling under 100,000 pieces

� Customs officers at Aabenraa seaport inDenmark seized over three millioncounterfeit cigarettes of the brands Princeand HB on a trailer from Klaipeda inLithuania. The contraband was concealedinside fairground attractions.

(photo courtesy of Danish Customs)

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8.1. North America

Information on cigarette seizures has beenprovided to CEN by Canada. A total oftwelve significant seizures accounting forapproximately 60 million cigarettes havebeen reported since 2002. In 2002, only oneseizure of more than 100,000 units was re-ported in Canada, involving 5.4 millionMarlboro cigarettes detected in Vancouverinside a consignment of plastic hangers ar-riving by marine container from China.However, 11 seizures of more than 100,000units were made in 2003, accounting formore than 54 million cigarettes.

In 2003, the most significant seizures in-volved counterfeit cigarettes and occurredbetween June and November. Seven seizureswere carried out in Vancouver, where a totalof 51,174,020 million cigarettes wereseized, the majority involving counterfeitproducts. Counterfeit Du Maurier, Playersand Rothmans brand cigarettes were detect-ed. All the seizures involved marine contain-ers originating in China. A cover load oftoilet paper was used in two cases. In twoother cases, the cigarettes were concealedamong markers and pens and among toys.Although two shipments were declared asporcelain ware and one as picture frames,no cover load was used.

Also in 2003, 2.8 million Superking brandcigarettes were seized in Halifax from a ship-ment of synthetic sofas and armchairs arriv-ing by marine container from Hong Kong,China. Although the shipment was destinedfor Vancouver, it was re-manifested for ex-port to the United Kingdom.

Three further seizures were then carried outin 2003 at the US frontier port of Cornwall,Ontario. A total of 480,000 unmarked ciga-rettes suspected of being manufactured on aUS native reserve were detected on boardpersonal motor vehicles. A tarpaulin or bedsheet concealed the cigarettes in two cases.

8.2. Central and South America

Three Members of the South American RILOregion entered a total of 347 cases on theCEN database within the period considered.The figures for 2003 are affected by a hugeincrease in cases reported by Brazil. Thisgreatly complicates any comparisons be-tween 2003 and 2002 within the region.

Chile also indicated an interesting increasingtrend in reported seizures, from only one in2002 to eight in 2003, the total quantity ris-ing eight-fold. The only seizure reported in2002 was carried out at an inland location.The origin of the consignment and the brandseized were unfortunately not reported, butit is of note that the cigarettes were concealedinside a cover load of electronic appliances.Two consignments of 9.1 million cigarettesof various brands said to be bounded forVenezuela were detected in March and May2003. The Venezuelan consignee did not ex-ist. The brands seized were Business Club,Golden Brown, Taba, Vigor, Dorchester,Feast and Marshall. Two other consignmentsfrom Panama, containing almost 9 millioncigarettes, were seized at the seaport of SanAntonio in September. The brands involvedwere Fox, Optiva and Backard.

Two con t a ine r i z ed sh ipmen t s f romArgentina were detected in June andDecember. In the first case, the goods wereshipped in Argentina as cigarettes (7.6 mil-lion of Melbour and Mill) but were declaredin Chi l e a s mugs , whi l e 8 .3 mi l l ionDorchester cigarettes were concealed undera cover load declared as ‘bazaar articles’ inthe second case. Both consignments weredeclared as being bound for Tacna, aPeruvian free zone, but were established tobe destined for Santiago (CL).

A total of 9.5 million Vigor, Dorchester,Europe, Prestige and Business Club brandswere detected in December at a farm, wheretwo tank trucks purposely modified to

transport contraband were also found. A fi-nal significant seizure was carried out at theland frontier with Bolivia, where 2.4 millioncigarettes of the Derby, Coast and Marblebrands were discovered among 20 tonnes ofsoy.

In Uruguay, the number of cases reportedremained rather stable, but the quantityseized decreased from nearly 9 million to1.5 million cigarettes. It should be said thatone single seizure in 2002 accounted for 8.6million cigarettes.

Of the 294 seizures reported by Brazil, it isinteresting to note that none was recorded atseaports, while the more significant of thetwo reported in 2002 was made at the port ofSantos. Here a container of unknown origin

Regional overviews of cigarette smuggling

8. Regional overviews ofcigarette smuggling

� As a result of analysing cargo manifestsChilean Customs inspected 2 containersin which 5.5 million cigarettes of differentbrands had been smuggled fromPanama.

(photo courtesy of Customs of Chile)

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was detected on its way to Buenos Aires(AR) leading to the seizure of 13.8 millioncounterfeit cigarettes of two brands: Astorfrom Venezuela and Souza Cruz from Brazil.

88% of all seizures reported in 2003 fromBrazil were made at Foz do Iguaçu, on thefrontier with Paraguay. They accounted for74% of the total contraband detected. Themost important origin of the smuggled ciga-rettes was Paraguay. 6% and 8% of the totalcigarettes respectively were detected at twoinland locations, Vitoria da Conquista-Bahiaand Santo Angelo-RS.

In 95% of the smuggling cases a vehicle wasused. A bus was recorded as the means oftransport sixteen times, accounting for 16%of the total quantity smuggled onboard ve-hicles. There was insufficient recorded in-formation on mode of transport and modeof concealment to permit further analysis,and no indication of the brands seized.

8.3. North Africa

Number of seizures andquantities seizedIn the North Africa region, two countriesrecorded details of cigarette seizures onCEN in 2002 and/or 2003: Algeria entereddata in both years; Morocco reported one

seizure of 128,000 cigarettes in 2002 andnone in 2003.

The number of seizures input by Algeria fellfrom 47 in 2002 to 26 in 2003, a decrease of45%. The quantity seized also decreaseddramatically by 61%, with nearly 52 millionbeing reported in 2003 compared to 135million in 2002.

The global contribution of the North Africanregion was particularly remarkable in 2002compared with 2001. Even considering theabove-mentioned decrease, the seizures re-ported in 2003 still reveal an interestingtrend in tobacco smuggling activities.

Place and type of locationof interceptionsIn 2003, as in 2002, most seizures were car-ried out at border crossing locations. In2003, however, there was a decrease in thenumber of seizures and quantity, particularlyat inland locations where only three seizureswere recorded as opposed to thirteen in theprevious year. The quantity seized at theselocations fell from 33.6 million cigarettes to1.5 million. Only one seizure was reportedas being made at a seaport location (Algerport) in 2003, against three in 2002, but forthe first time the reported departure countrywas China. In this case 8.5 million Marlboro

cigarettes were detected under a consign-ment of ventilators.

Month of seizureIn 2003 38% by number and 54% of the to-tal quantity were seized in the month ofMarch. The last reported seizure in the yearis dated July.

Country of departure and countryof destinationThe most commonly reported departurecountries for illicit consignments are sub-stantially the same as in 2002: Mali (11 cas-es) and Niger (13 cases). 50% of the totalseizures and of the quantity detected orig-ined from the latter. Illicit imports fromMorocco were recorded only once, for800,000 cigarettes, in 2003 whereas in2002 there were seven seizures of more than8 million cigarettes.

In 2002, two consignments of nearly 28million Marlboro cigarettes showed UnitedArab Emirates as the departure country andAlgeria as the destination. In 2003 no con-signments from that country were reported.

BrandsAmerican Legend, Gauloises and Marlborowere the brands seized. In 2002 they werethe same but one detection of Rym was alsoreported. All these brands are also popularin Algeria. In 2003 the most seized brandwas Gauloises (37% of the total quantity)followed by American Legend (36%).

Mode of transportThe most reported type of location ofseizure, as mentioned above, obviously dic-tates the most frequently used mode oftransport. Thus in 2003 it was a vehicle, ac-counting for 80.5% of the quantity seizedand 88% of the total reported cases. Of the23 cases in which a vehicle was used, a lorryand a car were each recorded eleven times,although most of the quantity (68%) wasfound concealed in the latter type of vehicle.


� The French Customs Investigation Service carried out in Metz a seizure of 2 millionsmuggled LM, Sovereign and Superkings brand cigarettes hidden in metal beams arrivingfrom Poland.

(photo courtesy of French Customs)

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Method of concealmentDetails on concealment methods were un-fortunately not given. The data reporteddoes show, however, that 4-wheel driveToyota vehicles were most frequently usedwith an average detection of 2.5 million cig-arettes. This strongly suggests that the ciga-rettes were loaded without any attempt atconcealment.

8.4. Western Africa

Information concerning two seizures hasbeen provided to the CEN database fromthis region.In March and October 2003 Customs inMali seized a total of 612,800 cigarettes ofthe Dunhill, Karelia and Gold Seal brands.The contraband was found abandoned inthe neighbourhood of Bamako.

8.5. Central Africa

The following is totally based on the reportprovided by RILO Central Africa located inDouala, Cameroon.

Cigarette smuggling has been a major con-cern for Customs administrations within theCentral African sub-region. About 70-85%of cigarettes imported into the sub-regionare said to be smuggled. This may be due tothe high duty rates applied to cigarettes andtobacco. The main methods used by fraud-sters are import without declaration (i.e.smuggling) and undervaluation. In the lattercase they declare a lower value bringing the

duty below 2 million francs CFA (approx3,050 Euro), thus avoiding pre-shipmentinspection, or mix cigarettes in a containerwith other articles which attract very lowCustoms duty. In this case both invoices andbill of lading are changed reducing thequantity of cigarettes in the container andincreasing the quantity of other articles withlower duty rates.

In respect of import without declaration, thefollowing cases were reported7:

a. A significant seizure recorded in 2003 re-sulted from the check of two containers atDouala port loaded with Winston brandcigarettes. Both the manifest and bill oflading were amended to show tomatopaste intended for transit to Malabe inEquatorial Guinea.

b. Another major seizure was made byCameroon Customs when one consign-ment of three containers was checked.One container was declared to containcigarettes while the other two were de-clared to contain plastic containers, whichnormally attract lower Customs duty.Marlboro brand cigarettes were seized.

As a general trend cigarettes are legitimatelyimported through the free port of Lome onthe West African coast. The consignmentsare then put into smaller boats for distribu-tion through the creeks8 into countries suchas Nigeria, Gabon, Congo and Cameroon.Various brands are seized: Marlboro,Wellington, Karelia and American Legend.

8.6. Eastern and Southern Africa

Number of seizures andquantities seizedIn 2002 one seizure in Kenya of 290,000cigarettes was reported. Apart from this, on-ly South Africa in the region provided infor-mation to the CEN database over the twoyears considered. The number of seizures al-most doubled from 2002 to 2003 whilst thetotal quantity seized increased by 22%.

Place and type of locationof interceptionsHalf the seizures, corresponding to 82% ofthe total quantity seized, were made in theGauteng area. Gauteng appears to be themost lucrative market for the disposal ofsmuggled cigarettes9. Durban and CapeTown were the common ports of entry usedon importation. As a result of the increasedenforcement effort at these two ports thefraudsters altered their import route toWalvis Bay in Namibia and thereafter thecigarettes were smuggled through theNakop and Vioolsdrift border post to theGauteng region10.


� The use of fake paper rolls to concealcigarettes inside is still common. Thisseizure of 2.2 million of Sovereigncigarettes was carried out in Italy in 2004.The contraband was detected onboard alorry coming from Ukraine throughSlovenia

(photo courtesy of Guardia di Finanza)

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Month of seizureThe last reported seizure is dated October2003. This single seizure of almost 12 mil-lion cigarettes was the largest recorded. InJuly 2003 five seizures were made and 38%of the total quantity was seized whilst in thesame month in 2002 no seizure was made.In 2002 the majority of seizures and quanti-ty were recorded in December.

Country of departure and countryof destinationContraband cigarettes are smuggled pre-dominantly from Zimbabwe. Seventeen cas-es totalling 28.4 million cigarettes werereported in 2003, whilst in 2002 the equiv-alent figures were ten seizures and 3.1 mil-lion cigarettes. Because of the politicalinstability and weak Zimbabwean dollar,cigarettes are available at a relatively cheapprice compared to the same brands in SouthAfrica.11 Two cases were reported in 2003with the origin of China, compared to threein 2002. The related quantities decreasedfrom 38.7 million to 14.7 million cigarettes.Two single seizures of 4.7 and 3.3 millioncigarettes from Lesotho and Namibia re-spectively were also reported.

BrandsThe table shows the breakdown of the dif-ferent brands seized in South Africa over thetwo past years although only 55% of therecords corresponding to 74% of the totalquantity contained information on thebrand seized.

Mode of transportThe mode of transport was not reported inseven cases, which however represented61% of the total quantity seized. From theannual report kindly provided by SouthAfrican Revenue Service, it can be said thatfuel tankers were used twice.

Method of concealmentThe majority (60%) of the cigarettes seizedin 2003 was detected on premises, whilst inthe previous year it was amongst or withinthe legitimate consignment covering thecontraband. In 2003 small quantities of cig-arettes were generally carried across theLimpopo river which forms the border be-tween Zimbabwe and South Africa. Thesewere then collated at a depot and transport-ed in larger loads to the Gauteng area.12

Cover loadsWhen a cover load was used (twice in2003), this was bags of paprika and dieseloil. Both consignments were detected inroad freight.

8.7. Middle East

Number of seizures and quantities seizedOver the past two years only Israel andLebanon in the Middle East region providedinformation on cigarette seizures. In 2001Saudi Arabia also contributed with twoseizures accounting for nearly 74 millioncigarettes.

The number of seizures input by Israeldropped from 26 in 2002 to 7 in 2003, a de-crease of 73%. The quantity seized also de-creased dramatically from about 182 millionin 2002 to 25 million in 2003, a drop of86%. The 2003 figures from Israel are in-complete in that additional data relating tofifteen seizures totalling 45 million ciga-rettes was submitted after the global analysiswas carried out. Taking into account theseizures not yet entered onto CEN, the totalseizures would be:

It can be seen that, even the fully inclusivestatistics for 2003 show a dramatic decreasefrom the previous year.

In Lebanon the situation was similar with adecrease in reported seizures from twelveto six and the related quantity from about113 million to 27, a drop of 76%. TheLebanese figures are however affected by asingle seizure of more than 80 million ciga-rettes in 2002.

Place and type of locationof interceptionsDespite the reduced seizures and quantity,the significant type of location was the samein 2003 as in 2002: seaport in Israel andhigh sea in Lebanon. Of particular note isthat in Israel two seizures were made at TelAviv airport - one consignment from Russia


2002 2003BRAND No. of cases Quantity No. of cases QuantityChesterfield 1 990,000Marlboro 1 19,580,000Peter Stuyvesant 2 19,130,000 5 17,019,800Remington Gold 6 14,840,000Rothmans 1 4,700,000Sportsman 1 290,000Unknown 10 3,153,400 11 13,651,440Grand Total 14 42,153,400 24 51,201,240

Year No. of cases Quantity2002 26 182,092,5002003 22 70,499,140

Brands seized in South Africa

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of 865,140 cigarettes of different, unspeci-fied brands, and one of 3,960,000 Dunhillfrom the Netherlands.

Month of seizureThe last seizure reported in the CEN data-base by Israel is dated August 2003. Themost prolific month was July when threeseizures (43% of the Israeli total) compris-ing 64% of the total quantity were made.Lebanon reported all its seizures and the lastone is dated June 2003. Half of all seizureswere made in May when 65% of the totalquantity was seized. This regional picturecontrasts strongly with 2002 where, in bothcountries, cigarette seizures were madeevery month with the exception of July inIsrael and May and June in Lebanon.

Country of departure and countryof destinationOf the consignments destined for Israel,43% by number and 64% by quantityseized, originated in China. Other specifiedcountries of departure were Greece, theNetherlands, Russia and Turkey. Of the sixshipments detected in Lebanon, two origi-nated in China, which did not appear in2002 as departure country. They correspondto 32% of the total quantity seized. For theremaining four cases the departure countrywas unfortunately not given. In 2002Cyprus featured most prominently, both interms of number of cases and quantity.

BrandsOf the seven cases reported in the CEN byIsrael, two relate to seizures of Marlborobrand and one each to Dunhill and LM. Inthree cases, corresponding to 48% of the to-tal quantity, the brand was not given. Theadditional data made available by Israelshow that the most commonly seized ciga-rettes in 2003 were Marlboro.

This is also true for Lebanon, where 50% ofthe seizures and 41% of the total quantityseized were Marlboro. Other brands seizedwere Dorchester, Gauloises and LuckyStrike. Brands such as United, Viceroy,Gitanes and Captain were not detected in2003 they appear to have been replaced byan increase in Marlboro. It is not possible toaccurately measure the increase, sinceMarlboro was seized mixed with variousother brands such as Kent, Viceroy, Unitedand Raquel totalling 11.4 million. The pre-viously mentioned exceptional Lebanonseizure in 2002 was of a total of more than80 million cigarettes of different brands(Lucky Strike, Pall Mall, Viceroy, Kent,Brooks, Valentin, Cooper and Winchester).

Mode of transportFor the majority, the illicit consignmentswere imported into the two countries onboard vessels. In Israel these were mainlycontainer ships and in Lebanon they were fi-shing vessels.

It is of note that in Israel two cases, detailedabove, concerned cigarettes smuggled by air.

Method of concealmentUnfortunately details on the method of con-cealment were not specified. In Israel onecase was in air freight and one in sea freight;in Lebanon two cases referred to a seafreight concealment.

Cover loadsThe sea freight shipments originated fromChina and the cover load used was glasswarein two cases and sport shoes in the remain-ing one. For the air freight consignment thecover load was not specified.


� Rolled up goods used as cover loads arefavoured by smugglers. In this case IrishCustoms seized a total of 3.1 millionSuperkings, Lambert & Butler and Palacehidden inside 60 fake rolled up carpets.

(photo courtesy of Irish Customs)

Tobacco GB14/06 14/06/04 11:32 Page 29

2002 2003

Australia 40,486,800 31,931,053Bangladesh 379,400 1,000,000China 59,590,000 76,960,900Fiji 160,000Hong Kong, China 151,366,840 83,097,950India 3,810,000Indonesia 10,750,000Mongolia 150,000 200,000Malaysia 13,712,900 11,340,000Singapore 28,700,000 18,400,000Sri Lanka 4,473,800 9,869,800Thailand 6,240,000

Quantity seized by Membersin the Asia/Pacific region

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8.8. Asia & Pacific

Number of seizures and quantities seizedAsia/Pacific is the region accounting for thelargest cigarette production, principallythrough the contribution of China. It is alsothe main originating region for illicit ciga-rette and tobacco smuggling. Therefore thereported information on cigarette seizures inthe CEN database from the Asia/Pacific re-gion over the past two years remains highlysignificant.

Over the past two years twelve Asia/Pacificmembers reported a total of 141 cases corre-sponding to 552.6 million seized cigarettes.In 2003 67 cases were reported from the re-gion, seven cases less than in 2002, and ac-counting for 5.4% of global seizures.However the quantity of seizures input bythe Asia/Pacific region in 2003 is 247 mil-lion cigarettes (9.7% of the global total)which is 58 million less than in 2002. The2003 figures are affected by a single seizureof 64.7 million cigarettes of the 555 andHilton brands made in China at the port ofDandong in June.

Within the Asia/Pacific region Hong KongChina, Sri Lanka, China and Australia arethe main seizure-reporting Members with acombined total in 2003 of 60 cases and 202million cigarettes13. This equates to 90% ofthe total quantity of both cases and cigarettesseized in the year. Among them, it is worthnoting that China and Sri Lanka contributed77 million and 9.8 million seized cigarettesrespectively – increases of 29% and 121% onthe previous year’s seizures, while otherMembers reported smal ler amounts .Particularly remarkable is the drop recordedin Hong Kong where the number of seizuresdecreased 21% and the quantity seized re-duced by almost half. It is also worthwhile tohighlight the contribution of Indonesia andIndia, both of whom recorded no seizures in2002, but 2003 seizures returned to the lev-els reported in 2001.

Place and type of locationof interceptionsCompared with 2002, an increased quantityof illicit cigarettes was seized at seaports in2003 and this remains the most prevalent lo-cation for cigarette smuggling, accounting for52% of the total seizures – an 18% increase

on 2002. Even if the significant seizure de-tailed above were excluded, seaport loca-tions stand out by quantity seized. In 2003however there was a decrease in seizures atinland locations, where the quantity seizeddropped from 126 to 48 million cigarettes.

Only one seizure of cigarettes from a freetrade zone was reported in 2003. On 28October 2003, Singapore detected a vesselfrom Vietnam transiting to Germany with atotal of 18.4 million pieces of counterfeitRegal cigarettes.

Month of seizureIn 2003 (with one exception) the monthlydetected quantities before October were lessthan their corresponding month in 2002.The exception to this was June 2003 wherethe seizure quantity was double that of June2002. However since October 2003 thequantities seized per month were larger thantheir corresponding 2002 months.


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Country of departure and countryof destinationThe most reported departure countries forillicit consignments in 2003 were almost alldifferent from those of 2002: China (24 cas-es and 34% of the total quantity seized) wasstill the most commonly mentioned depar-ture country, with transits mainly to HongKong, China and Australia. The DemocraticPeople’s Republic of Korea, Singapore andHong Kong, China accounted for 26%, 8%and 5.4% respectively. Significant departurecountries in 2002 were the Republic ofKorea, the Philippines, India and Malaysia,none of which featured in 2003.

As in 2002, Hong Kong China, China,Australia and Malaysia were the main desti-nation countries, corresponding to 33%,31%, 13% and 4.6% respectively in terms ofnumber of cases. It must be pointed out thatas a destination country for illicit cigarettetraffic China showed a sharp increase from19% in 2002 to 31% in 2003. Set againstthis Hong Kong, China has seen a relativedecrease from 47% in 2002 to 33% in 2003.Australia and Malaysia remained at essen-tially the same level in both years.

BrandsAs in 2002, Marlboro and 555 remain themajor brands seized. The largest singlechange from the 2002 results is that Zhong

Hua and Winston were not seized in signifi-cant quantities in 2003. Benson & Hedges isstill one of the most detected brands. Becauseof the large interception in Singapore, Regalaccounted for 7.4% of the total quantityseized in 2003. It was of note that 555 andGudang Garam increased steeply from 24million and 19,000 respectively in 2002 to67 and 11 million pieces in 2003.

Mode of transportAs mentioned above, compared with 2002,more seizures took place at sea ports in2003. Largely this reflects the fact that thecurrent most commonly used mode oftransport was by vessel. The previouslycommon use of fishing vessels to smugglecigarettes was not reported in 2003. The useof vehicles accounted for the same percent-age as the use of vessel in 2003: 36% of thetotal cases.

Method of concealmentThe three main methods of concealmentwere in road freight, sea freight and inpremises. In 2003, concealments in roadfreight were mainly recorded. It must behowever underlined that in five seizures car-ried out at seaports, accounting 68 millionunits, the method of concealment was notspecified. The mentioned quantity compris-es the large amount of cigarettes seized inone single case, affecting the figures.

Cover loads2003 seizure data shows that nine cases,amounting to 30 million illicit cigarettes,had food such as potatoes, flour, chilli, gar-lic, etc as cover loads. Additionally in thesame year Hong Kong Customs interceptedthree consignments totalling 11 million cig-arettes in road freight from mainland China.In these cases the cover loads used were fur-niture: cane baskets, wooden sofas and mat-tresses frames.

In 2002 the main cover loads were shoes,cardboard, furniture and clocks. Combinedseizure data for 2002-2003 clearly showthat food and furniture are still the maincover loads for cigarette smuggling amongthe Asia/Pacific region.


� Rolls of wire sheets were used bysmugglers stopped at Hong Kong, ChinaCustoms at Lockmachau control point.850,000 cigarettes of the brand Viceroyand Marlboro were discovered inside aconsignment in a container from China.

(photo courtesy of Hong Kong Customs, China)

Tobacco GB14/06 14/06/04 11:32 Page 31

Country 2002 2003

France 2,781,845 2,201,163Austria 941,808 3,078,866Belgium 5,685,274 4,227,180Switzerland 0 131,000Germany 1,510,299 1,482,788Denmark 474,333 1,728,030Spain 6,447,337 6,265,557Finland 1,251,375 453,860Ireland 6,245,671 2,026,004Italy 3,716,078 3,462,991Malta 5,016,667 6,410,000Netherlands 2,786,986 2,702,615Norway 394,822 353,216Portugal 9,698,908 0Sweden 833,737 2,133,114Average 2,664,609 2,596,243

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8.9. Western Europe

Number of seizures and quantities seizedWith 461 seizures, Western Europe record-ed 37% of the seizures made worldwide.Looking at the quantity of cigarettes seizedhowever this region’s contribution equals46%. It can be seen that Western Europewas the only region where both the numberof seizures and the total quantity seized overthe last two years remained essentially sta-ble. This is of note because a dramatic de-crease was recorded for each year since2000. For the sake of precision, comparedto 2002 the figures in 2003 showed a de-crease which was however not significant:16 seizures and 74 million units less.

Although there is a general consistent trendat the regional level, the situation in individ-ual countries differs in comparison betweenthe two years.

By number of seizures reported the samethree countries are leading in both years:Germany, France and Italy. By quantity, thesituation is slightly different: in 2003 Italyand Germany again head the table but inthird place Spain, which in 2002 was thefifth country, replaces Belgium. It can alsobe seen that there was a remarkable similar-ity in the total quantity seized in 2003 bythe three countries at the head of the table.

The average quantity seized in each countryis shown in the table.


No. of seizures – 2002

179 Germany

79 Italy

46 France

42 Belgium

31 Austria

25 Sweden

21 Netherlands

34 Spain

10 Norway

9 Ireland

8 Finland

3 Denmark

3 Malta

3 Portugal

0 Switzerland

Quantity – 2002

293,570,200 Italy

270,343,502 Germany

238,781,490 Belgium

127,964,860 France

116,052,060 Spain

58,526,716 Netherlands

56,211,040 Ireland

29,196,063 Austria

29,096,723 Portugal

20,843,420 Sweden

15,050,000 Malta

10,011,000 Finland

3,948,220 Norway

1,423,000 Denmark

0 Switzerland

Quantity – 2003

218,168,440 Italy

217,969,789 Germany

131,042,580 Belgium

158,483,730 France

213,028,940 Spain

62,160,140 Netherlands

36,468,080 Ireland

80,050,520 Austria

0 Portugal

53,327,840 Sweden

12,820,000 Malta

4,538,600 Finland

1,766,080 Norway

6,912,120 Denmark

131,000 Switzerland

No. of seizures – 2003

147 Germany

63 Italy

72 France

31 Belgium

26 Austria

25 Sweden

23 Netherlands

18 Spain

5 Norway

18 Ireland

10 Finland

4 Denmark

2 Malta

0 Portugal

1 Switzerland

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The difference in the figures among the firstthree countries is due to the fact that Germanyreported more than one hundred cases under 2million units, while in the other two countries,particularly Spain, this was the exception.

Austria recorded five seizures less in 2003than in 2002, but the total quantity seizednearly tripled. This was due to five largeseizures each over eight million cigarettes ac-counting for a total of 57.8 million; it is ofnote that four of these shipments transitedthrough Germany.

Sweden made the same number of seizures in2002 and 2003 but the total quantity seizedmore than doubled. One single notableseizure of nearly 28 million cigarettes ac-counts for the difference. In June 2003Swedish Customs seized cigarettes of counter-feit Prince, Marlboro and Superkings brandsat the port of Stugsund, a small port nearSöderhamn in the north of Sweden. Thisseizure is the largest ever made in Sweden andone of the largest made in the Western

European region over the last few years. Thecigarettes were discovered during an inspec-tion of 706 m3 of sawn redwood goods onboard a Russian registered vessel arriving fromSt. Petersburg. The consignee of the sawnwood was a Swedish joint stock company inSöderhamn, which had instructions from theRussian company to deliver the goods on todifferent buyers on the continent. One part ofthe goods was forwarded to Denmark. Danishpolice found more than two million cigarettesof the same three brands in the forwardedconsignment. In both cases the cigarettes hadbeen concealed inside bundles of wood.

In Ireland the number of cases doubled in2003 but the total quantity seized droppedfrom 56.2 to 36.4 million units.

Place and type of location ofinterceptionsIn Western Europe the greatest numbers ofseizures (26) were made at the port ofAncona (IT), where 74 million cigaretteswere seized. Larger quantities in a lower

number of cases were however detected atthe ports of Antwerp (BE) and Valencia (ES)where marine shipments are moved andaround 100 million units in each locationwere seized in 22 and 14 detections respec-tively. At the ports of Bremerhaven (DE) andBarcelona (ES) less seizures were made in2003 (9 in each location) but nearly thesame quantity as in Ancona were seized inboth locations.

Overall, seaport locations accounted for themajority of cigarettes seized, with exactlythe same percentage in 2002 and 2003,66.5% of the total quantity seized. The per-centage seized by quantity at inland loca-tions was also identical for both years at25.5%, although the 181 seizures madethere were more by number than the 173 atseaports. This equates to a decrease of 15%by number at seaports and an increase of8% at inland locations. These seizures werecarried out mainly in Germany (46% of thetotal cases reported in the region and 27%of the quantity seized).

More seizures were recorded in 2003 at air-ports and rail locations. No seizures weremade at mail centres; such seizures were re-ported in 2002 by France.


� Another example of fake rolled up goodsused to conceal cigarettes was detectedin Italy where 2 million Superkings andSovereign brand cigarettes were foundinside fake rolls of yarn.


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Month of seizureThe charts show the comparative pattern ofseizures by number and quantity for eachmonth in 2002 and 2003.

Although in Ireland the number of seizuresdoubled, no seizures were reported in thefirst two months of the year. Sweden alsomade no seizures in these two months, al-though the number of reported cases re-mained stable. No seizures were reportedfrom Belgium in August and Novemberwhilst the Netherlands had nil figures inSeptember and December.

Italy and Spain did not report any seizure inJune.

Compared with 2002, the quantity seized bymonth in 2003 tended to be more linear, al-though in spring and winter higher quantities(over 100 million cigarettes) were recorded.In 2002 the lowest monthly figure recordedwas 55.6 million in June. In 2003 it was inMay, but the quantity seized monthly neverfell below 70 million cigarettes. The mostsuccessful month was December with morethan 152 million cigarettes seized.

Country of departure and countryof destinationIt has been shown in previous sections thatWestern European was the main targeted re-gion for illicit consignments in 2003.Significant information concerning the rout-ing of contraband is contained in section 6.3but additional detail is included here.

China was the main source country in manyregions, and in particular for the countriesof the Western European region. Based onthe CEN data, in 2003 nine countries in thisgeographical area were targeted: Spain,Be lg ium, Germany, Aus t r i a , Un i t edKingdom, Italy, France, the Netherlands andPortugal. In the year, China was reported asthe departure country for consignmentsdestined for Western Europe in fifty cases,that is 51% of all cases and 62% of the ciga-


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Raquel and Chesterfield brands were recor-ded in 2003, which in the previous year didnot appear at all. The first were these brandsdetected in Belgium, the Netherlands, Italyand Spain. Most of the Chesterfield ciga-rettes were detected in Spain.

The detections of the GB brand are also ofinterest. In 2002 Portugal and Germany ma-de one seizure each, but in 2003 the sei-zures became larger and the GB cigaretteswere not mixed with other brands as in

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rettes seized where China was the country oforigin. In 2002 the situation was quite dif-ferent, with the respective percentages being27% and 30%.

There was a similar disparity between thetwo years in relation to cigarettes with Chinaas the country of origin actually seized inWestern Europe. In 2003 Western Europeancountries seized 68% of all cigarettes in thatcategory, compared with 51% in 2002. Inboth years the UK market was the most com-monly recorded destination, in 57% of casesin 2003 and 27% in the previous year.

Greece was reported as the country of depar-ture for consignments detected in Italy andmainly destined for the UK. It is, however,unlikely to be the true origin of the contra-band. Looking at the brands involved and atthe cases in which Greece was recorded asdestination country, it would seem to be moretwo of a transit country for the illicit ciga-rettes.

Spanish Customs seized 7.6 million GBbrand cigarettes in October 2003 at the portof Las Palmas de Gran Canaria. The ciga-rettes were concealed amongst a consign-ment of bedsheets in a container arrivingfrom the port of Manama (Bahrain). Thiswas the first time that the Kingdom ofBahrain has featured in a route for smug-gling cigarettes.

BrandsThe table shows all brands detected morethan three times in 2003 and the respectivequantity compared with the previous year.

It can be seen that brands destined for theUK market are still dominant. However in-creasing figures can be noted for the PallMall brand; this is very popular in Germanywhere all of the seizures were made. Thedramatic drop of seizures of West cigarettesis also remarkable.

Many seizures of significant amounts of the


Number of cases QuantityBRAND 2002 2003 2002 2003

Superkings 76 77 179,083,330 287,323,820Sovereign 79 64 356,859,540 218,322,860Pall Mall 46 56 17,005,840 28,588,105Regal 28 31 107,006,783 106,433,020Marlboro 31 30 134,041,980 111,527,280West 57 28 71,417,977 13,701,580Prince 22 26 15,029,440 35,429,820LM 18 25 8,021,600 10,170,627Benson&Hedges 28 22 138,823,280 129,623,460Lambert&Butler 2 10 2,304,200 7,108,280Memphis 8 9 2,301,360 7,655,640Raquel 7 30,680,020Winston 12 5 79,206,400 28,474,380Chesterfield 4 12,357,380Dorchester 6 4 42,934,320 11,658,800GB 2 3 1,059,700 17,788,600Rothmans 3 3 4,636,600 4,089,600Not specified/unknown 28 21 42,700,950 22,688,450Grand Total 446 425 1,202,433,300 1,083,621,722

Number of cases QuantityBRAND 2002 2003 2002 2003Riadi 1 24,810,000Gauloises 2 10,030,018Craven-A 1 9,120,000Virginia Star 1 9,000,000Rave 1 8,743,600Lucky Strike 2 2 9,919,800 8,531,140Dunhill 1 7,290,040Crown 1 6,400,000Boston 1 1 9,000,000 4,000,000Mayfair 3 8,384,740Melnik 1 13,954,600Grand Total 7 11 41,259,140 87,924,798

2002. The three seizures in 2003 were madein Spain, Germany and Italy.

The brands detected in a smaller number ofcases but accounting for a relatively largequantity seized (more than 5 million units)are shown in the table.

The Riadi brand was intercepted at the portof Genoa (IT) in a container en route toLibya. A number of brands featured in 2002but not 2003, and vice versa.

Most seized brands in Western Europe

Other significant brands seized in Western Europe

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Mode of transportAs in 2002, in 2003 the most frequentlyrecorded mode of conveyance was a vehicle.A drop of 7.6% in the number of the casesin which a vehicle was used produced acomparatively high decrease (26%) in thequantity seized. Conversely a 10% decreasein detections on vessel did not result in a re-duction of the seized quantity, which actual-ly rose by nearly 8% from 608 to 655million cigarettes.

The type of vehicle most frequently usedwas again a lorry. In 2003 there was a dra-matic decline in the number of cases inwhich a car was used (from 57 to 34) whilstthe use of delivery vans rose from 22 to 38.This situation reflects the trend in Germanyand Austria, which reported most of the cas-es. The total quantity transported by thesevehicles was not significant in comparisonwith that carried by lorry.

It is of note that in 2003 the cases in whichthe transport was by train increased fromtwo to five and the quantity seized rose sev-en-fold from 3.8 million in 2002. Two caseswere recorded in Germany where the de-tected amount of the contraband was onlyaround 100,000 cigarettes per seizure. Theother three cases were however more signif-icant. In particular those reported fromAustr ia , where two consignments ofBenson&Hedges cigarettes were previouslyshipped from China to Germany and thenloaded on board trains. Finland entered thelast seizure relating to 1.3 million LM ciga-rettes from Russia. These cases demonstratethat there is considerable potential scope forthe interception of smuggling by rail as stat-ed in the report of last year.

When a vessel was the mode of transport, itwas invariably a container ship. In two cases

the use of air transport was recorded.Although the total seized was comparativelysmall, the two cases show that also this modeof conveyance should not be undervalued.

Method of concealmentThe charts show that the majority of seizedgoods were detected ‘in freight’, that is thecigarettes were concealed within the legiti-mate goods which are used as a cover load.This was also the case in previous years. Itshould be noted that for consignments en-tered to this category on CEN, the cover loaditself may not have been correctly declared.

For 2002 and 2003 the charts show a com-parative difference in respect of the propor-tion of the total seized by quantity whichrelates to ‘in freight’ concealment. The 2003figures are substantially consistent with thepicture emerging from the analysis of modeof transport.

Of particular note is that in May and June2003 Irish Customs detected Lambert &


� Irish Customs detected in 2003 smuggledcigarettes of the brand Lambert & Butlerin two airfreight consignments comingfrom Spain. These seizures show thatthere is a considerable potential scope forthe detection of contraband by air.


Mode of transport by quantity - 2003

2 % Rail

0 % Air

0 % Pedestrian

5 % Unknown

38 % Vehicle

55 % Vessel

Mode of transport by No. of cases - 2003

1 % Rail

2 % Air

0 % Pedestrian

9 % Unknown

66 % Vehicle

22 % Vessel

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Butler brand cigarettes in two airfreight con-signments from Spain. The cigarettes werediscovered in consignments said to containfurniture at the depot of courier companiesat Dublin airport. In themselves the singleseizures do not involve large quantities ofcigarettes, but checks established that 65previous shipments had taken place be-tween September 2002 and May 2003. It isestimated that 6.9 million illicit cigaretteswere in the undetected shipments. The Irishseizures and the results of their investigationshow that there is considerable potentialscope for the detection of cigarette smug-gling in airfreight.There is great potential for valuable intelli-gence from the information on CEN, but this

requires the necessary detail to be input. Asan example, it would be most useful to knowwhether the cigarettes are concealed inside(i.e. within the structure of) legitimate goodsor whether they are merely placed under thecover load or behind one or two rows of it.The various photographs in this Report andits predecessors show examples of conceal-ments detected within the structure of thecargo and demonstrate that, generally speak-ing, it is more difficult to detect these.

In 2003, 31 cases were reported indicatingthat the cigarettes were concealed inside thecover load. In the previous year there were47 cases. They reflect respectively a quote of17% and 13% of the total reported cases inwhich a cover load was used. Although thenumber of such detections dropped, thepercentage of the related quantity remainedstable (10.8%) over the two years, which

means that larger amounts of cigarettes areconcealed inside each cover load. It shouldbe said that this method of concealment wasdetected predominantly in road freight.

Cover loadsA cover load was used to conceal smuggledcigarettes in 253 interceptions (25 less thanin 2002) corresponding to a total quantity ofmore than 1 billion units (nearly 10% lessthan in 2002).

The tables show the list of cover load bynumber of detections and by quantity in2003, compared with the same figures ofthe previous year. In the first table only thetype of cover load used more than threetimes is considered; in the second, onlythose featuring in seizures which total in ag-gregate more than 5 million cigarettes areincluded.


In freight 271In air freight 0In rail freight 2In road freight 173In sea freight 96

2002 - No. of seizures

In freight 1,082,708,733In air freight 0In rail freight 3,848,280In road freight 513,391,070In sea freight 565,469,383

2002 - Quantity seized

In freight 244In air freight 1In rail freight 3In road freight 155In sea freight 85In premises 45In transport 152


In freight 1,012,537,807In air freight 175,000In rail freight 26,055,200In road freight 374,118,707In sea freight 612,188,900In premises 57,921,659In transport 108,534,274


� Another very important detection was madein Ireland where Customs officers examinedfive crates delivered to a freight warehousein Dublin for export to Portugal. Nocigarettes were detected but this kind ofcover load is worth mentioning, since it isspecially constructed for fraudulent use.Fake blocks of glass sheets like that shownin the pictures, containing cigarettes inside,have been detected in different countries.


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By number of interceptions, the picture issimilar to 2002, in that food was again themost used type of cover load, followed byfurniture. Frozen food, the use of which di-minished dramatically, is not included in themain ‘food’ category. By quantity seized in2003 the second most used type of coverload was suitcases.

Although furniture still features prominently,its use as a cover load was recorded less in2003, both by number of cases and relatedquantity. It should nevertheless continue tobe considered as a high-risk commodity; it ispossible that smugglers have adapted theirmethods to conceal cigarettes within thestructure of the furniture.

Among the category ‘electrical appliances’,water boilers, water heaters, coffee ma-chines and vacuum cleaners are principallyrecorded. The last of these was used as thecover load for two large consignments de-tected in November in Italy in a very shortperiod of time.14

Some original and unusual cover loads weredetected in 2003, for example lifts, stoves,logs, roundabouts and arms of excavators. Inall cases the cigarettes were concealed insidethe cover load.15

The use of paper rolls decreased, althoughother ‘rolled’ goods, such as yarn and car-pets, were used more frequently. It wouldappear that this type of cover load shouldcontinue to be considered high risk.

A very important detection was made inIreland, where Customs officers carried outan examination of five crates delivered to afreight depot in Dublin, for export toPortugal. The examination revealed the pres-ence of 130,000 in one crate, while the re-maining four crates were found to be empty.The crates were specially constructed forfraudulent use in the following manner: size:approx. 150cm x 120cm x 200cm. Outerwalls were made of 3cm thick wood, then3cm laminated glass and the inner lining wasa 0.3mm wall of lead. In July 2003 inAncona (IT) a consignment declared asblocks of glass sheets was checked and 3.2million cigarettes of the Sovereign andDorchester brands were found inside theconsignment, which was purposely modifiedto carry the contraband inside. The coverload, which was in fact crates made of glassand wood, appears to be very similar to theone detected in Ireland. At least one moreseizure of cigarettes inside such a crate tookplace also in 2004 in Belgium. It can be con-cluded that consignments declared as palletsof glass are worthy of attention.


E2002 2003

Food 51 35Furniture 28 18Plastics 7 13Textiles 10 12Suitcases 11Electrical appliances 13 11Wood/Timber 11 10Cardboards 8Other 7Machinery 7Shoes 9 6Detergents 6Ceramics 1 5Household goods 9 4Glassware 5 4Building materials 4 4Aluminium 3 3Yarn 3Paper 3not specified/unknown 18 27Total 169 197

2002 2003

Food 172,269,990 95,214,355Suitcases 66,370,000Plastics 27,406,660 63,034,400Textiles 38,540,000 61,785,440Wood/Timber 16,365,200 61,609,325Electrical appliances 25,830,000 61,605,900Shoes 47,923,600 47,860,740Furniture 93,194,560 44,494,807Ceramics 14,000,000 28,438,180Other goods 24,116,580Detergents 24,070,400Household goods 88,887,000 23,155,000Machinery 20,582,400Candles 7,950,000 20,465,200Aluminium 18,354,880 18,036,000Umbrellas 16,500,000Personal effects 16,380,000Glassware 17,599,580 16,338,760Watches 16,300,000Cardboards 15,906,340Lamps 79,149,400 15,896,600Wall paper 14,000,000Building materials 16,017,820 10,689,800Wax 10,504,000Bathroom accessories 10,175,000 10,172,200Clothing 45,659,400 9,920,000Bags 47,986,200 9,630,000Blankets 9,000,000 9,000,000Bed sheets 7,000,000 7,608,600Synthetic fibre textiles 6,999,600Yarn 6,334,800Toys 23,750,000 6,008,000Wooden products 4,378,280 5,600,000Screwdrivers 5,600,000Metal products 6,861,560 5,592,180Towels 5,380,000not specified/unknown 38,547,820 88,028,960Grand Total 856,846,950 870,879,187

Cover loads No. of seizures

Cover loadsQuantity seized

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8.10. Eastern and Central Europe

Number of seizures and quantities seizedIn Eastern and Central Europe the numberof seizures rose from 264 to 288 but the to-tal quantity seized dropped from 594 mil-lion to 284 million cigarettes. The largeseizures reported in 2002 from Lithuania,Greece and Turkey certainly affected the fig-ures. It can be surmised that the action ofthe Customs administrations which disman-tled several smuggling organizations, partic-ular ly in the Bal t ic States , may havecontributed to this decrease. The increasedseizures and quantities reported by othercountries (Bulgaria and Slovakia) and thecontribution of countries that did not ap-pear in 2002 (FYROM, Slovenia and Serbiaand Montenegro), were not sufficient tocompensate for the lower figures recordedelsewhere in the region. It is also possiblethat seizures were not reported to the CENdatabase.

Bulgaria reported one exceptional seizure inJ u l y 2 0 0 3 w h e n n e a r l y 1 9 m i l l i o nSuperking and Winston cigarettes wereseized at the port of Bourgas.

The average of the quantity seized in the re-gion is reported in the table.

Place and type of locationof interceptionsIn Eastern and Central Europe the highestnumber of seizures (38) was made inPrzemysl (PL), on the border with Ukraine,where 25.5 million cigarettes were seized.The second highest number was detected atDorohusk (PL), another location near theUkrainian border, but the quantity seizedthere was not so significant (8 million) ifcompared with the third location that wasagain in Poland. In Swiecko 32 seizureswere made and the highest total amount inthe region was seized (26.5 million).

It is interesting to note that Przemysl andDorohusk reported only seven and threeseizures respectively in 2002 and that thenumber of detections in Swiecko doubled in2003, with a significant increase in thenumber of cigarettes seized.

Remarkable drops, both in terms of numberof seizures and quantity, were recorded inparticular in Kukuryki (PL), Budapest (HU)

and Budzisko (PL). The same trend was reg-istered at the port of Piraeus (GR) and inSalociai (LT), although several exceptionalseizures were reported at these locations in2002. There was a similar situation at Prague(CZ), although one more seizure was report-ed in 2003 than in 2002. It is noteworthythat in this case the exceptional seizures af-fecting the figures in 2002 were related totwo illicit consignments originating in Chinaand transiting through Germany.

The number of inland seizures increasedfrom 66 to 98 but the total quantity seizedat these locations decreased from 109 to 75million units. The bulk of interceptionswere made at border locations although they


Country 2002 2003

Bulgaria 2,635,920 5,053,800Czech Rep. 2,161,653 827,676Estonia 3,881,384 2,013,333Greece 11,179,000 4,844,560Hungary 885,702 509,194Lithuania 7,045,193 2,802,516Latvia 2,018,640 0

Poland 1,668,633 668,761Slovenia 0 2,875,000Slovakia 1,055,933 876,558Turkey 5,974,361 2,486,022Ukraine 601,333 642,502Serbia & Montenegro 0 399,600Average 2,252,769 987,338

� An usual detection was made in 2002 byFrench Customs near the German andLuxembourg border in a container lorry.2.5 million Regal cigarettes wereconcealed inside plastic buckets fromLithuania. The first dozen of buckets ineach pile were normal but the bucketsunderneath had the bottom part cut out.

(photo courtesy of French Customs)

FYROM 0 2,293,000

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reported a decrease of 17% in the number ofseizures and a dramatic drop of 56% in thequantity seized. Even more dramatically,seaports in the region reported a 44% de-crease in the number of interceptions and a63% fall in the quantity seized. A positivetrend was recorded at rail locations, wherethe number of seizures rose from 10 to 45cases, although the quantities seized re-mained essentially at the 2002 level.

Month of seizureThe graphs show the general trend by num-ber of seizures and by quantity in the re-gion, compared with 2002.

Of the countries which reported the majori-ty of seizures only the Czech Republic andHungary did not make any seizure in allmonths, with no results in August andNovember for the former and in March,October and December for the latter.

In Poland the seizures were made during allmonths of 2003 but the total interceptionsand cigarettes seized were concentrated

more in the second half of the year.It is interesting to note that in Turkey, fromwhere all seizures made were reported, in-terceptions of illicit cigarettes took place on-ly in the first half of the year.

Country of departure and countryof destinationSome notable routing aspects for the Easternand Central European region were includedin section 6.3 above. Additional points ofinterest are included here.

Only five countries in the Eastern andCentral European region were the intendedrecipients for cigarettes originating fromChina in 2003: Bulgaria, Turkey, Romania,Hungary and Poland. Collectively they werethe destination country for 7% of the totalnumber of cases in which China appears ascountry of origin, and 8.4% of the quantity.This picture differs from 2002 when destina-tion countries for illicit cigarettes from Chinaalso included the Czech Republic, Serbia andMontenegro, Ukraine, Slovakia and Greece;Turkey and Romania reported no seizures in

that year. In 20% of the total seizures in theregion in 2002, or 23.7% by quantity, one ofthese countries was the intended recipient.The seizures made in the Eastern and CentralEuropean region in which China was thecountry of departure, as a proportion of thosemade globally, constituted 6.3% by numberand 7.1% by quantity in 2002, but fell to3.0% and 3.3% respectively in 2003. In 2003two seizures were made in Turkey and one inGreece and mainly brands for the UK marketwere detected.

No seizure data for the review period wasentered by Romania, although it was one ofthe five most recorded countries of depar-ture in the region. In 2002 this was the casein two records but in 2003 in elevenrecords, with a corresponding increase inseized quantities from 8.6 to 20 million cig-arettes. It should be noted that in 2002 onesingle shipment originating from Romania,detected at the port of Piraeus (GR), ac-counted for 8.5 million cigarettes. In 2003seven of the eleven consignments were de-tected in Hungary en route to variousWestern European countries; from thebrands seized it would seem that the main


� Rail traffic should be considered high-risk for cigarette smuggling like thisseizure carried out in Italy in 2002. 3.5million Superkings cigarettes wereconcealed inside fake polyethylene filmsrolled on cement pipes. Theconsignment arrived from Ukraine andfurthermore the pipes were made of amixture of asbestos. A similar seizurewas also carried out in Spain.


MONTH 2002 2003

January 18 22February 35 14March 22 12April 27 24May 18 17June 21 33July 26 31August 22 23September 16 38October 20 31November 30 26December 9 17

MONTH 2002 2003

January 77,124,400 16,010,740February 40,357,500 14,467,380March 72,345,320 19,487,060April 75,180,990 15,951,480May 40,651,360 15,785,220June 28,126,140 48,940,690July 81,478,780 30,071,614August 29,131,780 30,452,055September 50,771,020 29,670,650October 36,967,746 26,274,400November 43,833,800 31,008,980December 18,762,140 6,233,140

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intended recipient was Austria. The remain-ing four illicit consignments were, in fact,seized in Austria although, paradoxically,the brands indicated the cigarettes were des-tined for the UK.

BrandsThe table shows brands intercepted morethan five times in 2003 and the respectivequantity compared with the previous year.Other brands which were detected only fea-tured on one or two occasions.

Of note was the number of seizures of con-signments detected on trains, which rose in2003 to 49 from 14 in the previous year, al-beit there was a corresponding decrease in thequantity seized from 31 million to 28 millioncigarettes. The seizures took place almost ex-clusively in Poland.

Method of concealmentDetections of cigarettes concealed in thestructure of the means of transport were


No. of cases Quantity (pcs.)BRAND 2002 2003 2002 2003 Pall Mall 22 55 14,036,810 32,354,180Prima 25 30 8,944,080 19,380,660Saint George 2 24 363,600 21,943,200LM 7 19 12,951,616 11,487,674Priluki 10 18 2,824,200 4,759,480Superkings 53 18 113,407,100 64,069,300Marlboro 16 16 66,635,600 13,330,800Memphis 13 13 3,816,400 6,198,360West 18 13 21,856,000 14,915,360Sovereign 17 11 130,956,000 18,550,100Boss 6 0 832,200Prince 3 5 18,843,960 4,474,360Not specified/unknown 10 34 21,332,640 27,615,875Grand Total 196 262 415,968,006 239,911,549

Pedestrian 2Rail 49Unknown 45Vehicle 181Vessel 11


Pedestrian 375,400Rail 28,534,500Unknown 31,872,939Vehicle 152,663,170Vessel 70,907,400


In baggage 4In freight 87In premises 35In transport 159Unknown 3


In baggage 860,780In freight 174,414,720In premises 22,417,110In transport 86,173,439Unknown 487,360


� Some concealments are very hard touncover. In this case Irish Customs found4.2 million Sovereign brand cigarettesinside wood burning stoves from Polandvia Antwerp, Belgium. The use of stovesas cover load was also detected inBulgaria where 13 million Superkingsand 6 million Winston cigarettes arrivingfrom UAE were seized.


It is of particular note that within the overalldecrease in the total quantity of cigarettesseized in the region in 2003 there was ahuge decrease in seizures and related quan-tities of brands destined for the UK market.The bulk of intercepted cigarettes involvedbrands destined for the internal regionalmarket or for Germany. More than 10 mil-lion Winston cigarettes were detected in twoseparate consignments, with 5.9 million be-ing seized in Bulgaria and 4.3 million inGreece. A smaller amount of 210,000Winston cigarettes was also seized in Turkey,where the brand was mixed with a largerquantity of Superkings and Marlboro.

Mode of transportThe most frequently used mode of transportwas a vehicle, and within that category mostdetections were made from lorries. As was thecase in 2002, the majority of the quantityseized was also transported by lorry.

More frequently brands seized in Eastern and Central Europe

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higher in 2003 than in 2002. On the otherhand concealments within the legitimateload were de t e c t ed l e s s f r equen t l y.Nevertheless the bulk of the goods seizedwere concealed ‘in freight’, i.e. inside oramongst a cover load: 51% in road freightand 40% in sea freight consignments.

Cover loadsIn Eastern and Central Europe a cover loadwas used to conceal the contraband in 87cases (22 less than in 2002) correspondingto a total quantity of more than 174 millioncigarettes. This is considerably less than in2002 when seizures of cigarettes concealedby a cover load were around 375 million.

The tables show cover loads by number ofdetections and by quantity in 2003, com-pared with the same figures of the previousyear. In the first table only the type of coverload used more than twice is consideredwhile in the second the seizures totalling

more than one million cigarettes are takeninto account.

In the overview of the situation in theWestern European region reference wasmade to the significant decrease in detec-tions involving furniture as a cover load.This was not mirrored in Eastern andCentral Europe, where the number of detec-tions was almost the same as in the neigh-bouring region, confirming this type ofcover load as high risk good for cigarettesmuggling. The same is true for wood/tim-ber, with consignments of timber in whichhollows have been made to conceal ciga-rettes continuing to be detected in Europe.

Of specific interest was the category ‘electri-cal appliances’ which was used to smugglehigher quantities of illicit cigarettes into theEastern and Central European region. Inthis category ovens were the preferredchoice of smugglers, with this being the cov-

er load for the previously mentioned 19 mil-lion cigarettes detected in Bulgaria; the ciga-rettes were concealed within the ovens. It isworthwhile to underline that this seizure,involving brands destined for the UK mar-ket, shows similarities with others reportedin Western Europe. In June 2003 more than4 million Sovereign cigarettes were foundinside stoves, as was the case in a seizuremade in Sweden in December 2002, where1.1 million cigarettes of the same brandwere detected. In both cases the consign-ments originated in Poland.

8.11. Commonwealth ofIndependent States

In the CIS region only Belarus input data onthe CEN database in both 2002 and 2003.Data from the Russian Federation were in-cluded in 2002. For 2003 data were notavailable in time for inclusion in this report.Nevertheless RILO CIS has provided a help-ful report ”Review on Activities of the RILOMoscow Participant Countries CustomsBodies in Preventing Tobacco ProductsSmuggling in 2003”. As this analysis isbased on information relating to significantseizures entered into the CEN data base, on-ly an extract of the RILO review will be re-ported in the current section in order toprovide Customs administrations, to whomthe present Report is mainly addressed, amore inclusive overview and subsequentlyadded value.

Belarus entered information relating to fiveseizures made in 2003 with more than 17million cigarettes being seized. This repre-sented a significant decrease in the numberof cases from the seventeen recorded in2002. The total quantity seized in 2003 alsoshowed a decrease at 17 million, but not tothe same dramatic extent. It is of note that ineach year a single seizure of more than 10million cigarettes transported by rail hasbeen made. In 2002 West brand cigarettesdestined for Russia were seized, whilst in


2002 2003

Electrical appliances 2,305,000 28,818,720Food 2,710,000 16,671,400Wood/Timber 36,665,660 13,969,120Building materials 12,637,936 12,424,840Furniture 31,418,000 12,198,600Plastics 1,702,600 11,639,600Glassware 5,994,280 9,292,400Household goods 8,626,200 9,070,000Chemical products 2,965,600 7,700,000Bags 2,074,000 7,236,200Textiles 26,750,000 4,670,600Clothing 0 4,291,200Paper 2,872,000 3,755,200Ceramics 16,347,800 3,533,200Machinery 3,585,500 3,077,780Lamps 728,000 2,249,200Cellulose 0 1,640,800Toilet paper 0 1,220,000Shoes 16,982,400 1,038,800Other 0 2,346,160Not specified/unknown 2,073,000 11,376,400Total 176,437,976 168,220,220

Cover loadQuantity seized

2002 2003

Furniture 18 15Food 3 10Electrical appliances 2 8Wood/Timber 10 7Building materials 5 5Textiles 2 5Glassware 4 2Household goods 2 2Machinery 2 2Metal products 3 2Paper 2 2Plastics 1 2Clothing 0 2Not specified/unknown 2 4Other 0 4Total 56 72

Cover loadNo. of seizures

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2003 Sobranie cigarettes destined forKazakhstan were detected.

The information provided by the RILO CISreport provides useful information on theBelarus seizures. The Republic of Belarus islocated at the crossing point of main trans-European highways, and is thus of specialinterest to international criminal groups.There is much intelligence that the territoryof the Republic is used actively as a smug-gling transit channel. The illicit traffic has adirect impact not only on the interests of theRepublic of Belarus, but a number ofEuropean countries as well.16 This is evi-denced by the routing of detected illicit to-bacco products. Around 70% of all tobaccoproducts seized in Belarus in 2003 were inthe process of being exported illegally onthe north-western and western borders tothe Baltic States and Poland with the inten-t ion of onward shipment to WesternEurope. In most cases criminals were tryingto illegally export varying quantities con-cealed in the structure of vehicles, some-t imes special ly adapted. Other casesinvolved shipment by international mailparcel and the use of special structural fea-tures of railway vans and locomotives.Analysis of the seizures shows that majorroutes run through the territory of Belarus,firstly Ukraine-Belarus-Poland and BalticStates and secondly Russian Fed.-Belarus-Poland and Baltic States.

In 2003 Customs in the Russian Federationseized around 22 million cigarettes, valuedat 367,000 US Dollars. The majority of in-terventions were carried out in the North-

Western region. To address this, a specialoperation ‘Excise’ was conducted in 2003,leading to further seizures. One of thelargest was made following the examinationof a shipment destined for a Spanish con-signee, with 14.6 million Marlboro, Regal,Superkings and Sovereign cigarettes beingseized. In the southern direction tobaccoproducts are exported mainly in the area ofOsetia. In 2003 practically all tobacco prod-ucts were exported from Russia by physicalpersons across Northern Osetia to Georgia,Armenia, Moldavia, as well as to countriessuch as Israel, Jordan, United Arab Emiratesand Mongolia.

The most recent foreign trade in tobaccoproducts suggests that the production ca-pacity of the tobacco industry in the RussianFed. developed to such an extent that thehome market became saturated, necessitat-ing an increase in exports. In general, 2003saw a drop in recorded crimes related to thesmuggling of tobacco products in theRussian Fed. Whereas in previous yearsthere were large detections, mainly in thesouthern region by so called "false transit"(where the goods went through the territoryof the Russian Fed. declared for Azerbaijanor Georgia, but in fact were illicitly divertedwithin the territory of the Russian Fed.), in2003 cigarettes were smuggled mainly byindividuals who carried relatively smallquantities from the territory of the RussianFederation.

During 2003 joint measures were takenagainst illicit tobacco products trafficking, in-cluding counterfeit cigarettes. These yielded

positive results, including the identificationof cigarette smuggling routes from theRussian Fed. to the countries of Northernand Western Europe. In particular therewere detections of cigarettes in concealmentsmade in raw timber routed from the RussianFed., through Finland to Western Europe.Cases of tobacco products smuggling werealso detected at the Armenia-Georgia border,where in May 2003 nearly 3 million ciga-rettes of a Russian brand were seized.


� During a search of a private warehousein Monaghan, Irish Customs seized 3.2million cigarettes of different brands thatwere found concealed inside thecomputer.


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On the CEN database, counterfeitcigarettes cases can be recordedin two categories:� smuggling of cigarettes

(tobacco commodity);� trade of counterfeit cigarettes

(IPR commodity).

The first of these relates to the typi-cal instance of non-declaration oftobacco products, which could al-so be counterfeit. There is a specif-ic entry field on the CEN databaseto record this kind of information.The second ca tegor y re la tes tocases in which the cigarettes aredec lared as a tobacco product ,that, upon inspection, are shown tobe counterfeit.

9.1. Smuggling of counterfeitcigarettes

For 2003 the CEN database contains 40records relating to smuggled cigarettes whichwere subsequently found to be counterfeit.These records represent 3.2% of all reportedseizures over 100,000 units. The total quanti-ty of these cigarettes was nearly 250 million,which is equal to 9.7% of the total quantityseized globally in 2003. As observed in previ-ous ‘Customs and Tobacco’ reports, therecorded figures do not appear to be in linewith the real situation. From a statisticalviewpoint it is nevertheless worthwhile tocompare the percentages emerging in 2003with the data related to the previous year.

In 2002 3.5% of reported cases related tosmuggling of counterfeit products, whichamounted to 197 million units correspon-ding to 7.2% of the total contraband seized.The following table shows the number of cas-es and quantities positively shown to becounterfeit, broken down by region and year.

Of the total smuggled cigarettes that were al-so counterfeit, the principal brands detectedwere Marlboro and Benson&Hedges. In2003 the same brands again featured most

Smuggling and trade in counterfeit cigarettes - Illicit production

9. Smuggling and trade in counterfeit cigarettes - Illicit production

Region 2002 2003 Grand Total

Asia and Pacific 1 3 4736,000 25,984,000 26,720,000

Eastern and Central Europe 11 6 1768,711,180 23,615,400 92,326,580

Middle East 2 1 39,000,000 6,999,800 15,999,800

North Africa 2 21,769,600 1,769,600

North America 1 7 85,440,000 51,174,020 56,614,020

Eastern and Southern Africa 2 3 529,180,000 9,059,800 38,239,800

Western Europe 13 19 3263,654,340 129,231,366 192,885,706

Central and South America 2 1 318,847,600 3,490,000 22,337,600

Total No. of cases 34 40 74Total quantity seized (pcs) 197,338,720 249,554,386 446,893,106

Superkings 69,216,800Du Maurier et Player’s 40,885,020Benson&Hedges 35,396,600Regal 18,400,000Sovereign 16,393,400Prince 15,212,020Marlboro 11,187,800Rothmans 9,300,000Peter Stuyvesant 9,059,800Lucky Strike 6,999,800Winston 5,936,000Gold Leaf 5,584,000Optiva and others 3,490,000Pall Mall and West 1,504,146

prominently, and other brands such asSuperkings, Regal, Sovereign and Prince wereincreasingly detected.There were no recorded detections of coun-terfeit Superkings in 2002. The table showsthe percentage of the counterfeit brands de-tected in 2003

The DuMaurier and Player’s brands were de-tected in Canada in seven seizures and theOptiva brand in Chile in one single seizuremixed with Mastro, Record and Premierbrands. The remaining brands were reportedas shown in the regional table above. In 2002and 2003 the main reporting countries wereGermany (8 cases), Poland (4) and SouthAfrica (3). Single seizures of large quantitieswere reported from Singapore, Austria andSweden. It is worth noting that Turkey re-ported nine cases in 2002 and none in 2003.

It has been reported that the Asia/Pacific re-gion, especially China, has an immense ca-pacity to produce counterfeit cigarettes,making it a major source country for world-wide fakes. Although the Chinese authoritiesshut down a large number of illegal cigarettefactories in the past years, there are no indi-cations of a significant reduction in thecounterfeit trade.17 The CEN database con-firms this. In fact in 2003 China was therecorded country of departure in 24 cases(60% of the total reported) and the amount

Counterfeit cigarettesNo. of seizures and quantity seized

Counterfeit brands – Quantity

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of the cigarettes seized accounted for 65% ofthe total. It is worth mentioning that in 2002the respective percentages were much lower,at 17% and 28%.

Russian Fed. and United Arab Emirateswere also reported in 2003 as the departurecountry, for se izures in Sweden andBulgaria respectively. The amount of coun-terfeit cigarettes recorded by those twocountries was around 25 million and 20million respectively.

The country of destination given for thecounterfeit cigarettes was mainly the same asthe country of seizure. In Europe, however,the brands seized would suggest that theshipments were intended for the UK market.

9.2. Illicit production of cigarettes

There is no doubt that the major source ofsupply for undeclared counterfeit cigarettesis the Asia/Pacific region. Nevertheless theillicit production of cigarettes discovered inother regions should not be undervalued.There has been one documented case ofcounterfeit cigarettes being manufactured inGauteng (South Africa) in 2002. A companyregistered a legal factory with Customs butalso operated two illicit factories where theymanufactured counterfeit Peter Stuyvesantcigarettes and other brands intended for theAfrican market.

Illicit production of cigarettes was also dis-covered in various European countries in2003. Such cases were reported in particularby the Czech Republic in the Eastern andCentral European region and by Belgiumand Germany in the Western European re-gion. In the Czech Republic in November2003 Customs finalized a long-term opera-tion called “Marsal” and uncovered a sophis-t icated, organized 12-member groupoperating from private premises located inthe northern part of the country close to the

border with Germany. The group was carry-ing out packaging and completion of the fi-nal product (boxes and cigarette packets).The production was conducted using basicmanual labour with the assistance of me-chanical equipment. The cigarettes them-selves were produced elsewhere and movedfrom unknown locations to these manufac-turing plants. Considering the quality of theproduct, it is highly likely that these ciga-rettes were produced by mechanical equip-ment. Also seized during the operations wascellophane and aluminium foil packagingmaterial which had previously been trans-ported by air from Vietnam. Further, largenumbers of cardboard boxes bearing namesof world-wide known cigarette brands wereseized. These were being stored ready to un-dergo the final processing phase, which in-volves packing already filled cigarettepackets into the boxes.

In Western Europe the dismantling of an il-legal factory was first reported by Belgium,where in the period January-March 2003 aplant was operational 6 days a week for theproduction of Regal cigarettes. In thosethree months almost 47 million cigaretteswere produced. When the illicit operationbegan, daily production amounted to ap-proximately 600,000 cigarettes a day.Production then increased to approximately85 mastercases, or some 1.7 million ciga-rettes a day. The maximum productionspeed of the seized machinery in the clan-destine plant was 2,500 cigarettes perminute or 15 mastercases (150,000 ciga-rettes) per hour. It has been calculated thattheoretically, at the maximum productioncapacity every day, the factory could pro-duce some 538 million counterfeit cigarettesin a year.

In July 2003 Customs investigation units inGermany conducted an operation against acriminal group comprising Polish, Russianand German Nationals and for the first timea complete production line was detected.


� Illicit production of cigarettes wasdiscovered in various European countriesin 2003. In the pictures an illegal factorywas dismantled in Germany where Westbrand cigarettes were produced. Thelogo stamp for the brand Regal wasdetected in Belgium.

(photo courtesy of German and Belgian Customs)

s -

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The illegal factory, located in WesternGermany, was able to produce up to 1,500finished cartons per hour. At 30 euros percarton this represents a duty evasion of45,000 euros per hour. During the operation,counterfeit West cigarettes, packaging materi-al and 20 tonnes of tobacco were seized.

Finally, in Denmark police detected machin-ery for the illegal production of cigarettes inAugust 2003. It is not known in whichcountry the machinery was to be used.

9.3. Trade in counterfeit cigarettes

In respect of the second category of datarecorded in the CEN database, a number ofseizures of counterfeit cigarettes have beeninput as an IPR commodity. This means thatthe products were declared to Customs ascigarettes which, upon inspection, werefound to be counterfeit products infringingIPR legislation.

According to the CEN database, nearly 154million counterfeit cigarettes were seizedwithin the two past years. The table showsthe breakdown of the reported seizures bycountry and year.

It can be seen that the number of detected

cases doubled in 2003 although the totalquantity reduced by 24%. It should be not-ed that in 2002 a single seizure of Viceroybrand, reported by Italy, accounted for 88%of the total quantity seized in the year. Thatconsignment originated in Cyprus and wasseized at the port of Gioia Tauro in transitfor Turkey.

The most frequently detected brands in2003 were Marlboro and Lucky Strike, intwo cases each. 8.5 million Davidoff were al-so detected in one single seizure made inItaly. The seizure reported from Peru refersto a small consignment of Hamilton brandcigarettes destined for Bolivia from Turkey.The origin of the other consignments seizedin 2003 varied between China, Egypt,Malaysia, South Korea and Benin. From thelatter nearly 28 million Marlboro cigarettesreached the port of Algeciras (ES) wherethey were seized.

Additionally, Customs in Bulgaria providedinformation on three seizures of cigaretteconsignments made in March, October andDecember 2003. As a result of the examina-tion of the cigarettes declared it was provedthat the products were counterfeit. Marlborowas the most detected brand.

Beyond any doubt the trade in counterfeit

cigarettes is a rapidly growing global prob-lem. These reported IPR seizures indicatethat, rather than opting to conceal the coun-terfeit cigarettes, which would signpost theirillicit nature if detected, criminals frequentlyprefer to declare them as cigarettes on thepremise that they are less likely to attract of-ficial attention and will not be detected ascounterfeit. This could explain why theseizure data in CEN may not totally reflectthe counterfeit cigarette smuggling picture.

The available data and information doesstrongly suggest that focusing attention oncombating the illicit trafficking of counter-feit cigarettes will require sustained long-term commitment. Confirmation of this isprovided by the data published by the USCustoms and Border Protection, showingthat both in 2002 and 2003 the IPR com-modity most frequently seized was ciga-rettes, mainly originating from China.18


Country 2002 2003 Grand Total

Spain 1 128,228,000 28,228,000

Israel 1 18,130,000 8,130,000

Italy 1 4 577,600,000 37,480,720 115,080,720

New Zealand 1 11,993,600 1,993,600

Peru 1 1475,000 475,000

Total No. of cases 3 6 9Total quantity 87,723,600 66,183,720 153,907,320

Counterfeit cigarettes – No. of seizures and quantity seized

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Thirty two seizures of smoking (hand-rolling) tobacco19 totalling 132,738 kgwere reported in 2003. Compared tothe previous year this constituted a de-crease of 15% in the number of casesand 40% in terms of quantity seized.The recorded decrease of the totalquantity can be explained by the factthat in 2003 no seizures were reportedfrom the CIS region which in 2002 con-tributed 65% of the total smoking to-bacco detected.

The table shows the breakdown of the databy region and relevant country.

Varying trends can be identified in the mostrepresentative regions. In the Middle Eastregion both Israel and Lebanon made con-siderable seizures which constitutes anemerging trend, as no seizures were report-ed in 2002. In Eastern and Central Europeonly the Czech Republic reported seizuresof smoking tobacco and these were signifi-cant, particularly if compared with the pre-vious year. The 2002 figures for this regionwere strongly influenced by a single seizureof 37 tonnes made in Ukraine.

In Western Europe a slight drop in the num-ber of seizures is recorded. There was how-ever an enormous increase of the totalquantity seized, which rose nearly four-fold.This was mainly due to the exceptionalseizures made particularly in Germany andin the Netherlands.20 In Rotterdam 16tonnes from Vietnam destined for Slovakia

were detected. It is of note that in 2002Slovakia reported a single seizure of 10tonnes and none in 2003. Germany report-ed three significant seizures totalling 52tonnes, two of which also departed fromVietnam and were destined for the CzechRepublic.21

This pattern for 2003 is wholly consistentwith that emerging from the analysis of theillicit production of cigarettes detailed in theprevious chapter. A clear trend is identifi-able from Western Europe seizures of a newroute from Asia to Europe; this was not evi-dent in 2002 when Western Europe seizurestended to originate from other Europeancountries and none were recorded as origi-nating in Vietnam.

Review of smuggling of smoking (hand-rolling) tobacco

10.Review of smuggling of smoking(hand-rolling) tobacco

No. of seizures QuantityRegion Country 2002 2003 2002 2003

Asia/ Pacific Australia 3 2 11,293 11,095CIS Russian Federation 4 143,042Eastern Central Europe Czech Rep. 1 2 37 31,426

Lithuania 1 1,242Poland 2 2,039Slovakia 1 10,000Ukraine 2 41,200

Total Eastern Central Europe 7 2 54,518 31,426Middle East Israel 2 7,650

Lebanon 2 2,004Total Middle East 4 9,654North Africa Morocco 1 14North America Canada 4 732Western Europe Germany 4 52,236

Denmark 11 3 75 132France 5 8 4,742 8,022Ireland 3 3 6,739 2,546Italy 1 895Netherlands 3 1 686 16,000Norway 1 1,575

Total Western Europe 23 20 13,817 59,831Grand Total 38 32 222,684 132,738

� Some regions showed an increasing trendin the seizures of smoking tobacco in2003. Single significant seizures werereported in particular by Germany, theNetherlands and Australia, where smokingtobacco from Vietnam was detected.

(photo courtesy of Australian Customs)

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To ensure the implementation of the WCO Global Information and IntelligenceStrategy and consistency of the Global RILO Network, the RILOs operate accordingto common guidelines specifying the role of the WCO Secretariat, the RILOs andNational Contact Points (NCPs). Further information can be obtained in the WCOdocument EC0134E2.

11.1. Role of the Secretariat

The WCO Secretariat, as the responsible fo-cal co-ordination point for the RILO net-work, monitors the consistency of RILOactivities with the “Recommendation of theCustoms Co-operation Council on theOperat ion of the Global Network ofRegional Intel l igence Liaison Offices(RILOs)” as adopted by the Council andthese guidelines. The Secretariat shall:

1. Ensure the central management of theCustoms Enforcement Network (CEN)by using, operating and maintaining thesystem as the global Information andIntelligence tool for the RILO network.

2. Ensure that the CEN is further im-proved taking into account new devel-opments and requirements.

3. Use, administer and monitor the infor-mation being kept within the CEN on aglobal level.

4. Carry out periodical global strategic andtactical analyses based on the informa-tion in the CEN.

5. Keep RILOs informed about projects,measures and developments relevant fortheir region.

6. Organize a global RILO meeting on aregular basis.

7. Outsource special tasks to RILOs in or-der to receive their assistance in carryingout matters of priority identified by theSecretariat or WCO bodies.

8. Task RILOs to represent the Secretariat,where appropriate.

9. Provide training and technical assistanceto the RILOs and their Members withinthe limits of financial and human re-sources.

10 Co-operate with other international lawenforcement agencies on a strategic level.

The WCO, CEN Team and the RILO Network

11. The WCO, CEN Team and the RILO Network

� The originality and inventiveness ofsmugglers can be seen in these picturesshowing a rail freight consignment.1,368,800 LM cigarettes were concealedinside logs detected by Finnish Customsin Kouvola. The consignment originatedin the Russian Federation.

(photo courtesy of Finnish Customs)

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11.2. Tasks of the RILOs

The RILOs, as the responsible regional focalpoint for the RILO network, monitor theconsistency of their Members activities with-in the rules of the WCO Global Informationand Inte l l igence St ra tegy, th i s RILORecommendation and these guidelines. By using information provided to them,they should:

1. A r r a n g e f o r t h e n o m i n a t i o n s o fNational Contact Points (NCPs) withintheir region.

2. Organize and send invitations to annualNCP meetings.

3. Provide technical and other assistance toNCPs.

4. Check that regional seizure informationis being entered into the CEN on a regu-lar and timely basis.

5. Validate regional seizure information be-ing entered into the CEN.

6. Produce regional tactical analyses tosupport Customs law enforcement au-thorities.

7. Collect, evaluate and disseminate infor-mation on Customs offences through theCEN.

8. Produce a periodic intelligence bulletincontaining : • Seizures of global and regional

relevance; • Regional trend analyses; • Regional analytical reports.

9. Provide the Secretariat with an annualreport on their activities.

10. Produce and disseminate intelligencealerts and intelligence profiles.

11. Design and implement target-orientedintelligence analysis projects.

12. Design and support regional intelli-gence-led operations.

13. Facilitate mutual administrative as-sistance.

The WCO, CEN Team and the RILO Network

14. Promote and maintain regional co-oper-ation with other law enforcement agen-cies and organizations, in accordancewith any rules or provisions being estab-lished by the Enforcement Committee orthe Council.

15. Assist Customs administrations withtheir analyses in specific cases, and facil-itate the exchange of case-related opera-tional information in accordance withrelevant legal provisions and in agree-ment with the responsible national or re-gional authorities.

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03 The WCO, CEN Team and the RILO Network

St. Lucia

Chile

WCO CEN Team BelgiumRILO Eastern and Central Europe PolandRILO Western Europe GermanyRILO CIS countries Russian FederationRILO Asia and the Pacific ChinaRILO South America ChileRILO North Africa MoroccoRILO West Africa SenegalRILO Central Africa CameroonRILO East and Southern Africa KenyaRILO Middle East Saudi ArabiaCCLEC Caribbean St. Lucia

11.3. Tasks of the National ContactPoint (NCP)

In order to secure the information exchange ata regional level and the quality of the informa-tion captured within CEN, the NCPs should:

1. Collect seizure data, including all re-quired details relating to Customs of-fences, from all possible sources atnational level.

2. Enter seizure data electronically into theCEN, or submit the data to the RILO byfax or mail.

3. Obtain photographs of significantseizures or of new/interesting conceal-ment methods for incorporation intothe CEN concealment database and forthe production of alerts.

4. Analyse national seizure information toidentify new or unusual smugglingmethods, consistent patterns, smugglingtrends and other information of interest,and enter results into the CEN or for-ward this information to the RILO.

5. Obtain national alerts and forward themto the RILO for regional dissemination.

6. Distribute at national level intelligencereports, alerts and other relevant publi-cations received from the WCO andRILOs.

7. Initiate and participate in special region-al projects conducted by RILOs to iden-tify new transborder smuggling threatsand trends.

8. Promote and maintain national co-oper-ation with other law enforcement agen-cies or organizations.

9. Task the RILO with specific analyticalstudies and participate in the process ofevaluating effectiveness.

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Kenya

Senegal

Saudi Arabia

Belgium

Russian Federation

China

Poland

Germany

Cameroon

Morocco

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WCO CEN TEAM – BRUSSELStel: 32 2 209 9211 (switchboard) - ext. 312 fax: 32 2 209 94 95 email: [email protected]

WESTERN EUROPE - GERMANY ZOLLKRIMINALAMT (ZKA)Bergisch Gladbacher Str. 83751069 Cologne tel: 49 221 672 4112fax: 49 221 672 4111e-mail: [email protected]

CENTRAL/EASTERN EUROPE - POLANDPOLISH CUSTOMS SERVICEMINISTRY OF FINANCE12 Swietokrzyska Str, 00-916 Warsawatel: 48 228 26 9189fax: 48 228 27 6797e-mail: [email protected] or [email protected]

ASIA/PACIFIC – CHINACHINESE CUSTOMS ADMINISTRATION10th Floor, East Wing, Jia 10,Guang Hua Road - Chao Yang District10026 Beijingtel: 86 10 6539 6346fax: 86 10 6539 6349e-mail: [email protected]

MIDDLE EAST - SAUDI ARABIACUSTOMS DEPARTMENTP.O. Box 22631,Riyadhtel: 966 1 478 7889fax: 966 1 478 5887e-mail: [email protected]

SOUTH AMERICA - CHILEDIRECCIÓN NACIONAL DE ADUANASPlaza Sotomayor, 60Valparaisotel: 56 32 20 0815fax: 56 32 23 31 63/25 4034e-mail: [email protected]

CIS – RUSSIAN FEDERATIONCENTRAL ENFORCEMENT DEPARTMENT OF THE STATE CUSTOMS COMMITTEENovozavodskaj Street 11/5121087 Moscowtel: 7 095 449 86 86fax: 7 095 449 86 90/86e-mail: [email protected]

NORTH AFRICA - MOROCCO ADMINISTRATION DES DOUANES ETIMPÔTS INDIRECTSAvenue Annakhil, Hay Ryad, Rabat Tel: 212 37 57 94 42Fax: 212 37 71 78 38E-mail: [email protected]

EASTERN/SOUTHERN AFRICA - KENYAKENYA REVENUE AUTHORITYTimes Tower 9th FloorHaile Selassie AvenueP.O. Box 72236Nairobitel: 254 20 34 04 14fax: 254 20 31 79 64 or 254 20 24 13 17e-mail: [email protected]

CENTRAL AFRICA - CAMEROONDIRECTION NATIONALE DES DOUANESB.P. 4049 Doualatel: 237 343 1690fax: 237 343 1690e-mail: [email protected]

WEST AFRICA - SENEGALRue René Ndiaye, Angle CardeB.P. 4033Dakartel: 221 822 1185fax: 221 822 5569e-mail: [email protected]

JOINT INTELLIGENCE OFFICE (JIO)CARIBBEANCCLEC – CARIBBEAN CUSTOMS LAWENFORCEMENT COUNSIL4 Manoel StreetP.O.Box 1030Tel: 1 758 453 2556Fax: 1 758 453 2563e-mail: [email protected]

WCO RILO Network

WCO RILO Network

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Footnotes

(1) It is worth mentioning that the trend in that country refers tothe illegal export of globally recognized, very high-quality to-bacco products. The contraband is normally concealed amongthe personal effects of air passengers and is detected by usingx-rays. The four most significant seizures involved a total of14,525 cigars.

(2) The analysis does not include data from the UK. These datawere to some extent available for 2003 and were not availablein time for 2002. Nevertheless, HM Customs and Excise madeavailable some intelligence reports which were of great help inbetter understanding the phenomenon of cigarette smuggling.

(3) See chapter 9.2

(4) See chapter 8.9

(5) See chapters 8.9 and 8.10

(6) In November 2002, the EU Customs Co-operation WorkingGroup (CCWG) approved the implementation of a JointCustoms Operation (JCO) for 2003 targeted at cigarettes andalcohol in maritime container shipments. The JCO was organ-ized by Italy as the forerunner country and joined by 12 EUmember states, plus five other countries (Cyprus, Estonia,Malta, Norway and Turkey). The exercise was calledOperation Hydra.RILO WE received the mandate to provide intelligence for thepreparation of the operational part of the exercise.The analytical report, which is now available on the CENwebsite, was to identify the main cigarette routes for Europeleaving China and Hong Kong China, the United ArabEmirates (UAE), Baltic countries (Estonia, Lithuania andLatvia) and Lebanon.The analytical support, based on information reported in theCEN, has been highly useful and the results of the operationhighly satisfactory. Six cigarette seizures have been made: fourin Italy and one each in Germany and the UK. A total of near-ly 41 million cigarettes have been seized, arriving from Chinaand the UAE.

(7) The relevant information will be entered into the CEN data-base as soon as possible.

(8) It should be noted that Cameroon has 365 km of unprotect-ed coastal land. Smuggled cigarettes are loaded into vehiclesand covered with rejected bananas from the nearby bananaplantations.

(9) South Africa Revenue Service - Report on cigarette and tobac-co smuggling 2003.




(13) Further and more detailed information on the situation of to-bacco smuggling in Hong Kong, China, Australia and NewZealand may be obtained from the RILO Monthly Bulletins forAsia and the Pacific. Cf. in particular issues no. 190, 191 and192 of October, November and December 2003 respectively.

(14) Operation “Hydra”.

(15) More details on the use of all the above-mentioned coverloads and others have been reported during the year 2003 inevery issue of RILO WE Roundup, published on the CENwebsite.

(16) Review of activities of the RILO-Moscow ParticipantCountries Customs Bodies in Preventing Tobacco ProductsSmuggling in 2003.

(17) WCO IPR Strategic Group: “Smuggling, Counterfeiting andPiracy: the Rising Tide of Contraband and Organised Crime inEurope”. www.wcoipr.org

(18) US Customs and Border Protection, L.A. Strategic TradeCenter. www.cpb.gov

(19) Other types of tobacco, such as mouth tobacco, water pipe to-bacco, fruit tobacco and raw tobacco, are not included.

(20) Detailed information on the seizures of smoking tobaccocarried out in Italy and France during 2003 may be found inRILO WE Roundup no. 2 and 4/2003 respectively. Both bul-letins are available on the CEN website.

(21) In addition, Germany reported a further seizure of 40 tonnesof raw tobacco also originating in Vietnam and having theCzech Republic as its final destination.

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REGION COUNTRY 2002 2003 Grand Total

A s i a a n d P a c i f i c Australia 1 1 27,200 90,000 97,200

Brunei 2 2134,000 134,000

Fiji 1 114,000 14.000

India 1 1 221,873 17.200 39.073

Sri Lanka 4 14 18160,000 733,200 893,200

Mongolia 3 1 434,200 72,000 106,200

New Zealand 1 152,200 52,200

Singapore 2 2110,000 110,000

Asia and Pacific – Total number of seizures 11 21 32Asia and Pacific – Total quantity 289,473 1,156,400 1,445,873

C I S Russian Fed. 461 46125,203,561 25,203,561

CIS – Total number of seizures 461 461CIS – Total quantity 25.203.561 25.203.561

Easte r n and Cent ra l Eu rope Czech Republic 129 219 3481,994,780 3,103,285 5,098,065

Estonia 32 30 62477,200 308,200 785,400

Poland 201 721 9225,500,793 22,958,655 28,459,448

Slovenia 9 6 15209,340 94,340 303,680

Slovakia 19 19548,300 548,300

Turkey 10 10629,400 629,400

Eastern and Central Europe – Total number of seizures 400 976 1,376Eastern and Central Europe – Total quantity 9,359,813 26,464,480 35,824,293

M i d d l e E a s t Saudi Arabia 1 114,200 14,200

UAE 1 12,077 2,077

Kuwait 1 141 41

Middle East – Total number of seizures 2 1 3Middle East – Total quantity 16,227 41 16,318

N o r t h A f r i c a Algeria 3 1 4127,000 94,820 221,820

Morocco 61 3 64283,180 142,600 425,780

North Africa – Total number of seizures 64 4 68North Africa – Total quantity 410,180 237,420 647,600

Number of seizures and quantities by region and country under the minimum limit of 100,000 pieces

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N o r t h A m e r i c a Canada 6 6357,800 357,800

North America – Total number of seizures 6 6North America – Total quantity 357,800 357,800

C e n t r a l a n d S o u t h A m e r i c a Brazil 2 24 2690,625 1,091,560 1,182,185

Uruguay 5 560,510 60,510

Central and South America – Total number of seizures 7 24 31Central and South America – Total quantity 151,135 1,091,560 1,242,695

Eastern and Southern Afr ica Mauritius 2 24,800 4,800

South Africa 36 16 521,241,740 312,380 1,554,120

Eastern and Southern Africa – Total number of seizures 38 16 54Eastern and Southern Africa – Total quantity 1,246,540 312,380 1,558,920

W e s t e r n E u r o p e Andorra 28 26 54590,700 497,720 1,088,420

Austria 1 196,000 96,000

Belgium 4 4285,080 285,080

France 1 15,800 5,800

Germany 1 179,980 79,980

Denmark 25 11 36540,915 260,330 801,245

Iceland 13 29 4241,640 111,600 153,240

Italy 1 17,120 7,120

Spain 1 120,000 20,000

Switzerland 2 270,000 70,000

The Netherlands 1 2 340,000 94,507 134,507

Western Europe – Total number of seizures 73 73 146Western Europe – Total quantity 1,472,155 1,269,237 2,741,392

Number of seizures (grand total) 1,056 1,121 2,177Quantity (grand total) 38,149,134 30,889,318 69,038,452

Number of seizures and quantities by region and country under the minimum limit of 100,000 pieces

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A s i a a n d P a c i f i c Australia 14 9 2340,486,800 31,931,053 72,417,853

Bangladesh 1 1 2379,400 1,000,000 1,379,400

China 5 9 1459,590,000 76,960,900 136,550,900

Fiji 1 1160,000 160,000

Hong Kong, China 37 29 66151,366,840 83,097,950 234,464,790

India 1 13,810,000 3,810,000

Indonesia 2 210,750,000 10,750,000

Mongolia 1 1 2150,000 200,000 350,000

Malaysia 8 1 913,712,900 11,340,000 25,052,900

Singapore 2 1 328,700,000 18,400,000 47,100,000

Sri Lanka 4 13 174,473,800 9,869,800 14,343,600

Thailand 1 16,240,000 6,240,000

Asia and Pacific – Total number of seizures 74 67 141Asia and Pacific – Total quantity 305,259,740 247,359,703 552,619,443

C I S Belarus 27 5 3224,666,920 17,010,000 41,676,920

Russian Federation 17 1722,155,200 22,155,200

CIS – Total number of seizures 44 5 49CIS – Total quantity 46,822,120 17,010,000 63,832,120

Easter n and Cent ra l Europe Bulgaria 5 4 913,179,600 20,215,200 33,394,800

Czech Republic 11 27 3823,778,180 22,347,244 46,125,424

Estonia 4 3 715,525,536 6,040,000 21,565,536

FYROM 3 36,879,000 6,879,000

Greece 8 5 1389,432,000 24,222,800 113,654,800

Hungary 70 46 11661,999,120 23,422,920 85,422,040

Latvia 4 48,074,560 8,074,560

Lithuania 18 11 29126,813,480 30,827,680 157,641,160

Poland 73 150 223121,810,230 100,314,205 222,124,435

Serbia and 1 1Montenegro 399.600 399.600Slovakia 12 18 30

12,671,190 15,778,040 28,449,230Slovenia 2 2

5,750,000 5,750,000Turkey 16 9 25

95,589,780 22,374,200 117,963,980Ukraine 43 9 52

25,857,300 5,782.520 31,639,820

Eastern and Central Europe – Total number of seizures 264 288 552Eastern and Central Europe – Total quantity 594,730,976 284,353,409 879,084,385

Number of seizures and quantities by region and country with a minimum limit of 100,000 pieces

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I M i d d l e E a s t Israel 26 7 33182,092,500 24,979,140 207,071,640

Lebanon 12 6 18113,673,160 27,466,200 141,139.360

Middle East – Total number of seizures 38 13 51Middle East – Total quantity 295,765,660 52,445,340 348,211,000

N o r t h A f r i c a Algeria 47 26 73135,534,600 51,866,600 187,401,200

Morocco 1 1128,000 128,000

North Africa – Total number of seizures 48 26 74North Africa – Total quantity 135,662,600 51,866,600 187,529,200

N o r t h A m e r i c a Canada 1 11 125,440,000 54,422,820 59,862,820

North America – Total number of seizures 1 11 12North America – Total quantity 5,440,000 54,422,820 59,862,820

Eastern and Southern Afr ica Kenya 1 1290,000 290,000

South Africa 13 24 3741.863,400 51,201,240 93,064,640

Eastern and Southern Africa – Total number of seizures 14 24 38Eastern and Southern Africa – Total quantity 42,153,400 51,201,240 93.354,640

W e s t e r n A f r i c a Mali 2 2612,800 612,800

Western Africa – Total number of seizures 2 2Western Africa – Total quantity 612,800 612,800

Number of seizures and quantities by region and country with a minimum limit of 100,000 pieces

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W e s t e r n E u r o p e Austria 31 26 5729,196,063 80,050,520 109,246,583

Belgium 42 31 73238,781,490 131,042,580 369,824,070

Germany 179 147 326270,343,502 217,969,789 488,313,291

Denmark 3 4 71,423,000 6,912,120 8,335,120

Finland 8 10 1810,011,000 4,538,600 14,549,600

France 46 72 118127,964,860 158,483,730 286,448,590

Ireland 9 18 2756.211.040 36.468.080 92,679,120

Italy 79 63 142293,570,000 218,168,440 511,738,640

Malta 3 2 515,050,000 12,820,000 27,870,000

Norway 10 5 153,948,220 1,766,080 5,714,300

Portugal 3 329,096,723 29,096,723

Spain 18 34 52116,052,060 213,028,940 329.081,000

Sweden 25 25 5020,843,420 53,327,840 74,171,260

Switzerland 1 1131,000 131,000

The Netherlands 21 23 4458,526,716 62,160,140 120,686,856

Western Europe – Total number of seizures 477 461 938Western Europe – Total quantity 1,271,018,294 1,196,867,859 2,467,886,153

Central and South America Brazil 2 331 33314,027,800 555,886,200 569,914,000

Chile 1 8 95,042,800 45,957,400 51,000,200

Uruguay 2 3 58,998,200 1,500,000 10,498,200

Central and South America – Total number of seizures 5 342 347Central and South America – Total quantity 28,068,800 603,343,600 631,412,400

Number of seizures (grand total) 965 1,239 2,204Quantity (grand total) 2,724,921,590 2,559,483,371 5,284,404,961

No. of seizures and quantity seized by region and countries of seizures below 100,000 pieces

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The World Customs Organization is an in-dependent intergovernmental body whosemission is to enhance the efficiency and ef-fectiveness of Member Customs administra-tions, thereby assisting them to contributesuccessfully to national development goals,particularly in the areas of trade facilitation,revenue collection, community protectionand national security.

The World Customs Organization is inter-nationally acknowledged as the global cen-tre of Customs expertise and plays a leadingrole in the discussion, development, promo-tion and implementation of modern and se-cure Customs systems and procedures. It isresponsive to the needs of its Members andits strategic environment, and its instru-ments and best-practice approaches are rec-ognized as the basis for sound Customsadministration throughout the world.

WCOMissionStatement

WCOVisionStatement

The World Customs Organization is gratefulto the analysts of RILO Western Europe, CPARotterdam and RILO Asia/Pacific for theirhard work in producing the analysis.The WCO is also grateful for the specificcontributions to this annual Report providedby the Regional Intelligence Liaison Offices,their National Contact Points and theCustoms Administration of Canada.

Acknowledgements

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WORLD CUSTOMS ORGANIZATION30 rue du Marché

B-1210 Brussels, BelgiumTel: +32 (0)2 209 92 11Fax: +32 (0)2 209 92 92

E-mail: [email protected]: www.wcoomd.org

final tobacco english 2003

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