Illicit cigarettes cost EU €13bn a year, auditors say

Illicit cigarettes cost the European Union about 13 billion euros a year in lost revenue, EU auditors said Tuesday, warning that poor coordination between member states is helping counterfeit cigarette makers operate across the bloc.

The European Court of Auditors said illicit cigarette production has grown in the EU in recent years, helped in part by differences in national laws and enforcement.

“Information sharing is inconsistent. Cross-border cooperation still has important gaps, and criminal organisations operate across borders every day,” ECA member Petri Sarvamaa said while presenting the report.

The report found that about one in 10 cigarettes smoked in the EU is either smuggled or produced illegally. It said illicit manufacturing sites have been detected in almost all EU countries.

The auditors said almost 60 percent of cigarettes impounded in 2022 were made in the bloc, citing the EU's anti-fraud office. They also said some crime groups had moved production from non-EU eastern European countries, particularly Ukraine, into the EU.

The report cited gaps including differing rules on machinery used to make cigarettes, varying punishments for tobacco-related offences and cases where seized machinery or unprocessed tobacco could be returned to circulation without effective monitoring.

The ECA urged the European Commission to take a stronger coordinating role. Sarvamaa said the commission and member states “must up their game” to fight the criminal activity.