Tobacco smuggling, including counterfeit products, is presently assessed as one of the most serious risks to border security at the Moldova-Ukraine border, causing the loss of millions of Euros to the State budgets of Moldova and Ukraine, as well as EU Member States. The EU’s anti-fraud office, OLAF, estimates the cost of tobacco smuggling to EU countries to be in excess of €10 billion a year. One of the EUBAM’s main partners in countering the illicit tobacco trade is the Ukrainian Association of Tobacco Producers (Ukrtyutyun). In this article they explain why cheap cigarettes may not be such good value for money.
Tobacco smuggling is a major threat in EUBAM’s area of operations, especially at the central segment of the Moldova-Ukraine border. Between December 2015 – November 2016, over 45.7 million cigarettes were seized at the border, whilst the Mission was also engaged in an operation which led to the seizure of 66 million cigarettes in the Bosporus from a ship on route between Famagusta and Skavodsk.
Tobacco smuggling takes many forms along the border, from small scale packages being hidden in vehicles to larger scale consignments being clandestinely transported over the “green” border, usually at night. Some smugglers also exploit legal loopholes. EUBAM remains concerned that without robust controls, Duty Free Shops can potentially be misused to smuggle cigarettes. This issue is particularly acute in Transnistria where Duty Free Shops introduced 1.32 billion cigarettes between December 2015 and November 2016, yet registered sales of only 639.5 million. Similarly, between January and June 2014, these Duty Free Shops bought in approximately 7.5 billion cigarettes and 1,592 tons of raw tobacco. EUBAM remains concerned that the surplus is traded on the black market and smuggled into the EU.
The Mission has been working for a number of years to close these loopholes and foster closer co-operation between the Moldovan and Ukrainian Governments with tobacco manufacturers and international counterparts. Such efforts have had an impact. According to analysis presented by British American Tobacco, a global cigarette producer, the market share of smuggled and illegally produced cigarettes in Ukraine has decreased from 9.2% in 2013 to 1% in 2016. To bring about these results, the Mission works to strengthen Moldovan and Ukrainian legislation and co-ordinate information and operations. EUBAM’s Advisor on Investigations, Kestutis Leimonas, explains.
On the operational level, EUBAM’s six field offices play an important role in advising Moldovan and Ukrainian partners on anti-smuggling controls and operations. One of the most important locations is the EUBAM Field Office in the ports of Odesa and Chornomorsk, Ukraine’s largest maritime gateways for imports and exports. Head of Field Office, Giuseppe Portale, explains the Mission’s role in verifying checks at the seaport.
Who we are?
The European Union Border Assistance Mission to Moldova and Ukraine (EUBAM) was launched in 2005. It promotes border control and customs norms and practices that meet EU standards and serve the needs of its two partner countries. It is an advisory, technical body with the Headhunters in Odesa (Ukraine). A Memorandum of Understanding signed by the European Commission and the Governments of Moldova and Ukraine in late 2005 is the legal basis for EUBAM, while an Advisory Board acts as the Mission’s governing body. The mandate of the Mission has already been extended five times (in 2007, 2009, 2011, 2015 and 2017), with the current mandate expiring on 30 November 2020.
What we do?
The Mission works with Moldova and Ukraine to harmonise border control, and customs and trade standards and procedures with those in EU Member States. It helps to improve cross-border cooperation between the border guard and customs agencies and other law enforcement bodies and to facilitate international coordinated cooperation. EUBAM assists Moldova and Ukraine to fulfil the obligations of the Deep and Comprehensive Free Trade Area (DCFTA), which both countries signed as part of their Association Agreements with the EU. It also contributes to the peaceful settlement of the Transnistrian conflict through confidence building measures and as a monitoring presence at the Transnistrian segment of the Moldova-Ukraine border.
Where we work?
The Moldova-Ukraine state border is 1,222 km long, consisting of 955 km of “green” (land) border and 267 km of “blue” (river) border.
The Mission is headquartered in Odesa (Ukraine). It has an EUBAM Office in Moldova and six field offices – three on the Moldovan side of the joint border and three on the Ukrainian side.
EUBAM Office in Moldova has a liaison function which is focused on projecting and representing the activities of EUBAM amongst other donors and beneficiaries to ensure better coordination and an improved consultative process. It enables the identification of strategic partner needs that are relevant to current and future planning, and have provides EUBAM with an understanding of the broader issues and obstacles that may affect the achievement of objectives.
There are 67 permanent official border crossing points along the Moldovan-Ukrainian border, including international, inter-state and local ones. The central segment of this border length 453 km is under Tiraspol control, including 25 official crossing points to Ukraine.
The “internal boundary” between the two banks of the Dniester river is not monitored by Moldovan border guards, but there are some customs check-points.