OLAF Report Shows Cigarette Fraud Still Costing the EU Dear

Source from:  worldtobacco.co.uk 07 August 2007 08/08/2007

There are more active fraud cases being investigated by the European Union (EU) anti-fraud office OLAF involving cigarettes than any other source of illicit revenue, says the agency's latest annual report. At the end of 2006, there were 77 active cases involving cigarettes on OLAF's books, compared with 72 regarding customs offences in general, 58 on exploiting EU agricultural funds, and 55 associated with internal fraud within EU institutions. The financial impact to EU and member state treasuries through lost tobacco duties in open and closed cigarette cases investigated in 2006 was €1.3bn, said OLAF, although €1bn of this was associated with closed cases. This made cigarette fraud the second most expensive fraud affecting EU spending in 2006, after regional development aid, where scams cost €1.6bn. Losses such as these involving tobacco duties are particularly painful for the EU, because member state customs duties are traditionally earmarked for transfer to Brussels. The report welcomed the agreement between Philip Morris, the EU and its member states to fight cigarette smuggling and counterfeiting. It highlighted that the agreement "includes the 'tracking and tracing' of cigarettes to identify where they have left the legitimate supply chain to fall into the hands of smugglers." Enditem