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Tobacco Agreements: new tools needed against smuggling


25 Feb 2016


Euro & Finance
Health & Consumers

Counterfeit cigarettes, smuggling and other forms of the illicit trade in tobacco products cost the EU and its Member States more than €10 billion per year in losses in duties and tax revenues. The EU has already put anti-fraud agreements with big tobacco companies in place. To be even more effective, the EPP Group is calling for further action to stop the fraud: "To tackle this crime, agreements with big tobacco companies were important at the start, but now we need a new box of tools", said Inge Gräßle MEP, Chairwoman of the European Parliament’s Budgetary Control Committee.

Anti-fraud agreements have forced big tobacco companies to limit these losses for example through tracking their products so that they don't end up on black markets and through payments when their products are seized.

"As the Philip Morris International (PMI) agreement will expire in July, a prolongation should not undermine the ratification of the FCTC protocol", recalled Gräßle. The PMI agreement has caused a drop of around 85% in the volume of genuine PMI cigarettes seized by Member States between 2006 and 2014.

"The fight against smuggling needs better and more effective tools on top of the current anti-fraud agreements. For example, the flow of illicit, so-called cheap white cigarettes, mostly from the Union's Eastern borders, needs to be stopped with decisive means. In this fight, the production of raw cut tobacco, filters and cigarette papers should be under strict scrutiny", said Gräßle.

"Before any new agreement is signed, we must know how it will reflect on this changing situation", highlighted Petri Sarvamaa MEP, EPP Group Spokesman in the Budgetary Control Committee. "Are the annual payments and seizure payments by the tobacco companies at the right level? This we can only doubt on the basis of the European Commission's working document released yesterday", he added.

"The European Parliament has been asking for an assessment from the European Commission for two years. In the meantime, we have been able to draw the conclusions of the reality by ourselves, based on the information out there. It is clear that we need more transparency and better action on the Commission's side", concluded Sarvamaa.