Cigarette counterfeiting and smuggling in the Balkans is one of the primary drivers of crime and corruption in the region, according to a coalition of investigative reporting projects.

Bosnia-Herzegovina alone is estimated to lose $200 million each year in tax revenue from tobacco smuggling, a sum that could approach billions worldwide.

The Organized Crime & Corruption Reporting Project, with bureaus and partners in Sarajevo, Albania, Bulgaria, Ukraine and else- where, has assembled a massive investigative package on tobacco smuggling, and particularly the involvement of government officials in the region.

High prices and taxes on tobacco in the West are driving the smuggling boom, with a packet of cigarettes purchased in Ukraine for less than a euro selling for seven euros in London.

Extortion, murder are common, and a variety of dubious and notorious public figures are implicated, according to the report.

These include the leaders of an irish Republican Army offshoot, who critics say are buying “prime” land on the Bulgarian coast using smuggling proceeds; the brother of Romania’s Transport Minister, who controls a chain of “lucrative” duty free shops that police say are hubs for laundering and smuggling cigarettes; family members of the Serbian leader Slobodan Milosevic, who died in prison while on trial for war crimes; and officials in Ukraine, Moldova, Montenegro and elsewhere.

The problem is so bad that the smuggling industry has grown into the “fourth or fifth largest competitor” to Phillip Morris International, one of the world’s largest tobacco companies.

Source:

“Project: Tobacco”
Organized Crime & Corruption Reporting Project, February 2008