Fresh blow to tobacco smugglers

• The Customs Surveillance investigation of the Tax Agency in the Basque Country has led to the arrest of 18 people from Latvia, Lithuania and Spain
• The searches carried out in various towns in Álava, Guipúzcoa, Navarra and Seville have resulted in the seizure of 240,000 packets of counterfeit tobacco of different brands and more than 35 tonnes of raw tobacco ready for manufacturing.
• The illegal factory, located in an industrial estate in Vitoria, had an area designated for the workers, who remained hidden in the facility for long periods of time.
• Following the detection of the Madrid and Guadalajara factories last year, there are now two clandestine cigarette manufacturing complexes dismantled in Spain

 

September 18, 2014.- The Tax Agency has dismantled an illegal cigarette factory in an industrial estate in Vitoria (Álava) with the capacity to produce 1.5 million packets of cigarettes a week. As part of Operation Unicorn, Customs Surveillance officers carried out searches last Tuesday in various towns in Alava, Guipúzcoa, Navarre and Seville, leading to the arrest of 18 members of the criminal organisation, including its top leaders, as well as the seizure of machinery used for production and packaging, more than 240,000 packets of tobacco of different brands ready for sale on the contraband market and more than 35 tonnes of cut tobacco leaves ready for clandestine manufacturing.

The organisation, made up of citizens from Latvia, Lithuania and Spain, produced illegal tobacco using technology significantly more advanced than that used by smuggling groups last year, when, within the framework of Operation 'Jaula', Customs Surveillance officials dismantled the first illegal cigarette factory detected in Spain in Coslada (Madrid) and Guadalajara.

On this occasion, the potential production capacity of the Vitoria factory would be at least four times greater than that detected last year in Guadalajara, around one and a half million packets of counterfeit tobacco per week.

 

Organized production

To carry out its criminal activity, the organisation had an industrial warehouse near the city of Vitoria where the cigarette factory and four other satellite warehouses were located, each with a specific mission.

Thus, a warehouse located in Guipúzcoa, near the border with France, was used to store material from Latvia needed for packaging cigarettes; In a second warehouse near the municipality of Legutiano (Álava) other types of materials were stored and in Lesaka (Navarra) in addition to various merchandise, raw tobacco ready for making cigarettes was kept. Finally, a fourth warehouse near Seville was used to store tobacco produced in Vitoria.

The investigations carried out have shown that the Vitoria factory was in a continuous production process, given the constant flow of goods that occurred between the main facility and the satellites.

 

Life in the factory

The search of the Vitoria factory also revealed that the warehouse had facilities for feeding and providing overnight accommodation for the workers, who had everything necessary to ensure they did not have to leave the premises for long periods of time. At the time of the Customs Surveillance intervention, the factory was operating at full capacity and 11 workers of Latvian and Lithuanian nationality were employed there.

 

Tax evasion

In a first inspection, pending the corresponding expert opinions, it was estimated that the dismantled manufacturing line was capable of producing and packaging the equivalent of three containers of tobacco each week. Assuming this potential production capacity, the tax fraud avoided is estimated at 4.5 million euros per week.

Following the searches carried out last Tuesday, together with production machinery, various manufacturing and packaging materials, and a truck used for transport, more than 240,000 packets of counterfeit cigarettes bearing the brands 'Austin' and 'Goal', already finished and filled with cigarettes, more than one million disassembled packets of 'Austin' and also 'American Legend', 'Ibiza' and 'Palermo', and more than 35 tonnes of raw tobacco ready for manufacturing were seized.

As a result of the actions carried out, 18 people have been arrested and brought to court, accused of crimes of smuggling and against industrial property. Operation Unicorn has involved the participation of Customs Surveillance officials from the Basque Country, Navarre and Andalusia, and the collaboration of the central services of the Customs and Excise Department of the Tax Agency. This investigation was supported by the European Anti-Fraud Office (OLAF).

 

More than 60 factories dismantled in the EU in a decade

Since 2004, more than 60 illegal factories have been dismantled throughout the European Union. The clandestine manufacture of cigarettes is a serious problem affecting the entire European Union and constitutes a significant part of the illicit trade in these products, together with smuggling and counterfeiting of cigarettes from Asian countries that are smuggled in containers by sea.

This illegal activity causes enormous economic damage in the countries where criminal organisations operate, not only due to the evasion of taxes levied on tobacco products and the negative impact this has on legal operators, but also due to the illegal economic activities associated with illicit manufacturing, which involve money laundering and financing of new illegal activities within the underground economy.

Customs Supervision: Filing of complaints for smuggling and related crimes

Free telephone number 900351378. Email: va.adu@aeat.es