Tobacco smuggling seminar

• The World Health Organization rewards Spain for the work of the Tax Agency in its fight against smuggling and encourages countries to speed up the ratification process for its prompt entry into force 

• The WHO protocol provides for improvements in the instruments available to countries to combat smuggling, counterfeiting and illegal tobacco manufacturing.

• In the last decade, the Tax Agency has seized more than 116 million packets of contraband and more than 280 containers of illicit tobacco

May 29, 2015.- The World Health Organization (WHO) has today highlighted the strong commitment to the fight against tobacco smuggling that Spain has been making, as the first European country to ratify, along with Austria, the WHO Protocol against Illicit Trade in Tobacco. At a conference held in Madrid, the Spanish Government, and on its behalf the Director General of the Tax Agency, Santiago Menéndez, has been awarded by the WHO in recognition of the work carried out by the Agency to combat the illicit trade in tobacco products.

Adopted in November 2012, the WHO Protocol to Eliminate Illicit Trade in Tobacco Products has already been signed by 54 countries, but to date only eight have ratified it. In December 2014, Spain ratified the protocol, which will enter into force three months after its content is formally accepted by at least 40 countries.

During the event, co-organised by the Tax Agency and the World Health Organisation, with the participation of the Ministry of Health, Social Services and Equality and the World Customs Organisation, the WHO called on countries to “follow the example” of Spain and adopt the protocol to improve the fight against tobacco smuggling, an illegal activity that produces considerable losses of public revenue, while contributing to the financing of transnational criminal activities.

Basic features of the WHO protocol

The objective of the Protocol is to eliminate all forms of illicit tobacco trade by improving the tools available to countries to combat smuggling, counterfeiting and illegal tobacco manufacturing. In particular, the Protocol's primary objective is to protect the supply chain, requiring that within five years of its entry into force, a global tracking and tracing regime be established to enable the traceability of any tobacco product manufactured or imported in the various countries that adopt the Protocol.

Furthermore, and with the same objective of guaranteeing the protection of the supply chain, the protocol establishes a series of measures relating to, among other matters, the granting of licences, due diligence of operators in the sector, the scope of sanctions and the destruction of seized products, as well as international cooperation and mutual assistance between the countries that adopt the protocol.

In parallel with the open ratification process prior to its entry into force, Spain is working on preparing the regulatory changes required by the protocol. At the same time, the Agency, for whom the fight against tobacco smuggling is an essential priority, has been improving the instruments dedicated to its repression, including new regulatory tools, such as the reinforcement of the sanctioning regime linked to tobacco smuggling provided for in the reform of the General Tax Law, currently in parliamentary procedure.

During the day, the Director General of the Tax Agency, Santiago Menéndez, underlined the “triple negative consequences” that tobacco smuggling brings: a direct economic damage to the State Public Treasury and the EU Budget, a risk to public safety in depressed geographical areas, where this phenomenon develops more intensely, and also a risk to public health as it is, on occasion, an uncontrolled product to which minors and other unprotected groups have easy access.

The fight against smuggling in Spain

In the last decade, the Tax Agency has managed to prevent the consumption of more than 116 million packets of tobacco illegally introduced into Spain and more than 280 containers loaded with contraband tobacco. In 2014 alone, the Agency seized 9.6 million packets of tobacco and arrested 131 people for smuggling.

Among the most notable actions in recent years by the Tax Agency in its work to suppress smuggling, the Director of Customs, Pilar Jurado, highlighted the dismantling of two clandestine cigarette factories in Madrid and the Basque Country (2013-2014), with the seizure of 55 tonnes of chopped tobacco ready for the illegal manufacture of cigarettes, as well as the seizure in 2011 in Valencia, in a single operation, of seven containers loaded with 35 tonnes of chopped tobacco from China.

Equally significant was the intervention in December 2013 of a smuggling vessel in waters near the Balearic Islands when it attempted to introduce three containers of loaded cigarettes into the port of Famagusta (Cyprus). This time, it was not a traditional shipment of tobacco in containers for its hidden passage through Customs, but a vessel specifically dedicated to illegal transport for its subsequent stash on the coasts, in line with the systems commonly used for drug trafficking.

To combat this illegal activity, the Customs Department of the Tax Agency has been planning a strategy based, among other guidelines, on increased controls in customs facilities and warehouses, increased maritime surveillance and control operations on the retail market.