Wednesday, 12 June 2013

Taxman plans action against cigarette smuggling - in Britain

Very expensive smugglers' boat, beached
BRITAIN / GIBRALTAR / SPAIN Yes, there is definitely a Spanish angle to all the hullabaloo raised by David Cameron when he spoke out loud recently about the damage to the UK's economy brought about by cigarette smuggling. Some of the headlines of the last couple of weeks: How cigarette smuggling fuels Africa's Islamist violence (Guardian); IRA's cigarette-smuggling millionaires: Former terrorists flooding the UK with potentially lethal fakes, cheating taxpayers of billions (MailOnline); Taxman's plan to curb tobacco smuggling in question after stinging report (Telegraph) Taxman’s plan to stop tobacco smuggling goes up in smoke (The Times) Third of cigarettes are illicit as smuggling is new ‘crime of choice’ (London Evening Standard). Not entirely dissimilar headlines have been around the Campo de Gibraltar area for years. More so with the unemployment crisis - permanent in La Línea and worse now. The fact is>>>that this area, admittedly much smaller than the UK, has been suffering the consequences of tobacco smuggling since - well, since Britain took over the Rock in 1704, probably.

On the Spanish side of the border, legal tobacco sales have dropped by close to 70% over the past couple of years. You can buy contraband tobacco almost anywhere within 100 kms of Gibraltar, and probably beyond. (See Tobacco sales sink in Spain, contraband and counterfeits rise, April 2011)

(Hold on - just coming through as we write: 'Guardia Civil seizes over 10,000 cigarette packs in Algeciras'. It's not even news any more around here, or at any rate we don't want to risk boring our readers with it all the time; not a day goes by without some kind of news on the subject.)

There are two related problems: the impact on the local and national economies, and a health aspect.

It is estimated that contraband tobacco costs the Spanish taxman about €1.6 billion last year - enough to pay for a lot of the horrifying cutbacks in education and healthcare that we are undergoing right now. That figure does not include the costs in healthcare, either.

The health aspect has two fronts: the well-known damage of addictive smoking that doesn't bare repeating here. Worse, however, is the fact that off-brands are now selling more than the Winstons, Marlboro and Chesterfields (plus all the Brit brands like B&H, Dunhill, etc. etc.)

Brands such as Elixir or Excite, for example, come under the 'dubious' category. If they really are low-cost, what do they contain? There are numerous international health warnings about these because they have been found to contain anything from mouse and rat droppings to cyanide (a 'normal' component in the 'better' brands, incidentally). The problem is even worse, much worse, when it comes to fake brands.

The match is perfect, it isn't easy to tell if the pack you just bought is real or false. There are ways, we're told, but we'll have to write another article on that.

What does Gibraltar care?
British Prime Minister David Cameron is making political hay out of the problem as it affects the UK. Other European politicians are riding his coattails.

Gibraltar Chief Minister Fabian Picardo, while supposedly tightening up some of the more obvious excesses of the Rock's smuggling activities (See The RGP Cigarette Trail (GibChronicle)) as an example, has otherwise done precious little to curb a multi-million euro business that is run mostly by members of at least two of Gibraltar's leading six families - and is thus politically fettered. A little research found several Indian concerns importing-exporting tobacco, too.

There are very few figures available on what the tobacco business means to Gibraltar financially (or at least we haven't been able to find any after considerable searching) but it's a good bet it is well into the millions.

Naturally, this kind of business doesn't come only from the little people taking an extra carton or three tucked away in the car, or on their bodies, when they cross the border - however many people (ants?) we're talking about. No, the problem has to come from the vast amount of large cases that get crossed either by boat or through various holes in the frontier fencing, to be picked up by the kind of people who occasionally get caught by the Spanish authorities (See above: 'Hold on'.)

Someone, or some company, has to import the tobacco before it can be smuggled out again. Think about it.

Here's a true story of some twenty-one years ago. The 1992 Sevilla World Fair was on, and most of the local Guardia Civil units had been sent there for duty, leaving only a few of their comrades here, unable to cope with the avalanche of smuggling that was inevitable.

One night, returning from work (yes he has done that, too) just after dark, Prospero was stopped about 300 metres from the frontier exit on the Spanish side by a man who ran out into the road and halted the traffic with an imperious wave. Behind him, on the run, emerged seven men carrying cases of Winston cigarettes (the fashion at the time) up from the beach. When they had reached the other side, they ran back for more. Cars began honking. They came up from the beach again, with another load. This time, the man who had stopped the traffic now allowed everyone through with a graceful bow.

This went on day after day, almost hour after hour all along the frontier area. Gibraltar ran out of Winston.

Where did they get a quick ready-made supply? From the vast Guardia Civil storage facility in Algeciras that was packed to the rafter with contraband tobacco that had been confiscated from smugglers previously. Good business, that, getting twice the money for the same merchandise.

But that was a long time ago. But things are not that different today. Worse, even, because much the same can be said of drug smuggling.

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