One in four cigarettes illegal

One in every four cigarettes smoked in the country is now believed to be either smuggled or counterfeit, the State’s chief prosecutor revealed today.

Director of Public Prosecutions James Hamilton said he was shocked at the scale of the black market tobacco trade which was costing the public purse €500m every year.

An increasing number of counterfeit cigarettes being shipped in, generally from the Far East, were also posing an extra serious health threat to smokers because of the unknown contents among the tobacco, he warned.

“We are dealing with a staggering scale of criminality when you think about it,” he said.

Mr Hamilton, speaking at an EU anti-fraud conference in Dublin Castle, said the €500m in lost revenue would be better in the State coffers than in criminal coffers, particularly in the present economic circumstances.

The soaring scale of the problem was illustrated by the seizure last year of 134 million cigarettes – almost double the recovery of 74.5 million illegal cigarettes in 2007, he said.

One seizure alone last year of an Ireland-bound shipment from Singapore through Le Havre in northern France was worth €25m.

That operation involved co-operation between the Gardaí, the PSNI and the UK’s Serious Organised Crime Agency (Soca).

Mr Hamilton said organised criminal gangs operating around the border who were smuggling the cigarettes from the East and Middle East were selling them on the streets and sometimes from door-to-door.

“The figures would indicate up to half a billion euro [revenue] shortfall in a year, with the suggestion that up to one in four of all cigarettes smoked in this jurisdiction are either smuggled or contraband,” he said.

“Which is an extraordinary figure I think. To be honest I was quite surprised to learn that it is so widespread.”

Ian Walton-George, director of investigations and operations at the EU’s anti-fraud agency Olaf, admitted counterfeit cigarettes were posing a serious problem for the authorities.

The forgeries were costing billions of euro every year to taxpayers across the continent and were so lucrative that people are now setting up mobile counterfeiting factories in every country across Europe, according to the senior investigator.

“We’ve got a problem with counterfeiting,” he said.

“Obviously the main countries would be China, Russia and the Ukraine, but within the EU there are illegal factories which are producing counterfeit cigarettes and that’s where the police, customs, the border guards have all got to work together to identify these.”

More than 120 investigators from 26 countries are attending the two-day conference at Dublin Castle on cross-border fraud, corruption and EU financial interests.

It will also examine international criminality in fuel and alcohol smuggling, VAT fraud as well as motor vehicle tax and excise fraud.

Alasdair Fraser, the North’s Director of Public Prosecutions, said co-operation between the Republic and the North in cross-border fraud and criminal proceedings was a “microcosm of good practice” for the rest of the EU.

But he admitted there were areas that could be strengthened.

“There’s not an area of life that can’t be improved, but I am satisfied that the existing arrangements are effective,” he said.