Two men smuggling tobacco into Spain. :: AFP
The European Union’s Anti-Fraud Office, known as OLAF, has produced a report on the tobacco smuggling which takes place across the border between Gibraltar and Spain, and has asked both governments to launch judicial proceedings after finding indications that organised crime could be behind the smuggling.
In the report, which is confidential and will not be made public, OLAF makes recommendations to the authorities on both sides of the border. The anti-fraud office began its investigation a year ago at the request of the Spanish government and its inspectors have made three visits to the border since then, twice as part of a wider inspection of the queues and once, in March, specifically to look at the problem of tobacco smuggling.
The OLAF report is said to indicate that there have been instances that could constitute the criminal offences of smuggling and money laundering, and it calls on the authorities on both sides to take action to put an end to this practice. The amount of tobacco which is imported into Gibraltar has increased considerably between 2009 and 2013, and the Spanish authorities, who accuse Gibraltar of knowing about and permitting the smuggling, insist that the quantity is far too great to be consumed by the population of Gibraltar as this would mean that every inhabitant would be smoking 200 cigarettes a day. With a population of just under 30,000, Gibraltar imports more than 110 million packets a year.
There is no IVA (VAT) in Gibraltar, so tobacco is much cheaper than in Spain. In a province such as Cadiz, where unemployment is as high as 42 per cent, cigarette smuggling has become an important source of extra income for many people. The Spanish tax authority says that most of this tobacco is illegally introduced into Spain by organised criminal gangs. Figures issued by the Guardia Civil show that 971,463 packets of cigarettes were confiscated by Customs last year and Spain says that 60 per cent of all tobacco seized in the country is discovered at the border with Gibraltar. The authorities estimate that Spain loses more than 1,000 million euros a year because of smuggling, and blame Gibraltar for a lack of action in stopping the problem.
In a statement, the Gibraltar government said it welcomed the fact that the issues identified by OLAF, and its recommendations, are in keeping with those that had already been identified and acted upon by the Gibraltar authorities. The Gibraltar government had already amended legislation to make it much tougher for people to break the law, and it recommended that Spain do likewise.