About RON 32 billion loss in 11 years for the state budget of Romania because of tobacco smuggling

More than 1.85 billion contraband cigarettes were consumed in Romania in 2022, although the illicit traffic level was the lowest in the last 15 years. In the first 3 months of 2023, authorities seized over 31 million cigarettes, 6 times more than in the same period of last year. Also, several networks of illegal tobacco manufacturers and sellers, including in online environment, have been discovered and dismantled. A serious phenomenon that endangers the economic and social safety of the community, contraband has been declared a threat to national security and, as of 2019, April 21^st is the National Day against Illicit Products Trafficking in Romania.

The continuous efforts of the authorities to stop illegal activities at the country’s borders led, in 2022, to a historical minimum of the last 15 years of the annual level of the cigarettes black market in Romania – of 7.1% versus the maximum level of 27% registered in 2010. But the figures have been increasing since the beginning of this year: in January 2023, the black market amounted to 8,1% of the total consumption, compared to 6.8% in November 2022, thus registering the highest level in the last two years, according to Novel Research.

Romania has the second largest EU external border, after Finland and registers the highest smuggling level in Eastern Europe, with a level of prejudice to the state budget amounting to approximately 2 billion lei in 2022 and a total of 32 billion lei loss, as direct impact of cigarette smuggling in the last decade (the equivalent of about 500 km of highway).

 “In 2022, most of the cigarettes seized by OLAF – 316.7 million (59.5%) – resulted from illicit production in the EU****, thus reflecting the intensification of tobacco products counterfeiting within the European Union, a visible trend in Romania, too. Therefore, the fight against illegal traffic continues and adjusts to the current trends, by stopping counterfeiting and online illicit trade, which bring new unknowns, especially in terms of the access of vulnerable categories to products from the illicit market and, implicitly, the safety of communities. As smuggling was reduced in the recent years, BAT contributed to the state budget with over 20 billion lei in 2020 and 2021. We will continue to support, through our partnerships, the efforts of the authorities with attributions in this field which, together with a predictable legislative and fiscal framework, can support the safety and economic development of the community and the legitimate players’ investments in the local economy,” said Ileana Dumitru, Legal and External Affairs Director for the South Eastern Europe Area at BAT.

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Dolj county ranks 1st with the largest volume of seizures at year start 

March 2023 marks a record in terms of total volume of illegal cigarettes seized by the authorities in recent years. Almost 14.5 million cigarettes worth approximately 9.5 million lei were seized only this March (25 times more than in March 2022, when almost 580,000 cigarettes were seized), representing at the same time, almost half of the total number of cigarettes seized in the entire first quarter of this year. Since the beginning of the year, 13.2 million contraband cigarettes were seized in Dolj County, representing approximately 42% of the total amount captured in the entire country in the first 3 months of the year.

Brasov, with 3.8 million illegal cigarettes seized, ranks 2^nd in the total weight of seizures since the beginning of the year, while Suceava, Maramures and Teleorman are placed on the 3^rd place, with seizures of approximately 2, 5 million cigarettes registered in each of these counties, according to data centralized on StopContrabanda.ro.

With borders intensively monitored by authorities, local counterfeiting and online illicit trade continue to grow

Amid consistent actions of the authorities to stop the smuggling phenomenon at the country’s borders, tobacco products counterfeiting in factories and various other illegal processing locations continue to grow. Several clandestine processing networks have been discovered since the beginning of the year, including an illegal cigarette factory in Falticeni, in February, and approximately 10 tons of tobacco in various forms (tobacco leaves, chopped tobacco, loose tobacco), intended for clandestine processing and bulk sales, predominantly in online environments.

Significant seizures of loose or unprocessed tobacco were recorded in Bucharest and nearby counties (Popesti Leordeni, Prahova, Ilfov, etc.), given that most of the tobacco trucks manage to enter Romania at the Southern borders of the country, and also in the Southern area, smuggling networks have access to a market with increased demand for bulk tobacco (Bucharest area), as well as to the infrastructure necessary for distribution (easy transport through courier companies, following online advertising).

In 2022, 1 in 4 illegal cigarettes consumed by Romanians was counterfeit*, representing the highest level of counterfeit cigarettes on the illicit market in the last 10 years. Of the total quantities captured by the authorities in 2022, about a quarter were identified as counterfeit, the most important captures of such products being made in Constanta, Valcea and Giurgiu.

Data on the evolution of cigarette seizures in Romania are centralized in real time on www.stopcontrabanda.ro platform, a BAT initiative that aims to support the authorities by centralizing information on contraband seizures across the country, but also to inform consumers about to the effects of cigarette smuggling on society. The campaign is carried out in partnership with the Romanian Police, the Romanian Border Police, the National Agency for Fiscal Administration (ANAF) and the Romanian Customs Authority. The “Stop Smuggling” campaign was launched in the Spring of 2017 by BAT to create a unique information point on cigarette smuggling.

About cigarette smuggling in Romania

• Romania ranks 4^th among the EU Member States in terms of consumed smuggled cigarettes volume and 1^st in Eastern Europe. Romanians consume about 6% of all smuggled cigarettes in the EU.
• Romania has 2,000 km of border with non-EU countries, where the price of tobacco can be up to three times lower.
• Illegal cigarette traffic annually prejudices the Romanian state by approximately 2 billion lei.

• Each container of illegal cigarettes equals 1 million euros profit for smuggling networks. Interpol data show that illicit cigarette trafficking is a catalyst for trafficking in drugs, weapons, people and even terrorist activities.
• In 2019, April 21^st was declared the National Day against Illicit Product Trafficking in Romania. In 2020, smuggling was included in the National Defense Strategy for 2020 – 2024, being considered a threat to the national security.
• In 2021, the highest volume of reported global seizures were cigarettes – 50.5%, according to the World Customs Organization’s Illicit Trafficking Report 2021.