France is a key trafficking destination
2007 to 2014 saw a two-Euro increase in the cost of the average packet of cigarettes, and a twofold rise in customs seizures. The soar in trafficking was a knock-on effect of the cigarette price hikes, and French Public Action and Accounts minister Gérald Darmanin acknowledged last October that it was crucial to step up the battle against this scourge. He declared to the French tobacconist national conference: “I stand by the price rise, but the State must also do more to help tackle smuggling and counterfeiting. Clearly if we raise prices but continue to let smuggling and counterfeiting pass, we won’t have dealt with the problem”.
2017 was a disappointing year for the customs service with an 8% drop in tobacco seized. But the public finance ministry is ramping up its field checks and the customs service is now publishing a weekly operations roundup on its website. There were huge seizures this summer all across French territory, which would suggest that the 2017 drop in seizures wasn’t about a fall in cigarette consumption.
According to an annual KPMG report in 2017, 24.6% of cigarettes smoked in France were obtained on the parallel market.
Border regions most affected
The customs seizures show that the parallel market cigarettes originate from all over the world, coming into French territory by air, boat, truck, bus, and utility or passenger vehicles. The customs service has said that it’s hard to tackle newer methods of evading checks by traffickers; they are more numerous and transport smaller, harder-to-detect quantities.
Small-scale road transport can be ideal to slip through the net. Opening up borders has ended systematic customs checks for vehicles such as coaches, and road transport is a simple way to bring in counterfeit or cheap foreign-bought cigarettes. As such, the border regions of Andorra and Spain, as well as Belgium, have become fertile ground for the parallel market.
“Clearly if we raise prices but continue to let smuggling and counterfeiting pass, we won’t have dealt with the problem”
Gérald Darmanin, Minister of Public Action and Accounts
Andorra: cigarette ‘tourism’
With cigarette packs at around 3 Euros, the principality of Andorra is a draw for the region’s smokers, but also for the trafficking networks working out of it. Gérard Vidal, president of the Occitania tobacconist federation, has seen many colleagues go out of business and is far from optimistic about the future: “in our region, poor pensioners take the coach to Andorra for ten Euros and bring back cigarettes, not to sell on the street, but at least for their own block of flats”, he sighs, certain that falling sales at the tobacconist are nothing to do with people stopping smoking. A travel agency in Haute-Garonne offers “shopping days” in Andorra on its website for just fifteen Euros. It offers trips twice a week, with pick-up points at six communes across the north of the Toulouse agglomeration. The coaches park up at Pas de la Case for three hours to give passengers the time to stock up on low-tax products, with cigarettes at the top of the list.
While Andorra stands out the most owing to the huge price difference, it is just symptomatic of a wider phenomenon all along the Spanish border, particularly in the growing number of tourist coaches passing through.
Buses from abroad into the whole territory
Gérard Vidal is well placed to observe the parallel market in his city of Toulouse, where Place Arnaud Bernard is notorious for its curbside cigarette vendors. But he acknowledges: “Today, with the bus, in France, we are all on the border”. Indeed, a proliferation of bus routes means that you can get to Andorra from various French cities such as Bordeaux, Marseilles and Nîmes. The links span well beyond the border zones.
The French Road and Rail Industry Regulation Authority’s annual report notes that almost 4.5 million passengers travelled on international bus lines in 2017. No less than 25 countries had coach links to France. These include several Eastern European countries, home to various counterfeit cigarette manufacturers which are subject to no kind of inspection, and are a further public health hazard.
Frequent coach connections to Eastern Europe
While smuggled cigarettes also reach France by boat from China and Algeria, those arriving by road are largely from Eastern Europe. A report commissioned by Seita Imperial Tobacco showed that 30% of the smuggled tobacco smoked last winter in Nouvelle-Aquitaine came from these countries.
Trafficking networks have adopted these regular bus links for their new strategy of smuggling in small amounts of goods. Such new trafficking is hard to detect, and was brought to light by the police in the winter of 2016-2017. Three Bulgarian nationals, as we will discuss in a separate article, were brought to trial on Wednesday 12 September at Bobigny high court, on charges of organised gang possession of smuggled tobacco and fraudulent sales.
These cigarettes were being sold in the street in broad daylight in Bagnolet near Porte de Montreuil. Barbès and the metro station Quatre-Chemins in Pantin are notorious in the Paris region for all their curbside cigarette vendors and their lack of discretion in hawking popular brands.
Cigarette traffickers are on the rise and there is no typical profile. Those who end up in court are sometimes just the final link of a chain. The main defendant in the Bagnolet case, Rayka M., is a self-effacing forty-year-old Bulgarian woman with contacts with fifteen-odd drivers from the Bulgarian company Karat-s, a partner of Eurolines network. Every Thursday evening, she would go to Gallieni bus station in Bagnolet to pick up the packages she had pre-ordered from the drivers, evading detection. One of the other defendants, also Bulgarian, was being supplied by drivers from the Serbian company Union Ivkoni.
The bus, a booming type of transport with little scrutiny
One visit to Paris-Gallieni international bus station will suffice to understand how Raykya M. could have gone undetected. Every half an hour or so, a bus arrives from Portugal, German, Poland or Serbia. Passengers often unload their luggage themselves, leaving without any baggage checks. No passenger Eurobsit interviewed could recall any baggage checks during their trips, which had sometimes been through several countries. Only identity checks were mentioned.
Since the sector was liberalised in 2015, passenger coach transport has been booming. In France, where international routes make up 40% of travel, but also Europe. It’s become easy to cross borders by bus at a low cost, with little chance of having a luggage check, which makes for easy pickings for traffickers.
Airports, those other transit points for smuggled tobacco, have significant budgets for inspections and luggage checks. Bags are checked in and registered under a passenger’s name, facilitating the work of customs officers when they make large seizures. There is no such system at bus stations despite the growing influx of passengers. Only some companies recommend labelling luggage on their lines, on a voluntary basis. “If we find 300 packets in a bus or train, the owner isn’t going to come forward. We seize the goods but the smuggler will go back to work the very next day…” a customs official recently commented. The Macron Law may have opened up coach travel to a vast market, but there are no safety provisions in the legislative proposals currently being drafted for fostering mobility.
Today, transport companies themselves are taking initiatives to tackle smuggling on their coaches. In the face of drug smuggling on international routes, the German company Flixbus has been piloting a video surveillance scheme on board some of its coaches, and a new luggage identification system.
We contacted the customs services for this article, who said that they do carry out spot checks on buses, and acknowledge that they are a known means of smuggling tobacco. But they do not have any statistics on what proportion of the seizures made are from tourist coaches.