ASH release
Immediate 24 October 2001
European Commission sides with tobaccosmugglers against UK Customs
ASH condemned the move by the European Commission tochallenge the efforts of UK Customs to control the scourge of bootlegging [1]as “another case of free-trade zealots trying undermine public health policy”and offered a scathing explanation of the Commission's motives.
The European Commission has announced itis investigating UK Customs for inhibiting free movement within the EU -because of the action they are taking against cross-Channel smuggling. British travellers can shop in Belgium or France and bring back as much tobaccoas they like - as long as it is for personal use, and not to be soldevading taxes. There are guidelines that for 800 cigarettes or less noquestions will be asked. For more than800, the traveller has the burden of proof to show these are for personaluse. Following complaints, the Commissionaccuses HM Customs of being to strict in implementing these guidelines.
Clive Bates, Director of ASH, said:
“Thefreedom to go shopping for cigs in Belgium is hardly a fundamental human right,especially when it really opens the door to bootleggers and petty criminals.”
“Peopleshould know that if they go over to warehouses on the continent and buythousands of cigarettes they easily risk being mistaken as smugglers. In fact, in most cases they aresmugglers.
“Hightobacco taxes help to reduce demand and save lives. Smugglers can undermine good health and tax policy, but shouldn'tbe assisted by the European Commission.
“This is one way the EuropeanCommission can gain control of tax policy and yet more power. If Britain can't prevent smuggling, then itcan't set it's own tax rates. We thinkthat the weakening of border controls is part of a wider Commission attempt togain de facto jurisdiction over taxation. “This sort of interference from the Commission is another example offree-trade being put before health and welfare.
Following the initial threat of legal action by theEuropean Commission in August, ASH wrote to the internal market Commissioner,Frits Bolkestein, pointing out that the complaints to were almost certainly anorchestrated campaign to undermine Customs controls [
…some £1.36 billionpounds of tobacco excise duties were evaded in 2000 through cross-Channelbootlegging of cigarettes and hand rolling tobacco - an increase of 38% overthe previous year. This represents alarge and lucrative criminal trade, which HM Customs has finally begun to
[1]
[2]
[3] Figures from
Contact: Clive Bates 020 7739 5902 (work). 077 6879 1237 (mobile) (ISDN available)
Tobacco smuggling and cross border shopping in the UK
Table 1: Revenue lost through all forms of tobacco smuggling
|
|
| £ million(6) |
|
| 1999 | 2000 |
| Cross-Channel smuggling of: |
|
|
| Hand rolling tobacco | 670 | 890 |
| Cigarettes and other tobacco | 320 | 470 |
| Total cross-Channel smuggling of tobacco | 985 | 1,360 |
| Tobacco smuggling by air passengers, internet and parcel | 110 | 120 |
|
|
|
|
| Freight smuggling of cigarettes | 1,600 | 2,300 |
| Assessment of all forms of tobacco smuggling and evasion(9),(10) | 2,700 | 3,800 |
Table 2: Revenue lost through cross-border shopping of EU duty paid tobacco
| £ million Product type | 1998 | 1999 |
| Cigarettes and other tobacco products | n/a | 185 |
| Hand-rolling tobacco | n/a | 35 |
| Total | 85 | 220 |
The increase in thecross-border shopping estimates between 1998 and 1999 reflects the effects ofthe abolition of intra-EU duty free sale in July 1999. Prior to abolition dutyfree sales were not included in the estimates of cross-border shopping; fromJuly 1999 onwards duty free sales have largely been replaced by EU duty paidsales, which are included in cross-border shopping. Because the switch fromduty free sales to EU duty paid sales does not involve an additional revenueloss, the measured increase in cross-border shopping between 1998 and 1999overstates the net additional loss of revenue.
