On 23 November 2022, ENACT hosted a seminar focusing on the cigarette trade, its many illegal flows, and North Africa’s pivotal role in this market. This event profiled new research into this lucrative trade and the North African axis, with the region being a transit, destination and consumer hub for cigarette trafficking by local organised crime groups and those from the Gulf, the Sahel, and the Balkans.
Massimiliano Messi, head of the Governance section of the EU Delegation in Tunis, opened the event and provided context on the illicit trade of cigarettes – a multi-billion-dollar business that is fuelling organised crime and corruption. Stressing that tobacco is indeed the world’s most smuggled legal substance he confirmed North Africa’s key role in the global and complex cigarette trading routes, particularly linked to the Sahel, the Gulf, and the Balkans. Mr. Messi reiterated the European Union’s support to ENACT and its research that provide a deeper awareness of current trends in organised crime so that we may shift from difficult scenarios such as this one.
Abdelkader Abderrahmane, ENACT Senior Researcher, further focused on the pivotal role that North Africa plays in cigarette smuggling networks, largely because of geography and its key position between the Gulf, Europe, and the Sahel. The green arrows in the figure below represent the most popular cigarette smuggling routes – from the Gulf to North Africa. The main route involves smuggling cigarettes from the Free Trade Zone (FTZ) in the United Arab Emirates (UAE) across Saudi Arabia and Egypt to Libya, and from there into Algeria and Tunisia, two large consumer markets for illegal cigarettes. In 2017, 10 billion cigarettes were smuggled across North Africa through this route. Another route involves smuggling cigarettes from the UAE across Turkey to the Balkans, from there to Greece, and then from there to Tunisia and Libya. In 2017, four billion cigarettes were smuggled from Greece and the Balkans to Libya and Tunisia. Smuggling activities also occur in the middle of the Mediterranean Sea, with Libyan smugglers meeting Balkan or Middle Eastern counterparts in the middle of the sea and exchanging merchandise there, for instance cigarettes for petrol or other goods.
The red arrows represent another popular smuggling route where Libya is used as a diverting hub for Balkan criminals to re-route smuggled cigarettes to Western Europe, with Italy playing a key role in this illicit flow. Mr Abderrahmane noted the growing number of Chinese tobacco factories in Romania, Bulgaria, Bosnia, Kosovo and Albania, with some of them being involved in cigarette smuggling between the Balkans and North Africa. These factories are in fact the leading source of cigarettes sold in the black market in North Africa – cigarettes are marked as to be exported to Turkey or to Italy, yet they are diverted to Libya, and smuggled into other North and sub-Saharan African countries.
The Sahel also plays a role in this criminal market. Cigarettes are trafficked across the region to Libya and Algeria, as represented by the blue arrows in the figure below. Cigarettes can also be moved from Burkina Faso across Niger and then across Libya. Alternatively, they can also be moved from Burkina Faso to Mali, Algeria, Mauritania, Niger, and then through Libya.
Libya became a hub for all forms of smuggling activity, including cigarettes, largely due to its geopolitical instability, which is compounded by its strategic location, making it an ideal transit country. One of the most important destinations for cigarettes smuggled through Libya is Tunisia – in 2017, Libya was a transit point for 2.1 billion illicit cigarettes, and it is estimated that since 2016, a quarter of cigarettes consumed in Tunisia are either counterfeit or smuggled. The driving incentive behind cigarettes smuggling in Tunisia is the price, as illicit cigarettes are about 50 per cent cheaper than brand names. Furthermore, the Tunisian state has a monopoly on the highly regulated tobacco industry. There is thus an incentive for corrupt stakeholders involved in the licit cigarette market to benefit from their position, for example by causing shortages of brand cigarettes to increase the demand of smuggled ones.
Mr. Abderrahmane concluded by reminding the audiences of the health concern that cigarettes pose. Cigarettes sold in Africa contain higher level of harmful components such as carbon monoxide and nicotine than those sold in the EU, and consumption is increasing as a result of lax regulations and an aggressive commercial policy pushed by manufacturers. Furthermore, he concluded that unless Free Trade Zones, like the one in the UAE, are better controlled, cigarette smuggling will continue in North Africa and elsewhere.
Following this, Marko Vesovic, journalist and member of the Global Initiative Network, presented his research on cigarette smuggling in the Balkans, highlighting the routes, players, and destinations.
Organised criminal groups engaged in other criminal activities, such as drugs or people smuggling, are also engaged in tobacco smuggling in Montenegro and the rest of the Balkans. He found that Libya is the North African country most affected by this trade coming from the Balkans; it is the entry point from where cigarettes are further diverted. Source countries include primarily the UAE, China (mostly through Chinese tobacco factories, for instance in Romania, which has flooded Ukraine with cigarettes), Turkey, Moldova, Bulgaria, Ukraine, Belarus, Albania, Greece, and Cyprus. There is a suspected link between the UAE and the Balkans, with reports of cigarette factories in the UAE owned or in large part financed by Western Balkan criminal networks.
Montenegro plays a key role as a transit country, with the greatest volume of cigarettes transiting through the Free Trade Zone of the Port of Bar. Between 2012 and 2018, numerous cigarette shipments leaving Montenegro were intercepted by EU member states coastguards . A common smuggling method involved showing falsified papers with Libya or Tunisia as the final destination, when in fact the tobacco shipment would be offloaded close to EU MS’ coasts, such as Italy, Spain or Greece. It is now illegal to store cigarettes in the Port of Bar, although the impact on the volume of trade remains to be seen.
Finally, Dr Max Gallien, Research fellow at the Institute of Development Studies and International Centre for Tax and Development focused on the wider picture of cigarette smuggling – the trends, taxes, and the big tobacco industry.
Cigarette smuggling is an interesting phenomenon as it sits on the back of a large global market – about 20 per cent of the adult population smokes. However, the distribution of smokers is changing, and smokers are increasingly found in Africa and the wider global South. It is estimated that 11.2 per cent of global cigarette consumption is linked to the illicit market. Cigarette smuggling also sits on the back of a global epidemic, with around 7.2 million deaths each year as a result of tobacco-related diseases. It is estimated to cost 1.8 per cent of global GDP in health costs, with 40 per cent of this cost being in developing countries. It is thus a harmful form of smuggling, that is unfortunately increasing.
Dr. Gallien emphasised that the tobacco industry’s influence on policy and academic discussions has been able to establish new and powerful narratives. For instance, the tobacco industry has reframed itself from perpetrator to victim of cigarette smuggling, despite evidence that there is industry complicity behind smuggling. It has also erroneously emphasised the role of tobacco taxes and their geographical unevenness as being the main driver behind cigarette smuggling, despite research finding that there are a wider set of drivers beyond prices.
Overall, awareness of this illicit traffic remains low, confirming the timeliness of this research and the need for ENACT to continue evidence-based research, particularly to help inform policymakers and drive the development of more effective responses to transnational organised crime, and the myriad threats it poses.
A recording of the seminar is available here.
