What is OLAF OLAF European AntiFraud Office Operational

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What is OLAF? OLAF - European Anti-Fraud Office Operational since 1 June 1999, successor

What is OLAF? OLAF - European Anti-Fraud Office Operational since 1 June 1999, successor to the Task Force for the Coordination of the Fight against Fraud (UCLAF) in the Commission Secretariat-General, set up in 1988 Responsible for protecting the European Union’s financial interests, combating fraud and all other illegal activities to the detriment of the EU budget

OLAF Activities • POLICY and LEGISLATION (Fraud-proofing of legislative and regulatory initiatives of the

OLAF Activities • POLICY and LEGISLATION (Fraud-proofing of legislative and regulatory initiatives of the Commission , Designing and developing a concept for fight against fraud, administrative and judicial follow-up…). • OPERATIONAL ACTIVITIES (Investigations and Operations): External and internal investigations, On-the-spot checks, coordination activities in close co-operation with the Member States, Third countries or other Community bodies or Institutions. . ). • INTELLIGENCE (Technical support to the MS, collection and analysis of information, profiling risk areas of fraud). • Horizontal activities (Administration, human resources, training, communication, co-operation with accession countries)

Role of the European Anti-Fraud Office Task Group Cigarettes • Established by the European

Role of the European Anti-Fraud Office Task Group Cigarettes • Established by the European Commission (UCLAF) in 1994 to investigate and coordinate investigative efforts of Member States in combating the illicit cigarette trade • Created due to concerns at the time about the significant development in cigarette smuggling to the EU, particularly from cigarettes warehoused in the EU that were sent for re-export to third countries and subsequently smuggled back onto the EU market • Currently comprises of 16 full time Officials, representing Belgium, Finland, Germany, Ireland, Italy, Lithuania, Poland, Romania, Slovakia, Spain, the UK plus designated representatives from the appropriate enforcement authorities in each of the Member States

Role of the TGC • Co-ordination and support of major international cigarette smuggling cases

Role of the TGC • Co-ordination and support of major international cigarette smuggling cases • Cig. Info / Mutual Assistance Broker (MAB): EU-wide seizure reporting system • Intelligence • HERCULE II Programme • International Operations – like Diablo, Mudan, Matthew, Sirocco • Annual TGC Conference – 16 th meeting Vienna, October 2011

Working with Industry • Payment of a collective total of $2. 15 billion to

Working with Industry • Payment of a collective total of $2. 15 billion to EU and Member States • Obligation on all parties to the Agreements to tackle contraband counterfeit • Tracking and Tracing of tobacco products • Supply commensurate to market demand • Anti-money laundering provisions • Payments on seizures of genuine product over 50, 000 • Intelligence Anti-Contraband Anti-Counterfeit Agreements with Philip Morris International, Japan Tobacco International, British American Tobacco and Imperial Tobacco Limited and legal actions / negotiations with other companies • (several hundred million cigarettes seized and many illegal factories closed)

International Dimension • Overseas Liaison Officers (Beijing, Kiev) • Cooperation agreements with third countries

International Dimension • Overseas Liaison Officers (Beijing, Kiev) • Cooperation agreements with third countries • Protocol on the Elimination of the Illicit Trade in Tobacco Products (Article 15 World Health Organization Framework Convention on Tobacco Control) • Working together with international organisations like EUROPOL, EUROJUST, INTERPOL, WCO

Number of cigarettes seized in EU (in billion sticks)

Number of cigarettes seized in EU (in billion sticks)

Overview of the problem ONE 40’ CONTAINER 1000 master cases = 10 000 cigarettes

Overview of the problem ONE 40’ CONTAINER 1000 master cases = 10 000 cigarettes Revenue lost +/- 2 million € 22% 15% Customs Duties Tobacco Excise 63% VAT

Main sources of illegal cigarettes in Europe • The Far East, particularly People’s Republic

Main sources of illegal cigarettes in Europe • The Far East, particularly People’s Republic of China • The Middle East • Countries Neighbouring the EU (Ukraine, Russian Federation, Belarus, Moldova, Serbia) • Illegal production facilities in Europe

Current Challenges • Cheap Whites • Illicit Production • “Globalisation”

Current Challenges • Cheap Whites • Illicit Production • “Globalisation”

Small independent manufacturers

Small independent manufacturers

Small independent manufacturers Jing Ling, BTF, Kaliningrad, RU Karelia, Greece Raquel, Cyprus

Small independent manufacturers Jing Ling, BTF, Kaliningrad, RU Karelia, Greece Raquel, Cyprus

 • Other Cheap Whites

• Other Cheap Whites

Seizures Jin Ling cigarettes 2005 - 2009 *CIGINFO data

Seizures Jin Ling cigarettes 2005 - 2009 *CIGINFO data

Percentage of seized Jin Ling among other brands *CIGINFO data

Percentage of seized Jin Ling among other brands *CIGINFO data

Illegal Production

Illegal Production

Illegal Factories 2004 -2010

Illegal Factories 2004 -2010

Illegal Production 11 9 6 4 8 1 2 10 5 3 7 12

Illegal Production 11 9 6 4 8 1 2 10 5 3 7 12 1. Belgium 2. Czech Rep. 3. France 4. Germany 5. Hungary 6. Latvia 7. Moldova 8. Poland 9. Russia 10. Slovak Rep. 11. Sweden 12. Ukraine

Globalisation of the Illegal Tobacco Trade • Complex shipping routes • Free zones •

Globalisation of the Illegal Tobacco Trade • Complex shipping routes • Free zones • Investigations covering many countries

Smuggling routes of Jin Ling cigarettes Kaliningrad Ports of: Hamburg Rotterdam Antwerp Port Said

Smuggling routes of Jin Ling cigarettes Kaliningrad Ports of: Hamburg Rotterdam Antwerp Port Said Mersin Famagusta Greece Germany

Smuggling routes of American Legend Kalamata Dubai Canary Islands Mauretania, Morocco, Benin, Niger, Algeria

Smuggling routes of American Legend Kalamata Dubai Canary Islands Mauretania, Morocco, Benin, Niger, Algeria

The “MIAMI” case Countries involved: Ireland, USA, Belgium, France, Germany, Spain, Portugal, Cyprus, Uruguay,

The “MIAMI” case Countries involved: Ireland, USA, Belgium, France, Germany, Spain, Portugal, Cyprus, Uruguay, Chile, Panama, the Netherlands, United Kingdom, Singapore, UAE & Canada

SCARLETT Diane Head of Operations Task Group Cigarettes European Anti-Fraud Office (OLAF) E-mail: Diane.

SCARLETT Diane Head of Operations Task Group Cigarettes European Anti-Fraud Office (OLAF) E-mail: Diane. [email protected] europa. eu Tel. +32 229 84654