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Tobacco smuggling in Gibraltar 'cost EU €700M'

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Tobacco smuggling in Gibraltar 'cost EU €700M'
More than 10 million packets of cigarettes were seized by Spanish police at the Gibraltar border in 2013. Photo: Marcos Moreno/AFP
16:36 CEST+02:00
The European Union's anti-fraud office estimates the EU lost €700 million ($940 million) in tax revenues from 2009 to 2013 as a result of tobacco smuggling through Gibraltar.

The €700-million figure is contained in a confidential new report by the EU's anti-fraud agency Olaf, cited by Spain's El País newspaper on Thursday.

The report also fingers specific companies involved in the illegal tobacco trade, according to the daily.

Olaf's 400-page report is the result of investigations into a complaint concerning increased smuggling of cigarettes across the frontier between Gibraltar and Spain in the period 2009-2013, an OLAF spokesperson told The Local recently.

Spanish media outlets said recently Gibraltar's cigarette imports tripled from 2006 to 2011, with 110 million packets coming into the territory in 2012 alone.

Much of this tobacco is thought to be smuggled into Spain.

There are also indications organized crime is involved in the trade, Olaf told The Local, calling for Spain and Gibraltar to tackle the problem.

Findings of the Olaf report were sent to Spanish and UK authorities, and prosecutors from Spain's High Court on Wednesday began laying the ground work for a judicial investigation of the matter.

UK authorities responded by saying Gibraltar was already tackling the problem of tobacco smuggling and was willing to work closely with Spanish authorities on a solution.

They also stressed the role of organized Spanish criminal gangs in the lucrative trade. 

Relations between London and Madrid became particularly strained last year after Gibraltar dropped 70 concrete blocks into the sea in July, in what its government said was an attempt to create an artificial reef.

The move had the effect of also blocking Spanish fishing boats from operating close to the airport runway, and Madrid responded by introducing stringent border checks.

Spain has repeatedly criticized Gibraltar for failing to clamp down on its imports, and many in Spain see the UK territory with 30,000 residents as a haven for smugglers and tax evaders. 

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