Spain's biggest ever operation against counterfeit tobacco has led to the seizure of 90 million fake cigarettes and the arrest of six men. The investigation saw the European Anti-Fraud Office (OLAF) working closely with Spanish Customs to break up one of the largest tobacco rackets in Europe and prevent the loss of 10 million euros in tax revenue.
Spanish Customs launched Operation BALMAN in February 2010 when intelligence about suspicious imports from China was provided by OLAF. Fast and accurate exchanges of information between OLAF and national authorities allowed investigators to track containers of counterfeit cigarettes from China to ports on the east coast of Spain, where they were pushed into the illegal market.
"The excellent work of Spanish Customs has resulted in a victory for European taxpayers and a strong blow against smugglers. It shows that proactive information-sharing between OLAF and national authorities is vital in our battle against the illicit trade in tobacco. We fight fraud best when we fight it together," said OLAF's acting Director-General Nicholas Ilett.
On 20 October 2010, six men were arrested in connection with the investigation after searches on homes and businesses in Alicante, Valencia, Barcelona, Tarragona and Badajoz. Chinese, Polish, and Spanish nationals were among those arrested and charged with smuggling. They may face also charges relating to money-laundering and infringement of intellectual property rights. The case continues as investigators analyse documents and computers confiscated during the raids. OLAF will continue to make available information and resources to assist the Spanish authorities in their enquiries.
The illegal tobacco trade has been growing in Spain and the rest of Europe since the global economic crisis hit in 2008. Smugglers have been quick to exploit the demand for cheap tobacco and make huge profits from counterfeit cigarettes: in China a container load sells for around 100 000 euros, in Europe it can reach more than one million euros. The European Commission has concluded cooperation agreements with four of the world's largest tobacco manufacturers(1) in order to tackle this illegal trade. OLAF is also reinforcing its cooperation with national authorities to stamp out an illicit industry that costs European taxpayers an estimated 10 billion euros each year and floods the market with uncontrolled and substandard goods.
Head of Unit Spokesman,
Communication, Public Relations
European Anti-Fraud Office (OLAF)
Rue Joseph II, 30 B-1049 Brussels
Phone: +32 2 296 72 00
Fax: +32 2 2998101