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TOBACCO FROM UKRAINE FILLING DOMESTIC DEMAND FOR CHEAP CIGARETTES

Police target tobacco smugglers

FOLLOWING a year-long police operation aimed at cracking a ring of cigarette smugglers, police recently apprehended 51 offenders operating in Slovakia, in one of the biggest raids in the country's history.
During the large-scale operation, which involved nearly 300 officers, police found nearly one million cigarettes, several guns, and substances used to produce various drugs.
Officials said the ring had been operating in Slovakia since 1998, distributing tobacco to the local market and to the neighbouring Czech Republic. Czech police also assisted in the sting.

FOLLOWING a year-long police operation aimed at cracking a ring of cigarette smugglers, police recently apprehended 51 offenders operating in Slovakia, in one of the biggest raids in the country's history.

During the large-scale operation, which involved nearly 300 officers, police found nearly one million cigarettes, several guns, and substances used to produce various drugs.

Officials said the ring had been operating in Slovakia since 1998, distributing tobacco to the local market and to the neighbouring Czech Republic. Czech police also assisted in the sting.

Illicit tobacco products traditionally come to Slovakia through the country's eastern border with Ukraine. Border police statistics show that customs officers every year apprehend about 16 million cigarettes in attempted smuggling operations.

Despite border police strengthening manpower on the 100-kilometres border, with 450 officers expected to patrol the strip by the time Slovakia joins the EU in 2004, the route is still notorious for being "full of holes", as former Interior Minister Ivan Šimko once admitted.

According to Interior Ministry spokeswoman Alena Koišová, there are currently 346 fully professional officers supervising the border.

Michal Borguľa, deputy chief of the Police Presidium's border-police section recently said that protecting the Ukrainian border was "a priority" for the country's security bodies. After Slovakia becomes a member of the EU, the border with Ukraine will become the eastern border of the eurozone, a fact that makes it critical that the frontier is secure, experts say.

Koišová told The Slovak Spectator that police are taking the task seriously and are still investing in adopting the so-called Schengen Treaty border system, an interconnected EU borders-and-customs information network.

"The Interior Ministry last year bought Sk54.7 million (1.3 million euro) worth of equipment, including cars, IT systems, and radio and telecoms equipment," said Koišová.

"The EU's PHARE funds last year helped to finance the purchase of more IT for the Slovak-Ukrainian border, with more than 600,000 euro, while pre-accession advisors continue to train Slovak border guards," she said.

Officials confirmed that members of the gang arrested recently were smuggling cheap cigarettes from Ukraine, and among other channels, they were using the Slovak post to distribute parcels containing the illicit material to their customers around the country.

According to Peter Kvasnička, an investigator from Trnava's regional bureau of investigation, officers conducted dozens of house searches and apprehended about 4,500 boxes of smuggled cigarettes. Each box contains 10 packets of 20 cigarettes.

"This was a nationwide police operation in which officers from the Košice, Trnava, Žilina, and Bratislava regions participated," he said.

The majority of the perpetrators were charged with smuggling and tax evasion, and 27 were placed in preliminary custody.

Police estimated that this smuggling ring caused total damages of about Sk10 million (240,000 euro) but expected losses to the state economy to grow as police uncovered more deals in the course of their investigation.

As part of its commitment to the EU, Slovakia has started increasing the price of its tobacco products. Because Ukraine is not an EU candidate country, its prices for tobacco products remain low, giving rise to temptation for smugglers.

Koišová from the Interior Ministry said: "Our experts estimate that 30 per cent of cigarettes that are smuggled to Slovakia from Ukraine are destined for the domestic black market and about 70 per cent are illegally shipped further to the Czech Republic and EU states, including such [distant] states as Great Britain," Koišová said.

In Slovakia, demand for cheap cigarettes and the subsequent illegal activity it feeds has been linked to the high unemployment rate. The average jobless rate reached 17.5 per cent in December 2002, and the rate is often twice as high in some eastern Slovak districts.

Koišová said officials with special police units estimate that "several thousand" Slovak citizens are involved in cigarette smuggling, among them a number of unemployed eastern Slovaks.

"The highest number of [cigarettes smugglers] and people actively helping them is in eastern Slovakia. The situation is influenced by the fact that there are not many opportunities there for citizens to earn a living legally," Koišová said.

But, she added, "there is another large group [of illegal cigarette dealers] in western Slovakia. They smuggle tobacco to the Czech Republic and Austria".

The need to eliminate what is believed to be a highly profitable illegal business was made a priority as Slovakia edged nearer to joining the EU. But estimates of the damage such illegal activity causes to the domestic economy also drive police efforts to crack down on smuggling.

"Slovakia's economy is damaged on a large scale by the illegal tobacco business, as a result of tax evasion on import tax, VAT, and customs duty," Koišová said.

Slovakia's Customs Office estimates that average losses from cigarette smuggling reach more than Sk1 billion (24 million euro) per year.

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