Illegal Underground Factory Raid Stresses Links Between Organized Crime and Importance of Collaboration

March 16, 2020
underground factory

In 2020 alone, 17 illegal factories have been raided within E.U. borders—in Belgium, Latvia, Poland, Spain and Italy. 

An illegal cigarette factory hidden four meters under the ground has been uncovered in Spain, with six workers trapped inside gasping for air.

The facility was controlled by an organized crime group involved in the trafficking of cigarettes, drugs and people. It produced up to 3,500 counterfeit cigarettes per hour, bringing in about €625,000 per week in criminal profits. Spanish law enforcement officers—helped by Europol and other law enforcement agencies—arrested 20 people suspected of being members of the criminal group. Three million counterfeit cigarettes were found.

The Spanish manufacturing facility was hidden in a bunker underground. It operated as a complete production line: Workers made and packed the cigarettes onsite, and they were forced to work and live in hazardous conditions without being allowed to leave the facility on their own. The six workers rescued by police during the raid were of Ukrainian and Lithuanian origin.

After making and packaging the cigarettes, the criminal group then distributed them on the European black market. As reported in the KPMG Stella Report, this illicit market is equivalent to approximately 43.6 billion cigarettes per year, which in 2018 cost E.U. governments €10 billion in lost revenue.

As Stop: Illegal reported last year, the illicit cigarette landscape is continuing to evolve. Highly interconnected organized crime groups are constantly finding novel strategies to evade detection. Moreover, a Europol statement highlighted that these Spanish raid seizures didn’t just include the millions of cigarettes, but also 144kg of marijuana, 20kg of hashish and three weapons. This shows that organized crime does not limit itself to one crime.

Illegal cigarette manufacturing is a growing problem in the E.U. While illegal cigarettes traditionally entered the E.U. market via ports or from Eastern Europe via land borders, they are now increasingly being produced within E.U.-based manufacturing facilities. As reported in Project Stella, E.U. factory raids—an indicator of the presence of illegal manufacturing—are growing. In 2018, they increased by 132 percent. In 2020 alone, 17 illegal factories have been raided within E.U. borders: in Belgium, Latvia, Poland, Spain and Italy. 

In Naples, Italy, the Guardia di Finanza recently uncovered three illegal cigarette factories that were producing 3.5 tons of cigarettes per day. The factories were equipped with a total of 39 machines, which were used to produce the cigarettes and package them for entry into the market. The first factory was raided at night, where eight people (all Moldovan citizens) were arrested.

Another recent example comes from the Belgian municipality of Zele, where customs officials uncovered an illegal cigarette factory with two production lines and a packaging line. In total, 11.5 million counterfeit cigarettes were found onsite—with an estimated street value of €12.2 million. Fourteen people (10 Ukrainians and four Poles) were arrested. The police reported that the counterfeit cigarettes were probably destined for the United Kingdom and would be marketed under the brands Richmond, Rothmans and Marlboro.

The production of illegal cigarettes is clearly shifting. Illicit trade is becoming more mobile, and more factories are moving closer to the location of distribution. As reported in Project Stella, the key raw materials required for cigarette manufacturing—tobacco, filter rods, papers and packaging materials—can easily be purchased either within the E.U. or imported with minimal customs checks. Organized crime groups are also able to get hold of increasingly sophisticated industrial-grade material online and shipped via free trade zones to avoid detection. This all makes it quicker and easier to set up and maintain illicit tobacco factories within the E.U.

This growth of E.U.-based illegal manufacturing sites suggests that it is currently too easy for organized crime groups to obtain essential tobacco manufacturing equipment. As outlined in Fighting Illicit Trade: Licensing, licensing for the import, export, and manufacturing of tobacco products and machinery is critical if we are to ensure effective control over relevant participants in the tobacco supply chain. An effective licensing regime should be proportionate, and only essential tobacco manufacturing equipment should be subject to the requirements. This can help secure the tobacco supply chain and reduce illicit trade.

By enacting appropriate licensing regimes, authorities can better monitor the industry and more easily identify the criminals involved in illicit trade.

This rise in illicit manufacturing within E.U. borders also stresses the need for international cooperation between law enforcement agencies. The European Commission states that effective collaboration between the law enforcement authorities of E.U. Member States is required to combat all forms of cross-border crimes. It is crucial in disrupting the complex network behind any illicit activity.

The recent successful operation in Spain is an example of exactly this type of cross-border partnership. It was carried out by the Spanish Civil Guard, with support from Europol and involvement from the Lithuanian Customs Criminal Service, Polish Police Central Bureau of Investigation and U.K. law enforcement authorities. Although Europol does not have autonomous investigative capabilities, it provides crucial operational coordination and support for different law enforcement agencies. In Spain, it facilitated the information exchange between participating countries, provided coordination support and analysed operational information against its databases to give leads to investigators.

With increasingly strong interconnections between organized crime groups and E.U. countries, cross-sector and cross-country collaboration is necessary to prevent anyone from profiting from—or taking advantage of—the illicit tobacco trade. Follow the links below for more information on the recent raids carried out across Europe:

STOP ILLEGAL

Written by STOP: ILLEGAL

Share this link