Europe’s criminal gangs are on the rise – and politicians are making life easy for them.
Poor law enforcement, coupled with overregulation which pushes consumers towards the black market, is leading to a heyday for gangsters looking to make cash and wreak havoc. As Denmark takes over the presidency of the Council of the European Union, it has an opportunity to change Europe’s direction of travel. Time is running out. It must make the right choice.
The presidency of the Council is an underrated tool for influence in Brussels. Rotated every six months, it grants a member state the chance to set the tone and direction on EU legislation. When it was Hungary’s turn to occupy the presidency last year, Viktor Orbán wasted no time tearing up EU norms while his country sat in the hotseat. Denmark is next in line. If played right, the Danish presidency could have far-reaching effects on Europe’s criminal underworld.
First in line should be cutting off gangs’ funding channels. As well as drugs, gangs are increasingly turning to illicit smuggling of tobacco and nicotine products like cigarettes and vapes. As regulators in Brussels – and in member states – consider hiking tobacco taxes and bringing in harsh new regulations on nicotine products, the demand for black-market products is growing.
There are several policy items which Denmark should push towards the chopping block. The most obvious is tobacco tax increases. Through mechanisms like the Tobacco Excise Directive, the EU looks poised to substantially increase the tax charged on cigarettes and other tobacco products across the bloc.
Smokers already fork out substantial amounts of money in tax every time they buy a pack of cigarettes. Making them more expensive will only boost the number of smokers who feel they have no choice but to turn to illicit vendors, which do not charge tax and can therefore offer much lower prices. By directing consumers towards the black market, regulators are opening up a whole new market for criminal gangs to cash in.
This is a huge – and growing – problem. Around 1 in 15 cigarettes in Europe already has illegal origins. Amazingly, Paris customs authorities recently caught a French senator smuggling 22kg of undeclared tobacco through an airport. This profitable business aids gangs in their other criminal activities.
The links between illicit tobacco and organised crime are well-documented. Even the EU has published policy memos on it. When criminals make money from dodgy cigarettes, they funnel that money into other illegal activities. It is no coincidence that rates of drug crime and violent and sexual offences have skyrocketed while the illegal tobacco trade has been booming in recent years. Illicit tobacco feeds other crime.
Unless Denmark uses its presidency to intervene, EU policy will continue heading in the wrong direction. Wopke Hoekstra, the Dutch EU commissioner, is responsible for the Tobacco Excise Directive, alongside his main brief on “climate, net zero and clean growth.” Hoekstra is pushing hard for higher taxes on cigarettes. The Netherlands saw tobacco tax revenues plummet after it raised excise rates domestically, suggesting a huge black-market boost. Perhaps Hoekstra hopes to conceal the Dutch mistake by expanding this failed policy to the whole continent.
To make matters worse, the EU is not limiting its ham-fisted policymaking to cigarettes. Other products like vapes and nicotine pouches are in the firing line, too – set for all-out bans, not just tax rises. This is music to gangsters’ ears. More market share for illicit sellers to claim!
No matter that those products are great tools for helping smokers quit. Or that rampant misinformation and scaremongering from politicians has already led smokers to incorrectly believe that vaping is as unhealthy as smoking. That alone likely kills millions, who could otherwise have elongated their lives by switching from cigarettes to vapes.
As well as the regulations themselves, other factors feed into gangs’ ability to profit from illicit sales. Law enforcement agencies have largely sat back and watched as criminals have taken substantial market share in tobacco and nicotine products. Authorities boast about seizing hundreds of millions of illegal cigarettes per year, but they are only scratching the surface. The EU reckons as much as 8% of European cigarette consumption is illicit (although according to its documentation, the only problem it seems to have with that is the lost tax revenue).
The consequences of these poor policies are far-reaching. As well as the crime and health effects, politicians might also have to consider how tourism might suffer. The Sun recently warned British holidaymakers travelling to France they face a five-year jail sentence and a six-figure fine for possessing nicotine pouches, which are legal in Britain but were recently banned in France. The EU looks set to follow in France’s footsteps on this, which would be another shot in its own foot.
The same could be said of disposable vapes. This time, it’s Britain and Belgium which have imposed bans. Vapers travelling in or out of those countries will have to take care not to fall foul of different regulations when they cross national borders. Once again, EU politicians like Wopke Hoekstra and his allies are itching to copy domestic bans at the EU level, taking local failures and imposing them on all 27 member states.
If Denmark does not use its six-month presidency to change the conversation on these issues, criminal gangs’ ability to profit from a growing black market for nicotine products will only escalate. This is an entirely solvable problem – if Brussels would only commit to solving it, rather than trying to outdo itself on maximising the number of new regulations it passes each year.
Jason Reed is a policy analyst and political commentator for a wide range of global media outlets, and a project manager with non-profit group Young Voices. Read more at jason-reed.co.uk and follow him @JasonReed624.