Criminal gangs are using artificial intelligence to help them find locations in Europe to build illicit cigarette factories with less chance of getting caught, an EU auditor warned on Tuesday. These gangs used to operate in Eastern Europe where it was easier to hide, Petri Sarvamaa in charge of the European Court of Auditor’s report on illicit tobacco, told a press briefing. Now, with AI, it’s easier to find places to operate that are closer to their markets, he said, in rural locations and villages.
It’s just one of the many challenges facing EU and member countries as they grapple to clamp down on illicit tobacco networks, which cause at least €13 billion in lost revenue in the bloc annually. In 2023, almost one in 10 cigarettes in Europe was illegally produced or smuggled in. The report also lands as EU countries' attempts to find agreement on raising minimum tobacco and vape taxation levels have slowed after snus-loving Sweden — which is holding a general election next week — rebuffed a levy on nicotine pouches.
The aim of the law is to harmonize prices across the bloc, strengthening the single market while nudging smokers to quit. A lack of coordination and intelligence sharing between EU agencies and member countries’ authorities is hindering the bloc’s response to new cigarette factories, meaning “most alarmingly” the true size, structure and economic impact is unknown, Sarvamaa said. To clamp down on this illegal activity, “it all starts with the Commission,” Sarvamaa said.
The Commission broadly accepted ECA’s recommendations, bar areas it said were beyond its role. It pushed back on defining strategies for the various EU authorities, noting that OLAF and others are responsible for setting their own strategic priorities. And it said it was not possible to provide a robust approach to assessing the size and economic impact of illicit trade, since no single method could do this.
But he stopped short of recommending how Europe should proceed with its overhaul of tobacco products and excise legislation, saying this was a role for policy and lawmakers.
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