MADRID Aug 11 Organised crime gangs may be
smuggling cigarettes from Gibraltar to Spain, EU investigators
have concluded following a dispute last year over tougher
controls that Madrid imposed on its border with the British
A year-long investigation by the European Union anti-fraud
office (OLAF) conducted at the request of Spain found potential
links between an increase in the size of the Gibraltar market
for cigarettes between 2009 and 2013 and a rise in smuggling and
a larger illicit market in southern Spain.
"The concerns include indications of the involvement of
organised crime," OLAF's press department said in a statement on
Monday, stating it had sent findings to both the Spanish General
State Prosecutor and the Gibraltar Attorney General.
"As OLAF can carry out only administrative investigations,
it is for those authorities to decide what further actions may
be necessary," said the statement emailed to Reuters.
Britain has run Gibraltar, a rocky outcrop off Spain's
southern coast, since Madrid ceded the land 300 years ago. But
Gibraltar, and the waters surrounding it, remain a disputed
territory with Spain claiming it as its own.
A Spanish court official said a High Court investigation
would be opened in response to the OLAF report.
No one was immediately available at the Gibraltar Attorney
General's office to comment on OLAF's conclusions.
Gibraltar authorities accused Spain last year of using heavy
handed border controls to disrupt day-to-day traffic across the
frontier in reaction to an artificial reef they erected in the
But Spain said the extra checks were necessary to root out
tobacco smuggling and that Gibraltar does too little to stem
what it calls an increasing flow of contraband cigarettes out of
the territory, which has a low sales tax.
Cigarettes are about 40 percent cheaper on "the Rock" -
Gibraltar's nickname - than in Spain.
In November, European Commission inspectors, sent to
Gibraltar to investigate the dispute, urged Britain to improve
safeguards against tobacco smuggling and said both sides should
exchange intelligence on the problem.
Britain has said it is working to help prevent cigarette
smuggling. Spain has kept up the strict frontier checks although
traffic tailbacks have eased with people trying to avoid rush
hour trips and making fewer journeys in general.
(Reporting by Paul Day; Editing by Mark Heinrich)