The "Appearances are deceiving" campaign, launched both in the North and the North-East

Sighetu Marmației, April 2, 2015 - It was announced today that the "Appearances are deceiving" anti-smuggling campaign has been extended across the North and North-Eastern border counties. The campaign aims to show the public the real face of the illicit cigarette trade, and is an initiative of Euromonitor Business Consulting Services, via www.faracontrabanda.ro, in partnership with the General Directorate of Customs, part of the National Agency for Fiscal Administration, with the unconditional support of the Territorial Inspectorate of the Sighet Border Police, the Maramureș County Police, the Maramureș Gendarmerie and JTI. On March 12th, the campaign was launched in Timișoara for the South-Western and Western counties, in partnership with the local authorities in Timiș county.

The campaign's messages were conceived by Publicis and distributed by Pastel between March and June, across 15 counties in the North, North-East, West and South-West, through the press, street banners and direct communication.

In January 2015, illegal cigarettes constituted 19.2% of the market, up from 15.4% in November last year. The biggest increase, 10.8%, was reported in the North-East. In fact, in the past 12 months, this region has been the most vulnerable in the country to smuggling. In the North-West, illicit trade continued to grow to the degree observed in November 2014. It is worth noting that the Ukrainian conflict has pushed the flow of smuggled cigarettes from North-Western Customs points to the North-East", stated Marian Marcu, General Manager of Novel Research.

"We will communicate the 'Appearances are deceiving' campaign across the border areas in the Northern and North-Eastern regions. Why here? Because, in these areas, illicit trading has always tended to be an everyday activity. The neighboring countries of the North and North-East, which are not EU members, have lower taxes than in the EU, and a pack of cigarettes costs a fifth or less of the price in Romania. So, smugglers can make enormous profits. A truck full of illegal cigarettes is worth 1 million EUR! Through the message of the campaign, 'Appearances are deceiving', we aim to inform the public, simply and clearly, that networks of smugglers, starting with suppliers and ending with dealers, takes enormous advantage of people with low incomes. The idea developed by Publicis concerns how the last link of the smuggling chain, the seller, presents himself: apparently as poor as the buyer, but actually just a facet of the phenomenon, the end of a chain or of a real network. Therefore, the image of a two-faced guy was created, a person you feel sorry for and whom you think you’re helping when you buy an illegal pack of cigarettes, not realizing that in fact that he’s hiding a thick gold chain under the worn-out clothes. The dual character is partly inspired by the deceitful and cunning characters in the movie "Filantropica": the outstretched hand that tells the naive buyer a story, who lets himself be fooled. If we take into account that 80% of the price of a pack of cigarettes consists of taxes, the one being cheated most is actually the state. At the same time, society is cheated, because a cigarette smuggling network can be used also for drug dealing or human trafficking", said Cristina Vasiloiu, General Manager of Euromonitor Business Consulting Services.

"Paradoxically, as so often in our history, we are at a border nowadays as well. This time, we are talking about the EU’s and Romania’s longest external border, at more than 2,000 kilometers in length. Given the fact that cigarettes are excise, the smuggling of tobacco costs the state significant sums in lost revenue. As previously declared, a new national Strategy is necessary to fight the illicit cigarette trade on a national level in 2015-2018 and needs to focus on improving the legal framework as well as implementing concrete steps in a coordinated way with all the institutions involved. The General Directorate of Customs continues to apply strict measures to reduce smuggling and will encourage these kind of initiatives to emphasize the deeply negative social effects of this phenomenon. At the moment, with the support of cigarette producers, 33 canine teams are active in border points, specializing in detecting cigarettes, as well as 11 canine teams for detecting both drugs and cigarettes. Collaboration protocols for fighting illicit cigarette traffic have been signed between ANAF and major cigarette producers and between DGV and the Customs Administration authorities of Moldova and Serbia. A similar agreement will be signed with Ukraine. Besides, given that the studies by Customs and the Novel study reveal a growth of the black market in Northern, Western and North-Eastern areas, the Border Customs Offices in Sighet, Halmeu and Siret will resume monitoring low-scale border traffic of certain products, including cigarettes, as soon as they have the resources", said Claudiu Ardeleanu, Head of the General Directorate of Customs.

"Competition is the key to the development of any economic sector. As far as we are concerned, apart from intervention in the legislative process, by issuing conformity certifications, the Competition Council also acts as a consultant, both for public authorities and for the business environment. By making decisions on the basis of market studies, the Council makes recommendations, as well as concrete, specific requests, in order to correct malfunctions. On completing its investigation of the cigarette market, the Council noticed serious market disruptions caused by an increase in smuggling and counterfeiting. Due to this worrying situation, in order to identify the short, medium and long term measures to reduce the impact of the illicit tobacco trade, the Council advised the Government to create a Regional Group to fight cigarette smuggling, consisting of representatives of the Romanian authorities responsible in this field, such as the Ministry of Finance, ANAF, DGV, MAI, IGPR, the Gendarmerie and the Local Police, of parallel institutions in Moldova, Ukraine, Bulgaria and Serbia, and the tobacco industry. Furthermore, the Council required cigarette companies to periodically issue information, for a period of three years, regarding the measures undertaken together with the authorities", declared Dan Ionescu, Counselor in the Competition Council.

 "The British Revenue and Customs Service is honoured to take part in this initiative. The topics of this campaign are of interest both for Great Britain and for the European Union. Cigarette smuggling is a serious issue for Great Britain. For each transport of 10 million cigarettes reaching the illegal markets in Great Britain, the London Government loses over 2.5 million GBP worth of taxes, money which could be invested in healthcare services, education, pensions, as well as other areas of social work. Romania plays a key role in approaching this issue, and this is why we are pleased to join JTI and their work initiative, together with the Romanian partners", stated Richard Paris, Fiscal Crime Liaison Officer

|HM Revenue & Customs| British Embassy Bucharest

"The tobacco industry is the second largest fiscal contributor to the state, after the oil industry. Last year, major producers paid around 2.7 billion EUR to the state through excises, VAT, taxes and contributions. At the same time, we are extremely vulnerable to external factors: the fiscal policy, which caused smuggling to grow in 2014 and in January 2015, as well as the geopolitical context. The conflict in Ukraine, the depreciation of the Moldovan Leu and inflation in Moldova all affected the price of cigarettes in neighboring countries and stimulated the black market. Besides, based on the small traffic agreement between Romania and Ukraine, citizens from border areas will be able to travel without a visa, an advantage that criminals will surely exploit. Even the opening of the Vidin-Calafat bridge, a positive event in itself, has a negative impact on the legal cigarette market. That is because Bulgaria and Romania’s border is an internal EU border and there are no more customs checks and the transportation of tobacco and 'cheap white' cigarettes is increasing dramatically. Apart from regulating these internal EU frontiers with Bulgaria and Hungary, unitary legislation is necessary, based on quantity criteria, tax evasion and cigarette smuggling crimes, as well as establishing specific attributions for the Local Police and the Gendarmerie, as illicit cigarette trade is one of their areas of competence. At the same time, tobacco producers have signed agreements with the European Commission in order to fight cigarette smuggling. We support the creation, using the funds allotted to Romania under these agreements, of a rewards fund for those who have made outstanding achievements in fighting smuggling. It is surely in our best interest to support the efforts of the authorities and this kind of campaign", stated Gilda Lazăr, Director of Corporate Affairs & Communications, JTI Romania, Moldova and Bulgaria.

The most important information and communication materials are displayed on the platform www.faracontrabanda.ro. Today's launch is part of the fourth regional public campaign initiated by Euromonitor Business Consulting Services, with the aim of reducing the black market in cigarettes. The previous campaigns resulted in notable decreases of contraband cigarettes in the targeted regions and time frames.

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For over 10 years, Euromonitor Business Consulting Services has been providing consulting services in areas such as business development policies and strategies in Central and Eastern Europe, interim management in the corporate business sector and crisis management, as well as mentoring and coaching programs for top managers, focusing on leadership issues and professional development. As of 2010, under the umbrella of Euromonitor Conferences, the company organized a series of events in Romania and abroad to draw public attention to phenomena which harm the consolidation of a healthy economic environment in the region, cigarette smuggling being one concrete example. As of 2010, Euromonitor Business Consulting Services hosts the www.faracontrabanda.Ro website.