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Germany fights cigarette smugglers
By CNN's Stephanie Halasz
BERLIN, Germany -- The European Union says $2 billion is lost each year because of international cigarette smuggling. But in Germany, officials believe a solution to the problem can be found inside tobacco companies themselves. Last week, over 1,000 custom officials raided the Hamburg headquarters of tobbaco giant Reemtsma as part of an investigation into claims that employees are involved in illegally selling cigarettes to Iraq via Turkey. The inquiry also centres on claims that employees routed untaxed cigarettes to Eastern Europe to be then brought back to Germany and sold on the black market, avoiding a 72 percent tax. Herward Lohrke, a customs official, told CNN: "The tobacco industry makes a profit from smuggled cigarettes because it produces smuggled cigarettes. "I don't want to say it produces for smuggling purposes, but in the end the industry does make a profit because it does not have to pay taxes on the cigarettes." But the cigarette industry says the big buyers -- the people who buy in large quantities -- are the culprits. Ernst Brueckner, of the German Cigarette Manufacturer Association, said: "Even if all buyers were legal and legitimate first buyers, a seller could never exclude the possibilities of his products landing in these dark channels, and this is why the cigarette producers are in a difficult situation." The illegal cigarette trade is a multi-billion-dollar business in Europe. In Germany, customs officials intercept about one billion cigarettes coming into the country each year. But experts estimate eight times that amount make it across the border successfully. And every day smugglers cross Germany's 600 mile long border with Eastern Europe. Customs officials say Germany is becoming a transit point for smuggled cigarettes, with contraband going to Italy because of its porous borders, or to Britain, an attractive destination because of the high tax on tobacco. Even in Berlin, a legal pack of cigarettes costs around $3 --- but on the black market it can go for half that.
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