Cargo Trains Smuggle Cigarettes from Belarus into the European Union
Since 2014 the pattern of illegal exports from Belarus to EU has moved towards larger consignments. Large quantities of detained tobacco found on cargo trains. On 6 November Jury Siańko became the Head of the State Customs Committee. Will he change the current situation with smuggling from Belarus to EU?
The decrease in individual border traffic and the growing share of Belarusians cigarettes in the EU shadow market are both reasons for concern. Financed by the EU and foreign tobacco producers, Belarusian State Customs Committee aims to reduce smuggling and increase revenue for the state.
More Confiscated Goods – Greater Revenue
A new appointment in the Belarusian bureaucratic system removed Aliaksandr Špilieŭski from the State Customs Committee with a young Jury Siańko. The new head of customs started a campaign for electronic registration at border crossings which is set to start on 1 December in Kazlovichy.
The new campaign can reduce queues at border crossings and generate profits from the registration fee and increase international traffic. But what is the aim of such campaign without new anti-smuggling activities: to increase customs revenues or to reduce the volume of contraband?
Compared to Western Europe, Belarus has very low cigarette prices and the volume of illicit tobacco trading with EU has been steadily increasing. About a three times higher average cigarette price and near 38% higher AI-95 gasoline price in Poland gives plenty incentive for increased contraband. Smugglers traditionally illegally export tobacco products to Lithuania, Latvia and Poland. Alexander Pogosky from the Directorate on Economic Crime stated that $700m in shadow tobacco exports are helping to finance criminal groups.
Larger tobacco consignments and the growth of detained cigarettes show a new pattern of smuggling to the EU. 11 September Siarhei Prudnichenka from the Contraband Department on the press-conference said that in January-October 2014 the State Customs Committee detained more than 99m cigarettes – that is two times more than the same period in 2013. Prudnichenka also noted the increase in contraband by rail through loose goods, timber products and goods from the woodwork industry – all of which are simply used for cover.
While illegal exports and imports hurt the EU's economy because of lost custom duties, smuggling actually benefits the Belarusian Customs Committee. For example in 2011 the Brest Customs Services department alone detained goods with an estimated value of $2.4m. According to Siarhei Poludzen from the State Customs Committee noted that border guards detain motor vehicle on the Belarusian border about three times per day. Later special auctions sell confiscated vehicles, tobacco, clothes and other detained goods in Belarus.
Individual Smugglers – Are They Really That Dangerous?
Low salaries and pensions in Belarus trigger increases in contraband. The typical individual smuggler is a man around 35 years old without a job and with a vehicle capable of transporting gasoline or cigarettes. Retired people, thanks to their small pensions, usually transport clothing and food from the EU. Later they sell these smuggled goods in EU countries by themselves or to traders in a border zone regions. However, in Belarus smugglers are subject to administrative liability, while in neighbouring Lithuania they adopted criminal liability for the same activity.
Individual smugglers cannot use entire railway cars for contraband, naturally. The customs service finds this all to be a profitable business as an increase in detained goods from individual smugglers provides additional visible evidence of them doing a good job. According to the value of confiscated goods moving to Poland – tobacco smuggling alone grew two-fold – up to 99m confiscated cigarettes in 2014. But in comparison with the total volume of shadow exports, which are estimated to be 8.7bn cigarettes, it is not so much.
But who can use railway for contraband in a country with such a strong security service apparatus? And even if it is a state shadow business – why are the Customs Committee intercepting more and more smuggled goods? Siarhei Prudnichenka noted that cooperation between the State Customs Committee and Japan Tobacco International, which provides money for vehicles and monitoring equipment, pays for training seminars for frontier guards. EU and American foreign tobacco companies such as British American Tobacco finance the Customs Committee to reduce losses from smuggling.
Next year the Belarusian Customs Committee can expect even more financing from its official foreign sponsors because of the visible results it has been achieving. Also the appointment of the new leader of the State Customs Committee gives a signal that the border guards may become more effective next year. Furthermore, according to the National Statistical Agency in the first nine months of 2014 the volume of official Belarusian tobacco export rose for 42% – which indicates either a shift to legal exports or an increase in production.
Need for the Better Customs Control
As a result of the illegal goods being sent to EU, it continues to loses custom duties and taxes – leading domestic firms produce less because of smuggling. At the same time, producers of other goods in the EU can even make gains because of cheap but illegal gasoline or raw materials like contraband wood. The estimated profits from tobacco smugglers alone is at least $1bn annually, which the EU's lost tax revenues exceeding $1.5bn. But a part of the smugglers’ profit goes to bribes which corrupts the state.
The problem of smuggling becomes even more important in the light of the discussion about the liberalisation of EU-Belarus visa regime. If the current results of the State Customs Committee work remains the same, the EU should review its policy towards Belarusian border guards. The new policy should include better monitoring of and support for the Belarus Customs Committee's work and stronger cooperation with border guards from EU member states.
Raman Kachurka is based in Brest and holds an MA in International Economics from the University of Warsaw.
New Weapons from China, Taking Offence at NATO, Afghanistan Border – Belarus Security Digest
China regards Belarus as a promising market for its armaments. Attempts to establish cooperation between NATO and CSTO have failed.
The situation in Afghanistan keeps special services and border guards from CIS countries on their toes: an escalation of the conflict is expected in the spring. Several ex-Soviet countries are getting ready to repel attacks from the Taliban.
Belarus plans to start manufacturing engines for cruise missiles with the support of Ukrainian experts in 2016. Belarus' Ministry of Interior has a hard time recruiting new staff. All of this and more in this edition of the Belarus Security Digest.
China will assist the Belarusian army
On 8 November, the defence ministries of Belarus and China signed a protocol for a bilateral agreement on non-repayable military assistance provided by China to Belarus. It is highly likely that it will be another batch of armoured vehicles. Conversely, it is unlikely that the amount of aid will exceed $7m as Beijing pushes its military wares on international markets.
The gifting of these goods is really a sales promotion, which allows potential buyers to familiarise themselves with the quality and technical features of the Chinese products. Belarusian soldiers are already became familiar with Chinese small arms back after a November 2012 a joint anti-terrorist training session known as "Swift Eagle – 2012" took place in China.
CSTO took offence at NATO
The Collective Security Treaty Organisation (CSTO) decided to suspend efforts directed at establishing relations with NATO. They have motivated this decision by their non-constructive, and often openly hostile, position held by the EU and the Alliance.
The CSTO regularly accuses NATO of attempts to destabilise the situation in CSTO countries. They cite the alleged "disproportionate increase in the number of employees of Western embassies and, first of all, the United States" as well as "revitalisation of numerous NGOs funded through Western grants" as being reasons for concern.
The CSTO's renunciation of contacts with NATO was expected: CSTO has attempted to establish dialogue with their western colleagues since 2004. The West ignored them and favoured the development of bilateral relations with CSTO's member states.
In fact, this decision, even if it does not affect anything directly, is one of the hallmarks of the "Cold War 2.0" between Russia and the West. The lack of recognition by the West signals the limited international importance of CSTO.
The Situation in Afghanistan
The situation in Afghanistan has been at the centre of attention of the CIS' special security services and border guards. On 5 November, a meeting of the Council of Heads of Security and Special Services of the CIS member states took place in Minsk.
The agenda included the issues of combating international terrorist organisations operating in Afghanistan because of the threat of an expansion of their activities into the territory of the CIS after the withdrawal of most the ISAF's troops in 2014. Separately, they have discussed measures to protect their transportation infrastructure from terrorist attacks.
On 20 November, in Brest, a meeting of the Council of Commanders of Border Troops of the CIS took place. According to experts, the situation on the ground is showing signs of deterioration. In spring 2015, the situation on the border with Afghanistan will become even more difficult.
Belarus Hopes to Join the League of Missile Wielding Nations
In November, a meeting of representatives of the Ukrainian corporation Motor Sich and the State Military and Industrial Committee of Belarus took place in Zaporizhzha, Ukraine. Both the Ukrainian and Belarusian parties avoided advertising this event officially and have refrained from making any comments on it as well. Meanwhile, information is circulating about some preliminary agreements on expanding cooperation between the two parties.
In particular, the manufacturing line for small gas turbine engines for cruise missile may be moved to the JSC Orsha Aircraft Repair Plant. Belarus has never manufactured anything similar; it lacks the expertise, an engineering school and even the manufacturing equipment. If the agreement were implemented, it would become a serious technological breakthrough for Belarus. Even despite the fact that the Ukrainian experts be the ones to make it happen. Manufacturing is preliminarily scheduled to begin in 2016.
Belarus' New Defence Minister
On 25 November, Minister of Defence Jury Zhadobin was discharged from his post as a result of aging out. The forty-seven-year-old Andrej Raukou was appointed to take over his post. This move can be viewed as one technical manager of the military agency being replaced by another. This staffing decision was taken in the framework of Lukashenka's recent policy to bring in younger senior managers to important posts in the government.
The new minister has already made it clear that no major changes should be expected in the defence field as Alexander Lukashenka has defined the strategy. He will simply have to implement it. Traditionally, the details of this strategy are not disclosed. The indicator of the defence budget for 2015 will be of critical importance. It will be a sign of a possible shift in government priorities in connection with the ongoing regional security crisis.
Problems with Police Staffing
The Ministry of Interior is undertaking efforts to improve the situation with the nation's police force staffing. They view the professional orientation of youth as one of the potential tools to rectify the situation. In November, the Academy of the Ministry of Interior held a seminar with managers of the nation's school system, which has introduced legal education classes as well as the cadet schools with the participation of Major General Ihar Shunievich, the Interior Minister. This confirms the importance of this policy shift in the activities of the ministry.
The lack of budgetary funds limits the ministry's ability to overcome the more negative trends associated with new personnel recruitment. Discussions about the bloated budgets of security agencies in Belarus is nothing but speculation. A year ago, the Office of the Prosecutor General of Belarus demanded that the Department of Internal Affairs of the Minsk region to fully staff the economic crime units with qualified experts.
Police Colonel Siarhiej Bandaryk, head of the Main Department of Ideological Work of the Ministry of Interior recognised then the existence of serious problems with the recruitment of high quality personnel. Three main reasons explain it: recruits poor health; tough competition on the labour market; and new recruits' mind-set that views financial well-being "here and now" and an issue associated with their prospective careers' progression.
Andrei is the head of “Belarus Security Blog” analytical project.