Cigarettes sold on eastern border come from Russia
In the border district, the amount of tobacco products sold through retail outlets is only half that recorded elsewhere in Finland
By Juho Maijala in Virolahti
Restaurant Wirta is the hottest place in the quiet municipality of Virolahti.
A bingo night attracts a dozen or so players to the popular watering-hole.
The only cigarettes being smoked on the terrace during the breaks between games are Russian.
The Cyrillic health warning text on the packet reveals the country of origin.
At its cheapest, a carton of cigarettes in Russia costs only one-tenth of the Finnish price.
For Jenni Ilkka, the cigarettes were brought in by her mother. One is allowed to bring back tobacco as a gift, but selling such products on is illegal.
”It is usual that even those people who do not smoke bring back a carton. It is not difficult to get shot of it”, says Ilkka.
Finnish Customs calls the import and sales of occasional cartons ”soldier-ant smuggling”.
According to Virolahti residents, it is normal operating procedure in the border district.
Finnish smokes really do not sell well on the eastern border.
Based on the sales figures posted for example by the R-Kiosk chain, more than half of the cigarettes smoked in certain municipalities come from elsewhere, and that "elsewhere" is likely to be just across the border.
According to Finnish Customs, approximately 90 per cent of all tobacco items smuggled into Finland comes from Russia, while the remaining 10% is brought in by sea.
The proportion of eastern cigarettes would seem to be the greatest in the small municipalities close to the border-crossing points.
In larger cities in the border district, contraband tobacco does not sell very well. When the distance to the border grows, the deviation from the national norm in sales figures dies away to nothingness.
Kesko Food retailers have made the same observation as the R-Kiosks.
No figures per municipality are given, but Petteri Niemi, Vice President for the commerce unit at Kesko Food, reports that in the vicinity of the border the sales of cigarettes are only half of what they are a hundred kilometres away.
Ministerial Counsellor Ismo Tuominen says that the Ministry of Social Affairs and Health is unaware of any obvious municipal differences in the volume of cigarettes smoked, so it is merely a matter of the source of supply.
According to Tuominen, one is allowed to bring back tobacco from abroad for his or her own use, but the smuggling and illegal distribution of cigarettes are always regarded as criminal behaviour.
”This is no grey economy activity, but pitch-black”, Tuominen notes.
A tightening of import restrictions could conceivably reduce the volume of illegal resale of cigarettes and tobacco.
”If there were a call for it [the import of tobacco] to be reduced, why could the permitted import limit not be for example 60 cigarettes, or three packets, instead of a full carton of 200”, asks Senior Inspecting Officer Ari Hooman from the Customs Office at Nuijamaa.
On the terrace of Restaurant Wirta, Tero Siivonen from nearby Ylämaa to the north-east says that he has been smoking only Russian cigarettes for the past 25 years.
His non-smoking brother fetches cigarette cartons for him.
Terhi Tuominen from Vantaa smokes Russian cigarettes only when they are easy to get. Accustomed to Finnish cigarettes, Tuominen says that her throat gets sore if she smokes eastern tobacco.
It is also possible to buy cheap western cigarettes in Russia, but they are twice as expensive as the real Russian ones.
In Virolahti, people smoke the genuine Russian article.
The tobacco rally causes tax revenue losses of up to EUR 90 million
The state’s annual tax revenue losses amount up to EUR 90 million because of travellers who bring cigarettes - legally or illegally - into Finland from Russia.
Finnish Customs evaluates that the share of illegal imports of the total pot is some EUR 50 million.
In addition, private persons legally carry across the border more than 100 to 200 million duty-free cigarettes each year.
The tax revenue losses from legal duty-free imports amount to EUR 20 to 40 million.
In 2011, Finnish Customs confiscated 12.5 million smuggled cigarettes.
The seized amount of tobacco is estimated to be roughly five per cent of the total volume that is smuggled in annually.
At the top of the tobacco rally table seems to be the municipality of Salla in Eastern Lapland (see map), where the amount of tobacco sold by the local R-kiosk relative to the number of residents is only one-third of the average amount in Finland as a whole.
Such a huge deficit in the sales of tobacco cannot be explained in any other way but by imports - legitimate and not so legitimate - from the east.
The Kelloselkä border crossing point is located in Salla.
The silver medal in the comparison goes to Parikkala, where the sales figure relative to the number of residents is only 40 per cent of the average amount bought in Finland as whole.
In Kemijärvi, Kuhmo, Ilomantsi, Outokumpu, Kitee, and Imatra, the R-Kiosk sales of tobacco are about 50 per cent of the national average.
A private person is allowed to bring back from Russia one carton of cigarettes for his or her own use, or as a gift. Tobacco can be brought "occasionally", which has been interpreted to mean two cartons per week.
BACKGROUND: Smuggling means a multi-million business
Smuggling cigarettes into Finland is a multi-million-Euro business.
One carton of cigarettes costs EUR 50-55 at a store here, while in the street, the black-market price is usually EUR 20-25.
A total of 80% of the price of a legal pack of cigarettes consists of duty.
Only a part of the smuggled cigarettes remain in the Finnish market, as the tax on tobacco is even higher in Sweden and Norway, something that might also help to explain the fact that R-Kiosk sales in the border town of Tornio (see the area marked in yellow on the map) are actually greater than the national average.
Here, however, it is probably Swedes availing themselves of the same opportunities.
The smugglers in southern and eastern Finland are mainly Finns and Russians. The largest batches are full truckloads or containers.
Typically, professional smugglers hide their cigarettes in passenger cars.
Even as many as 200 to 250 cartons have been found stuffed into the hollow structures of a passenger vehicle.
Professional perpetrators also resort to "soldier-ant smuggling".
In such cases a busload of people are given a carton each and ordered/asked to bring it across the border.
On the Finnish side of the border, all cigarettes are collected from the passengers and thereafter put on the market.
In these parts, the import and sale of occasional cartons is practiced also by otherwise law-abiding people.
In essence, it is part and parcel of the local way of life.
Helsingin Sanomat / First published in print 13.8.2012
Previously in HS International Edition:
Customs and Border Guard share duties in pilot experiment at Nuijamaa frontier station (17.3.2009)
Border Guard upgrading surveillance technology on land border (11.4.2011)
Helmi sniffs out smuggled cigarettes (2.3.2010)
Cigarettes being smuggled into Finland from Russia (13.10.2009)
Customs announce competition for ideas on disposal of huge load of contraband alcohol (28.1.2005)
Cigarette personal import limits upheld but with altered reasoning (20.5.2009)