Forum: Fight Against Smuggling

On 22 September 2021, SSE Riga hosted the 3rd national forum on smuggling-related problems, “Fight Against Smuggling: Challenges and Progress”, organised by SSE Riga and the association BASE (“Business Against Shadow Economy”) in cooperation with the research centre SKDS.

During the forum, research data were presented, which reveal the opinion of the general public on the smuggling problem in the country, as well as the attitude towards the purchase of smuggled goods, knowledge about places to buy smuggled goods, as well as possible penalties and actions to reduce smuggling.

When opening the Forum, Professor and Director of the Centre for Sustainable Business at SSE Riga Arnis Sauka emphasised: “This forum has become a supplement and continuation of SSE Riga's annual Shadow Economy Conference and study, which does not include the smuggling aspect and measurements. I am convinced that there is a need to talk about smuggling, and this event is a great platform for raising the issue of smuggling - researchers have contributed to it and now I hope that the leaders of the responsible authorities will help to solve the problem.”

In 2021, the number of people in Latvia, who bought smuggled goods, such as cigarettes, alcohol or fuel within the previous year, decreased. However, the research data show that people in Latvia are still tolerant of the purchase of smuggled goods and this tolerance has even increased over the past year - almost a third or 32% of the surveyed inhabitants of Latvia do not consider the purchase of smuggled goods to be reprehensible.

This indicator had decreased significantly in recent years - in 2019 it was 26%, but last year 28% of respondents did not consider the purchase of smuggled goods to be reprehensible. Experts have explained this by the general public mood in the wake of the Covid-19 pandemic. 

At the same time, the number of people who have not bought smuggled goods is also growing this year - 77% of respondents have acknowledged this, compared to 72% last year. For example, in 2013, only 41% of respondents had not bought smuggled goods. 

On the other hand, the number of residents who know where to buy smuggled goods has remained the same - 36% of respondents, the same as last year, indicated that they would know where to buy them, if necessary.

Still, the most popular smuggled product is cigarettes - 10% of the respondents indicated that they had bought smuggled cigarettes themselves, another 9% noted that their acquaintances or friends had done so. 3% of the respondents have bought smuggled fuel, but 2% of the respondents have bought smuggled alcohol. The main motivation to buy smuggled goods is still their price.

It is interesting, however, that 9% of respondents indicated that smuggled goods are purchased so that the state does not receive money in taxes. Last year, only 1% of respondents had such motivation. 

Speaking about the reasons for why smuggled goods are popular in Latvia, the experts have emphasised that the volumes of smuggling are directly related to the excise tax policy implemented in the country. The experience of European Union countries shows that the increase in excise duty and, consequently, the increase in the price of the product, stimulates consumers to engage in cross-border trade, to buy a product on the illegal market, or to switch to cheaper substitutes.

22.09.2021. Video recording of Forum: Fight Against Smuggling (in Latvian):

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Arnis Sauka
Professor. Head of the Centre for Sustainable Business. EMBA Course: Research Methods. Read More
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