The Financial Management of the Illicit Tobacco Trade in the United Kingdom

Over the last two decades official and media discourses have paid increasing attention to the proceeds of ‘organised crime’. In the main, these accounts portray crime-money as a corruptive force, a threat to social life and the stability of national and global financial systems (for a critique see van Duyne & Levi, 2005; Reuter, 2013). In the UK alone, for example, the Home Office (2007) estimates the annual revenue derived from organised crime at more than £11 billion, while the attendant economic and social costs are close to £25 billion. However, despite the apocalyptic tone of these discourses, which are primarily based on estimations of crime-money constructed by using dubious methodologies and extrapolations from economic models (see van Duyne, 1994), as well as the fact that asset recovery has become a priority for policy-makers and law enforcement agencies internationally (Levi and Osofsky, 1995; Brown et al., 2012; FATF, 2012; NCA, 2015), research on the financial management in illegal markets and other manifestations of ‘organised crime’ is limited (see Levitt and Venkatesh, 2000), with the drug market in specific contexts being perhaps the exception (see Reuter et al., 1990; Naylor, 2004; Brå, 2007; Skinnari, 2010). Although there is a relatively sound understanding of finance-related issues in the drug markets, with an emphasis on prices, costs of doing business (Caulkins et al., 1999; Moeller, 2012), investments and money laundering, not much is known about other illegal markets (cf. Reuter, 1985; Moneyval, 2005; Petrunov, 2011; Soudijn and Zhang, 2013) apart from estimations of their proceeds.1 This view is also shared by law enforcement agencies. In a recent event held at the Dutch Ministry of Security and Justice, for example, even the Head of Europol’s Financial Intelligence unit noted that “very little is known about the financial management of organised crime…” (Navarrete, 2015).