Lithuania: Illegal Activities: Prostitution, Smuggling of Tobacco, Smuggling and Production of Illegal Alcoholic Beverages, and Drugs

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Canonical URL: Lithuania: Illegal Activities: Prostitution, Smuggling of Tobacco, Smuggling and Production of Illegal Alcoholic Beverages, and Drugs

Lithuanian National Accounts (LNA) produced by Statistics Lithuania investigate four types of illegal activities in line with ESA 2010 and the European Commission’s recommendations:
- Prostitution;
- Smuggling of tobacco;
- Smuggling and production of illegal alcoholic beverages;
- Drugs.
Selection of these activities is based on consumption habits of Lithuanians, economic and social aspects, geographical location, and other factors.
Analysis showed:
- Smuggled tobacco, alcoholic beverages and drugs are most often consumed inside the country.
- Sexual services are provided both inside the country (including to foreigners) and abroad.
Adjustments are made to imports of goods and services and exports of services to reflect these findings.

Legal context: Offering of all kinds of sexual services in Lithuania is forbidden by law.
Estimation approach:
- Handbook on Measuring the Non-Observed Economy suggests estimating total supply and total use of prostitution services; reliable data on final use by residents vs use by non-residents are unavailable, so the split is based on assumptions.
- Formula used: Supply = persons providing sexual services * average earnings.
Classification and assumptions:
- Total estimated number of persons providing sexual services is classified into three groups.
- Different hourly rates, number of clients, and number of working days per year are applied for those three groups.
Data and crosschecking:
- Calculations are based on all possible data sources and a number of assumptions which are analysed and crosschecked.

Scope: Only smuggling of cigarettes is investigated; production inside the country is not evaluated because the phenomenon is not widespread.
Estimation logic:
- Total amount of cigarettes (including the illegal part) consumed by households is estimated.
- Scheme: Total amount of consumed cigarettes – legal cigarettes = illegal cigarettes.
Main data sources:
- Survey by the Drug, Tobacco and Alcohol Control Department performed in 2004, 2008 and 2012 using the methodology prepared by the European Monitoring Centre for Drugs and Drug Addiction.
- Survey identifies the amount of smokers and their smoking intensity for each age group.
- Supplementary information on smoking habits from other available data sources is used.

Types of illegal alcoholic drinks distinguished:
- Strong drinks smuggled from neighbouring countries (most often, vodka);
- Poor quality diluted strong drinks produced inside the country;
- Sufficient quality home-made vodka produced inside the country.
Consumption: All types of illegal drinks are consumed inside the country.
Estimation approach:
- Total consumption of alcoholic beverages, including illegal drinks, is mainly based on the 2004, 2008 and 2012 survey conducted by the Drug, Tobacco and Alcohol Control Department.
- Total consumption of all alcoholic drinks (as absolute alcohol, in litres) is estimated for consumers divided into three age groups, examining four main types of drinks: vodka, beer, wine, and alcoholic cocktails.
- Information on legally sold alcoholic beverages is taken from an annual statistical survey on trade and catering enterprises and additional data sources.
- To estimate missing years, changes in the population are used for the extrapolation of the number of alcohol consumers.
- Scheme: Total amount of drinks consumed – legal drinks = illegal drinks.
Allocation by type:
- Total estimated illegal alcohol, expressed as absolute alcohol, is divided into three types of illegal drinks based on seized amounts provided by law enforcement institutions such as the Police Department and Lithuanian Customs.

Legal context: Sale, production, marketing, promotion and use of all drugs are illegal in Lithuania.
Types of drugs estimated (seven):
- Cannabis;
- Ecstasy;
- Amphetamine;
- Cocaine;
- Heroin;
- LSD;
- Poppy concentrate.
Main data source: Survey by the Drug, Tobacco and Alcohol Control Department.
Estimation formula:
- Consumption of drug = number of users * drug use intensity * size of consumed dose.
Units and extrapolation:
- Estimated amounts for each drug are expressed in doses and kilograms for the surveyed years.
- To fill missing years between surveys, changes in the population are used for the extrapolation of the number of drug users.
- Analysis by drug type supports assumptions on splitting smuggled and domestically produced amounts.

Compilation and use:
- Estimates of the four illegal activities are produced by experts of national accounts of Statistics Lithuania and provided to compilers of balance of payments (BOP) in Bank of Lithuania.
- Estimated data on illegal activities are included in both National Accounts (NA) and BOP statistics.
Temporal allocation for BOP:
- Annual data on illegal goods prepared by national accounts compilers enable BOP compilers to estimate monthly and quarterly data based on imports of goods and the structure of illegal activities.
- Estimated data on illegal goods (tobacco, drugs and alcohol) are included in monthly and quarterly imports of goods of BOP.
- Estimated data on prostitution are incorporated in the BOP services account under the travel item.
- Since 2010 annual volume of exports of prostitution have amounted around 2 % of total travel exports and, imports amounted about 0.5%.