{
  "title": "Portugal: Tobacco Smuggling and Drug Trafficking in the International Accounts",
  "sourceUrl": "https://www.imf.org/en/data/statistics/informal-economy-data/reports/portugal-tobacco-smuggling-and-drug-trafficking",
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  "summary": "Within the balance of payments domain, this development has occurred with the 2019 benchmark revision (data published by October 2019) and affected the entire time span of the series.",
  "sections": [
    {
      "heading": "Introduction and scope",
      "content": "- The inclusion of illegal activities in national accounts followed the changeover to the ESA2010.\n- In the balance of payments domain, legal recognition of illegal activities occurred with the 2019 benchmark revision (data published by October 2019) and affected the entire time span of the series.\n- For international transactions, only tobacco smuggling and drug trafficking are considered; alcohol smuggling is assumed not to be relevant in Portugal.\n- An estimation of prostitution activities was included only in the internal component of national accounts.\n- Exports of illegal activities represent about 0.04% of total exports of goods and around 0.07% of total imports in 2017."
    },
    {
      "heading": "Methodology and data sources",
      "content": "- The estimation is mainly performed by Instituto National de Estatistica de Portugal (PT-INE) within the national accounts framework and shared with Banco de Portugal for balance of payments purposes.\n- The estimate follows guidelines agreed between Eurostat and Member States to ensure comparability.\n- Drug trafficking\n  - Assumption: the consumption of drugs is assured by imports while exports are null.\n  - Calculation of the value of drug imports is based on consumption data (demand side perspective); a seizure-based approach (supply side perspective) was tested but revealed weaknesses.\n  - Drugs considered: cannabis, cocaine, ecstasy (or MDMA) and heroin (or opium). Other drugs are not considered due to the low prevalence of their use.\n  - Determining the value of drug imports involves multiple sources and is complex because there is no single source indicating the amount consumed.\n- Tobacco smuggling\n  - Main source: reports on fraud combat, tax and customs evasion published by the Office of the Secretary of State for Fiscal Affairs and available annually.\n  - Seizures provide an almost direct estimate of the value of illegal tobacco exports through the value of seizures.\n  - Methodological approach: Eurostat supply-side perspective with two main assumptions:\n    - i) seizures are a proportion of imports;\n    - ii) exports are equivalent to imports (price/margins adjusted), based on conclusions that tobacco seized in Portugal is mainly intended for the European market and Portugal is primarily a gateway to Europe.\n  - Adjustment: convert the value (in euro) of street price seizures to wholesale prices using, in the absence of better information, the cannabis margin (retail price/wholesale price).\n  - Exports are valued according to the value of seizures.\n  - To mitigate volatility in yearly seizure values, for each year the average of the values of the last three known years is assumed."
    },
    {
      "heading": "Linkages across statistical domains and compilation practices",
      "content": "- Banco de Portugal incorporated an estimate of illegal activities equivalent to the one in national accounts with the 2019 benchmark revision.\n- During the benchmark revision, efforts were made to enhance coherence between PT-INE (non-financial accounts) and Banco de Portugal (external statistics).\n- Due to limited regular access by Banco de Portugal to some data and PT-INE’s more thorough handling of these data, Banco de Portugal adopted PT-INE figures.\n- Implementation strategy:\n  - Direct incorporation in the balance of payments domain of the entire set of results estimated by PT-INE.\n  - Where PT-INE’s estimation is not produced in a timely manner for monthly balance of payments compilation, an advanced procedure was introduced to anticipate PT-INE’s annual estimation.\n  - The anticipation model assumes the same approach as the INE model to minimize revisions when PT-INE data are disclosed.\n  - Monthly figures are compiled using the methodology of the annual figures to achieve compatible periodicity for illegal activities in the monthly balance of payments."
    },
    {
      "heading": "Current challenges and limitations",
      "content": "- Estimates suffer from several drawbacks:\n  - Absence of monthly indicators of illegal activities that would allow imposing seasonality on consumption over estimated annual values.\n  - Time lag between available sources and the need to compile monthly balance of payments statistics.\n  - Lack of sources to estimate possible services associated with illegal balance of payments activities."
    }
  ],
  "bullets": [
    "The inclusion of illegal activities in national accounts followed the changeover to the ESA2010.",
    "In the balance of payments domain, legal recognition of illegal activities occurred with the 2019 benchmark revision (data published by October 2019) and affected the entire time span of the series.",
    "For international transactions, only tobacco smuggling and drug trafficking are considered; alcohol smuggling is assumed not to be relevant in Portugal.",
    "An estimation of prostitution activities was included only in the internal component of national accounts.",
    "Exports of illegal activities represent about 0.04% of total exports of goods and around 0.07% of total imports in 2017.",
    "The estimation is mainly performed by Instituto National de Estatistica de Portugal (PT-INE) within the national accounts framework and shared with Banco de Portugal for balance of payments purposes.",
    "The estimate follows guidelines agreed between Eurostat and Member States to ensure comparability.",
    "Drug trafficking",
    "Tobacco smuggling",
    "Banco de Portugal incorporated an estimate of illegal activities equivalent to the one in national accounts with the 2019 benchmark revision.",
    "During the benchmark revision, efforts were made to enhance coherence between PT-INE (non-financial accounts) and Banco de Portugal (external statistics).",
    "Due to limited regular access by Banco de Portugal to some data and PT-INE’s more thorough handling of these data, Banco de Portugal adopted PT-INE figures.",
    "Implementation strategy:",
    "Estimates suffer from several drawbacks:"
  ],
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  "generatedAtUtc": "2026-10-02T02:57:02.041Z"
}