BRUSSELS, Dec 14: The European Commission signed a $400 million deal with Japan Tobacco International on Friday to fight cigarette smuggling and counterfeiting that costs the EU 6 billion euros ($8.72 billion) a year in lost tax.

JT International (JTI) will give the cash to the European Union executive and 26 of the bloc’s 27 member countries over 15 years to pay for cracking down on illegal trading in cigarettes brought into the EU by ship, lorry, train, post and on foot.

Some five billion contraband and counterfeit cigarettes were seized in the EU last year and Europe accounts for three-quarters of all cigarettes seized globally.

“Our customers too often don’t get what they pay for,” JTI President and Chief Executive, Pierre de Labouchere, told a news conference.

“We really believe we will get a good return on this investment,” Labouchere said.

The deal, two years in the making, represents a fraction of the $14.4 billion net sales chalked up by the Japan Tobacco Group in the year ended March 31.

Britain was the only EU country not to sign up to the agreement, even though its revenue losses are greater than in many member states due higher duties on cigarettes.—Reuters