The European Union has criticised Switzerland for not doing enough to combat cigarette smuggling.
A group of parliamentarians, meeting in Austria on Friday, said the Swiss justice and customs authorities were not cooperating sufficiently with their neighbours to stop the practice.
They said they could not recommend the signing of any more bilateral treaties with Switzerland until the situation improved.
Delegates said cigarette smuggling was costing the EU millions in lost revenues. They added that although legal cooperation among EU countries had improved in recent years, Switzerland was still lagging behind.
They said suspects were not being handed over and that incriminating documents were not being confiscated. They also condemned Switzerland's banking secrecy laws as counter-productive.
The group noted that Switzerland itself was not a centre for smuggling but said they were concerned that it could become a haven for guilty parties.
On Tuesday, the Italian prime minister, Giuliano Amato, and the Swiss president, Adolf Ogi, said they had agreed to step up legal cooperation over cigarette smuggling.
The meeting followed comments in August by the Italian finance minister, Ottaviano Del Turco, who accused Switzerland of failing to support Italy's efforts to crack down on smugglers.
swissinfo with agencies