Moldova officials behind counterfeit cigarette smuggling to EU

Counterfeit cigarettes are produced in Moldova by politically connected figures, a new report says. (File photo: European Union)

CHISINAU (Tiraspol Times) - According to a just-released investigative report, Moldova is increasingly at the center of cigarette counterfeiting and smuggling in Europe. Business is booming thanks to the country's new location right on the European Union's border after Romania (which Moldova used to be part of until 1940) joined the EU on 1 January 2007.

Tobacco smuggling is now one of the primary drivers of crime and corruption in the country, which is the poorest nation in Europe. Worldwide, tax losses could amount to $50 billion, according to the Framework Convention Alliance, a consortium of non-profit groups seeking to stop smuggling.

Some of the smuggling takes place out in the open, on the Internet. Online sellers from Moldova sell counterfeit Marlboros and other imitations of Western brands and ship them to their customers in Europe and the USA via the post office and courier services. It is illegal in almost all countries to import cigarettes without paying custom and excise fees. To circumvent customs, they label their cigarette boxes with fake duty-paid stamps and also falsify the description of the package contents.

NewPort group, a company from the capital of Moldova (address: Albisoara 84/5-23, Chisinau), writes on an online trading web site: "Our company is interested in exporting cheap cigarettes to poor countries in Asia or Africa. We are producers for more then 50 years already. Our production factory is situated in Central-Eastern Europe. Companies interested, please feel free to contact us."

The company's marketing arm officially claims to sell Moldovan brands like Doina and MT, but investigators say that the Moldovans also do a brisk trade in counterfeits.

Moldova government officials involved

The business of counterfeiting cigarettes is now the “fourth or fifth biggest competitor,” to Phillip Morris International, the overseas arm of the largest tobacco company in the world, said a representative of the company. Counterfeiters are typically located in failed states such as the "black hole" which Moldova is increasingly being described as. They operate with impunity because government officials are directly involved in the illegal trade.

The Organized Crime & Corruption Reporting Project, a coalition of investigative reporters from EU member states and other European countries, has documented the organized crime business of tobacco smuggling, and particularly the involvement of government officials in the region. According to the researchers, politically connected figures in Moldova control a stake in the state tobacco monopoly but remain hidden behind a shield of official secrecy.

High prices and taxes on tobacco in the West are driving the smuggling boom, with a packet of cigarettes purchased in Moldova for less than €0.50 selling for seven euros in London. Extortion, murder are common, and a variety of dubious and notorious public figures are implicated, according to the report.

The report names as brother of Romania's Transport Minister, who controls a chain of lucrative duty free shops that police say are hubs for laundering and smuggling cigarettes; and also singles out officials in Ukraine, Moldova, Montenegro and elsewhere. Transdniestria is not named in the report. Due to the presence of multiple peacekeeping troops from a total of four different countries, the borders of Transdniestria (officially: Pridnestrovie) are more tightly patrolled than elsewhere in the region and this fact alone deters smugglers. Another reason is that Transdniestria, unlike Moldova, does not share a direct border with any EU countries.

A European border monitoring mission, EUBAM, has also been on guard on Transdniestria's border since 2005. To date there have been no documented cases of counterfeit cigarette smuggling via Transdniestria's borders. This is in stark contrast to the situation on Moldova's border with the Romania (and the EU), where truckloads of counterfeit Marlboros and other brand name cigarettes are detected on a regular basis.

See also:
» Moldova targeted as U.S. govt investigates counterfeit cigarettes
» Watchdog: Moldova one of the most corrupt countries in the world
» Voronin clan named country's richest, but heir will "never return to Moldova"