Transnistria: last Soviet outpost and smugglers’ paradise

Monitoring the Transnistrian border

Until recently Transnistria, the disputed region that lies along the Ukraine-Moldova border, was one of the world’s main weapons smuggling gateways. But now the unrecognised state has become a major transit point for bootleg tobacco and alcohol. Several factories have sprung up to manufacture millions of euros of black market goods, including cigarettes.

In the breakaway state, which declared independence from Moldova nearly three decades ago, the cigarette imports are more than double the number sold domestically. Transnistria imported 1.32 billion cigarettes for sale at its Duty-Free stores between December 2015 and November 2016, but registered sales of just 639.5 million, according to the European Union Border Assistance Mission to Moldova and Ukraine (EUBAM).

At the same time, its unofficial status allows the region to benefit from the shady re-export trade in cheap cigarettes produced elsewhere. As a result, Transnistria became a major entry point for illicit cigarettes in the European Union.


Smuggling golden triangle

A 1,200 kilometre-long porous land and river border with Ukraine, and a similar-span frontier with Moldova allows the effortless transportation of large and small consignments in and out of the Transnistria region, through its neighbours and onto European Union states.

Despite a decade-long effort to boost border cooperation between Moldova and Ukraine, corruption makes the rules as Rosian Vasiloi, Former Deputy Head of Moldova’s Border Police Department, explained to Eurobsit: “smuggling through Transnistria remains an enormous industry, allowing separatist leaders to enrich themselves from the proceeds.” Before adding “the separatist regime has total control of all the illegal activities in the region.”

The breakaway state’s network of factories produce mainly “cheap whites” or “illicit whites”, the nickname for cigarettes that are manufactured in one country and then smuggled into another without the payment of duties. “Cheap whites” account for as much as 35% of the illicit cigarette market in the EU, according to 2015 data from the Transcrime Research Center in Milan, Italy.

But many “cheap whites” also transit through Transnistria. Vasiloi revealed to Eurobsit that the most seized cigarette brands at the Transnistrian border were China’s Ashima, Neman from Belarus, and several types produced by Moldova’s largest tobacco producer TUTUN CTC, whose brands are famous all over Eastern Europe and other former Soviet Union states.


“Wholesalers in Ukraine can buy cigarettes from Transnistria in shipments of 500 packs, for $50 (or just 10 cents per pack), possibly the lowest price in the world”


World’s ‘cheapest’ cigarettes

The Ukrainian TV channel 112 recently described on its website how wholesalers in Ukraine can buy cigarettes from Transnistria in shipments of 500 packs, for $50 (or just 10 cents per pack), possibly the lowest price in the world.

Despite official data indicating zero exports of Moldovan cigarettes to Ukraine over the past two years, Vasiloi said online forums are “full of proposals to buy wholesale quantities of Moldovan cigarettes.” Many smugglers from Transnistria set up subsidiaries in Moldova and Ukraine to expedite trade, he added.

US-based anthropologist Michael Bobick, who has conducted fieldwork in Transnistria, told Eurobsit that a whole industry of intermediaries has sprung up to help businesses smuggle goods into and out of the breakaway region. “A cousin, a relative or family friend will have a side business that can help you process what you need across the border,” he told Eurobsit, adding that any cross-border trade will require “paying-off” some people.


Border officials get rich

Bobick cited local media reports suggesting that customs officials can earn anything from $10,000 to $100,000 per month “for letting certain businesses bring in their cigarettes untaxed.

In the past, ordinary people would drive to Odessa, load up their car or van with cigarettes and exploit the price differential as a way of surviving, Bobick explained. Over time, influential businessmen “took over that trade, monopolising cigarette and liquor sales in the territory,” he added.

Despite Ukraine in 2015 banning the transportation of cigarettes, alcohol and oil and gas into Transnistria without going into Moldova, reports suggest the direct trade continues to flourish.

Bobick previously wrote the report: ‘There’s a new “Sheriff” in town: Corruption and Captive Markets in Transnistria’, describing how the territory’s second-largest company, Sheriff — which owns supermarkets, gas stations, factories and several media outlets — has become a behemoth, thanks to its connections with the breakaway region’s top leaders.

In his study, he detailed the frequent sighting in Sheriff supermarkets of cigarette packages without “duty paid” stamps or Ukrainian cigarettes with stamps imitating those from the United Arab Emirates, the Philippines and North Africa.


Moldova controls one checkpoint

Vasiloi, who is now a security and military analyst for the independent Moldovan think-tank IDIS Viitorul, told Eurobsit that out of 25 border checkpoints on Transnistria’s border with Ukraine, only one of them is controlled by Moldovan authorities.

Joint customs controls were introduced by Moldova and Ukraine at the Pervomaisc-Kuchurgan checkpoint in July 2017, with support from EUBAM, with 12 others to follow. It’s believed as much as 70% of illegal trade from Transnistria passes through this checkpoint, according to the Ukrainian TV channel Hromadske International, so the new measures could help reduce the black market trade.

The other 30% of smuggling from the breakaway region to Ukraine’s Odessa province takes place either at unofficial crossings or by bribing officials at border points controlled by Transnistrian officials, he said.

Despite regular media reports in Ukraine about seizures of cigarettes and alcohol, the number of smuggled goods continues to rise, Vasiloi added, singling out the famous Privoz market in the Ukrainian port city of Odessa, which he said remains “jam-packed with contraband cigarettes.”

On Moldova’s other side, the law enforcement and border agencies of five EU countries last year seized more than 7 million cigarettes smuggled from Moldova and Ukraine, many of them thought to have been produced in Transnistria.

Investigators in Poland, Hungary, Slovakia, Slovenia and Romania (along with Moldova and Ukraine) impounded tobacco products following reports of suspicious consignments on trucks and trailers travelling through their respective countries.

Smugglers, meanwhile, are becoming increasingly inventive. Local media reports suggest they are using drones to carry cartons of cigarettes across the Moldova-Romania border. In one case last year, some 12,500 cigarettes and the mini aircraft were found to have crashed on the ground near the Romanian border city of Iasi.

Similar incidents have already been reported by Eurobsit on Ukraine’s border with Slovakia, and elsewhere in eastern Europe.

Photo credit: Moldpres

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