Smuggling Networks Linked to China Tobacco Revealed in OCCRP Investigative Series

Charles Turner

The China National Tobacco Corporation has grown into the world’s biggest cigarette company by feeding the addiction of China’s approximately 300 million smokers. But now the state-owned giant is ready to take over the rest of the globe.

Since jumping on China’s “Belt and Road Initiative” in 2015, CNTC brands have increasingly been found around the world, including in countries where there is no legal market for them.

The Organized Crime and Corruption Reporting Project (OCCRP) and 12 more media outlets recently published “China Tobacco Goes Global,” an investigative series revealing how CNTC has pushed into new nations using methods that are ethically dubious, and sometimes outright illegal.

Taking a leaf from the playbook of Transnational tobacco, “Big Tobacco” companies that have long dominated the sector internationally, CNTC has been flooding illegal markets with its brands before lobbying governments to legalize them.

Here are some of the stories OCCRP and its partners have published so far:

Latin America: Reporters discovered that CNTC is connected to a network of Panama-based companies that have shipped huge amounts of its cigarettes to Latin American countries where there is no legal market.

One of the firms, Overseas United, had its export permit revoked by Panamanian authorities after its cigarettes were found on the local market. But executives at Overseas United were able to send over 632 tons of Chinese cigarettes abroad using another company in the network, Finta Inc.

Two legal representatives of Finta were also executives of the other two companies in the Panama network exposed in this investigation. In Colombia, they sent cigarettes to a convicted smuggler. In Ecuador, $34,000 worth of cigarettes were sent to the Chinese embassy, which told reporters the huge shipment was simply “diplomatic material.”

The Latin American story was a collaborative effort between OCCRP and the Concolón and Cuestión Pública.

USA: The Panama-based network of companies uncovered by OCCRP is also linked to illegal Chinese cigarettes seized in Texas, according to a paywalled report published in the Houston Chronicle.

Europe: Police records obtained by OCCRP provide evidence tying a CNTC official to organized crime groups in Europe. A high-level executive at CNTC’s factory in Romania apparently collaborated with smugglers in pretending to send 17 tons of cigarettes to Libya via Italy, thus avoiding excise taxes. In reality, the shipping container was filled with junk, while the real product was put into an identical container destined for the Italian black market.

The Romanian factory produces CNTC brands like Regina and Marble, which appear to be marketed to European smokers. But reporters also found that the factory also sold cigarettes to companies in conflict zones like Syria, where tracking tobacco products is nearly impossible.

The Romania investigation was a collaborative effort between OCCRP and RISE Romania

Ukraine: CNTC’s Romanian factory sold hundreds of millions of cigarettes to Ukrainian companies under investigation for cigarette smuggling. One of its top customers is now co-owned by Vadym Sliusariev, a politically connected former border official.

The Ukraine story was a collaborative effort between OCCRP and the Kyiv Post.

Brazil: China is complying with recommendations under a global treaty to decrease the amount of land under tobacco cultivation –– but much of this production has simply shifted overseas. Brazil has become a major supplier, with farmers working under difficult conditions to grow tobacco for Chinese cigarettes. Reporters looked into alleged labor rights abuses in Brazil’s tobacco industry tied to tobacco-leaf buyer China Brasil Tabacos Exportadora SA, which doubled its profits in 2020.

The tobacco-leaf buyer was founded by local subsidiaries of CNTC and the U.S. company Pyxus International. Pyxus has been penalised by U.S. government authorities for breaching labour rights, yet, despite being the largest tobacco company in the world, CNTC has avoided such scrutiny.

The Brazil investigation was a collaborative effort between the OCCRP and Intercept Brasil.

OCCRP will publish additional China Tobacco investigations in the coming weeks, which you can follow by subscribing to its weekly newsletter. If you have information about CNTC cigarettes sold in illegal markets, please contact OCCRP journalists at info@occrp.org.

Charles Michio Turner is the Engagement Editor at the Organized Crime and Corruption Reporting Project, Sarajevo, Bosnia and Herzegovina. 

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