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Cigarettte smuggling, a crime without punishment

“Gimme a cigarette,” a client asks. “Haitian?”, the clerk asks him. “Yes”, he answers. The clerk hands him dubiously an L&M cigarette sold legally on the Dominican market. “But this is not Haitian,” the client complains. The clerk then looks discretely under the counter for the cigarette of Haitian manufacture “Comme il Faut”, smuggled and sold tax free in the Dominican Republic at RD$5.00 eah, which is to say RD$2.00 and RD$4.00 less than the authorized brands.

In Santo Domingo, the cities along the frontier and in the South and in other areas, the Comme il Faut and Point are sold openly, in spite of the fact that the Comme il Faut Company, headquartered in Port-au-Prince, confirmed to this newspaper that they do not export to the Dominican Republic.

The Dominican Association of the Cigarette Industry (Procigar) complains that these brands are added to another 20 that are smuggled mostly through Panama. The countries of origin are China, India, France, Thailand, Germany, United States, England, Russia, Ukraine and others and the smugglers do not suffer the weight of justice.

Brands such as Nise, Mega, Capital, Poker, Gold City, Gold Seal, Elephant, Modern, Cumbia, Cocopalm, Roma, Yangchen, Sizty and others are sold illegally in spite of the authorities carry out vast seizures. Just between 2013 and 2014 the Directorate General of Customs has seized 7,814,644 units and another 10 million were seized by the Specialized Corps of Frontier Ground Security (Cesfront).

These numbers represent a competition for the local tobacco industry which generates more than 7,500 jobs and just last year contributed RD$3.9 billion in Selective Consumer Taxes.

It is estimated that with just the entry of more than 200 million illegal cigarettes in 2013, the state lost RD$600 million.

This loss is also reflected in the amount of cigarettes that were declared in Customs last year. When between 2008 and 2012 there were more than 2 million units declared each year, in 2013 there were 1.6 million declared according to the information from Internal Taxes.

Compliance with the tax office is not of any interest for some merchants in Chinatown in Santo Domingo where they sell illegal cigarettes. In a store they show the regulated brands on the shelves that are seen from the street, but nevertheless, once inside, the clerk keeps the contraband under the counter or bundled up in a bag. Among the brands that he offers are Point and Nise. A pack of 20 costs RD$60, a price way below the RD$120 which Lider costs or the RD$140 for Nacionals, both of which are legal.

“The tax load on cigarettes in the Dominican Republic is around 56%, which is to say that when you buy a pack of Nacional and pay a hundred pesos, there are RD$56 pesos going to taxes, and this is something that they do not pay (the sellers), then of course the earnings are much higher,” says Manuel Cabral, the president of Asocigar.

How do they get into the country?

The smuggled cigarettes are brought into the country by way of the sea, camouflaged in containers, refrigerators, suitcases or across the Haitian frontier, according to the Directorate General of Customs.

A smuggler took advantage of a shipment of hardware items to two companies so that, through connections in the port, they would fill part of a container with cigarettes without declaring that there were millions of units.

In the case of Haitian products, they come in through the frontier passes and the bi-national markets, such as that in Jimani, which is near the Haitian capital of Port-au-Prince.

Under the battered tents rising above the dusty ground in Malpaso, Jimani, there are pastas, cooking oils, beans, milk, hygiene products, rum-that is also smuggled-and other supplies. Here, Haitian sellers offer Comme il Faut cigarettes that they buy in warehouses in their country and which are called by Dominicans in the frontier cities “CamefĂș”, a bastardization of the French pronunciation.

On a sunny Friday morning, a merchant who has worked for 16 years I n the area, talked with a team from Diario Libre which did not reveal that they were the media. In broken Spanish he commented: “There are people that buy a group of cigarettes to us to resell there. They buy at one price to sell at another price there. Dominicans, lots, lots is what they buy, in boxes.”

The boxes cost RD$11,000. At retail, a 10 pack is sold for RD$25 and in the Dominican small markets known as “colmados” they are re-sold at RD$30 or RD$50, much less than the RD$75 for the legal brand Nacional or RD$90 if it is Marlboro.

And how do they get the boxes across the frontier? We ask the merchant. “Through the gate, if you don’t have some relationship at that gate, there is a boss that is hard, If you don’t have some deal with this boss, they don’t let you past,” he answers while he points out the military that belong to Cesfront and guard the gates along the frontier.

“We do not have control over our products once they are purchased in Haiti,” said Jean-Dany Pierre François, the spokesman for the Comme il Faut Company. “We sell only to distributors in Haiti that are registered here and pay taxes here. Likewise, we also suffer similar problems of unfair competition because of a lack of control on the frontier.”

A few meters from the frontiers gates in Jimani, at the Cesfront detachment headquarters, there are bags of charcoal and stacks of wood that were seized, together with bags of garlic, rum, whiskey, medicines, and boxes of cigarettes that were being smuggled.

“Many time they are not found (the contraband) because they pass through in vehicles, then after they get past our radius of action where we have cameras, then that is when the intelligence service comes into play,” says Major Nobel Guerrero, the detachment’s chief of operations.

The officer showed the team a photograph taken of an SUV whose owner was carrying 400 packs of cigarettes in the motor and in the seats. “There are different persons that try to smuggle the contraband. There is a network that distributes the items among 10 or 15 persons, and each one is charged with bringing in 15 packs, 20 packs,” says the Army officer.

What do I care?

In order to identify a smuggled box of cigarettes, you have to see whether it has the tax stamp and the warning that consumption could be prejudicial to your health. The description of the product has to be in Spanish and have the manufacturer’s information.

But this is not important to a group of smokers in Enriquillo Park in the National District. They buy any brand just for the price. “What do I care? I want to smoke!” says Bolivar Corporan, who has been smoking for 50 years.

“I’d like to obey the laws of the country, but here the law is not accepted,” commented Pedro Baez while he held a cigarette of Chinese manufacture called “Yangcheng”.

The World Health Organization (WHO) estimates that each year the illegal and non-regulated black market for cigarettes reaches 600 billion units or 11% of the world’s consumption.

Justice is waiting

In spite of the seizure by the Directorate General of Customs and the work by Cesfront, the cases do not usually reach the courts with the same promptness.

“From 2012 until now they have seized around 10 million units (cigarettes) which have been destroyed under the provisos of the General Customs Law. For these types of cases, defined as merchandise prohibited from entering the country, the law proceeds to the seizure and not to the arraignment on charges, so that we do not have any arraignments or charges filed for committing this illegal act,” says a report from Cesfront.

The Customs Law establishes that the contraband will be punished with the seizure of the articles, money and property that is the product o the illicit activity. There are fines that are twice the amount of taxes and tariffs of each kind whose payment the smuggler had avoided. There are also provisos for prison sentences of between two and five years. In cases of recidivism, the prison term is no less than three years or more than 10.

Nevertheless, Customs told Diario Libre that they have not filed charges against anyone for this crime. Diario Libre went so far as to investigate in the prosecutor’s offices in the jurisdictions where the institution has registered the most seizures: the National District, Santo Domingo province, Santiago, Azua, Barahona, and San Francisco de Macoris, but none of these places reports a judicial process over the past few years.

Marcos Bisono, the legal representative of Procigar, indicated that members of the industry have met with the Attorney General in order to present their preoccupation over the lack of prosecution in these cases. “Customs has not filed charges against anyone and they know who are the ones importing contraband cigarettes. Why are they not charged? We are waiting for the state to take some initiative on the procedures in order that we can get involved,” he says.

An official from Customs explained that to file charges against a smuggler is complicated because they regularly use third parties and the intermediaries distribute the products.

At the time of destroying 550,000 cigarettes in November 2013, the director general of Customs, Fernando Fernandez stated: “We will not give an inch to those who break the law, trying to introduce contraband merchandise into the Dominican Republic.”

Source: DiarioLibre

Category: DR News |

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Last updated March 28, 2017 at 6:14 PM
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