This article originally appeared on VICE Germany.
It’s 9AM at Neukölln train station in southwest Berlin. The kebab shop is yet to open its doors for the day, but next door a criminal operation is already up and running. Two Vietnamese men have set up shop outside the station, selling tax-free cigarettes that have been smuggled into Germany.
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Roughly every three minutes another customer turns up; they have a brief conversation and then money changes hands. For €2.20 you get a pack, for ten-times that you get a carton. I ask one of these salesmen, who looks about 20, how long he’s been doing this. He grins as he dodges my questions.
“Huh?”
“Do you stand here every day? It’s a pretty tough job, isn’t it?”
“Wuh?”
Instead of the answers I was after, he gives me a pack of L&M, a popular brand in Germany. It’s missing its silver tax stamp, and the package is clearly a knock-off. It also says “Made in the UE” instead of “EU”, and lists an address in the imaginary country of “Swizerland”. The supplier has made very little effort to make the cigarettes look like the real thing. A colleague later says they taste dry, old and like vomit.
There are packs like this all over Berlin. According to a customs investigation, you can buy illegal cigarettes in about 300 spots across the city – Berlin’s multi-million-euro cigarette black market.
The black market for cigarettes has been relatively unchanged since the early 1990s. Back then, Vietnamese groups were fighting over territory and nearly 40 competing gang members ended up dead over a period of four years. Today, things have calmed down, but more and more gangs have recently started selling. There’s a lot of money at stake; according to a study by the accountancy firm KMPG, 4.8 billion cigarettes were sold illegally across Europe in 2016 alone.
Investigators call these counterfeit cigarettes “cheap whites”, some of which come from illegal factories in eastern Ukraine, Russia, Belarus and Poland. Customs investigators say that traces of animal excrement and plastic have been detected in some samples.
Sometimes, foreign suppliers divert their stolen goods through legal factories in order to get them past German inspectors. The cigarettes used to be transported in lorries, but today they’re split among several car loads – this way, one always makes it through.
Sellers pay €13 to €15 per carton, and transport them from the greater Berlin area to so-called “bunkers”. These apartments, cellars, garages and cars are close to where the cigarettes are ultimately sold, including the Neukölln station, a major point of sale.
At about 11PM we watch as a courier hands over five fresh cartons to a vendor. Tax evasion is a criminal offence in Germany, but according to a customs investigator, even if a street vendor gets caught with 400 cartons they could get away with a suspended sentence. The biggest risk is the threat of deportation. Because many of them are living in Germany illegally, they often use their earnings to pay back the debt they owe to the smugglers who got them there. Customers pay a €15 fine for up to 100 cigarettes; buying a carton of cigarettes legally would cost much more than that.
Thanks to high demand, low penalties and even lower financial losses during raids, the profit margins in the illegal cigarette trade are huge. Understandably, other groups now want to get in on the action. For the past 30 years, east Berlin has been divided among Vietnamese cigarette-trafficking gangs, but since last year a new organisation has taken over the market in west Berlin: a small group of Syrian refugees and people of Lebanese origin. Some are concerned that these new groups might eventually expand into east Berlin and start a counterfeit cigarette war.
For years, nobody sold illegal cigarettes on Berlin’s Sonnenallee, a five-kilometre-long avenue in the west side of the city. The new illegal cigarette network operates on this street, populated by Syrian, Lebanese and Palestinian restaurants, cafes and shops.
As usual, the sidewalks of Sonnenallee are full of people doing their shopping. A man in his fifties wearing a brown sweatshirt is standing in front of a butcher’s shop. He keeps looking up and down the side street. My Syrian friend Hamoudi* approaches him while I keep my distance.
“Got any cigarettes?” asks Hamoudi.
“€37 for a carton, €4 for a pack,” the man responds in Arabic.
“Are they good quality? Where are they from?”
“Yeah, they’re good. From Poland, not Russia.” The man fishes a pack of Winstons out of his backpack.
“Where can I find you if I want to buy more?” asks Hamoudi.
“You can buy cigarettes anywhere on this street. But why are you asking so many questions?” The seller seems nervous.
“Just because,” says Hamoudi. “Is it a good job?”
“It’s alright. I’m doing it because I can’t speak German,” he responds.
Down a side street, we take a closer look at the cigarettes. According to the packaging these Winstons were made in Romania and sold in Poland. No tax stamp. They taste old and dry. Half an hour later, Hamoudi buys the same brand for the same price from another seller. Syrians only sell to other Syrians, the sellers tell Hamoudi.
Authorities have been trying to crack down on the market for a long time. A few cigarette sellers in Neukölln were picked up by police for the first time in 2016, back when task force investigators started to realise that something was going on in the area. In March of 2018, the police seized 120,000 untaxed cigarettes and traced them back to a Syrian-Lebanese group. But the group opened up new distribution channels and met with Polish suppliers. Larger deliveries meant bigger profits. Later that year, customs arrested an entire gang in Neukölln, but their business is still up and running.
On top of Christian Lanninger’s shelf sits an oversized box of Jin Ling cigarettes – produced exclusively for the black market. Lanninger is the press spokesperson for the Berlin customs investigation office. “We’re just getting started with our investigation into the traders, but it’s clear that globalisation can’t be stopped when it comes to the cigarette trade,” he says.
Two other investigators – Andreas Lemke* and Carsten Bruges* – are here too, tasked with investigating in the people behind these operations and their business structures. Lemke was there in September of 1999 when customs and the police launched a joint investigation into the cigarette trade. Today, he leads an office that seized 16.3 million cigarettes in 2018 alone.
According to Lemke, there is a big difference in the market between now and its early days: “There aren’t any more murders – at least, not that we’re aware of.” Lanniger interjects: “But the market continues to grow.”
The more expensive legal cigarettes become, the more people seek out ways to purchase them illegally. On top of that, Germany is becoming a transit country for illegal cigarettes headed to France, where the tobacco tax has skyrocketed.
As demand grows, so does the market. That won’t change – in Germany, at least – as long as the punishment for possession of 100 untaxed cigarettes costs less than the price of 100 taxed cigarettes. Nor will it change as long as the state puts migrants in a situation where they are easily exploited by criminal organisations. Bureaucracy moves very slowly, so people look for other ways to help themselves. As criminal activity goes, selling untaxed cigarettes is relatively mild.
In November of 2018, 200 officials searched 12 properties in Berlin and Brandenburg. They discovered 500,000 untaxed cigarettes and 200 pounds of hookah tobacco. They also seized over €100,000 in cash, and a lot of firearms. Since then, investigations have been underway against ten of the accused, all people of Syrian and Lebanese origin, including group leaders, but also shop salesmen, street vendors and suppliers from Brandenburg.
“You see, it has nothing to do with nationality – if tomorrow we had refugees from Sweden coming in, they could just as well get into this type of criminal activity,” says Lanninger.
Lemke doubts that disputes over suppliers or stock are likely to happen anytime soon, because the supply from Poland is just so high. But, he says, the Arab groups do have potential for growth: “They have the manpower, and the market is on their side. Their odds are as good as the Vietnamese, if not better, because they can learn from the previous model.”
The investigators say they’re not trying to accuse all refugees of being criminals. They know that the members of the Syrian-Lebanese and Vietnamese gangs are only a minority within the minority, and that the trade is not limited to Berlin – that these networks exist all over Germany.
What happens next, though, is anyone’s guess. As the Vietnamese gangs lose their monopoly, the market is less predictable than it’s been for years.
*Name has been changed to protect their identity.
