An investigative report reveals organized networks that mimic Cleopatra cigarettes a famous Egyptian brand, in foreign countries in large scales, from 2012 till now, to smuggle it to Libya through cargo ships, then through the desert to Egypt to be sold instead of the original Cleopatra cigarettes that being made by the Egyptian Eastern Company S.A.E.
The state owns 55% of the shares of Eastern Company; So, Eastern Company is a primary resource of Egypt’s treasury, with 56 billion Egyptian pounds in 2017/2018 balance sheet. This is worth of the state’s profit share of custom taxes and tariffs.
The State of Egypt lost about 5 billion Egyptian pounds per year because of smuggling Cleopatra Cigarettes.
Over two years, we tracked dozens of shipments, and investigated the origins of those companies, which are scattered over six different European, Asian and Arab countries. We aimed at exposing an organized network of businesspersons and politicians of different nationalities that protect foreign companies that produced Cleopatra cigarette packs labelled “Made in Egypt” and smuggling them to Egypt. Those packs are in fact “Made outside Egypt”.
The report targets audiences in many countries, mainly in Egypt as the Egyptian get affected directly by the smuggling, specially that the Egyptian government decided to increase taxes revenue for the public treasury by raising prices of Cleopatra cigarettes in the Egyptian market from 4.5 EGP (0.75 USD) in 2011, to 16 EGP (0.89 USD) in 2018. However, at the same time the public Egyptian treasury was losing more than 5 billion Egyptian pounds annually, due to operations of production and smuggling of Cleopatra cigarettes in several countries, and because Eastern Company delayed to take legal actions to stop production and demand compensations for the losses.
Also, in Montenegro and Albania, as the manufacturing operation done there illegally so no benefits returns to the state.
In EU\’s countries, where the European customs authorities combat against the smuggling of cigarettes in the world, especially by the British, and French customs authorities along with the European Anti-Fraud Office (OLAF).
What makes this project innovative?
Note: I have uploaded 2 PDFs Arabic and English versions for the whole report to ggogle drive, the link at the additional links section. https://drive.google.com/drive/folders/1UuCTnUMFdnMIomNc_RIN5_p7ibNpuuV4?usp=sharing According to the documents we got from Greek Authorities, The European anti-fraud office (OLAF) with the cooperation with the Greek authorities wouldn't able to find any information about the Company which produce Cleopatra cigarettes in Montenegro, plus they couldn't trace the telephone number too. But, we do. We used "truecaller" mobile app to trace the telephone number and we exposed the owner of the company and his relation with the Boss behind that network. This report so different from others, because over two years, we tracked dozens of shipments, and investigated the origins of those companies, which are scattered over six different European, Asian and Arab countries. We aimed at exposing an organized network of businesspersons and politicians of different nationalities that protect foreign companies that produced Cleopatra cigarettes. To achieve our goals, we used innovative techniques because the people behind those networks are so careful to show themselves or their names, but we succeeded to expose them by using social media search tools and techniques, so we got a lot of photos and evidences.
What was the impact of your project? How did you measure it?
I have published 4 episodes about this story, from the first episode it has gone viral over the internet in Egypt, a lot of newspapers and websites published a news breaking about the findings in the episode, and the most famous economic newsletter in Egypt and the Arab region called "enterprise.press" had published a summary about the first episode. The Egyptian exchange had stopped Eastern company's shares and asked the company to send a statement about the findings in the episode. After 1 month from publishing all episodes, the Industry Committee of the Egyptian Parliament sent me an official invitation to attend the discussion board about the information and documents exposed by my investigative report. The committee meeting was attended by the Chef of the committee and a large number of parliament members, in addition to Chairman of the Holding Company for Chemicals (the mother company of Eastern Company), Eastern Company's CEO, and Head of Export Sector of the Eastern Company, plus a number of leaders. At the end, the Egyptian Parliament referred “Cleopatra” file to the state prosecutor to start a criminal investigation. The committee said prosecutor needed to look into whether Eastern Company managers had neglected to stop the flow of counterfeit cigarettes from Montenegro and Albania into the country. In addition, requested to call the Minister of Business Sector to be asked about his lack of action to protect the Egyptian Trademark of “Cleopatra” cigarettes. Also to call the Minister of Finance to be asked about the losses of the General Treasury from the faking of “Cleopatra” cigarettes and smuggling for sale in Egypt. The Industry Committee thanks me as an official recognition for the efforts in this investigation. Last month, this investigative report has been selected by Arab Data Journalists' Network to won the first place prize as best data driven story in Arab world.
Source and methodology
The start point was to collect shipments documents from the port of Bar in Montenegro, then we got the production table for DKP factory in Montenegro to calculate the production scale of Cleopatra cigarettes there, after that, we got the contracts between DKP and Liberty FZE to produce Cleopatra cigarettes. From that point, we put a plan to trace the people names, the companies and the vessels. We used social media (facebook – twitter – Instagram – linkedin) search tools and techniques such as inVid, graph.tips and social-search tools, to trace names and expose the relations between them plus got important information, statistics and evidences. We used marine traffic a global ship tracking intelligence to track vessels routes, and then we used vessels databases to expose the names and the companies behind the vessels. To trace the companies we used search engines like opencorporates and occrp database in addition to UAE free zones databases and Montenegrin commercial register and Montenegrin parliament database website. In the fieldwork, we got in touch with Egyptian customs, Greek authorities, Montenegrin authorities and Albanian authorities, so we got a lot of documents and information that was helpful to complete the whole picture. We got in touch with all people and companies involved in the networks to give them the right to reply and at the same time to verify our data. Also, we used the trademarks search engines and databases, plus the intellectual property office for each country where the companies tried to register Cleopatra trademark, to get the documents and information regarding the registration dates of the Cleopatra trademark and the companies behind that. In addition to Panjiva global trade insights, a database website with import and export details on commercial shipments, which was helpful to give us important information regarding the tobacco and cigarettes manufacture equipment trade between the companies involved in the networks. Two different teams made a fact checking, one for every episode, the second for the whole report, to verify every single information and document, then the legal revision by local lawyers from each country we mentioned in the report and an international lawyers to review the whole report.
We used excel program to store and arrange data then we created a pivot tables to set the relation between all information. Then we used OCCRP VIS visual investigative scenarios to build the networks with all people names, the companies and the relations between them.
Marko Vesovic, As a participation from Montenegro ARIJ - Arab Reporters for Investigative Journalism BIRN - Balkan Investigative Reporting Network