It is Belarus’s fate to be located between two economic blocs – Russia and the EU. While the country’s eastern border is largely symbolic – all the more so since the Eurasian Economic Union (EEU) treaty came into force on 1 January – the absence of any integration projects, and the failure of Minsk to establish strong ties with the EU has ensured that its border to the west remains very much intact.
Entrenched borders and stringent customs regulations may be an obstacle to free trade between countries, but they also provide an illegal source of income for enterprising citizens. Smuggling in Belarus is flourishing: both on the border with EU states such as Latvia, Lithuania, and Poland, and its southern border with Ukraine. Belarusian media features stories about the seizure of contraband goods practically every week, but the reports cover only a small fraction of seizures, and an even smaller number of successful anti-smuggling operations receive coverage.
Smuggling is widespread in Belarus, and not because Belarus is a corrupt state where the customs and border authorities are happy to encourage the shadow economy for an appropriate kickback. On the contrary, these bodies are efficient, and corruption is much less prevalent in Belarus than in other post-Soviet states.
In Belarusian law, the smuggling of most categories of goods is only a minor infringement
The reason for the rise of smuggling is that Belarusian law categorises smuggling most categories of goods as only a minor infringement. The grey economy provides people in Belarus and Ukraine, as well as the residents of impoverished border regions in Lithuania and Poland, with a more substantial income than they could command by working legally. For some people, smuggling is the only available source of income.
Smuggling on the Belarus border takes place in various forms and quantities. Usually the contraband goods are either just taken through border posts without being declared, or cross illegally through woods and rivers.
According to the border authorities, the goods most commonly smuggled from Belarus into the EU are cigarettes, whereas from Russia to the EU through Belarus, cigarettes and alcohol take the lead. By contrast, Ukraine’s largest unofficial ‘exports’ are meat, alcohol, and food products. Amber is the most common contraband item from Kaliningrad, the Russian enclave on the Baltic; and clothing, food products, and drugs are the items most often smuggled from Europe into Belarus and Russia.
At different times, different goods have provided the best income for the smugglers. Immediately after the breakup of the USSR in 1991, goods manufactured in Belarus were in great demand in Poland. But the situation changed as the market economy developed in Belarus’ western neighbours, and its own economy stagnated. Nowadays, Belarusians buy most things – equipment, clothing, building materials – abroad, as they are cheaper and better quality. The only things worth smuggling out of the country today are cigarettes and fuel.
The movement of contraband goods has become a real art.
The art of smuggling
The movement of contraband goods has become a real art. Smaller items can be hidden in personal luggage or clothing, or carried in cars, buses, and trains. People make bags with double bottoms, and construct all kinds of hiding places in cars and other vehicles. They conceal contraband among legally transported goods, and wear several layers. Drugs are secreted in food cans, cosmetic tubes, furniture, and clothing.
Russian/Polish border sign reading 'only after passport checking'. Image by Michal Fuldra via Demotix (C)
Smugglers comes in all shapes and sizes; ‘babushki’ (grandmas) crossing the border with a few packs of cigarettes, and international gangs with the resources necessary for organising large shipments of contraband, able to buy off border and customs officials.
Smugglers who are caught produce all kinds of stories as to why they are carrying large boxes of cigarettes through border areas: ‘gathering mushrooms,’ they say; and ‘we’re looking for a Christmas tree’ – time consuming activities for heavy smokers...
Honour among thieves
Viktar Sazonaŭ, a human rights activist and writer from the border town of Hrodna, has written an entire book, A Smuggler’s Notes, in which he describes, with a fair amount of humour, the activities of local smugglers in the 1990s and early 2000s. At the time, Viktar combined his day job as a scientific officer with a sideline in smuggling, and would earn three or four times his monthly salary in one trip.
Viktar waxes nostalgic about the smugglers of the time: ‘They were completely different people, much more romantic. They went to have a look at the West. They were active, decisive, goodhearted, and always ready to help one another. They were full of capitalist ideas, boldness, and risk taking, and thought they could use smuggling to build some capital, open a business, and become respected citizens.’ Today’s smugglers, on the other hand, are, according to Viktar, ‘miserly and full of envy. They try to steal the best goods from under one another’s noses. Their only aim is to survive, to earn some extra cash’. Sazonaŭ believes that an improvement in Belarus' economy would make smuggling less attractive. ‘It’s very nerveracking work and not easy. Some smugglers have a higher than average standard of living not because they make a huge profit but because they work 20 hours a day. If there was a chance of earning a decent living here legally, most people would do like the Poles did – chuck it in and live a normal existence, paying their taxes and enjoying life.’
Smuggling became popular in Belarus because its citizens are a law-abiding lot
It sounds paradoxical, says Viktor, but smuggling became popular in Belarus because its citizens are a law-abiding lot. They see nothing immoral in buying something in one country and selling it in another – it’s just business. In their own country, Belarusians live exemplary lives, observing the law: stealing is considered a disgrace. But smuggling isn’t the same as stealing, although it might seem so in terms of the ‘public good’. By treating smuggling as a less than serious offence, the government encourages the attitude that, while it is a far from completely legal business, at least it’s a morally acceptable one.
This view of smuggling is shared by Olga, who gave up her calling after being caught by the border police. In an interview with the Polish national daily Rzeczpospolita, Olga talked about her previous work, making it sound like a job in any old run-of-the-mill firm. Her employers provided her with a salary, a car, and a phone, and even paid her taxes.
Olga started transporting contraband cigarettes because she was desperate. Her husband had left her and she had two children to support. For nearly two years, Olga earned not just enough to make ends meet, but enough for a new flat and holidays abroad. She was caught, Olga said, when rival smugglers reported her to the customs people. When she arrived at the border, her car was immediately searched . Olga avoided prosecution because she wasn’t carrying a large enough quantity, but she decided to leave the business.
Olga’s employers provided her with a salary, a car, and a phone, and even paid her taxes.
Olga told her interviewer that it wasn’t difficult to become a smuggler – you just needed to know the right people. You can work alone, but to make a lot of money you need to carry larger amounts than you can buy in an ordinary shop. So you have an arrangement with wholesalers and ‘packers’. You leave your car with people who have special equipment; they load the car with cigarettes and after you cross the border you take them to a similar firm to unload.
Olga doesn’t think she worked for the mafia. ‘What mafia? What criminals? They were just normal people! I wasn’t smuggling drugs, after all. People smoke – that’s all there is to it’, she says. And her friends saw nothing wrong with her work either.
Black market smokes
Olga’s story hints at the enormous scale of cigarette smuggling from Belarus into the EU. Famous for Lukashenka’s dictatorship, Chernobyl fallout, and ice hockey, Belarus is evidently also well known now among European smokers – it is one of the largest suppliers of illegal cigarettes to EU countries. The loss of EU tax revenue from the illegal trade in tobacco products comes to some $10 billion per year; and the Belarusian contribution to this loss is a considerable one.
In Belarusian law, cigarette smuggling may only be a minor offence, but it can be just as profitable as smuggling drugs or arms – much more serious crimes. So the business has grown enormously over the last few years.
10 billion cigarettes cross the border illegally each year
Official figures show that the Belarusian market accounts for 20 billion cigarettes a year, but the country’s tobacco industry produces 30 billion. In other words, 10 billion cigarettes cross the border illegally each year. In Belarus, the cigarettes ‘exported’ to Europe (the premium NZ, Minsk, and Viceroy brands) cost less than €0.5 (£0.37) a pack. In EU member states, similar brands cost between £2 and £6, depending on countries’ tax levels, allowing smugglers to make enormous profits.
The cigarettes are usually sold in areas close to the border, and to known customers. The more organised and professional operators transport them straight to western Europe. Research into the Polish cigarette market reveals that, in 2013, 14.5% of cigarettes sold were illegal imports. Almost half of these came from Belarus, a sharp contrast with figures from 2007, when a mere 2% of contraband cigarettes came from Belarus.
In a survey carried out in 2013 by the Lithuanian Free Market Institute, in the previous year, 35% of those surveyed admitted to buying contraband cigarettes, 16% to buying contraband alcoholic drinks, and 29% to buying contraband fuel. And almost two thirds of Lithuanians argued that this was all justified by their country’s difficult economic situation.
The Lukashenka government fears public unrest if living standards fall
Eyes wide shut
Despite the enormous volume of cigarette smuggling, the Belarusian government shows no signs of increasing penalties for this crime. The illegal ‘export’ of cigarettes generates large profits for the country’s two tobacco factories and provides the state with massive funding in the form of excise duties.
But smuggling is a two-way process. The ‘import’ of cheap, high-quality food and manufactured products from the EU costs Belarus billions of dollars a year, and it has no means of controlling it – so far. In 2013, Alyaksandr Lukashenka stunned the public by proposing the introduction of a ‘$100 a head’ duty on people leaving the country, since Belarusians, he claimed, take up to $3 billion out of Belarus each year. This proposal has, however, been dropped. The country’s leadership is worried about the potential for public unrest if living standards – the basis of the ‘contract’ between the Lukashenka government and Belarusians – are threatened. People have, after all, accepted political powerlessness in exchange for material welfare.
So, some resourceful Belarusians and their neighbours still earn a good living from smuggling, and the authorities, afraid of social instability, and buoyed by the income from the extra excise duties, are in no hurry to take decisive measures against the cigarette business. This situation is typical of post-Soviet societies, where smuggling is considered a morally acceptable means of earning an income. It is also very convenient for European smokers, who can buy black market smokes at half price. The situation suits everyone – except, of course, the EU countries losing billions of Euros in tax every year.
Standfirst image: A selection of cigarettes with Russian packaging. (c) Michal Fuldra / Demotix.