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November 17, 1996
. Vreme News Digest Agency No 267
Montenegro And The Mob

Speedboats In Transit

by Dejan Anastasijevic

Italian police arrested last Antonio Pagano last week. Pagano, one of the most wanted criminals in the country, was known as the "number one" of the "Santa Coroma", one of the four constituent units of the Italian mafia (the other three are the "Cosa Nostra", the "Camorra" and the "Nargenta"). Pagano was allegedly with his Romanian mistress Liliana Ivanescu at the time the police made the arrest in a spacious Rome villa registered in her name. Pagano's deputy, Benedetto Stano, was arrested shortly afterwards. After the arrests, which engaged an entire fleet of helicopters and hundreds of carabinieri, the police staged a press conference which said that a severe blow had been dealt to the Santa Corona and its basic activity, smuggling cigarettes and drug-trafficking via Montenegro.

"The enormous business of cigarette-smuggling is being conducted with the tacit consent of big companies and the Montenegrin underground because it is bringing major revenues along the Adriatic coast, said Giorgio Oliva, a Brindisi police chief. Oliva said that Pagano and Stano, wanted by the Italian authorities for many years, had been hiding in Montenegro, where they set up headquarters for overseas operations. Sources say that they had a fleet of some fifty speedboats for the transport of cigarettes from Bari to the Montenegrin port of Bar. The remaining members of the gang, Francesco Sparacca, Santo Vantagiatto and Francesco Prudentini are allegedly still in Montenegro.

THE UNDERGROUND AND THE SKY: Vreme paid a visit to Montenegro to see if the story was true but could not find any of the three Italians. What we did see for ourselves is that smuggling cigarettes is much more than a criminal activity in the coastal republic: everyone we talked to, including government officials and street dealers, agreed with the theory that the "transit" of cigarettes, as they call it, is one of the major economic branches in Montenegro. What is more, rumors have it that the money for wages and pensions during the UN-imposed economic sanctions against Yugoslavia was allocated from the profits made by the "transit" of these goods. For that reason and the scale of the profit made in this business, it was difficult to find someone willing to explain exactly how the "transit" works. One of the people interviewed said he would be better off dead than saying a word or two about the business.

A customs officer nevertheless told us that the main transport route until January 27 this year was an "airlift" by Russian-owned planes via the Podgorica airport. He said the planes with Ukrainian crews were loaded with about forty tons of cigarettes each, mainly Marlboro Rothmans and other quality blends, and landed three or four times a day in the Montenegrin capital allegedly because of technical problems. A part of the load was transported in vans and trucks to distributors in Serbia, but most of it was taken to the ports of Bar and Zelenika and loaded on to Santa Corona speedboats bound for Italy. He says that January 27 was a crucial date for the business because the annual report on imports and exports was to be sent the day after to the federal customs board in Belgrade, nominally in charge of all forms of trade. It appears that some sort of conflict emerged between Belgrade and Montenegro, probably about sharing the profit, so the "air lift" route was no used as frequently as before. However, the turnover via roads from Albania, Bulgaria and Macedonia intensified at the same time.

CUSTOMS WARS: Legally and financially, the load goes down as transit during its transportation through Montenegro, which is why the business was named "transit". Accordingly, under the law, no taxes or duties are paid for goods in transit. However, being paid for are the "good services" of Montenegrin individuals, registered as transportation costs. Montenegrins make thirty US dollars per box. A box is fifty cartons containing ten packets each.

They are paid mostly in cash, after the delivery is made. Some payments are made through bank transactions: for that purpose, the Montenegrin finance minister, Predrag Goranovic, opened an account in the Cypress Popular Bank of Cyprus. Goranovic's cabinet naturally declined to comment on the issue raised by Vreme and a few foreign reporters.

Italian police say that 1.2 million boxes are annually transported through Montenegro, which brings a profit of 36 million dollars per annum. The figure is probably not a breathtaking one, but it is certainly sufficient to add to the pension fund and invest in more lucrative transactions. The calculation includes cigarettes, but not drugs, arms and fuel, which are a separate business altogether. Much is being said in Bar about the presence of the Italian mafia in Montenegro, perhaps because a number of ten-metre speedboats are always anchored in the marina. Still the talk of the town is an incident which happened last April, when an Italian was killed in a gunfight and his mates got away in a speedboat owned by Ratko Knezevic, prime minister Milo Djukanovic's aide and the head of the Montenegrin trade mission in Washington. Italian police found the yacht on their own coast and returned it to its owner, who recently made a name for himself by bringing top model Claudia Schieffer to Montenegro. Knezevic is also best man to one Giovanni di Stefano, a close friend of Zeljko Raznjatovic Arkan. Some spacious and beautiful villas in Bar have allegedly been bought by rich Italians headed by a character known as Ciccio, but they seem to be vacant these says. A man who lives in the neighborhood was recently attacked and badly wounded by dogs guarding the villas, and told by the police he would be well advised not to file a complaint.

Mihalj Kertes, the man in charge of the federal customs board and hence the turnover of cigarettes in Montenegro, says that the business is perfectly legitimate. "It is normal transit like anywhere else in the world, the rest is pure fiction", Kertes said in a recent interview for the daily Washington Post. A European Union customs delegation recently visited Yugoslavia to investigate the "transit" issue and, according to Kertes, left the country assured that everything is being done by the book. However, an officer who wished to stay anonymous said he had a different impression. "I don't know what those EU supervisors wrote in their report, but I guarantee you that a customs officer with any experience at all would have realized what the business is about the moment he saw the records", he said. Other sources say that customs officers gained some much power during the sanctions period that they stopped paying attention to "paper work" and started doing business quite openly. They say that Kertes and his aides have only a small percentage from the "transit", while the lion's share of the profit goes to the mastermind of the entire operation, Milo Djukanovic.

It seems, however, that the recent arrests in Italy and the pressure exerted by the "Belgrade group" (reportedly headed by a certain pastry shop owner and a certain rally driver) to cut in on the business will result in either a fall in turnover or diminished profits for the Montenegrin side. The Montenegrin party seems to have realized the situation and is probably prepared to withdraw, do the laundering and invest the money in less risky ventures. On Saturday, November 16, Montenegro will officially become a large off shore zone, like Hong Kong, the Cayman islands and other places with an inflow of dirty cash. Although there are certain obstacles to such a course of events (such as the Constitution of the Federal Republic of Yugoslavia), there is reason to believe that Belgrade and Podgorica will cut some kind of a deal. After all, they have a common interest.

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