Who cares about 122 million euros worth of cigarettes: A private citizen submits bills to the state, the Customs Administration ignores them

The Supreme Court has not yet reviewed the rulings of the Administrative Court - whether cigarettes were legally confiscated in the Bar. The Customs Administration stored the seized cigars in the bar company PGS Montenegro, which it has not paid for this service since June 2022, claiming that the contract on the acceptance of the goods has expired. PGS Montenegro states that the contract is valid until the day the cigarettes are shipped from the warehouse. Close to 165.612 packs of cigarettes (about 150 containers), worth about 122 million euros, according to the recorded customs debt, were seized.

51081 views 90 reactions 23 comment(s)
Seized cigarettes in Port Bar, Photo: UPC
Seized cigarettes in Port Bar, Photo: UPC
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.

While waiting for the court's decision on the fate of the multimillion-dollar confiscated cigarettes, the state does not care too much about them.

About 150 containers of these tobacco products are languishing in warehouses rented by the state to a private individual, who continues to issue invoices for the storage of goods.

The Customs Administration claims that the contract has expired and that it has been fully complied with, while the private company PGS Montenegro says that their service continues as long as there are cigarettes, which is why they are still asking for money for services.

A "Vijesti" source familiar with the matter claims that representatives of the state have not visited the warehouse in a year.

The Supreme Court should rule on nine rulings of the Administrative Court in favor of the state, and on the lawsuits of companies that kept cigarettes in the Free Zone and that did not comply with the Government's decision to prohibit the storage of tobacco in the Port of Bar. The administrative court confirmed that the cigarettes were legally confiscated, which further means that they can be burned.

The government of Prime Minister Dritan Abazović intended to sell them, but the position of the European partners is that they must be destroyed.

In the meantime, those cigarettes are kept in the warehouse of the private company PGS Montenegro, which for the needs of its business has leased space from the state oil company Montenegro Bonus. According to data from the Central Register of Business Entities, the bar company's activity code is "warehousing". The President of the Board of Directors is Enrico Pacorini.

Cigarettes are under a customs seal, which can only be removed with the approval of the prosecution.

In May 2022, the former Revenue and Customs Administration (UPC) concluded a contract with this company on the acceptance of goods, and the State Property Administration and Montenegro bonus tell "Vijesti" that they are not involved in the business between the Customs Administration and a private company.

In 2022, the government confiscated about 165.612 packs of cigarettes (about 150 containers) in the Free Zone of the Port of Bar, worth about 122 million euros (according to the recorded customs debt), and according to estimates on the black market, their value is over 60 million euros.

Decisions on banning the storage of tobacco in the Port of Bar were made by the Government in June and December 2021, and the deadline for cigarette owners to move them from the warehouse in the Port was extended. After those deadlines expired, the UPC ordered the Customs Bar to confiscate the tobacco products in stock. That Government decision was made with reference to Article 5 of the Law on Free Zones, which states that "in the zone and warehouse, economic activities that do not pose a risk to human health and/or the environment, material goods and state security can be carried out, in accordance with the law".

Who sued the state

According to "Vijesti" information, the companies Ripšped from Bar, Atlas Mont from Seychelles (two cases), Sace LTD from the USA (two cases) and "West Point" from Podgorica are seeking a revision of the Administrative Court's verdict.

The Supreme Court told "Vijesta" that these six cases were submitted for the purpose of an extraordinary legal remedy - a request for examination of the court decision.

"The cases were received in the registry of the Supreme Court in the period from November 8, 2023 to December 13, 2023. The judges are in charge of the cases, and after the files are completed, the cases will be taken up," said the Supreme Court.

"Vijesti" did not come up with the names of the remaining three cases, and the Ministry of Finance did not announce the names either, except that nine disputes were initiated.

"Regarding the handling of confiscated cigarettes in the Luka Bar Free Zone in May 2022, the Administrative Court made decisions based on the owner's lawsuits, which dismissed the lawsuits. However, in accordance with the Law on Administrative Disputes, the owners exercised their right and submitted requests for review of the court decision to the Supreme Court. In this sense, the competent authorities will wait for the decisions of the Supreme Court and act in accordance with the decisions and valid regulations when it comes to dealing with confiscated goods. Also, due to the investigations initiated by the competent prosecutor's office, the handling of cigarettes will depend on the outcome of the proceedings conducted before those authorities. After the Ministry of Finance confirmed the decisions of the UPC on confiscation of goods-cigarettes from business entities that did not act according to the Government's decision, nine disputes were initiated before the Administrative Court, which rejected the lawsuit in all cases. In all nine cases, revisions to the judgments of the Administrative Court were announced," the Ministry of Finance stated.

Customs Administration: Everything that was due has been paid

The Customs Administration confirmed to "Vijesta" that the state signed a contract with a company from Bar for the storage of cigarettes.

"UPC, which was then managed by Rade Milošević, only concluded a contract on the provision of services for the acceptance of goods - cigarettes with PGS. However, the Revenue and Customs Administration did not conclude a contract to rent space from "PGS Montenegro" for the reason that the space lease is a centralized procurement, which is carried out for state bodies by the Administration for Cadastre and State Property, which also did not conclude a contract with the aforementioned company for space rental. ", stated the Customs Administration.

As explained, the former UPC initiated the simple procurement procedure on May 12, 5, which related to the acceptance of goods, with clearly defined specifications and conditions of the procurement in question.

"For the aforementioned procedure, a contract on the provision of acceptance services for these goods was concluded on May 24, 5 with "PGS Montenegro", the contracted value of which was 2022 euros. The contract was concluded for a certain period of time, more precisely, the executor (PGS Montenegro) was obliged to perform the service within a maximum of 16.650,00 days from the date of conclusion of the contract, and UPC, as the other contracting party, was obliged to perform the service within 20 days from the date of issuing the invoice payment. The contract was signed by the then director of UPC Rado Milošević and Aleksandar Adamović, director of PGS Montenegro. After the service was performed by PGS Montenegro, i.e., after the invoice was paid by the then UPC, the contract was fully executed and no longer produces legal effect", the Customs Administration explained, noting that this is the only contract that UPC had with the company PGS Montenegro.

The UPC says that the private bar company continues to issue invoices (various amounts), referring to the contract that was implemented in 2022 and related to the acceptance of goods.

"The former UPC, i.e. the legal successor, the Customs Administration, does not pay invoices for the reason that there is no legal basis for it," said the Customs Administration.

From this state institution, they stated that the cigarettes were kept in that area after the placement due to the investigations initiated by other state authorities until the end of the procedure.

"Disputes are ongoing before the Supreme Court based on the lawsuit of the owners (legal entities) from which, due to non-compliance with the order of the Customs Office, Bar for the movement of tobacco products from the Free Zone, the Port of Bar was confiscated. Access to the area where the seized tobacco products are placed is limited by the fact that a customs seal has been placed on the entrance door, which can only be removed with the approval of the competent prosecutor's office," said the Customs Administration.

PGS: There are three indivisible services in storage

The executive director of PGS Montenegro, Aleksandar Adamović, told "Vijesta" that: The contract on the acceptance of goods with the UPC was signed and implemented within a period of 25 days from the signing, that is, from May 12, 2022 to June 7, 2022, and that PGS did not gave UPC to sublease the space that it rents from the company Montenegro bonus. He explained that when they sublease space, they have to inform Montenegro bonus about it

He stated that for the realization of this contract it was necessary to pay them 20,871.90 euros, and a total of 13,765.29 euros was paid.

"Vijesti" asked PGS Montenegro to clarify the legal basis for the further issuing of invoices, since the UPC states that the contract has expired.

"That the contract on the acceptance of the goods has expired is probably true, but the fact that it was implemented is irrelevant. PGS issues invoices for the storage of confiscated goods in the warehouse, that is, the second of the three indivisible services", said Adamović.

He explained that, at the request of the UPC, on May 12, 2022, the PGS offered the conditions for acceptance, storage and shipment of confiscated goods.

"In storage, these are three indivisible services and cannot be divided, that is, acceptance cannot be rejected. Acceptance (the service of transshipment of goods from the truck to the warehouse) is invoiced after the completed service. Warehousing (the service of storing goods in a warehouse) is invoiced by time periods and lasts until shipment. Shipping (handover service from the warehouse to the truck) is invoiced after the service is completed. Those conditions were aligned with UPC's needs, i.e. far below our commercial offer, all with the aim of solving their problem. From June 7, 2022 until today, UPC has not paid a single invoice for storage, while there is no indication when the shipment will be realized," explained Adamović, adding that one of the conditions for their participation in this business is discretion due to the sensitivity of the work.

No indication of when the cigarettes will be removed: Customs Administration
No indication of when the cigarettes will be removed: Customs Administrationphoto: Luka Zeković

Adamović said that PGS is a warehouseman with 90 years of tradition and does not deal with such goods.

"It is impressive and it was an honor to be recognized by the UPC as the only safe warehouse in the Bar Port Free Zone. Unfortunately, due to all other events that occur later, PGS remains a non-priority and finances a complete state undertaking that exceeds 200.000 euros", says Adamović.

The contract with Montenegro bonus expires in September 2025

The state oil company Montenegro bonus said that the company PGS Montenegro rents a warehouse that is owned by the state, and which the government gave to Montenegro bonus for use, management and disposal, except for the disposal of property rights.

"The current management of Montenegro Bonus is in possession of contract number 01-798 dated September 30, 9, which was concluded by the former management, led by the executive director Milan Čolaković, with the executive director of PGS Montenegro, which concerns the property in Bar was subleased to this company, based on an advertisement for a warehouse for which the then Board of Directors, led by the chairman of the board, Miroslav Ivanišević, made a decision for a period of four plus one years", they said in Montengro bonus, adding that according to the contract, Bar's private the company pays monthly rent in the amount of 2020 euros without VAT.

Montenegro bonus said that they have no information about the contractual relationship between the bar company and the state regarding the placement of cigarettes from the Bar Port Free Zone, nor did Montenegro bonus participate in any agreements with the Revenue and Customs Administration.

The State Property Administration does not have data on the storage of cigarettes

The Administration for State Property told "Vijesta" officially that they do not have information on the basis of which contract the PGS Montenegro company uses the space owned by Montenegro bonus, because the administration did not lease it, and that they were not involved in the contractual relationship that the private company had with the former Revenue and Customs Administration.

"Since we have no data on the use of this space, we are unable to provide you with the requested information," said the Property Administration.

Bonus video: