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Notes

1 - Annual net profits amount to approximately 150 million Euro on the import level and approximately 80 million Euro on the distribution level at a .0375 and .02 Euro net profit respectively per cigarette with a black market volume of 4 billion cigarettes per year.

2 - Articles were systematically selected from the daily papers "die tageszeitung" and "Der Tagesspiegel," both published in Berlin, and the weekly publications "Die Zeit" and "Der Spiegel," both published in Hamburg. Articles were taken from the author's press archive on crime and criminal policy covering the time period since 1993. In addition, articles from "die tageszeitung" and "Der Spiegel" were researched specifically for this study with the help of CD-ROM data bases and annual indexes for the time period since 1988. Articles from other publications were included when available from the author's press archive.

3 - The author would like to thank Wilfried Wieloch, head of the Zollfahndungsamt Berlin (detectives branch of the customs service), Shirley Glanz, head of the cigarette unit of the Zollfahndungsamt Berlin, and Ehrhard Wall, head of the organized-crime unit of the Zollfahndungsamt Berlin, for willingly sharing valuable information. The author is also indebted to Wolfgang Schmitz from the press bureau of the Zollkriminalamt (central investigative agency of the customs service) in Cologne for providing informative material.

4 - The author would like to thank those informants who provided inside information on the wholesale and streetsale of untaxed cigarettes and whose names have to remain anonymous.

5 - See Klaus von Lampe, Understanding Organized Crime: A German View (Paper presented at the Annual Meeting of the Academy of Criminal Justice Sciences, Boston, March 1995), and K. von Lampe, Organized Crime: Begriff und Theorie organisierter Kriminalität in den USA (Frankfurt am Main: Peter Lang, 1999), for analyses of the development of the concept of organized crime in Germany and the United States.

6 - Vietnamese are reported to be engaged in video piracy and prostitution. See Der Tagesspiegel, '25jähriger Vietnamese in Bordell erschossen', 24 May 1993; Christian Arns, 'Streit um Polizeieinsatz in Vietnamesenheim', die tageszeitung, 5 August 1993, p. 17; Der Spiegel, 'Zweites Standbein', 15/1994, p. 68; Gerhard Habenicht, 'Der illegale Handel mit Zigaretten', Kriminalistik, 4/1995, p. 249; Regina Mönch, 'Trotz Mord blüht das Geschäft', Der Tagesspiegel, 17 May 1996, p. 3; Der Spiegel, 'Wurm in der Suppe', 21/1996, p. 37.

7 - Hans-Jürgen Kerner, 'Drogen und Kriminalität', in G. Kaiser, H.-J. Kerner, F. Sack & H. Schellhoss (Eds.), Kleines Kriminologisches Wörterbuch (Heidelberg: C.F. Müller, 1993), p. 96; Ulrich Sieber & Marion Bögel, Logistik der Organisierten Kriminalität (Wiesbaden: Bundeskriminalamt, 1993), pp. 110, 266.

8 - Bundeskriminalamt, Bundeslagebild Organisierte Kriminalität 1997, Wiesbaden 1998.

9 - These figures may be partly misleading because they do not indicate the percentage of naturalized foreigners among the German suspects.

10 - 87,928 Vietnamese lived in Germany in 1997, compared with 2,107,426 Turks, 721,029 Yugoslavians, 607,868 Italians, 363,202 Greeks, 283,312 Poles, 281,380 Bosnians, 206,554 Croates, 185,076 Austrians, 132,314 Portugese, 131,636 Spaniards, 115,, 162 Britains, 113,848 Iranians, 112,804 Dutch, 110,105 Americans, 103,902 French, 95,190 Rumanians, 83,904 Maroccans, 69,082 Russians, 66,385 Afghans, 60,330 Sri Lankans, 55,904 Lebanese, 52,029 Hungarians, and 51,397 Ukrainians (Fischer Weltalmanach '99, 203).

11 - The customs officials interviewed for this study knew of no case of an attempted or successful bribary of a customs service detective. Incidents coming closest to police corruption are cases of police officers more or less randomly extorting street vendors (see below, note 53).

12 - Der Spiegel, 'Lachende Grüppchen', 43/1995, 130.

13 - Bernd Lehmann, 'Bekämpfung vietnamesischer Straftätergruppierungen in Berlin', der kriminalist, 2/1998, p. 51.

14 - Vietnamese names consist of three elements. While the police uses a strict routine of generally taking the first element as the surname, the customs service decided to store all three elements in equal rank and to conduct searches with an "or" command to allow a comparison with a wider range of entries (E. Wall, Zollfahndungsamt Berlin, personal communication, April 1999).

15 - B. Lehmann, op. cit., p. 57. According to Sebastian Laudan, 'Die Bekämpfung ethnisch geprägter OK am Beispiel der Vietnamesen', Kriminalistik, 3/1999, p. 190, authorities in Berlin do have access to the necessary number of capable interpreters.

16 - E. Wall, Zollfahndungsamt Berlin, personal communication, April 1999.

17 - Marina Mai, 'Statt Vietnam Ausreise nach Tschechien', die tageszeitung, 22 September 1998.

18 - G. Habenicht, op. cit., p. 248; S. Glanz and E. Wall, Zollfahndungsamt Berlin, personal communication, April 1999.

19 - Bernd Lehmann, op. cit., p. 57.

20 - Vera Gaserow, 'Die verkauften Vietnamesen', Die Zeit, 24 May 1996, p. 61; M. Mai, 'Statt Vietnam...', op. cit.

21 - M. Mai, 'Statt Vietnam...', op. cit.

22 - E. Wall, Zollfahndungsamt Berlin, personal communication, April 1999.

23 - G. Habenicht, op. cit., p. 248.

24 - S. Glanz and E. Wall, Zollfahndungsamt Berlin, personal communication, April 1999.

25 - The customs officials interviewed for this study confirmed this assumption from their experiences with apprehended consumers.

26 - The average monthly income in East Germany is only 80 % of the level in West Germany while the unemployment rate is almost twice as high (19.5 % and 11 % in 1997; see Fischer Weltalmanach '99, 213-215).

27 - die tageszeitung, 'Sachsens Zöllner im Streß', 3 June 1991; Der Spiegel, 'Gewaltig zugenommen', 52/1991, p. 86.

28 - In Berlin, the cigarette unit of the customs service's detectives branch never had a staff of more than 30 officers to go up against the thousands of consumers, street vendors, wholesale dealers and smugglers (W. Wieloch, Zollfahndungsamt Berlin, personal communication, April 1999).

29 - In 1994 the laws criminalizing the purchase of untaxed cigarettes were supplemented by a summary offense clause (Sec. 30a of the German Tobacco Act) which provides a less costly and time consuming procedure to deal with consumers. Buyers of up to 400 cigarettes have to pay an exemplary fine of between 30 and 75 Deutsche Marks and have their merchandise forfeited. Buyers of more than 400 cigarettes face a fine of at least 100 Deutsche Marks. The customs service makes frequent use of this provision (E. Wall, personal communication, April 1999).

30 - Barbara Bollwahn, 'Polizei: Schlag gegen die Zigarettenmafia', die tageszeitung, 27 September 1996; S. Laudan, op. cit., p. 188.

31 - Werner Schmidt, 'Illegale Zigaretten werden ins Haus gebracht', Der Tagesspiegel, 22 October 1998.

32 - G. Habenicht, op. cit., p. 248; B. Lehmann, op. cit., p. 53.

33 - Alexander Smoltczyk, 'Der neue Ho-Chi-Minh-Pfad', Wochenpost, 6 May 1995, pp. 4, 6.

34 - See G. Habenicht, op. cit., p. 248. The customs agents interviewed for this study have no evidence of a clear-cut hierarchy within individual street sale operations.

35 - Der Spiegel, 'Gewaltig...', op. cit., p. 86; Klaus Wittmann, 'Perfekt, blitzschnell und dreist', Die Zeit, 3 May 1996, p. 25.

36 - This assessment can be based on the number of cigarettes confiscated in East Germany (1997: 54 %, 1998: 58 %) and West Germany (1997: 46 %, 1998: 42 %; see Die Tabak Zeitung, 'Zigarettenschmuggel blieb auch 1998 auf hohem Niveau', 1 April 1999).

37 - Der Spiegel, 'Wurm in der Suppe', 21/1996, p. 37; B. Lehmann, op. cit., p. 52. According to a 1991 estimate by the German cigarette industry as many as nine billion untaxed cigarettes were sold in a year, see Der Spiegel, 'Ile koschtuje karton', 26/1991, p. 56.

38 - Der Tagesspiegel, 'Deutsche geben 38,9 Mrd. DM für das Rauchen aus', 20 January 1999.

39 - Anita Kugler, 'Von illegalen Zigaretten und Vietnamesen', die tageszeitung, 12 July 1993, p. 5.

40 - G. Habenicht, op. cit., p. 248; Wolfram Runkel, 'Operation Blauer Dunst', Zeitmagazin, 4 August 1995, p. 22; K. Wittmann, op. cit.; Der Spiegel, 'Nie Fragen gestellt', 27/1997, p. 26.

41 - S. Glanz and E. Wall, Zollfahndungsamt Berlin, personal communication, April 1999.

42 - See Steven Wisotsky, Beyond the War on Drugs (Buffalo: Prometheus, 1990), p. 34-35, on the crime-tariff providers in illegal markets charge in order to cancel out perceived risks. Another possible explanation may be that higher sales prices have to cover extortion payments extracted from street vendors (discussed below). This, however, does not explain why the same prices are charged by clandestine vendors who do not seem to be subjected to extortion.

43 - Der Spiegel, 'Ile...', op. cit.

44 - Der Tagesspiegel, 'Schlag gegen Zigarettenhändler und ihre Schmuggelware', 3 December 1993; W. Runkel, op. cit.; Hermann Schmidtendorf, 'Zigarettenschmuggel wird immer dreister', Der Tagesspiegel, 3 April 1995; Die Tabak Zeitung, 'Die spektakulärsten Zoll-Erfolge', 1 April 1999.

45 - Plutonia Plarre, 'Lukratives Geschäft mit illegalen Fluppen, die tageszeitung, 23 February 1993, p. 17; A. Smoltczyk, op. cit., p. 4.

46 - Der Tagesspiegel, 'Schlag gegen Zigaretten-Mafia', 23 September 1994; 'Nie Fragen...', op. cit., p. 26. E. Wall of the Zollfahndungsamt Berlin stated in the interview conducted for this study that out of political considerations customs agents are discouraged from thorough searches of the cross-boarder traffic.

47 - G. Habenicht, op. cit., p. 248; Der Tagesspiegel, 'Zigaretten bringen Millionen', 9 April 1995; 'Nie Fragen...', op. cit., p. 26.

48 - K. Wittmann, 'Perfekt...', op. cit. According to a more recent estimate profits may be as high as 1.8 million Deutsche Marks per truck load ('Zigarettenschmuggel blieb auch...', op. cit.).

49 - 'Nie Fragen...', op. cit., p. 25.

50 - 'Nie Fragen...', op. cit., p. 26.

51 - E. Wall, Zollfahndungsamt Berlin, personal communication, April 1999.

52 - A. Smoltczyk, op. cit., p. 6.

53 - In the greater Berlin area incidents of police misconduct to the detrioent of Vietnamese street vendors have also become known. Police officers allegedly abused arrested Vietnamese and in some cases sold confiscated cigarettes for their own profit (see die tageszeitung, 'Das war eine Art Stillhalteabkommen', 15 July 1992, p. 17; die tageszeitung, 'Skandal weitet sich aus', 20 August 1994, p. 35; Plutonia Plarre, 'Polizei: Korpsgeist und Faustrecht', die tageszeitung 19 August 1997, p. 17).

54 - See die tageszeitung, 'Leipziger Neonazis kündigen Rache an', 3 July 1991, p. 21; die tageszeitung, 'Überfall auf Vietnamesen', 30 July 1992, p. 20; Ute Scheub, 'Der Schmuggel hat mich uffjeregt', die tageszeitung, 30 September 1992, p. 2.

55 - See the annual reports of the internal intelligence agency Bundesamt für Verfassungsschutz (Bundesministerium des Innern, Verfassungsschutzbericht 1991, Bonn 1992, and consecutive years) for more details.

56 - Klaus Wieking, 'Trotz aller Hürden', zitty 6/1997, pp. 28-29.

57 - die tageszeitung, 'Studie: Bandenkriege nehmen an Härte zu', 19 March 1993, p. 23.

58 - B. Lehmann, op. cit., p. 52.

59 - B. Lehmann, op. cit., p. 56.

60 - G. Habenicht, op. cit., p. 249; Der Spiegel, 'Mauer des Schweigens', 1/1996, p. 56.

61 - Der Tagesspiegel, 'Berlin wird Stützpunkt der Organisierten Kriminalität', 18 June 1993; Der Tagesspiegel, 'Mord an Vietnamesen geklärt', 23 November 1994.

62 - Marina Mai, 'Morde unter Schutzgelderpressern', die tageszeitung, 8 September 1998, p. 24.

63 - B. Lehmann, op. cit., p. 52.

64 - W. Schmidt, 'Hanoi-Bande: Mord gehört zum Geschäft', Der Tagesspiegel, 9 April 1995, p. 13.

65 - W. Schmidt, 'Vietnamesischer Bandenchef gefaßt', Der Tagesspiegel, 27 July 1996.

66 - Der Tagesspiegel, 'Tödliche Schießerei der Zigarettenmafia', 22 December 1995.

67 - S. Laudan, op. cit., p. 185.

68 - S. Laudan, op. cit., p. 190-191.

69 - S. Laudan, op. cit., p. 191; W. Schmidt, 'Die Polizei befürchtet neue Bandenkämpfe', Der Tagesspiegel, 2 February 1998.

70 - Payments of up to 15,000 Deutsche Marks per month have been reported. See S. Laudan, op. cit., p. 183; B. Lehmann, op. cit., p. 57; Regina Mönch, 'Trotz Mord blüht das Geschäft', Der Tagesspiegel, 17 May 1996; W. Schmidt, 'Vietnamesischer Bandenchef gefaßt', Der Tagesspiegel, 27 September 1996. In recent years the level of extortion payments has apparently decreased to between 500 and 1,500 Deutsche Marks (see W. Schmidt, 'Wer illegale Zigaretten kauft, muß mit Schießereien rechnen', Der Tagesspiegel, 15 December 1998).

71 - S. Laudan, op. cit., p. 183.

72 - Der Tagesspiegel, 'Erneuter Schlag gegen die Zigaretten-Mafia', 20 June 1997; according to B. Lehmann, op. cit., p. 52, "elevated soldiers" are charged with independently administrating certain vending places.

73 - S. Laudan, op. cit., p. 184; B. Lehmann, op. cit., p. 52.

74 - B. Lehmann, op. cit., p. 52.

75 - Marina Mai, 'Morde unter Schutzgelderpressern', die tageszeitung, 8 September 1998, p. 24.

76 - S. Laudan, op. cit., p. 184.

77 - Der Tagesspiegel, 'Morde unter Vietnamesen erneut vor Gericht', 29 January 1998.

78 - Pino Arlacchi, Mafia Business: The Mafia Ethic and the Spirit of Capitalism (London: Verso, 1986), p. 198, 201.

79 - See K. von Lampe, Organized Crime, op.cit., p. 221, for more details.

80 - See P. Plarre, 'Lukratives Geschäft...', op. cit.; W. Schmidt, 'Auch Deutsche verdienen an der Zigarettenmafia', Der Tagesspiegel, 24 May 1996; Der Spiegel, 'Nie Fragen...', op. cit., p. 25-26; Klaus Wittmann, 'Tabakschmuggel mit Mafiaverbindung aufgeflogen', die tageszeitung, 30 November 1998.

81 - See Der Spiegel, 'Nie Fragen...', op. cit., p. 26; Der Tagesspiegel, 'Zigaretten bringen Millionen', 9 April 1995; P. Plarre, 'Lukratives Geschäft...', op. cit.

82 - For a detailed discussion of the factors leading to the establishment of hierarchical organizations as opposed to contractual arrangements in illegal markets with reference to Oliver Williamson's transaction-cost approach see Dwight C. Smith, 'Illicit Enterprise: An Organized Crime Paradigm for the Nineties', in R. Kelly, K. Chin & R. Schatzberg (Eds.), Handbook of Organized Crime in the United States (Westport, Ct.: Greenwood, 1994), pp. 133-144.

83 On the relation between the structure and environment of criminal enterprises, see Gary Potter, Criminal Organizations (Prospects Heights, Ill.: Waveland, 1994), pp. 153-175.

84 - See Peter Lupsha, 'Organized Crime in the United States', R. J. Kelly (Ed.), Organized Crime: A Global Perspective (Totowa, NJ: Rowman & Littlefield, 1986), p. 33; Howard Abadinsky, Organized Crime (Chicago: Nelson Hall, 1994), p. 7-8; Diego Gambetta, The Sicilian Mafia: The Business of Private Protection (Cambridge/London: Harvard University Press, 1993), p. 227; Dennis J. Kenney & James O. Finckenauer, Organized Crime in America (Belmont et. al.: Wadsworth, 1995), p. 28.

85 - Peter Reuter, Disorganized Crime (Cambridge, Mass.: MIT Press, 1983), p. 140.

86 - See Peter Reuter, op. cit., pp. 140-142.

87 - See Peter Reuter, 'Social control in Illegal Markets', in D. Black (Ed.), Toward a General Theory of Social Control , Vol. 2. (New York: Academic Press, 1984), pp. 29-58.

88 - See Daryl A. Hellman, The Economics of Crime (New York: St. Martin's Press, 1980), p. 173; William A. Luksetich & Michael D. White, Crime and Public Policy: An Economic Approach (Boston/Toronto: Little, Brown and Company, 1982), p. 221.

89 - die tageszeitung, 'Von Polen überfallen', 23 July 1996, p. 5.

90 - On a general characterization of organized-crime groups to that effect see Paul H. Rubin, 'The Economic Theory of the Criminal Firm', in S. Rottenberg (Ed.), The Economics of Crime and Punishment (Washington: American Enterprise Institute for Public Policy Research, 1973), p. 155.

91 - See Alan Block, East Side, West Side: Organizing Crime in New York 1930-1950 (New Brunswick/London: Transaction Publishers, 1980), p. 13; Thomas C. Schelling, 'What is the Business of Organized Crime?', Journal of Public Law, Vol. 20, No. 1, 1971, p. 77; Stergios Skaperdas & Constantinos Syropoulos, 'Gangs as Primitive States', in G. Fiorentini & S. Peltzman (Eds.), The Economics of Organised Crime (Cambridge: Cambridge University Press, 1995), pp. 61-82.

92 - On a general discussion of the characteristics of illegal markets subjected to systematic extortion see Th. Schelling, op. cit., pp. 77-80.

93 - See Th. Schelling, op. cit., p. 76.

94 - D. Hellman, op. cit.

95 - See Peter Reuter, Disorganized Crime, op. cit., pp. 133-135.

96 - See Peter Reuter, Disorganized Crime, op. cit., p. 134.

97 - See Th. Schelling, op. cit., p. 75.

98 - The inability to establish a comprehensive monopoly even at the hight of the power of the large extortion gangs during the mid 1990s also makes it unlikely that monopoly rents could be extracted from the street vendors of untaxed cigarettes. See Peter Reuter, Disorganized Crime, op. cit., pp. 133-134, on the possibilities of pure extortion gangs to extract monopoly rents from illegal enterprises.

99 - See Donald Cressey, Theft of the Nation (New York et. al.: Harper & Row, 1969), p. 249; Frederic D. Homer, Guns and Garlic: Myths and Realities of Organized Crime (West Lafayette: Purdue University Press, 1974), p. 165; D. Kenney & J. Finckenauer, op. cit., p. 5; G. Potter, op. cit., p. 105.

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