No Contracts With UAE Tobacco Companies in Algeria

The Ministry of Justice called on notaries to stop concluding contracts with the United Tobacco Company and the Algerian Emirati Tobacco Company, which specialize in the production and distribution of tobacco, as a precautionary measure, intending to put an end to all suspicious operations.

Last weekend, the National Chamber of Notaries, based on correspondence from the Ministry of Justice, notified the heads of the regional chambers, prohibiting the conclusion of contracts or any other transactions with the two mixed companies “UTC” and “STAEM”, whether related to legal or natural persons, while obligating the National Chamber of Notaries and heads of regional chambers to communicate this instruction to all notaries across the national territory.

This instruction addressed to the notaries comes after the Algerian authorities complained about the Emirati party due to its failure to comply with its obligations in the agreement signed in 2005, according to which it entered into a partnership with Algeria, as it was expected that the Emiratis would work to develop the capabilities of the tobacco company and make Algeria an exporting country for tobacco products, especially towards Europe and Africa. This did not happen at all and suggests that there is a suspicion that millions of dollars were smuggled into the tobacco sector and transferred abroad, which caused Algeria billions in losses for more than 20 years.

The UAE Minister of Economy, Sultan bin Saeed Al Mansoori, said in 2008 that the volume of UAE investments in Algeria would exceed $50 billion in the next five years, but after more than ten years the volume has not exceeded $5 billion, so what about the $45 billion?

During Bouteflika’s government, a hidden part of the relationship between an Emirati businessman and a personal advisor to the former president was linked. When this billionaire came to Algeria in 2004, the first suspicion surrounding the latter’s activity was the process of dismantling the National public company owned by the Algerian state “Tobacco and Match Company, SNTA” in 2005. It was a profitable company that provided important revenues to the public treasury. Accordingly, he founded a company called the “Algerian Emirati Tobacco Company” STAEM, which is active in manufacturing cigarettes of international brands in Algeria.

Under this partnership, the Algerian National Tobacco and Match Company acquired 49%, the Emirati investor “Union Tobacco Company” owned 49%, and the remaining 2% went to a financial company affiliated with the Algerian Ministry of Finance, after which the Emirati party exploited loopholes in the contracts and manipulated the procedures to own the majority of the stake in the mixed company representing 51% of its shares, which is considered a major manipulation to plunder public money.

The recent decision of the Ministry of Justice prompted observers to ask: Has the Algerian government decided to get rid of dependence on the UAE concerning the tobacco industries, and does it intend to encourage projects undertaken by Algerians without the presence of a foreign partner? Giving preference to national capital and local investors in the manufacture of all types of tobacco products.