Eurasia Press & News
Iraqi tycoon Nizar Hanna Nasri sits atop an empire spanning pharmaceuticals, liquor imports, and some of Erbil’s most spectacular real estate developments. But his success was built on a far less visible foundation: A globe-spanning trade in black-market cigarettes.
Key Findings
Nizar Hanna Nasri’s facilities have fed billions of cigarettes into black markets from Cameroon to Moldova.
OCCRP identified three active counterfeit cigarette factories in Iraq with links to Nasri.
Nasri’s brands are sold on illicit markets in Europe, the Sahel, the Middle East and Central Asia.
Nasri’s partners have included Iraqi Kurdistan’s ruling Barzani family, former Iraqi President Jalal Talabani, and Saddam Hussein’s son.
The tycoon’s real estate interests are intertwined with the Barzani family.
For most Iraqis, the sanctions of the 1990s were a nightmare. But for Nizar Hanna Nasri, they were an opportunity.
With most basic commodities banned from being imported, smugglers could make fortunes circumventing the embargo and moving products into Iraq. One of the most profitable illicit trades was in cigarettes, and Nasri was one of the most successful operators.
Publicly, Nasri is a real estate tycoon, bankrolling shopping malls, residential complexes, and office high-rises in the Iraqi Kurdish capital Erbil. But behind the scenes, he built an operation that still produces cigarettes for black markets across the Middle East, particularly neighboring Iran, nourishing an industry that funds organized crime, corrupt politicians and even militias.
As a brief prepared by Adit, a French strategic intelligence company, put it: “The question of trade in cigarettes could seem a secondary question. It is not. It is used by all the military groups in the region, not all of which can be called terrorists, to finance their fighting.”
Nasri, from Iraq’s Assyrian Christian minority, has come to be known as the “father” of Iraqi counterfeit cigarettes. Starting in the late 1980s, he built alliances with powerful political figures and monopolized the smuggling of black-market tobacco into Iraq before constructing a network of facilities to produce his own knock-off brands.
Nasri’s company has since shifted its focus away from cigarettes, but the infrastructure he developed in the 1990s and 2000s is still in action. Industry sources estimate there are up to six illicit cigarette factories in operation in Iraq today. These include three linked to the operation Nasri built, OCCRP found.
Reports in the 1990s and 2000s by international media and the World Health Organization highlighted the smuggling of black-market cigarettes in Iraq and the wider region. Nasri, however, was never publicly linked to the trade. He has managed to maintain a low public profile despite striking partnerships with some of Iraq’s most powerful politicians.
But now, OCCRP has compiled one of the most detailed portraits of Nasri’s involvement in the illicit tobacco trade to date. Reporters analyzed thousands of leaked corporate intelligence documents, corroborating details through interviews with over 20 tobacco industry figures, smugglers, and Nasri’s former partners and competitors.
Like many cigarette smugglers, Nasri relied on contracts with the world’s biggest tobacco companies, who employed him in markets from Belarus to Azerbaijan. Some of his business is legitimate: His Lebanon-based company, European Tobacco, has produced and distributed its own cigarette brands on at least three continents, including markets it is legally allowed to supply.
But public records, confidential industry reports, and interviews with Nasri’s former and current associates show that this is only one aspect of his business: The same supply chains are also used to run a booming trade in black-market cigarettes in countries as far-flung as Cameroon and Moldova. His ersatz brands — such as Business Club, Vigor, and President — are sold on illicit markets in Europe and war zones in Africa.
Over the years, Nasri has partnered with powerful figures, including former Iraqi President Jalal Talabani; former Azerbaijani President Heydar Aliyev; Burkinabé smuggler and Philip Morris representative Apollinaire Compaoré; and even Saddam Hussein’s son Uday. Today, he remains a close ally of Iraqi Kurdistan’s ruling Barzani family, with whom he has numerous intertwined financial interests.
“You can run this kind of business if you have close connections on the top level,” a former economic adviser to a regional tobacco distributor told OCCRP. “No other way.”
In response to detailed questions, a lawyer representing the Nasri Group denied that Nasri or any company affiliated with him had ever been involved in smuggling or counterfeiting, and said any such charges were “false” and “unacceptable.” He said European Tobacco produced legitimate cigarettes under legally registered trademarks and that any apparent knock-offs were likely counterfeited and sold by third parties without their knowledge.
“Our companies and the shareholders have not been involved in any illegal act and all of their business activities are in conformity with the laws and regulations of the countries where they take place,” he wrote.
“You can run this kind of business if you have close connections on the top level. No other way.”
– A former economic adviser to a regional tobacco distributor
He further denied that Nasri had ever exploited political influence for commercial gain: “Neither the Companies we own nor their shareholders have any political orientation or affiliation with any armed party. They conduct their business in broad daylight and have no special privileges. Also, our companies have no business relationship with any politician, neither inside nor outside Iraq.”
The tobacco companies contacted by OCCRP — Japan Tobacco, British American Tobacco, Philip Morris, Imperial Brands, and SEITA — all declined to comment.
Tobacco Spies
In the late 2000s, corporate intelligence staff working for Japan Tobacco International assembled thousands of documents about tobacco counterfeiting and smuggling networks from China to the Middle East.
These documents, leaked to OCCRP, identify key industry figures and describe their business activities, commercial associations, and relationships to politicians and organized crime syndicates. They include company records, bills of lading, passport copies, and briefings from numerous informants.
While major tobacco companies commonly assemble corporate intelligence, the results are rarely leaked to the media.
To corroborate the reports, OCCRP reviewed public records and interviewed senior industry executives and former operatives in Iraq, Iraqi Kurdistan, Turkey, Lebanon, the United Arab Emirates, Jordan, and Russia.
Birth of an Empire
The 1990s were a golden era for Iraqi cigarette smugglers. Heavy sanctions, imposed by the United Nations against Saddam Hussein’s government after his invasion of Kuwait, led to a proliferation of smuggling routes to bring in basic commodities and sell sanctioned oil abroad.
Born to an Assyrian jeweler in the ethnically diverse city of Kirkuk in 1961, Nasri is an architect by profession. But by the 1990s, the deprivations — and opportunities — presented by Iraq’s conflicts and deepening isolation had drawn him to a different profession entirely.
Back then, tobacco giants regularly contracted smugglers under the guise of “duty free” or “transit” sales. Attracted by potential profits from closed or sanctioned markets, they hired distributors who supplied certain countries legally, but also funneled cigarettes into neighboring states illegally. The practice is said to have declined since a series of lawsuits in Europe in the early 2000s, but it is still known to occur.
Local hubs for this trade included coastal cities in Cyprus and Turkey, such as Mersin, where the Nasri family ran at least six companies, including a distributor that managed warehouses for cigarettes later smuggled into Iraq. Traders in these cities leveraged cross-border commercial ties to move cigarettes into Kurdistan and other parts of Iraq, where they were then distributed throughout the region.
By 1994, the New York Times was describing Iraqi Kurdistan as “the largest black-market clearing house for cigarettes in the Middle East.” The region became so oversupplied with tobacco products that, in 2002, a spokesman for the Barzani family’s Kurdistan Democratic Party told the Wall Street Journal that to justify the volumes, “you’d have to find babies in their cradles smoking.”
Nasri was among a cast of men who began to make fortunes in this illicit ecosystem. Although from diverse backgrounds, they were united by their organized crime connections, links to diaspora communities created by years of upheaval, and a high tolerance for risk.
“During Saddam’s time there was nobody from the West [working in these markets],” Hulusi Kaymaz, a former partner of Nasri’s based in Mersin, told OCCRP. “There was a big embargo. There were not even banks. Who took the risk? These kinds of guys.”
The Nasri family entered the trade at the right time, setting up Golden Universal, Inc., in 1987, just a few years before the Gulf War started, to handle transactions out of Mersin. From there their operations kept expanding: In 1995, they founded another Mersin-based company, Dolphin Foreign Trade Limited, which signed an agreement with the French tobacco company SEITA to supply the former Soviet Union states, as well as Iraq, Iran, Turkey, Bulgaria, and the United Arab Emirates. Industry documents released in a lawsuit say the British-based Imperial Brands (formerly known as Imperial Tobacco Group) and British American Tobacco also approached him.
By the late 1990s, Nasri was distributing billions of cigarettes a year in a mix of legal and illegal markets, according to a contract and leaked industry documents seen by OCCRP. One 2009 Japan Tobacco brief put the number as high as 10 billion a month, although this was not possible to confirm. It’s difficult to determine how much Nasri made from the trade, but estimates of his cut suggest he was clearing millions — perhaps tens of millions — of dollars a year.
Three former associates described Nasri as reserved, polite, and well-mannered. His family’s social media posts offer a portrait of a refined lifestyle, with his mother celebrating Christmas in a marble-floored salon and his son buying a McLaren 720S, worth over $250,000.
But documents reviewed by OCCRP suggest he could also be aggressive when defending his interests.
In 2006, SEITA brought arbitration proceedings against Nasri in the International Commercial Court in Geneva as part of a years-long business dispute. A document submitted to the ICC mentions claims against Dolphin, including forgery and launching a denigration campaign against SEITA.
SEITA had tried to cut Nasri out of their local operations in favor of his partner, Tareq Al-Hasan. In retaliation, documents submitted to the proceedings indicate, Nasri forged documents while requesting that Erbil authorities seize SEITA’s local cigarette imports. According to an ICC document, over $97 million were in dispute. After years of litigation, the arbitral body sided with SEITA, ordering Dolphin to pay damages and costs, according to a document sent by Imperial Tobacco to shareholders.
Another document, submitted by security officials in Kirkuk, suggested that Nasri tried to bribe an Iraqi expert supposed to weigh in on his case. A Japan Tobacco report further said Nasri denied denigrating SEITA’s image during their dispute.
Imperial Brands, which bought SEITA in 2008, and Nasri both declined to comment on the case.
Strange Bedfellows
Even before these incidents, Nasri had proven willing to put business considerations before political and ethnic rivalries. By the late 1990s, his partners included not only members of Iraqi Kurdistan’s ruling Barzani family, but the son of Iraqi President Saddam Hussein, against whom the Kurds had struggled in years of conflict that killed tens of thousands of people.
Corporate records show Nasri and partners used Kani Commercial Company as he sought to monopolize the cigarette supply chain into Iraqi Kurdistan, thereby making themselves indispensable to any tobacco company that wanted to do business there.
Kani Commercial is briefly mentioned in a Wall Street Journal article and a 1998 Duhok academic journal on monopoly businesses in Kurdistan, but the company has almost no presence in public records. Internal records, invoices, and correspondence obtained by OCCRP show it was based in Dohuk and billed expenses to European Tobacco, while receiving a share of profits from one of Nasri’s other operations.
His partners in Kani included businessman Saed Barzani, according to internal company documents contained in the JTI leak obtained by OCCRP. Nasri’s association with Saed began in the late 1990s when he hired him and his two brothers, Sardar and Sarfar, to work at European Tobacco’s Athens business, according to one Japan Tobacco brief. Before that, the brothers had no clear tobacco industry experience. They had spent decades in the United States, where their ventures included a TGI Friday’s restaurant in Alexandria, Virginia.
Andreas Koutroukides, who became executive managing director of Saed Barzani’s conglomerate Eagle Group, said Saed acted as the financial “trustee”of Nechirvan Barzani, who succeeded his uncle Masoud as Iraqi Kurdish president in 2019.
Documents reviewed by OCCRP revealed that Nasri also had links to Nechirvan Barzani.
One expenses spreadsheet filed by Japan Tobacco informants showed that two of Nasri’s companies, European Tobacco and Nasri Group, paid personal expenses for Nechirvan in 2004 and 2005. These included mobile phone bills, expenses related to a Cadillac in the United Arab Emirates, and what appear to be cash payments as high as $25,000.
In 2003, Saed Barzani bought a 9,384-square-foot villa near CIA headquarters in Langley, Virginia for $7 million, according to U.S. property records. Reports among the leaked Japan Tobacco documents indicated Saed was an unsuccessful businessman in the 1980s and 1990s who would not have been able to afford the property until after he started making money with Nasri.
Two years later, Barzani transferred the mansion at no cost to a woman named Nabila Mustafa, who appeared to be Nechirvan Barzani’s wife. Public records also show that Nechirvan’s brother, Barez Barzani, used the villa’s address for a company office in 2018. In response to questions from OCCRP, a lawyer for Nechirvan Barzani said that he “rejects in the strongest possible terms any allegation or inference of wrongdoing” and suggested that “external agents” were using OCCRP as a proxy for political attacks against Barzani.
“The Office of the President is mindful of a co-ordinated campaign by those opposed to his policies to initiate and deploy derogatory and untrue allegations into the public domain for political reasons,” the lawyer wrote.
Saed Barzani died in 2019. His brother, who was made Eagle Group’s vice chairman, did not respond to questions sent by email.
With Nechirvan’s support, Kani was able to monopolize cigarette imports into the region. Kani took between $9 and $30 for every “master case” of 10,000 cigarettes — each case had a street value of roughly $250 — that reached the Kurdish region, according to two of Nasri’s former associates.
One Japan Tobacco brief claimed Kani collected the money as a “transit tax,” making both Nasri and the Barzanis “very wealthy.” Two senior tobacco executives in Iraq estimated the business brought in $150 million to $200 million a year. By 2008, a Japan Tobacco analyst claimed Nasri and the Barzanis were “so closely tied together financially that they need each other to succeed in Northern Iraq.”
It was in this context that Nasri began working with Saddam Hussein’s eldest son, Uday, according to court documents and press reports. Uday had been taking his own cut on cigarette imports into Iraq since at least 1995. He oversaw an elite clique of Iraqi tobacco traders that included Nasri’s partner, Tareq Al-Hasan, and Waheb Tabra, who later became a key figure in Nasri’s operations. A 2002 Wall Street Journal report estimated that Uday made around $10 million a year from the trade, although tobacco executives in Iraq told OCCRP the figure may have been closer to $20 million.
Hasan declined to comment and Tabra did not respond to questions sent by OCCRP.
Under the arrangement, Nasri smuggled cigarettes into Iraqi Kurdistan, thereby circumventing the U.N. embargo, and then sent them south where traders including Hasan oversaw their distribution in the rest of Iraq.
The 2003 overthrow of Saddam and the death of Uday in a gunfight with U.S. troops in Mosul in July that year put an end to the deal. But none of this slowed Nasri’s business — in fact, it began to thrive like never before.
Counterfeits and Militant Groups
Shortly after Uday’s death, Nasri took advantage of the chaos in Iraq to build his own counterfeiting operation. He began producing knock-offs of major international brands such as Marlboros and Rothmans, as well as popular Iranian brands such as Bahman and Farvardin, according to industry sources and corporate intelligence reports, destined for markets in Jordan, Iraq, Iran, Azerbaijan, Turkey and Lebanon.
Over time, Iraq itself was transforming from a transit country, where tobacco products were smuggled through into neighboring countries, into a primary source of contraband cigarettes. This fact was underlined by a growing number of seizures at the Turkish border, where authorities were concerned about commissions extracted by the Kurdistan Workers’ Party, or PKK, against which Ankara had been fighting for decades.
It was a lucrative business, according to a former employee of U.K.-based tobacco company Gallaher Group, who once interviewed for jobs with Nasri.
“A case of 10,000 Marlboros is light as a feather and has a street value of anywhere from $1,500 to over $10,000 depending on the consumer country’s level of development and excise taxes,” he told OCCRP. “A truckload of these cases is just a truck loaded with money.”
Koutroukides estimated that Nasri’s counterfeiting operation, known as “Abkazia,” was making half a million to a million dollars a day starting in 2004. The Middle East Company for Reconstruction and Investment, or MECRI, a cigarette and construction company associated with the operation, cleared $700 million annually, according to a 30-page prospectus on Nasri’s and Saed Barzani’s projects from 2008 issued by a Barzani-linked company, the Eagle Group.
Proceeds from the illicit tobacco trade often end up in the hands of organized crime networks, paramilitaries, and insurgents from across the political spectrum, sometimes in the form of transit fees along smuggling routes. A 2015 report by the Paris-based Center for the Analysis of Terrorism noted that cigarette smuggling from Kurdish territory into areas held by the Islamic State was “likely” allowing the Islamist group to extract tolls from the trade. Shia paramilitaries have also reportedly profited.
It is difficult to estimate how much money from Nasri’s trade goes to militant groups. But one Japan Tobacco case file noted that a “substantial portion” of the counterfeits from the Abkazia operation were smuggled into Iran “with the connivance and support of the Peshmerga,” the Kurdish region’s military forces, as well as “various other ‘militia’ and possibly insurgent groups active in the border region, as well as corrupt security forces.”
The same brief noted that “at a minimum” Nasri and Tabra, his partner, would have had to “pay fees to one or more of these groups in order to protect their shipments moving across country.”
OCCRP was able to identify four facilities — two active, two inactive — affiliated with the Akbazia operation, including one on the territory of a former chicken farm near the Tigris River outside Dohuk. A report by a multinational tobacco company, a rival to Japan Tobacco, said the chicken farm facility was still active as of 2019. Internal company emails and Nasri’s former business partners say the plant was linked to Tabra as recently as 2018 and is still operating under the control of the Barzanis.
A sister factory in Erbil was mentioned in an unsigned 2008 lease agreement in which Nasri handed over the management of the Abkazia operation to his business partner Tabra, along with 40 percent of the profits. Another sister factory, located near the former chicken factory, appears in the internal records of one of Tabra’s companies. These are no longer operating.
The fourth Akbazia facility, located in the northern city of Sulaymaniyah, produced millions of cigarettes, largely for export to Iran. The facility was leased from a company linked to Jalal Talabani, head of the Patriotic Union of Kurdistan and a longtime rival of the Barzanis, according to corporate intelligence reports and industry sources. Talabani, who was president of Iraq at the time, died in 2017.
The same rival to Japan Tobacco visited this site and wrote about it in early 2019, noting that it was run as part of the Nokan Group, which had ties to Talabani and his wife, Hero Khan. A technician working at the factory told OCCRP he did not know what brands were being made.
Nokan Group and a spokesperson for the Patriotic Union of Kurdistan, Talabani’s political party, did not respond to emailed questions.
Despite handing over management of the Abkazia operation factories to Tabra, Nasri and Saed Barzani retained 60 percent of the profits as silent partners. According to the Japan Tobacco brief, Nasri still made a “huge cash amount” from the factories.
While his Iraqi factories produced the bulk of his counterfeits, leaked documents show Nasri also used facilities in Azerbaijan, Tajikistan, and Hong Kong to make black-market cigarettes sent on to countries from Cameroon to Uzbekistan.
🔗Allies Abroad
To build his international network, Nasri struck alliances with a wide range of smugglers, criminals, and high-level politicians.
MORE
Nasri’s brands, such as Business Club and Vigor, are still sold on the black market in Europe. In 2020, Ukrainian authorities nabbed 34 million illicit Business Clubs on their way to the Moldovan breakaway region Transnistria.
A lawyer representing the Nasri Group said European Tobacco conformed with all laws in the countries where it operated. He said some third parties had previously “counterfeited our trademarks (notably Business Club) and sold them without our knowledge, either online, or in Africa and in other parts of the world.”
“European Tobacco Inc. took certain legal measures against such illegal behaviors that came to its knowledge,” he said.
He said the company did not have factories or activities in Iraq, Azerbaijan, Tajikistan, or Europe. “In case there are illegal activities taking place in such countries, or elsewhere, both companies would not be related to them or bear any responsibility whatsoever for them,” he wrote.
New Frontiers
Today, Nasri’s involvement in the cigarette trade is relegated to a footnote on the website of his Lebanon-based Nasri Group of Companies, which previously described European Tobacco as its “foundation business.” Instead, the company touts its real estate and liquor and pharmaceutical marketing and distribution businesses.
Center stage in this portfolio are millions of square meters of developments in Erbil, many of which broke ground after the 2003 invasion. They include a sprawling residential complex called Dream City, an office building, and the 120,000 square-meter “Downtown Erbil” shopping mall near the city’s ancient citadel. Estimates for the value of these properties run into the billions of dollars.
The transition has not been entirely seamless. One Japan Tobacco brief from 2009 described two of his projects as plagued by “inefficient administration and corruption.” Nearly two decades after it was started, his Dream City project is still unfinished.
But public records, leaked documents and interviews show Nasri has nevertheless maintained his partnership with the Barzanis, specifically through MECRI and a successor company, Salah Al Din Holding. MECRI, which leased out the Abkazia facilities, has also overseen Nasri’s main property developments.
Through a lawyer, Nasri declined to comment on specific questions about the construction projects. Publicly listed phone numbers and email addresses for Salah Al Din Holding were disconnected.
🔗The Mystery of MECRI
The Middle East Company for Reconstruction and Investment, or MECRI, does not appear in Iraq or Iraqi Kurdistan’s chamber of commerce of company registries, and its website is now defunct. But evidence strongly suggests it is controlled by Nizar Hanna Nasri and members of the Barzani family.
Meeting minutes from MECRI itself, as well as briefs compiled by Japan Tobacco in 2009, said that MECRI was controlled by Nasri, his brother, and Saed Barzani.
A 2008 prospectus issued by Saed Barzani’s Eagle Group listed MECRI among Barzani’s interests in Iraq, saying the company’s initial purpose was to distribute cigarettes but that it was now investing in the “reconstruction sector.” The company also appears in a lease document handing management of Nasri’s illicit factories over to Tabra.
An engineer who worked for MECRI confirmed the Barzani family tie to OCCRP. The engineer also told OCCRP that MECRI had later split into two companies: Nasri Group, owned by Nasri, and another called Salah Al Din Holding.
Salah Al Din, incorporated in 2006, appears in the registry of Erbil’s Chamber of Commerce but its shareholders are not listed. Kurdish media has reported that the company belongs to Nechirvan Barzani, which the engineer confirmed.
Documents related to Nasri’s tobacco business also show that Salahaddin Holding was involved in a draft lease for Nasri and Saed Barzani’s illicit factories.
Nasri’s shared interests with the Barzanis also include the Eagle Group. The company is headed by Saed Barzani, according to Koutroukides, the 2008 prospectus and a company registry certificate obtained by OCCRP. It claims to have carried out projects for the United Nations Development Program and the U.S. military.”
Like their other businesses, the company’s ownership is difficult to trace in public registries. But a 30-page prospectus from 2008 showed that the company claimed to own Nasri Group and other Nasri interests.
Eagle Group also manages Kurdistan’s first private bank, now called Region Trade Bank, whose four shareholders include Nasri and Saed Barzani, as well as Nasri’s brother, Nameer.
According to leaked correspondence and intelligence briefs, Nasri banked proceeds from his cigarette operation at Region Trade Bank. Koutroukides, who oversaw the bank while at Eagle Group, also said the bank accepted Nasri’s cigarette money, and that Nasri was “using and abusing” bank funds. Saed’s brother Sardar at times withdrew millions of dollars from the vault at will, he said.
Region Trade Bank did not respond to emailed questions.
The Fitch Ratings credit rating agency rated the bank a “substantial credit risk” last year, reflecting its “limited franchise, unstable business model, volatile and concentrated customer deposit base and low profitability.”
Smuggling Continues
For big tobacco companies, the salad days of Iraqi smuggling are over. In 2000, the European Union filed a major lawsuit on smuggling-related charges against three of the world’s biggest tobacco companies. Another lawsuit that followed in 2002 against one of these tobacco companies included allegations about their illicit Iraq trade.
Those companies — Philip Morris, Japan Tobacco, and RJR Reynolds (which later became part of Japan Tobacco) — eventually struck settlement agreements, which they rebranded as “cooperation agreements,” with the European Union. So did Imperial Tobacco and British American Tobacco, whose agreements released Imperial Tobacco from liability for smuggling, though they were not part of the suit. They collectively paid $1.9 billion in fines.
Still, Iraq remains a major source of black-market cigarettes for the region. Statistics OCCRP obtained from Imperial Tobacco, supported by U.N. trade data, show that as many as 65 billion cigarettes still reach the country annually, although the range varies widely — more than three times its prewar consumption. The illicit operation Nasri built still rolls cigarettes, while a constellation of former business partners and associates run other illicit factories from Sulaymaniyah to Baghdad.
Iraqi tobacco executives, meanwhile, say the Barzanis still take a cut on cigarettes brought into the country.
Nasri’s operations are also ongoing. In Baghdad, Nasri’s former partner, Waheb Tabra, has licensed a new tobacco factory. In Sulaymaniyah, the factory associated with Talabani is still in operation.
Nasri himself appears to have stepped back from day-to-day operations, his businesses remain active. European Tobacco — which in recent years sent illegal cigarettes to Europe — maintains a London-based entity, directed by Nizar’s brothers, which still files annual financial reports.
