Melilla, a counterfeiting hub that may be at the end of the line

2019-01-10 / European Observatory on Illicit Trade

The Spanish enclave of Melilla is a swirling 13.4km2 hive of activity on the Moroccan coast, and has a strong point of contention for its neighbour’s law enforcement authorities. This is due to the huge influx of counterfeit goods that cross the border of the autonomous city every day into Morocco. This trafficking is giving the authorities such a headache that it is considering permanently closing the border posts of the city.

Melia is quite clearly a boon for the traffickers in its surrounding region. Its customs regime is exceptionally lax; its customs duties are heavily reduced on account of being a ‘free port’ throughout the territory. It is also exempt from VAT. Only goods arriving from Morocco by truck are subject to a higher rate of taxation. Moreover, the Spanish city is an enclave within Morocco and has a highly widespread informal economy. As a report from April 2018 by the General Confederation of Moroccan Businesses revealed, the underground economy makes up 20% of the country’s GDP. The greatest affected sectors include textiles, the construction industry, agribusiness and tobacco.

Its particular blend of factors has led to an influx of thousands of tonnes of diverse, undeclared products, as was reported in L’économiste as early as 1995. Still today, trafficking is booming: on 10 April 2018 alone, more than 1,700 bottles were intercepted by the Moroccan gendarmerie, as the local daily newspaper Melilla Hoy reported. More generally, smuggling from the enclave is said to have cost Morocco over 370 million dirhams (34.1 M€) over the first eleven months of 2016 alone. This all went into Spanish coffers, argue the local authorities of the Tanger-Tétouan-Al Hoceima region, as Assabah reported on Thursday 17 November 2016.

From scooters to female mules

Traffickers are game for anything when it comes to transporting contraband. Since the 1990s, L’Economiste again reports, small boats, cars with the back seats ripped out, and scooters with hidden compartments have all been caught in action. Each type of merchandise has its own specialised transport: scooters for fruit or shoes, for example.

Another type of transport has also attracted attention: female mules. Women are used by traffickers to carry “packets of up to 80 kilos and they are not taxed at all”, as Arte reported in a documentary broadcast in March 2017. According to the Franco-German television channel, more than 20,000 women are struggling to make a living from trafficking across the border with Spain. This work is exhausting and dangerous. In January 2018, two ‘female mules’ were crushed to death in a crowd at the Tarajal border, between the Moroccan cities of Fnideq and Ceuta, as reported in Le Monde.

Could closing the border do more harm than good?

Such human tragedy on top of the economic losses finally convinced the Moroccan authorities to completely close down its Melilla customs post on 31 July 2018. This was a disaster for local business: in less than two months, the Spanish enclave saw an estimated 200 million Euros of revenue losses, according to the newspaper Al Massae. In September 2018, a meeting was scheduled between Nabyl Lakhdar, Customs Director, and the Director General of the Spanish Customs, María Pilar Jurado Borrego, to look for a solution.

This meeting was ultimately pushed back to 11 December 2018 and no agreement has yet been announced. But the ‘free zone’ is haunted by the fear that it could be permanently closed down from as soon as February 2019. This fear is shared by Abdeslam Mohamed, president of the Merchants of the Melilla border (ASCEMEL), who told El Faro that he had received this information from Moroccan customs. This closure would threaten more than 200 self-employed cargo workers. Not to forget the thousands of people who would be indirectly affected. It would mean an estimated loss of 1,200 million Euros to the local economy, according to the business leader.

Author: Valentin Pacaud