Analysis: What are the future prospects for Chen Zhi, Habanos in Sweden & globally?

Chen Zhi was indicted on October 14th last year by the US DOJ for human trafficking and money laundering. A month before that, Cigarrvärlden was the first to reveal Chen Zhi's ownership in Habanos globally and in the Swedish subsidiary Elite Trading Scandinavia. The connection to Chen Zhi's suspected violations of the law led to the Swedish subsidiary Elite Trading Scandinavia having its tobacco license revoked just before Christmas. Shortly after Christmas, Chen Zhi, who had previously gone underground in Cambodia, was extradited to China. This has put the entire cigar industry on hold. What has happened? And what is to come?

Which makes time for an analysis. Here you go, an analysis and a trip down memory lane that begins in Sweden 65 years ago.

Published:  2026-01-12, at 15.40 am Written by: Hatem Sabbagh, publisher/editor-in-chief of Cigarrvärlden & Managing Director of Cigarrklubben CK Sverige AB. We use AI and Google Translate for translations, with some review to enhance readability. Pardon the Spanglish.

This is an analysis, the writer is responsible for the analysis in the text.

Disclaimer: Cigarrvärlden is owned and operated by Cigarrklubben CK Sverige AB, which also operates a cigar club and has a foot in both camps. To put it mildly. Divison and separation of operations and the editorial is explained under the section "Conflicts of Interest (in Swedish)". Cigarrvärlden operates under a ‘certificate of no legal impediment to publication conferring constitutional protection’ (utgivningsbevis). With this certificate, Cigarrvärlden enjoys a special legal status in Swedish law under the freedom of expression act. Cigarrklubben CK Sverige AB does not sell and have ever sold cigars or tobacco in any way, shape or form. 

Marquis de Tabac

Habanos Nordic AB was initially owned by a mildly odd figure and a fellow countryman of mine. André Radi was on holiday in Sweden in the 60s when he crashed his rental car. Which delayed his return to Lebanon, a return that never happened. Because while he was stuck drowning in  Swedish insurance bureaucracy he met the Swedish Elisabeth who later became his wife. He never returned and became a citizen of Gothenburg.

André was an avid cigar smoker, not only that, he embodied the image of a cigar smoker, gruff voice, a hefty stomach, always a three-piece suit with a pocket watch. The only thing missing was a monocle. He was rather quick in starting a cigar shop that later became Marquis de Tabac. In old newspaper articles he sparkles with a oneliner after another. He refused to sell lottery tickets newspapers and candy. He scolded old ladies who came into the shop and complained that it smelled of cigars (he smoked in the shop):

"What else is it supposed to smell like? It's a cigar business." 

He started his morning by smoking a Montecristo number 4 in bed, because with its short smoking time of 50 minutes it barely had time to smoke into the bedroom.

André was also the first to receive exclusive rights from Cuba to import and sell Cuban cigars in Sweden during the mid-90s, which he actually did until around 2002. Then the Cubans bought his Swedish company, changed its name to Habanos Nordic AB and Stephan Praetorius stepped in as CEO around 2003.

The Premium Company Nordic AB & Stephan Praetorius

During his time as CEO of Habanos Nordic AB, today Elite Trading Scandinavia AB, Stephan Praetorius has increased its turnover from pennies to today's 10 million USD a year.

In April 2024, Stephan Praetorius submitted an application to the Municipality of Gothenburg for both a wholesale and retail tobacco license for a company that he owns 100%. The company is called The Premium Company Nordic AB and Stephan Praetorius is its sole board member and a close relative is what in Sweden is called a substitute board member, why this is of interest will become clear later. The Premium Company Nordic AB had at the time the same chartered accountants as Elite Trading Scandinavia AB. And Stephan Praetorius was also the CEO of Elite Trading Scandinavia AB at the time. 

Part of the application for the tobacco permit concerns how the business is financed and for that there is a letter of intent, which is written on Elite Trading Scandinavia's letterhead and signed by Stephan Praetorius. In addition, there are several other documents that explain this in detail, all signed by Stephan Praetorius.

Elite Trading Scandinavia will transfer all of its operations relating to Sweden and the Swedish market to The Premium Company Nordic, a transaction in which Stephan Praetorius is the decision-maker for both companies. This includes the opportunity to use offices and warehouses of approximately 1,000 square meters on August Barks gata without paying rent, to take over the staff and customer registers. Elite Trading Scandinavia will continue to import cigars, pay Swedish tobacco tax and ensure correct labeling and traceability. However, when a sale of the tobacco product occurs, Elite Trading Scandinavia will then sell the cigar to The Premium Company Nordic, which in turn will bill the customer. As part of the financing, The Premium Company Nordic will receive generous credit terms from Elite Trading Scandinavia.

This is a transaction worth approximately 20 sek million in turnover, which Stephan Praetorius has entered into as a representative of both companies, one where he is employed as CEO and one where he owns the entire company. His employer bears all the risk and receives exactly zero money for the value transfer, in addition to which his employer will issue generous credits.

A quick and rough estimate of the value of Elite Trading Scandinavia's Swedish operations is 25 million sek, and there is no formal obstacle for Stephan Praetorius to enter into agreements on behalf of both companies despite conflicts of interest. This is done regularly in large conglomerates with subsidiaries, but it is guided by what the Swedish Tax Agency calls the arm's length principle , as well as transfer pricing and profit allocation .

The generous credit is also legally odd, it can be perceived by the legislator as The Premium Company Nordic ultimately paying Elite Trading Scandinavia with Elite Trading Scandinavia's own money for taking over its operations. This looks a  bit like a raid and a resembles the Swedish Trustor affair all be it on a smaller scale. Briefly explained, the assets of the selling entity are used to pay for the transaction by the buying entity. In this case, for example, The Premium Company Nordic does not have to pay rent for an entire year, or pay anything to use Elite Trading Scandinavia's staff during the same year. This raises questions.

Another possibility is that the board and owners of Elite Trading Scandinavia have no idea what Stephan Praetorius has done and took the opportunity to line his pockets, which is embezzlement of some sorts. It is a theory that we initially dismissed, since it would have been discovered with a minimum of knowledge. But in light of the revelations that emerged, mainly regarding the (low) level of knowledge of everyone involved, we have written off the stake holders competence on an ongoing basis. 

This is both odd and legally interesting that I am in the process of handing it over to the Swedish Economic Crime Authority. If there is any wrong doings, it is unique that the wrong doings have been agreed upon in writing and submitted to the authorities. The entire scheme also looks like it could be money laundering, even if it does not have to be.

Regardless of what it is, this is legal and financial complexity at its finest. It requires competence from all stakeholders, the right tools in place in order to handle the documentation requirements. These type of transactions is something that both large accounting firms and law firms are hired for. It is not a skill that Elite Trading Scandinavia, The Premium Company Nordic or Stephan Praetorius possess and the lack of skill will become clear when you continue reading, it is recurring and culminates at the end.

The competence takes us back or forward to Stephan Praetorius of substitute member of the board. A close relative. People like to ask their loved ones if they can take a seat on the board, since according to the law, you have no legal responsibility as a substitute, you just have to take someones place if the die for example. Nothing could be further from the truth, since precedent has for as long as I can remember begged to differ. If the corporate veil is pierced (which is it is for taxes and criminal activities as a bare minimum in Sweden, the board is never sheltered from that), an the board is held personally liable, the substitutes are held just as liable as the members of the board and the CEO. Thus, these risks are difficult to grasp. Why do you expose people close to you if you are not on solid legal grounds?

The competence is also in question when it comes to the application for a tobacco permit for The Premium Company Nordic and Stephan Praetorius' communication with the Municipality of Gothenburg. This is not really news to us, the industry is notorious for outright ignoring the tobacco marketing ban even though it initially in the 70s. What is astonishing is that they have become so relaxed in their attitude towards breaking the law that it is part of the application to the authorities. Interspersed with certifications of decades of experience and deep knowledge of the legislation.

In addition to selling to other retailers, The Premium Company Nordic will also sell exclusive boxes directly to end consumers, these are special editions that cannot be sold to stores because of the limited volumes. Stephan Praetorius explains in the application that they will inform various stores and cigar clubs that there will soon be an opportunity to buy a box of a specific cigar, and anyone who is interested should send a notification of interest by email that can go through the cigar clubs, stores or directly to The Premium Company Nordic. When the cigar is in stock, The Premium Company Nordic will send an email to everyone who has registered an interest and inform them that the cigar is now in stock. There is only one problem, it is considered marketing and is again explicitly stated by the Swedish Consumer Agency: you are not allowed to send newsletters about cigars, or that cigars are now in stock. The municipality of Gothenburg reacted to this and said no. The Premium Company Nordic had to revise its routine before it could get its permit approved, which it finally got. Stephan Praetorius was not slow to express in a follow-up email that he intended to honor the tobacco permit with the respect for the law that it deserves or something along those lines.

In one of Cigarrvärlden's previous articles from last year, Stephan Praetorius claimed that Elite Trading Scandinavia does not cater events, which is at odds with hours of footage on social media from events that are aimed at end consumers. 

In an article in Cigar Journal from 2014, Stephan Praetorius begins by talking about Finland's and Iceland's ban on tobacco marketing without mentioning Sweden, and in the next breath refers to Mellgrens in Gothenburg (Sweden) and says:

“I'm thinking above all of clubs in the large towns for which we organize tastings and events.”

He also gets across that what is actually being sold isnot just tobacco, but primarily a lifestyle, which is also startling, since tobacco has not been allowed to be marketed as a lifestyle since the early 2000s - explicitly. He also takes the opportunity to express the indoor smoking ban that came into effect in 2005, meaning that drinking and smoking are not allowed indoors, and in the next article he poses with a cigar and a drink in the smoking room at Hotell Havanna, which Cigarrvärden has previously written about.

Back to the present. Sometime around the time of the application, The Premium Company Nordic also managed to employ a chartered accountant, the same as Elite Trading Scandinavia. On December 8, 2025, Elite Trading Scandinavia's chartered accountant submitted an application to resign to the Swedish authorities.

On December 17, 2025, The Premium Company Nordic acquired another chartered accountant. 

Elite Trading Scandinavia is currently without an chartered accountant, despite being stipulated by both its size by law and articles of association. This means that Elite Trading Scandinavia can be formally liquidated by the Swedish Companies Registration Office.

Elite Trading Scandinavia AB, Stephan Praetorius & Anders Worsøe

On February 5, 2025, Stephan Praetorius left as CEO of Elite Trading Scandinavia and it is actually the detail that set the snowball rolling that led to Elite Trading Scandinavia losing its tobacco license on December 15, 2025 due to the connections to Chen Zhi.

Stephan Praetorius left as a formal CEO but still had the CEO's mandate, as he continues to steer the ship despite having formally left the board. He has been mandated by the board to act as if he were CEO but with a power of attorney (but not acting CEO). This has caused a lot of headache and many journalists have contacted me for a clarification about this. Obviously, my knowledge is Iimited,  but I know enough to indulge in a little speculation, and fortunately this is an analysis, which gives room for just that.

Chen Zhi's activities were not really known to the general public at this time, but there are certain dates that are of interest. Stephan Praetorius is first and foremost the person who updated the beneficial owner register at the Swedish Companies Registration Office in June 2023 with Chen Zhi's ownership share, so Chen Zhi is at least not unknown to Stephan Praetorius in that respect.

In February 2024, Jack Adamo Davies comes up with a three-part series of articles published by Radio Free Asia linking Chen Zhi to money laundering, crypto fraud and human trafficking, which Stephan Praetorius may have picked up. In April 2024, the arrangement with The Premium Company Nordic was staged and the wholesale and retail tobacco licenses approved in December 2024. Two months later, in February 2025, Stephan Praetorius left the board of Elite Trading Scandinavia.

One theory is that he wants to avoid responsibility if the corporate veil is pierced and stay away from Elite Trading Scandinavia. It is not particularly difficult to understand, the people who will stand up to Chen Zhi will turn out to be few, and will also have to pay a high price for it. In addition, it requires integrity, and Stephan Praetorius does not seem to possess that. Basically better safe than sorry, but this is just my theory. If it turns out to be true, then perhaps more people knew what was going on with Chen Zhi behind the curtains, than anyone admitted in the spring of 2024 when these backup plans were put into motion, and perhaps even at the groups global level, even though  the opposite has been claimed .

This brings us back to the lack of competence. It is a legal requirement for a licensee to notify the municipality of changes in ownership and on the board, something that Elite Trading Scandinavia never did, either for Chen Zhi or when Stephan Praetorius left as CEO, which, and this is a recurring mantra, echoes hollowly against the proclaimed respect and long-standing competence and relationship that Elite Trading Scandinavia and The Premium Nordic Company claim to have with the law.

If the change of ownership regarding Chen Zhi had been reported in 2023, there would have been nothing in the press about him at the time, and that would have been processed and probably approved by the Municipality straight way. The same if Stephan Praetorius had reported that he had stepped down as CEO. My editorial team would probably have reacted in October when the indictment came, but it would have delayed the revocation of the tobacco license by at least six months. 

The same outcome would probably have been achieved if Elite Trading Scandinavia had, from the beginning, in the spring and summer of 2025,  produced the documents from Cambodia that the Municipality of Gothenburg requested instead of providing odd excerpts from internet services. 

The municipality of Gothenburg could have stood firm and demanded the same evidence from Chinese authorities due to the 83 charges brought against Chen Zhi in China, but they could also have let things go and closed the case with the tobacco permit in place.

Instead, Stephan Praetorius and the Danish lawyer Anders Worsøe, who when this whole matter began was Elite Trading Scandinavia's substitue on the board for two decades but during the summer of 2025 became a board member, without informing the Municipality of Gothenburg, which – again – is required by law, focused on expressing their willingness to cooperate with the authorities, referring to their many years of experience and expertise in the field and the parent company's compliance department and emphasizing their respect for the law in all countries where they operate. This was interspersed with various reasons why documents requested by the municipality could not be delivered at this time, but could be, if they were given further extension.

In parallel with the charm offensive, the Municipality of Gothenburg realized that Anders Worsøe now was a member and has not been subject to a background check because he was previously a substitute. This was again information that Elite Trading Scandinavia should have given the municipality but which the municipality discovered itself in connection with a credit report in the middle of the entire process. Which, again, brings us back to Elite Trading Scandinavia's holy grail, competence.

In connection with the municipalities background check, it emerged that Anders Worsøe had taken an unauthorized loan from his limited liability company in 2018, which is not just illegal in Denmark, but also illegal in Sweden, and according to an article published by Danish advokatwatch, had also been fined by the tax authorities. The loan remained unpaid over two fiscal years. This raises more questions than it answers due to his profession; he should simply know better. It should be added that Anders Worsøe's unauthorized loans were not considered to be a liability for Elite Trading Scandinavia, but that is only because it was more than three years ago, otherwise my assessment is that things would have been more problematic.

Why do the owners place someone on the board who, in theory at least, cannot meet the broad requirements of the law? Especially when Chen Zhi is in the crosshairs. For the simple reason that the owners actually have no idea what regulations apply to tobacco in Sweden – there is no other plausible explanation when you delve into the matter, everyone's interpretations of the law, both towards the authorities and when the authorities are looking away. And why in Gods name a Danish but not a Swedish lawyer?

Anders Worsøe is probably as good a Danish lawyer as any other Danish lawyer, when it comes to Danish law and in Denmark. In that way, the legal profession is well-designed and the bar associations in each country are a guarantee of uniformity and a minimum level of quality. But a good lawyer in Denmark is lousy in Norway and vice versa. 

Anders Worsøe's lack of competence for the Swedish legal is found when you read between the lines and when it comes to certain specific wording. It comes of as strange in terms of Swedish administrative law and seems to indicate that Anders Worsøe does not understand the Swedish administrative law ecosystem in which he operates. First, the constant words of praise and how he himself relates to the law, these come in parallel with the fact that he is unable to meet the minimum requirements of the law, such as the duty to provide information in the event of changes in ownership and changes in the board of directors. 

Another approach that is odd is Anders Worsøe's claim that Chen Zhi is not a person of significant influence, it is not really subject to interpretation and has been tried quite a few times within the framework of both alcohol and tobacco laws (which are synonymous in that sense). It could of course be legal argumentation with the knowledge that one is grasping for straws, but that knowledge is usually noticed and it is clear that if it is a so-called hail Mary. That is not clear here.

Elite Trading Scandinavia received several reprieves, which together amounted to around 100 days. On the evening of December 9, 2025, after office hours, Anders Worsøe emailed the Municipality of Gothenburg and asked for a further reprieve. This is also an indication that they do not have a clear understanding of the ecosystem in which they operate, in addition to that, the media globally had begun to scrutinize Chen Zhi's activities and the Municipality of Gothenburg had several eyes on them by this time. It should be added that the time for the reprieve was set for the following day, December 10, 2025.

The municipality said no, and Anders Worsøe then made the objection that Chen Zhi had been deleted from the Swedish Companies Registration Office's as as beneficial owner since December 2, 2025, even though his ownership in Elite Trading Scandinavia remained unchanged. An objection that the municipality did not give much thought to.

Chen Zhi had been deleted from the Swedish Companies Registration Office's service as beneficial owner by Anders Worsøe's Swedish colleague at the same firm, who had probably done so using a Swedish mobile bank token. According to their website, the colleague at the law firm is the only Swedish lawyer active in Denmark and a member of both the Swedish and Danish Bar Associations. It is incomprehensible to me that she is not the one who sits on the board of Elite Trading Scandinavia, in any case she should be the one who handles contacts with Swedish authorities. She should probably be familiar with Swedish legislation and how administrative law works, even on a bad day she is clearly better than Anders Worsøe. Or me for that matter.

At the end of last year, Elite Trading Scandinavia, led by Anders Worsø and Stephan Praetorius, had its tobacco license revoked, managed to be subject to liquidation for not having a chartered accountant, and has opened itself up to fines for not meeting the requirements of registration of beneficial owners. To top it all off, the question arises of which chartered accountant would consider undertaking such an assignment if they knew that they were to be the auditor of a company where Chen Zhi is a partner and that same partner is on OFAC's sanctions list. 

The future of Elite Trading Scandinavia

The question is how an appeal will take form? The appeal has been submitted on time, which means that the decision to revoke the tobacco license does not become legally binding until the verdict becomes law. Which takes approximately 18 months through all three courts.

For Elite Trading Scandinavia, the appeal has (finally) been handed over to the Swedish lawyer at Anders Worsø's firm. The appeal is what it is, it is not that the predecessors paved the way for a glorious performance. 

It is either way difficult to win against what in Sweden is called expert authorities in Swedish Administrative Court. The Administrative Court attaches great importance to the authorities being experts, which is not always a good thing. In this particular case, however, it is particularly straight forward. The issue at hand (which is explained in the next paragraph) is both simple and has been tried in the in the Supreme Administrative Court before. 

What the Administrative Courts have to deal with when it comes to the substantive issue is not the suspicions against Chen Zhi or his characther, but the fact that the Municipality of Gothenburg requested documentation that Elite Trading Scandinavia failed to produce. The municipalities have a broad mandate when it comes to requesting documentation to make suitability assessments. Elite Trading Scandinavia has the right to refuse, but the Municipality of Gothenburg has the right to revoke the permit, with the refusal as a legal basis. This has been tried before by the Supreme Administrative Court, and that is, I guess, the only issue the court will decide on. 

If Elite Trading Scandinavia suddenly decides to provide the documents or if Chen Zhi leaves the group, is acquitted or something else happens, it is of no importance, but it is the circumstances at the time of revocation that apply to the court. In such a situation, Elite Trading Scandinavia will still lose the permit, and then apply for it again and get it approved.

Again, this is something that Elite Trading Scandinavia could have avoided if they had provided the documents the municipality requested initially, instead of delaying. Because there is an aspect here that seems to have been forgotten. That Chen Zhi is actually innocent, until proven guilty. That he is suspected of a crime is nothing more than suspicions and the fact that the whole world has written about him, Cigarrvärlden included, does not change the presumption of innocence. It is something that could have been argued for if they had submitted the documents that the municipality requested from the beginning, that ship has probably sailed, if nothing else it is on its way. 

Because Chen Zhi is on his way to leave Elite Trading Scandinavia and the entire Habanos group. But not quite in a manner anyone had imagined…

Chen Zhi extradited to China

Chen Zhi was extradited to China by Cambodia last week. The relationship between the three is not straightforward and consists of several layers. The fact that China considers Chen Zhi a political risk today is not synonymous with that it has always been the case. Quite the opposite.

When Chen Zhi began his career in Cambodia, he had the support of China, when it came to fraud, China had nothing against Chen Zhi's methods, as long as they were not directed at China. At the same time, China used Chen Zhi's conglomerate to place agents from the intelligence service and thus keep an eye on, or lure home dissidents and memebers of the opposition. Rumors claim that Chen Zhi's father is Cai Qi, Xi Jingping's Chief of staff from an extramarital affair which has given Chen Zhi access to power, however, this is not something that we have been able to confirm.

As Chen Zhi's power grew, he came closer to the ruling family in Cambodia, which ultimately meant that the money the Cambodian government received from Chen Zhi far exceeded the financial compensation the Cambodian government received from China. When Chen Zhi was granted one of the few licenses to start a bank in Cambodia, he also received a tool to move money through the global banking system with significantly fewer questions about money laundering. That was really when he became big and powerful player. In connection with that, his frauds also began to target Chinese people and he began to smuggle money out of China in one way or another. That was really when he made an enemy of China, who appointed a police task force that investigated him and ultimately produced 83 indictments, but that was five years ago and not much has happened after that,

Cambodia may be a puppet state to China, but has nevertheless proven to be unruly, both when it comes to defending Chen Zhi, but also when it comes to supporting internet fraud. It is the country's core business and almost a national sport that today has a turnover of 70 billion USD annually, Cambodia would be bankrupt without the fraudsters. China has been patient when it comes to Chen, it has probably benefited from Cambodia on other levels and has played the long game. But when the indictment was announced by the US DOJ on October 14 last year, the pressure on everyone involved increased.

China, of course, wanted to keep Chen Zhi at a safe distance from both the Yankees and the British so that he wouldn't start blabbering about his dealings with the Chinese intelligence apparatus. Cambodia came out with half-hearted support for the fight against fraud while emphasizing Chen Zhi's innocence. All with the same credibility as a slimy car salesman. And somewhere here I started theorizing and sharing my theories with other journalists.

I was absolutely convinced that Chen Zhi would waltz straight into the American embassy in Cambodia, honestly I still can't believe he never did. His potential prison sentence of 40 years could certainly have been reduced to 20 years if he had shared intel with the Americans about Chinese intelligence, he would have been out after 10 years. And with a few million dollars stashed away somewhere, he would have had a tolerable existence under the radar until it was time to leave this world. An American journalist adds the possibility of being pardoned by Trump.

Because one thing I am absolutely convinced of is that Chen Zhi will meet one of two fates, one is that he ends up in a deep dungeon in China modeled after the Middle Ages. The other is that he, like many Chinese before him who have been extradited to China and convicted of large-scale fraud and money laundering, will be sentenced to death. I say this with no joy nor schadenfreude, I might add. On a human level, I feel for the man.

In connection with the death penalty, he will receive a hefty fine that in one way or another far exceeds his assets and the assets will then end up in the hands of the Chinese state. And the asset that is of interest for this analysis is Chen Zhi's ownership in Habanos. Everything indicates that the new owner of Habanos will then be the state-owned China Tobacco.

The state not only becomes a partner in a company consisting of the world's most prestigious brands, but also gets rid of an uncomfortable political risk.

What else could happen to Chen Zhi's ownership stake?

The simple answer is not much, or nothing. Chen Zhi’s ownership of the Habanos Group is in the company Simply Advanced Limited, which is registered in the British Virgin Islands, which in turn is subject to the British monarch and a governor appointed by the British monarch but proposed by the British government. The island’s defense and foreign affairs are handled in London. To complicate matters, the currency of the British Virgin Islands is the US dollar.

The sanctions and all the seizures that came into effect against Chen Zhi were a joint venture between British and American authorities. All transactions in USD are a violation of sanctions. International transactions go through a system called SWIFT, which is jointly owned by all the world's banks that are connected to it. SWIFT has three servers, one in Holland, one in Belgium and one server in the USA. Smaller banks that are not connected to SWIFT usually go through a so-called intermediary bank, in nine cases out of ten it is the Bank of New York. It is therefore not possible to pay Chen Zhi, who is also on the sanctions list, in USD, and if you find another currency, the payment cannot go through the SWIFT system, because then the SWIFT server in the USA would violate the sanctions.

Cuba could theoretically have nationalized Chen Zhi's share, assuming that the ownership was in Cuba. But now the joint ownership between the Cubans and Chen Zhi begins in Spain and Cuba can not really go full banana republic in a European country. The Cubans could theoretically set up a completely new corporate structure globally without Chen Zhi, but that would involve major costs and disruptions in supply chains, not to mention new processes for permits in the various countries. And perhaps the occasional local partner who craps his pants because the type of action that is taken to oust someone. On top of that, the Cubans know nothing about commerce. The entire commercial aspects of the monopoly have been controlled from Spain by Fernando Dominguez. The Cubans are relegated to farming tobacco and rolling cigars.

It is of course possible to pay Chen Zhi directly in Chinese yuan without going through the SWIFT system, provided that you can negotiate with a person in Chinese custody.

What is happening in the rest of the world with Habanos local ownership?

It is not entirely clear, much due to the fact that the regulations differ among many countries. But the fact that Habanos loses a country here or there is serious, because Habanos lacks a market that everyone else has and that is that Cuban cigars are not sold in the United States due to the embargo that came into effect in the 60s. What remains is Europe, the Arab world and China.

China is immune to the sanctions, and the Arab world is not exactly known for its regulatory compliance or US craze, but Europe, with Spain at the forefront, accounts for approximately 30% of all Habanos sales. 

In England, the local distributor is in dire straits, with a turnover of around 75 million USD annually is far above the limit for having to act when it comes to the British Modern Slavery Act, which covers Chen Zhi's suspected human trafficking but also the report that came out on September 15th about cigar production in Cuban prisons under slave-like conditions. There is also a British background check of owners that may be reviewed as Chen Zhi's Simply Advanced Limited owns 25% of the local distributor, which gives Chen Zhi a personal ownership of just over 12%. Here too, there is a complicated permit process that spans several authorities.

France looks a lot like England and Sweden. In France, ownership looks like that of in Sweden. Spain also has a permit requirement, with background check of owners at the retail level in any case. The law was changed in September 2025 and is more similar to the Swedish one. This also applies to Italy and Hungary. Here, permits are drawn or auctioned, limited so that there is sufficient distance between the traders and a predetermined number of traders per inhabitant. 

Not even Canada is spared, like England, they also have a modern slavery act .

The decision of the Municipality of Gothenburg will probably echo through the rest of Europe, but it is difficult to predict the effects because we do not have the same insight into the administrative legal process in each country, but I am convinced that something will happen. And by something I mean that cases will be opened and reviews made in one way or another. Unfortunately, I do not have a good answer to exactly what this may lead to because I simply don´t know what the variables in play are for each country.

When it comes to the countries that fall under Elite Trading Scandinavia's distribution rights, i.e. the rest of Scandinavia and the Baltics, it is impossible to predict how a Swedish permit may affect other countries. 

The legislator has not thought about this, how to deal with Sweden as a transit country – when tobacco transits here. In any case, you are not allowed to act as a middleman between a EU country directly and an end customer if you are based in Sweden, basically dropshipping without paying tobacco tax. I find it difficult to see how this would not require a tobacco permit.

But is Elite Trading Scandinavia allowed to receive tobacco products and then resell them to countries within the EU without a tobacco permit? Theoretically, it should be possible, but one thing is certain: nothing is certain until there is precedent. And as of today, no one really has a good answer to that question.

However, if that works, Elite Trading Scandinavia will face another challenge, which is that their tax office credit facility for paying tobacco tax and VAT on imported tobacco products could be revoked. If that happens they will face major challenges with liquidity, which in this respect affects the supply chain to other countries in Scandinavia and the Baltics, but more on that in the next paragraph.

Back to Sweden – The Premium Company Nordic

When it comes to The Premium Company Nordic's permit, it is still intact. The Municipality of Gothenburg has not started a regulatory matter for that company yet. But why should they?

Well, it is for the simple reason that an unsuitable lender without any ownership, in this case Chen Zhi through Elite Trading Scandinavia, may be considered to be a person with significant influence if it is possible to question where his funds come from. 

And if Chen Zhi is the basis for revoking Elite Trading Scandinavia's tobacco license, then the same should reasonably apply to The Premium Company Nordic AB. Incidentally, it is not my claims, but it is part of a document that the Swedish Economic Crime Authority has put together for tobacco and alcohol officers.

The Swedish Tax Agency, Customs, Companies Registration Office & Swedish Police

Both Elite Trading Scandinavia and The Premium Company Nordic each have tax and customs credit facilities. This is preferred when working with goods that are subject to excise duty. 

Suppose you import diapers from anywhere for 100 USD, when the diapers arrive to Sweden you have to pay customs duty and VAT. The customs duty is usually a few percent and the VAT is 25%. When it is paid you receive your goods and you have paid 125 USD. The ratio is 1: 0.25

Suppose instead that you import alcohol, fuel or tobacco as in this case. Then you pay excise duty, and customs duty on the excise duty itself and on top of that add VAT. To be clear, you pay 25% VAT on both the purchase price, shipping, customs duty and on the excise duty itself. Depending on the type of product you are importing and what it costs to purchase, your ratio of the price of the product versus customs duties, taxes and VAT can be anywhere from 1:2 to 1:20.

This is harsh for any importer because it ties up plenty of working capital, and that is why there are tax and customs credits and these are linked to a trade free zone.

A trade free zone basically means that the Swedish border is extended to your warehouse. In this case, it is August Barks gata. When the goods arrive, they have formally crossed the Swedish border, at least not in tax or customs terms. When Elite Trading Scandinavia receives an order for a box of cigars, it must be cleared and taxed when it is delivered to the customer. This is reported to the authorities on a monthly basis and invoiced accordingly, which means that you do not have to tie up plenty of working capital on imports, quite the opposite, you could keep huge stocks for pennies on the dollar.

There is a difference between the regulations regarding tax and customs credits and tobacco permits, and that is that the processing of tax and customs credits is confidential, basically you can recieve confirmation if there is one, or not. Nothing else.

The similarity, however, is the same legal requirement for owners suitability and the same requirement for disclosing information to the authorities in the event of changes in ownership and changes in the board of directors.

This should surface soon, whether an inspection has been carried out or not should be made known, mainly by revoked credit facilities. The Swedish Tax Agency and the Swedish Customs are usually considerably stricter than the municipalities in these types of issues, which is not surprising since they are closer to the taxpayers' cash flows.

If Elite Trading Scandinavia and The Premium Company Nordic lose their credit facilities and free trade zones, the supply chains to the rest of Scandinavia and the Baltics will likely be affected because it will tie up a lot of working capital, regardless of whether a permit is required for other countries within the EU or not.

It also remains to be seen what the Swedish Companies Registration Office will do. Since the beginning of last year, the Swedish Companies Registration Office has been tasked with examining money laundering in view of its control over several registers. And the question is whether it has done anything in relation to Chen Zhi and Elite Trading Scandinavia or whether the Swedish Companies Registration Office will do anything, considering that the systems should now be flashing red due to the lack of an authorized chartered accountant.

If that weren't enough, Swedish police have a special group currently looking into Chen Zhi's crypto mining blockchains that have been passed through Swedish servers. This story is far from over, it's just beginning.

In summary, this is an un-epic shitshow , much of this could have been avoided or postponed if Elite Trading Scandinavia, Stephan Praetorius and Anders Worsøe had understood the regulations. 

Why is it un-epic? Unfortunately, this level of knowledge is more the rule than the exception and companies start on a small scale with deviations from the law, then they grow the violations together with the business in general. Another company produced tobacco without paying tobacco tax for over a 100 000 USD, a giant had a major bank shut down their bank accounts, containing 150 milllion USD for odd Russian transactions related to tobacco. Another company sold tobacco for a year for 3 million USD even though said company had lost its tobacco permit. Elite Trading Scandinavia is far from alone in.

Written by: Hatem Sabbagh

Footnote: Cigarrvärlden contacted Stephan Praetorius, who hangs up as soon as we introduce ourselves. Cigarrvärlden has contacted Anders Worsøe to no avail. The chartered accountant can not comment due to client confidentiality.

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