Fifth Avenue Products Trading GmbH, the official distributor of Cuban cigars in Germany, Austria, and Poland, temporarily suspended all its operations on Friday, September 4, unable to accept new orders or make shipments.
The trigger is the case of the Chinese businessman Chen Zhi, whose inclusion in the European Union sanctions list has halted the company's banking connections.
The letter that halted the German market
In a communication sent to retailers and signed by Christoph A. Puszkar, managing director of the company, Fifth Avenue explained that its banking ties were subject to restrictions stemming from “an ongoing compliance and sanctions review affecting one of our shareholders.”
The letter, collected by the portal halfwheel., did not identify the shareholder, although all indications point to Chen Zhi, who indirectly controls about 16% of Fifth Avenue through his stake in Allied Cigar Corporation S.L.U.
Puszkar emphasized that the measures "are not directly related to the quality of our products, our services, or our existing business relationships"; and assured that the company is working "with the utmost priority" alongside external experts to resume operations.
According to the German commercial register, Altabana —the vehicle of Habanos S.A. for its stakes in distributors— possesses 80% of Fifth Avenue, while the Swiss-German group Villiger retains the remaining 20%.
European sanctions change the rules of the game
On July 30, the European Union added Chen Zhi to its sanctions list, freezing his assets and imposing a travel ban due to his alleged involvement with cyber fraud centers in Southeast Asia.
Until then, the risk of sanctions was limited to the U.S. and the United Kingdom. With the European decision, banks operating within the EU became directly exposed.
Since March 2026, several European banks had already begun to unilaterally close accounts of companies in the Habanos ecosystem, preferring to end business relationships rather than assume legal or reputational risks.
Fifth Avenue is, however, the first company in the network to publicly acknowledge that its operations have been halted due to European sanctions.
A chain of disruptions that spans the world
The sanctions imposed by the U.S. and the United Kingdom on Chen Zhi in October 2025 had already caused months of disruption for the British importer Hunters & Frankau and Tabacalera USA, which could only resume operations in May 2026 after obtaining special licenses.
In June, Nicotine Insider reported that Pacific Cigar Company, the exclusive distributor of Habanos for the Asia-Pacific region, also faced significant banking difficulties.
The entrepreneur linked to Habanos S.A. acquired his stake in 2020, when a group of Asian investors paid 1.4 billion dollars to purchase Imperial Brands' handcrafted cigar business, including 50% of Habanos S.A.
Currently, Chen Zhi is facing charges in China for intentional injury using cruel means, a crime that may carry the death penalty.
Tabacalera SLU declared in December 2025, according to a spokesperson quoted by the AFP agency, that it was carrying out "a restructuring process in order to exclude Mr. Chen Zhi from the group."
The impact on Cuba and its cigars
The blow comes at a particularly delicate time for Cuban tobacco exports.
Germany was the fifth largest market for Habanos S.A. in 2024, following China, Spain, Switzerland, and the United Kingdom.
Europe accounts for 54% of the company's total sales value, which that year reached record revenues of 827 million dollars.
The crisis is compounding other recent disturbances: the Cuban regime definitively canceled the Festival del Habano 2026 in July due to the island's economic and energy crisis; and Canada has already been reporting a shortage of Cuban cigars since March.
While Fifth Avenue waits for a banking solution that could take months—similar to the situation with Tabacalera USA—the European market for cigars is facing its biggest distribution crisis in decades, with direct consequences for an industry that represents one of the few sources of foreign currency left for the Cuban dictatorship.
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