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It is the first positive doping test in this year's Tour.
Cocaine is not a prohibited drug out of competition, but it is not allowed during races.
Here is the official statement from the UCI, world cycling's governing body:
The Union Cycliste Internationale (UCI) announces that it has notified Italian rider Luca Paolini of an Adverse Analytical Finding of Cocaine (Benzoylecgonine metabolite) in a sample collected in the scope of an in-competition control on 7 July 2015 during the Tour de France.
The rider has the right to request and attend the analysis of the B sample.
In accordance with UCI Anti-doping Rules, the rider has been provisionally suspended until the adjudication of the affair.
At this stage of the procedure, the UCI will not comment any further.
This spring, the Paolini won the prestigious semi-classic one-day race Gent-Wevelgem.
Last year Paolini was caught using his cellphone during a stage of the Tour for which he was given a warning.
More to come.