HOME

TheInfoList



OR:

The illicit cigarette trade is defined as “the production, import, export, purchase, sale, or possession of tobacco goods which fail to comply with legislation” (FATF 2012). Illicit cigarette trade activities fall under 3 categories: #
Contraband Contraband (from Medieval French ''contrebande'' "smuggling") refers to any item that, relating to its nature, is illegal to be possessed or sold. It is used for goods that by their nature are considered too dangerous or offensive in the eyes o ...
: cigarettes smuggled from abroad without domestic duty paid; #
Counterfeit To counterfeit means to imitate something authentic, with the intent to steal, destroy, or replace the original, for use in illegal transactions, or otherwise to deceive individuals into believing that the fake is of equal or greater value tha ...
: cigarettes manufactured without authorization of the rightful owners, with intent to deceive consumers and to avoid paying duty; # Illicit whites: brands manufactured legitimately in one country, but smuggled and sold in another without duties being paid. Cigarette smuggling, also informally referred to as "buttlegging," is the illicit transportation of
cigarette A cigarette is a narrow cylinder containing a combustible material, typically tobacco, that is rolled into thin paper for smoking. The cigarette is ignited at one end, causing it to smolder; the resulting smoke is orally inhaled via the opp ...
s or
cigar A cigar is a rolled bundle of dried and fermented tobacco leaves made to be smoked. Cigars are produced in a variety of sizes and shapes. Since the 20th century, almost all cigars are made of three distinct components: the filler, the binder l ...
s from an administrative division with low taxation to a division with high taxation for sale and consumption. The practice, commonly used by the
tobacco industry The tobacco industry comprises those persons and companies who are engaged in the growth, preparation for sale, shipment, advertisement, and distribution of tobacco and tobacco-related products. It is a global industry; tobacco can grow in any ...
,
organized crime Organized crime (or organised crime) is a category of transnational, national, or local groupings of highly centralized enterprises run by criminals to engage in illegal activity, most commonly for profit. While organized crime is generally th ...
syndicates and rebel groups, is a form of
tax evasion Tax evasion is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to reduce the taxp ...
.
Interstate 95 Interstate 95 (I-95) is the main north–south Interstate Highway on the East Coast of the United States, running from U.S. Route 1, US Route 1 (US 1) in Miami, Miami, Florida, to the Houlton–Woodstock Border Crossing between M ...
, a highway traversing the East Coast of the United States, came to be known informally as "New Tobacco Road" when it became a favorite cigarette-smuggling route. Illicit cigarette trade is usually a
crime In ordinary language, a crime is an unlawful act punishable by a State (polity), state or other authority. The term ''crime'' does not, in modern criminal law, have any simple and universally accepted definition,Farmer, Lindsay: "Crime, definit ...
.


Drivers of illicit trade

The illicit trade of tobacco is both supply and demand driven, as consumers look to save money by evading taxes on tobacco; and suppliers want to take advantage of easy border entry, high profit margins, and weak repercussions if caught. Illegal cigarettes are priced much cheaper than legal cigarettes, and do not undergo stringent regulation in the form of health warnings, product checks, or age verification. Studies highlight that increased tobacco taxes do not dissuade consumers from smoking, rather, consumers turn to cheaper brands and illegal cigarettes. Low costs of production and high levels of demand make illicit cigarettes one of the world's most trafficked illegal goods. In London alone, 85% of smuggled cigarettes were found to be counterfeit, while the UK Border Agency averages more than 1 million counterfeit cigarette seizures per day. Similarly, South Africa reports the incidence of illicit cigarettes has doubled the past 3 years, accounting for 25% of the total market in 2012.Allen, E. (2011) ‘The Illicit Trade in Tobacco Products and How to Tackle it’. World Customs Journal, 6(2), 121-130 Public tolerance and acceptance of illegal cigarettes as a norm also factors into the continued purchase behavior among consumers, as they believe legitimate cigarettes are over-taxed and too expensive. Illicit cigarettes continue to dominate in Malaysia, where 34.5% of all cigarettes,Internatioinal Tax and Investment Center and Oxford Economics (2013) 'Asia-11 Illicit Tobacco Indicator 2012'. International Tax and Investment Center and Oxford Economics, 1-132 approximately 7.9 billion sticks, sold were illicit. Illicit trade remains prevalent in Malaysia due to its long coast lines, which allow for shipments to be sent from neighbouring nations, such as kreteks from Indonesia, into the East Malaysian states of Sabah and Sarawak.Rejab, I. and Zain, Z. (2006) 'Modus Operandi of Cigarette Smuggling'. South East Asia Tobacco Control Alliance, 1-44 Smugglers have also become increasingly more efficient in unloading, storing, and distributing smuggled cigarettes quickly in local villages; whilst avoiding customs officers. In
Lahad Datu Lahad Datu ( ms, Bandar Lahad Datu) is the capital of the Lahad Datu District in the Dent Peninsula on Tawau Division of Sabah, Malaysia. Its population was estimated to be around 27,887 in 2010. The town is surrounded by stretches of cocoa and ...
,
Sabah Sabah () is a States and federal territories of Malaysia, state of Malaysia located in northern Borneo, in the region of East Malaysia. Sabah borders the Malaysian state of Sarawak to the southwest and the North Kalimantan province of Indone ...
, locals have become part of the problem, as they frequently purchase illicit cigarettes from illegal immigrants from the
Philippines The Philippines (; fil, Pilipinas, links=no), officially the Republic of the Philippines ( fil, Republika ng Pilipinas, links=no), * bik, Republika kan Filipinas * ceb, Republika sa Pilipinas * cbk, República de Filipinas * hil, Republ ...
and
Indonesia Indonesia, officially the Republic of Indonesia, is a country in Southeast Asia and Oceania between the Indian and Pacific oceans. It consists of over 17,000 islands, including Sumatra, Java, Sulawesi, and parts of Borneo and New Guine ...
— who openly peddle these goods in a thriving flea market full of smuggled illicit goods. Lax law enforcement further facilitates the prevalence of illicit trade and smuggled goods in this area, as the sale of these illicit goods are responsible for sustaining the livelihood of these illegal immigrants. The low salaries of responsible law enforcement units are highlighted as a contributing factor to the lack of smuggled cigarette seizures. cigarette smugglers are notified before raids are conducted by Insiders in law enforcement, providing ample time to conceal shipments of illicit cigarettes. With less than 2% of all shipment containers checked upon arrival at ports (due to high volumes of containers), and low penalties for illicit smuggling, this issue will remain prevalent in
Malaysia Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...
(and other countries with poor border control) as illicit cigarette smuggling continues to be seen as a lucrative, relatively low risk activity. The implementation of the Plain Packaging Act of tobacco products in 2012 in
Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
has sparked debate on its efficacy on reducing the incidence of smoking among youth. While some studies conclude that plain packaging will make cigarettes less attractive to youth, the
American Legislative Exchange Council The American Legislative Exchange Council (ALEC) is a nonprofit organization of conservative state legislators and private sector representatives who draft and share model legislation for distribution among state governments in the United State ...
(ALEC) has lobbied against the sale of plain packaged cigarettes—citing lack of evidence. Tobacco organisations instead posit plain packaging will ease the ability of illegal tobacco manufacturers to replicate legitimate products—resulting in higher incidences of illicit trade. While no other countries have implemented plain packaging yet, time will tell if this move will have positive or negative consequences in reducing youth and adult smoking.


Links to organized crime

Numerous reports,Financial Action Task Force (2012) ‘Illicit Tobacco Trade’. FATF Report, 1-78World Customs Organization (2012) 'Illicit Trade Report 2012'. World Customs Organization available from have forged links between the illegal tobacco trade and
organised crime Organized crime (or organised crime) is a category of transnational, national, or local groupings of highly centralized enterprises run by criminals to engage in illegal activity, most commonly for profit. While organized crime is generally th ...
groups, who are attracted by high consumer demand, high potential profits, and relatively low potential penalties. In Malaysia, first time offence results in up to RM100,000 fine and a 3-year sentence; with a RM200,000 fine and 6-year jail sentence for subsequent offences. Organised crime syndicates garner wide reach through diverse distribution channels in the form of small retailers and street vendors. While retailers may be charged in court if found to be in possession of cigarettes, it has been widely assumed that crime syndicates pay these fines in order to maintain cooperation with retailers, and sustain their distribution network. Beyond these traditional distribution channels, the resale of tobacco products on the Internet is being actively developed—enabling greater reach, more discretion, and lesser chances of being caught. In 2012, French police disrupted this trend through deleting domain names of online trading sites selling tobacco products. Evidence suggests tobacco smuggling operations have been linked to
terrorist Terrorism, in its broadest sense, is the use of criminal violence to provoke a state of terror or fear, mostly with the intention to achieve political or religious aims. The term is used in this regard primarily to refer to intentional violen ...
organisations such as
Hamas Hamas (, ; , ; an acronym of , "Islamic Resistance Movement") is a Palestinian Sunni-Islamic fundamentalist, militant, and nationalist organization. It has a social service wing, Dawah, and a military wing, the Izz ad-Din al-Qassam Bri ...
and
Hezbollah Hezbollah (; ar, حزب الله ', , also transliterated Hizbullah or Hizballah, among others) is a Lebanese Shia Islamist political party and militant group, led by its Secretary-General Hassan Nasrallah since 1992. Hezbollah's parami ...
, which utilize these profits to finance terrorism around the world. since the 1980s. The WCO Illicit Trade Report 2012 highlights the illicit tobacco trade represents a good opportunity for organized crime groups and/or terrorists to generate large sums of criminal profits. Billingslea wrote, terrorist groups work with organized crime groups as well as International drug trafficking organisations due to their “established trafficking routes and business contacts for the transfer of commodity for profit”, He adds, known and suspected Hezbollah and Hamas members have established front companies and legitimate businesses in the cigarette trade in Central and South America. The
IRA Ira or IRA may refer to: *Ira (name), a Hebrew, Sanskrit, Russian or Finnish language personal name *Ira (surname), a rare Estonian and some other language family name *Iran, UNDP code IRA Law *Indian Reorganization Act of 1934, US, on status of ...
(Irish Republican Army) was one of the first groups to begin using cigarettes to fund their activities. Police estimate that the IRA made $100million in the past 5 years from trafficking illicit cigarettes. In the Middle East, the Kurdish Workers Party (PKK) has known involvement in the trafficking of contraband cigarettes and tax stamps. The EU Commission report that the PKK has been smuggling American cigarettes into Iraq, which were then controlled by
Saddam Hussein Saddam Hussein ( ; ar, صدام حسين, Ṣaddām Ḥusayn; 28 April 1937 – 30 December 2006) was an Iraqi politician who served as the fifth president of Iraq from 16 July 1979 until 9 April 2003. A leading member of the revolution ...
's son. The combined efforts from cigarette and oil smuggling was reported to have made Saddam Hussein as much as $2.7billion annually after 1991. Most recently, 16 Palestinian men arrested due to a cigarette smuggling scheme in
New York New York most commonly refers to: * New York City, the most populous city in the United States, located in the state of New York * New York (state), a state in the northeastern United States New York may also refer to: Film and television * '' ...
were found to have some ties to convicted terrorists. One criminal in particular, had known financial ties to
Omar Abdel-Rahman Sheikh Omar Abdel-Rahman ( ar, عمر عبد الرحمن), (ʾUmar ʾAbd ar-Raḥmān; 3 May 1938 – 18 February 2017), commonly known in the United States as "The Blind Sheikh", was a blind Egyptians, Egyptian Islamist militant who served a ...
, a cleric serving a life sentence for a conspiracy to blow up New York City landmarks. Others arrested also had ties to a top Hamas official. Similarly in
Hong Kong Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...
, police arrested 1,200 individuals from a wide range of gangs for drug trafficking, illegal possession of arms, and contraband cigarettes. Operation Thunderbolt, which aims to target triads in Hong Kong and neighboring provinces, has been successful in infiltrating various branches of the gang's operational networks. The World Customs Organisation (2013) notes that while the number of illegal cigarette seizures has increased globally, the number of smuggling routes and channels continue to diversify accordingly. In
Ireland Ireland ( ; ga, Éire ; Ulster Scots dialect, Ulster-Scots: ) is an island in the Atlantic Ocean, North Atlantic Ocean, in Northwestern Europe, north-western Europe. It is separated from Great Britain to its east by the North Channel (Grea ...
, four men were recently caught transporting 9 million cigarettes with a retail value of €4.3 million, which arrived via sea freight from Malaysia. Police believe this shipment was destined for Ireland's largest smuggling gangs, who have also been involved in armed robberies and burglaries. In the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
, cigarette smuggling has become so increasingly profitable that smuggling syndicates have turned to bribing young women to smuggle cigarettes in exchange for free summer holidays. UK border officials have revealed that close to 50 million cigarettes are seized each month from girls as young as 15, who were given flights to Spain, accommodation and pocket money. Cigarette smuggling has since become one of Europe's fastest growing forms of organized crime, and has been responsible for funding larger operations such as drug smuggling or people trafficking.
South Africa South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring countri ...
faces similar problems with cigarette smuggling, as police report the sale of illegal cigarettes is bigger than drugs in South Africa.


Costs of illicit trade

The global scale of the illegal cigarette trade has reached an all-time high, as governments are estimated to lose over US$50 billion in global government revenues each year. A Euromonitor (2011) report estimates that there are 360 billion cigarettes consumed annually (excluding China), which accounts for 10% of the global market. Euromonitor (2013) reports black market sales of cigarettes rose for the 6th year in a row, although cigarette consumption in the EU fell by 5.7% in 2012—resulting in over 12 billion Euros in lost tax revenue. Illicit cigarette trade not only deprives the government of a key source of tax revenue, but also creates an imbalance in the market for legitimate industry players who operate within stringent regulations. In Asia-Pacific (and globally) Malaysia ranks as the country with the highest share (45%) of illicit cigarettes in the total market, followed by
Hong Kong Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China ( abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delt ...
(35%), and
Pakistan Pakistan ( ur, ), officially the Islamic Republic of Pakistan ( ur, , label=none), is a country in South Asia. It is the world's List of countries and dependencies by population, fifth-most populous country, with a population of almost 24 ...
(26.7%) in the Asian continent. Although illegal cigarettes have been associated with low-income groups, its low price and accessibility also makes it attractive to smokers in general due to increasing tobacco taxes, and affordable for youths—who have lower disposable income. Brunei illustrates a unique case globally, where 89.8%, or 315.2 million of cigarettes consumed are illicit. After the government's 339% excise duty application in 2010, cigarette prices hit $6.1 per pack, one of the highest in the Asia Pacific after Singapore and Australia. This resulted in the withdrawal of major international tobacco firms, and a tax loss of $63 million due to the proliferating illicit market. Tobacco Atlas estimates that if illicit trade was eliminated, $31.3 billion in tax revenue would be gained, and 164,000 premature deaths would be avoided annually due to higher average cigarette prices. The WCO recommends placing greater importance on information collection and sharing on a national and International level in order to develop strategies to respond to this threat.


Societal impacts of illicit trade


Youth smoking

Costs of illicit trade also go beyond purely financial measures, with repercussions such as encouraging youth uptake of smoking, and increasing health risks for consumers, as illegal cigarettes are not bound by product and ingredient checks. Despite industry and government efforts to implement ID checks for tobacco sales to regulate availability, the prominence of illicit cigarette trade facilitates cigarette affordability for youth; with its lower-than-market price, and provision of easy channels for purchase in the form of small retailers and online. Internet sites have since become a core channel of distribution as it allows the selling and shipping of small quantities of cigarettes undetected by Customs Officials. Numerous studies also draw a direct link between the availability of cheap illicit cigarettes and the high youth smoking rates. In Canada, illegal cigarettes accounted for 17.5% of all cigarettes smoked by adolescents, with greater prevalence in
Toronto Toronto ( ; or ) is the capital city of the Canadian province of Ontario. With a recorded population of 2,794,356 in 2021, it is the most populous city in Canada and the fourth most populous city in North America. The city is the ancho ...
and
Quebec Quebec ( ; )According to the Canadian government, ''Québec'' (with the acute accent) is the official name in Canadian French and ''Quebec'' (without the accent) is the province's official name in Canadian English is one of the thirtee ...
, where 22% of Canadian high school students regularly smoke illegal cigarettes . The study adds illegal cigarettes were responsible for providing an accessible alternative to quitting, and for youth in particular, encourages initiation and continuation of smoking over the long term.Callaghan, R. C., Veldhuizen, S. Leatherdale, S., Murnaghan, D. and Manske, S. (2009) ‘Use of contraband cigarettes among adolescent daily smokers in Canada’. Canadian Medical Association Journal, 181(6-7), 384-386


Dangerous additives

The ICC (
International Chamber of Commerce The International Chamber of Commerce (ICC; French: ''Chambre de commerce internationale'') is the largest, most representative business organization in the world. Its over 45 million members in over 100 countries have interests spanning every s ...
) warns counterfeit cigarettes were found to contain unsanitary ingredients (such as human feces, dead flies and mold), as well as a higher dosage of lethal substances in excess of legitimate cigarettes. Illicit cigarettes seized in
Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
and the United Kingdom were found to contain five times more cadmium, six times as much lead, 160% more tar, and 133% more carbon dioxide.International Chamber of Commerce (2007) ‘Counterfeit cigarettes contain disturbing toxic substances’. International Chamber of Commerce nlineavailable from Consumers are warned to take caution and avoid the temptation to save money by purchasing illegal cigarettes as it poses greater health risks compared to legal cigarettes.


Identifying illicit cigarettes

Below are some common indicators of illicit cigarette packs: * The absence of pictorial health warnings * Poor detailing on cigarettes (print, spelling errors, inconsistent lettering) * Packs without domestic tax stamps or security marks * Packs with non-domestic tax stamps * Unlisted importer or manufacturer * Unregistered brands * Pack sizes with less than 20 cigarettes * Unusual taste * Cheap price (below market average) * Not on the Trusted Trade Network database (individual product verification)


Illicit trade around the world


Australia

The country's attempts to discourage smoking through higher taxes have instead fueled the illegal cigarette industry, leading to a $1.1 billion loss of taxes due to illegal cigarettes in 2012. In May 2016, it is estimated that possibly 14.3 percent of tobacco consumed in Australia was bought through the black market and the cost in loss of revenue earned from taxes each year was $1.4 billion.


Belarus

Belarus Belarus,, , ; alternatively and formerly known as Byelorussia (from Russian ). officially the Republic of Belarus,; rus, Республика Беларусь, Respublika Belarus. is a landlocked country in Eastern Europe. It is bordered by R ...
is characterized as "the main provider of contraband cigarettes in Europe". In 2017, European Commissioner
Günther Oettinger Günther Hermann Oettinger (born 15 October 1953) is a German lawyer and politician of the Christian Democratic Union (CDU) who served as European Commissioner for Budget and Human Resources from 2017 to 2019, as European Commissioner for Digit ...
stated that nearly 10% of illicit cigarettes in the European Union originate from Belarus. Lithuanian and Polish customs often report about big consignments of cigarettes found with other goods and stated that the smuggling is a serious problem. Customs in
Latvia Latvia ( or ; lv, Latvija ; ltg, Latveja; liv, Leţmō), officially the Republic of Latvia ( lv, Latvijas Republika, links=no, ltg, Latvejas Republika, links=no, liv, Leţmō Vabāmō, links=no), is a country in the Baltic region of ...
and
Ukraine Ukraine ( uk, Україна, Ukraïna, ) is a country in Eastern Europe. It is the second-largest European country after Russia, which it borders to the east and northeast. Ukraine covers approximately . Prior to the ongoing Russian inv ...
also reported about thousands of confiscated packs of cigarettes from Belarus but on a much smaller scale. Besides European Union, another important destination of smuggling from Belarus is Russia. It is assumed that smuggling is an important revenue generator for the regime of
Alexander Lukashenko Alexander Grigoryevich Lukashenko (as transliterated from Russian language, Russian; also transliterated from Belarusian language, Belarusian as Alyaksand(a)r Ryhoravich Lukashenka;, ; rus, Александр Григорьевич Лука ...
. Aliaksei Aleksin, a businessman with close ties to Lukashenko, is called among the main alleged organizers of the smuggling industry. Organized crime groups are also reported to be active in this industry. Local citizens are common among ordinary performers of smuggling who cross the Belarus-EU border by cars, trucks and trains.Francesco Calderoni, Anna Brener, Mariya Karayotova, Martina Rotondi, Mateja Zor
The Belarusian Hub for Illicit Tobacco
''transcrime.it''
It is estimated that one truck can transport around 4 million packs of cigarettes. Rafts with GPS tracking systems and low-flying drones are used occasionally. The smugglers prefer to transport inexpensive Belarusian brands of cigarettes which enjoy much smaller excise rates in Belarus than higher-segment cigarettes. Significant amounts of Belarusian cigarettes produced by state-owned Grodno tobacco factory for local market (Minsk Capital, NZ, Fest and others) were found not only in neighboring markets but also in distant countries having no borders with Belarus such as Ireland and UK. It was estimated that 12% of cigarettes smuggled out of Belarus ended up in the UK. Cigarettes in Belarus are several times cheaper than in the European Union. In 2016, according to BBC, a pack of cigarettes bought in Belarus for c. 40p could be sold in the UK for £3. In 2017, it was estimated that total losses of the member states of the EU due to smuggling from Belarus amounted to roughly EUR 1 billion every year.


Belgium

The country is the host of several case of "white" smuggling mainly from Belgium to France / United Kingdom due of their lower taxes ( which makes up to 50% less expensive ). However, local customs face cases of counterfeit cigarettes factories that are mainly meant to be exported to the United Kingdom. Seizes usually exceed 1 Ton worth of tobacco + machines + millions of cigarettes each time. The situation is lately raising up with the ongoing tax hikes. Cigarettes Manufacters are worried about the situation and expect that the trend only increase.


Canada

As of 2009, illegal cigarettes are believed to be a $1.5 billion industry in Canada. In Canada, between 63 and 79 percent of the price of a package of cigarettes is tax. Many border-goers take advantage of the situation, not only in Canada but also in the U.S., the land that has traditionally imported rather than exported illegal goods. Canadian provinces with lower tobacco taxes have reported higher rates of smuggling, and much of the smuggling is dominated by
First Nations First Nations or first peoples may refer to: * Indigenous peoples, for ethnic groups who are the earliest known inhabitants of an area. Indigenous groups *First Nations is commonly used to describe some Indigenous groups including: **First Natio ...
members (though the bulk of First Nations members and leadership have opposed and condemned tobacco smuggling).


Hong Kong

*Customs officers seized 1.3million illicit cigarettes (total market value of $3.3million with a duty potential of $2.2million) in electric water heaters in an industrial building. *Hong Kong Police arrest 1,200 suspects on charges ranging from drug trafficking, illegal possession of arms, drugs, and contraband cigarettes.


Indonesia

Most illegal cigarette brands in Indonesia, if not all, often uses funny names and resembling those of existing cigarette brands, like ''Djaran Goyang'' (← Djarum Super), ''Magbul Premium'' (← Dji Sam Soe Magnum Filter, cf. animated series ''Riska dan Si Gembul''), ''Gudang Gabah'' (←
Gudang Garam PT Perusahaan Rokok Tjap Gudang Garam Tbk ( Republican spelling Indonesian for "Salt Warehouse brand Cigarette Company"), trading as PT Gudang Garam Tbk, is an Indonesian tobacco company, best known for its ''kretek'' (clove cigarette) product ...
), ''Mildboro'' (←
Marlboro Marlboro (, ) is an American brand of cigarettes, currently owned and manufactured by Philip Morris USA (a branch of Altria) within the United States and by Philip Morris International (now separate from Altria) outside the US. The largest Marl ...
), ''Men Doan'', ''SMD Bold'' (← Djarum Super MLD), and others.


Ireland

In
Ireland Ireland ( ; ga, Éire ; Ulster Scots dialect, Ulster-Scots: ) is an island in the Atlantic Ocean, North Atlantic Ocean, in Northwestern Europe, north-western Europe. It is separated from Great Britain to its east by the North Channel (Grea ...
the
Irish Republican Army The Irish Republican Army (IRA) is a name used by various paramilitary organisations in Ireland throughout the 20th and 21st centuries. Organisations by this name have been dedicated to irredentism through Irish republicanism, the belief tha ...
smuggled cigarettes to raise money for weapons and equipment. It may be associated with other criminal activity, for example: *9 million cigarettes with an estimated retail value of 4.3 million euros were seized when 4 men were caught transporting the shipment, which arrived at Dublin Port, from Malaysia. Police believe the cigarettes were destined for one of the country's largest smuggling gangs, which have also been involved in armed robberies and burglaries. In the
Republic of Ireland Ireland ( ga, Éire ), also known as the Republic of Ireland (), is a country in north-western Europe consisting of 26 of the 32 counties of the island of Ireland. The capital and largest city is Dublin, on the eastern side of the island. A ...
, cigarette prices are amongst the highest in the world due to heavy
excise tax file:Lincoln Beer Stamp 1871.JPG, upright=1.2, 1871 U.S. Revenue stamp for 1/6 barrel of beer. Brewers would receive the stamp sheets, cut them into individual stamps, cancel them, and paste them over the Bunghole, bung of the beer barrel so when ...
: typically €15 (US$12.70, GB£9.70) for a pack of twenty. Because of this, a heavy incentive is created for smuggling from the
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
mainland, where the same pack can cost far less (e.g. Spain €5, or in Eastern Europe €3–€4). Larger operators can purchase a shipping container full of cigarettes in Asia for €300,000, selling the tobacco on for as much as €5 million. Smuggled packs are sold for €4–€5, with Dublin's
Moore Street Moore Street (; ) is a street in central Dublin, Ireland, off Henry Street, one of Ireland's main shopping streets. The famous Moore Street open-air fruit and vegetable market is Dublin's oldest food market. The market there is a famous landm ...
a notorious site. Criminal gangs earn over €350 million a year from the trade, with one-quarter of tobacco smoked in Ireland being smuggled. In 2012, 96 million cigarettes were seized by
Revenue Commissioners The Revenue Commissioners ( ga, Na Coimisinéirí Ioncaim), commonly called Revenue, is the Irish Government agency responsible for customs, excise, taxation and related matters. Though Revenue can trace itself back to predecessors (with the A ...
, dropping to 45 million in 2016. Higher security levels in airports have pushed criminals to using other methods to import tobacco, such as car ferries.


Jordan

In August 2019, the Jordanian government tightened the customs regulations, citing the soaring smuggling of cigarettes to
Syria Syria ( ar, سُورِيَا or سُورِيَة, translit=Sūriyā), officially the Syrian Arab Republic ( ar, الجمهورية العربية السورية, al-Jumhūrīyah al-ʻArabīyah as-Sūrīyah), is a Western Asian country loc ...
for profit. The move gave rise to anti-government violence, where a clash erupted between the government and the protesters in the northern city of
Ar-Ramtha Ar-Ramtha ( ar, الرَّمثا, ar-Ramṯā), colloquially transliterated as Ar-Romtha ( ar, الرُّمثا, ar-Rumṯā), is a city situated in the far northwest of Jordan near the Jordan–Syria border, border with Syria. It covers 40 k ...
.


Malaysia

*Malaysia records RM1.9 billion loss to illegal cigarettes in 2012. *Locals at Lahad Datu help fuel demand for illicit goods through frequent purchase of illicit cigarettes from illegal immigrants in an open illegal goods flea market.


Montenegro

In the Former
Yugoslavia Yugoslavia (; sh-Latn-Cyrl, separator=" / ", Jugoslavija, Југославија ; sl, Jugoslavija ; mk, Југославија ;; rup, Iugoslavia; hu, Jugoszlávia; rue, label=Pannonian Rusyn, Югославия, translit=Juhoslavija ...
,
Montenegro ) , image_map = Europe-Montenegro.svg , map_caption = , image_map2 = , capital = Podgorica , coordinates = , largest_city = capital , official_languages = M ...
was known for being a haven for cigarette smuggling into
Italy Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical re ...
.


Palestine

*16 Palestinian men arrested in a scheme that may have generated $55 million in revenue from selling illicit cigarettes.


Paraguay

Due to discrepancies in the cigarette tax rate between
Brazil Brazil ( pt, Brasil; ), officially the Federative Republic of Brazil (Portuguese: ), is the largest country in both South America and Latin America. At and with over 217 million people, Brazil is the world's fifth-largest country by area ...
and
Paraguay Paraguay (; ), officially the Republic of Paraguay ( es, República del Paraguay, links=no; gn, Tavakuairetã Paraguái, links=si), is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to th ...
(16% in Paraguay vs. 80% in Brazil), large quantities of cigarettes are smuggled into Brazil via Santa Catarina. Journalists have alleged that the Tabacalera Del Este factory owned by relatives of Paraguayan President
Horacio Cartes Horacio Manuel Cartes Jara (born 5 July 1956) is a Paraguayan businessman and politician who served as the president of Paraguay from 2013 to 2018. He is a member of the Colorado Party. Cartes owns about two dozen businesses in his Grupo Carte ...
, in responsible for producing cigarettes for the purpose of being smuggled into Brazil via
Ciudad del Este Ciudad del Este (, Spanish for Eastern City; often shortered as CDE) is the second-largest city in Paraguay and capital of the Alto Paraná Department, situated on the Paraná River. It is located 327 km from Asunción, the capital, and is ...
.


Spain

*16,500 kg (worth 2 million Euros) of shredded tobacco was seized at an illegal cigarette factory located in an abandoned building in an industrial park.


Ukraine

A 700-meters smuggling tunnel with a narrow gauge railway was revealed in July 2012 between
Uzhhorod Uzhhorod ( uk, У́жгород, , ; ) is a city and municipality on the river Uzh in western Ukraine, at the border with Slovakia and near the border with Hungary. The city is approximately equidistant from the Baltic, the Adriatic and the B ...
(
Ukraine Ukraine ( uk, Україна, Ukraïna, ) is a country in Eastern Europe. It is the second-largest European country after Russia, which it borders to the east and northeast. Ukraine covers approximately . Prior to the ongoing Russian inv ...
) and
Vyšné Nemecké Vyšné Nemecké ( hu, Felsőnémeti, uk, Ви́шнє Німе́цьке) is a small village in the Sobrance District, Košice Region, right on the Slovak side of the main international road border with Ukraine, opposite the city of Uzhhorod ...
(
Slovakia Slovakia (; sk, Slovensko ), officially the Slovak Republic ( sk, Slovenská republika, links=no ), is a landlocked country in Central Europe. It is bordered by Poland to the north, Ukraine to the east, Hungary to the south, Austria to the s ...
), at the border of the
Schengen Area The Schengen Area ( , ) is an area comprising 27 European countries that have officially abolished all passport and all other types of border control at their mutual borders. Being an element within the wider area of freedom, security and j ...
. The tunnel used professional mining and security technologies. It was used primarily for smuggling of cigarettes.


United Kingdom

Belarus is believed to be one of the main sources of cigarettes smuggled to the United Kingdom. It was estimated that in 2015, 610 million cigarettes produced in Belarus were smuggled to the United Kingdom and illegally sold there. An example: * Haul of illegal tobacco and cigarettes with a shop value of £415,000 seized from 10 storage units in
Derby Derby ( ) is a city and unitary authority area in Derbyshire, England. It lies on the banks of the River Derwent in the south of Derbyshire, which is in the East Midlands Region. It was traditionally the county town of Derbyshire. Derby gai ...
.


United States

In the
United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
, each of the fifty states taxes cigarette packs at a different rate. In 1992, states charged an average of 25 cents. By January 2002, that average increased to 45 cents. Six months later, states, trying to compensate for
budget deficit Within the budgetary process, deficit spending is the amount by which spending exceeds revenue over a particular period of time, also called simply deficit, or budget deficit; the opposite of budget surplus. The term may be applied to the budget ...
s, raised their cigarette taxes to an average 54 cents. According to John D'Angelo of the U.S. government's Bureau of Alcohol, Tobacco, and Firearms (ATF), there is a "direct relationship between the increase in a state's tax and an increase in illegal trafficking." This is true with all psychotropic substances and, indeed, all forms of vice that may be desirable to individuals: the more the state or even the national government tries to repress the trade in any legal or illegal substance, the higher the prices, and with them the profit margins, become—and the greater the willingness of illicit marketers to meet the demand, and with it the willingness to commit other violent crimes to prevent the closure of the illicit markets, becomes. This is known as "the forbidden-fruit effect," among other references. The U.S. government foiled funding operations by
Al-Qaeda Al-Qaeda (; , ) is an Islamic extremism, Islamic extremist organization composed of Salafist jihadists. Its members are mostly composed of Arab, Arabs, but also include other peoples. Al-Qaeda has mounted attacks on civilian and military ta ...
in
New York New York most commonly refers to: * New York City, the most populous city in the United States, located in the state of New York * New York (state), a state in the northeastern United States New York may also refer to: Film and television * '' ...
in 1999 and
Hezbollah Hezbollah (; ar, حزب الله ', , also transliterated Hizbullah or Hizballah, among others) is a Lebanese Shia Islamist political party and militant group, led by its Secretary-General Hassan Nasrallah since 1992. Hezbollah's parami ...
in
North Carolina North Carolina () is a state in the Southeastern region of the United States. The state is the 28th largest and 9th-most populous of the United States. It is bordered by Virginia to the north, the Atlantic Ocean to the east, Georgia and So ...
in 2002. It has been reported that smuggling one truckload of cigarettes within the United States can lead to a profit of US$2 million. Laws specifically pertaining to cigarette smuggling in the United States have included the Contraband Cigarette Trafficking Act of 1978, which makes cigarette smuggling a felony punishable by up to five years in prison. One of the most notable places of cigarette smuggling in the United States is New York City. There, the cigarette tax is the second highest in the nation, at $6.86 per pack (federal, state, and municipal). Smugglers purchase cigarettes in other lower-tax states, such as nearby
Pennsylvania Pennsylvania (; ( Pennsylvania Dutch: )), officially the Commonwealth of Pennsylvania, is a state spanning the Mid-Atlantic, Northeastern, Appalachian, and Great Lakes regions of the United States. It borders Delaware to its southeast, ...
, where the tax rate is only $3.61 per pack. If smugglers travel further to even lower-tax states, they can buy cigarettes for even less, such as
Virginia Virginia, officially the Commonwealth of Virginia, is a state in the Mid-Atlantic and Southeastern regions of the United States, between the Atlantic Coast and the Appalachian Mountains. The geography and climate of the Commonwealth ar ...
, where the tax is only $0.30 per pack. As stated above,
Interstate 95 Interstate 95 (I-95) is the main north–south Interstate Highway on the East Coast of the United States, running from U.S. Route 1, US Route 1 (US 1) in Miami, Miami, Florida, to the Houlton–Woodstock Border Crossing between M ...
, since
New York New York most commonly refers to: * New York City, the most populous city in the United States, located in the state of New York * New York (state), a state in the northeastern United States New York may also refer to: Film and television * '' ...
is one of the states through which it runs, became a favorite route for cigarette smuggling and drew the informal nickname of "New Tobacco Road"' from the practice. Increases in illicit cigarette seizures can follow increases in cigarette tax. The government of Massachusetts banned the sale of menthol cigarettes which has resulted in illicit interstate importation and sales.


Anti-illicit trade

World Health Organization (WHO): Protocol to Eliminate Illicit Trade in Tobacco Products is a
multilateral treaty A multilateral treaty is a treaty to which two or more sovereign states are parties. Each party owes the same obligations to all other parties, except to the extent that they have stated reservation (law), reservations. Examples of multilateral tre ...
is aimed at combatting Illegal trade in tobacco products through controlling supply chain and international cooperation. Parties commit to establishing tracking and tracing system to reduce, with aims to eradicate, illicit trade. The Protocol has been signed by representatives of all 6 WHO regions. Get Some Answers (United Kingdom) a website created by The North England Tackling Illicit Tobacco for Better Health Programme, aims to inform and increase awareness of illegal tobacco, its impact, and consequences. The website provides forums for discussion, link to Crime Stoppers to share information, and link to
National Health Service The National Health Service (NHS) is the umbrella term for the publicly funded healthcare systems of the United Kingdom (UK). Since 1948, they have been funded out of general taxation. There are three systems which are referred to using the " ...
(NHS) for individuals who want to quit smoking. Retailers Against Smuggling (Ireland) This body was established in 2009 by Irish retailers to fight against illicit tobacco trade through raising awareness about the effects of illicit tobacco on retailers, liaising with relevant law enforcement authorities, and campaigning for legislative reform and extra law enforcement resources. Contraband Enforcement Strategy (Canada) The
Royal Canadian Mounted Police The Royal Canadian Mounted Police (RCMP; french: Gendarmerie royale du Canada; french: GRC, label=none), commonly known in English as the Mounties (and colloquially in French as ) is the federal police, federal and national police service of ...
aims to nationally reduce the availability of, and decrease the demand for contraband tobacco through working with youth to prevent involvement in crimes as an offender or victim. This published report prioritises reducing the threat of criminal terrorist activity in Canada through effectively addressing contraband activities, disrupting organized crime groups, and enhancing intelligence gathering and sharing Rokok Tak Sah (Malaysia) Launched by
Royal Malaysian Customs The Royal Malaysian Customs Department ( ms, Jabatan Kastam Diraja Malaysia), abbreviated RMC or JKDM, is the Malaysian Government agency responsible for administrating the nation's indirect tax policy, border enforcement and narcotic offences ...
, this campaign is aimed at educating retailers and the public about the penalties of buying and selling illicit cigarettes. Brochures and newspaper advertisements were deployed to raise awareness of how to identify illegal cigarettes. Customs officers also increased enforcement efforts to seize illegal cigarettes and fine retailers facilitating sales to the public. Don't Get Burnt (Singapore) This campaign by
Singapore Customs The Singapore Customs is a government agency under the Ministry of Finance of the Government of Singapore. Singapore Customs was reconstituted on 1 April 2003, after the Customs and Excise Department and the Trade Facilitation Division and Sta ...
seeks to warn the public about the dangers and stiff penalties for activities involving illicit tobacco trade. The campaign encourages citizens to report illegal activities and educates the public about identifying illegal cigarettes through: radio networks, cable television, outdoor and print advertisements, roadshows and community engagement. Efforts resulted in a 30.4% decrease in the number of illegal cigarette buyers caught. Hong Kong United Against Illicit Tobacco (2013) This movement aims to consolidate opposition to illicit trade, educate the public to move the issue up the government's priority list, and sell the public on the idea that illicit tobacco only benefits criminals. Stop Illegal Cigarettes (South Africa) This campaign, backed by the Tobacco Institute of Southern Africa, comprises tobacco industries working together to tackle illegal cigarette trade among retailers and increasing consumer awareness. Trusted Trade Network (UK) This network has been designed to rid the world of counterfeit and illicit goods through multi-stage authentication measures, working from the company straight to the consumer.


See also

*
Chop chop (tobacco) Chop-chop, also known as loose tobacco, is an Australian term for untaxed illegal tobacco, such as that which is homegrown. The practice of using chop-chop emerged in avoidance of heavy excise and taxation levies, sharply lowering the cost compare ...
*
Human trafficking Human trafficking is the trade of humans for the purpose of forced labour, sexual slavery, or commercial sexual exploitation for the trafficker or others. This may encompass providing a spouse in the context of forced marriage, or the extrac ...
*
Illegal drug trade The illegal drug trade or drug trafficking is a global black market dedicated to the cultivation, manufacture, distribution and sale of prohibited drugs. Most jurisdictions prohibit trade, except under license, of many types of drugs through ...
* Protocol to Eliminate Illicit Trade in Tobacco Products, articles 8-13 *
Rum-running Rum-running or bootlegging is the illegal business of smuggling alcoholic beverages where such transportation is forbidden by law. Smuggling usually takes place to circumvent taxation or prohibition laws within a particular jurisdiction. The ter ...


References


External links


Database of Cigarette Smuggling Activities around the world
{{Authority control Cigarettes Tobacco control Trade by commodity Organized crime activity Smuggling Organized crime