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Category: Illicit Trade

  • Modernization and Enforcement Needed for Pakistan’s Illicit Crisis

    Modernization and Enforcement Needed for Pakistan’s Illicit Crisis

    Pakistan’s tobacco industry is facing mounting pressure as illicit cigarettes tighten their grip on the market, eroding government revenue and undermining the legitimate sector, according to experts. Macroeconomic analyst Osama Siddiqui said the country needs a robust track-and-trace system and stronger coordination among enforcement and revenue authorities to monitor production, distribution, and retail.

    “Without a decisive crackdown on the illicit tobacco trade, Pakistan’s legal industry will continue to suffer while the black market thrives unchecked,” Siddiqui said. “A modernized supply chain and sustained enforcement are the only ways to reclaim lost revenue and restore market fairness.”

    Recent estimates indicate that illicit cigarettes now make up more than half of total sales, costing the national exchequer over Rs 415 billion ($1.5 billion) annually. The smuggled, untaxed, and/or products sold below the legal minimum price continue to weaken the formal industry’s competitiveness while fueling organized black-market networks, experts say.

  • Maldives Faces Surge in Smuggled Cigarettes and Vapes

    Maldives Faces Surge in Smuggled Cigarettes and Vapes

    The number of smuggled cigarettes in the Maldives has now surpassed legally imported, duty-paid cigarettes, Deputy Speaker Ahmed Nazim said today (October 27). Speaking on behalf of the Parliament’s Committee on National Security Services (241 Committee), Nazim said that recent increases in cigarette import duties and the ban on vapes have fueled a spike in illicit trade, costing the state significant revenue.

    Nazim said that smuggled cigarettes and vapes are widely available, often sold openly through social media, and are entering the country through customs channels. He emphasized that the committee’s recommendations, if implemented, would be critical to curbing smuggling and protecting state revenue. “People’s tax money is being lost while others profit,” he said.

    The warning follows a major seizure in April when customs intercepted two containers carrying 13.6 million sticks of cigarettes disguised as plywood cargo, with an estimated value of MVR 122 million ($7.9 million). The containers remain under investigation at Maldives Ports Limited, pending referral to the Prosecutor General’s Office.

  • SA’s Cigarette Market ‘Captured by Criminals’

    SA’s Cigarette Market ‘Captured by Criminals’

    South Africa’s cigarette trade has been “captured by criminal syndicates,” with three-fourths of all cigarettes now sold coming from illicit sources, the South African Revenue Service (SARS) said this week. Speaking to Parliament’s health committee on October 22, SARS Commissioner Edward Kieswetter said the illegal trade has drained billions in tax revenue and poses a growing threat to the economy. Research from the University of Cape Town, Ipsos, and Tax Justice SA shows the illicit tobacco market has ballooned from 19% in 2014 to 75% in 2025, costing the state roughly R84 billion ($4.9 billion) in excise losses between 2020 and 2022.

    Kieswetter described the trade as “industrial-scale criminality,” involving money laundering through gold refineries, property schemes, and offshore investments. He linked the rise of illicit tobacco to weakened enforcement between 2014 and 2018, during the Zuma era, which saw oversight dismantled and revenue stagnate despite steady consumption.

    The South African Police Service (SAPS) confirmed that the illicit cigarette trade has become a “national priority threat” linked to organized crime, saying the trade now operates through five-tiered syndicates spanning financiers, smugglers, and distributors connected to drug trafficking and human smuggling networks. Most contraband enters through Zimbabwe, Mozambique, and Botswana, it said.

  • Australia Launches National Taskforce to Combat Illicit Tobacco Crisis

    Australia Launches National Taskforce to Combat Illicit Tobacco Crisis

    With Australia’s demand for black-market tobacco surging in recent years, driven by steep tax hikes on legal products, authorities have announced a new multi-agency taskforce set to target the organized criminal networks behind it. The Illicit Tobacco National Disruption Group, led by the Australian Border Force, will unite federal, state and territory police with agencies including AUSTRAC, the Australian Criminal Intelligence Commission, the ATO, and Services Australia.

    Backed by almost A$190 million ($124 million) in new funding aimed at dismantling smuggling and distribution operations, the crackdown will examine every stage of the supply chain, from pre-border smuggling to warehouse storage and local street sales. The taskforce will focus on mid-level criminals who import, distribute, or sell illegal tobacco, while also targeting financial flows that sustain the trade. Home Affairs Minister Tony Burke said the coordinated approach was vital as illicit tobacco networks were increasingly tied to broader organized crime.

    “The same criminal groups are involved in organized tobacco, arson and the drug trade,” Burke told the ABC’s Insiders program. “If there’s a cohesion of threats and a convergence of threats, there needs to be a convergence of protection in responding.”

  • Singapore Busts Major Vape Smuggling Syndicate Linked to Malaysia

    Singapore Busts Major Vape Smuggling Syndicate Linked to Malaysia

    Singapore authorities announced the dismantling of a large-scale vape smuggling syndicate operating between Malaysia and Singapore, arresting 12 suspects and seizing over 64,000 vaping devices worth nearly RM2 million ($460,000). The suspects—11 men and one woman aged 25 to 35—were detained on October 16 during a joint operation led by the Singapore Police Force with support from the Criminal Investigation Department, Police Intelligence Department, and Special Operations Command.

    Police said the syndicate was responsible for importing and distributing vapes to local buyers. The arrests took place at a car park where the group was allegedly distributing devices. Follow-up raids uncovered two storage facilities containing the illegal goods, alongside cash, multiple mobile devices, and eight vehicles used in the smuggling operation.

    All 12 suspects were charged in court for offenses under Singapore’s Tobacco (Control of Advertisements and Sale) Act 1993, which prohibits the import, sale, and distribution of vapes. Four face conspiracy charges, while eight are charged with possession for sale. Offenders can be fined up to S$10,000 ($2,300) or jailed for six months for a first offense, with harsher penalties for repeat violations.

  • Ukraine’s Illegal E-Cigarette Market Costs $180M in Taxes

    Ukraine’s Illegal E-Cigarette Market Costs $180M in Taxes

    Ukraine’s e-cigarette market is almost entirely illegal, with the shadow market accounting for 93% of consumption, according to Mykola Pasichnyi, professor at the Kyiv National University of Trade and Economics. About 40% of vaping liquids are smuggled, while 60% is counterfeit and locally produced, he said.

    The illicit trade causes the government to lose an estimated 7.5 billion UAH ($180 million) annually in taxes, including excise, VAT, and local levies. Pasichnyi warned that combating this requires stronger enforcement by customs, border guards, and tax authorities, along with dedicated funding.

    Despite the scale of the problem, Ukraine’s draft 2026 budget allocates only an additional 13,500 UAH ($324) for the Bureau of Economic Security and none for customs reform, raising concerns over government priorities. Experts say urgent action is needed to regulate the market, recapture lost revenue, and curb the illegal trade.

  • Greece Fears EU Tobacco Tax Hike Will Fuel Smuggling Surge

    Greece Fears EU Tobacco Tax Hike Will Fuel Smuggling Surge

    Greece is warning that the European Commission’s sweeping proposal to raise tobacco taxes could trigger a sharp rise in cigarette smuggling, undermining both revenue and public health goals. The reforms — part of the EU’s effort to modernize its Tobacco Taxation Directive and introduce a new European levy — could push the average price of a cigarette pack in Greece from €4.60 to €7.00, an increase of more than 50%.

    At the Economic and Financial Affairs Council (ECOFIN) meeting, Greek Finance Minister Kyriakos Pierrakakis cautioned that steep excise hikes would “lead to a rise in smuggling,” citing Greece’s experience and its porous borders with non-EU countries, a key transit point for illicit tobacco. He warned that drastic price differences across regions would create new incentives for cross-border trafficking and black-market trade, threatening legal retailers and state revenues alike.

    Greece, which already has one of the highest smoking rates in the EU at around 30%, is particularly vulnerable to illicit trade. The government argues that the proposed tax levels could push many smokers toward cheaper, untaxed cigarettes, further expanding an underground market that already costs the country millions in lost revenue. To prevent this, Athens is advocating for a more moderate tax path, a longer adjustment period, and weight-based taxation for new nicotine products — balancing fiscal goals with the urgent need to curb smuggling.

  • EU Tobacco Tax Would Worsen Cyprus’ €22M Illicit Losses

    EU Tobacco Tax Would Worsen Cyprus’ €22M Illicit Losses

    Cyprus joins 11 other EU member states in opposing the European Commission’s plan to dramatically increase tobacco taxes, as officials warned the move could worsen the country’s growing illicit cigarette trade, which already costs €22 million annually in lost revenue. At 29%, Cyprus has the seventh-highest smoking rate in the EU.

    The proposal, discussed at the Economic and Financial Affairs Council in Luxembourg, would nearly triple minimum excise duties on cigarettes and, for the first time, introduce EU-wide levies on e-cigarettes and heated tobacco products. Under the plan, minimum cigarette taxes would rise from €90 to €215 per 1,000 cigarettes, pushing the price of a pack in Cyprus from €4.50 to as much as €7.50, while hand-rolling tobacco would almost double in cost. Next-generation nicotine products would face a 45% minimum tax from 2028, increasing to €88 per 1,000 units by 2032.

    Cyprus already faces a mounting smuggling crisis, with illicit cigarette consumption rising to 14.3% in 2024, up from 11% the previous year—equal to 130 million illegal cigarettes consumed. Across the EU, illicit consumption reached 38.9 billion cigarettes, causing €14.9 billion in lost revenue.

  • Northern Ireland Busts ‘One of the Largest’ Illegal Tobacco Factories

    Northern Ireland Busts ‘One of the Largest’ Illegal Tobacco Factories

    Authorities in Northern Ireland dismantled what is believed to be one of the country’s largest illegal tobacco factories, following an October 5 raid by HM Revenue and Customs (HMRC) with support from the police. The operation uncovered a “state-of-the-art factory” equipped with expensive machinery, professional extraction equipment, and soundproofing insulation. Officers seized nine tons of tobacco and 1.3 million cigarettes, with an estimated value of over £3 million in unpaid duty. Seven men were arrested on suspicion of fraudulent evasion of duty, and investigations are ongoing.

    Dermot Clarke, operational lead in HMRC’s Fraud Investigation Service, described the site as “one of the most sophisticated tobacco factories we have ever uncovered in Northern Ireland,” warning that illicit trade harms public services, undermines legitimate businesses, and funds other criminal activity.

  • Cigarette-Smuggling Balloons Shut Down Lithuanian Airport

    Cigarette-Smuggling Balloons Shut Down Lithuanian Airport

    Balloons carrying thousands of packs of illicit cigarettes shut down the Vilnius Airport in Lithuania when they floated into the country’s airspace.

    According to the National Crisis Management Centre (NCMC), 25 meteorological balloons were detected entering the country from Belarus, and two ended up directly over the airport.

    The “airspace violations” follow a number of drone incursions suspected of being linked to Russia disrupting air traffic, according to the BBC. Russia has denied any involvement.

    “Balloons with contraband cargo—cigarettes from Belarus—are nothing new in Lithuania, Latvia, and Poland,” said a NCMC spokesperson. This year, 544 balloons have been recorded entering Lithuania from Belarus, according to the spokesperson. Last year, 966 balloons were recorded.

    “Meteorological balloons are a rudimentary tool used by smugglers—they are cheaper than drones for transporting cigarettes from Belarus,” the spokesperson said. “Our services’ aim is to seize the largest possible quantities of contraband and to detain organizers and perpetrators so that this activity is unprofitable and does not pose a risk to civil aviation.”