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Category: Illicit Trade

  • Drug-Laced Vape Ring Busted in Malaysia

    Drug-Laced Vape Ring Busted in Malaysia

    Malaysian authorities, working closely with South Korea’s National Intelligence Service (NIS), dismantled an international drug ring accused of attempting to smuggle 2 million doses of etomidate- and cocaine-laced e-cigarettes into South Korea. Authorities seized nearly 5,000 cartridges and thousands of packaging boxes. Etomidate, a potent anesthetic, can cause severe health risks or death when abused.

    Four suspects, including the 31-year-old Singaporean ringleader, were arrested in June in Malaysia. The group allegedly aimed to distribute 20,000 liquid e-cigarettes monthly via Malaysia and other transit points. The ringleader had set up a fake headhunting business in Seoul’s Gangnam district, targeting South Korean students studying in Singapore to build a distribution network. The NIS began tracking the operation in 2023.

  • Indonesia: Two Arrested for Making Narcotic-Laced Vapes in Apartment

    Indonesia: Two Arrested for Making Narcotic-Laced Vapes in Apartment

    Two people were arrested in North Sumatra, Indonesia, for allegedly operating an illegal drug lab that produced vape liquids infused with narcotics. Acting on a public tip, police raided an apartment and uncovered a makeshift factory that was producing up to 300 narcotic-laced vape cartridges per day, each selling for Rp 5 million ($305).

    North Sumatra Police Narcotics Division Chief Sr. Comr. Jean Calvijn Simanjuntak said police seized 2,965 cartridges, along with raw materials, solvents, flavoring agents, and sweeteners used in production.

    Both suspects were reportedly repeat drug offenders and are believed to have been running the illegal lab for at least six months.

  • Philip Morris Supports India’s Crackdown on Illicits

    Philip Morris Supports India’s Crackdown on Illicits

    On World Anti-Counterfeiting Day, Philip Morris International’s (PMI) India affiliate, IPM India, reinforced its commitment to combat illicit tobacco trade, protect government revenue, and uphold product integrity. The pledge aligns with India’s rollout of pack-level track and trace (T&T) technology, aimed at identifying and curbing counterfeit tobacco products.

    India, the fourth-largest illegal cigarette market globally, sees smuggled cigarettes make up 25% of its domestic market, according to PMI estimates. The company emphasized the critical need for stronger enforcement and collaboration to address the issue, which undermines public health, economic stability, and national security.

    Navaneel Kar, managing director of IPM India, praised the government’s T&T initiative, stating it will enhance transparency and enforcement. PMI says it has implemented T&T systems in over 140 countries, including the EU and GCC states, with positive outcomes in reducing illicit trade.

    Rodney Van Dooren, PMI’s Head of Illicit Trade Prevention for Asia Pacific, called for regional cooperation, noting India’s leadership role and growing influence in tackling counterfeit goods.

  • Thai Police Raid Illicit Vape Facility

    Thai Police Raid Illicit Vape Facility

    Thai police raided a large-scale illegal e-cigarette manufacturing facility this past weekend in the Khu Khot subdistrict, seizing more than 21,000 e-cigarette devices and arresting 29 suspects. Officers stormed a three-story commercial building in Lam Luk Ka district, Pathum Thani Province, which had been transformed into a covert production hub. Behind the main office and worker accommodation, police discovered a sprawling three to four rai (4,800 to 6,400 square meters) factory producing disposable and refillable e-cigarettes.

    Police confiscated 6.1 million baht ($189,000) of illegal products, along with assembly tools, sealing machines, and e-liquid filling equipment. Authorities said the factory began illegal production in early 2025, and had recently begun transitioning from disposable to refillable models, and was in the process of installing a conveyor-belt system to boost output.

  • Article Outlines Role of “Middlemen” in Smuggling Vapes from China to U.S.

    Article Outlines Role of “Middlemen” in Smuggling Vapes from China to U.S.

    Today (June 23), Reuters published an article titled, “How middlemen funnel illegal Chinese vapes into the United States.” In it, reporters Emma Rumney, Kaylee Kang, and Tom Polansek found that China, according to its customs data, exported more than $3.6 billion in vapes to the U.S. in 2024. However, in that time period, according to U.S. customs figures, only $333 million in Chinese vapes were officially received in the U.S.

    “Mismatches in customs data between the U.S. and its trading partners are not uncommon,” the article said, “but a 90% gap was unusual, two customs data specialists told Reuters. Unauthorized vapes often arrive in the U.S. disguised as other items like shoes and toys, according to the U.S. Food and Drug Administration (FDA), which leads efforts to control the vape market.”

    The FDA, which has faced criticism for slow enforcement, is now turning to artificial intelligence and increased inter-agency collaboration to curb illegal imports. The FDA said that over the past two years, efforts by FDA and Customs Border Protection had led to the seizure of around 7.1 million e-cigarettes with an estimated retail value of over $136 million. Executives at British American Tobacco estimate illicit vapes made up 70% of U.S. sales last year, valued at over $8 billion.

    According to the investigation, a small customs firm near O’Hare International Airport in Chicago processed 60% of all vape and vape parts shipments from China in 2024, as recorded by the FDA. Many of these shipments included illegal brands such as Lost Mary and Geek Bar, which the FDA has banned due to their appeal to minors and lack of authorization. The article outlines how these importers operate and have been able to avoid FDA scrutiny.

  • $730K Worth of Smuggled Indonesian Cigarettes Seized in Philippines

    $730K Worth of Smuggled Indonesian Cigarettes Seized in Philippines

    Authorities in the Philippines intercepted a major smuggling attempt involving P43 million ($731,000) worth of Indonesian cigarettes last week off the coast of Zamboanga City, officials confirmed. Police reported two outrigger-type pump boats carrying 749 boxes of imported cigarettes were intercepted on June 18, roughly two miles from Santa Cruz Island. The six crew members, all from Sulu province, were taken into custody.

    The seized contraband was turned over to the Bureau of Customs Region 9 for proper disposition. Over the past eight months, PRO-9 units have confiscated more than 10 tons of Indonesian-branded cigarettes in multiple operations across Zamboanga Peninsula and nearby cities, including Dapitan, Dipolog, and Pagadian.

  • Philippines Planning Track-and-Trace System for Consumer Use

    Philippines Planning Track-and-Trace System for Consumer Use

    The Bureau of Internal Revenue (BIR) in the Philippines is set to roll out a digital track-and-trace system next year that will enable the public to verify the legitimacy of cigarette and vape products using QR codes, BIR Commissioner Romeo Lumagui Jr. said.

    The new system, being developed through a public-private partnership, will allow consumers to scan QR codes on product packaging using their mobile phones. The scanned information will link to a secure website providing detailed data on product origin, legitimacy, and tax compliance.

    Currently, the BIR uses its Internal Revenue Stamp Integrated System exclusively, which only government devices can verify. The planned QR tracker expands verification capabilities to the public, helping expose illicit cigarette and vape products and address loopholes such as fake export claims used to evade excise taxes.

    The rollout faced delays due to procurement and budget concerns, requiring approval from the Department of Economy, Planning and Development (formerly NEDA) and the Department of Finance. A feasibility study and revised terms of reference are currently under review.

  • Malaysia Losing $1.2B to Illicit Cigarettes

    Malaysia Losing $1.2B to Illicit Cigarettes

    Malaysia continues to suffer major revenue losses from the illicit cigarette trade, with an estimated RM5 billion ($1.2 billion) in tax revenue lost each year, according to the latest NielsenIQ Illicit Cigarettes Study released in March.

    After peaking at 63.8% in 2020, illicit cigarette consumption continued its slow decline down to 54.6%, according to the report, with 10 dominant contraband brands accounting for 75% of cigarettes smuggled. The study also raised alarm over rampant tax stamp fraud, noting that 31% of illegal cigarette packs bore counterfeit stamps.

    “Organized smuggling syndicates are growing increasingly sophisticated, posing a serious challenge to enforcement and public health policy,” the report stated. Hotspot states such as Johor, Selangor, and Sabah were identified as major entry and distribution points for illicit tobacco products.

  • Belgium Losing €544M from Illegal and Foreign Cigarettes

    Belgium Losing €544M from Illegal and Foreign Cigarettes

    Legal cigarette sales in Belgium continued to fall in 2024, while the volume of counterfeit and smuggled products increased significantly, according to the 19th annual report by consultancy firm KPMG, commissioned by Philip Morris International.

    Nearly 2.4 billion cigarettes consumed in Belgium last year came from non-domestic sources, a 17% increase compared to the previous year, meaning nearly one in three cigarettes smoked in the country were not purchased through Belgian sales channels. While domestically-produced sales declined, 1.1 billion cigarettes in Belgium were legally purchased abroad last year, an increase of 22%. The volume of counterfeit and smuggled cigarettes in the country also grew, by 13%, to 1.3 billion.

    Imports from Bulgaria tripled since 2020 to 770 million cigarettes last year, as did those from Luxembourg at 740 million in 2024. According to KPMG, the shift to illegal or foreign products is estimated to have cost the Belgian government around €544 million in lost tax revenue last year.

  • EU Sees Highest Rate of Illicit Cigarettes Since 2015

    EU Sees Highest Rate of Illicit Cigarettes Since 2015

    According to the 2024 KPMG study, produced annually and commissioned by Philip Morris Products SA, smokers in the European Union consumed 38.9 billion illicit cigarettes in 2024, a 10.8% increase versus 2023, the highest level since 2015. That number accounts for 9.2% of total cigarette consumption, with governments losing as much as €14.9 billion in tax revenues at a time when many countries face intense economic pressures and rising black markets.

    PMI called for effective policymaking to counter the growing threat of illicit trade, and said it believes that steep and abrupt tax increases are exacerbating the issue and benefitting criminals who supply unregulated, untaxed, and inferior products. To combat this growing threat, PMI urges the adoption of evidence-based regulation with balanced and predictable taxation through tax calendars, continued public-private collaboration, and enhanced support of regional and national law enforcement agencies.

    “The illicit tobacco trade threatens the European economy, public health, security, and social stability; today, higher-taxed and higher-priced markets such as France and the Netherlands are especially impacted by illegally imported and counterfeit goods,” said Christos Harpantidis, PMI’s Senior Vice President, External Affairs. “Its massive socioeconomic impact negatively affects tax collection, job creation, and legitimate businesses, the engine of our European economies. The availability of cheap, unregulated cigarettes in the underground economy also impairs efforts to reduce smoking rates and achieve a smoke-free future.”

    France has the largest illicit market in Europe, reaching 18.7 billion illicit cigarettes consumed last year, 37.6% of total consumption. The Netherlands saw the largest increase in illicit cigarettes, which doubled to 17.9% of total consumption.

    A detailed overview of the results, country profiles, and methodology of the KPMG study is available here.