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Category: Illicit Trade

  • Belgium’s Cigarette Black Market Soars

    Belgium’s Cigarette Black Market Soars

    Cimabel, the cigarette manufacturers’ federation for Belgium and Luxembourg, said that 36.5% of consumed cigarettes in Belgium dodged taxation in 2024, a staggering increase from the 20% in 2023. While only 1% of the cigarettes are counterfeit, Cimabel blames “excessive” tax hikes imposed by the previous federal government on legal products are allowing organized crime syndicates to smuggle in illicit product from Bulgaria to sell significantly cheaper.

    Already with a reputation as a smuggling hub for arms and drugs, Cimabel warns that Belgium authorities are now tasked with getting on the global bandwagon to reduce cigarette smoking without opening the door for criminals.

    “The state is hemorrhaging revenue while criminals rake in millions,” Cimabel said. “The federation is now calling for a rethink on excise policies, urging the government to strike a balance between public health and stopping illicit traders from lighting up their profits.” 

  • Report: Massachusetts’ Restrictions Created Huge Illicit Market

    Report: Massachusetts’ Restrictions Created Huge Illicit Market

    A new report says that Massachusetts, one of the states at the forefront of fighting tobacco and nicotine with taxes and regulations, saw a 21,000% increase in illegal vape seizures last year. The Massachusetts Multi-Agency Illegal Tobacco Task Force (which is under the umbrella of the state’s Department of Revenue) said state police vape seizures jumped from 1,326 units to 279,432.

    The report also found there is a thriving market for untaxed menthol cigarettes, flavored cigars, and other banned products, all presumedly powered by state policies like high taxes and strict prohibition.

    “It just shows that, in the state’s own report, black market sales will rise or thrive because of this,” V.J. Mayor, the CEO of the Northeast Wholesalers Association told Inside Sources. “And it doesn’t achieve the public health outcome that the state is looking for when it increases state excise taxes on cigarettes.

    “Massachusetts’ experience proves that overly restrictive policies do not eliminate the problem, they simply drive it underground. This fuels a thriving black market, undermines legitimate businesses, and ultimately shortchanges the state’s revenue.”

    The state’s restrictive policies date back to 2019’s “An Act Modernizing Tobacco Control” law, which banned the sale of flavored tobacco products, added new regulatory requirements, and placed a 75% excise tax on electronic nicotine systems. It also opened the door for local authorities to extend their own controls, with numerous towns adding more taxes, creating generational bans, and outlawing specific products.

    “These numbers are absolutely staggering and prove what [we] warned from the start—Massachusetts has created the perfect environment for illegal smuggling,” said Peter Brennan, executive director for the New England Convenience Store and Energy Marketers Association. “Our members are losing customers to the illicit market every day, and the state is bleeding tax revenue because criminals are filling the void created by excessive taxes and product bans.”

    Paul Craney, from the free-market Massachusetts Fiscal Alliance think tank, says Massachusetts has one of the highest rates of consumers who buy tobacco products without paying state taxes as people cross the border into New Hampshire to buy the products significantly cheaper, and then also end up doing more shopping for alcohol, groceries, and more. The Tax Foundation and Mackinac Center for Public Policy found that between 2007 and 2022, New Hampshire’s government received $955 million from Massachusetts smokers.

    “This report is also clear evidence of just how misguided additional prohibitions would be,” Brennan said. “Ideas like creating a so-called nicotine-free generation or limiting sales of nicotine products to adult-only stores will only make a bad situation worse—driving even more consumers to illegal sellers, costing even more tax revenue, and putting even more pressure on our small businesses.”

  • Philippines Looks to Tighten Vape Import Laws 

    Philippines Looks to Tighten Vape Import Laws 

    Potential new requirements have been drafted in an administrative order to tighten measures against the illegal trade of vape products, promote consumer safety, and streamline import procedures in the Philippines. Today (March 10), the Department of Trade and Industry asked the public and stakeholders to help provide insights for its amended documentary requirements in the issuance of a Statement of Confirmation (SOC) for product importers. The SOC is a mandatory certification that verifies the legitimacy and compliance of imported vape products and tobacco items.

    In the proposed order, importers would need to submit an expanded set of documents consisting of a packing list, commercial invoice, bill of lading/airway bill, production batch details, and a valid Philippine Standard License. Additional compliance requirements include a P150,000 ($2,550) surety bond, a valid certificate of registration from the Bureau of Customs, proof of billing and ownership, or lease of warehouse space, and an excise tax return with a Bureau of Internal Revenue stamp.

  • Hong Kong Officials Seize $3.8M in Illicit Products

    Hong Kong Officials Seize $3.8M in Illicit Products

    Today (March 7), Hong Kong customs officers seized more than 6 million illicit cigarettes and heated tobacco products worth more than HK$29 million ($3.8 million) in two separate operations.

    In one operation, two men were arrested with 6 million cigarettes that are relatively unpopular in the area, stored in a truck and warehouse.

    “It is believed that the products would later be exported to other countries,” said Chan Sing-lung, a senior investigator of Customs’ Revenue Crimes Investigation Bureau. “But we do not rule out the possibility that some might get into the local illicit cigarette market for sale.”

    Earlier in the morning, a mainland man was arrested with 90,000 illegal cigarettes and 110,000 illicit heated tobacco products. Another 140,000 duty-not-paid cigarettes from Japan and alternative smoking products were found in his hotel room, together with a large number of empty bags for Japanese duty-free goods.

    Officials said the contraband was part of a larger smuggling operation from Japan.

    “Our investigation shows the group took advantage of air passengers to bring illicit tobacco products into the city, store them in hotel rooms and then distribute them to customers,” said Wong Wing-yuen, a senior investigator of the Customs and Excise Department.

    In the past half month, 13 men and eight women were arrested, mostly mainland tourists traveling from Japan. They were involved in 20 cases of 600,000 untaxed cigarettes and 240,000 alternative tobacco products, with a total market value of HK$4 million ($520,000).

  • Sri Lanka Destroys $4 M in Illicit Cigarettes  

    Sri Lanka Destroys $4 M in Illicit Cigarettes  

    Sri Lankan customs officials destroyed $4 million worth of illegally imported foreign cigarettes this week in Colombo. The cigarettes were confiscated in 2018, 2022, and 2024. According to customs spokesman Seevali Arukgoda, the authorities seized 8.7 million cigarettes during those three years.

    Arukgoda said the agency plans to invest in modern equipment powered by artificial intelligence to improve container scanning and enhance contraband detection.

  • Swiss Airports See All-Time High in Cigarette Smuggling 

    Swiss Airports See All-Time High in Cigarette Smuggling 

    Cigarette smuggling at Swiss airports increased by nearly 28% in 2024, with the majority of the illicit products coming from Turkey, Egypt, Ethiopia, and the Republic of Congo, with most apparently intended to be sold in France. Customs officials discovered 880,000 undeclared cigarettes last year, up from 690,000 in 2023.

    More than 700,000 undeclared cigarettes were seized at Geneva Airport. All foreign couriers stopped while traveling were fined, and those found to be commercial smugglers were banned from entry. Unpaid fines were converted to days in prison for smugglers.

    As examples, customs officials pointed to one day when a 35-year-old Egyptian man was caught with 44,840 cigarettes (220 cartons), and later that day a 25-year-old Greek man had 47,360 cigarettes (235 cartons) in his luggage.

  • Malaysia’s Illicit Tobacco Trade Down, But Evolving 

    Malaysia’s Illicit Tobacco Trade Down, But Evolving 

    Officials in Malaysia announced that 55% of the cigarettes being purchased are illegal, a decline for the fourth consecutive year since 2020’s peak of 63.8%. JT International Bhd (JTI Malaysia) managing director Juliana Mohd Yahaya said law enforcement efforts in curbing illegal tobacco smuggling and a ban on trans-shipments of tobacco products are helping the cause.

    “We expect the incidence of illicit cigarettes to continue to decline this year,” she said at a news conference discussing the nation’s annual Illicit Cigarettes Study for 2024. “What has also contributed to the reduction in illicit cigarette incidence is the ongoing tobacco tax moratorium by the Ministry of Finance. But we know that at some point, [the moratorium] will end, so if the government were to impose an excise increase on tobacco products, we hope that it would be a moderate and predictable one.”

    Another finding from the study was that an ever-increasing number, 13.8%, of illicit cigarettes bore fake tax stamps, leading companies like JTI Malaysia to advocate for the government’s transition from paper-based tax stamps to digital tax codes, aligning with the government’s digitalization drive.

    Malaysia’s nicotine makeup consists of consumers using 23.8% legal cigarettes, 29.9% illicit cigarettes, 25.3% e-cigarettes/vapes/HTPs, and 20.4% of users who use both traditional and alternative products.

  • Thai PM Orders Crackdown on E-Cigs

    Thai PM Orders Crackdown on E-Cigs

    Following a raid in Bangkok that seized 3,000 vapor items worth more than 2 million baht ($60,000) over the weekend, Thailand’s Prime Minister, Paetongtarn Shinawatra, ordered a comprehensive crackdown on e-cigarettes, warning that any officials found complicit will face serious consequences.

    The Thai government’s spokesperson, Jirayu Huangsap, said that the directive comes amid reports of widespread e-cigarette sales and corruption across the country.

     “The Prime Minister has ordered a crackdown on e-cigarettes and urged decisive action against any officials involved,” Jirayu said. “This operation covered just one jurisdiction under the Metropolitan Police Bureau, yet numerous illegal vendors were found operating openly.”

    Jirayu said shops selling the products were not concealed but operated openly on streets with eye-catching displays, making it unlikely that local police patrols would overlook them. He also said some of the shops were operating near schools, with reports suggesting certain officials had accepted bribes to turn a blind eye to these activities.

     “In areas where arrests are made by other agencies, local police must be investigated to determine whether negligence or involvement in bribery is a factor, similar to when illegal gambling dens are discovered in their jurisdictions,” Jirayu said. “I have already reported this to the Royal Thai Police. If commanding officers fail to take action, the problem will persist. The situation has escalated to the point where potent drugs are being mixed into e-cigarettes, resulting in youth fatalities, including cases of lung perforation.”

  • Illicit U.S. Vape Sales at $2.4 Billion for 2024

    Illicit U.S. Vape Sales at $2.4 Billion for 2024

    Sales of illicit, flavored disposable vapes in the United States accounted for 35% of the e-cigarettes sold in convenience stores and supermarkets in 2024, according to Reuters. The $2.4 billion in sales marks a considerable improvement over 2023’s $3.2 billion.

    The research comes from a source at Circana, which could not confirm the data as it is not officially public yet. The company’s data only tracks sales in certain channels such as convenience stores but does not capture vape sales made online, in independent stores, or specialty vape outlets.

    Circana told Reuters that it estimated the entire vape market it tracks to be $6.8 billion last year.

  • Belgium’s Largest-Ever Illegal Cigarette Factory Discovered

    Belgium’s Largest-Ever Illegal Cigarette Factory Discovered

    On Thursday (Feb. 20), Belgian customs officials seized 30 million cigarettes in Lommel (Limbourg), raiding the largest illegal cigarette factory ever discovered in the country. The illicit cigarettes represented more than €14.4 million in evaded taxes.

    Authorities uncovered a fully operational production facility with four complete production and packaging lines running continuously. Approximately 50 people, mainly of Ukrainian, Moldovan, and Romanians, were working at the site. Customs officers also confiscated several tons of tobacco and various branded cigarettes stored in the warehouse.

    This is the first clandestine factory uncovered in 2025, following a record year in 2024 when 12 illegal cigarette production sites were dismantled.