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Category: Illicit Trade

  • Hong Kong Sees Surge in Visitors Carrying Illicit Cigarettes

    Hong Kong Sees Surge in Visitors Carrying Illicit Cigarettes

    Cigarette smuggling occurrences in Hong Kong surged 80% last year, accounting for 68% of the total number of cases handled by Hong Kong Customs, officials said. At a news conference today, the Customs and Excise Department said more than 21,000 of the 31,000 total cases they handled in 2024 involved illicit cigarettes.

    Chan Tsz-tat, who became the city’s Commissioner of Customs and Excise in December, attributed the surge in cigarette smuggling cases to a 94% increase of inbound travelers found with cigarettes that exceeded the 19-stick duty-free limit. Chan said the underlying reason for the increase is that Hong Kong increased the tobacco duty from HK$1.9 (24 US cents) to HK$3.3 per cigarette over the past two years.

    Customs seized about 600 million sticks of illicit cigarettes, which is actually a decrease of 6% compared with the previous year as smuggling syndicates are lowering the number of cigarettes being smuggled at one time and diversifying smuggling channels to minimize losses. Customs officials made 40 large-scale cigarette confiscations, during which it seized 328 million cigarettes. 

  • BAT: Illicit Vapes Making Market “Unsustainable”

    BAT: Illicit Vapes Making Market “Unsustainable”

    British American Tobacco’s growth in smoke-free products was deemed to be dragged down by the prevalence of illicit vapes in the US market, making for disappointing numbers in 2025. The company reported that vape sales in the US fell 0.8% last year, with price increases failing to make up for a slump in volumes, a sign that competition from unauthorized manufacturers is eroding its market share.

    Cigarette volumes in the US plunged 10.1%, BAT said, blaming a downturn in consumer spending and an increase in the discount category, where the company does not operate. The company is forecasting growth in adjusted operating profit of 1.5% to 2.5% for 2025.

    “We all understand the situation is unsustainable in the US on the vapor side,” said Chief Executive Officer Tadeu Marroco on a call with reporters, adding that the illicit vapes mean that users have no control over the specifics of what they are consuming. “Hopefully the new administration will bring a new way to think about enforcement.”

  • Lithuanian Customs: Huge Increase in Counterfeit Cigarettes from Latvia

    Lithuanian Customs: Huge Increase in Counterfeit Cigarettes from Latvia

    Lithuania’s State Border Guard Service says it has already intercepted half a million packs of illegal cigarettes coming into the country from Latvia, after only confiscating 111,000 illegal packs last year. Lithuanian customs officials say there has been a huge increase in the production of counterfeit cigarettes in Latvia, which are ending up on the Western European market.  

    “Illegal cigarette production in Latvia was particularly active last year, and the scale is really impressive as 30 truckloads were intercepted at the end of last year,” said Darius Zvironas, director general of the Lithuanian Customs Department. “Not the total amount produced, but the amount waiting to be shipped out. These are huge figures.

    “The flow of such cigarettes from Latvia goes through Lithuania, mainly towards Western Europe, and some of them end up in Lithuania.”

    Earlier this week, a shipment of smuggled cigarettes from Latvia worth €620,000 was intercepted in the Raseiniai District.

  • Queensland Cracks Down on Illicit Trade

    The Queensland government is intensifying efforts to combat the illegal trade of tobacco and vapes, which it claims is being exploited by criminal gangs. Health Minister Tim Nicholls revealed that 350-400 stores, including repeat offenders, are under surveillance, with recent raids seizing millions of illicit cigarettes, tons of loose tobacco, and tens of thousands of illegal vapes. Nicholls emphasized the need for stricter financial penalties, arguing that current fines, capped at $3,200 for individuals and $10,000 for corporations, are insufficient to deter the lucrative trade. Discussions are underway with the attorney-general to introduce harsher penalties.

    Meanwhile, the government faces mounting pressure to release the delayed Mid-Year Fiscal and Economic Review (MYFER). Labor’s Shannon Fentiman criticized the delay, suggesting the government is buying time to address fiscal mismanagement and accusing the LNP of stalling after their October election victory. Nicholls defended the postponement, citing efforts to uncover past Labor overspending and ensure an accurate portrayal of state finances. He dismissed opposition criticism as desperation, maintaining that the government is prioritizing transparency and accountability in its economic reporting.

  • Illegal Cigarette Factory Dismantled in Latvia

    Illegal Cigarette Factory Dismantled in Latvia

    Photo: Europol

    Latvian authorities dismantled a large illegal cigarette factory last week.

    The massive illegal manufacturing site was fully equipped with production machinery and raw materials. Police detained 32 people and seized nearly 300 million cigarettes, along with approximately 47 tons of leaf tobacco.

    If the cigarettes had entered the market, they would have deprived the Latvian state of more than €75 million in revenues, according to authorities.

    Searches were conducted simultaneously at multiple locations. Police carried out 26 searches in Riga, discovering warehouses containing cigarettes and detaining seven individuals, including six Latvian and one Russian national.

    Meanwhile, the state border guard carried conducted eight searches in Ludza, Rēzekne and Daugavpils, detaining 25 Ukrainian nationals at the Ludza factory, where counterfeit cigarettes were being manufactured under well-known brand names.

    The investigation was supported by Europol, which provided analytical support, and the Lithuanian Customs Criminal Service.

  • Thailand Launches Track-and-Trace System

    Thailand Launches Track-and-Trace System

    Photo: rangizzz

    Thailand is launching a track-and-trace system that allows smokers to verify the authenticity of their cigarettes by scanning a QR code, reports The Pattaya News.

    According to authorities, the innovation enhances tax collection efficiency, promotes transparency, and ensures compliance with international standards.

    Consumers can use smartphones to scan unique QR codes on cigarette excise stamps, accessing details such as the brand, manufacturer, tax payment date, shipment location and price.

    Discrepancies between the displayed information and the product can indicate contraband or counterfeit goods. Such illicit products may not meet quality standards and could pose serious health risks due to unregulated ingredients, says the Thai government.

    The system allows the public to report suspicious items directly to the Excise Department through a built-in whistleblowing feature.

  • Sophisticated Illegal Factory Dismantled in Spain

    Sophisticated Illegal Factory Dismantled in Spain

    Image: Paco Ayala

    Authorities dismantled a large a large counterfeit cigarette factory in Spain’s Malaga province, reports Sur.

    Guardia Civil officers confiscated 1,448 packs of counterfeit cigarettes from the facility, which operated 24 hours a day and distributed cigarettes throughout Spain. The illegal factory counterfeited four internationally known brands and had an estimated turnover of €4 million ($4.2 million) a month.

    Police were impressed by the operation’s level of sophistication. The facility was powered by a self-contained generator and stored 500 liters of fuel. To avoid detection, the factory operators had soundproofed the generator and made an exhaust pipe to expel the gases.

    In addition to the finished cigarettes, authorities confiscated a large amount of materials such as paper, filters and machinery, along with printing plates with the names of the commercial brands and packets ready to be assembled.

  • Illicit Trade Hurts PTC’s Sales

    Illicit Trade Hurts PTC’s Sales

    Image: Ali Sher

    Competition from illicit tobacco products caused Pakistan Tobacco Co.’s (PTC) sales to drop by 11.26 percent in the first quarter of the current fiscal year as compared to 2023-2024.

    “The legitimate tobacco industry in Pakistan faces continued challenges as illicit cigarette sales have reached alarming levels,” PTC’s senior regulatory affairs manager, Qasim Tariq, was quoted as saying by the Associated Press of Pakistan.

    During the period under review, PTC sold 6.3 billion cigarettes, against 7.1 billion in the comparable 2023 quarter.

    PTC is not the only organization impacted by illicit trade. In a recent statement to the Senate Standing Committee, the Federal Board of Revenue (FBR) revealed that 50 percent of cigarettes were being sold in Pakistan illegally, causing the government to miss out on much-needed tax revenue.

    Tariq attributes the problem, in part, to excessive tobacco taxation levels. In February 2023, the government increased the Federal Excise Duty by more than 150 percent, driving many smokers to purchase their tobacco on the black market instead. “As a result, there is an estimated PKR300 billion loss to government revenue which is essential for public services, infrastructure and economic development initiatives,” he remarked.

    While commending the FBR for its enforcement efforts against illicit tobacco trade, Tariq emphasized that isolated measures would not be enough to address the problem. He believes that the market for illicit products remains strong due the FBR’s limited resources and inconsistent enforcement at the retail level.

    “PTC strongly advocates for the full and consistent implementation of a track-and-trace system in all regions, including Azad Jammu and Kashmir, to enable authorities to identify and monitor products, reduce tax evasion and ensure only legitimate products reach consumers,” he said.

  • Illicit Market Thriving After Flavor Ban: ITCAN

    Illicit Market Thriving After Flavor Ban: ITCAN

    Image: Ahmed

    One year after Quebec banned non-tobacco flavored vapes, most vapers are buying such products illegally in the province, according to Imperial Tobacco Canada (ITCAN).

    In a survey carried out by Leger, 61 percent of vapers said that they purchased non-tobacco flavored vapor products in the past 12 months. Forty percent of those respondents said that they purchased an illegal flavored vapor product from a vape shop, and 33 percent of those respondents said they purchased flavored vapor products online. Forty-seven percent of those respondents said they knew it was illegal when they purchased a flavored vapor product

    “If the government’s objective was to create an untaxed and unregulated vapor market, then well done and mission accomplished,” said ITCAN Vice President of Corporate and Regulatory Affairs Eric Gagnon in a statement.

    ITCAN attributed the problem in part to weak enforcement. “A report from the Ministère de la Santé et des Services Sociaux (MSSS) website reveals that only 150 (38 percent of all vape shops) have been inspected by MSSS,” the company wrote. “Worse yet, very few fines have been issued with reports showing only 28 of those 150 received fines, even though more than 90 percent are uncompliant.”

    ITCAN urged the government to train inspectors, issue fines heavy enough to deter illegal players and conduct an “enforcement blitz” to demonstrate the gravity of the situation, among other suggestions.  

  • Maldives Intercepts Illegal Cigarette Shipment

    Maldives Intercepts Illegal Cigarette Shipment

    Photo: Sergey

    The Maldives Customs Service intercepted more than 8,000 cartons of cigarettes illegally shipped into the country on a fuel tanker operated by Hawks, one of the nation’s leading fuel importers and distributors, reports The Edition.

    Under a court order, authorities subsequently searched the Hawks Boatyard on suspicion that more cigarette cartons may be stored there. “So far in this operation, approximately 1,695 million cigarette sticks of Manchester brand have been found during the search of Hawks Boatyard, in the accommodation block and workshop,” the customs service wrote in a statement.

    The agency said that the cigarettes were brought in on MT Hawks Javaahiru and taken to Thilafushi on a local boat owned by the company, which was unloaded after regular business hours.

    A senior Hawks official told Mihaaru News that company management was not involved in the smuggling operation. “We are also hearing that this was done by some employees in connection with some foreigners,” he was quoted as saying. “Our management only learned of this when police also came with a court order to search the premises,” the official said.

    The official said Hawks was cooperating with authorities and would conduct an internal investigation.