Arrest For Tobacco Smuggling; Customs Welcomes Sentencing For Largest-Ever Tobacco Fraud Case
A 29-year-old Auckland businessman has appeared in the Auckland District Court today after Customs arrested him in relation to tobacco smuggling. He faces multiple charges under the Customs & Excise Act and the Crimes Act, and more charges are likely.
In early January 2020, Customs examined a sea cargo consignment of new household items, likely for resale, and discovered it contained 75,000 undeclared Chinese-branded cigarettes. The total evasion of Customs duty and GST amounted to $83,365.
Initial enquiries found the name of the person receiving the consignment was a false identity. Subsequent investigations linked the shipment to the businessman, and showed the use of a number of storage facilities and P.O Boxes across Auckland that had been opened using false identities. The storage facilities and P.O Boxes were likely used to facilitate illegal imports, prior to the cigarettes being sold wholesale, using Chinese social media channels.
Customs investigators executed several search warrants in Auckland yesterday, 3 June, resulting in the man’s arrest. Approximately 3,000 cigarettes and around $14,000 in cash were also seized.
Customs Investigations Manager Bruce Berry says the number of illegal tobacco seizures has increased substantially in the past few years, and this latest case is an example of the ongoing trend that Customs has seen during the COVID-19 pandemic.
“Organised crime groups and individuals have been somewhat constrained in their ability to smuggle tobacco, due to COVID-19. Nevertheless, Customs has continued to seize considerable amounts of illegally imported tobacco in recent months, both in sea freight and international mail.”
From January to the end of April 2020, Customs has made 374 interceptions, adding up to 977,637 cigarettes or cigars and 65 kilograms of loose tobacco. This excludes an additional 592 kilograms of tobacco products abandoned by those who did not want to pay taxes.
“Like illegal drugs, the relatively high price of tobacco makes New Zealand an attractive market. We are seeing both organised crime groups and opportunists trying to smuggle tobacco into the country to evade duty and make money. This latest arrest, once again, shows that Customs will do everything it can to stop this illegal activity,” Mr Berry says.
Customs has also today welcomed the sentencing of another Auckland businessman who was arrested at the end of 2018, in what has been Customs’ largest cigarette operation to date. The man was convicted for smuggling 19,419,400 cigarettes, and evading over $18.7 million in Customs duty and GST. He will have to serve 5 years and 3 months’ imprisonment.
“This sentence should send a clear message to organised crime groups and opportunists that Customs is as focused on tobacco smuggling as it is on other illicit commodities. The recent change in tobacco legislation will give us an even greater ability, from 1 July 2020, to take quick enforcement action against law breakers,” he says.
If you have suspicions about someone involved in smuggling cigarettes illegally, call 0800 4 CUSTOMS (0800 428 786) in confidence, or Crime stoppers anonymously.
Last month, Parliament passed legislation that closed a loophole, which allowed some people to import cigarettes and loose leaf tobacco for manufacturing cigarettes and ‘roll your owns’ for sale on the black market without excise tax being paid. From 1 July 2020:
- tobacco products, tobacco leaf and tobacco refuse will become prohibited imports and a person will be required to have a permit to import these products;
- tobacco products cannot be received through the international mail, they must only be imported using a freight forwarder, the fast-freight courier system or as bulk sea or air cargo;
- any tobacco products, leaf or refuse imported without a permit will be seized and destroyed.
A permit is not required to import cigars, cigarillos, water-pipe tobacco, chewing tobacco, snuff and snus. Passengers arriving into New Zealand with tobacco do not need a permit and individual duty-free tobacco limits are unchanged.