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Successive Illicit Tobacco Busts Show Much More Work To Be Done

A spate of illicit tobacco seizures by New Zealand Customs reveals a sophisticated criminal network, with increasing involvement from gangs and organised crime syndicates. Without a robust policy and enforcement response from the Government, modelled on the illicit drug regime, illegal trade of tobacco will likely grow exponentially.

Last week, the New Zealand Herald reported three arrests in relation to the seizure of 2.2 million illegal cigarettes at the border. The case, which was largest ever seizure of illicit cigarettes at the time, is one of three major seizures since July and is thought to be linked with a Malaysian organised-crime syndicate.

Kirsten Daggar-Nickson, Head of Legal and Corporate Affairs at Imperial Brands Australasia, says the seizures are testament to the excellent work of New Zealand Customs, but illustrate serious gaps in the Government’s policy and enforcement response which must be addressed to combat the trade.

“Customs do an outstanding job with the limited resources and enforcement powers they receive. Unfortunately, they are now outnumbered and under resourced.

“The Government needs to support customs with a robust policy and enforcement regime that can properly deal with the issue of illicit trade in tobacco. The concern is that the New Zealand market could follow growth in Australia which has far greater levels of trade in illicit tobacco sustained by a highly sophisticated network of organised crime groups.”

According to independent research from KPMG UK, New Zealand’s illicit tobacco market was equivalent to approximately $287m in lost excise revenue last year. The latest three seizures represent only a $6.2m fraction of that total.

“New Zealand is now at a decisive moment. When sophisticated criminal groups take over the market it is likely the trade will grow exponentially,” Ms Daggar-Nickson said.

“If you contrast the penalties for illicit tobacco to those for illicit drugs it is simple to understand the attraction. Supply of Class A drugs in punishable by a maximum life sentence while the importation of illicit tobacco, which can be far more lucrative, is limited to a five-year sentence.

“The policy and enforcement response required is therefore very similar to how a country would respond to illicit drug issues. But first, it requires an acknowledgement from policy makers that a very unfortunate downside of well-intentioned tobacco control policy has been encouragement of a criminal environment and that it needs to be dealt with properly as a major crime issue through our judicial, police and border systems.

“The first step to acknowledging the seriousness of the issue is to add it to the Government’s Transnational Organised Crime Strategy which lays out Government’s strategy to address other major threats such as illicit drugs, international fraud, foreign fishing and illegal immigration.”

In 2018, a multi-agency Illicit Tobacco Taskforce (ITTF) was launched in Australia to target and dismantle organised crime syndicates operating in the illicit tobacco trade. The ITTF combines the powers and expertise of the Australian Border Force and Department of Home Affairs with the Australian Criminal Intelligence Commission (ACIC) and other government organisations.

The Australian Government also increased criminal penalties to establish a stronger deterrence to illicit trade activity. Custodial sentences were raised to up to 10 years and fines were raised to up to five times the evaded excise value.

According to Ms Daggar-Nickson the same action must be taken in New Zealand.

“It would be a mistake to assume that New Zealand won’t reach Australian levels of criminal activity unless immediate action is taken by the Government to correct the current policy, sentencing and enforcement.

“New Zealand can learn from the Australian experience. But even their admirable efforts have come too late to stem the flow of illicit tobacco into the country. One-in-five cigarettes smoked today in Australia comes from the black-market and senior Australian Border Force figures will tell you that trade is close to uncontrollable.

“New Zealand can only avoid the problems in Australia if it commits the resources to combatting the problem now.”

© Scoop Media

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