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The Problem

Scale of the issue

An issue of global magnitude

The World Health Organization (WHO) estimated that the global illicit trade amounted to 600 billion cigarettes in 2006, which represents about 11 percent of global consumption. Most countries are affected in one way or another.

Illicit trade (non-domestic) incidence 2015

Illicit trade (non-domestic) incidence 2015

Illicit trade in cigarettes is widespread and notable seizures are recorded in almost all regions across the globe. While just a fraction of this reality, seizures reported to the World Customs Organization help illustrating the magnitude of the problem.

As part of their work to tackle the illegal tobacco market, enforcement agencies make a distinction between source countries, transit points, and final destination countries for illicit tobacco.

Free trade zones

Free Trade Zones or Free Zones (FTZs) were established to reduce barriers and facilitate global free trade. However, in recent years organized crime groups have found ways in which these zones can be exploited to move their illicit products (including cigarettes) around the world without detection.

Operation GRYPHON, the World Customs Organization’s first global operation against illicit trade in tobacco, confirmed that:

“Free trade zones also play an important role in the illicit smuggling of cigarettes. Consignments arriving in these zones are subsequently repacked into other containers, enabling the illicit cigarettes to be ‘lost’ or disappear. They then leave the zone as low-value goods (e.g., textiles, etc.), either misdeclared or concealed in other shipments.”

Criminal networks are increasingly using transit or trans-shipment of goods through multiple, geographically diverse ports as a means to disguise the nature of the product and make it more difficult for law enforcement to track their activity.

In some cases, criminals have even established illicit white production facilities in FTZs. As an example, the KPMG SUN Report 2015 reported that 1.3 billion cigarettes within the EU are thought to have originated from the Jebel Ali Free Trade Zone in the United Arab Emirates.