While globally 10% of cigarettes consumed are illicit, this figure rises to 15% in 16 Asian nations. Photo credit: 2happy, CC0.
A recent report from the Transnational Alliance to Combat Illicit Trade (TRACIT) and the EU-ASEAN Business Council revealed the current state of illicit tobacco trade within the Association of Southeast Asian Nations (ASEAN) region.
The report outlines the wide-ranging adverse effects of illicit trade throughout the ASEAN region, encompassing damage to economic growth, investment, employment, environmental conservation, and crime prevention efforts.
Illicit trade often encompasses counterfeit or inferior goods, posing risks to consumer safety. Notably, tobacco smuggling emerges as a significant concern. While globally 10% of cigarettes consumed are illicit, this figure rises to 15% in 16 Asian nations, including ASEAN member states. In 2017, ASEAN governments incurred a tax revenue loss of US$2.9 billion due to illicit tobacco products.
According to the report, cigarettes produced within ASEAN nations are smuggled to other ASEAN countries, as well as to Asia-Pacific countries and various global markets. “For example, there are massive outflows of illicit whites and counterfeits smuggled from Vietnam and Cambodia to Europe. Exports or transshipments from Indonesia and Singapore are also significant,” the report said. “In Thailand, brands exported from Vietnam and Indonesia and that appear to have consignees based in Singapore, Hong Kong, Malaysia and the United Arab Emirates are likely considered goods in transit which receive less scrutiny by Customs.”
While much attention is given to illicit cigarettes, the report notes that other tobacco products, such as smokeless tobacco, are also susceptible to illegal trade. The bans on e-cigarettes in Singapore and Thailand have contributed to an increase in the smuggling of illicit vaping products from neighboring Malaysia, a major producer of e-cigarettes.