7 arrested as Hong Kong customs foils HK$100 million contraband cigarette-smuggling operation

Hong Kong customs officers have arrested seven people and seized HK$100 million (US$12.8 million) worth of black market cigarettes in a two-week crackdown on seaborne contraband smuggling activities ahead of the holiday season.

Declared as Christmas lights, flower pots and household products on import documents, the stash was hidden in five shipping containers that arrived from mainland China, Taiwan and Thailand between November 15 and 27, according to the Customs and Excise Department on Wednesday.

A source familiar with the operation said he believed that part of the haul, consisting of 20 cigarette brands, was intended for the local market. The rest was destined to be exported to other places, such as Australia.

“To avoid detection, [international cigarette smuggling] syndicates are using a ruse called the merry-go-round to keep illegal tobacco products circulating through different countries before being smuggled to their final destinations,” the source said.

Hong Kong customs is still investigating the origin and the intended destinations of the illegal cigarettes. Photo: Yik Yeung-man

Apart from the mainland, Taiwan and Thailand, he said the syndicates had also used such tactics for other jurisdictions, including Cambodia, Malaysia, South Korea and Vietnam.

During the two-week operation against seaborne smuggling activities, officers from customs’ revenue crimes investigation bureau selected five containers for inspection.

Senior Inspector Adam Lam Wai-kit said three of the containers were from the Nansha port in Guangdong province, while the remaining two came from Taiwan and Thailand.

About 28 million untaxed cigarettes, with an estimated street value of HK$100 million, had been found in the five containers, he added.

“We believe the illegal tobacco products were intended for the Hong Kong and overseas markets to meet demand during the Christmas and New Year holiday season,” Lam said.

The syndicates took advantage of the busy seaborne logistics services before the festive season to smuggle the contraband and evade detection, he said, adding they hoped “their cargoes will receive less scrutiny at a control point upon entering the city”.

The illicit cigarette stash has been declared as Christmas lights, flower pots and household products on import documents. Photo: Handout

During the operation, customs officers arrested seven men on suspicion of dealing with illicit cigarettes – an offence punishable by up to two years in jail and a HK$1 million fine.

The seven suspects, aged between 24 and 63, included two directors of a logistics company and five drivers. They were released on bail pending further investigation.

The senior inspector said customs was still investigating the origin and intended destinations of the tobacco products and did not rule out further arrests.

The latest haul has brought the total value of the contraband seized so far this year to HK$2.21 billion. The 642 million untaxed cigarettes customs seized this year would have generated HK$1.51 billion in tax revenue if they had been imported legally.

Customs officers seized 732 million illegal cigarettes worth HK$2.01 billion in the whole of last year – the biggest annual haul since records began two decades ago.