Cigarette Smuggling

Cigarettes are one the world's most taxed and smuggled goods. Each state or country imposes different levels of taxation on the product. The differences create a financial opportunity that criminals, including terrorists, often exploit. Cigarette smuggling has become a sizable revenue stream for illicit actors. The global cigarette black market accounts for 8 to 10 percent of all cigarettes sold worldwide and annually costs governments between US$40 billion and US$50 billion in lost tax revenues.

The illegal market contains counterfeit and contraband cigarettes. Criminals produce counterfeit cigarettes—usually containing substandard, unregulated ingredients with increased levels of toxins such as arsenic, cadmium, lead, and thallium—and then package them to imitate well-known and trademarked cigarette brands, such as Marlboro. Contraband cigarettes are cigarettes produced by legitimate manufacturers who produce ...