KUALA LUMPUR — Regulatory and enforcement gaps are allowing illicit tobacco products to move across Philippine borders, with criminal networks using sea routes linking Malaysia and Mindanao to distribute illegal cigarettes, Japan Tobacco International (JTI) said.
“Smuggling networks do not operate within the boundaries of a single country,” JTI Anti-Illicit Trade Operations Regional Director Valentin Dinca told reporters on Monday.
“They take advantage of gaps between jurisdictions, moving products through different markets and shifting routes to avoid detection,” he added.
This has made stronger regional cooperation necessary, he continued.
The Philippines and Malaysia are major destination markets for illicit tobacco originating from China, the United Arab Emirates, Vietnam, Indonesia and Cambodia.
Malaysia also serves as a transit hub, along with Singapore and Thailand, with the trade corridor extending to Hong Kong and Australia.
Within the Philippines, Mindanao has emerged as a major convergence point for illicit tobacco shipments.
Dinca identified Tawi-Tawi, Sarangani and Zamboanga as provinces where illicit tobacco shipped by sea from Malaysia and Indonesia converges before being redistributed to other domestic markets.
He said traders were exploiting gaps in maritime transport and domestic distribution by using smaller vessels and less visible channels to move products that were originally declared for export into illegal markets.
The Philippines-Malaysia connection was highlighted earlier this year after local police raided a cigarette manufacturing facility in Cebu linked to a Malaysian-based syndicate.
Authorities seized about P1.1 billion worth of contraband.
In June, the Bureau of Customs said it had intercepted 23 containers of illicit cigarettes valued at about P1.716 billion in a joint operation with the National Bureau of Investigation, Bureau of Internal Revenue, and Philippine Coast Guard.
JTI Philippines Director for Corporate Affairs and Communications Shaiful Mahpar said Asean governments should align their export-control frameworks to prevent criminals from exploiting differences in national regulations.
Under the proposal, products intended for export should also comply with the legal and regulatory requirements of their destination markets, including tax stamps and graphic health warnings.
Mahpar said illicit trade networks were operating across borders while enforcement measures often remained limited to individual jurisdictions.
He called for Asean countries to strengthen intelligence sharing and cross-border enforcement cooperation to prevent criminal groups from taking advantage of regulatory differences.
“To effectively combat illicit tobacco, Asean must act collectively and deny criminals the ability to exploit differences between national regulations,” Mahpar said.
“By harmonizing destination-market compliance rules, strengthening intelligence sharing, and enhancing cross-border enforcement cooperation, Asean can transform fragmented national efforts into a coordinated regional defense against illicit trade,” he added.