‘Trusted insiders’ help smuggle tobacco into Aoteaora, customs say

Tobacco smuggling into Aotearoa is on the rise – and Customs believes that “trusted insiders” are playing an increasing role in the illicit trade.

Smuggling is “increasingly attractive to organized crime groupsif cigarette prices continue to rise across the country, says New Zealand Customs’ annual report 2021/22 released in February.

But as the threat of tobacco smuggling grows, so does the threat of “trusted insiders” aiding in that smuggling, the Customs Service said.

Stuff is aware of three recent cases involving “trusted insiders” who used their privileged positions to undermine customs control and smuggle illicit contraband into the country.

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A trusted insider can be anyone who has privileged access or control over any part of the customs supply chain, said Chief Customs Officer for Fraud and Prohibition Nigel Barnes Stuff.

“That can be anyone, from employees of courier companies to someone who has access to secure areas from an airport or port,” Barnes said.

Organized crime syndicates “undermines” trusted insiders and convinces them – for example through enticement or intimidation – to help move illegal goods without detection.

Barnes be Stuff to a 2017 court case that went unreported at the time, in which five NZ Post employees were convicted of defrauding customs revenue.

The five NZ Post employees teamed up with another person to smuggle 855,600 cigarettes into New Zealand – with a total evasion of more than $700,000.

The group coordinated packs of cigarettes from Korea and then intercepted them at the New Zealand Post International Mail Centre.

They took the packages off a mail belt and placed them in the delivery area before they had to be X-rayed and cleared.

The cigarettes were sold on the black market.

There are six other examples of ‘trusted insiders’ Air New Zealand baggage handlers who imported nearly half a ton of methamphetamine from Malaysia and the US to New Zealand, and three Air China employees who allegedly took cigarettes and other dutiable goods directly from Air China aircraft without declaring them.

Stuff contacted all three entities for comment and asked what, if any, they had done to improve security. Air New Zealand and NZ Post declined to comment. Air China did not respond.

A number of other studies are ongoing, Barnes said.

“Tobacco is a very profitable product in today’s world.

“If you were someone who wanted to sell illegal products, you could make a lot of money selling illegal tobacco and there would be less personal risk than if you were involved in drugsfor example,” Barnes said.

He said easy access to cheap tobacco in the Asia-Pacific regions created a “natural draw” for New Zealand and Australia. It leads to more illegal tobacco smuggling.

“People who engage in tobacco smuggling should not only expect to be caught, but also lose all their ill-gotten gains.”

In the 2022/2023 budget, New Zealand Customs received a further $10.4 million in funding to be spread over the next four years.

The funding will be used to establish a dedicated illicit tobacco investigation team, as well as intelligence and forensic support for tobacco investigations.

“This will allow us to treat the increased levels of tobacco smuggling as the organized crime problem it is, rather than just people trying to get their hands on cheap cigarettes,” Barnes said.

Since 2019, tobacco customs investigations have led to criminal charges against people who smuggled more than 17 million cigarettes and at least 13.5 tonnes of tobacco into Aotearoa.