Hong Kong customs seizes HK$208 million in black market cigarettes in 15 days, after tobacco tax took effect in last month’s budget
Customs arrested 538 people and seized HK$62 million worth of illegal tobacco products in 10 days during the first round of the operation between February 19 and 28.
Lau attributed the increase in cigarette seizures to their enhanced enforcement action in combating the trade of illegal tobacco products at all levels and operation’s longer duration in the second phase.
“We also believe that crime syndicates anticipated the possibility of an increase in tobacco tax, so they stockpiled a larger quantity of illicit cigarettes ahead of time to supply the market after the tax hike,” he said.
Financial Secretary Paul Chan Mo-po announced an immediate 80 HK cents a stick increase in tobacco tax as part of his budget address on February 28.
The increase in tobacco tax raised the average cost of a pack of 20 cigarettes by HK$16 to more than HK$90. A pack costs HK$19 to HK$38 on the black market.
Superintendent Lau said local syndicates behind illegal cigarette businesses had turned to places “such as subdivided flats in urban areas” to store illegal tobacco products “in an attempt to evade detection and reduce financial losses”.
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Customs officers discovered HK$2.25 million worth of untaxed cigarettes in two shops at a Tsuen Wan shopping centre on March 7, marking the first time that stores at a mall were found to be used for storing illegal tobacco products.
Lau emphasised that customs would continue to closely monitor their tactics and conduct enforcement actions to crack down on the illegal trade of black market cigarettes.
The largest seizure in the operation was made on March 11 when customs officers discovered HK$76 million worth of untaxed cigarettes in a village hut in Yuen Long.
It was one of the six storage facilities customs officers discovered in the second round of the operation.
On March 6, they discovered HK$26 million worth of contraband cigarettes hidden in four containers in Lok Ma Chau.
To combat seaborne smuggling of black-market cigarettes, they discovered HK$43 million worth of illicit cigarettes in a shipment of frozen food from Taiwan on February 29.
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Among the 776 people arrested between February 29 and March 14, 730 of the suspects were detained at air, land and sea entry points between February 19 and 28,
They were found to be in possession of tobacco products in excess of the quantity allowed under duty-free concession.
Arriving passengers aged 18 or above are allowed to bring 19 cigarettes, one cigar or 25 grams of manufactured tobacco into Hong Kong tax-free for personal use.
According to the Customs and Excise Department, 691 of those caught at control points were fined HK$2,000 and imposed five times the duty payable on the contraband cigarettes because their offences were compoundable under the Dutiable Commodities Ordinance.
Another 39 were charged under the legislation. Possession of contraband cigarettes in Hong Kong is punishable by up to two years in prison and an HK$1 million fine.
Superintendent Auyeung Man-ching of the customs service rail and ferry command also warned that “the more you bring, the heavier the penalty”.
Customs officers confiscated 652 million black market cigarettes worth HK$2.25 billion last year, the highest annual cash value for more than 20 years.