Tobacco Asia

24 tobaccoasia Issue 1, 2026 January / February He warned that criminal supply chains often involve po‑ litically connected actors, cross‑border corruption, and diverse product flows that challenge the simplicity of data‑driven mod‑ els. His examples from Georgia demonstrated the issue: in one week, authorities dismantled a counterfeit cigarette ring linked to a former boxing champion, uncovered factory‑scale cigarette production connected to some of the country's defense offi‑ cials, and investigated an assassination with ties to illegal tobac‑ co shipments. "Complex organized crime," he said, "cannot be reduced to an algorithm." Global trade flows It was soon time to move from country case studies to under‑ standing how illegal supply chains work. Nick Hodsman, head of anti‑illicit trade policy at British American Tobacco (BAT), explained how "mirror data"—the comparison of export dec‑ larations from origin countries with import declarations at the destination—reveals systemic enforcement gaps. In a US case study on e‑liquids, China reported exporting roughly five times more volume than US customs recorded as arriving. Free‑trade zones make enforcement more challenging. Containers can be relabeled during transit. Items shipped as "food products" or "noodles" leave Asia and arrive in Europe as "leather belts" or generic "consumer goods." These discrep‑ ancies hamper surveillance systems that rely on accurate decla‑ rations to identify suspicious cargo. Lillian Ortega, owner and chief regulatory strategist at WOW! Solutions and a former US Food and Drug Administration enforcement official, said the US faces its own structural vulnerabilities. FDA reviews premarket tobacco product applications (PMTA) and authorizes nicotine products for sale in the US mar‑ ket. The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) enforces the Prevent All Cigarette Trafficking (PACT) Act, which was amended in 2021 to include electronic nicotine deliv‑ ery systems (ENDS) like vapes and e‑cigarettes under tobacco trafficking regulations. US Customs and Border Protection (CBP) oversees border security, while state governments enforce sepa‑ rate licensing and tax rules. When a court case expanded FDA's authority in 2016 to include vapor products, many items already on store shelves remained under enforcement discretion, creating a gray market that persists to this day. The result is a legal landscape where about 26 million PMTA submissions have led to only 39 authorized vapor prod‑ ucts (all owned by current or former tobacco product manu‑ facturers) and 20 authorized nicotine pouches. Everything else remains unauthorized—yet widely accessible. Ortega empha‑ sized the policy lesson shared across regions: "Make the legal route faster than the illegal one." Without predictable review timelines, authorized products cannot reach shelves in enough volume to displace illegal suppliers. And without coordinated enforcement, illegal products fill the gap. In Europe, Hodsman compared Hungary's restrictive to‑ bacco rules, which encourage consumers to turn to cross‑border and online sellers, leading to an estimated 10% decline in excise revenue, versus more stable regulatory environments like Por‑ tugal, where illegal markets remain relatively contained. In the UK, reasonably strong regulations have been undermined by weak enforcement at the frontline, resulting in the widespread sales of unauthorized disposable vapes. The industry continues to work on creating policies that better limit the illegal tobacco trade, which is more than a criminal issue. Credit: Dieter G., Pixabay.

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