KUALA LUMPUR: Illegal cigarette syndicates in the country are circumventing enforcement measures with new logistic routes and technologies, said Retail and Trade Brands Advocacy Malaysia Chapter (RTBA Malaysia) today.
The advocacy group said this came recent statement made by Bukit Aman Internal Security and Public Order Department director Datuk Seri Abdul Rahim Jaafar who said that smuggling syndicates operating along the country's border have moved from using conventional equipment to sophisticated technologies like drones.
RTBA Malaysia managing director Datuk Fazli Nordin said based on the analysis made by the advocacy group, smuggling syndicates are changing the way they operate as a reaction to the enhanced enforcement measures put into place in Budget 2021 to counter the illegal cigarettes trade.
"Large ports in Malaysia used to be the primary route for the illegal cigarettes trade.
"With new restrictions in place, these criminals are now utilising small private jetties and unofficial landing spots throughout Malaysia's coast to bring in their illegal and untaxed products," he said in a statement today.
RTBA Malaysia is an advocacy group that protects businesses in Malaysia and in the Asia-Pacific region from criminal conduct.
According to Fazli, the authorities have seized approximately 76.2 million sticks of illegal cigarettes that came through the coastal route in the first quarter of 2021 alone.
This marked a significant jump when compared to 34 million sticks of illegal cigarettes seized in the whole of 2020, based on news reports.
"Clearly, the massive uptick in coastal illegal trafficking shows that these criminals are changing their modus operandi and are putting in place a new logistic eco-system that take advantage of Malaysia's long and lightly guarded coastline," he said.
Fazli pointed out that Malaysia's coastal route requires detailed coordination as many modes of transportation are used.
Large cargo ships are used to transport illegal cigarettes multi-nationally in international waters, while smaller boats are used to carry these goods into Malaysian waters.
Fishing boats and speed boats will then pick up the goods from these boats offshore and bringing them to land in an unguarded coastal area.
Finally, lorries and vans will transport these goods to undisclosed warehouses or staging points for distribution.
In view of this development, Fazli believes that any progress made by the enhanced enforcement measures in Budget 2021 to tackle the illegal cigarettes trade will be short-lived once these criminal syndicates solidify their new logistic system.
"It is basically a factor of demand-and-supply. Demand for cheap illegal cigarettes will continue to be high as legal cigarettes are just too expensive.
"Criminal syndicates will naturally take advantage of this high demand and do whatever it takes to make huge profits at the expense of our government's revenue and national economy," he said.
RTBA Malaysia recommends that the government further strive in strengthening efforts to curb illegal cigarettes trade.
"More resources and attention needs to be focused on securing our coastline across the country.
"Just like these criminal syndicates, our enforcement agencies must also look into embracing new technologies and deploying innovative methods to be one step ahead of them," he said.
As importantly, policies to address the wide price gap between legal and illegal cigarettes must be considered and put into place, he said.
"The upcoming Budget 2022 must include clever reforms that address the demand factor so that these criminal syndicates will find illegal cigarettes trafficking to be an unprofitable venture," Fazli said.
At the tabling of Budget 2021 last year, finance minister Senator Datuk Sri Tengku Zafrul announced that the multi-agency task force will be strengthened with the participation of the Malaysian Anti-Corruption Commission and the National Anti-Financial Crime Centre.
He also outlined several measures that would help to reduce the number of illegal cigarettes in the country.
These include a freeze on the issuance of new import licenses for cigarettes, tightening the renewal of import licenses for cigarettes, limiting transhipment of cigarettes to dedicated ports, imposition of tax on the import of cigarettes with drawback facilities for re-export, disallowing transhipment of cigarettes and re-export of cigarettes by small boats.
He also proposed cigarettes and tobacco products to be classified as taxable goods at all duty-free islands and any free trade zones that have been permitted retail sales of duty-free cigarettes.