Illegal Pathways to Illegal Profits: The Big Cigarette Companies and International Smuggling

Cigarette smuggling takes place on a colossal scale. Each year approximately 400 billion cigarettes, or one-third of all legally exported cigarettes, end up illegally smuggled across international borders. Cigarettes are the world’s most widely smuggled legal consumer product. Based on company documents that use these terms, this report looks at the smuggling of cigarettes manufactured by British American Tobacco, Philip Morris, and R.J. Reynolds Tobacco in four representative countries —Bangladesh, Cameroon, Colombia and Spain—to illustrate, in considerable detail, the major cigarette companies’ various roles in international smuggling operations. As these examples show, the major companies have gone well beyond knowingly selling cigarettes that they know will end up in the hands of smugglers but have also carefully monitored and overseen the smuggling of their brands into various countries, often treating the illegal importation and contraband sales of their cigarettes as just one more regularly monitored distribution channel, along with ongoing legal cigarette meetings with the middleman companies directly in charge of the smuggling efforts to discuss details of the smuggling operations, including destinations, brands, routes, quantities and prices. This report details the inner workings of the major cigarette companies’ actions to encourage and support cigarette imports and sales. It is also clear that knowledge of the companies’ efforts to promote and facilitate the smuggling of its brands often reaches to the highest-ranking company executives.