The illegal tobacco industry in Australia has become far more sophisticated in recent years. The Australian Criminal Intelligence Commission recently observed “the supply networks increasingly operate as borderless, decentralised, digitally enabled enterprises embedded within legitimate systems” through the use “sophistication of multinational businesses, using technology, professional facilitators and transnational connections.”
As of 2023-24, the Australian Institute of Criminology (AIC) estimates the total cost of the illegal tobacco trade to Australia was up to $82.3 billion in 2023-24. This was assessed as being is equivalent to 3.2% of Australia’s gross domestic product. This was an increase from $68.7 billion in 2022-23.
Illicit tobacco offences in Australia are governed by a combination of Commonwealth, State, and Territory laws, with key provisions found in the Customs Act 1901 (Cth), Taxation Administration Act 1953 (Cth), and the Excise Act 1901 (Cth).
Between 1 July 2018 and 31 December 2025, the Commonwealth Director of Public Prosecutions received 430 referrals for illegal tobacco offences. These referrals came from various agencies, including police forces, the Australian Border Force, and the Australian Taxation Office. During that period, 405 prosecutions were finalised, resulting in 284 convictions. Of these convictions, 107 offenders were sentenced to imprisonment with actual custody, 79 to imprisonment without custody, 67 to community-based orders, 25 to fines, and six were discharged without a recorded conviction.
The complexity of criminal conduct under Commonwealth tobacco offences has increased, with more people charged in broader operations across interstate boundaries. This has led to evidentiary challenges and considerations of appropriate penalties.
The Customs Act criminalises activities such as importing tobacco with the intent to defraud revenue (s 233BABAD(1)), moving or possessing tobacco with knowledge or recklessness regarding its illegal importation (s 233BABAD(2), (2A), (2B)), and related offences. Penalties under the Customs Act can reach up to 10 years’ imprisonment and/or significant fines based on the amount of duty evaded.
The Taxation Administration Act includes “reasonable suspicion” offences for possession, sale, or purchase of tobacco where no customs or excise duty has been paid, with penalties scaled by the quantity of tobacco involved. For instance, possession of 500 kg or more can result in up to five years’ imprisonment.
The Excise Act addresses offences such as manufacturing excisable goods without a licence (s 25(1)) and unlawfully moving or selling excisable goods (s 117A, s 117B), with penalties including imprisonment and fines.
The prosecution of these offences often involves complex criminal conduct, including transnational serious and organised crime groups. The scale and complexity of cases have increased, with many involving multiple co-accused and interstate operations. Conspiracy charges and other extensions of criminal liability under the Criminal Code are frequently used when prosecuting these offences.
Evidentiary Challenges in Prosecution
Prosecuting illicit tobacco offences presents significant evidentiary challenges. Under the Customs Act, the prosecution must prove that the accused knew the tobacco was imported and either intended to defraud the revenue or was reckless about the intent to defraud. This can be particularly difficult when the accused is involved in activities such as storing or selling the tobacco rather than directly importing it. In such cases, the prosecution often relies on circumstantial evidence to establish the requisite knowledge or intent. The evidentiary burden is generally higher for proving intent (s233BABAD(2) compared to recklessness (s233BABAD(2B).
Offences under the Taxation Administration Act do not require proof that the tobacco was imported. The prosecution only needs to demonstrate that the accused possessed, sold, or bought tobacco with a reasonable suspicion that no duty had been paid. The maximum penalties for Taxation Administration Act offences are lower than those under the Customs Act.
Evidence will often be obtained under various Commonwealth legislation that allow authorities to execute search warrants and intercept telecommunication.
The prosecution of illegal tobacco offences involves inter-agency cooperation including agencies such as the Australian Border Force, Australian Taxation Office, the Australian Federal Police, the Office of the Illicit Tobacco and E-Cigarette Commissioner, the Illicit Tobacco Taskforce, Department of Home Affairs, the Australian Criminal Intelligence Commission, the Australian Taxation Office, the Australian Transaction Reports and Analysis Centre.
If you are charged with an offence relating to the illegal tobacco trade, it is essential you obtain expert legal advice. With offices in Canberra, Sydney and Perth Hugo Law Group is well placed to represent clients charged with illegal tobacco involving inter-agency cooperation and a combination of Commonwealth, State, and Territory laws.
