Illegal Tobacco Trade : The untold story on legitimate trade

As highlighted at recent Freight & Trade Alliance (FTA) Border Compliance Program continuing professional development (CPD) events, the illegal tobacco trade in Australia has become a significant national issue.

Reports indicate that billions of illicit cigarettes and tonnes of illegal tobacco enter the country each year, fueling a black market impacting the federal budget by $9.3 billion according to a recent Sky News commentary. This has created a substantial underground economy and poses a major challenge for both law enforcement agencies and industry.
 
Authorities have expressed growing frustration at the scale of the crisis, with successive government policies relating to tobacco taxation and vaping contributing to an environment susceptible to criminal exploitation.

A 7NEWS Spotlight investigation aired last night (14 June 2026) revealing how the market has shifted underground and into the hands of organised crime groups, with links to firebombings, extortion attempts and other targeted acts of violence. The investigation highlighted the urgent need for policy reform and enforcement strategies capable of disrupting this ruthless trade before it escalates further.
 
Australian Border Force (ABF) Deputy Commissioner Tim Fitzgerald was particularly compelling in outlining the scale of the criminal activity and the impact on ABF officers and personnel working in licensed premises. The raw emotion displayed during the interview underscored the immense pressure faced by law enforcement agencies dealing with unprecedented volumes of illegal activity.
 
Of particular note was the assertion that a significant proportion of the illicit tobacco trade has been facilitated through containerised cargo moving via Port Botany, allegedly as part of a deliberate strategy by organised crime syndicates to overwhelm available enforcement resources through a single international gateway. If this assessment is accurate, the syndicates appear to be achieving their objective.
 
What remains largely untold, however, is the consequential impact on legitimate trade.
 
Since December 2025, FTA members have reported numerous consignments at Port Botany being "late-tagged" by the ABF, with Border Holds applied after vessel arrival. While most targeted containers ultimately prove to contain legitimate goods, these consignments can still be subject to significant delays and additional costs.
 
Where the selection for examination is completed (or "tagged") prior to vessel arrival, stevedores generally provide additional free storage once the container has been returned to the terminal and released in the Integrated Cargo System (ICS).
 
However, this concession is typically not available where containers are late-tagged. In these cases, importers may incur storage charges despite having met all statutory reporting requirements. This situation is further compounded by shipping lines, which commonly apply container detention fees due to the delayed return of empty containers.
 
In these circumstances, members have sought compensation under the Scheme for Compensation for Detriment caused by Defective Administration (CDDA Scheme). Responses received have consistently determined that the ABF's actions do not constitute defective administration, as the application and subsequent removal of border processing holds did not involve error, unreasonable action or a failure to follow established policy.
 
FTA has subsequently raised concerns with Transport for NSW, arguing that the application of storage charges in these circumstances may be inconsistent with provisions contained within the Port Botany Landside Improvement Strategy (PBLIS) Mandatory Standards, which require stevedores to provide extended storage relief in specified circumstances.
 
FTA is seeking clarification as to whether extended storage relief should also apply where all cargo reporting and import declaration obligations have been met in accordance with statutory requirements, but the container is subsequently late-tagged by the ABF for examination.
 
Transport for NSW has requested additional, detailed evidence from industry to support further investigation. FTA strongly encourages members impacted by these circumstances to contribute specific examples that clearly demonstrate the operational and financial consequences of late-tagging practices.
 
Providing this information is critical to strengthening our collective case for regulatory clarity and fair treatment under existing frameworks. Members are therefore urged to submit comprehensive details to tjensen@FTAlliance.com.au, including consignment information (vessel, voyage, and container number) along with ICS screenshots that clearly illustrate the timeline of events (including cargo report and import declaration lodgement and finalisation, and vessel arrival).

Paul Zalai - Director FTA / Secretariat APSA