Price gaps, demand, porous borders drive illicit tobacco trade in S’wak, says Customs

Abg Zamari Abg Nazarin (file pic)

By Amanda L

KUCHING, Apr 25: Illicit cigarette and e-cigarette trade in Sarawak remains “manageable but serious”, according to the Royal Malaysian Customs Department (RMCD) Sarawak, which says the issue is driven by price disparities, sustained demand and porous borders.

Sarawak Customs Deputy Director Abg Zamari Abg Nazarin said the illicit tobacco trade is not a domestic issue alone but part of a structured three-tier system involving overseas manufacturers, smuggling networks and local retail distribution.

“Illicit trade is systemic. It is not isolated. It is a global problem driven by demand, pricing differences and organised networks,” he said at the Sarawak’s Illicit Trade: Drivers, Risks & the Cost of Prohibition programme held at a hotel in Kuching today.

Abg Zamari identified three key drivers sustaining the trade: high tobacco taxation that creates a significant price gap, consistent consumer demand, and Sarawak’s geographical realities, including long coastlines and extensive land and maritime borders.

He said enforcement agencies continue to step up operations against syndicates, with ongoing prosecutions involving large-scale seizures and duty evasion cases.

However, he acknowledged that increasingly sophisticated smuggling methods continue to challenge enforcement capacity. E-cigarettes were highlighted as a growing concern, with authorities describing the segment as the “next frontier” of illicit trade.

According to him, vape products are increasingly being distributed through parcel delivery services, social media platforms such as Facebook, Instagram and Telegram, as well as mixed-compliance retail outlets.

“There is rapid market growth, strong youth-driven demand, and emerging health risks linked to unregulated products,” he said.

He added that enforcement is guided by the Customs Act 1967 and Excise Act 1976, which provide for severe penalties, including fines of up to 20 times the value of seized goods and imprisonment of up to five years for offences involving smuggling, possession or distribution of duty-unpaid products.

Sarawak’s geography, he said, remains one of the most significant enforcement challenges, with more than 1,000 kilometres of coastline and extensive borders with Kalimantan and Brunei complicating surveillance and interception efforts.

In response, enforcement strategies have shifted towards intelligence-led operations supported by data analytics, track-and-trace systems, and cross-border intelligence sharing with regional counterparts in Indonesia and Brunei.

“We now rely heavily on risk assessment and predictive analytics rather than random enforcement,” he said.

He also highlighted ongoing cooperation among multiple agencies, including the Royal Malaysia Police (PDRM), Malaysian Maritime Enforcement Agency (MMEA), Ministry of Health (MOH) and the Malaysian Anti-Corruption Commission (MACC) in tackling illicit trade networks.

While noting that enforcement success rates remain strong, Abg Zamari acknowledged operational risks, including potential information leaks and the evolving tactics of smuggling syndicates.

Looking ahead, he warned that illicit vape products, including those involving unregulated substances, could expand rapidly if left unchecked.

“Vape is the next frontier. The market is growing fast, especially among younger users,” he said, adding that enforcement efforts would continue to adapt in response to emerging threats. — DayakDaily