By Timothy S. Donahue

Top Takeaways:

• Major bust: More than 60 suspects were arrested in China.
• Huge haul: Authorities seized more than 90 million cigarettes.
• Joint strike: Chinese intelligence led Australia to 112 containers.

More than 90 million illicit cigarettes didn’t make it to market.

Chinese and Australian authorities have disrupted a transnational tobacco-smuggling network, seizing more than 90 million cigarettes in a coordinated operation targeting illicit shipments moving through China and into Australia.

The investigation began with a crackdown by the Zhanjiang Customs Anti-Smuggling Bureau in Guangdong province, China, coordinated by the Anti-Smuggling Bureau of the General Administration of Customs.

Chinese authorities dismantled nine alleged cigarette-smuggling groups and shut down nine storage sites, according to China’s Ministry of Public Security. They seized more than 32 million cigarettes and more than 1,100 boxes of e-cigarettes.

Investigators said the network concealed counterfeit tobacco products manufactured overseas within legitimate cargo, moved the shipments through China, and then smuggled them into Australia.

Chinese customs shared intelligence with Australian authorities through bilateral customs enforcement channels as investigators sought to disrupt the entire supply chain.

That intelligence enabled the Australian Border Force to target 112 shipping containers traveling from China to Australia from January through May.

Australian authorities later seized more than 60 million cigarettes, 8.7 tons of loose tobacco, and 40,000 vapes. The products had an estimated combined value of A$92 million ($59 million).

“This exceptional result would not have been possible without the close and enduring partnership between the Australian Border Force and the Anti-Smuggling Bureau of General Administration of China Customs,” ABF Commissioner Gavan Reynolds said.

More than 60 people were arrested in China in connection with the investigation.

Wang He, deputy director general of China’s Anti-Smuggling Bureau, said the operation had “effectively cut off a major smuggling route of illicit tobacco into and via mainland China.”

The operation comes as Australia intensifies enforcement against illicit tobacco and vaping products, which authorities increasingly associate with organized crime.

In a separate operation announced on Aug. 14, Australian authorities charged seven people and dismantled two alleged criminal networks accused of using freight and warehousing operations to circumvent border controls. Investigators seized hundreds of thousands of vapes, cigarettes, cash, firearms, and other assets.

Australian authorities have also reported sharp increases in tobacco seizures. More than 109 million illicit cigarettes were seized upon entry into the country during the fiscal year ended June 30, up nearly 500% from the previous year.

The latest China-Australia operation moves enforcement further up the supply chain, using intelligence from Chinese investigators to identify suspect cargo before it moves through Australian distribution networks.