Customs arrests Malaysian tobacco smuggling syndicate

Three Malaysian nationals arrested for trying to smuggle millions of cigarettes into New Zealand.

The men, all aged in their thirties, face joint charges for defrauding the revenue of Customs, and for participating in an organised criminal group.

The maximum penalty for defrauding the revenue of Customs is five years’ imprisonment, and the maximum penalty for participating in an organised criminal group is 10 years’ imprisonment.

Around 30 Customs staff, with the assistance of NZ Police, executed search warrants this morning at three residential addresses in the Auckland suburbs of Mount Roskill, Flat Bush and Albany, resulting in the three arrests. Approximately $20,000 cash and a quantity of cigarettes were also seized.

In mid-July 2020, Customs intercepted 2.2 million cigarettes that had been exported from Malaysia and declared as 175 roof extension units. This was at the time Customs’ largest tobacco seizure in a single shipment, in an attempt to evade payment of $2.72 million in duty and GST. The sole director of a ‘shell’ company linked to the shipment was arrested at the end of July.

Customs Investigations Manager Bruce Berry says the three individuals arrested today are believed to be linked to a Malaysian-organised criminal syndicate operating in New Zealand.

“In recent years, Customs has conducted a number of investigations involving Malaysian syndicates, which show that members are often sent to New Zealand to smuggle and distribute the commodities.

“These syndicates often use a shell or inactive company to try to give the appearance of legitimate operations, and we believe this case is no different. We are not ruling out further charges,” he says.

Customs has seized three Malaysian cigarette shipments in Auckland within a duration of six weeks.

A second shipment of 2.39 million smuggled cigarettes was intercepted in early-August, hidden inside construction materials to evade payment of $2.95 million in duty and GST. A third shipment of 2.31 million cigarettes, concealed in a similar way to evade payment of $2.85 million in duty and GST, was intercepted in late-August.

“In the past, Customs has largely seen Chinese-branded cigarettes exported from China. The Malaysian-exported cigarettes have been a game-changer in terms of the distinctive packaging, sophistication of concealment, and the significant volumes per shipment. This is something that our partners in Australia have been seeing for some time – it’s all driven by greed and profit,” he adds.