‘ASEAN must harmonize rules to combat illicit tobacco trade’

MANILA, Philippines — ASEAN member-states must harmonize their trade rules to plug loopholes that are being exploited by transnational crimes to proliferate illicit tobacco trade, a Japan Tobacco International (JTI) Philippines official said.

Mario Zinampan, fiscal and regulatory affairs director at JTI Philippines, said the Philippines is one of the role models in combating illicit tobacco trade since it follows the destination principle across its various rules and regulations.

The destination principle, Zinampan said, requires exporters to comply with the legal and regulatory requirements of their destination markets. It has been proven as a safeguard against diversion of goods.

“Under Philippine laws, if you are an exporter, you are required to comply with the laws of the destination country,” he said during the recent annual economic forum of the Economic Journalists Association of the Philippines.

“Unfortunately, in other parts of ASEAN, this kind of law does not exist,” he added.

Because of the absence of such a rule, the Philippines is at a losing end as it becomes a destination for illicit tobacco products, Zinampan said.

“Criminal syndicates exploit regulatory gaps. The weakest link puts the entire region at risk,” Zinampan said, emphasizing that illicit tobacco trade is not anymore a domestic issue but a regional problem.

“ASEAN should harmonize the destination principle and align export control rules to close loopholes and strengthen enforcement. The Philippines has shown what works and now is the time to turn national best practice into regional standard,” he added.

Citing an industry report, Zinampan said around 145 billion sticks of illicit cigarettes and e-vapes were sold across ASEAN-6 markets (Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam) last year.

The six countries incurred $13.1 billion in combined government revenue losses in the past two years, Zinampan added.

The Philippines alone lost P141 billion in revenues from 2024 to 2025 because of illicit tobacco trade, Zinampan said. Meanwhile, illicit operators earned P127 billion during the two-year period, he added.

One in four cigarettes sold in the country is considered illicit, which is higher than the ASEAN-6 average of 16 percent, Zinampan said.

“The Philippines is not dealing with a domestic problem. It is part of an illicit trade supply chain. To defeat a regional threat, ASEAN must act as one,” Zinampan said.

“Criminal networks operate cross-border, so national response cannot dismantle them,” he added.