P3 billion worth of illicit cigarettes to be shredded

CEBU, Philippines — Authorities are set to destroy more than P3 billion worth of smuggled cigarettes seized in a series of anti-smuggling operations as they prepare criminal charges against those behind the illegal shipment, which was initially determined to have come from China.

For the past few weeks, the Bureau of Customs (BOC), in coordination with the National Bureau of Investigation (NBI), has served three search warrants after receiving an intelligence report.

A total of 59 container vans loaded with cigarettes believed to have been manufactured in Changsha, China, under the Modern Gia brand were seized at Gothong Wharf in Mandaue City, a warehouse in Barangay Bacayan, Cebu City, and the Manila port.

In a joint press conference yesterday, BOC Commissioner Ariel Nepomuceno credited the NBI, led by Director Melvin Matibag, for providing the intelligence that led to one of the largest cigarette smuggling seizures jointly conducted by the two agencies this year.

“This is worth no less than P3 billion. We thank the NBI for the information that resulted in this successful operation,” Nepomuceno said.

Matibag said authorities are preparing multiple criminal complaints against those involved, including possible violations of the Anti-Agricultural Economic Sabotage Act, the Customs Modernization and Tariff Act, the National Internal Revenue Code of 1997, and intellectual property laws if investigators confirm the unauthorized use of registered cigarette brands.

He said investigators are pursuing not only those directly involved in transporting the cargo but also the financiers, protectors, and masterminds behind the smuggling operation.

“We will not stop with the arrest of drivers, helpers or guards. We are going after the financiers, protectors and those truly behind this illegal operation,” Matibag said.

Both officials identified the consignee and shipper as Tandia Cargo Handling Services, whose accreditation has been suspended pending investigation.

According to Nepomuceno, initial findings indicate the shipment may have originated from either Taiwan or mainland China before being transferred from larger vessels on the high seas to smaller domestic boats, allowing it to bypass international ports.

He said smugglers have shifted to local shipping routes and warehouses intended for domestic cargo because of tighter enforcement at international ports. Authorities are also validating intelligence reports on other possible backdoor entry points, particularly in the southern Philippines.

The commissioner assured the public that the BOC will continue to beef up coordination with other law enforcement agencies to prevent the illegal entry of cigarettes and other contraband.

Seized cigarettes up for destruction

Nepomuceno confirmed that the confiscated cigarettes will not be auctioned but will instead be destroyed as protocol.

He said the cigarettes will remain under tight security until their destruction to prevent them from re-entering the market.

The destruction will be witnessed by representatives from the BOC, NBI, local government units, the Department of Health, and legitimate cigarette manufacturers to ensure transparency. Rather than simply crushing the products, the BOC has ordered that they be completely shredded to make them impossible to recover or resell.

Matibag reiterated that no one involved in the operation would be spared from prosecution, regardless of status or position.

“No one is above the law. We will hold everyone involved accountable,” he said.

He urged those involved in the smuggling operation to cooperate with investigators, saying individuals who voluntarily provide information identifying the key personalities behind the syndicate may receive consideration under the law.

For his part, Matibag said the investigation will be conducted primarily in Cebu, where the shipment was intercepted, while investigators continue gathering documentary evidence and identifying all persons of interest.

He also assured the public that any BOC personnel found to have participated in the illegal operation would likewise face investigation.

Shipment origins traced

Authorities have sought records from the Securities and Exchange Commission and the Department of Trade and Industry to identify the corporations, incorporators, and business owners linked to the shipment.

“Ongoing pa po ang identification namin ng mga identities,” Matibag said, withholding other details pending the conclusion of the investigation.

Nepomuceno, however, named Tandia Cargo Handling Services, an accredited importer, adding that this is the first cigarette seizure linked to the company based on BOC records.

Despite this, he stressed that it does not necessarily mean the people behind it are new to smuggling.

The commissioner said DTI records indicate the business was registered on June 6, 2020, while its SEC registration is still being verified.

Aside from this, authorities are also looking into companies linked to the Mindanao smuggling operations to determine their ties to the Cebu shipments.

Meanwhile, BIR Assistant Regional Director Roberto Caro said the confiscated cigarettes are subject to excise taxes and that possession of untaxed cigarettes already constitutes a violation of the National Internal Revenue Code.

Caro said the unpaid excise taxes on the first 25 container vans seized in Cebu alone were initially estimated at around P4 billion, although the amount remains subject to the final inventory and assessment of the remaining shipments.

Profit loss

Matibag said that when unpaid taxes, customs duties, and losses to legitimate businesses are combined, the economic impact of the illegal operation could exceed P10 billion.

Nepomuceno also said consumers often unknowingly purchase smuggled cigarettes due to their resemblance to legitimate products. He, however, said counterfeit packs frequently contain poor-quality health warnings and fake or missing BIR revenue tax stamps.

He added that the BOC has conducted 1,096 successful anti-smuggling operations since he assumed office on July 1 last year, adding that nine cigarette smuggling cases have already been filed in court.

The commissioner said the intensified anti-smuggling campaign aims to protect legitimate businesses, preserve government revenues, and safeguard jobs supported by the legal tobacco industry.

He warned cigarette smugglers that authorities would continue pursuing those behind the illegal trade.

“We are serious in this fight. This is a war. I don’t believe smugglers can defeat a determined government,” Nepomuceno said.

Matibag echoed the commitment, saying the BOC and NBI will continue working with other law enforcement agencies to dismantle cigarette smuggling syndicates and prevent illegal shipments from entering the country's ports .(CEBU NEWS)