THE local unit of Japan Tobacco International (JTI) is urging Asean governments to tighten and harmonize export controls and require tobacco products to comply with destination-market rules after illicit trade cost the region an estimated $13.1 billion in revenues over the past two years.
Speaking at the Economic Journalists Association of the Philippines’ economic forum on Friday, JTI Philippines (JTIP) Fiscal and Regulatory Affairs Director Mario Zinampan said illicit tobacco trade is no longer a country issue but an ‘Asean-wide crisis’ that requires a coordinated regional response.
‘The [United Nations] has warned Southeast Asia that it faces growing threats from transnational organized crime,’ Zinampan said. ‘What we are confronting is not an isolated Philippine issue but part of a broader regional criminal ecosystem.’
As such, JTIP is proposing an ‘Asean Declaration on Harmonizing Rules to Combat Illicit Trade in High-Risk and Sensitive Goods,’ along with guidelines on export integrity, customs cooperation, track-and-trace interoperability and intelligence sharing.
Asean countries would be required to comply with destination-country rules, improving proof-of-export and verification requirements, enhancing customs coordination, exchanging information on illicit routes and diversion schemes and promoting interoperable systems to support real-time monitoring of goods moving across borders.
Zinampan said the proposal aims to establish common export integrity principles to make products moving across Asean borders less vulnerable to smuggling, misdeclaration, undervaluation, counterfeiting and diversion.
The so-called destination principle is also already embedded in various Philippine laws and regulations, which require exporters to comply with the legal and regulatory requirements of the destination country, Zinampan added.
However, similar requirements are not uniformly applied across Asean, creating regulatory gaps that can be exploited by illicit traders, he added.
‘The weakest link puts the entire region at risk,’ Zinampan said. ‘Asean should harmonize the destination principle and align export control rules to close loopholes and strengthen enforcement.’
BIR, BOC destroy smuggled cigarettes
A separate statement by the Bureau of Internal Revenue (BIR) on Friday read that it destroyed, together with the Bureau of Customs (BOC), illicit tobacco products and manufacturing materials seized in Cebu last Thursday.
The destruction covered 170,052 packs of illicit cigarettes, 1,567 boxes and sacks of cigarette raw materials and two production machines, with around P240 million in unpaid taxes and administrative penalties, seized from various enforcement operations in Cebu.
‘Once the proceedings are final, there should be no unnecessary delay in disposing of these illicit products,’ Internal Revenue Commissioner Charlito Martin R. Mendoza was quoted as saying.
‘We will also continue working closely with the BOC and our other enforcement partners to strengthen the campaign against illicit tobacco, keep these products off the market, and hold those responsible accountable,’ Mendoza added.
Based on the latest Euromonitor study, the Philippine government lost about P141 billion in revenues from illicit tobacco trade over the last two years, with one in four cigarettes sold in the country considered.
Across Asean, Indonesia had the biggest revenue losses worth $5.6 billion, followed by Malaysia and the Philippines at $2.5 billion in revenue losses each.
Illicit tobacco incidence in the region is projected to increase to 27.8 percent in 2028 from 23.6 percent in 2025, according to the study.