Australia Extends Illicit Tobacco Crackdown From Tougher Penalties to Customs and Logistics Supply Chains

Sep.14
Australia Extends Illicit Tobacco Crackdown From Tougher Penalties to Customs and Logistics Supply Chains
Australia's federal government introduced a new illicit tobacco enforcement bill on September 10 that would strengthen evidentiary presumptions, representative sampling, seizure and forfeiture procedures, proceeds-of-crime powers and obligations for customs and logistics operators. The proposal follows the Combatting Illicit Tobacco Act 2026, which took effect in August and increased penalties while expanding investigative and asset-recovery tools. Together, the reforms extend Australia's crackdown from tougher criminal sanctions into import, logistics and evidentiary enforcement.

Key Points

  • The government introduced the Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026 in the House of Representatives on September 10.
  • The bill would expand evidentiary presumptions, representative sampling and seizure and forfeiture mechanisms aimed at reducing proof barriers in large illicit tobacco cases.
  • It would also strengthen duties for licensed customs brokers, warehouses and depots to prevent their businesses and facilities from being used in illicit tobacco supply chains.
  • The measure follows the Combatting Illicit Tobacco Act 2026, which strengthened penalties, investigative powers and proceeds-of-crime tools in August.

2Firsts

September 14, 2026

Australia's federal government introduced the Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026 in the House of Representatives on September 10, proposing further changes to evidence rules, seizure and forfeiture procedures, proceeds-of-crime measures and customs supply-chain obligations.

The bill has completed its first reading and is now before the House.

It follows less than a month after the Combatting Illicit Tobacco Act 2026 received Royal Assent on August 26. That earlier legislation increased penalties for illicit tobacco offenses and expanded investigative and asset-recovery powers, while the latest bill extends the government's reforms further into imports, warehousing, customs licensing and evidentiary procedures.

Bill Targets Evidentiary Barriers in Large Tobacco Cases

One of the bill's key elements is a further overhaul of how illicit tobacco cases can be proved.

Explanatory material indicates that the government plans to introduce or expand evidentiary presumptions in certain circumstances and allow representative sampling of homogeneous bulk seizures.

The measures are intended to reduce the burden on enforcement agencies of proving the nature, tax status and relevant characteristics of every item in large illicit tobacco consignments.

Australian law already uses a reasonable-suspicion framework for some illicit tobacco offenses.

The Combatting Illicit Tobacco Act 2026, which took effect in August, expanded offenses covering possession, sale, supply and purchase of certain quantities of tobacco where there are reasonable grounds to suspect excise or customs duty has not been paid.

The September bill therefore does not introduce the reasonable-suspicion concept for the first time. It builds on that framework by further modifying evidence and enforcement procedures.

Seizure and Forfeiture Procedures to Be Expanded

The bill would also strengthen customs seizure and forfeiture powers.

The proposed changes include an expanded use of existing "special forfeited goods" mechanisms, allowing some tobacco products imported in breach of licensing or customs requirements to be seized or forfeited through more direct procedures.

The government also plans to streamline parts of the administrative process following seizure.

The measures are designed to shorten the enforcement path between identifying suspected illicit tobacco and securing forfeiture and disposal.

Duties Extend to Customs Brokers, Warehouses and Depots

Another major element of the proposal is the extension of obligations across the legitimate customs supply chain.

The reforms would apply to licensed customs brokers, warehouses and depots, requiring relevant operators to take reasonable steps to prevent their facilities, licences or businesses from being used in illicit tobacco movements.

The government also plans to expand the role of the existing National Customs Broker Licensing Advisory Committee to cover a wider group of customs-licensed operators, including warehouses and depots.

The changes would extend illicit tobacco compliance beyond importers and retailers into the infrastructure that supports international trade and domestic distribution.

For legitimate businesses, illicit tobacco exposure would increasingly involve internal controls, customer due diligence and management of facilities as well as the goods themselves.

Proceeds-of-Crime Measures Strengthened Further

The bill also proposes amendments to the Proceeds of Crime Act 2002.

The changes are intended to strengthen authorities' ability to identify, restrain and confiscate criminal benefits associated with illicit tobacco and to revise aspects of how financial penalties are calculated.

The proposal continues a direction established by the August legislation.

The Combatting Illicit Tobacco Act 2026 had already expanded tools involving restraining orders, search powers, access to electronic data, unexplained wealth and other proceeds-of-crime mechanisms.

Taken together, the two rounds of legislation move Australia's enforcement strategy beyond higher penalties toward disrupting the financial, logistical and supply-chain foundations of illicit tobacco networks.

August Raised the Cost of Offending; September Targets the Enforcement Chain

The August legislation focused on higher penalties for illicit importation, possession, sale, supply and manufacture of tobacco, while expanding investigative and asset-recovery powers.

The September bill addresses additional issues involving proof, product identification, seizure, forfeiture and supply-chain responsibilities.

The two measures therefore form a broader sequence of reforms: the first raises penalties and strengthens investigative tools, while the latest proposal seeks to reduce procedural and evidentiary barriers and push compliance obligations further upstream into the import and logistics chain.

Enforcement Expands Across Borders and Retail Channels

The legislation comes amid a broader acceleration of illicit tobacco enforcement in Australia.

During 2026, the Australian Border Force has carried out operations targeting petrol stations, retail networks and suspected import channels, while also working with overseas authorities, including Chinese enforcement agencies, on transnational tobacco-smuggling networks.

State governments have also increased enforcement.

Victoria, for example, has activated powers allowing authorities to temporarily close premises suspected of selling illicit tobacco and to seek longer closure orders through the courts.

The combination of federal and state measures shows Australia's illicit tobacco response expanding beyond traditional seizures and fines into criminal prosecution, asset recovery, supply-chain controls, cross-border cooperation and retail shutdowns.

Tax Debate Continues as Government Prioritizes Enforcement

Australia continues to debate the relationship between high tobacco excise rates and the growth of the illicit market.

A Senate inquiry into illicit tobacco this year recommended reconsidering further excise increases and examining options for tax changes.

The September bill, however, does not alter tobacco tax rates. Instead, it continues the federal government's emphasis on customs, criminal and supply-chain enforcement.

While the tax debate remains unresolved, the government's latest legislative move continues to expand enforcement capacity against illicit tobacco networks and the businesses and infrastructure that support them.

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Cover Image: Australian Border Force / Australian Parliament


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