The Serious Impact of Global Illegal Trade

Aug.23.2022
The Serious Impact of Global Illegal Trade
Illegal trade causes significant economic, societal, and health impacts, highlighting the need for education, innovation, and law enforcement.

Illegal trade is a grave global issue, with staggering financial losses amounting to over $2 trillion annually, according to the United Nations. Naturally, discussions on illegal trade and its negative impacts often focus on its economic costs. However, while facts and figures are important, we also need to highlight its effects on people's lives and the various harms it inflicts on global consumers and communities.


Poses a threat to consumers.


All illegal products have one common characteristic: they are not regulated or subject to any form of proper supervision. Basic safety and quality standards, as well as laws, are often overlooked, which is hazardous to consumers.


Currently, many adult smokers are unable to purchase legal tobacco products, which also applies to those who would have continued smoking but are looking for a better alternative to cigarettes. Both circumstances are a result of increased taxation and the current economic environment. This implies that millions of people are turning to illegal, rolled tobacco products to continue smoking.


Data from the European Union (EU) is highly convincing. A recent report by KPMG found that the illegal consumption of cigarettes in the EU increased by approximately 3.9% in 2021, totaling 35.5 billion illegal cigarettes. This accounts for 8.1% of the total consumption of cigarettes in the entire EU.


The results of this annual study clearly indicate that we need to continue focusing on education and awareness to help the most vulnerable individuals in our society understand the real dangers behind illegal trade. It is also essential to develop and implement innovative policies that are truly inclusive of everyone. These policies should continue to discourage smoking and encourage smoking cessation, while also promoting better alternatives for adult smokers, including smoke-free products.


Encouraging organized crime.


One cannot overemphasize this point: consumers need to understand the consequences of buying unregulated counterfeit products. Illicit trade is often regarded as a victimless or minor crime, with little impact on society. However, this is far from the truth. Many are unaware that the financial flows generated by illicit trade fuel transnational organized crime groups. These funds help facilitate other crimes, such as human trafficking, corruption, and money laundering.


This is why at PMI, we collaborate with others to raise awareness of this global issue. In 2020, we partnered with a private sector alliance to launch a US campaign to combat illegal trade, highlighting the importance of protecting against fraud and substandard products.


Furthermore, we are spearheading a public education program called "United to Safeguard America from Illegal Trade (USA-IT)". USA-IT collaborates with individuals from both the private and public sectors to provide information and training programs to local officials, law enforcement agencies, and thought leaders, in order to address the issue of illegal trade and increase awareness of the depth and severity of the problem.


Damage to Public Services


Illegal trade of goods deprives the government of much-needed tax revenue. A report by PwC found that if all illegally traded cigarettes were to be bought legally in the countries where they were discovered, the EU government could generate an estimated €10.4 billion in additional tax revenue. This loss of tax revenue could limit the government's ability to invest in public services, public safety, and infrastructure, while people in Europe and other parts of the world are already grappling with rising prices of basic goods.


Enforcement, awareness, cooperation, and technology.


There is no quick fix for combating illegal trade. The only way to bring positive change for consumers and society is through education, partnerships, innovation, and the specific implementation of the rule of law. Given the immense and widespread human cost of illicit trade, we should use every tool at our disposal to address it - technology is key. PMI is using cutting-edge technology and innovative tracking and authentication solutions to safeguard our supply chain and protect our products.


Governments around the world should consider strengthening punishment for those engaged in illegal trade and enforcing it strictly. In a climate of escalating inflation and geopolitical instability, it is particularly important for governments to fulfill their role in ensuring security through harsh punishment of criminals and effective law enforcement. For instance, OECD recommended measures for effective policy in free trade zones.


An important tool in combating illegal trade is public-private collaboration. According to a recent survey by PMI, most people believe that leaders need to consider all perspectives when finding solutions to the world's biggest issues. For illegal trade, this means stakeholders coming together. PMI IMPACT is our global initiative that supports projects dedicated to reducing or preventing illegal trade and addressing its negative consequences - proving the effectiveness of this approach.


Finally, many consumers are still unaware of the human cost of illegal trade. That's why at PMI, we invest so much energy in awareness-raising activities. You can learn more about our work to prevent illegal trade here.


Statement


This article is compiled from third-party information and is only intended for industry exchange and learning purposes.


This article does not represent the views of 2FIRSTS, and 2FIRSTS cannot confirm the authenticity or accuracy of the article content. The compilation of this article is solely for industry-related exchange and research purposes.


Due to limitations in translation skills, the translated article may not fully convey the same meaning as the original. Therefore, please refer to the original article for accuracy.


2FIRSTS maintains complete alignment with the Chinese government on any domestic, Hong Kong, Macau, Taiwan, and foreign-related statements and positions.


The copyright of the compiled information belongs to the original media and author. If there is any infringement, please contact us for deletion.



Disclaimer

This article is provided solely for professional research, industry discussion, and informational purposes. Any references to brands, companies, products, technologies, or policies are made for factual reporting and analytical purposes only, and do not constitute endorsement, recommendation, promotion, or advertising by 2Firsts.

Nicotine-containing products, including but not limited to cigarettes, e-cigarettes, heated tobacco products, and nicotine pouches, carry significant health risks. Readers are responsible for complying with all applicable laws and regulations in their respective jurisdictions, including age restrictions and access limitations.

The information contained in this article should not be regarded as investment, legal, medical, regulatory, or commercial advice. While 2Firsts strives to ensure the accuracy and reliability of its content, it does not assume liability for any direct or indirect loss arising from errors, omissions, inaccuracies, or reliance on the information contained herein.

This article is not intended for individuals below the legal age for accessing tobacco or nicotine-related information in their jurisdiction.

 

Copyright Notice

This article is either original content produced by 2Firsts or content reproduced, translated, summarized, or adapted from third-party sources with attribution where applicable. The intellectual property rights of the original content remain with 2Firsts or the respective original rights holders.

No individual or organization may copy, reproduce, distribute, republish, modify, translate, or otherwise use this content without prior authorization. Any unauthorized use may result in legal action.

For copyright-related inquiries, corrections, or removal requests, please contact: info@2firsts.com.

 

AI-Assisted Translation and Editing Notice

Portions of this article may have been translated, edited, or reviewed with the assistance of artificial intelligence tools to improve efficiency and readability. Due to the limitations of AI-assisted translation and editing, discrepancies, omissions, or inaccuracies may exist when compared with the original source.

Where applicable, readers are advised to refer to the original source for the most complete and accurate information. If you identify any errors or believe that any content infringes upon your rights, please contact us at info@2firsts.com, and we will review and address the matter promptly.

Product | OXVA Introduces XLIM PRO 4 With Liquid-Level Anti-Burn Technology and Dedicated Pods
Product | OXVA Introduces XLIM PRO 4 With Liquid-Level Anti-Burn Technology and Dedicated Pods
Vaping brand OXVA introduced the XLIM PRO 4 refillable pod system in October 2026, featuring Anti-Burn Tech (ABT) based on smart e-liquid-level detection. The system can issue refill alerts and stop power output when e-liquid levels become too low. ABT requires the XLIM PRO 4 device and a dedicated XLIM ABT cartridge. Standard XLIM pods remain compatible but do not support ABT protection. OXVA previously introduced temperature-based anti-burn technology in the XLIM Pro 2 DNA, developed with Evolv. The new device features a 1,800mAh battery, 5–30W output and a 0.98-inch HD color screen. OXVA's official store lists the device at $37.90 and dedicated ABT replacement cartridges at $12.99. Independent testing confirmed the low-liquid protection response but recorded varying cartridge lifespans.
product
Oct.30
Sweden Finds ZYN Ingredient Labels Noncompliant Over Generic Flavoring Disclosure, Swedish Match Faces SEK 2 Million Monthly Penalty
Sweden Finds ZYN Ingredient Labels Noncompliant Over Generic Flavoring Disclosure, Swedish Match Faces SEK 2 Million Monthly Penalty
Sweden's Public Health Agency has found ingredient labels on ZYN nicotine pouches sold by Philip Morris International subsidiary Swedish Match to be noncompliant, according to Dagens industri. The products' packaging listed 10 to 13 ingredients, compared with 11 to 42 in regulatory submissions, with multiple flavoring ingredients grouped under the generic term "aromer." The agency ordered corrective action, warning of a conditional penalty of SEK 2 million per month for noncompliance. The order applies only to products manufactured after the decision becomes legally effective and does not require recalls. Swedish Match disputes the agency's interpretation and plans to appeal.
PMI
Oct.22
Global Nicotine-Pouch E-Commerce Group Haypp Shuts Sweden’s Snusnetto Over Age Verification as Identity Checks Become Industry Infrastructure for New Nicotine Products
Global Nicotine-Pouch E-Commerce Group Haypp Shuts Sweden’s Snusnetto Over Age Verification as Identity Checks Become Industry Infrastructure for New Nicotine Products
Sweden's Supreme Administrative Court has declined to hear an appeal over age verification for tobacco and nicotine products collected from parcel lockers, leaving in place a lower-court ruling that geo-located BankID verification is insufficient to securely verify the actual recipient. Haypp Group has stopped tobacco and nicotine sales through Snusnetto and is deploying a new system across its other Swedish e-commerce sites to verify the age of the person who actually opens the locker and receives the shipment. The change comes as age verification across next-generation nicotine products expands from purchase checks into retail, delivery and, for some e-cigarettes, device access itself.
Regulations
Oct.20
Smoke-Free Business Hits 42% of Q2 Net Revenue as PMI’s First TNFD Report Covers Single-Use Electronics, Critical Raw Materials and IQOS Repairs
Smoke-Free Business Hits 42% of Q2 Net Revenue as PMI’s First TNFD Report Covers Single-Use Electronics, Critical Raw Materials and IQOS Repairs
Philip Morris International has published its first report aligned with the Taskforce on Nature-related Financial Disclosures, bringing its electronics supply chain and the use and end-of-life stages of smoke-free devices and consumables into its nature-related assessment. PMI said its smoke-free business accounted for about 42% of total net revenues in the second quarter of 2026. The report says non-circular electronic products, particularly single-use items, can increase consumption of limited natural resources and also details an IQOS repair pilot. A 2040 circularity scenario tests assumptions including a 50% reduction in product waste-related costs, 10% raw-material savings and a 25% substitution rate for refurbished products versus new products.
Sep.23
Indiana Halts Sales of Elf Bar, Lost Mary, MR FOG and iJOY Vapes Under Foreign-Adversary Rules; Some Products Return After Compliance Filings
Indiana Halts Sales of Elf Bar, Lost Mary, MR FOG and iJOY Vapes Under Foreign-Adversary Rules; Some Products Return After Compliance Filings
Indiana's Alcohol and Tobacco Commission (ATC) ordered tobacco certificate holders in September to remove certain vaping products marketed under Elf Bar, Lost Mary, MR FOG, iJOY and other brands from inventory under the state's foreign-adversary product law. The agency later listed 257 MR FOG products and 77 Lost Mary product entries as lawful for sale. The Lost Mary revision expressly stated that compliance evidence had been received for 20 additional products. 2Firsts compliance expert Kurt said potential filings could include e-liquid and ingredient-origin records, U.S. nicotine-analog supply-chain documentation and FDA premarket application status.
Regulations
Oct.08
Philip Morris Malaysia Again Meets Religious Authority Over Cigarette Alternatives as Perlis Mufti Responds on Halal Criteria
Philip Morris Malaysia Again Meets Religious Authority Over Cigarette Alternatives as Perlis Mufti Responds on Halal Criteria
Philip Morris Malaysia Managing Director Naeem Shahab Khan met Perlis Mufti Mohd Asri Zainul Abidin on September 17 and presented the company's shift from conventional cigarettes toward alternative products. The mufti said a product could be considered halal if it is clean, its side effects are not harmful or can be controlled, and it does not involve excessive waste. His remarks did not mention IQOS or any other specific PMI product and did not amount to a new product-specific religious ruling. It was at least the second publicly reported engagement between Philip Morris Malaysia and a Malaysian religious institution over cigarette alternatives within six months.
Regulations
Sep.18 by 2Firsts Perspectives