How ₱3.56B worth of smuggled cigarettes reached Cebu, Manila

CEBU CITY, Philippines — National authorities said the ₱3.56-billion shipment of alleged smuggled cigarettes seized in Cebu and Manila may have originated from Taiwan or mainland China before being transferred at sea and disguised as a domestic shipment to evade routine inspections at international ports.

The finding emerged from an ongoing investigation by the National Bureau of Investigation (NBI), Bureau of Customs (BOC), Bureau of Internal Revenue (BIR), Philippine Coast Guard (PCG), and other law enforcement agencies into what authorities believe is a large-scale cigarette smuggling operation involving 59 container vans intercepted in separate operations in Cebu and Manila.

Investigators are continuing to determine the shipment’s exact origin, identify all individuals and entities allegedly involved, and establish their corresponding criminal, civil, and administrative liabilities.

READ: BOC probes cigarette smuggling in Cebu, rest of the country

Possible origin

BOC Commissioner Ariel Nepomuceno said investigators’ initial findings indicate the shipment may have originated in either Taiwan or mainland China before entering Philippine waters.

“Sa initial report, ito ay maaaring nanggaling sa tinatawag na high seas. Yung sa malayong, malayong bahagi ng ating karagatan, merong malaking barko na galing sa labas. In this case, ang initial report galing ito ng either Taiwan o mainland China,” he said.

READ: ₱2.6M smuggled cigarettes seized in Vallehermoso, Negros Oriental

He stressed, however, that authorities have yet to conclusively determine the shipment’s exact origin.

Transferred at sea

Nepomuceno said authorities believe the shipment was initially transported by a larger vessel before being transferred to a smaller ship while at sea.

He said investigators believe the cargo was then declared as a domestic shipment upon entering the country, allowing it to bypass standard inspection procedures at international ports.

“Ito ay tinransfer sa mas maliit na barko at ginawang local shipment. Kaya ito ay hindi dumaan sa ating international ports,” he said.

He explained that this method allegedly enabled the shipment to bypass the stricter inspection procedures normally imposed on international cargo arriving directly from overseas.

Nepomuceno added that authorities have observed smugglers increasingly resorting to this scheme, as customs inspections at international ports have become more stringent.

Intelligence information

The operation stemmed from verified intelligence information and case buildup developed by operatives of the NBI Special Action Unit regarding the alleged proliferation and distribution of illegally imported cigarettes, including products without the required excise tax stamps.

Acting on intelligence reports that a shipment of suspected smuggled cigarettes was set to be unloaded at a shipping yard in Tondo, Manila, the NBI-SAU, in coordination with the BOC, BIR, and PCG, conducted an enforcement operation on June 22.

Authorities found that 23 of the 24 container vans covered by BIR mission orders allegedly contained cigarettes without the required excise tax stamps, while the remaining container van was missing.

During the operation, they also intercepted three container vans that had already left the area for delivery. The vessel that transported the shipment, along with the three delivery trucks, was also seized as part of the ongoing investigation.

Shipment traced to Cebu

The subsequent investigation traced the shipment to a private wharf in Mandaue City, Cebu.

Upon verification, the NBI Cebu District Office and the NBI Central Visayas Regional Office coordinated with the Coast Guard District Central Visayas, BOC Port of Cebu, Mandaue City Police Office, and the Philippine National Police Maritime Group to conduct another joint interdiction operation.

That operation resulted in the seizure of 11 additional 40-foot container vans believed to contain illicit cigarettes.

Investigators later cross-matched shipping documents and cargo records, leading to the identification of 25 more 20-foot container vans believed to be linked to the same alleged smuggling operation. The containers remained stored at the same private wharf pending lawful inspection.

To facilitate the inspection of the remaining containers, the NBI Special Action Unit secured a Letter of Authority from the Anti-Agricultural Economic Sabotage Council.

The authority was implemented on July 8 by the NBI-SAU in coordination with the NBI Cebu District Office, NBI Central Visayas Regional Office, BOC, BIR, and barangay officials, allowing authorities to inspect and document the suspected contraband in accordance with Republic Act No. 12022 and other applicable laws.

Discovery of 59 containers

Authorities said the operations in Manila and Cebu ultimately led to the seizure or discovery of 59 container vans allegedly containing illicit cigarettes with an estimated aggregate market value of ₱3.56 billion.

Authorities also described the haul as one of the largest shipments of illicit cigarettes uncovered in recent years, saying it allegedly resulted in substantial government revenue losses from unpaid customs duties and excise taxes while posing a threat to legitimate businesses and lawful commerce.

Possible charges

Authorities said their investigation is now focused on determining the criminal, civil, and administrative liabilities of all individuals and entities allegedly involved in the operation.

The shipment is being investigated for possible violations of the Anti-Agricultural Economic Sabotage Act of 2024; the National Internal Revenue Code of 1997; the Customs Modernization and Tariff Act; and other applicable laws.

Investigation continues

Law enforcers said their investigation remains ongoing to determine the full extent of the alleged smuggling network.

As of this writing, investigators are working to identify all individuals and entities allegedly involved, establish their respective criminal, civil, and administrative liabilities, and file the appropriate charges against those found responsible.

Nepomuceno earlier said authorities continue to unravel the alleged scheme used to bring the shipment into the country, while NBI Director Melvin Matibag stressed that everyone found to have participated in the operation would be held accountable regardless of status or position.

“No one is above the law. Hindi po namin titignan kung anong estado o posisyon sa buhay ng sino mang may kinalaman na gumagawa ng illegal, sisiguraduhin naming mananagot sa batas,” Matibag said.

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