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  • ATO action to reduce the gap

    The ATO administers tobacco duty collection jointly with Home Affairs, and we work together with other government partners to control the illicit tobacco trade.

    Find out about:

    Illicit Tobacco Taskforce

    Illicit tobacco is a serious organised crime priority of the Australian Government. Tobacco is a commodity just like any other illicit or illegal commodity. It is used by criminals to fund more serious and insidious crimes that undermine Australia’s national interests. Innovation in dealing with serious crime groups is essential in a sophisticated and prosperous country like Australia.

    On 8 May 2018, the Treasurer announced five tobacco-related budget revenue measures to collectively protect current and future Commonwealth revenue legitimately due from the tobacco industry.

    The ATO is part of the multi-agency Illicit Tobacco Taskforce (ITTF), established on 1 July 2018 to combat illicit tobacco smuggling. The taskforce is contained within the broader Department of Treasury Black Economy Taskforce. Funding and staffing was provided for the Australian Border Force (ABF) within Home Affairs, the ATO, the Australian Criminal Intelligence Commission (ACIC), the Australian Transaction Reports and Analysis Centre (AUSTRAC) and the Commonwealth Director of Public Prosecutions (CDPP).

    A budget of $70.2 million was provided to Home Affairs for distribution to the relevant agencies. Led by the ABF, the taskforce is being phased in over four years for partner agencies and five years for the ABF, when it becomes an ongoing measure. The ATO is funded to support the ITTF under a separate measure.

    Through its joint-agency approach, the taskforce has a full array of powers to effectively investigate, prosecute and dismantle serious organised crime groups responsible for illicit tobacco smuggling, domestic cultivation, manufacturing and distribution. The taskforce works alongside Commonwealth and state law enforcement partners to implement the law.

    The ITTF enhances the whole-of-government response and capability to gather intelligence and investigate illicit tobacco activity. It targets, disrupts and dismantles crime syndicates, and prosecutes people involved. It brings together a range of agencies with distinct but complementary powers and functions, to work collaboratively to protect Commonwealth revenue and enhance border protection.

    Using enhanced investigative and intelligence gathering methodologies, the taskforce is disrupting illicit tobacco activity by:

    • targeting supply chain vulnerabilities both within and outside Australia through enhanced data analysis, complex profile referrals to the Home Affairs National Profiling Centre, liaison and operational engagement with international law enforcement partners and customs organisations
    • targeting the criminal wealth of the actors in cooperation with the Criminal Assets Confiscation Taskforce and the Serious Financial Crime Taskforce, aligning ITTF efforts with Capability 2 of the Commonwealth Organised Crime Strategic Framework in targeting the criminal economy
    • using specialist law enforcement capabilities available to partner agencies in pursuit of the ITTF Mission
    • leveraging the data-mining and financial analysis capabilities of AUSTRAC and the ATO to trace the illicit financial flows derived from illicit tobacco trafficking domestically and across Australia’s border to generate a coherent picture of the illicit tobacco financial activity and generate opportunities for disruption
    • working closely with the CDPP in the preparation of cogent briefs of evidence in both the criminal and civil (proceeds of crime) jurisdictions
    • working with domestic and international law enforcement and customs bodies, based on operational requirements, to leverage additional capabilities and support for ITTF operations.

    The achievements of the ABF Tobacco Strike Team over the past few years demonstrate the effectiveness of Australia's enhanced approach in tackling illicit tobacco in the community. We use the backdrop of the experience of other countries, including the United Kingdom, the strategic insights of ACIC, and the findings of the Black Economy Taskforce to guide our approach.

    Tobacco legislation

    A range of policy and regulatory reform measures have been passed in recent years to tackle the trade in illicit tobacco.

    The 2018–19 Budget ‘Black Economy Package – combatting illicit tobacco’ included a measure removing the option for importers to enter tobacco products into a licensed warehouse. The legislation took effect from 1 July 2019. We conduct warehouse licence and compliance checks to ensure tobacco is not going to a warehouse before excise is applied at the border.

    On 16 August 2018, the government passed the Treasury Laws Amendment (Illicit Tobacco Offences) Bill with a new tobacco offence regime. This received royal assent on 24 August 2018. More details are available at Illicit tobacco offences.

    The 2016–17 Budget included an increase in the range of enforcement options available for illicit tobacco offences, including penalties.

    As part of our contribution to the ITTF and government, we continue to provide advice and assistance about the laws regarding illicit tobacco.

    Media approaches

    Our media approach to tobacco crop seizures has a strong focus on local media. This has led to an increase in referrals made by members of the community.

    We use a range of communication tactics, including media releases, to let people know about the risks of being associated with the illicit tobacco trade. This approach increases community awareness, and ensures that people continue to refer illicit tobacco crops to state or federal law enforcement agencies or the ATO.

    We undertake targeted advertising to select communities in regional Australia, providing awareness and understanding of the signs of illegal tobacco growing operations and how to report suspicious activity.

    These strategies facilitate an informed community and an assurance that we are disrupting and dealing with serious organised crime syndicates involved in illicit tobacco.

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      Last modified: 17 Oct 2019QC 55324