The illicit trade in tobacco represents a significant
percentage of the global cigarette market: it is
estimated to amount to tens of billions of
dollars. Given its cash intensive and
profitable nature, the illicit tobacco trade is also a
vector for money laundering, as it presents low levels of
risk for the offenders in terms of detection, seizure and
The international nature of the illicit tobacco trade
requires an international response. Various FATF
members are exposed to the risks posed by the illicit
tobacco trade, from the cultivation of raw tobacco to
national and international distribution, through to the
final point of sale, whether it be in the formal or
Based on the results of a questionnaire sent to FATF
members and supported by a range of case studies, this
typologies report aims to:
a) determine the extent
of the money laundering and terrorist financing (ML/TF)
vulnerabilities associated with illicit trade in tobacco at
a global, regional and domestic level.
b) identify relevant case
studies and determine trends and patterns from a global,
regional and domestic perspective.
c) identify possible
indicators which may assist financial and non-financial
institutions in developing mechanisms to identify, report
and counter smuggling activities and the misuse of trade
d) assist jurisdictions and
FATF-style regional bodies (FSRBs) in knowledge building
and the identification of the consequences of and enabling
factors associated with the illicit trade in tobacco.
e) enhance the efforts
aimed at curbing ML and TF associated with the illicit
trade in tobacco.
Illicit Tobacco Trade will highlight the need to
enhance the international cooperation and recognise the
illicit trade in tobacco as a significant global money
laundering and terror financing threat.