Latest / Real Crime with Adam Shand / Why Illegal Tobacco Is Exploding in Australia | Kelly Crossley & Rowan Pike

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Why Illegal Tobacco Is Exploding in Australia | Kelly Crossley & Rowan Pike · Real Crime with Adam Shand

• 0:05
  Speaker 1: Appoche production.
• 0:14
  Speaker 2: Welcome to Real Crime with Adam shannd I'm your host,
• 0:16
  Speaker 2: Adam Shann. Let's talk about illegal tobacco today. It's absolutely
• 0:20
  Speaker 2: swamping our market here.
• 0:22
  Speaker 3: Please say, out of three hundred tobaccoos in Victoria, one
• 0:26
  Speaker 3: thousand sells Michael cigarettes.
• 0:28
  Speaker 2: Back in twenty fifteen, it represented just fourteen percent of consumption.
• 0:33
  Speaker 2: This year it's expected to hit fifty percent. The crooks
• 0:37
  Speaker 2: rked in ten billion dollars last year, and the trade
• 0:40
  Speaker 2: is fueling violence, murder, arson as two syndicates seek to
• 0:45
  Speaker 2: monopolize the trade.
• 0:47
  Speaker 3: Firebombings, violent turf groups, and even murder.
• 0:54
  Speaker 2: The profits are absolutely staggering, more than what the crooks
• 0:58
  Speaker 2: make from the top five drugs.
• 1:00
  Speaker 4: Combined efforts by organized crime groups to control the illicit
• 1:03
  Speaker 4: tobacco and beat market led to over two hundred fire
• 1:06
  Speaker 4: bombings at least three homicides, including an innocent civilian.
• 1:11
  Speaker 2: The illegal trade is literally facilitated by the federal government.
• 1:15
  Speaker 2: The excise on smokes has taken a packet to fifty dollars,
• 1:19
  Speaker 2: whereas you can buy the illegal version for just fourteen bucks.
• 1:23
  Speaker 2: Same product, just as deadly, just as addictive. It's so
• 1:28
  Speaker 2: widespread and entrenched. Your average law abiding citizen has no
• 1:32
  Speaker 2: qualms in going to the illicit market. I've seen this
• 1:35
  Speaker 2: in shops in my local area, about one hundred meters
• 1:38
  Speaker 2: from the local cop shop, and they do absolutely nothing
• 1:41
  Speaker 2: about it. Later in the program, I'm going to talk
• 1:44
  Speaker 2: to former Australian Federal Police officer Rowan Pike about why
• 1:48
  Speaker 2: the good guys are losing the battle. But first let's
• 1:51
  Speaker 2: talk about how these smokes are getting into this country.
• 1:54
  Speaker 2: Kelly Crossley is in the freight forwarding business, which is
• 1:58
  Speaker 2: right at the frontline of the trade.
• 1:59
  Speaker 5: She's a director of Perth based Transittainer.
• 2:02
  Speaker 2: Welcome to real crime, Kelly, thank you, thanks for having me, Adam,
• 2:06
  Speaker 2: absolute pleasure. Now tell me what is freight forwarding. Let's
• 2:10
  Speaker 2: get the definitions right here.
• 2:12
  Speaker 3: Freight forwarding so we are the people that do the
• 2:15
  Speaker 3: importing and exporting for the actual importers or exporters. So
• 2:20
  Speaker 3: we arrange the containers on the vessel book the slots,
• 2:24
  Speaker 3: ship it over here and then we clear it through
• 2:26
  Speaker 3: customs and quarantine and deliver it to their door. So
• 2:29
  Speaker 3: all the moving parts of the supply chain basically.
• 2:32
  Speaker 2: And so what we're discovering is this illegal trade is
• 2:36
  Speaker 2: not coming in boats smuggled into the vast distances of Australia.
• 2:41
  Speaker 2: It's coming in through the container trade. How is it
• 2:44
  Speaker 2: getting in in your experience, Well, it's.
• 2:47
  Speaker 3: Coming in through the container trade, but it's also coming
• 2:50
  Speaker 3: in through air freight. So there's two ways that's coming in.
• 2:53
  Speaker 3: There's a few things that are happening at the moment.
• 2:55
  Speaker 3: There's one thing that's I guess is pretty big. Is
• 2:58
  Speaker 3: called piggybacking or ABN fraud or ABN identity theft. So
• 3:05
  Speaker 3: people are taking a legitimate importer's ABN, pretending to be
• 3:10
  Speaker 3: that business and then using the ABN commercial documents, presenting
• 3:16
  Speaker 3: those documents two way freightfulder, a customs broker like us,
• 3:19
  Speaker 3: and then clearing the cargo none the wiser to the
• 3:22
  Speaker 3: poor importer. So the poor importer's ABN and somebody's details
• 3:26
  Speaker 3: have literally just been used.
• 3:27
  Speaker 1: They have no clue and a lot of it's coming
• 3:30
  Speaker 1: in like that.
• 3:31
  Speaker 2: So these illegal importers are using the AABN numbers of
• 3:36
  Speaker 2: legitimate importers.
• 3:37
  Speaker 5: Why are they not aware this is happening using their ABN.
• 3:41
  Speaker 3: Suppose in the way, who's alerting them? Like, how do
• 3:43
  Speaker 3: they know it's ab and look up my ABN, your
• 3:47
  Speaker 3: ab and everybody ABN is. It's available to the public.
• 3:49
  Speaker 3: It's there and LinkedIn. All your details are there. You
• 3:54
  Speaker 3: can go on a business's web page and you can
• 3:56
  Speaker 3: have a look at their company logos, letterheads, you can
• 3:59
  Speaker 3: copy all their details. ABN's right there for the taking.
• 4:05
  Speaker 3: And that's the way we do a customs entry is
• 4:08
  Speaker 3: via a ABN. So yeah, if we get that ABN,
• 4:12
  Speaker 3: or if a broker gets that ABN, an importer just
• 4:16
  Speaker 3: wouldn't know.
• 4:16
  Speaker 1: A business would not know.
• 4:18
  Speaker 3: Because an ABN is there for everybody to see on
• 4:21
  Speaker 3: a public website from ab and look up.
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  Speaker 5: And so correct me if I'm wrong.
• 4:25
  Speaker 2: The importer, the illegal importer goes through a freight forwarding
• 4:30
  Speaker 2: company that facilitates this.
• 4:32
  Speaker 3: Yes, correct, So anything that comes into the country must
• 4:37
  Speaker 3: be declared to ABF Customs and Quarantine. So in order
• 4:42
  Speaker 3: to do that, you would engage a customs broker or
• 4:44
  Speaker 3: a freight folder. As a customs broker, we need to
• 4:48
  Speaker 3: be doing our due diligence and doing all the correct
• 4:50
  Speaker 3: checks to make sure that that person has been identified.
• 4:53
  Speaker 3: It is getting harder and harder to do, so we've
• 4:56
  Speaker 3: got to go through the processes and everything is from
• 4:59
  Speaker 3: our side is electronic. So we're looking at a set
• 5:02
  Speaker 3: of commercial documents that is a commercial invoice of packing,
• 5:06
  Speaker 3: list of packing, declaration and a bill.
• 5:08
  Speaker 1: Of lading for example, that is declaring what the goods are.
• 5:13
  Speaker 3: We're classifying the goods, putting him into home consumption and
• 5:17
  Speaker 3: collecting the revenue from the importers. So it's us, it's ABF.
• 5:23
  Speaker 3: We're on the front line of what's happening.
• 5:26
  Speaker 2: You talk about due diligence. How much due diligence can
• 5:30
  Speaker 2: you do? Are there any red flags? Or I mean,
• 5:32
  Speaker 2: is it practical that you could be checking every single
• 5:35
  Speaker 2: ABN but it's not being used by a crook.
• 5:38
  Speaker 3: My business, we have a very very strict procedure with
• 5:42
  Speaker 3: what we do in terms of checking the ABN, and
• 5:45
  Speaker 3: there are multiple steps for checking that. And we have
• 5:49
  Speaker 3: picked up piggybacking and we've alerted importers to the piggybacking
• 5:52
  Speaker 3: several occasions.
• 5:54
  Speaker 1: Do other companies do it?
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  Speaker 3: Look, I would hope so, But you know we're all
• 5:59
  Speaker 3: that we're under resource. People may not be or importers
• 6:04
  Speaker 3: or freight forwards and brokers may not be doing as
• 6:07
  Speaker 3: much I would hope. So, but you know it's up
• 6:10
  Speaker 3: to the business, I guess, and that business has to
• 6:12
  Speaker 3: have their own procedure in place, and it needs to
• 6:15
  Speaker 3: be a bit more education about what's happening. But you know,
• 6:18
  Speaker 3: we have maybe bigger folders and things that might not
• 6:21
  Speaker 3: have that time or might not have the resources. So
• 6:23
  Speaker 3: what checks they do, I don't know. I can't speak
• 6:26
  Speaker 3: for those.
• 6:26
  Speaker 1: For US strict, very strict process, but.
• 6:30
  Speaker 2: The crooks this is always an arms rates and the
• 6:31
  Speaker 2: crooks find ways to dupe other elements in the supply
• 6:36
  Speaker 2: chain to facilitate this. So it's a huge volume of
• 6:40
  Speaker 2: trade coming in and I know it's physically impossible for
• 6:44
  Speaker 2: the Australian Border Force and Customs to actually check every container,
• 6:48
  Speaker 2: check every air freight coming in.
• 6:50
  Speaker 5: So this really plays towards the crook's strengths.
• 6:53
  Speaker 2: Doesn't it that It's add lots of costs to the
• 6:56
  Speaker 2: system were we to check every container, check every ABN.
• 7:00
  Speaker 3: Correct, Yes, I mean, look, it's a too pronged approach
• 7:03
  Speaker 3: where the forwarder needs to be obviously doing it because
• 7:05
  Speaker 3: if it doesn't get past the folder or the broker,
• 7:09
  Speaker 3: that feed or that customs entry can get flagged and
• 7:12
  Speaker 3: not get lodged, so it can stop, you know, at
• 7:16
  Speaker 3: our level, should it not stop at our level? Obviously
• 7:19
  Speaker 3: ABF have also their own ways of doing checks, you know,
• 7:22
  Speaker 3: see cargo and manifests, and it's quite complex, but they
• 7:26
  Speaker 3: have other ways. And of course we have ABF and
• 7:28
  Speaker 3: things on the ground where containers and loose cargo and
• 7:31
  Speaker 3: air freight goes through X ray machines, so many would
• 7:35
  Speaker 3: be randomly selected and obviously targeted. But again, yeah, we
• 7:39
  Speaker 3: can't X ray every single container that comes off the terminal.
• 7:44
  Speaker 3: It's just not possible. So we're playing right into their
• 7:46
  Speaker 3: hands for sure.
• 7:48
  Speaker 2: And when you have picked up these piggybacked shipments, what
• 7:52
  Speaker 2: were the tells that you saw?
• 7:55
  Speaker 3: For me, it's a bit of experience, but you know
• 7:58
  Speaker 3: there's some things that we have in place and you
• 8:01
  Speaker 3: can see. Is getting hold of an importer it should
• 8:03
  Speaker 3: never be hard. You should be able to pick up
• 8:06
  Speaker 3: the phone and actually speak to somebody on the other
• 8:07
  Speaker 3: end of the phone right moving addresses several times, so
• 8:11
  Speaker 3: you might have contact, or our staff ember may have
• 8:13
  Speaker 3: contact via mobile. You might even have a conversation with somebody,
• 8:17
  Speaker 3: so it may sound legitimate. But if the address changes
• 8:21
  Speaker 3: three four, five, times, and it's last minute that starts
• 8:24
  Speaker 3: to raise a few red flags. Sometimes the urgency which
• 8:28
  Speaker 3: you know again judgment, there are very urgencyments that that happen.
• 8:32
  Speaker 3: But the urgency can be where is it, I need
• 8:35
  Speaker 3: it now, what's happening with it? Why is it on hold?
• 8:37
  Speaker 1: Why?
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  Speaker 3: So I guess reading somebody's vibe through through conversation. The
• 8:43
  Speaker 3: other thing is, though, when documents come through, is you
• 8:45
  Speaker 3: have to be really stringent with your checks and domain.
• 8:50
  Speaker 3: For example, for a business name, it will be changed
• 8:54
  Speaker 3: ever so slightly, So we need to look at the
• 8:58
  Speaker 3: domain on a website address and if the domain on
• 9:00
  Speaker 3: the real import or the business's website addresses, say at
• 9:04
  Speaker 3: train Entertainer WA, dot com dot au, that's.
• 9:07
  Speaker 1: The real one.
• 9:08
  Speaker 3: The fake one may be slightly missing an eye in transittainer.
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  Speaker 3: That's how clever they are, Like who's going to pick
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  Speaker 3: that up? And that's how they get away with it.
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  Speaker 3: So they will literally use they could use my ABN,
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  Speaker 3: my logos and the little eye in transittainer could be missing.
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  Speaker 1: It's easily oversea, so you have to do those real
• 9:29
  Speaker 1: detailed checks.
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  Speaker 2: And of course the freight forwarder is not committing a
• 9:34
  Speaker 2: crime by being duped by the dodgy importer.
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  Speaker 5: So it's not up to your.
• 9:41
  Speaker 2: Side of things to be the police as it were.
• 9:44
  Speaker 2: You're just doing your part of the process.
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  Speaker 3: Yeah, absolutely, definitely not up to us. We obviously have
• 9:50
  Speaker 3: a responsibility to holding a corporate license and a customers
• 9:54
  Speaker 3: broker has a responsibility to the Commonwealth and to the
• 9:56
  Speaker 3: government to collect the revenue all those sorts of things.
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  Speaker 3: So whilst we can't police it and it's not our job,
• 10:02
  Speaker 3: it is our job to be checking for vicious activity,
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  Speaker 3: and if we are suspicious, we should not lodge the entry.
• 10:09
  Speaker 3: And that's pretty much what it comes down to. It
• 10:12
  Speaker 3: should be flagged and we don't launch it, and we
• 10:14
  Speaker 3: should be raising alarm bells about it. So we can't
• 10:17
  Speaker 3: police it, but we certainly have a responsibility to do
• 10:19
  Speaker 3: something about it and take our responsibility serious.
• 10:22
  Speaker 5: Yeah, but it seems like it's there.
• 10:24
  Speaker 2: I say, it's more a moral responsibility than a binding
• 10:27
  Speaker 2: legal one.
• 10:29
  Speaker 3: No, we still have you know, there's legislation in place,
• 10:32
  Speaker 3: to be honest, I think that's why there's that's a
• 10:34
  Speaker 3: whole other story we can cover one day. The shortage
• 10:36
  Speaker 3: on customs brokers because of the legislation and the pressure
• 10:39
  Speaker 3: that they are put under.
• 10:41
  Speaker 1: It's tough. It's a tough gig. They can be.
• 10:43
  Speaker 3: Held responsible if we don't do the right checks and
• 10:46
  Speaker 3: we are lodging entries and you know, look to be
• 10:49
  Speaker 3: seen giving a false statement.
• 10:51
  Speaker 1: They come down hard on us.
• 10:52
  Speaker 3: It's tough, and that's why the customs brokers are probably
• 10:55
  Speaker 3: putting their hands up now and saying, I don't want
• 10:57
  Speaker 3: to be doing this gig anymore.
• 10:59
  Speaker 1: We have an industry shortage.
• 11:00
  Speaker 3: People are walking away from wanting to take on that
• 11:02
  Speaker 3: responsibility and you know, looking at or losing their career
• 11:06
  Speaker 3: or who knows, end up in jail for it.
• 11:09
  Speaker 1: So it is tough.
• 11:10
  Speaker 5: It's hard because it's pretty rich.
• 11:13
  Speaker 2: I think to be blaming the freight forwarder who might
• 11:16
  Speaker 2: have been duped by a very sophisticated, very clever bunch
• 11:20
  Speaker 2: of crooks.
• 11:21
  Speaker 5: You're not making any money out of it. The crooks are.
• 11:24
  Speaker 3: You've got all the risk, absolutely, you know that's one
• 11:28
  Speaker 3: hundred percent spot on. The risk is on us and
• 11:31
  Speaker 3: you know ABF under resource. So the risk is it
• 11:34
  Speaker 3: really does it falls on us, and it's tough, and
• 11:37
  Speaker 3: you know what happens if it does pass us? As
• 11:39
  Speaker 3: maybe the initial gatekeeper. Why should we be held responsible.
• 11:43
  Speaker 3: Why isn't it ABF's problem or why isn't it But
• 11:47
  Speaker 3: I guess as a business and you know your own morals,
• 11:50
  Speaker 3: you know you have to take those seriously and certainly
• 11:52
  Speaker 3: not on us.
• 11:53
  Speaker 1: But we have processes and things we must do.
• 11:56
  Speaker 2: Still, we're seeing a lot of these cigarettes coming through
• 12:00
  Speaker 2: Dubai and particularly a free trade area in Dubai, and
• 12:06
  Speaker 2: the brand we're seeing is Manchester. Quite often it's a
• 12:09
  Speaker 2: Syrian company, I've understand. Do you start to look at
• 12:13
  Speaker 2: the source of the shipments as a possible red flag?
• 12:17
  Speaker 3: Yeah, locations absolutely, I think all the other indicators have
• 12:20
  Speaker 3: to be first. Getting a random set of documents from
• 12:23
  Speaker 3: a random email address, you know, gmails, hot miles, those sorts.
• 12:27
  Speaker 1: Of things are straight away for me.
• 12:30
  Speaker 3: And look, it's hard because we have a lot of gmails,
• 12:33
  Speaker 3: and especially dealing with with China and all sorts of countries,
• 12:36
  Speaker 3: we have them all the time. But a random set
• 12:39
  Speaker 3: of documents straight away from a Gmail address is a problem. Yes,
• 12:43
  Speaker 3: Jabilali and those sorts of places, and we've had one
• 12:47
  Speaker 3: from there, to be honest with you, Commodities that we
• 12:50
  Speaker 3: need to be looking at, definitely for us, we just
• 12:53
  Speaker 3: need to look at those documents where they've come from
• 12:55
  Speaker 3: and do all the checks. Load ports, countries, commodities definitely
• 12:59
  Speaker 3: do come under scrutiny, probably more for ABF. I guess
• 13:03
  Speaker 3: we are doing our normal process. ABF would probably look
• 13:06
  Speaker 3: at that more than what we do.
• 13:07
  Speaker 2: We've seen a talk fest, various police ministers and industry
• 13:12
  Speaker 2: folks getting together to talk about this problem, but they
• 13:15
  Speaker 2: won't address the elephant in the room. The exercise is
• 13:20
  Speaker 2: driving this trade and they're doing nothing to affect the
• 13:23
  Speaker 2: demand for the product. Would you expect to see anything
• 13:26
  Speaker 2: change simply by another Let's get tough, let's tighten the rules,
• 13:30
  Speaker 2: possibly even put more owners on the freight forwarders and
• 13:33
  Speaker 2: the innocent parts.
• 13:34
  Speaker 5: Of this trade.
• 13:35
  Speaker 1: Ye, that's tough.
• 13:36
  Speaker 3: I mean, yeah, potentially, and it's not helping, that's for sure.
• 13:41
  Speaker 3: And that's probably another issue and not from my area
• 13:44
  Speaker 3: to say, I guess, but yeah, the rates on the
• 13:47
  Speaker 3: judy are just astronomical and yeah, obviously that leads to
• 13:52
  Speaker 3: what is happening now. And you know criminals aren't going
• 13:54
  Speaker 3: to do it if they're not going to make money, right,
• 13:56
  Speaker 3: So do we lower those rates? Do we change that?
• 14:00
  Speaker 3: That's a tough one.
• 14:03
  Speaker 2: Well, it's the definition of madness not to change something
• 14:05
  Speaker 2: when you see it's not working. And they claim to
• 14:08
  Speaker 2: have reduced smoking rates. I think Hegret's still killed twenty
• 14:11
  Speaker 2: thousand strains every year. That's not changing too much. I mean,
• 14:15
  Speaker 2: we've always seen this prohibition in America creates the Chicago underworld.
• 14:19
  Speaker 5: I mean, you can blame that the crooks for what
• 14:21
  Speaker 5: they're doing.
• 14:21
  Speaker 2: They're setting fires, they're murdering people, there's all this violence
• 14:24
  Speaker 2: going on.
• 14:25
  Speaker 5: But where the government doesn't want to change.
• 14:27
  Speaker 2: Particularly where it seems very irksome to me that more
• 14:30
  Speaker 2: owners should fall on the legal parts of the trade
• 14:34
  Speaker 2: in other words of freightforward as the retailers, when it's
• 14:37
  Speaker 2: the government take it that's facilitating this at it's.
• 14:40
  Speaker 3: Heart, Yeah, I would like to see it change, Yeah,
• 14:43
  Speaker 3: because you know, I think also that the funds from this,
• 14:46
  Speaker 3: what people have to realize is the amount of money
• 14:49
  Speaker 3: that they are making and then the other criminal activity
• 14:51
  Speaker 3: that it goes to is probably more frightening as well.
• 14:53
  Speaker 3: So with the government take a backstep though, you know
• 14:57
  Speaker 3: they're not going to, which is sad, because you're right,
• 14:59
  Speaker 3: something has to change. This is only going to get worse.
• 15:02
  Speaker 3: The criminal activity is going to get worse. About the
• 15:05
  Speaker 3: figures already, it's going to get worse. How much more
• 15:09
  Speaker 3: can we do? We're doing enough as it is. Now
• 15:11
  Speaker 3: something has got to change.
• 15:13
  Speaker 5: Thanks for that, Kelly.
• 15:15
  Speaker 2: That's Kelly Crossley from Transittainer in Perth on how the
• 15:19
  Speaker 2: illegal cigarettes are getting into this country.
• 15:22
  Speaker 5: In a moment, we'll talk.
• 15:23
  Speaker 2: To Rowan Pike, a former Australian Federal Police officer who
• 15:27
  Speaker 2: was involved in the first task force into illegal tobacco.
• 15:31
  Speaker 5: That'll be Rowan Pike after the break.
• 15:37
  Speaker 2: It's a truism that you can prohibit something, but you
• 15:40
  Speaker 2: can't make it unpopular. Government intervention in the market for alcohol, drugs, now,
• 15:45
  Speaker 2: tobacco has always driven the black markets.
• 15:48
  Speaker 5: There would have.
• 15:49
  Speaker 2: Been no al Capone if it wasn't for prohibition of alcohol.
• 15:53
  Speaker 2: Tobacco is still legal, of course, but the excise regime
• 15:57
  Speaker 2: has literally created the underworld war we're seeing across this
• 16:00
  Speaker 2: country as syndicates battle for control of this lucrative market.
• 16:05
  Speaker 6: Financial year, the Australian Border Force intercepted over two point
• 16:08
  Speaker 6: five billion illegal cigarettes, enough to avoid four point three
• 16:13
  Speaker 6: six billion dollars in duty.
• 16:16
  Speaker 2: Rowan Pike is a former Australian federal police officer who
• 16:19
  Speaker 2: established Australia's tobacco Strike Team while working at Border Force.
• 16:24
  Speaker 5: But ten years he's.
• 16:26
  Speaker 2: Been saying government cannot continue to increase tobacco excise without
• 16:30
  Speaker 2: boosting the resources for enforcement. They didn't listen, and exactly
• 16:35
  Speaker 2: what Roan predicted has come to pass.
• 16:38
  Speaker 6: Organized crime now has a stranglehold on the illicit tobacco market.
• 16:44
  Speaker 2: We're now seeing summits and task forces, new laws and
• 16:48
  Speaker 2: crackdowns to combat this scourge.
• 16:50
  Speaker 5: But is it too little? Two leg? Let me welcome
• 16:53
  Speaker 5: Rowan to real crime? Can I run? Hi? How are
• 16:57
  Speaker 5: you going? Good? Thank you bikey. You must be bored
• 17:01
  Speaker 5: of saying I told you so?
• 17:03
  Speaker 2: Yes, well, I have said that a few times recently,
• 17:05
  Speaker 2: but to be honest, doesn't give me much satisfaction in
• 17:08
  Speaker 2: doing so. I'd rather just help fix the problem in
• 17:11
  Speaker 2: Australia and overseas. But they haven't been listening. Doesn't say
• 17:16
  Speaker 2: much for my advocacy in the topic. But they have
• 17:20
  Speaker 2: finally put turning their minds to enforcement. But as you say,
• 17:24
  Speaker 2: it may well be too little, too late. Well, yeah,
• 17:26
  Speaker 2: I tend to think governments are as addicted to the
• 17:29
  Speaker 2: excise revenue. As smokers are to nicotine, they can't kick
• 17:34
  Speaker 2: the habit, and that's the crux of the issue. How
• 17:37
  Speaker 2: much enforcement is enough to make a dent on this,
• 17:41
  Speaker 2: that's a good question. So the answer is we don't know,
• 17:45
  Speaker 2: because we've never had a decent crack at the enforcement.
• 17:49
  Speaker 2: Even the convention that we signed twenty two years ago
• 17:52
  Speaker 2: which started the high taxing regime and hundreds of other
• 17:57
  Speaker 2: regulations that surround the tobacco industry that twenty two years later,
• 18:02
  Speaker 2: that actually said that we should upscale our enforcement activities
• 18:06
  Speaker 2: in order to protect against elicit tobacco, but we ignored that.
• 18:10
  Speaker 2: Then there was another convention came out ten years later
• 18:13
  Speaker 2: specifically targeted at elicit tobacco from the World Health Authority,
• 18:18
  Speaker 2: and Australia has refused to sign that. So that has
• 18:22
  Speaker 2: been our attitude up until recently. And it's only really
• 18:25
  Speaker 2: the criminals blowing each other up and murdering each other,
• 18:28
  Speaker 2: which has focused the attention of authorities and really embarrassed
• 18:33
  Speaker 2: them into some sort of action.
• 18:35
  Speaker 5: So is it going to work. I'm not overly confident.
• 18:38
  Speaker 2: It could have worked ten to fifteen years ago when
• 18:41
  Speaker 2: we first started talking about it, But as I say,
• 18:43
  Speaker 2: no one's ever had a real decent shot at the
• 18:47
  Speaker 2: enforcement side, and certainly it won't hurt. Certainly, the way
• 18:51
  Speaker 2: that criminals are getting their product to market through thousands
• 18:54
  Speaker 2: of shops on the high Street is just simply embarrassing,
• 18:57
  Speaker 2: and that access and availability is driving smoking rates to
• 19:01
  Speaker 2: actually go up. So that can certainly be dressed, but
• 19:05
  Speaker 2: it's going to take a sustained larger enforcement effort than
• 19:08
  Speaker 2: what we currently envisage.
• 19:10
  Speaker 5: Well, I was.
• 19:10
  Speaker 2: Seeing recently all these big press conferences and talk about
• 19:14
  Speaker 2: new state laws and increasing the fines on retailers and
• 19:18
  Speaker 2: so and so forth, and it all sounds great, And
• 19:20
  Speaker 2: they've been show and tells where they've seized all this tobacco,
• 19:23
  Speaker 2: but no one's talking about excise. No, well, excis is
• 19:28
  Speaker 2: clearly the driver. They've got their head in the sand
• 19:31
  Speaker 2: about that. There needs to be a holistic review of
• 19:35
  Speaker 2: our tobacco control policy and that includes exercise, which is
• 19:39
  Speaker 2: clearly driven it. You said at the top that they're
• 19:42
  Speaker 2: addicted to the revenue, but the revenue is gone, if
• 19:46
  Speaker 2: not entirely, but it's well on the way. So it's
• 19:48
  Speaker 2: dropped from sixteen billion to seven point seven and on
• 19:52
  Speaker 2: the current trajectory. It'll be one or two billion in
• 19:55
  Speaker 2: a couple of years, and no one will be smoking
• 19:57
  Speaker 2: the legal product. Why would you when it's four or
• 20:00
  Speaker 2: five times more than the illegal product, so they won't
• 20:03
  Speaker 2: have that to fall back on. But say, every state
• 20:06
  Speaker 2: and territory is doing something different, So so much for
• 20:10
  Speaker 2: the coordinated collaborative response that the federal government's supposed to
• 20:14
  Speaker 2: be coordinating. Everyone's doing something different, and we're yet to
• 20:18
  Speaker 2: see whether any of those things that they're doing going
• 20:21
  Speaker 2: to have a positive effect. You again, you mentioned seizures
• 20:24
  Speaker 2: that they love standing behind a big table full of
• 20:27
  Speaker 2: sizars or rolling out the numbers the X million dollars
• 20:30
  Speaker 2: of cigarettes. What I've come to know through my time
• 20:34
  Speaker 2: in the public service and beyond, is that cazars have
• 20:37
  Speaker 2: no effect on the availability of the product. They're just
• 20:41
  Speaker 2: simply bombarding the border with billions of cigarettes. And they
• 20:45
  Speaker 2: sound like big numbers. They are big numbers, but when
• 20:48
  Speaker 2: the profit margins thirty or more to one, they can
• 20:51
  Speaker 2: afford to lose ten twenty container loads and the next
• 20:55
  Speaker 2: one is still going to make a profit. So caizures
• 20:58
  Speaker 2: have little disruptive effect on the organized crime syndicates. I
• 21:03
  Speaker 2: think yes, because this goes a lot further than just
• 21:06
  Speaker 2: supplying tobacco to consumers.
• 21:08
  Speaker 5: We're seeing a whole new criminal underworld. I note that
• 21:12
  Speaker 5: Kashamad is one of the big syndicate leaders. He was
• 21:15
  Speaker 5: deported after being busted for heroin. If he'd knowed about tobacco,
• 21:19
  Speaker 5: he wouldn't have bothered with heroin. He would have gone
• 21:21
  Speaker 5: straight to tobacco, and he's making literally billions. Now, yeah,
• 21:25
  Speaker 5: that's right.
• 21:25
  Speaker 2: So some of the criminal syndicates are diversifying away from
• 21:29
  Speaker 2: drugs into tobacco because it's much lower risk and just
• 21:32
  Speaker 2: as high profit. Kaz As, you say as the classic
• 21:36
  Speaker 2: example from a heroin importer now tobacco deal. But there
• 21:39
  Speaker 2: were syndicates in the past. It just hasn't exploded overnight
• 21:44
  Speaker 2: this problem. It's been going for decades. But the criminals
• 21:47
  Speaker 2: previously were clever enough to not alert authorities to what
• 21:51
  Speaker 2: they were doing and flew under the radar and just
• 21:54
  Speaker 2: quietly accumulated vast sums of wealth without upsetting authorities.
• 21:58
  Speaker 5: But Kazas sort of upset the apple cart.
• 22:01
  Speaker 2: Are now all of those syndicates who were previously doing it,
• 22:05
  Speaker 2: but also new ones and opportunists are coming into the market,
• 22:08
  Speaker 2: realizing how easy it is. We had this moment where
• 22:12
  Speaker 2: the syndicates began to talk about the Commission, which getting
• 22:16
  Speaker 2: together and regulating the market together.
• 22:18
  Speaker 5: It's kind of scary.
• 22:19
  Speaker 2: But also we saw previously when gangsters try to do that,
• 22:25
  Speaker 2: they end up shooting each other, they end up blowing
• 22:27
  Speaker 2: each other up.
• 22:28
  Speaker 5: They don't play well together. So I wonder whether.
• 22:31
  Speaker 2: Disunity is really an ally to enforcement here to arrest
• 22:36
  Speaker 2: enough people to get resources inside these empires, to map
• 22:40
  Speaker 2: an enforcement strategy that might actually work.
• 22:43
  Speaker 5: Yes, I agree, totally agree.
• 22:45
  Speaker 2: As I said, there was an unwritten agreement between syndicates
• 22:50
  Speaker 2: going back decades to not upset the apple cart. But
• 22:54
  Speaker 2: Kas has certainly done that and the commission. I mean,
• 22:57
  Speaker 2: it's just pure greed. He's wanted to take over a
• 23:00
  Speaker 2: lot that has brought attention to himself and has meant
• 23:05
  Speaker 2: that there's.
• 23:05
  Speaker 5: Been a law enforcement response.
• 23:07
  Speaker 2: So here in Victoria, in particular Victoria Police are doing
• 23:10
  Speaker 2: a great job, spending lots of resources and money tackling
• 23:14
  Speaker 2: this organized crime skirt. And in fact, even yesterday Kaz's
• 23:18
  Speaker 2: uncle was arrested, so he's clearly one of according to
• 23:21
  Speaker 2: Victoria Police, probably one of the main players here, but
• 23:24
  Speaker 2: Kaz needs people on the ground to assist his activities,
• 23:28
  Speaker 2: so it goes on. You know, we heard the terms
• 23:31
  Speaker 2: you can't arrest your way out of a problem, and
• 23:33
  Speaker 2: that's a nice thing to say, but again, we've never really.
• 23:37
  Speaker 5: Tried in the tobacco space.
• 23:39
  Speaker 2: So it'll be interesting if we do start locking up
• 23:41
  Speaker 2: some of the big players, what effect that does have
• 23:44
  Speaker 2: on these syndicates and whether that pulls them up a bit.
• 23:48
  Speaker 5: Well.
• 23:48
  Speaker 7: Indeed, his uncle who's alleged to be his number one
• 23:52
  Speaker 7: lieutenant on the ground, I know he's a former policeman,
• 23:57
  Speaker 7: but I wonder whether you just make a vacancy for
• 23:59
  Speaker 7: somebody else. I mean they're doing that certainly with the
• 24:02
  Speaker 7: arson squads that are running around. They're giving Paul Tree
• 24:05
  Speaker 7: sums to people to run around, standing over shopkeepers and
• 24:08
  Speaker 7: burning down shops that won't comply.
• 24:11
  Speaker 5: I'd be interested to see what an all out blitz
• 24:13
  Speaker 5: would look like.
• 24:16
  Speaker 2: Yeah, I don't think they, well, the state governments around
• 24:19
  Speaker 2: the country really really understand the resources and funding required
• 24:24
  Speaker 2: for an all out blitz when there's thousands of shops.
• 24:27
  Speaker 2: I mean, Victoria's talking about fourteen inspectors with they don't
• 24:31
  Speaker 2: have powers or weapons, or security or training. I don't
• 24:34
  Speaker 2: think they're going to make much of a dentt in
• 24:37
  Speaker 2: the thousands of shops. There's thirty within two columns of
• 24:41
  Speaker 2: my house here, so it's everywhere, and it takes a
• 24:44
  Speaker 2: much bigger effort to make a dentt in it, certainly
• 24:48
  Speaker 2: than what authorities currently understand. But yes, it's going to
• 24:52
  Speaker 2: be interesting times coming forth. But as you say, someone
• 24:55
  Speaker 2: else will step up if people get arrested. And that's
• 24:58
  Speaker 2: why I say it's easy to say this when you've
• 25:01
  Speaker 2: left law enforcement. When you're in law enforcement, making arrests
• 25:04
  Speaker 2: and charging people and locking them up is the bill
• 25:08
  Speaker 2: and end all of what you do. You're following the
• 25:10
  Speaker 2: legislation and so on, and you think that this is
• 25:13
  Speaker 2: going to have a great effect.
• 25:14
  Speaker 5: But after you leave, you think that there might be
• 25:16
  Speaker 5: a better way.
• 25:17
  Speaker 2: And there are a couple of better ways in addressing
• 25:19
  Speaker 2: the policy which needs to change in order for this
• 25:24
  Speaker 2: to not continue on. Okay, Well, in a parallel universe,
• 25:27
  Speaker 2: Rowan Pike becomes the chief commissioner of this Raini Vidual
• 25:31
  Speaker 2: Police or the Border Force, and he said unlimited resources.
• 25:34
  Speaker 5: He's speaking to the states. What does he do.
• 25:38
  Speaker 2: Well, he goes to the government for a start and says,
• 25:41
  Speaker 2: there's three ways of fixing this. Firstly, you have to
• 25:44
  Speaker 2: admit that the policy that you've been following for the
• 25:48
  Speaker 2: last ten years has failed and is incorrect and needs
• 25:51
  Speaker 2: to be reviewed. So the government hasn't actually admitted that yet.
• 25:54
  Speaker 2: So as the commissioner, they would have the power to
• 25:57
  Speaker 2: influence government thinking on this matter. But remembering that's the
• 26:02
  Speaker 2: Health Department that is still in charge of tobacco control policy.
• 26:07
  Speaker 2: So that's one of the many difficulties in this space
• 26:09
  Speaker 2: for law enforcement agency to influence health policy. But let's
• 26:13
  Speaker 2: just say they did, they would say that the excise
• 26:17
  Speaker 2: has to come down, the enforcement has to increase multiple
• 26:22
  Speaker 2: times over. And thirdly, we have to start thinking about
• 26:26
  Speaker 2: harm reduction. So even though everyone has been rainwashed to
• 26:31
  Speaker 2: think that bapes are the worst thing on the world
• 26:32
  Speaker 2: and everyone's going to die if you're taking vote and
• 26:34
  Speaker 2: also nicotine pouches, if you look overseas, which Australia rarely
• 26:39
  Speaker 2: do in this space, the countries that have succeeded in
• 26:41
  Speaker 2: reducing their smoking rate, which is the endgame at the
• 26:45
  Speaker 2: end of the day, because smoking is the worst possible thing.
• 26:47
  Speaker 2: L the countries that have succeeded are the ones that
• 26:50
  Speaker 2: have embraced harm reduction in terms of transitioning smokers away
• 26:56
  Speaker 2: from deadly cigarettes into safer nicotine products, and we need
• 27:00
  Speaker 2: to address that issue. So those three things all I'm
• 27:05
  Speaker 2: into play. It's not just simply a matter of enforcement. Yeah,
• 27:09
  Speaker 2: as you say you're out of the job, would you
• 27:10
  Speaker 2: want to take on that job?
• 27:12
  Speaker 5: Are you a massochist?
• 27:14
  Speaker 4: No?
• 27:14
  Speaker 2: I think there's a Well, there's a new commissioner there,
• 27:17
  Speaker 2: and I'm sure she looks very sensible, But yeah, if
• 27:20
  Speaker 2: she wants to take this on, it's a bit of
• 27:22
  Speaker 2: a poison chalice, given that, as I say, she's battling
• 27:25
  Speaker 2: against agencies that are not under her influence. The Health
• 27:30
  Speaker 2: Department is just dead set on carrying on doubling down
• 27:33
  Speaker 2: on this bad policy, and until that changes, no matter
• 27:37
  Speaker 2: how much enforcement you throw at it, I don't think
• 27:39
  Speaker 2: it'll be fixed. I don't have much confidence that it
• 27:44
  Speaker 2: is going to be fixed. And I think we're going
• 27:46
  Speaker 2: to continue to see. I think there's governments with tax
• 27:49
  Speaker 2: a bit like junkies. They'll keep consuming their tax revenue
• 27:52
  Speaker 2: even if it's diminishing. They'll continue to do the same
• 27:55
  Speaker 2: thing till it's all gone. Basically, and under that scenario
• 27:58
  Speaker 2: where we don't address the actual issue, what does this
• 28:02
  Speaker 2: look like? Because I can see this illegal tobacco revenue
• 28:06
  Speaker 2: funding the underworld all other kinds of offenses, guns, money laundering,
• 28:11
  Speaker 2: you name it, and we're going to have a seriously
• 28:14
  Speaker 2: entrenched underworld that will affect everybody. Well, yes, that's exactly.
• 28:20
  Speaker 2: It's easy to envisage that happening. In fact, I would
• 28:23
  Speaker 2: suggest that it's entrenched now. We're already at that point.
• 28:27
  Speaker 2: There are just a few smokers that are just hanging
• 28:29
  Speaker 2: on to their favorite brands and so on. But given
• 28:33
  Speaker 2: cost of living, crisis inflation, just access and availability of
• 28:37
  Speaker 2: the illicit product, those last smokers are likely to move over.
• 28:43
  Speaker 2: It's easy to predict that the end of the legal
• 28:46
  Speaker 2: market for various reasons. One is obviously the excise and
• 28:50
  Speaker 2: people don't want to pay it. But there's also shopkeepers
• 28:53
  Speaker 2: who are being threatened every day, multiple people, with the
• 28:58
  Speaker 2: fact that they've got tens of thousands of dollars a product,
• 29:00
  Speaker 2: a very valuable product.
• 29:02
  Speaker 5: Sitting behind their counter.
• 29:03
  Speaker 2: And I certainly wouldn't want to be doing that in
• 29:06
  Speaker 2: a service station or a seven eleven late at night.
• 29:08
  Speaker 2: It's a really dangerous business to be in now, so
• 29:11
  Speaker 2: there's going to be less people actually want to sell
• 29:12
  Speaker 2: the product, and at the end of the perhaps in
• 29:16
  Speaker 2: a couple of years, the criminals will run the entire
• 29:19
  Speaker 2: tobacco market. There will be just as many people smoking,
• 29:22
  Speaker 2: but the government won't be getting any of the revenue.
• 29:25
  Speaker 8: So there's a little talk about targeting the offshore syndicate
• 29:30
  Speaker 8: leaders into pole all this type of stuff, but you
• 29:35
  Speaker 8: catch one, the market still exists.
• 29:38
  Speaker 2: Excise is the only way to address this. Really, it's
• 29:42
  Speaker 2: certainly a key one. The criminals are attracted by bad policy,
• 29:46
  Speaker 2: so all around the globe they sit there and look
• 29:50
  Speaker 2: for vulnerability in tax policy for a commodity at tobacco
• 29:55
  Speaker 2: or alcohol or anything else. They've obviously targeted. Australia has
• 29:59
  Speaker 2: been vulnerable and they're throwing all their vast resources at us,
• 30:03
  Speaker 2: which has overcome the ability of our law enforcement to
• 30:07
  Speaker 2: stop that happening. So, yes, you can lock up five
• 30:11
  Speaker 2: to ten of them, but the product is going to
• 30:13
  Speaker 2: keep coming to satisfy the market of people who actually
• 30:17
  Speaker 2: want this product, and that's increasing now that it's so
• 30:20
  Speaker 2: cheap as well.
• 30:21
  Speaker 5: Well, that's right. I mean, I think this is a
• 30:23
  Speaker 5: bit like s book making. The sp bookmaker was a
• 30:27
  Speaker 5: friend to people in the community. They weren't going to
• 30:29
  Speaker 5: put him in.
• 30:30
  Speaker 2: If you're buying cheap smoke from the retail around the corner,
• 30:33
  Speaker 2: whether it's a crook or not, you're very reluctant to
• 30:36
  Speaker 2: get involved and point the finger. I mean, I've got
• 30:39
  Speaker 2: one shop operating in my area about fifty meters from
• 30:42
  Speaker 2: a police station and they're happy as larry.
• 30:45
  Speaker 5: So I mean, in an.
• 30:46
  Speaker 2: Already stretched police force in the States, you can't see
• 30:50
  Speaker 2: the resources. I mean, Victoria can't get enough officers to
• 30:53
  Speaker 2: do the basic stuff now, let alone take on a
• 30:55
  Speaker 2: whole nother gangland war if you like.
• 30:58
  Speaker 5: So something has to change and it's not changing. No, no,
• 31:03
  Speaker 5: it's not.
• 31:03
  Speaker 2: And the Victoria place rather be doing one of the
• 31:07
  Speaker 2: multiple other responsibilities they have. But as you say, the
• 31:11
  Speaker 2: government occasionally brings out that argument about do you realize
• 31:14
  Speaker 2: what you're doing. You're just promoting organized crime and making
• 31:18
  Speaker 2: them stronger. But that has zero effect on your average
• 31:22
  Speaker 2: consumer who just sees a ten dollars product and a
• 31:25
  Speaker 2: fifty dollars product and says it's a no brainer. So
• 31:28
  Speaker 2: I mean, even though Australians are generally laura abiding, there
• 31:32
  Speaker 2: is a limit to the faith, I guess, and the
• 31:34
  Speaker 2: trust they have in government policy. And when that faith
• 31:39
  Speaker 2: is broken, which it obviously is now, then people will
• 31:43
  Speaker 2: have no qualms about breaking the law or moving to
• 31:46
  Speaker 2: the illegal product. And they're doing that in droves, and yeah,
• 31:49
  Speaker 2: that trust, if you like, and even their reliance on
• 31:54
  Speaker 2: the product itself. You know, they're happy with a certain
• 31:57
  Speaker 2: brand that they might have had for ten or twenty years.
• 32:00
  Speaker 2: That's broken as well, and now it's just all downhill. Really,
• 32:04
  Speaker 2: that's right, because I mean talk about a safe smoking product.
• 32:07
  Speaker 2: I mean, tobacco is bad for you, whether it's good
• 32:10
  Speaker 2: quality or bad quality, and people will buy it as
• 32:12
  Speaker 2: long as it's got nicotine and you know it doesn't
• 32:14
  Speaker 2: make you sick as soon as you smoke it.
• 32:16
  Speaker 5: So I think a hiding to nothing, Roan.
• 32:18
  Speaker 2: I hope we aren't having this conversation in two or
• 32:20
  Speaker 2: three years time when the legal tobacco is now sponsoring
• 32:23
  Speaker 2: the footy or something.
• 32:27
  Speaker 5: Yes, no, I think they've had that.
• 32:29
  Speaker 2: We're not going to reverse our policy to that extent,
• 32:32
  Speaker 2: but I'm not really sure what it's going to take
• 32:34
  Speaker 2: for the government to wake up that the policy has failed.
• 32:37
  Speaker 2: So you know, there's murders, there's innocent victims, there's shopkeepers destroyed,
• 32:42
  Speaker 2: there's no revenue, there's tobacco smoking rates going up.
• 32:48
  Speaker 9: Yeah.
• 32:49
  Speaker 2: I just don't know how bad it has to get
• 32:51
  Speaker 2: before the government says, oh, okay, we might have got
• 32:53
  Speaker 2: this wrong and reverse some of these policies. But my
• 32:56
  Speaker 2: experiences was the Gangland War down here in Victoria and
• 32:59
  Speaker 2: the proliferation of party drugs back then. We really haven't
• 33:03
  Speaker 2: seen advances in UG reform to address the demand for
• 33:08
  Speaker 2: these product That's where it begins. And so I can
• 33:10
  Speaker 2: see the same thing rolling through again that the governments
• 33:13
  Speaker 2: are unlucky to reform these deeply entrenched policies. Like you say,
• 33:18
  Speaker 2: I mean the fact that the Health Department, for God's sakes,
• 33:21
  Speaker 2: is in charge of this. This should be under justice,
• 33:23
  Speaker 2: it should be under the border agencies, but it's not.
• 33:26
  Speaker 2: I mean, how do we get that simple change to
• 33:29
  Speaker 2: get the right public bodies to be enforcing it.
• 33:33
  Speaker 5: I don't know.
• 33:34
  Speaker 2: We've had multiple federal inquiries that have all said the
• 33:37
  Speaker 2: same thing, that the Home Affairs Department or law enforcement
• 33:41
  Speaker 2: agencies should be running the show. This is an organized
• 33:45
  Speaker 2: crime problem which is clearly out of the remit of
• 33:47
  Speaker 2: the health department, and yet health departments still are running
• 33:51
  Speaker 2: the show. So we should just thank them for creating
• 33:54
  Speaker 2: a problem, and then they need to stand aside and
• 33:57
  Speaker 2: let the groin ups into the room and to try
• 33:59
  Speaker 2: to fix this. Unfortunately, fixing it includes changing the policy
• 34:04
  Speaker 2: that health started, and they're highly reluctant to do so.
• 34:08
  Speaker 5: They certainly are.
• 34:09
  Speaker 2: And I can't see you going back into the fray
• 34:10
  Speaker 2: row and you'd be better off on the sideline at
• 34:12
  Speaker 2: this stage.
• 34:12
  Speaker 5: So thanks for your time today, my pleasure. Thank you.
• 34:18
  Speaker 5: That's right on park.
• 34:19
  Speaker 2: Former Australian Federal Police and Border Force run the Tobacco
• 34:22
  Speaker 2: Strike Team Thinca's issue here, of course, is our tax system.
• 34:26
  Speaker 2: We don't get our richest people to pay their fair
• 34:29
  Speaker 2: share of tax, so traditionally the burden has fallen on
• 34:32
  Speaker 2: the sinners, the drinkers, the smokers, the betters, this sort
• 34:35
  Speaker 2: of thing. So, as Rowan says, until we get a
• 34:38
  Speaker 2: change in emphasis, look at excise, we're just going to
• 34:41
  Speaker 2: be playing catch up here and all the coppers in
• 34:44
  Speaker 2: the world and all the show and tells and all
• 34:46
  Speaker 2: the siegures will make no difference whatsoever, because, as I
• 34:49
  Speaker 2: said of the outset, you can prohibit something, but you
• 34:51
  Speaker 2: can't make it unpopular.
• 34:53
  Speaker 5: Are you buying illegal smokes?
• 34:54
  Speaker 2: Let me know in the comments, or you can also
• 34:56
  Speaker 2: send me an email Adam Shanner, writer at gmail dot com.
• 35:00
  Speaker 2: If you happen to want to point the finger, can
• 35:02
  Speaker 2: always call crime stoppers two one and out of Triple three,
• 35:05
  Speaker 2: Triple zero. I'm not sure many people are doing that though,
• 35:08
  Speaker 2: but thankfully this has been Adam Chan for real crime.
• 35:22
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• 35:26
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• 35:29
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  Speaker 9: If you've ever thought about advertising your business in a podcast,
• 35:42
  Speaker 9: there's a link to reach out in the show notes,
• 35:44
  Speaker 9: or head to podshape dot com to book a free call.