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30 March 2026 | 2 min read
15 April 2026
How banks, AUSTRAC and government are working together to disrupt illicit tobacco
Illicit tobacco isn’t just a health issue, it’s a serious form of financial crime that has real impacts on communities, customers and legitimate businesses right across Australia.
Behind the black‑market sale of cheap cigarettes and loose tobacco sits a complex web of organised crime, money laundering and corruption, and that’s why banks, government and law‑enforcement agencies are working more closely than ever to shut it down.
What is illicit tobacco – and why does it matter?
Illicit tobacco includes cigarettes and loose tobacco that is imported, manufactured or sold, illegally, often without tax paid, outside licensing rules, or through black‑market distribution networks, or otherwise illegally.
Authorities estimate illicit tobacco now represents around half of the Australian tobacco market, making it one of the most profitable forms of organised crime in the country. The scale of the trade means it isn’t operating on the fringes; it’s embedded in complex criminal networks that also engage in drug trafficking, people smuggling and other serious financial crimes.
There are also safety and community impacts:
- Legitimate retailers are undercut or pressured by criminal networks
- Poor‑quality and unregulated products pose health risks
- Organised crime becomes embedded in local communities
A shared objective: collaboration over competition
For banks, tackling illicit tobacco isn’t about competing, it’s about protecting communities and the financial system.
NAB Executive Group Investigations, Chris Sheehan, says collaboration across the entire sector is essential.
“Commercially, we are competitors, but when it comes to fighting organised crime, we work really closely together. If one organisation has identified a particularly effective detection methodology or algorithm, we’ll share that information so we can all make the environment harder for criminals to operate within.”
This collaboration helps ensure criminals can’t simply move from one financial institution to another to continue laundering money.
Why this approach works
Illicit tobacco is profitable because it has historically been easy to hide, but money leaves a trail.
By combining banks’ visibility of financial flows, AUSTRAC’s intelligence and coordination, and law enforcement powers to seize assets and prosecute offenders, we’re working together to make it harder, riskier and less profitable for organised crime gangs to operate.
Learn more about how we’re fighting illicit tobacco.
