07/07/2026
Australia’s financial crime regulator has delivered a stark warning that illicit tobacco is no longer just a tax issue – it is now a major source of funding for organised crime across the country.
Speaking at the AFIA Risk Summit this week, AUSTRAC CEO Brendan Thomas highlighted the growing threat posed by professional criminal networks that use sophisticated money laundering methods to hide billions of dollars in criminal proceeds. AUSTRAC estimates that illicit tobacco cost Australia more than $7 billion in lost tax revenue in 2024–25, while organised crime groups are generating between $4 billion and $7 billion in profits each year from the trade. [CEO Speech…| AUSTRAC]
According to AUSTRAC, these profits are increasingly being laundered through legitimate financial systems and used to fund other criminal activities. The agency warned that criminal groups are becoming more sophisticated, using global networks, specialist money launderers, digital technologies and artificial intelligence to conceal their activities.
The warning comes as new anti-money laundering and counter-terrorism financing laws take effect, strengthening requirements on businesses to identify and manage money laundering risks. The reforms place greater emphasis on risk assessments, governance, reporting and executive accountability.
For communities, the message is clear: illicit tobacco sales are not a victimless crime. Every illegal cigarette, pouch of chop-chop or illicit vape sold can contribute to a criminal economy worth billions of dollars and support broader organised crime activity.
What You Can Do
If you suspect a business may be involved in illicit tobacco sales or related money laundering activity:
- Report illicit tobacco sales to the relevant state authority, Crime Stoppers or law enforcement agency.
- Be alert to businesses operating unusually large cash-based activities that appear inconsistent with their legitimate operations.
- Support lawful retailers who comply with Australia’s tobacco and vape laws.
Reducing demand for illicit tobacco and reporting suspicious activity can help disrupt the criminal profits that fuel organised crime and protect the integrity of Australia’s financial system.