This bill is currently before Parliament.
Health, care & disability
People and companies could be prosecuted for importing, carrying or possessing tobacco when the facts give reasonable grounds to suspect it was imported unlawfully or to avoid duty.
The government says organised crime has turned illicit tobaccoTobacco imported or traded outside Australia’s legal customs and tax rules. into a high-profit, low-risk trade, using increasingly sophisticated supply chains while existing offences are difficult to prove. Assistant Minister Julian Hill said illicit packets can be produced overseas for less than $1, while adult smoking in Australia has fallen to 5.8 per cent. He said smoking still causes 20 per cent of Australia’s cancer burden, kills 66 Australians each day and eventually kills two in every three long-term smokers. The government says the bill would make prosecutions and seizures more practical, protect legitimate businesses and help authorities recover criminal profits.
Australia had already tightened border controls through the 2018–19 Black Economy Package, but illicit tobaccoTobacco imported or traded outside Australia’s legal customs and tax rules. remained a substantial market and was increasingly linked to organised crime, with the ATO estimating 1,741 tonnes was consumed in 2023–24. After authorities reported a surging black market, record seizures and new funding in 2026, the bill responds by modernising offences, seizure and customs-licensing rules and proceeds-of-crime powers so agencies can prosecute unlawful importation more readily, prevent diversion through depots and warehouses, and recover criminal profits.
Mary Aldred (Liberal) argued that stronger offences and faster forfeiture would not change criminal behaviour while the gap between legal and illicit tobaccoTobacco imported or traded outside Australia’s legal customs and tax rules. prices remained so profitable. She also objected that the bill’s presumptions require defendants to point to evidence to rebut them, weakening the usual protection that the prosecution must prove its case. Aldred said that, of 284 convictions recorded from July 2018 to December 2025, only 107 offenders—about 38 per cent—received time in custody, which she used to argue that higher maximum penalties would have little practical effect. Andrew Hastie (Liberal) likewise argued that the bill was not a complete answer because it did not address the economic incentives behind the illegal market, although he said the Coalition would not oppose its enforcement measures.
Hon Julian Hill MP introduced this bill. Supportive speeches so far have come from Labor, Liberal, some crossbench members.
Did it become law?
Not yet
Final passage
No final vote yet
The bill has not yet completed passage through Parliament.
Days since introduction
26 days
Updated 06 Oct 2026.
Meaning
People and companies could be prosecuted for importing, carrying or possessing tobacco when the facts give reasonable grounds to suspect it was imported unlawfully or to avoid duty. The bill also creates four offences covering tobacco imported without permission or against permit conditions. These offences carry maximum penalties of five years in prison, 6,000 penalty units, or both. Customs officers’ existing arrest power would extend to the new offences.
More serious cases could attract up to 10 years in prison, 8,000 penalty units, or both. A case becomes aggravated if at least one listed circumstance applies, including 100 kilograms or more of tobacco, at least $200,000 in duty at risk, three or more people acting together, false documents, repeated conduct or misuse of a trusted position.
Prosecutors could use observable warning signs to establish reasonable suspicionA suspicion supported by objective facts. that tobacco is illicit. These include non-compliant packaging, concealment, missing import records or a sale price below the combined tobacco duty and GST. Cigarette-shaped goods would be presumed to contain tobacco, while testing a representative sample could establish that a larger group of similar goods is tobacco. Goods containing nicotine could also be treated as tobacco when an authorised Customs officer reasonably suspects this from their packaging, labelling, smell or appearance. These presumptions would apply to specified existing offences as well as the new ones, but a defendant could point to evidence suggesting they are wrong.
The bill makes clear that unlawfully imported tobacco can be placed in the strongest existing category of prohibited goods, known as tier 1 goods. This allows the stronger penalties already attached to that category to apply if tobacco is added through regulations.
Duty-refundable tobacco would remain under customs controlLegal oversight restricting how imported goods may be handled. for an extended period; other imported tobacco would remain covered by the general customs-control rules. Under the bill’s default definition, duty must have been paid and the tobacco must be received by a listed duty-free or ship-stores operator for sale to an eligible traveller or use as ship stores. The extended period ends at the earlier of the refund application being withdrawn, rejected or disallowed, sale to the traveller, or taking ship stores aboard for export. Regulations could replace both the default definition and the control period. A person responsible for tobacco that goes missing or is not kept safely could have to pay an amount equal to the duty.
Only approved duty-free shops and warehouses licensed for ship stores could receive duty-refundable tobacco. Ship-stores tobacco would have to be stored securely, sales would be limited to eligible travellers or use as ship stores, and operators would have to keep an electronic register of receipts, sales, disposal, destruction, loss, theft and unauthorised removal. Breaching these licence conditions would be an offence.
The existing seizure framework for tobacco at Customs places would extend to tobacco imported in breach of permit conditions. It would not create new entry, search or surveillance powers. For tobacco seized under the specified powers, an officer must take at least one notification action—such as an individual notice, bulk notice, publication or electronic notification—before the day that is the 28th day of the next calendar month. The tobacco would be forfeited immediately and its owner could not claim its return, although available legal challenges and compensation rights would remain.
Customs brokers and operators of licensed depots and warehouses would be prohibited from using their work, premises or operations to help import prohibited tobacco or breach licence conditions or Commonwealth law. They would also have to take all reasonable steps to stop other people doing so; taking reasonable steps does not excuse a licence holder’s own prohibited conduct. The National Customs Licensing Advisory Committee could investigate selected depot and warehouse applications and report or advise, but the Comptroller-General of Customs would keep responsibility for licensing decisions.
Law-enforcement agencies could seek court orders for property-tracking documents after court proceedings have begun, and a magistrate could order documents located in or accessible from anywhere in Australia. Produced documents or their information could be used as evidence, subject to an existing exception. The maximum penalty for destroying or interfering with a required document would rise from six months or 30 penalty units to two years or 120 penalty units.
When a court calculates criminal benefits to be repaid, offenders could not subtract their costs, investments or benefits obtained for someone else as their agent. The repayment order could be reduced only for restitution, compensation or damages already paid, not merely owed, and not for a fine. If that paid amount is later refunded or repaid to the offender, the court could increase the order by the same amount. For criminal-benefit, book-and-media-profit and unexplained-wealth orders, control of property would be assessed when the relevant application was made—or earlier, when a restraining order was sought—helping stop property being shielded later. The bill also prevents the same underlying property value being counted more than once as unexplained wealthAssets a person cannot show came from lawful sources., while preserving the value of property given away or transferred for too little.
New section 233BABADA - Offences involving tobacco products—reasonable suspicion of unlawful imports New section 233BABADA introduces two new offences involving tobacco products to the Customs Act. Subsection 233BABADA(1) creates an offence in relation to the importation of tobacco products, and subsection 233BABADA(2) creates an offence in relation to the conveyance or possession of tobacco products. Offence—importation of tobacco products An offence against subsection 233BABADA(1) will be made out if the following three elements are present: the person imports goods (paragraph 233BABADA(Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) explanatory memorandum
New section 233BABADC – Aggravated offences involving tobacco products New section 233BABADC introduces aggravated offences where certain circumstances are present in the factual matrix giving rise to a suspected contravention of new section 233BABADA or section 233BABADB. The presence of one or more of these circumstances indicates conduct at the more serious end of the range of offending against the new sections mentioned, and therefore is more culpable and warrants a higher degree of opprobrium. As each new section is made up of a number of offences, there is a corresponding aggravated veCustoms and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) explanatory memorandum
233BABADE Presumptions for offences involving tobacco products—whether goods are tobacco products (1) This section applies for the purposes of the following provisions: (a) paragraphs 233BABAD(1)(b), (2)(b), (2A)(b) and (2B)(b); (b) paragraphs 233BABADA(1)(b) and (2)(b); (c) paragraphs 233BABADB(1)(b), (2)(b), (3)(b) and (4)(b). Presumption—goods in the form of cigarettes (2) Subject to subsection (6), goods are taken to be tobacco products if the goods are in the form of cigarettes. Presumption—appearance and sampling of goods (3) Subject to subsection (6), goods (the relevant goods)Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) introduced text
Item 1 After subsection 233BAA(3) This item inserts new subsection 233BAA(3A) after subsection 233BAA(3) of the Customs Act. This amendment provides that paragraphs 233BAA(1)(a) and 233BAA(1)(b) do not limit the goods that may be specified for the purposes of paragraph 233BAA(1)(c). Paragraph 233BAA(1)(c) provides the regulation-making power to prescribe “other specified goods” as tier 1 goods. The purpose of the amendment made by this item is to expressly make clearer that the power in paragraph 233BAA(1)(c), which enlivens penalties for importing tier 1 goods, is to be construed as not liCustoms and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) explanatory memorandum
This item inserts new paragraph 30(1)(ba) after the paragraph 30(1)(b) to provide for when goods to which new section 30AA applies are subject to customs control. As the definition inserted by item 1 above is also dependant on the application of new section 30AA, it follows that paragraph (ba) is concerned with duty-refundable tobacco. As section 30 of the Customs Act provides for when imported goods are subject to customs control, paragraph (ba) has the effect of referring a reader to new subsection 30AA(4) in order to enable the determination of the duration of the period for which duty-refCustoms and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) explanatory memorandum
5 After section 82 82AA Conditions of a warehouse licence—duty‑refundable tobacco (1) A warehouse licence is subject to the condition that the holder of the licence must not receive duty‑refundable tobacco, or tobacco products that would, if they were to be received by the holder, become duty‑refundable tobacco, unless the licence covers a warehouse that is: (a) an inwards duty free shop (within the meaning of subsection 96B(1)); or (b) an outwards duty free shop (within the meaning of subsection 96A(1)); or (c) licensed to warehouse ship’s stores (within the meaning of section 130C). (2Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) introduced text
205AA Special notice requirements—seizing tobacco products (1) This section applies if: (a) goods (the seized goods) have been seized under subsection 203B(2) or (2A), 203CA(3) or 203CB(2) in a calendar month; and (b) the seized goods are tobacco products. (2) An officer of Customs must, before the day that is the 28th day of the next calendar month, take at least one of the following actions: (a) serve a notice in relation to the seized goods in accordance with subsection (3); (b) serve a bulk notice that covers the seized goods in accordance with subsection (6); (c) publish informatioCustoms and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) introduced text
1 After subsection 77N(2A) (2B) The holder of a licence must not engage in conduct, in connection with the management or control of, or the operations carried out at, the depot that facilitates, assists or enables: (a) the importation of tobacco products that are prohibited imports; or (b) conduct that is inconsistent with another condition of the licence or that contravenes a law of the Commonwealth. (2C) The holder of a licence must take all reasonable steps to prevent a person from engaging in conduct, in connection with the depot, or the operations carried out at the depot, that faciliCustoms and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) introduced text
1 After subsection 202(4) (4A) To avoid doubt: (a) the fact that proceedings have been instituted or have commenced (whether or not under this Act) does not prevent a magistrate from making a *production order; and (b) subject to subsection 206(2), a *property‑tracking document that is produced or made available to an *authorised officer, or information contained in such a document, may be admissible in evidence in proceedings (whether or not under this Act). 2 Section 208 Repeal the section, substitute: 208 Jurisdiction of magistrates A magistrate in a State or a *self‑governing TerritCustoms and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) introduced text
4 Section 126 Repeal the section, substitute: 126 Matters that do not reduce the value of benefits (1) In assessing the value of *benefits that a person has derived from the commission of an offence or offences (the illegal activity), none of the following are to be subtracted: (a) expenses or outgoings the person incurred, or investments the person made, directly or indirectly, in relation to the illegal activity (regardless of when the expenses or outgoings were incurred, or the investments were made); (b) the value of any benefits that the person derives as *agent for, or otherwise onCustoms and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) introduced text
Context
Australia had already tightened border controls through the 2018–19 Black Economy Package, but illicit tobaccoTobacco imported or traded outside Australia’s legal customs and tax rules. remained a substantial market and was increasingly linked to organised crime, with the ATO estimating 1,741 tonnes was consumed in 2023–24. After authorities reported a surging black market, record seizures and new funding in 2026, the bill responds by modernising offences, seizure and customs-licensing rules and proceeds-of-crime powers so agencies can prosecute unlawful importation more readily, prevent diversion through depots and warehouses, and recover criminal profits.
2018–19 Black Economy Package controls take effect
The package removed importers’ ability to enter tobacco products into licensed warehouses as part of earlier efforts to combat illicit tobaccoTobacco imported or traded outside Australia’s legal customs and tax rules..
Australian Border Force ↗ATO estimates 1,741 tonnes of illicit tobaccoTobacco imported or traded outside Australia’s legal customs and tax rules. consumed
The Australian Taxation Office estimated that illicit tobaccoTobacco imported or traded outside Australia’s legal customs and tax rules. accounted for 1,741 tonnes of consumption in 2023–24, despite the overall tobacco market being smaller than in 2018–19.
Australian Taxation Office ↗Government announces tougher laws as black markets surge
The federal government announced tougher penalties, new offences and expanded enforcement powers as illicit tobaccoTobacco imported or traded outside Australia’s legal customs and tax rules., vapes and related products drove a growing black market.
ABC News ↗Record seizures lead to Northern Territory funding
The federal government committed $5.9 million to combat illicit tobaccoTobacco imported or traded outside Australia’s legal customs and tax rules. in the Northern Territory after Australian Border Force reported record seizures and links between the trade and organised crime.
ABC News ↗Hon Julian Hill MP introduces the bill
Hon Julian Hill MP introduced the bill to update enforcement laws that the government said had not kept pace with increasingly sophisticated illicit tobaccoTobacco imported or traded outside Australia’s legal customs and tax rules. supply chains.
Hansard ↗Legislative route
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The bill reached this recorded parliamentary step.
Referred to Committee (17/09/2026): Senate Legal and Constitutional Affairs Legislation Committee; Report due 08/10/2026
Report due 08 Oct 2026
APH bill page notesKey criticism
Mary Aldred (Liberal) argued that stronger offences and faster forfeiture would not change criminal behaviour while the gap between legal and illicit tobaccoTobacco imported or traded outside Australia’s legal customs and tax rules. prices remained so profitable. She also objected that the bill’s presumptions require defendants to point to evidence to rebut them, weakening the usual protection that the prosecution must prove its case. Aldred said that, of 284 convictions recorded from July 2018 to December 2025, only 107 offenders—about 38 per cent—received time in custody, which she used to argue that higher maximum penalties would have little practical effect. Andrew Hastie (Liberal) likewise argued that the bill was not a complete answer because it did not address the economic incentives behind the illegal market, although he said the Coalition would not oppose its enforcement measures.
The government argues that cheap global production—less than $1 a packet—and sophisticated international crime groups are major drivers of the market. It says the objective warning signs are needed because organisers distance themselves from the border, making intent and knowledge difficult to prove, while defendants can still present evidence that a presumption is wrong.
Further sources
Votes
No recorded votes have been found yet for this bill.
Parliamentary debate
Start here — lead voices
Hill urges Parliament to pass the bill swiftly, arguing that modernised offences, tighter supply-chain controls and stronger proceeds-of-crime powers will help law enforcement disrupt illicit tobaccoTobacco imported or traded outside Australia’s legal customs and tax rules. operations and strip organised criminals of their profits.
Read in Hansard ↗Hastie says the coalition will not oppose the bill because its stronger enforcement, customs controls and proceeds-of-crime measures are worthwhile, but argues it is inadequate without lower tobacco excise, regulated nicotine alternatives and substantially greater enforcement.
Read in Hansard ↗Monique Ryan supports the bill because it strengthens enforcement against illicit tobaccoTobacco imported or traded outside Australia’s legal customs and tax rules., including prosecution, investigative and asset-seizure powers.
Read in Hansard ↗Aldred says the coalition will not oppose the bill's stronger enforcement measures, but argues they will have little effect unless the government also cuts tobacco excise, addresses demand and secures meaningful penalties for offenders.
Read in Hansard ↗All speeches by bloc
3 speakers · 3 support
“Nevertheless, I urge all members of this House, and the other place, to support the swift passage of this bill so our law enforcement officials nationwide have the powers that they need and that they have asked for, to go after the crooks at pace.”Read the full speech in Hansard ↗
“The bill creates new offences for importing, possessing and transporting illegal tobacco. It introduces tougher penalties for people involved in large-scale illegal tobacco operations. It gives customs officers stronger and simpler powers to seize illegal goods. It applies customs controls to tobacco products that have received a refund of tobacco duty. It strengthens the licensing rules for customs brokers and operators of customs depots and warehouses. And it improves the operation of proceeds of crime laws to ensure that criminal profits can be identified, restrained and confiscated.”Read the full speech in Hansard ↗
“I urge all members of this House, and the other place, to support the swift passage of this bill. Our law enforcement officials have asked for these powers. They need the tools to disrupt criminal networks, seize illicit products, confiscate criminal profits and protect our communities. This bill strengthens Australia's borders, supports legitimate businesses and ensures organised crime cannot exploit weaknesses in our laws or treat penalties as simply another cost of doing business. I commend the bill to the House.”Read the full speech in Hansard ↗
3 speakers · 3 support
“The coalition's position on this legislation is clear. We support stronger enforcement, better laws, tighter customs and border controls, and improved pursuit of the criminal profits generated by illicit tobacco. For those reasons, we will not oppose the bill. But this bill, again, is nowhere near enough. Australia cannot arrest, seize and prosecute its way out of a market in which organised crime continues to enjoy extraordinary profit margins. Unless the federal government tackles the economic incentives, improves enforcement, restores integrity to the legal market and gives consumers lawful and regulated alternatives, organised crime will continue to adapt and sustain itself. The choice is very clear: on that side of the House, more illicit tobacco, more organised crime, more Australians breaking the law in purchasing those illegal tobacco products; on this side of the House, reimposing the law, breaking the economic model used to sell illicit tobacco, and enforcing the law and crushing these organised criminal gangs. That's what we want to see: more Australians operating within the law.”Read the full speech in Hansard ↗
“The coalition won't oppose moves to strengthen enforcement or introduce real consequences for illegal conduct, but I'd like to make a couple of points beyond that. First, we all continue to hear from this government that its settings are right, that everything is working and that it might be all the Victorian government's fault, as we heard in question time last week. I do have some sympathy for that argument, until you look at the string of arson attacks across South Australia and New South Wales in the past fortnight alone. Yet under this government there is still the insistence that it has this all under control. The facts would suggest otherwise. This is the second bill in a matter of months seeking tougher penalties and greater enforcement for a problem that will keep playing out as whack-a-mole for overstretched and underresourced police and enforcement agencies while the government refuses, point-blank, to address the real underlying driver here.”Read the full speech in Hansard ↗
“The bill also strengthens customs licensing, compliance and oversight arrangements, including a greater scrutiny of people associated with customs depots and licensed warehouses. Again, these are sensible measures, and the coalition will not stand in their way.”Read the full speech in Hansard ↗
1 speaker · 1 support
“So this is good legislation, but I want to be clear why we need it, because I'm concerned that the government could be about to cave to the tobacco industry, to the convenience store industry and to their lobbyists by cutting the tobacco excise. If it drops the tobacco excise, this government will add to a long succession of short-sighted, stupid failures from both sides of politics in this very important policy area.”Read the full speech in Hansard ↗
Record
House · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
House · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
Senate Legal and Constitutional Affairs Legislation Committee
Report due 08 Oct 2026
Referred to Committee (17 Sept 2026): Senate Legal and Constitutional Affairs Legislation Committee; Report due 8 Oct 2026
APH bill page notes
