RCMP fear black-market cigarettes could fund terrorism

The black market, cross-country tobacco trade has created an underground economy Canadian authorities fear could be used to finance overseas terrorism, internal RCMP intelligence documents obtained by Canwest News Service show. The materials also indicate RCMP intelligence predicted the expansion of the underground tobacco trade shortly after the federal government shelved plans in the early 1990s to invade several Mohawk reserves. The government chose instead to lower tobacco taxes to undercut the financial incentive for smuggling. The underground tobacco trade now spans the country, with authorities finding Mohawk-made cigarettes from Newfoundland to Vancouver Island, according to an RCMP intelligence analysis from 2008.

Black market tobacco also greases an underground economy in Canada worth hundreds of millions of dollars, supplying money for a range of illegal enterprises that could include terrorism, according to an RCMP Quebec division intelligence report for January and February 2008, obtained under the Access to Information Act “By offering tobacco products at a better price, smugglers stimulate an underground economy within which its profits could be used to finance illegal activities,” said the report. “These activities [include] the smuggling of drugs and firearms, the financing of terrorism, money laundering, among others.” The RCMP claim 105 crime groups are involved, at different levels, in the illegal tobacco trade.