Black-market cigarettes could fund terrorism, RCMP fear
Canadian authorities worry that the booming black market trade in cigarettes could be used to finance terrorism; many Indian reservations are used as bases for the illicit trade
Jorge Barrera and Jack Branswell write in the National Post that 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.
Sgt. Harvey said police traced money made by a Middle Eastern group from the purchase and reselling of Akwesasne-made cigarettes to a Middle Eastern country. What the money was used for remains unclear and the investigation is ongoing, he said.
Illegal cigarette factories on the U.S. side of Akwesasne supply the majority of tobacco contraband in Canada, authoritiessay. Foreign-made cigarettes, including Chinese, are also present.
The threat of “bloodshed” and a “nationwide indigenous uprising” forced the shelving of plans, wrote Winegard, in his paper, “The Forgotten Front of the Oka Crisis: Operation Feather/Akwesasne,” published in the Fall-Winter 2009 edition of the Journal of Military and Strategic Studies.
The cigarette war, though, was far from over. Smugglers, adjusting to lower margins caused by lower taxes, expanded across Canada and diversified their smuggling, a 1996 RCMP intelligence analysis said. “As predicted, this reduction in smuggling was short lived,” said the analysis. “Smuggling networks have become so deeply entrenched that they will transport and distribute any commodity that will result in profit.”
As taxes creep up, the RCMP continues to make noise. It is doubtful anything will change. The cost of shutting down the trade remains too high for both Canada and the U.S., says Mr. Winegard. “Both governments recognize the potential for immediate and prolonged violence, not only within Mohawk territory, but with the possibility of it spreading to other First Nations communities,” Winegard said. “An unofficial, status-quo remains in place.”