Organized contraband smuggling and its enforcement in Canada: An assessment of the anti-smuggling initiative

This article provides an overview of contemporary cigarette and liquor smuggling affecting Canada and summarizes the results of research that evaluates a Federal enforcement program in this country entitled the Anti-Smuggling Initiative (ASI). To combat the escalation and increased organization of cigarette smuggling, the Canadian Government provided special funding to federal enforcement and prosecution agencies beginning in 1994. The program evaluation concluded that there was a substantial decrease in the contraband tobacco market as a result of the ASI initiatives; however, evidence suggests that reductions in Canadian cigarette taxes made during the same period were the most powerful policy tool in influencing cigarette smuggling. While the ASI laid the foundation for success in dismantling some of the largest known tobacco and liquor smuggling operations in Canada, it does not appear to have had a strong deterrent effect on organized smuggling in general. Instead, the impact on smuggling groups can more accurately be characterized as one of displacement. Indeed, history shows that early successes in organized crime enforcement are often followed by diminishing returns as criminal groups become more adaptive and sophisticated. This research concludes that to most effectively address the smuggling of legal goods, enforcement must be supplemented with taxation policies that reduce the financial viability and attractiveness of this trade.