While there is no concrete evidence that illicit tobacco traders are already using AI, JT International (JTI) Anti-Illicit Trade Operations regional director Valentin Dinca said the company is not discounting the possibility that criminal networks could harness the technology to make their operations more efficient or harder to detect.
Potential tools
During a recent media briefing, Dinca pointed to technologies such as AI and data analytics—combined with faster intelligence sharing among law enforcement agencies—as potential tools against an illicit tobacco trade that operates across multiple markets.
He said the decision to deploy AI ultimately rests with law enforcement authorities. JTI, for its part, is prepared to provide information and support government efforts against illicit tobacco trade.
“Seeing the improvements that illicit trade has, how quick they are to adapt, how quickly they change their counterfeit products to adapt to the realities of the modern market, there could be reason to believe that they use AI. Plus, AI is now at arm’s length with everybody, and it's very easy to use from a criminal perspective,” he said.
AI guardrails
Dinca, however, said safeguards would need to be in place if authorities turn to AI, especially when using government-held data.
“There clearly should be a lot of safeguards in place. And this will have to rest with the authorities. Because they are the owners of the databases,” he added.
The cross-border nature of illicit tobacco makes intelligence sharing particularly important. Weaknesses at one point in the supply chain can create openings for products to be diverted and distributed illegally across different jurisdictions.
Dinca said illicit traders can exploit these gaps, leaving consumers exposed to unregulated products that may have a disregard for health safeguards.
‘Destination market’
He described the Philippines as a “destination market” for so-called illicit whites—cigarettes that are legally manufactured, typically for export, but are eventually smuggled into markets where applicable taxes and duties are not paid.
Research by Kantar that was cited by JTI identified parts of Mindanao, including Tawi-Tawi, Sarangani and the Zamboanga area, as transit or convergence points for illicit tobacco entering the Philippines from neighboring markets such as Malaysia and Indonesia.
A 2026 study by the EU-ASEAN Business Council and Euromonitor estimated that illicit cigarettes accounted for 25.3 percent of cigarette consumption in the Philippines in 2025, up from 23.8 percent in 2024.
It estimated potential forgone tax revenue from illicit cigarettes at $2.06 billion over the two-year period.
Track-and-trace system
Regional customs authorities have also been building mechanisms for faster intelligence sharing.
The Philippines led ASEAN's first Joint Customs Control operation against illicit tobacco in December 2023, with Malaysia serving as secretariat. All 10 ASEAN member states participated in the operation, exchanging information on suspected illicit tobacco movements across the region.
Technology is also beginning to play a larger role in enforcement.
The EU-ASEAN Business Council report and Euromonitor International said Malaysia introduced a Digital Market Intelligence module in 2025 that uses AI-powered analytics to complement its tobacco track-and-trace system.
Malaysia's use of AI analytics serves as an example for other countries in the region on how technology could be combined with existing tracking systems and cross-border intelligence to identify illicit tobacco activity. —Ed: Corrie S. Narisma
Content Producer
