Smuggling ‘huge’ in Cayman

Customs busts reveal cigarette scam

The arrests of three people, including two airline employees, in connection with smuggling cigarettes into Grand Cayman this month revealed just a small part of a massive problem that some local business owners say they’ve known about for years, but which authorities have done little to combat.  

Essentially, people are evading import duty by sneaking otherwise taxable items like cigarettes and alcohol past airport customs officers.  

“We are aware that there’s a growing trend of smuggling involving duty-free cigarettes, and we have identified the varying techniques used,” Acting Customs Collector Samantha Bennett said this week. “These cigarettes will eventually end up on the black market, but we will make every effort to stop those criminals who seek to make money from smuggling of goods, whether the goods are legal or illegal.” 

In the specific case, a three-day operation by customs led to the arrests of two airline employees, a 21-year-old woman and a 26-year-old man. Later on, a 35-year-old woman was arrested upon arrival in Grand Cayman.  

The items involved were seven cartons of duty-free cigarettes. The three have been arrested and released on bail, but “charges were anticipated,” Ms. Bennett said.  

The collector said it was likely the three individuals would face fines upon conviction and that it was a concern that public sector employees had been revealed as participants in these activities. “They’re people in an area of trust,” she said.  

According to local business owners, this bust is not the first time illegal attempts to avoid paying duty on cigarettes or other products have been made.  

“The smuggling is major. The duty on a carton of cigarettes is $42, so that’s why they’re smuggling in the cigarettes,” Reflections Liquor-4-Less owner Prentice Panton said. “You could make more money smuggling cigarettes than smuggling marijuana.”  

The lost duty on seven cartons smuggled in during the recent customs case amounts to $294.  

David Dibben of CEL Distributors in Cayman believes his company has missed out on major cash in recent years due to the smuggling of alcohol and cigarettes.  

“It’s a huge, huge loss of sales because of this,” Mr. Dibben said. “It’s not only smuggling, we’ve had to enforce trademarks to go and seize stuff from people. You don’t know exactly how it affects your business, you can only go from where your high point was to where you’ve seen your sales decline … in the last three years.”  

In recent years, Mr. Dibben said, companies have become more savvy, falsifying invoices for products they did not pay duty on. He lauded the customs department and Ms. Bennett for taking steps to finally address the issue.  

“There was no enforcement basically [in the past],” he said. “[Companies] that falsify invoices should be held accountable as well.”  

Robert Hamaty of Tortuga Rum Company Ltd. said he had been made aware of situations where duty-free products purchased at Owen Roberts International Airport never left the jurisdiction and were simply handed to someone outside the airport to take back into Grand Cayman.  

He said Tortuga’s duty-free store at the airport sells a carton of cigarettes for US$39.50. No duty is charged on a carton that leaves the island, but if the carton is secretly kept in Cayman, it would then avoid the CI$42 duty normally charged.  

Mr. Panton said he’d heard of other methods of smuggling where suitcases holding 50 cartons of cigarettes were flown in and left on the airport floor, somehow making it into the parking lot without being charged duty. One such case is worth $2,100 in duty.  

Current prices for cigarettes in Cayman range from the “lowest” end, about CI$7.25 per pack to more than CI$10 per pack. Both Mr. Panton and Mr. Dibben agreed the high prices, brought on by increases in duty, has created something of a “black market” for smugglers.  

“When they put the duty up … it breeds crime,” Mr. Panton said. “It’s liquor as well, you know [that gets smuggled].”  

Chamber of Commerce President Johann Moxam said Mr. Dibben recently spoke with Chamber council members at length regarding smuggling issues about which Mr. Moxam said he was gravely concerned.  

“The Chamber has received complaints from its members and we are in the process of gathering all the relevant facts and we hope to get a meeting with Samantha [Bennett] and also with the ministry responsible for enforcing relevant laws,” Mr. Moxam said.  

“The black market that is developing in Cayman and the lack of enforcement negatively impacts the business community and the wider community … and it is an area that we would encourage the government to look at. We congratulate the government on their operations and efforts thus far.”  

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5 COMMENTS

  1. People don’t mind paying taxes and will grumble about it but still pay. When taxes are outrageous, there is a cottage industry in avoiding duties and smuggling thrives. Lower the taxes to a realistic rate, cut public sector benefits, wasteful spending and you will accomplish a lot more instead of turning the screw on the public hand that feeds you.

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  2. In my humble opinion I think it might benefit the people of Cayman if the high tax rate applied to ALL cigarets. In fact, it might be helpful if the costs were raised so high that none could afford them. The health benefits of not smoking tobacco (or anything else) would be astounding’
    My opinion is formed from personal experience, of being a 25 year consumer of 3 packs of Camels a day, who had COPD, constant coughing, wheezing, shortness of breath, and the urge to grab a smoke 24/7. Fortunately for me I quit for the umpteenth but final time 25 years ago, and have been living free of asthma symptoms and all of the above for quite some time now.
    So yes, I think I know what’s good for other people, and think it wise to not only help them to give up, but to CAUSE them to not be able to begin abusing themselves, and/or to CAUSE them to have to cease doing so.
    Addendum: Some time about 30 years ago during one of the times I thought I should give up smoking, I thought to myself that a good friend, an ex-sailor with a thriving business in Cayman, whom I had known for years, also smoked Camels, and he seemed tome to be fine, so why should I quit. But a short time later he died of lung cancer, leaving behind a charming wife and two remarkably successful young men, all of whom have made their marks in Grand Cayman. I attribute to him a significant part of my successfully having saved my own life from the evil weed.
    FYI–I am now 86 years old.

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  3. Duty on tobacco! Well, where that came from? My guest is that the Cayman Islands government decided to do like other countries and get a lot of revenues from it. In Canada, for example, a part of the tobacco taxes is being used as a deterrent but the most part is to cover all health issues as a result of tobacco usage. Note that Canada provides free health care to all its citizens and it is fair to charge those taxes. Does the Cayman Islands provides free health care? I don’t think so so what is the tobacco taxes used for? Also, just for the record, I still do not agree with tobacco smuggling .

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  4. Everyone please remember: nothing to eat or drink 8 hrs prior to landing at the airport. This could affect the results of your colonoscopy that TSA will be administering upon arrival. TSA will take the address you will be staying so they can reach you later with their findings.
    Hello Mr. Jones on behalf of our agents we are happy to announce that your colonoscopy came back clear of contraband however you may have a polyp that you may want to have looked at when you arrive back in the states.

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