September 23, 2019
Local authorities are looking into reports that counterfeit cigarettes and Cuban cigars may have been smuggled into the country by a Thai firm under investigation for human trafficking.
The probe started after some people reported falling ill from smoking the smuggled products, said officials who asked not to be identified while the investigation is underway.
They added the the victims were being examined for possible exposure to heavy metals, including mercury, that may have been in the fake tobacco products.
The investigation came after the Bureau of Internal Revenue (BIR) destroyed 1,500 boxes of fake cigarettes and filter rods in Bacolod City earlier this month.
Antonio Jonathan Jaminilo, director of BIR Region 12, reported that the destroyed tobacco products were worth P14 million in foregone taxes had they been sold in the market.
The fake cigarettes and Cuban cigars under investigation have been traced to TS Ungum, a Thailand-based firm that may have sourced the illicit products from NCU Hospitality, a company reportedly owned by a a certain Nam Cho’o’l-ung, a North Korean living in Thailand.
Based on information from a counterpart probe in Thailand, the local authorities said NCU Hospitality and its North Korean owner were linked to Magnolias Pattaya Boutique Resort, which is suspected of human trafficking, including minors, and prostitution, as well as making fake Cuban cigars and other tobacco products.
Investigators have interviewed several women believed to be familiar with the activities of the Thai boutique resort. They shared with local authorities extensive details about the lifestyle of its North Korean owner.
The North Korean owner of NCU Hospitality was believed to be holding millions of dollars in a Thai bank account, the sources said.
According to various media reports, North Koreans sent overseas are usually subject to harsh oversight and must turn over the vast majority of their funds to the government in Pyongyang. This is believed to be one of the ways how its Supreme Leader Kim Jong-un is able to finance his country’s missile program and nuclear weapons development.
North Korea is known for its schemes abroad designed to generate revenues for Kim’s government. Based on reports, those activities include quasi-slave labor in the Middle East, deploying information technology (IT) workers abroad to carry out cyber heists, and even drug dealings.
Here in the Philippines, smuggling in fake cigarettes is nothing new.
Earlier this year, the Department of Finance (DoF) reported that fake cigarette-making machines were seized in joint operations conducted by the BIR, the Bureau of Customs and the National Bureau of Investigation.
Several factories were raided in Bulacan province, Nueva Ecijia and Bacolod City, among others, according to a report in August. The confiscated products were estimated to be worth millions of pesos, the report added.
A case study published by the University of Asia and the Pacific said the estimated government losses on unpaid excise tax and valued added tax (VAT) from illegal tobacco trading increased from P2.6 billion in 2012 to P19.9 billion in 2014. The losses in 2015 was estimated at P17.9 billion, the study added.
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