Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026

The short answer

Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026

The Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026 was introduced in the House of Representatives on 10 September 2026 by Assistant Minister for Customs Julian Hill. It amends the Customs Act 1901 and related laws to create separate offences for the importation of illicit tobacco and for its possession or movement inside Australia, and to allow prosecutors to rely on objective circumstances — such as prices below the applicable excise and GST, non-compliant plain packaging, or hidden goods — to show tobacco entered the country unlawfully. The bill also strengthens proceeds of crime powers so investigators can obtain documents and act against assets linked to the illicit trade. Introducing the bill is the start of the parliamentary process only: at this stage no vote has been taken, no royal assent has been given and no commencement date is set.

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What the bill does

The Customs and Other Legislation Amendment (Illicit Tobacco Enforcement Modernisation and Other Measures) Bill 2026 is a government bill introduced in the House of Representatives on 10 September 2026. Its purpose, as published on the Parliament of Australia bills register, is to modernise the enforcement framework in the Customs Act 1901 and related legislation so that the illicit tobacco trade can be prosecuted more effectively.

The bill does not create a new tax or change the rate of tobacco excise. Instead it changes how the existing prohibitions on importing and dealing with unlawfully imported tobacco are proved in court, and how the proceeds of that trade can be pursued. It is one part of a broader government package announced during 2026 against organised crime involvement in the tobacco market.

A bill of this kind must pass both houses of Parliament and then receive royal assent before it becomes law. When this article was prepared, the bill had only been introduced and referred into the parliamentary process; the text of the bill and the accompanying explanatory material on the Parliament website are the primary record of what is proposed.

Evidence review

The problem the bill is meant to fix

Under the existing law, prosecution of illicit tobacco importation has commonly required the prosecution to prove that the accused person knew the tobacco had been illegally imported and was subject to customs duty. Assistant Minister for Customs Julian Hill described the present offences as designed for another era, when the offenders were low-level operators, and said the scale and sophistication of organised crime now demand a different approach.

According to reporting by the ABC on 10 September 2026, prosecutions have routinely been frustrated by the knowledge requirement, because organised operations are structured so that the people who handle the goods can deny knowing where the tobacco came from. The bill is intended to remove that obstacle by shifting the focus onto objective circumstances that a reasonable person would treat as evidence that the tobacco was illicit.

The government has framed the measure as a law-enforcement reform aimed at organised crime rather than at ordinary smokers or licensed retailers selling lawful product. Health Minister Mark Butler told Parliament that the government's position is that enforcement, rather than a cut to tobacco excise, is the best way to attack the black market.

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Separate offences and the reasonable-suspicion test

The core change reported by the ABC is the creation of two distinct categories of offence: one covering the importation of tobacco, and another covering the possession or movement of tobacco within Australia. Splitting the conduct into separate offences means that conduct occurring entirely inside the country can be charged without having to establish the original act of importation against the same person.

Prosecutors would be able to point to circumstances that would lead a reasonable person to suspect the tobacco was illicit. Reported examples include cigarettes sold for less than the excise and GST that would apply to a compliant product, the absence of documentation showing where the tobacco came from, products that do not meet Australia's plain-packaging rules, and banned variants such as menthol flavouring.

Because Commonwealth law reaches companies as well as individuals, the reforms would also allow action against tobacconists, warehouse operators and distribution businesses in possession of illegal tobacco. Mr Hill said serious criminals remain the focus, but that it would also become easier for law enforcement to act against retail premises.

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Proceeds of crime and asset recovery

The bill also strengthens proceeds of crime laws. Reported changes include expanded powers for investigators to obtain documents and tightened rules designed to prevent people involved in the trade from shielding assets. Mr Hill argued that the most effective deterrent is the seizure of money and property, saying that what really hurts these criminals is taking their cash, cars, houses, boats and other assets.

Asset recovery is significant because it addresses the business model of the illicit trade rather than only individual acts of possession or sale. If the bill passes, the proceeds of crime provisions would operate alongside the new tobacco offences, so a person could face both a criminal charge and action against the proceeds connected to the offending.

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How the bill sits against the excise debate

The introduction of the bill came in the same week as competing proposals to cut the tax on legal tobacco. The Coalition has promised to cut the excise by 80 per cent, which it says would reduce the tax on a packet of 20 cigarettes by $24, and to legalise and tax nicotine vapes and pouches for adults, alongside $200 million in additional enforcement and $60 million for a public education campaign. One Nation has announced a 75 per cent excise reduction, arguing that this would suppress the black market.

Health Minister Mark Butler told the House that the government believes enforcement is the better route, while leaving the door open to other sensible ideas that do not prejudice its public health campaign. The bill is therefore not the only live proposal in this policy area, and the parliamentary debate over enforcement versus excise is continuing.

Mr Hill said he had briefed the crossbench and urged the Parliament to support the reforms, describing them as exactly the powers law enforcement agencies have been asking for. Whether they are enacted depends on the ordinary course of parliamentary consideration and any committee inquiry to which the bill may be referred.

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What happens next

A bill introduced to the House of Representatives normally proceeds to a second reading debate, then to consideration in detail, before being sent to the Senate. Either house may refer it to a committee, and the passage of time depends on the sitting calendar. None of those steps has yet occurred for this bill at the time of writing.

Once a bill passes both houses it needs royal assent from the Governor-General, and an Act commences on the date or dates set out in its commencement provisions, which may be later than assent. Until those steps are completed, the bill has no legal effect and the offences described here do not operate as law.

Readers should treat the bill register and the explanatory memorandum on the Parliament of Australia website as the authoritative sources for the text and progress of the bill, and should note that the summary here is based on the official register and contemporaneous reporting of the introduction on 10 September 2026.

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