The Illegal E-cigarette Dark Web: From Mexican Black Markets To Southeast Asian Workshops, Who Is Abusing Chinese-made Products?

Three recent news reports from Thailand, the Philippines, Mexico and the United States once again reveal a cruel truth: against the backdrop of increasingly strict global e-cigarette regulations, illegal channels are rapidly reconfiguring the gray supply chain of the e-cigarette industry. As the world's largest e-cigarette manufacturing country, China's export products are being abused by transnational criminal groups and deeply embedded in the global underground economy.
01 Mexico: Drug cartels control e-cigarette smuggling channels According to a June 18 report by Daily Signal: "Smuggling illegal Chinese e-cigarettes and counterfeit cigarettes from Mexico to the United States... is no longer just a side business, but a strategic operation."
In Mexico, drug cartels such as Sinaloa and Jalisco are smuggling Chinese-made products along with fentanyl and weapons through the same logistics channels to the United States, generating billions of dollars in gray income. Most of these e-cigarette devices are produced by Chinese-related enterprises, and the drug cartels "whitewash" them through mislabeling, port bribes, and border inspection loopholes.
According to Polaris National Security Think Tank, it is estimated that 216 million illegal Chinese e-cigarettes will flow into the US market in 2024. Among the top 10 e-cigarette brands most popular among US minors, seven are illegally imported Chinese products.
02 Philippines: Tax Bureau launches QR code tracking system to block tax evasion of e-cigarettes According to the Philippine Tax Bureau's official website on June 18: "E-cigarettes are a relatively new industry. We have not taxed them since 2022... Many retailers do not know they need to pay consumption tax."
In the Philippines, the government is developing a QR code tracking system to curb tax evasion and smuggling of illegal e-cigarettes. Consumers and regulatory agencies can use their mobile phones to scan the codes to verify the authenticity of e-cigarettes. BIR Commissioner Romeo Lumagui said the system will assist law enforcement and protect law-abiding merchants.
He pointed out that a large number of illegal e-cigarettes are circulating through retail channels, which are difficult to trace due to their strong concealment at the retail end. Especially among young people, e-cigarettes have rapidly gained popularity, causing traditional tobacco law enforcement mechanisms to lag far behind.
In addition to strengthening on-site inspections, the government is also encouraging the public to assist in combating the illegal market through a tip-off reward mechanism to promote tax compliance.
03 Thailand: Seven arrested for recycling e-cigarette devices and reselling them illegally According to a June 22 report by Bangkok Post: "The criminal gang purchased second-hand e-cigarette devices, refilled them with e-liquid, and then repackaged and sold them online."
In Bangkok, Thailand, police raided an illegal e-cigarette production workshop and seized 3,200 refurbished e-cigarette devices, arresting two Chinese citizens and five Burmese workers. The gang cleaned, refilled, sealed and repackaged the old devices as new products and sold them online, seriously threatening consumer health and safety.

The value of the involved products exceeded 1.5 million Thai baht. The police pointed out that this behavior is a typical operation mode of an e-cigarette "black factory", which is highly concealed and extremely harmful.
The three incidents present a common logic: in the disorderly regulatory zone, Chinese-made e-cigarettes are being systematically abused by the global underground economy, becoming a new low-risk and high-reward weapon for criminal groups. China is the global manufacturing center for e-cigarettes, with advanced technology and huge production capacity. However, as regulatory measures in Europe and the United States become stricter and export barriers increase, some illegal products are slipping through the cracks and being used as tools for money laundering, high-profit sales, luring minors, and funding violence. This not only damages the international image of Chinese e-cigarette enterprises but also poses a threat to global public safety. "Made in China" needs to be vigilant against the risk of external abuse. To prevent the legitimate industry from evolving from an "innocent manufacturer" to a "participant in the responsibility chain", enterprises should enhance brand anti-counterfeiting and compliance control mechanisms and establish overseas illegal circulation monitoring mechanisms. At the industry alliance level, efforts should be made to promote a global consensus on the e-cigarette industry, define the boundaries between "legitimate products" and "illegal market behaviors", and proactively build industry credibility. Today's illegal e-cigarette crisis is not only a public health issue but also concerns global security, industrial order, and national image. We must be vigilant.