A European business advocacy group has urged the Association of Southeast Asian Nations (Asean), chaired by the Philippines this year, to put the fight against illicit trade at the centre of its 2026 economic agenda, warning that it undermines tax revenues, distorts competition and erodes confidence in regional supply chains just as Asean is trying to deepen integration and attract more investment.
To continue reading, subscribe to Eco‑Business.
There's something for everyone. We offer a range of subscription plans.
- Access our stories and receive our Insights Weekly newsletter with the free EB Member plan.
- Unlock unlimited access to our content and archive with EB Circle.
- Publish your content with EB Premium.
Calling illicit trade as a “strategic economic risk,” the European Union‑Asean Business Council (EU‑ABC) said in a new policy paper the Philippines can help steer member states to strengthen licensing and oversight frameworks for high‑risk goods by requiring licensing for manufacturers, importers, exporters and distributors.
Agri‑foods, alcohol, fisheries, forestry products, petroleum, pharmaceuticals, precious metals and gemstones, pesticides, tobacco, wildlife and a wide range of counterfeits remain heavily affected by illegal trade, according to EU‑ABC, which acts as a policy bridge between European companies, Asean governments and regional institutions.
Governments can enhance transparency through registries of legitimate economic operators and require clear declaration of the intended market of sale for goods in transit, said the report.
For instance, it cited how Philippine law requires that tobacco products intended for export reflect graphic health warnings that are necessary in order to be legally sold and taxed in the country where it is supposed to end up. Graphic health warnings make it easier to spot non‑compliant, untaxed or illicit packs in the market.
Authorities sieze US$675 thousand (P39 million) worth of smuggled cigarettes and dried tobacco products bound for Manila, Philippines. Image: Bureau of Customs (BOC)
“By aligning export packaging with destination‑market requirements prior to shipment, this approach helps limit opportunities for re‑routing and leakage into unintended markets,” the report read.
The group added that Asean should formalise joint operations along major smuggling routes and at vulnerable transit hubs, backed by common risk profiles for shipments and stronger intelligence sharing between customs and law-enforcement agencies.
It also called on member-states to classify organised, large-scale illicit trade as a serious economic crime.
EU-ABC executive director Chris Humphrey said: “Illicit trade comes with huge costs for the region. Economic loss aside, communities suffer from health and safety risks, environmental harm, organised crime enabled by illicit trade, and worst of all, the loss of human lives. It must be met with a firm and coordinated response.”
The Philippines has said its chairship will be focusing on strengthening trade and investment and enhancing supply chain resilience. The region’s foreign direct investment reached record levels, to about US$225 billion in 2024, making it one of the top destinations among developing regions, especially for manufacturing and supply chain-related investment.
