Cigarette and tobacco smuggling is financing militant or extremist groups such as the Pakistani Taliban and sapping about $40 billion a year from government budgets, campaigners said Monday.
The claims were made as 160 countries resumed talks at the World Health Organization on expanding an international anti-smoking treaty to clamp down on the illicit trade in tobacco.
Apart from issues such as enforcement and coordination, the ten-day preparatory negotiations are also examining a possible halt to duty free sales of cigarettes or measures against Internet sales, WHO documents showed.
An alliance of some 350 anti-tobacco campaign groups said in a statement that concerted action against the contraband and counterfeit cigarettes trade would far outweigh the $40.5 billion in lost tax revenue.
Some 12 percent of the global cigarette market was illicit, equivalent to some 657 billion cigarettes a year, the International Union against Tobacco and Lung Disease estimated in a report.
Researchers also alleged that "half a dozen terrorist" or militant groups, including the Pakistani Taliban, Al-Qaeda in the Islamic Maghreb, Hezbollah, leftwing FARC rebels in Colombia and the Real IRA in Northern Ireland, rely on black market tobacco for revenue.
"We believe that tobacco has been second only to drugs as a source of finance to the Pakistani Taliban," said David Kaplan, editorial director of the US-based Center for Public Integrity.
His body also highlighted "smuggling hubs" in China, Paraguay and Ukraine, where either illegally produced counterfeits or contraband excess production from legal factories were fuelling black markets around the world.
It estimated that 80 percent of counterfeit cigarettes in the European Union and 99 percent of those sold on U.S. streets were among the estimated 420 billion made illegally every year in China.
"Renegade factories, multinational companies and weak enforcement all play a role in fuelling this massive illegal trade, whose profits rival those of narcotics," said Bill Buzenberg, executive director of the center.