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Types of smuggling

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Goods edit Much smuggling occurs when enterprising merchants attempt to supply demand for a good or service that is illegal or heavily taxed. As a result, illegal drug trafficking, and the smuggling of weapons (illegal arms trade), as well as the historical staples of smuggling, alcohol and tobacco, are widespread. As the smuggler faces significant risk of civil and criminal penalties if caught with contraband, smugglers are able to impose a significant price premium on smuggled goods. The profits involved in smuggling goods appear to be extensive. The Iron Law of Prohibition dictates that greater enforcement results in more potent alcohol and drugs being smuggled. Profits also derive from avoiding taxes or levies on imported goods. For example, a smuggler might purchase a large quantity of cigarettes in a place with low taxes and smuggle them into a place with higher taxes, where they can be sold at a far higher margin than would otherwise be possible. It has been reported that smuggl...
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Methods

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In smuggling, concealment can involve concealing the smuggled goods on a person's clothing, luggage or inside a body cavity. Some smugglers hide the whole transportation vehicle or ship used to bring the items into an area. Avoiding border checks, such as by small ships, private airplanes, through overland smuggling routes, smuggling tunnels and even small submersibles. This also applies for illegally passing a border oneself, for illegal immigration or illegal emigration. In many parts of the world, particularly the Gulf of Mexico, the smuggling vessel of choice is the go-fast boat. Submitting to border checks with the goods or people hidden in a vehicle or between (other) merchandise, or the goods hidden in luggage, in or under clothes, inside the body (see body cavity search, balloon swallower and mule), etc. Many smugglers fly on regularly scheduled airlines. A large number of suspected smugglers are caught each year by customs worldwide. Goods and people are also smuggled acr...
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Economics of smuggling

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Research on smuggling as economic phenomenon is scant. Jagdish Bhagwati and Bent Hansen first forwarded a theory of smuggling in which they saw smuggling essentially as an import-substituting economic activity. Their main consideration, however, was the welfare implications of smuggling. Against common belief that the private sector is more efficient than the public sector, they showed that smuggling might not enhance social welfare though it may divert resources from government to private sector. In contrast, Faizul Latif Chowdhury, in 1999, suggested a production-substituting model of smuggling in which price disparity due to cost of supply is critically important as an incentive for smuggling. This price disparity is caused by domestic consumption taxes and import duties. Drawing attention to the case of cigarettes, Chowdhury suggested that, in Bangladesh, smuggling of cigarettes reduced the level of domestic production. Domestic production of cigarettes is subject to value added ta...
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