Faced with the massive influx of illegal e-cigarettes, although the Federal Food and Drug Administration (FDA) and Customs and Border Protection (CBP) have stepped up their crackdown, illegal e-cigarettes are still prevalent. British American Tobacco (BAT) estimates that illegal e-cigarettes will account for about 70% of the US e-cigarette market in 2024, with a total of 8.14 billion yuan, and these illegal products mainly come from China.
Reuters combined official US data and information revealed by e-cigarette industry insiders to reveal the inside story of the illegal e-cigarette supply chain and found that a group of middlemen (including importers, distributors and customs brokers) played a key role.
A small customs brokerage 15 minutes away from Chicago O’Hare International Airport is actually an important middleman for importing Chinese e-cigarettes, helping millions of illegal Chinese-made e-cigarettes to be imported into the United States in 2024. What’s even more shocking is that 60% of the e-cigarettes (including legal and illegal) and e-cigarette tools imported from China to the United States in 2024 were imported through customs with the help of this company.
In May this year, the FDA and CBP took joint action to seize unauthorized e-cigarettes worth 34 million yuan in Chicago. For the first time, the FDA sent a letter to 24 e-cigarette middlemen warning that falsely reporting product information to customs is a federal crime.
Customs brokers mainly assist importers in handling documents and customs clearance procedures, but if they fail to do their job or deliberately mislabel goods, they may violate US law.
Although Jay Kim, the owner of this customs broker, claimed that many of the e-cigarettes they helped import were approved for sale by the FDA, data showed that the company helped import products including LostMary and Geek Bar, which have been publicly banned from import and sale because of their different flavors that attract children.
Kim claimed that he had withdrawn from the e-cigarette business in 2024, but the e-cigarette import business under his company’s name continued until 2025 when it was jointly seized by the FDA and CBP.
Shenzhen, China is the largest source of legal and illegal e-cigarettes. In 2024, China Customs reported that the export of e-cigarettes to the United States was 3.6 billion yuan, but the official record of the U.S. Customs was only 333 million yuan. The huge difference shows the severity of its smuggling and tax evasion.
In addition to Jin’s customs brokerage, there is also a network of small companies, which are even opened in residential houses. For example, Somo Trade LLC, headquartered in Chicago and established in 2023, was the second largest importer of e-cigarettes in the United States in 2024, and the company’s registered address is in a residential house.
