HONG KONG, April 1  -- Hong Kong Customs has smashed a supply chain for telephone ordering of illicit cigarettes at Tin Shui Wai, the customs announced Wednesday.

About 400,000 sticks of suspected illicit cigarettes were seized on a light goods vehicle and in a storehouse. The total market value of the cigarettes was about 1.1 million HK dollars ( 141,935 U.S. dollars) with a duty potential of about 800,000 HK dollars.

In the operation, two men aged 40 and 42 were arrested and the vehicle used for distribution of suspected illicit cigarettes was seized, the customs said.

A customs spokesman said that telephone ordering of illicit cigarettes had become the predominant means of transaction in the illicit cigarette market. Customs adopted strategies targeting cross-boundary smuggling of illicit cigarettes as well as smashing illegal sale and distribution of illicit cigarettes by telephone ordering, thereby intercepting the supply chain from source to retail.

Customs will continue to closely monitor the situation and conduct stringent enforcement action against illicit cigarette activities, the customs said.

Under the Import and Export Ordinance, smuggling is a serious offence. The maximum penalty is a fine of 2 million HK dollars and imprisonment for seven years.

Under the Dutiable Commodities Ordinance, anyone involved in dealing with, possession of, selling or buying illicit cigarettes commits an offence. The maximum penalty is a fine of 1 million HK dollars and imprisonment for two years.