The bank is taking firm action to address Australia's growing black market for tobacco. By abruptly shutting down accounts and card payment services for tobacconists without explanation, CBA is supporting efforts by financial regulators to curb money laundering linked to untaxed tobacco products. This approach, however, has raised concerns among legitimate retailers who feel they are being treated unfairly.
Tobacconists around the country are quietly being removed from CBA’s service network. These closures are part of a broader national strategy targeting criminal groups that use small retailers to launder proceeds from the illegal sale of tobacco and vapes. The black market is costing the Australian Tax Office around $3.2 billion in lost revenue each year. In response, CBA has issued 30-day termination notices, cutting affected businesses off from banking and card services altogether.
Some store owners say they received no clear explanation from the bank, forcing them to find new banking arrangements at short notice. In one example, a retailer with no record of wrongdoing was locked out of both business and personal accounts despite no link to illegal activity. Industry sources believe that businesses with ‘tobacco’ in their names may be flagged automatically, regardless of their compliance, while others that sell illegal products out of sight remain operational.
From CBA’s perspective, the move is intended to reduce exposure to financial crime. Still, it has sparked concern over the unintended impact on lawful operators, especially those already under pressure from competition with illicit sellers. Some fear that shutting down legitimate businesses will only give black market dealers more space to operate, particularly in areas with weak enforcement.
Australia’s financial crime authority has instructed banks to closely monitor payment systems used by retail outlets in high-risk sectors. Industry representatives, however, say banks must verify whether businesses hold valid tobacco licences before closing accounts. They argue the aim should be to disrupt illegal networks without penalising those who comply with the law.
