Lam said one of the containers was packed with boxes of untaxed tobacco products with the packets labelled with the Hong Kong health warning.
The type of contraband cigarettes is known as “cheap white”.
“Criminals might try to pass off such ‘cheap white’ cigarettes bearing Hong Kong’s statutory health warnings as legally taxed cigarettes,” Lam said.
“They could be offering these untaxed cigarettes to retailers like news-stands and groceries, enticing them with substantial profits to distribute these illicit tobacco products in the market.”
He appealed to businesses not to buy cigarettes with an unknown origin.
“Any cigarettes sold significantly below the normal tax rate are likely untaxed illicit cigarettes,” Lam warned.
“If customs reasonably suspects that a business is selling untaxed cigarettes, we will take decisive enforcement action.”
The increase in tobacco tax in February’s budget pushed the average cost of a pack of 20 cigarettes up by HK$16 to more than HK$90, with tax accounting for HK$66 of the sale price.
The Post learned that a pack of contraband cigarettes cost between HK$20 and HK$40 on the black market.
Lam said if tax had been paid on the latest haul of illegal cigarettes, the city would have benefited by HK$100 million.
“It is the largest seizure of illicit cigarettes in a single operation this year,” he said.
Customs said an investigation to trace the source and route of the untaxed cigarettes continued and that further arrests had not been ruled out.
The cargo vessel was first spotted in waters to the south of the city and tried to flee when two customs boats approached it.
Senior Inspector Lam Ming-hong, of customs’ ports and maritime command, said a forced boarding was needed to get the vessel to stop because it refused to follow instructions to halt.
Customs officers carried out a search after the crew were unable to produce shipping documents and the illicit cargo was discovered.
The seven crew members were still in custody for questioning on Thursday afternoon.
The latest haul followed customs officers’ first bust of an illicit cigarette factory in Lau Fau Shan on July 3.
About HK$120 million worth of contraband and processed tobacco, as well as machinery was seized and four men were arrested.
Customs launched a crackdown on street peddling of contraband cigarettes on July 1.
The operation, which continues, has already led to the arrest of 44 people.
Anyone convicted of the sale, handling, purchase or possession of illicit cigarettes faces a maximum fine of HK$1 million and two years behind bars.
