OPINION – The unearthing of IRGC’s involvement in Australia’s firebombing incidents in 2025 has subsequently brought into question – the extent by which overseas terrorist groups and Australian domestic organized crime are in sinister collaboration. Although the firebombings occurred in 2025, the facilitation of terrorist financing by the efforts of criminal proceeds have long been understood. With illicit tobacco being a staple and incredibly lucrative commodity in the Australian criminal underworld, spurred by the nation’s expensive excise tax, its profound role in terrorist financing is a pressing issue for Australia to further investigate, especially in light of the IRGC discovery.

From late 2024, Australia experienced a series of arson attacks against Jewish-affiliated enterprises, of which two were linked to the IRGC by the Australian Security Intelligence Organization (ASIO) in August 2025. The first incident involved a firebomb attack on the Lewis Continental Kitchen in Sydney in October 2024 coordinated by Sayed Mohammad Moosawi, a former chief of the Nomads motorcycle gang. The second incident involved a firebomb attack on Adass Israel Synagogue in December 2024, which resulted in over $20 million in damages.

In response, ASIO head Mike Burgess pinned the attacks on the IRGC, attesting that the group utilized proxies to operationalize these attacks. Previously, the IRGC has been listed as a terrorist entity by other Western states, namely Canada and the United States. While the attacks did not ultimately result in terrorism charges in Australia, the IRGC’s involvement would shed light on the looming crime-terror nexus, the symbiotic relationship between terrorism and organized crime that is festering in the nation. Understanding this interplay of crime and terror is crucial for counterterrorism efforts in Australia to proactively deter the future threat of terrorism on their soil.

In recent years, the illicit tobacco market has been a rampant issue in Australia, with an economy of approximately $10 billion annually. The market is propagated by the nation’s expensive excise tax on tobacco which compels users to turn to illegal avenues to procure the commodity, ultimately driving the lucrative underground market even further. At A$1.49 per 0.8 gram stick, increased in September 2025 or A$40, or US$26 for a pack of 20 cigarettes, the prices of tobacco is exorbitant compared to other Western countries such as Canada at an excise duty rate of CAD$0.19 per stick and an “average” pack costing between CAD$15.36 to $19.75 as of April 2025. In addition to an estimated loss of $7 billion in excise revenue, this illicit market is known to facilitate terrorist financing operations, being listed as a substantial financier to offshore terrorist groups by the Australia Criminal Intelligence Commission (ACIC). In relation to the firebombing attacks, the discovered crime-terror ties is a warning for Australian stakeholders to address the nation’s excise tax policy which would, in turn, strategically cripple terrorist financing.

Further linkage between illicit tobacco and terrorist financing has been discovered by Australian authorities. Prior to the two firebomb attacks between 2024 and 2025, Australia had already been experiencing a long string of firebomb attacks, linked to illicit tobacco kingpin, Kazem “Kaz” Hamad. Hamad, who was deported from Australia to Iraq in 2023, was believed to be involved with 150 arson attacks targeting tobacco shops across Melbourne. Notably, he was linked to the arson attack on the Lux nightclub in November 2024 where perpetrators of the incident drove a blue Volkswagen Golf. According to a joint report by the Australia Federal Police (AFP), the ASIO, and the Victoria Police, the same vehicle was allegedly used in the Adass Israel synagogue firebombing and a shooting in Bundoora, both of which happened on the same night. Given this linkage, the IRGC may be a key benefactor to the Hamad’s affluent illicit tobacco trade while members of his criminal network will commit violence to appease this overseas client of theirs. By leveraging these networks, the IRGC can employ an outsourcing approach to inflict damage on adversaries while maintaining a guise of plausible deniability.

The IRGC’s methodology, which is a form of hybrid, or asymmetrical, warfare, is a staple in the organization’s playbook which has been observed before in its plan to attack targets in Sri Lanka and the United States in 2024. The IRGC utilized drug trafficker Farhad Shakeri, who held a strong network of organized criminals in both Sri Lanka and the U.S. Shakeri planned to use his criminal contacts to bomb the Israel consulate in Colombo and Arugam Bay, assassinate Israeli tourists in both locations, and also assassinate President Donald Trump in the U.S simultaneously during the first anniversary of Hamas’ 7 October 2023 attack on Israel. However, his plans were later thwarted by law enforcement and intelligence communities of both Sri Lanka and the U.S.

Following the discovery of the IRGC involvement, the Albanese government removed the Iranian ambassador from the country along with the suspension of its embassy in August 2025 while finally listing the IRGC as a terrorist entity. Operationally, this new designation may bolster the Five Eyes’ information sharing with Australia while granting the nation a legal framework to pursue terrorism charges against IRGC-affiliated activity. Additionally, Australia has ramped up its law enforcement efforts to dismantle the illicit tobacco market. New sets of laws have been implemented in 2025 by Queensland and New South Wales to tackle illicit tobacco operations along with drug busts such as in Operation Xray Modred which led to the seizure of approximately $53.8 million worth of tobacco across 17 different storage facilities. The operation is regarded as one of the largest busts in Queensland history. Overall, Australia’s stringent measures and due diligence in crippling the illicit tobacco market demonstrates its strong commitment to reduce criminality and terrorism alike.

However, while enforcement efforts are effective, it is paramount for Australia to consider policy changes to tobacco excise to not only reduce user dependence on illegal sources but cull domestic terrorist financing operations. One policy option that has been discussed by the nation’s largest tobacco wholesalers was to temporarily freeze the increase in tobacco prices. Doing so would create a window for government and law enforcement to deliberate on viable solutions while preventing the situation from worsening. Reduction of excise may lead to complications such as a potential drop in fiscal budget. However, given the tremendous loss of revenue due to the black market as discussed, conversion of illegitimate users to legitimate users as a result of improved policy may create fiscal opportunities for the Australian government instead.

Moreover, preventing tobacco use may contribute to the reduction of the illicit market which does not require touching excise tax. Through a whole-of-society approach such as anti-tobacco education or promotion of healthy lifestyles, Australia may minimize the demand for illegitimate procurement of the product, thus inadvertently mitigating the terrorist financing problem.

Conclusion

The IRGC’s asymmetrical operations in the Australian firebombing incidents emphasize the ever-present need for counterterrorism and national security stakeholders to employ criminological perspectives to unravel the crime-terror nexus. It must be understood that terrorism does not begin with an attack, but rather an established logistical and financial foundation before that. Given organized crime groups’ vast access to lucrative contraband such as illicit tobacco in the case of Australia, terrorist organizations will utilize them for financing opportunities. Given this, restricting distribution of illicit markets will result in considerable mileage in counterterrorism efforts. As crime and terror become a conjoined threat, law enforcement and national security efforts must be just as, if not more, collectivized to counteract them. Australia must not only rely on domestic enforcement efforts and foreign policy decisions to cripple the capability of nefarious actors, but also curb the demand for the rampant illicit tobacco market by changing to its excise tax policies and discouraging product usage. By accomplishing this, the nation can remain optimistic as it positions itself to strategically fight against both crime and terrorism.

Are you Subscribed to The Cipher Brief’s Digital Channel on YouTube? There is no better place to get clear perspectives from deeply experienced national security experts.

Read more expert-driven national security insights, perspective and analysis in The Cipher Brief because National Security is Everyone’s Business.