Contraband refers to goods that are prohibited by law or treaty from being imported or exported. Contraband is no more than smuggling harmful materials for sale or for personal use and this is forbidden in Islam.
Dr. Monzer Kahf, Scholar in Islamic Economics & Financial Expert, states the following:
1. Certainly smuggling harmful materials for sale or for personal use, such as alcoholic beverages, drugs or cigarettes, is forbidden in the Shariah and it is forbidden to buy, store, transport sell them, etc. It is prohibited to make any transaction related to them including money cleansing, even if they were permitted by any man-made law.
2. Government taxes, including custom duties are of three types:
A. Fair and objective ones that are adopted for the interests of the people, and generally with their approval, using the term loosely to include any form of explicit or implicit acceptance, are permissible to impose and the Shari`ah calls for abiding by them even if they were not liked by the payee.
B. Oppressive taxes meant to favour some citizens over others, like many of the taxes imposed for the benefit of a ruling family or class, or to deprive certain people from their properties in favour of certain others, without any just cause are not acceptable in the Shari`ah and it is permissible to avoid them by any means, except immoral action or action that results in increasing the amount of tax burden exhorted from another oppressed person, like the one who avoids the tax. Taxes that are generally of the first category but have certain limits of exemption that are generally arbitrary, these limits are not really meant for their own virtues, but you’ve got to have a limit anyway. The example of such limit is the $400 on personal goods purchased oversees when a person returns home in this country. Everybody knows that it is okay to get a little over this limit without declaring it. Any large-scale smuggling, especially of (certainly not harmful, immoral or prohibited) goods intended for sale violates the standards of social cooperation and deprives the treasury of resources, usually, used for the general welfare of the country and therefore must not be done.
3. Any taxation system usually has many clauses that provide certain cases of avoiding, you may call them loopholes. It is always permissible to use the loopholes of the taxation system in any country, Muslim or not. Loopholes are meant to benefit those people to whom they apply, and in many times, they are made for good reasons, even though most people may not discover them.”