CUSTOMS arrested two Spaniards and seized 20,000 cigarettes just as they were about to load them onto a waiting boat at Catalan Bay car-park.
The Spanish nationals arrived at the temporary reclamation parking in two vehicles just as a small boat was arriving from the sea.
They reversed one of the vehicles to the rocks at the easternmost parking area and started to unload the tobacco in large bags from the boot.
Customs officers swooped just as this was taking place, making the two individuals drop the bags and start to run back to the main car park.
But officers caught up with them and then searched the area to find the tobacco and impounded a Ford Fiesta involved in the operation.
They are now on police bail and will need to surrender at New Mole House Police Station on December 6.
Cigarettes are cheaper in Gibraltar than neighbouring Spain making their sale across the frontier a lucrative deal for smugglers.
The parking from which the smugglers tried to smuggle the cigarettes is due to be demolished to make way for the new Eastside development.
The government sold the site to Vietnamese investors TNS Global that paid the first installment of £90 million in April 2023.