A smuggling scandal implicating Taiwan's presidential bodyguards has engulfed China Airlines after the island's largest carrier revealed huge quantities of duty-free cigarettes were routinely sold to staff accompanying the island's leader on visits overseas.

The scam -- which was first unveiled earlier this week -- appears to have gone back years, covering both President Tsai Ing-wen's administration and her predecessor Ma Ying-jeou.

Taiwan's intelligence chief resigned earlier this week after it emerged that an agent who was accompanying President Tsai on a state visit overseas was caught attempting to smuggle nearly 10,000 cartons of cigarettes on Monday.

The scandal comes as Tsai seeks a second term in a January presidential election against Kaohsiung mayor Han Kuo-yu of the Beijing-friendly Kuomintang party.

"The improper conduct of National Security Bureau agents' mass purchase of duty-free cigarettes reveals a long-term bad practice," Tsai wrote in a Facebook post on Thursday as new details emerged of the racket.

"I find this unacceptable and I have ordered all units to cooperate with the judicial probe," she added.

The scam was initially exposed on Monday when the customs department announced that an agent within Tsai's entourage tried to bring in 9,800 cigarette cartons through a VIP lane as they returned from an official trip to the Caribbean.

The agent pre-ordered the cigarettes online in Taiwan, stored them at a warehouse at the airport, then tried to smuggle them past customs through the VIP lane to avoid paying duty, according to the authorities.

The scandal soon enveloped China Airlines, which often puts on charter flights for presidential trips and is majority-owned by the government.

Figures released by the airline on Thursday showed inexplicably high quantities of duty-free cigarettes were routinely ordered ahead of presidential trips.

In March, when Tsai visited allies in the Pacific, some 6,900 cartons of cigarettes were sold to passengers travelling with her. On an August 2018 trip, it was nearly 4,500 cartons.

The largest quantity under Tsai's predecessor Ma was in March 2016 when some 3,700 cartons were sold to passengers travelling with him to Central America.

Taiwan's customs law limits travellers to a maximum five cartons of cigarettes -- and only one can be tax-free.

Even if an entire plane of 300 passengers ordered their maximum cigarette allowance it would only come to 1,500 cartons -- and presidential flights usually carry far fewer passengers than commercial routes.

China Airlines chairman Hsieh Shih-chien has apologised and said the company will end its pre-ordering service of duty-free products for future presidential trips.

Two agents have been detained so far for their alleged involvement while the government has ordered an internal probe of China Airlines.

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