From Naval Action-pedia

Smuggling is the illegal transportation of goods across international borders.
In Naval Action, it's the movement of a player of one nation entering the port of another nation, generally with the intent of buying or selling in that port so as to make a profit or to obtain goods that cannot be as readily or profitably found in the player's home nation nor in neutral or Free Ports.

If you wish to enter ports of enemy nations you must be in a ship designated as a trader.

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