Three people have been arrested on suspicion of paramilitary activity in connection to the Irish National Liberation Army (INLA), the Police Service of Northern Ireland has said.

Police said a 57-year-old woman, a 40-year-old man and a 45-year-old man were arrested in Londonderry under the Terrorism Act by detectives on Wednesday.

All three have been taken to Musgrave Street police station in Belfast for questioning.

The arrests come amid a number of searches that were carried out in the Galliagh, Buncrana Road and Ballymagroarty areas of Derry, the force said.

These raids were in relation to INLA criminality including the supply of controlled drugs and illicit cigarettes, money laundering and a recent paramilitary-style attack on November 14.

The PSNI said a quantity of Class A and B drugs were seized during the search in the Galliagh area and a 17-year-old male was arrested on suspicion of possession with intent to supply.

Quantities of Class C drugs were seized during the searches in the Ballymagroarty and Buncrana Road areas, as well as documentation, phones, computers and cash.

The raids follow on operation on Tuesday in which PSNI officers alongside those from HMRC visited 10 shops in the Derry and Strabane areas.

More than 36,000 illicit cigarettes and five kilograms of illicit tobacco were seized. Counterfeit clothing, footwear, DVDs and CDs were confiscated in three of the shops, the force said.

Detective Inspector Tom McClure of PSNI’s organised crime unit said the operations are “further evidence” of the commitment by the force to tackling paramilitarism.

“INLA in Derry and Strabane claim to be protecting their communities from crime, however in reality they themselves are heavily involved in a wide range of criminal money-making ‘rackets’ including extortion, supply of controlled drugs, counterfeit goods and money laundering,” he said.

“As well as taking a cut from alleged local drug dealers (known locally as ‘pay-to-stay’) they are also supplying controlled drugs themselves.

“INLA use brutality, threats and fear to exert control in their local communities and they recently carried out a paramilitary-style shooting of a man for having a minor altercation with INLA members.

“We also believe they are heavily involved in the importation and supply of illicit cigarettes into the North West and for this reason we requested HMRC’s assistance for yesterday’s operation.”

He said he was “very concerned” that all 10 shops that were visited on Tuesday were found to have illicit cigarettes on their premises, and warned retailers who stock and sell them to “think carefully about the potential implications upon conviction”.

“They and customers who knowingly purchase illicit cigarettes should also be aware that they may be indirectly funding INLA terrorism and criminality which brings misery and harm to local communities, all for their own selfish gains,” he added.

The force said a 56-year-old man arrested on Tuesday by HMRC accused of fraudulent evasion of duty chargeable on goods in respect of the seizure of 19,800 illegal cigarettes from a shop in Galliagh, has been released pending a report to the public prosecution service.