Can a Kempetei destroy a Universal shipping id/iff?

[Coral Reaver]

In my universal id it says.

Cannot participate in any unlawful actions except against Rheinland lawful and Rheinland commercial factions.

Does smuggling not count as a unlawful action?

Yes it does, but I think the "unlawful actions" written in the ID is more about denying you the ability to commit piracy or shoot civilians/lawfuls without good reasons.

Smuggling and embargo-breaking do not exactly fall into that. But I'm not sure so don't take my word for it.