What is the difference in phrasing this statement, are both grammatically correct?
Tabak und Alkohol werden unter der Hand importiert.
Tabak und Alkohol sind unter der Hand importiert.
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The first means approximately "Tobacco and alcohol are being imported clandestinely." It might be used in the report of a government agency about the state of smuggling in their domain of authority. (Think "We have a smuggling problem!")
The second means approximately "Tobacco and alcohol are clandestine imports." It might be said by someone trying to convince you to go to a really rad party he's throwing. (Think "This shit is the good stuff, man! It's only legal in Tennessee!")
„Werden“ is used to describe an event, „sein“ is used to describe the result. The second sentence is wrong, however, or at least awkward. I think it would sound wrong if translated to English as well. Take another one:
Das Haus wird abgerissen. (The house is being demolished)
Das Haus ist abgerissen. (The house is demolished)
However, take note that in German, Passive Voice with „werden“ and „sein“ do not necessarily form a pair:
Das Passiv wird im Deutschunterricht früh gelehrt.
*Das Passiv ist im Deutschunterricht früh gelehrt.
Passive Voice with „werden“ originally meant that something becomes something else, but today, it often means that something happens all the time.