Change the voice:
An action in a sentence can be represented in two ways, namely active and passive voice.
The passive voice always uses the past participle form of the main verb irrespective of any tense. Only the auxiliary verbs depend upon the sentence given in the active voice.
The correct answer is C)The smugglers have been arrested by the police.
The option C is correct as the given sentence is in the active voice and to transform it into the passive voice, the subject of the given sentence(the police) comes in the place of the object(the smugglers) and vice versa. Also, as the sentence is in the present perfect tense, 'been' is added after 'have'.
Options A, B, and D are wrong as 'are', 'has', and 'are being' cannot be used respectively because the given sentence when transformed, should only take 'have +been' as the given sentence is in the present perfect tense.