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August 2, 2008 10:09 PM Subscribe
Caught smuggling, tobacco firms pay $1-billion in penalties.
posted by KokuRyu (52 comments total)
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Two of Canada's big three tobacco companies will pay more than $1-billion in criminal and civil penalties for orchestrating the wholesale shipment to the United States of cigarettes that were smuggled back into Canada and resold at bargain prices
Tax-free cigarettes poured south (from Canada to the US) by the truckload, most commonly through the porous St. Regis Mohawk Akwesasne reserve, near Cornwall, Ont., which straddles the U.S.-Canadian border. From there they were distributed to smugglers who brought them back to Canada to be resold on the street and in convenience stores (tax free).Anti-smoking groups have mixed feelings
about Big Tobacco fines in this instance. "If you or I had any intention of defrauding the government of a couple of million dollars, we'd be thrown in jail," said François Damphousse, the Non-Smokers' Rights Association's Quebec director.
"Why aren't the executives facing such charges for having defrauded the government of billions of dollars?"
(Key executives who orchestrated the smuggling operation in the early 90s have avoided jail time
But the bigger issue is a massive C$10 billion lawsuit brought by British Columbia against the tobacco industry. The province is suing for state-sponsored health-care costs allegedly racked up because of the effects of tobacco products...the trial is to start in late 2010...(and is seen) as an attempt by politicians to destroy an industry they regard as immoral.
[The same two tobacco companies, RJN and Philip Morris, have gotten into trouble in the past for essentially smuggling cigarettes into the EU. More info here
.][Also, how cigarettes funded the Balkan Wars.