British American Tobacco Companies by serendipitously


									21 September 2000

    British American Tobacco Companies Reject US Court Action by
                   Colombian Provincial Governors
A lawsuit naming British American Tobacco companies alleging activities including smuggling, which
appears to have been filed in the USA by some Colombian provincial governors, is completely without
merit. The case is wrong as a matter of fact and law, and if the suit is eventually served on any British
American Tobacco Group companies, they will defend it vigorously.
It is noteworthy that neither the Colombian Government nor Colombian Customs authorities have
supported the action by joining as plaintiffs.
The entire lack of merit apart, it is also inappropriate to bring a case to a US court alleging matters that
relate only to the internal tax affairs of Colombia.
In a recent case involving similar claims, a New York Federal court confirmed the long established legal
principle that the courts of one country will not intervene in the tax laws of another country. In the past
year, a Washington DC Federal court has also rejected efforts by the Ukraine and the Republics of
Guatemala and Nicaragua to have US courts determine claims against US and UK based tobacco
companies about healthcare costs in those countries.
Colombia has faced widespread problems with smuggling for decades, involving most consumer goods. It
occurs in part because of inadequate policing of Duty Free Zones officially established and managed in
the provinces. Recent Colombian Government measures to establish more effective controls even
generated civil unrest, illustrating how endemic the problem has become and how dependent the
economies of some parts of the country have become on illicit trade.
British American Tobacco Colombia has actively co-operated for several years with the Colombian
Government in its efforts to combat smuggling. The company is acknowledged by the Colombian
Government as a key payer of cigarette excise tax.

Rather than being a cause of the problem in Colombia, British American Tobacco:

•   Has invested heavily in a merchandising and distribution network, enabling its brands to reach areas
    previously only supplied through unofficial channels;
•   Has a formal co-operation agreement with the Colombian customs authority DIAN to strengthen
    DIAN's anti-smuggling efforts;
•   Helps with new initiatives including training sessions with customs officials and police;
•   Liaises with the authorities to help them monitor the market.

British American Tobacco's views on smuggling are well known and widely published.

•   British America Tobacco companies do not smuggle and do not collude with smugglers.
•   All the cigarettes sold by us are legal sales. All our exports to different markets are registered with the
    authorities and properly accounted for.
•   Only governments can tackle smuggling effectively.
•   Smuggling does happen. However no international business operating through distributors can
    control every subsequent link in diverse and myriad secondary supply-chains.
•   If there were no smuggling at all, that would be an ideal scenario for everybody, including us.

Click here to read our full paper Smuggling: Our View

Notes to Editors:
The British American Tobacco Group companies apparently named in the lawsuit are British American
Tobacco (1998) Ltd, Brown & Williamson Tobacco Corporation, B.A.T Industries PLC, Batus Tobacco
Services Inc and British American Tobacco (South America) Ltd.

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