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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