Crimes of big tobacco | alternet

Page 1

5/6/2016

Crimes of Big Tobacco | Alternet SEARCH

NEWS & POLITICS

Crimes of Big Tobacco Big Tobacco's multibillion-dollar pro ts rest on a global underground network of smugglers and money launderers. A sixmonth investigation follows the paper trail of this illegal trade. By Mark Schapiro / The Nation

April 22, 2002 COMMENT NOW!

Tobacco is one of the most globalized industries on the planet. More cigarettes are traded than any other single product, some trillion "sticks," as they're known in the business, passing international borders each year. As a result, American brands have been propelled into every corner of the world, with just four companies controlling 70 percent of the global market. Marlboro, Kool, Kent: They have become as omnipresent around the world as they are here in the United States. With declining sales in this country, foreign markets have become increasingly critical to the tobacco companies' nancial health: The top US tobacco rms now earn more from cigarettes sold abroad than in the United States. How they got there is a tale that leads straight into a global underground of smugglers and money launderers who have played a key role in facilitating the tobacco companies' entry into foreign markets. A six-month investigation by The Nation, the Center for Investigative Reporting, and the PBS newsmagazine show NOW With Bill Moyers (which aired its investigative report on April 19), has unpeeled the many layers of a complex distribution system of a multibillion-dollar trade in smuggled cigarettes. Twentyve percent of exported cigarettes, according to the World Health Organization, are smuggled. Smuggling has enabled multinational tobacco companies to increase sales volume dramatically by evading local tariffs and competing head to head with domestic producers, thereby helping to establish internationally recognizable brands. The smuggling has landed the tobacco companies in US court. Lawsuits led by European and Canadian governments and Colombian state governments against Philip Morris and British American Tobacco (BAT, Brown & Williamson's Britishbased parent company) have highlighted the companies' alleged links to smugglers and money launderers. Documents released as a result of the historic $200 billion-plus settlement with US state attorneys general in 1998 also provide a glimpse into the way the companies devised advertising and distribution strategies that helped fuel the market for smuggled cigarettes. The companies stand accused of violating the Racketeer In uenced and Corrupt Organizations Act (RICO), of defrauding governments of hundreds of millions in tax revenues and of hiding and ultimately taking the illicit pro ts back to the United States, which constitutes money laundering. As the cases were unfolding just one month after the September 11 terrorist attacks, the tobacco companies -- with support from the White House -- fought back in the US Congress, where they took advantage of the nation's distraction to win changes in the USA Patriot Act in a brazen effort to shield themselves from liability. But their headache has not gone away. The cases are still winding through the courts, and the companies' attempts to evade accountability are the focus of growing international outrage. Underground in Colombia I went to Colombia, a country infamous for smuggling exports to the United States, to see how the ip side of that equation -- smuggling from the United States to Colombia -- worked for more than a decade. http://www.alternet.org/story/12938/crimes_of_big_tobacco

1/12


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.