(Canadian) Tobacco firms hit with $1-billion in penalties

[Newsjock]

Source: Globe and Mail

TORONTO -- 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 to this country and resold at bargain prices.

The admissions of guilt drew only lukewarm praise from anti-smoking activists. Imposed under the federal Excise Act, the fines and settlement costs total $1.15-billion and are the largest ever levied in Canada.

... The charges encompass a five-year period that began in 1989.

Tax-free cigarettes poured south 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.

The motive appeared to have been to induce smokers to buy particular brands.

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