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MARCH 5, 2001
12:01 PM
CONTACT:  Center for Public Integrity
Helen Sanderson 202-466-1300 x151
Tobacco Companies Linked To Criminal Organizations In Cigarette Smuggling Trade, Says CPI Investigation
WASHINGTON - March 5 - A yearlong investigation by the Center for Public Integrity shows that British American Tobacco, Philip Morris and R.J. Reynolds have worked closely with companies and individuals directly connected to organized crime in the global smuggling of cigarettes.

The investigation by the Center's International Consortium of Investigative Journalists is based on a review of thousands of pages of corporate and government documents and dozens of interviews with law enforcement officials, smugglers and other sources worldwide. It indicates that tobacco smuggling is increasingly dominated by a handful of criminal organizations that in some cases have links to organized crime.

Corporate documents, court records and internal government reports -- some dating to the 1970s -- also show that BAT, Philip Morris and RJR have orchestrated smuggling networks variously in Canada, Colombia, China, Southeast Asia, Europe, the Middle East, Africa and the United States as a major part of their marketing strategy to increase profits.

It's estimated that about one in every three cigarettes exported worldwide is sold on the black market.

The companies have sought to undercut rising government taxes, which studies show are the main reason most smokers quit, as well as to gain market share by offering competitively priced popular international brands on the black market.

The result has been tax evasion on a global scale that has greatly depleted government treasuries, especially in Third World countries. Cigarette smuggling has also fostered international crime and money laundering and alarmed growing numbers of law enforcement officials worldwide.

The International Consortium of Investigative Journalists first revealed the link between tobacco companies and cigarette smuggling in a January 2000 report based on 11,000 pages of corporate documents, dealing mostly with Latin America and Asia.

Those findings were published in over 40 media outlets in 10 countries and helped prompt a parliamentary hearing in Britain, as well as a formal government investigation. Since then, three civil lawsuits have been filed in the United States against the tobacco companies under the Racketeer Influenced and Corrupt Organizations (RICO) act -- the latest by the European Union and several of its member nations.

This new eight-part Center report can be read in its entirety in 'The Public i' at and can be made available for republication by contacting Center sales manager Andy Atwater at


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