Press release      21^st September 2000 immediate

BAT faces punitive racketeering charges over Colombiancigarette smuggling 

BritishAmerican Tobacco (BAT) is today facing serious racketeering charges over itsinvolvement in cigarette smuggling in Colombia.  BAT faces action by the Departments (States) of Colombia whichallege that it committed violations of racketeering laws:  

“…arisingfrom its involvement in organized crime in pursuit of a massive, ongoingsmuggling scheme.” 

The full text of the filing isavailable on the ASH web site [1] and alleges involvement in money laundering, and that BAT:

“…committed,and continue to commit, acts that constitute negligence, fraud, unjustenrichment, public nuisance, negligent misrepresentation, and conspiracy tocommit such torts.”

Thefiling was made by New York lawyers Speiser, Krause, Nolan & Granito [2],which represent the Colombian Departments and adds BAT to the case that wasalready up and running against its rival Philip Morris.  A number of the BAT personnel named in thefiling are currently at board level.

Related developments. ASH has released hundreds of BATconfidential documents showing BAT's involvement in smuggling in Asia, LatinAmerica and Africa and related developments [3]. In June, the House of CommonsHealth Select Committee made a formal recommendation that the Department ofTrade and Industry should undertake an investigation of BAT's involvement insmuggling.  The response from Secretaryof State, Stephen Byers is expected in the next couple of weeks.  The European Union has announced that itwill launch a smuggling RICO action shortly, though it is not yet known whetherthis will include BAT

ASH saidthe Colombian move was significant and further strengthened the case for a DTICompanies Act investigation of the allegations of fraud and misconduct atBAT.  Clive Bates, Director of ASH said:

“Allthe evidence we have seen, and there's lots of it, suggests that BAT treatedsmuggling as just another distribution channel and arranged their businessoperations to exploit it to the full. 

“Whilewe're very heartened that the authorities are finally catching up with BAT andits role in smuggling, it is a British company and the it is British governmentthat needs to take hold of the situation.  A DTI investigation into the allegations of fraud and misconduct isclearly now essential and would demonstrate the Government was prepared totackle rogue corporations, however big and self-important.”

[1]See the full filing at http://www.ash.org.uk/html/smuggling/html/colombiarico.html

[2]+1 212-661-0011 (telephone)

[3]Full background on BAT and smuggling: http://www.ash.org.uk/?smugglingincluding the defence of BAT by Rt. HonKenneth Clarke QC MP and ASH's challenging response toClarke.

Press Contact: Clive Bates 020 7739 5902 (w) 0468 791 237 (m) ISDN isavailable