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Canada Makes Smuggling Arrests (fwd)
Canada makes cross-border tobacco smuggling arrests
05:50 p.m Sep 28, 1998 Eastern
MONTREAL (Reuters) - Canadian police said
Monday they arrested three men alleged to be involved in a ring that
smuggled tobacco across the border between Canada and the United States and
evaded paying C$43 million in taxes.
One of the men arrested was a Montreal
tobacco company representative, the
Royal Canadian Mounted Police said. Police
did not specify which tobacco
company he was associated with, but Sgt.
Normand Houle told Reuters it was
not Montreal-based Imperial Tobacco Ltd.,
Canada's largest tobacco concern.
``I can't divulge the name of the company,
but it was not involved in the
smuggling,'' he said.
Imperial, which holds 68 percent of
Canada's cigarette market, is a wholly
owned unit of Imasco Ltd. , also based in
Montreal, which is controlled by
England's B.A.T Industries .
Canada's third-largest tobacco maker, RJR
MacDonald, which is wholly owned
by RJR Nabisco Holdings Corp. unit R.J.
Reynolds Tobacco International, also
has a manufacturing plant in Montreal.
Police said arrest warrants were also
issued for three people living in the United
States. The Mounties plan to seek their
extradition to Canada to face the
charges.
In the alleged scheme, the group smuggled
about 1.9 million cartons of cigarettes
and 660,000 tobacco tins between April 1994
and September 1996 across the
border between Canada and the United
States, police said.
Canadian tobacco products exported to the
United States, usually for reexport
to other countries, are not taxed in the
same way they are if sold for consumption
in Canada. People smuggling exported
Canadian tobacco products back into the
country were able to sell them in Canada at
large discounts and still recoup hefty
profits.
The 1.9 million cartons of cigarettes
involved in the alleged scheme would carry a
retail value in Canada's French-speaking
province of Quebec of about C$53
million.
Police said their investigation began in
1994 when investigators began probing
the origin of Canadian cigarettes flooding
into the Akwesasne aboriginal reserve
which straddles the Canada-U.S. border near
Cornwall, Ontario, about 110
kilometres (68 miles) southwest of Montreal.
The suppliers exported Canadian-made
cigarettes and tobacco products which
were shipped to warehouses in Florida and
then trucked back to the
communities of Champlain and Massina in the
State of New York.
The shipments then were redirected to
Hogansburg on the U.S. side of the
Akwesasne reserve. They were subsequently
smuggled back into Canada for
sale, police said.
((Robert Melnbardis--Reuters Montreal
bureau 514-985-2434))
Copyright 1998 Reuters Limited.