Global Reach of Tobacco Company's Involvement in Cigarette ...

Global Reach of Tobacco Company's Involvement In Cigarette Smuggling Exposed B Page 4 of 9
was mainland China . Evidence from Hong Kong suggests that
BAT cigarettes worth more than £490 million ($810 million)
were smuggled into China during the 1990s .
In the late 1980s, competition between Hong Kong-based rival
traders smuggling BAT cigarettes into China became so
intense that bribes were paid to the BAT local director whose
job it was to deal with them . After one jilted trader exposed the
system to Hong Kong's anti-corruption commission, former
BAT (HK) export director Jerry Lui was extradited from the
United States. BAT itself was not charged with any offense .
The case against Lui nearly foundered after the chief witness
against him, trader Tommy Chui, was murdered . His body was
found floating in Singapore harbor in 1995, stuffed in a
garbage bag with tape over his mouth . Another potential
witness committed suicide . Nevertheless, in June 1998 Lui
was convicted and sentenced to three years and eight months'
imprisonment. He later launched an ultimately unsuccessful
appeal and awaits the outcome of a continuing appeal
application .
BAT company documents disclosed during Lui's trial led
Justice Wally Yeung Chun-kuen to comment: "The evidence
suggests that management of BAT (HK) was aware duty-notpaid
cigarettes . . . would ultimately be smuggled in China and
other countries . . . . To some extent such irresponsible
behaviour amounted to assisting criminals in transnational
crime . "
The company claimed at the time that the smuggling was the
work of "rogue" employees and replied that "British American
Tobacco does not smuggle. It does not condone smuggling
and its business is entirely lawful ."
Exploited Traditional Route s
The documents obtained and reviewed by the Center's
international consortium of investigative reporters show that in
many Asian countries BAT did not merely tolerate GT trade
channels, but exploited traditional smuggling routes when that
would maximize sales. The documents also trace the rise
and fall of Lui within BAT ranks .
At first, Lui worked for BAT's U .S. subsidiary
Brown & Williamson . His job was "aiding and
abetting our efforts to get U .S. brands well
established in export markets," a BAT
document said . At the end of 1991, he was
appointed the director of exports for British
American Tobacco (Hong Kong) Ltd . His job 5t Express 555 is BAT's
was to supply export distributors in the
man brand in east Asi a
region. Many of them transported contraband cigarettes into
China .
In internal BAT documents, the job that Lui had held in Hong
Kong was described more clearly as "Director of Exports to
China." The same BATCo file also noted company worries
about the "dependence of continued transit trade into China ."
According to court proceedings in Hong Kong last year, Lui
had to report to BAT (HK) executive meetings on the volume
of cigarettes being supplied to each distributor .
h"p ://www.public-i.org/story_01_020200.htm 04/02/2000
http://legacy.library.ucsf.edu/tid/ume14a99/pdf
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