Indian Time - A Voice from the Eastern Door

July 31, 2008 – (OTTAWA) - The Royal Canadian Mounted Police (RCMP) announced it has concluded a long-running file after two of Canada’s largest tobacco companies entered guilty pleas this morning in response to indictable offences under Section 240(1)(a) of the Excise Act.

The guilty pleas, from Imperial Tobacco Canada Limited (ITCL) and Rothmans Benson & Hedges (RBH), are the culmination of more than eight years of investigative work by RCMP Customs and Excise sections in Ontario and Québec. As part of agreed statements of fact, the two companies admitted to “aiding persons to sell and be in possession of tobacco manufactured in Canada that was not packed and was not stamped in conformity with the Excise Act and its amendments and Ministerial regulations.”

As a result, the two companies have paid the largest fines ever levied in Canada; ITCL has paid a $200-million fine and RBH $100-million.

This is apart from additional amounts the companies have agreed to pay by way of civil settlements with Canada and the Provinces, which are to be administered by the Canada Revenue Agency (CRA). It also includes a commitment by the companies to combat contraband tobacco activities in Canada.

“The result we’ve seen today brings to a close a significant chapter in contraband tobacco history and reconfirms the RCMP’s commitment to bringing such cases to a successful conclusion for the benefit of Canadians,” said RCMP Assistant Commissioner Mike Cabana.

“The message sent today is that no company is above the law,” added Assistant Commissioner Cabana.

The material time of the charges involved illegal activity between the years of 1989-1994. Then, the contraband tobacco market in Canada involved product being produced in Canada, and shipped to locations in the US near the Canada/US border. From there, it was distributed to smugglers or black market distributors who brought it back into Canada for further illegal distribution.