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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2401

Exploitation of war zones to sell cigarettes

By Manjari Peiris

“ The British American Tobacco’s decades-long history of calculated deception in the United States and abroad and its re-entry into the U.S. market, the mounting allegations of corruption and mass concealment of funds by BAT must be fully investigated by U.S. regulators for possible violations of the Foreign Corrupt Practices Act and any other applicable criminal or civil laws,” said Matthew L. Myers, President of the Campaign for Tobacco-Free Kids.

“This is a company that has proven it cannot and will not play by the rules. Unless and until they are held accountable by governments, shareholders, business partners and the public, the company’s wrongdoing will only continue.”

The Campaign for Tobacco-Free Kids which is a non-profit organization that works to reduce tobacco use and its deadly toll on consumers in the United States and in many countries around the world, including in Africa has written to the U.S. Department of Justice and the U.S. Securities and Exchange Commission urging to investigate British American Tobacco, Plc. (BAT) and its subsidiaries for what appear to be serious violations of the anti-bribery and accounting provisions of the Foreign Corrupt Practices Act (FCPA). These possible FCPA violations carried out by BAT are based on recently exposed allegations of widespread bribery and corruption in Africa, including the secret movement of millions of undocumented U.S. dollars across international borders into war-torn Democratic Republic of Congo (DRC).

An investigative report published this week by The Guardian revealed new allegations that, for years, BAT secretly and possibly illegally moved millions of U.S. dollars in cash across international borders into the war-torn Democratic Republic of Congo (DRC) allegedly to support the company’s tobacco leaf operations in that country. The new allegations indicate BAT’s operations included engaging with armed rebels involved in the long-standing DRC conflict in order to make secret cash drops used to pay for tobacco leaf from farmers in Auzi, an unmapped town BAT built in the 1950’s, according to The Guardian.

“For BAT every person is a potential smoker and every country is potentially exploitable. Fragile states are particularly so because the normal rules do not apply, taxes can be avoided, and cigarettes can still be sold profitably. In other words – as long as money can be made, anything goes,” said Anna Gilmore, Professor of Public Health at the University of Bath and UK Centre for Tobacco and Alcohol Studies. “Plus at some point many of the ‘fragile’ markets will formalize. BAT’s aim is generally to get in there early, get smokers addicted to its products before its competitors and, where relevant, get the best deals on local manufacturing options.”

In addition to possible violations of the FCPA, The Guardian report raises questions about whether BAT’s conduct in moving U.S. dollars during the DRC conflict also violates federal anti-money laundering laws, especially as the U.S. has had sanctions in place against the DRC since 2006. The story also exposes BAT’s role in flooding South Sudan with its cheapest cigarette brands following years of war and operating around terrorist networks in Somalia to continue selling cigarettes in the country.

British American Tobacco has faced mounting allegations that the company engaged in widespread bribery and corruption in Africa to gain advantage over competitors and stifle government efforts to curb smoking. Earlier this month, the U.K. Serious Fraud Office (SFO) formally launched an investigation of BAT on suspicions of corruption.

The growing allegations about BAT’s conduct are particularly alarming following the July 2017 merger of BAT and Reynolds American in the United States. The recent merger places BAT in a leading position in the U.S. market and, according to BAT, created the largest tobacco company in the world by operating profits.

Subsequently, other news outlets, revealed allegations that the company was engaging in bribery and other corrupt acts that included bribing Ministry of Health officials in Burundi, Comoros and Rwanda, a former Kenyan Minister of Justice and a Member of Parliament from Uganda.

Tobacco use kills more than seven million people worldwide each year. Without urgent action by governments to pass proven tobacco control laws and curb the power and influence of tobacco companies, tobacco use will kill one billion people this century.

- Asian Tribune -

Matthew L. Myers, President of the Campaign for Tobacco-Free Kids
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