Big Tobacco and The Patriot Act

During the debate to pass the Financial Anti-Terrorist Act (later re-named the Patriot Act) after Sept. 11th, tobacco lobbyists managed to remove a section that basically said, "If you do stuff like money laundering in another country that we would consider illegal in the US, we will bust you."

Well, this presents a problem for Big Tobacco, who regularly smuggles squares into other countries to get around taxes and other nasty things that might cost them money.

...Philip Morris and Brown & Williamson developed a system for smuggling their Marlboros, Kools and other brands into [Colombia] without paying customs tariffs or any import taxes whatsoever. For more than a decade, this enabled them to compete head to head with ColombiaÕs domestic manufacturers: While legal imports of foreign cigarettes should cost from four to five dollars a pack, with all duties paid, they were sold throughout Colombia at just over a buck a pack.

And it worked.

Shortly after the Patriot Act passed the House without Section 107(B), CanadaÕs lawsuit was dismissed by the appeals court, which based its decision substantially on the revenue rule; and on Feb. 19, the Colombian and European cases were likewise dismissed by a federal district judge who also cited the revenue rule.

Who needs strong anti-terrorism legislation? Cheap smokes on holiday! Woo-hoo!

via blogdex