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Dubai police smash ring; seize 3.8m counterfeit cigarettes

GENEVA - Police in Dubai have arrested the owner of a factory where they discovered 3.8 million counterfeit Monte Carlo brand cigarettes, Japan Tobacco International said yesterday.

In a statement from its Geneva headquarters, the tobacco company said the arrest followed a year-long investigation and that it had cooperated closely with the Dubai government during the probe. It said the cigarettes had been illegally produced in Greece and Bosnia, with packaging made in Italy.

Japan Tobacco - which bought R.J. Reynolds' international operations in 1999 - said the fight against contraband and counterfeit cigarettes was one of its top priorities.

"Unfortunately counterfeiting is a growing problem that is like a balloon - you squeeze it at one end, and the volume expands at the other end," said Andre Benoit, a company spokesman. "We will continue to combat it through assistance to government authorities worldwide and with continuing vigilance in our sales and distribution policies and daily practices."

However, critics say that tobacco multinationals are heavily implicated in smuggling.

The European Union's executive commission has filed lawsuits in the United States, accusing Japan Tobacco and Philip Morris of complicity in smuggling cigarettes into Europe, costing several hundred million euros in lost customs and tax revenues.

Canadian authorities last month charged executives of JTI-Macdonald Corp. - the company's Canadian subsidiary - with fraud for allegedly smuggling cigarettes into Canada and evading hundreds of millions of dollars in duties and taxes between 1991 and 1996. The company has denied the charges.

Japan Tobacco Inc. is the world's third largest cigarette manufacturer with sales of $31.4 billion in the year ended March 31,2002. It produces Mild Seven, Camel and Winston, as well as Monte Carlo.

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