Smuggling and the Global Firm Smuggling is the illegal importation of legal goods; e.g cars, cigarettes, and refrigerators.

The Mexican Paradigm (1996) Smuggling decreases but doesn’t disappear with trade liberalization. Smugglers evolve from Robin Hoods to organized crime. Global firms must understand the ramifications of smuggling and its potential problems.

New Questions: To what extent do global firms appreciate smuggling and cooperate with it? To what extent can governments hold global firms culpable for their participation in smuggling?

This paper exams The role of global firms in the Black Market Peso Exchange (BMPE) The British American Tobacco smuggling scandal Litigation by foreign governments against U.S. tobacco companies under RICO

Global Firms and BMPE Synergies exist between Colombian narcotic traffickers trying to launder drug dollars and smugglers of consumer goods into Latin America. June 2000, the U.S. Justice Department begins talks with Hewlett-Packard, Ford, Whirlpool, General Motors, SONY, Westinghouse and General Electric. Talks rumored as “bogging down in legal murk.”

The BAT Scandal BAT archives were made public as part of resolved health lawsuits in the United States. BAT clearly assisted smugglers of their brands.

Litigation Under RICO Suits are aimed primarily at R.J.Reynolds and Philip Morris. Plaintiffs include Canada, Colombia, Ecuador, and the European Union. Plaintiff suits have been stymied by the Revenue Rule. The USA Patriot Act became the target of intense lobbying by the U.S. tobacco industry.

Global Firms Face New Realities Governments are watching. Cleaning up smuggling within the firm can be costly.