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AGO running after tobacco company
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Posted on Sep 22 2005
The CNMI government is running after a Chinese tobacco manufacturer that allegedly failed to comply with the Commonwealth’s tobacco escrow law, asking the Superior Court to declare the firm’s liability at up to $265,195.44.
CNMI consumer counsel Brian Caldwell filed a civil action against Yuxi Hongta Tobacco (Group), Ltd., Yuxi Cigarette Factory—a cigarette and tobacco manufacturer in the People’s Republic of China. He said the company’s products, “Hongtashan” and “Ashima” were sold in the CNMI in 2001 and 2003.
Caldwell earlier filed similar lawsuits against two Philippine tobacco companies, Fortune Tobacco Corp. and La Suerte Cigar & Cigarette Factory.
He said Yuxi has failed to meet certain obligations required by Public Law 13-15, which requires tobacco manufacturers selling products in the Commonwealth to deposit a certain amount into the CNMI’s tobacco escrow fund by April 15 of the year following the year when it sold products locally.
The consumer counsel disclosed that Yuxi—whether directly or through a distributor, retailer or similar intermediary—sold 1.7 million units of cigarettes in 2001. He said the law required Yuxi to deposit at least $23,120 by April 15, 2002, which the company allegedly failed to do. Caldwell said the company sold 2.1 million units in 2003, making it obligated to deposit at least $35,183.19 in escrow by April 15, 2004.
Subject to inflation adjustment, Caldwell said the company should pay the amounts due—$25,358.73 and $40,940.13, respectively. He asked the court to impose civil penalties of $76,076.19 and $122,820.39 for the nonpayments in 2001 and 2003 sales, alleging that Yuxi knowingly violated the law.
Caldwell asked the court to impose civil penalties equivalent to 100 percent of the amounts due to be deposited in escrow with respect to the 2001 and 2003 sales if it finds the violation unintentional.
