August 22, 2001 — Kenneth Clarke was called before the Commons all-party health committee, chaired by Labour MP David Hinchliffe, after the original disclosure that BAT stood accused of complicity in cigarette smuggling. These are extracts from his testimony on Feb. 16, 2000.

I am a member of the board and I am a member of the audit committee and I am a non-executive director. I hold those roles because I am satisfied and I satisfied myself that the company is a company of integrity. It is an extremely good corporate citizen.

It is… quite unfounded to suggest that the company whose products are being smuggled is organising the smuggling. We do not, and we would not, and we would stop any of our employees doing it.

I, together with my fellow directors, seek to ensure that the company follows the highest standards of probity, not just complying with the criminal law in whatever country we trade, also maintaining what would be regarded as good ethical standards by a British publicly quoted company.

I am not an executive director and I have only been connected with the company at all for two years. I have of course had to make inquiries… one of the duties of the audit committee is to make sure that the system of internal control in the company is in place and that would include controls over our distribution channels if that became an issue It is not in the interests of BAT to have our product smuggled any more than it would be remotely acceptable for us to be engaged in the smuggling. When it is carried out by others, it damages us. If we do get a complaint about the behaviour of the company, then we investigate it. If I get a complaint about the behaviour of the company, I investigate it. The Guardian article is one of the things I responded to.

We sell into the legitimate trade where we have chosen legitimate traders… We do not deal with any distributor who we think is just a smuggler. We deal with legitimate licensed distributors.

An attempt is being made to discredit the tobacco companies but the tobacco companies are ethical companies.

We asked Mr Clarke recently whether he had been aware of the activities of BAT International sarl, registered in Geneva, and its successor BAT International Ltd, registered in Zug. He replied on August 16: I am of course aware of the existence of BAT International… As a non-executive director of the parent company I do not, however, have any detailed knowledge of the day to day activities of the company.