HOWZAT

“The volume of imports was such that every Andorran man, woman and child would have had to be smoking about 140 cigarettes a day to match the number of cigarettes imported.”

Jack said Gallaher tried to ring-fence senior management from possible prosecution.

“I told Peter Wilson that once we started to go down this road we would not be able to just stop. Gallaher could not bear to be behind [British rival] Imperial [Tobacco] in the stock market.

“[They] checked with outside barristers what their position was and were told, ‘If you don’t ask you don’t know what the answer is’ . . . They adopted a policy of wilful blindness, and I’m being charitable when I say that.”

In another statement, Jack claims he was advised not to leave a paper trail, not to ask searching questions about shipments, or to attend meetings where this was discussed, to afford the company some plausible deniability if accused of facilitating smuggling. “We were all aware that we were embarking on business that was potentially extremely risky . . . By following this course we could never be accused of conspiring to smuggle as no meeting had taken place and it was always possible to deny knowledge of everything and blame the distributor.”

However, Gallaher was quick to respond in 2000 when Customs, acting on the instructions of the then chancellor, Gordon Brown, threatened prosecutions if tobacco companies didn’t clean up their act. Gallaher was the first to offer greater co-

operation with Customs in combating smuggling and supplying only legitimate distributors and markets.

Jack’s evidence and disclosed internal documents suggest that behind the corporate veil it was business as usual: Gallaher continued volume selling its cigarettes, indifferent to the smuggling risks.

A senior retired official said Customs was aware that Gallaher “played the [co-operation] game very well”, and better than its rivals.

In one example in 2000, Gallaher sold 650m Sovereign cigarettes to a suspected smuggler operating from the Isle of Man, knowing that only weeks earlier Customs had raised its concerns about the distributor.

The judgment says Gallaher later falsely denied all knowledge of the distributor.

Another document, dated May 16, 2003, was from Gallaher to a South African distributor who, Customs had warned eight months earlier, was a major smuggler into the UK.

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