Two of the largest tobacco companies in Canada have admitted customs charges related to contraband cigarettes and have been ordered to pay more than $US1 billion in penalties.
Imperial Tobacco Canada Ltd, a unit for British American Tobacco and Rothmans Benson & Hedges, a unit of Philip Morris and Rothmans both pleaded guilty to a single charge on Thursday.
The case follows more than eight years of investigations by federal police in Ontario and Quebec provinces.
Imperial Tobacco paid a $US200 million fine and Rothmans Benson & Hedges paid a fine of $US100 million.
The penalties are described by the Royal Canadian Mounted Police as "the largest fines ever levied in Canada".
In addition, the two companies agreed to pay $US400 million and $US450 million respectively, over 15 years to Canada's federal and provincial governments to settle civil litigation.
Most of this money will be spent on funding various anti-smuggling measures.
The charges relate to 1989 - 1994, when tobacco taxes in eastern Canadian provinces were so high that they prompted widespread smuggling.
