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China cigarette maker told to pay $.2M
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Posted on May 17 2006
The Superior Court has found a China cigarette manufacturer liable to pay $265,195.44 to the CNMI government for not complying with the local tobacco law.
In a default judgment, Superior Court Presiding Judge Robert C. Naraja ordered Yuxi Hongta Tobacco (Group) Ltd., Yuxi Cigarette Factory to pay $198,896.58 in civil penalties plus interest at the rate of 9 percent per annum.
Naraja directed the Yunnan, China-based Yuxi Hongta to pay the Attorney General his costs and fees incurred in this case.
The judge ordered the cigarette manufacturer to establish within 15 days a “qualified escrow fund” and place into that fund $25,358.73 and $40,940.13 for calendar years 2001 and 2003.
Yuxi Hongta is enjoined from selling its cigarettes in the CNMI, whether directly or through a distributor, retailer or similar intermediary unless and until it complies fully with the Commonwealth Tobacco Escow Statute, said Naraja in the order.
Naraja said the tobacco manufacturer violated the Commonwealth Tobacco Escrow Statute, Public Law 12-45, as amended by P.L. 13-15 Section 3(B).
The judge said such violations were “knowing” within the meaning of the law.
The CNMI government, through Assistant Attorney General Brian Caldwell, filed the lawsuit in 2005 against Yuxi Hongta to compel the company to comply with Public Law 13-15, which requires tobacco product manufacturers to meet certain obligations.
The government’s lawsuit alleged that in November 1998, the CNMI, along with 46 states and four territories, entered into a settlement agreement with leading tobacco product manufacturers called the “master settlement agreement.”
Yuxi Hongta is considered a non-participating manufacturer, Caldwell said.
Caldwell said pursuant to P.L. 13-15, for each cigarette that is sold in the CNMI, a non-participating manufacturer must deposit money, including an amount to adjust for inflation, into a qualified escrow fund.
Caldwell said the defendant has not placed any monies into a qualified escrow fund pursuant to the Commonwealth Tobacco Escrow Statute.
