Cheap imported cigarettes: deals or duds?

By Вen Li

A new website offering cheap cigarettes is targeting University of Calgary students. Posters advertising the site have been spotted on campus since Mon., July 29.

The website, which registered its domain name on July 24, 2002 under a Calgary address, sells cartons of cigarettes for US$24.99–34.99 each, half the price at the SU Stör.

"I would be nervous about paying $29.99 in U.S. funds in advance," said Ellen Wright, Senior Vice-President of Operations Better Business Bureau of Southern Alberta. "What if you don’t get them?"

Former U of C computer science student Zishan Rahman is the proprietor of the site, which does not handle credit card payments directly. Instead it accepts credit card payments through PayPal, an unregulated on-line payment facilitator based in Palo Alto, California, which only deals in u.s. currency.

"PayPal’s buyer protection policy protects consumers," said Rahman. "If they don’t actually receive anything, then PayPal can actually sue us. All they have to do is tell PayPal they didn’t get anything. PayPal can close our account at any time or it can ask for that refund, and we would have to give that."

But because customers are not paying the site directly, customers may not be directly protected by their credit card companies’ "goods not received" clause. Most credit cards allow the customer not to pay if a business fails to deliver on a sale.

Students’ Union Vice-President Operations and Finance Robbie White shared concerns about students losing their money.

"Students may fall for it and get their money stolen," said White. "But I imagine most students wouldn’t."

According to White, the posters advertising the site in Science Theaters, Math Sciences and other locations would be torn down as of Tuesday afternoon.

"I’m pretty sure the poster violates our poster policy," he said. "The poster boards are mainly for students, not for selling products. It’s also not creating a good image with regards to the university’s new smoking-cessation policy."

The poster implies but does not explicitly state that the cigarettes originate from the U.S., with text including "Get your favorite American cigarettes at your doorstep only for us$29.99" and "It is legal for Canadians to receive one carton per day per person." According to Rahman, the cigarettes originate elsewhere.

"It’s not coming from Canada, it’s not coming from the United States, it’s coming from Pakistan," he said. "They’re American brand cigarettes but they are not made in the U.S.A."

Without commenting specifically on the advertisement, Canada Customs and Revenue Agency representative Gordon Luchia said there are no limits on Canadians importing tobacco products, but all such products will be taxed at the border.

"If you’re having cigarettes mailed from outside the country, the excise, GST and duty are applied to the Canadian value of the product," said Luchia. "There is no provision that allows anyone to receive one [exempt] carton per person per day."

An e-mail response from Rahman to questions from a prospective customer working on our behalf contradicts the government statement.

"You can buy one carton for US$29.99 per day. If you order more you will be taxed + customs [sic] will cease [sic] the extra cartons."

In a separate e-mail, they also claimed that the cigarettes would be tax-free to customers.

"If you are from Canada, as long you purchase one carton per day and if you are accessed any taxes. [sic] We haven’t heard from any of customers that they pay any kind of taxes, but if you are for any reason charged any taxes please let us know and we will reimburse the taxes charged to you."

Luchia asserted cigarettes can be shipped tax-free from within Canada if taxes, duties and excise were paid by the importer at the border. He estimated that taxes, duties and excise would amount to about twice the Canadian value of the cigarettes, or $45 on a $30 (U.S.) cigarette carton.

According to Health Canada media representitive Andrew Swift, there are no safety regulations in Canada regarding the manufacture of cigarttes, but there are packaging requirements.

"If he [Rahman] is importing these cigarettes, they would have to contain the Health Canada warnings on the packaging," said Swift. "Any importers would also have to collect taxes on them."

"If these cigarettes do not have the warning, then they are not being sold legally. That is a contravention of the Tobbaco Act," Swift continued.

Rahman did not comment about packaging the cigarettes to meet Canadian standards, but regarding safety of the imports, he stated that the cigarettes manufactured in Asia are no different than those from the U.S. or Canada.

"They’re as safe as any other cigarettes, they’re approved by Phillip Morris, the packages the customers get will have the same brand and same guarantee as Phillip Morris," Rahman said.

"I’ve been getting these cigarettes for the past four months and I have not been charged anything. I don’t even pay a dime to the post man or the post office. Nothing. Nothing at all. Not even gst. You would be paying gst but that’s included in the price," Rahman continued.

According to Wright the bbb has no prior record of the website previous to being contacted by the Gauntlet, possibly due to the business’ age.

"If they’ve only been in business for two weeks, it’s a claim that sounds too good to be true," said Wright. "Certainly I’m deeply concerned about the age of the company."

Phillip Morris did not return calls by press time.

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