David Dodge, governor of the Bank of
Canada, testified at a hearing in a smuggling case against
defendants including JTI-Macdonald Corp., after prosecutors tried
to keep him and 12 other defense witnesses off the stand.
Dodge and the other 12 are former Canadian government
officials. Prosecutors opposed their testimony, saying it would
go beyond the proper scope of a preliminary hearing. Judge Jean-
Marc Labrosse of the Ontario Court of Appeals last week ruled
against the government, saying, ``The respondents have a
statutory right to call evidence.''
JTI-Macdonald Corp., a unit of Japan Tobacco Inc., and other
defendants are accused of exporting cigarettes to the U.S. in the
1990s knowing they would be smuggled back into Canada for sale on
the black market.
Dodge, deputy minister of finance from 1992 to 1997, told
investigators ``he had no reason to believe in 1992 to 1997 that
JTI was involved in the smuggling of tobacco products,'' defense
lawyer Scott Fenton said last week in an appeals court filing.
Dodge's testimony today can't be reported because of a
court-imposed ban imposed to avoid influencing potential jurors.
Prosecutors must prove at the hearing that they have enough
evidence to justify a trial.
JTI-Macdonald, three Reynolds American Inc. units and eight
former and current executives are charged with defrauding Canada
of C$1.2 billion ($1 billion) in taxes and duties through
JTI-Macdonald denied the charges, saying the cigarettes
were sold legally to U.S. distributors who passed them on to
smugglers. The Reynolds American units -- R.J. Reynolds Tobacco
Co., R.J. Reynolds Tobacco International and Northern Brands
International Inc. -- dispute Canada's authority to try them and
aren't represented in court.
The case is Regina v. JTI-Macdonald Inc., Ontario Provincial
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