Kaliningrad is a Russian exclave on the Baltic Sea, between Poland and Lithuania. It has long been a key transit country for smuggled cigarettes, with the region renown for violence and organised crime.
Two Murders of Distributors
In 1999, there were two murders in two months of cigarette distributors in Kaliningrad. In April, a Reemtsma importer was murdered.  A month later, one of British American Tobacco's customers was assassinated. The victim was a partner in a company called Kvest, which was one of BAT's customers. At the time Kvest was a customer of Reemtsma Poland, BAT Poland, and Philip Morris. 
Gallaher / Japan Tobacco International and BAT Linked to Cheap Whites
In 2008, the International Consortium of Investigative Journalists (ICIJ) revealed how Europe was "being flooded by smuggled Russian-made cigarettes worth at least $1 billion a year ... The organization behind this fast expanding black market, the Baltic Tobacco Factory (BTF) of Kaliningrad, Russia, has links to two of the world’s largest tobacco companies. Its factory network in Russia and Ukraine was previously owned and run by subsidiaries of Japan Tobacco International (JTI) Group, the world’s number three producer".
The investigation "identified a network of Russian and East European companies, including 5 factories believed to play roles in manufacturing the contraband cigarettes being smuggled to the West. The Russian-run factory network now claims to be able to produce more than 24 billion cigarettes annually. This would be equivalent to 7 percent of legal EU cigarette imports".
The ICIJ reported that "despite Baltic Tobacco’s marketing tactics, it has ties to major multinational tobacco companies, including two of the largest cigarette firms in the world — Japan Tobacco International (JTI) and British American Tobacco (BAT) ... Although BAT has publicly stated its opposition to cigarette smuggling, the company has supplied Baltic Tobacco with high quality Western-style tobacco".
The article continued: "In 2004 the Baltic Tobacco Factory was linked to another tobacco multinational, UK-based Gallaher. In that year, BTF was owned by PRT Ltd., a company based at the Polish headquarters of Britain’s Gallaher Group, located in Poddebice near Lodz, according to the Russian company database SKRIN. Gallaher took over the Poddebice operation – Compania Tytoniowa Merkury, a privatized Polish state cigarette factory – on 5 March 2003. A spokesman for Japan Tobacco International (JTI), now owner of Gallaher, stated in an email to ICIJ that BTF and PRT “might have been third-party contractors at some point before 2003” with the Gallaher Group". 
Japan Tobacco International
In November 2011, the Organised Crime and Corruption Reporting Project (OCCRP) published numerous leaked documents concerning smuggling and Japan Tobacco International.
One of the leaked documents from JTI's Brand Integrity Unit revealed that the company's "investigations reveal that several wholesalers and sub-distributors working for or with JTI’s current distributor in Russia appear to be colluding with smugglers in collecting and consolidating loads of Saint George, which are then moved to the Baltic States via mainly the Kaliningrad Region of Russia". As much as 34,500 cases annually were estimated to being diverted onto the black market, which equated to about two percent of total sales of JTI's Saint George brand in Russia.
The investigators pointed out that: "If all Saint George now known or suspected of being diverted from Russia were seized in the European Union, the Company could be exposed to EU penalties of some Euro 28-to-31 million annually".
The investigators also believed that "the bulk of the Saint George cigarettes are acquired in, and then shipped from, Russia via a series of front and temporary companies owned or controlled by a group of individuals who Russian law enforcement agencies confirm are associated with the Kuznetsov Criminal Group". 
- Christopher Hughes, New Murder in Kaliningrad: Urgent Task, 16 May 1999
- Birgit Spanuth, New Murder in Kaliningrad: Juri Volkov, 17 May 1999
- Roman Shleynov, Stefan Candea, Duncan Campbell, Vlad Lavrov, Made To Be Smuggled Russian Contraband Cigarettes ‘Flooding’ EU The ICIJ, 20 October 2008,
- JTI, Brand Integrity Group Investigations Report, 24 September 2009