[Intl-tobacco] Marlboro Man does billion dollar deal on smuggling with Europe - ASH demands to know why UK is not included?

Fri, 09 Jul 2004 09:43:31 -0400

ASH news release:  Embargo: 12.00 noon Brussels time 9th July 2004

[view HTML version of press release:
www.ash.org.uk/html/press/040709.html]

Marlboro Man does billion dollar deal on smuggling with Europe - ASH
demands to know why UK is not included?

Today Philip Morris International, the world's biggest tobacco
manufacturer, announced that it will pay the European Commission a
billion dollars in a landmark deal on tobacco smuggling. The agreement
sets out how the company will control future smuggling of its
cigarettes.  In the past tobacco industry executives have denied they
aided and abetted smuggling but this agreement highlights that falsehood
by showing exactly how smuggling can be controlled.

>From now on the company will be heavily penalised if its cigarettes are
smuggled into Europe. It will have to pay the taxes due on any Philip
Morris cigarettes seized by European customs.  And if more than 90
million cigarettes a year (9 container loads) are found to be smuggled,
it will incur additional payments of 400%. This would amount to fines of
7.5 million euros for each additional container. Philip Morris is also
required to mark all its cigarettes with the country of destination and
to have tight controls on all the contractors it supplies, so the route
by which cigarettes are smuggled can be tracked and traced[1].

In return, the EC[2] drops its US court case against Philip Morris which
accused the company of complicity in cigarette smuggling by
intentionally oversupplying neighbouring countries. The lawsuit was
initially dismissed on jurisdictional grounds but the EC was given the
go-ahead to take out a new case  based on money-laundering laws.

Currently this agreement only applies to Philip Morris, but now PMI have
settled the pressure will be on the other two companies in the law suit,
RJ Reynolds and JT International, to settle too.  It also provides a
baseline for the protocol on smuggling required under the new
international tobacco treaty, the Framework Convention on Tobacco
Control (FCTC), due to be ratified shortly.

The tightly worded document, which is over 50 pages long, contrasts
dramatically with the inadequate and general Memoranda of Understanding
(MOU) the UK government currently has with Gallaher, British American
Tobacco (BAT) and Imperial Tobacco[3].

Deborah Arnott, Director of the tobacco control campaign group, ASH,
said:

"ASH demands to know why the UK did not take part in the legal action
taken out by the EC against Philip Morris. We are the victims of some of
the highest levels of smuggling in Europe with tax unpaid on one in four
cigarettes consumed in this country. Our citizens need the protection of
this agreement and our government must sign up to it as soon as
possible. We also call on the government to re-open negotiations with
BAT, Gallaher and Imperial immediately and to accept nothing less than
the terms of the Philip Morris agreement with the EC."

Notes and links:
[1]  See attached brief for the key features of the agreement between
the EC and PMI: http://www.ash.org.uk/html/press/040709brief.html
[2] The 10 other plaintiffs in addition to the EC were the EU Member
States Belgium, Finland, France, Greece, Germany, Italy, Luxembourg,
Netherlands, Portugal and Spain. [3]  Links to Memoranda of
Understanding with BAT and Imperial and Gallaher.
http://www.ash.org.uk/html/smuggling/pdfs/bat-hmce-mou.pdf
http://www.ash.org.uk/html/smuggling/pdfs/imperial-hmce-mou.pdf
http://www.ash.org.uk/html/smuggling/html/gallaher-hmce-mou.html

Contact: Deborah Arnott  020 7739 5902 (w) 079 7693 5987 (m) ISDN
available