By Bruno Waterfield - 4th April 2004
Brussels has confirmed a draft deal between the EU, ten national capitals and multinational tobacco giant Philip Morris International.
Press reports indicate that the tobacco manufacturer is set to pay out €800 million in an “agreement to combat illegal trade in counterfeit and genuine cigarettes”.
The European Commission on Monday heralded an imminent breakthrough on a deal wrapping up a bitter dispute.
EU customs authorities have made allegations that Philip Morris International had colluded in the smuggling of cigarettes into Europe in a bid to get tobacco products into European markets.
Cash – to avoid possibly huge and lengthy EU lawsuits – will fund a crackdown on contraband and smuggled cigarettes.
David Davies, Philip Morris vice president told Reuters his bill would be $1 billion over 12 years to end the dispute.
But Davies played down linkage of the deal with anti-smuggling lawsuits – contraband cigarette cost the EU hundreds of million euros every year in lost duties.
“This agreement resolves past disputes, it gets us from conflict to cooperation,” he said.
Budget commissioner Michaele Schreyer told journalists that a draft deal “is still subject to the approval of the commission, the member states and the board of directors of Philip Morris International”.
The agreement “would contemplate substantial payments over a number of years”, said the EU finance chief, but would not be regarded as penalties.
“These payments, contrary to certain press interpretations, are not and should not be viewed as fines or recoveries,” she said in a statement.
“The funds could be made available to fund contraband and anti-counterfeit measures.”
Other aspects of the agreement will involve closer cooperation between Philip Morris and EU law enforcement agencies.
Have your say...
Please enter your comments below.