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December 17th, 2015:

AWARD ON JURISDICTION AND ADMISSIBILITY

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Ruling Does Not Address Legality of Trademark Ban Under International Law

http://investors.pmi.com/phoenix.zhtml?c=146476&p=irol-newsArticle&ID=2123843

Press Release

Philip Morris Asia Limited Comments on Tribunal’s Decision to Decline Jurisdiction in Arbitration Against Commonwealth of Australia Over Plain Packaging

Ruling Does Not Address Legality of Trademark Ban Under International Law

HONG KONG–(BUSINESS WIRE)–Dec. 17, 2015– Philip Morris Asia Limited (PMAL), a Hong Kong company that is the parent of Philip Morris Australia, said today that an arbitral tribunal has declined jurisdiction to hear the merits of PMAL’s case against the Commonwealth of Australia under Australia’s 1993 Investment Promotion and Protection Agreement (IPPA) with Hong Kong.

“There is nothing in today’s outcome that addresses, let alone validates, plain packaging in Australia or anywhere else,” said Marc Firestone, Philip Morris International Senior Vice President and General Counsel. “It is regrettable that the outcome hinged entirely on a procedural issue that Australia chose to advocate instead of confronting head on the merits of whether plain packaging is legal or even works”.

PMAL filed its claims under the IPPA on November 21, 2011, when the Australian government passed plain packaging legislation. PMAL asserted that the sweeping ban on trademarks breaches the foreign investment protections that the Australian government guaranteed in its IPPA with Hong Kong.

Firestone continued, “This case has never been about a government’s undeniable authority to regulate in the public interest. Nor has there ever been any question that tobacco products merit strict oversight. In our view, the real point is simply this: Even when pursuing tobacco control objectives, governments are still accountable if they choose to use unlawful means. This is the essence of the rule of law.”

The Australian government’s tobacco packaging policy remains the subject of international disagreement. The World Trade Organization (WTO) is currently considering challenges to Australia’s legislation by four WTO Members. Separately, courts in Europe are also assessing plain packaging under national and international law. The decision on jurisdiction under the Australia-Hong Kong IPPA has no bearing on any of these proceedings.

Australia’s former Labor government made bold promises regarding the public health benefits that its excessive, expropriatory trademark ban — which it labeled a policy experiment – would yield. Three years into the experiment, data from a range of sources consistently demonstrate that the promised outcomes are not being delivered.

PMAL is reviewing the Tribunal’s decision in detail and will determine any further course of action.

###

Philip Morris International Inc.

Philip Morris International Inc. (PMI) is the leading international tobacco company, with six of the world’s top 15 international brands, including Marlboro, the number one cigarette brand worldwide. PMI’s products are sold in more than 180 markets. In 2014, the company held an estimated 15.5% share of the total international cigarette market outside of the U.S., or 28.5% excluding the People’s Republic of China and the U.S. For more information, see www.pmi.com.

Philip Morris Asia Limited

Philip Morris Asia Limited (PMAL) manages PMI’s business in the Asia region. PMA is based in Hong Kong where the company was incorporated under the Hong Kong Companies Ordinance in 1994. PMAL owns the Australian affiliate, Philip Morris Limited (PML).

Philip Morris Limited

Philip Morris Limited (PML) began operations in Australia in 1954 as the first affiliate outside of the United States. Based in Melbourne, PML employs more than 500 people and is the second largest distributor of cigarettes in Australia. PML sells a number of well-known brands, including Marlboro, Alpine, Longbeach, Peter Jackson and choice. In 2014, PML held an estimated 34% share of the Australian cigarette market.

AUSTRALIA PREVAILS IN ARBITRATION WITH PHILIP MORRIS OVER TOBACCO PLAIN PACKAGING DISPUTE

https://www.iareporter.com/articles/breaking-australia-prevails-in-arbitration-with-philip-morris-over-tobacco-plain-packaging-dispute/

A tribunal at the Permanent Court of Arbitration has issued a decision dismissing a high-profile case between cigarette multinational Philip Morris and the Commonwealth of Australia.

The PCA website indicates that a Decision on Jurisdiction and Admissibility was issued on December 17, 2015. A source involved in the case has confirmed to IAReporter that the tribunal has dismissed the investor’s claims of breach of the Australia-Hong Kong bilateral investment treaty.

Subsequent to this, Philip Morris issued a press release confirming the result, and lamenting that the case was decided on the basis of “… a procedural issue that Australia chose to advocate instead of confronting head on the merits of whether plain packaging is legal or even works”.

Hearings occurred in February 2015; detailed legal arguments have remained confidential

The tribunal of Gabrielle Kaufmann-Kohler, Don McRae and Karl-Heinz Boeckstiegel had earlier determined in April 2014 that the proceedings would be bifurcated into a preliminary phase and, if necessary, a later merits phase. Hearings on Australia’s jurisdictional and admissibility objections were held in February 2015.

As we previously discussed (see here), Australia had filed the objections on several grounds, including a complaint that the claim represented an abuse of process due to corporate restructuring engaged in by Philip Morris, as well as a complaint that Philip Morris’ investment in Australia was not admitted in accordance with Australian law, and a complaint that the dispute between the investor and the state was already on foot when Philip Morris acquired its investment in Australia in February 2011.

The tribunal’s detailed reasoning for rejecting jurisdiction is not yet known. The award will not become public until the parties agree on the redaction of any confidential information contained in the award.

Although the broad contours of Australia’s jurisdiction and admissibility objections could be gleaned from an earlier “response” to Philip Morris’s request for arbitration (which we analyzed here), the more detailed subsequent legal arguments filed in the case have remained confidential.

As we’ve reported, Australia’s Attorney General’s office denied a request by Investment Arbitration Reporter under the country’s freedom of information law for access to a detailed defence pleading filed on jurisdiction and merits last year. IAReporter then requested an internal review of that decision, but that review failed to overturn the agency’s earlier rejection of our request.

The claimant has also declined to release its own briefs in the case.

It remains possible that the detailed briefs could be published now that the case has concluded.

Notwithstanding dismissal of the BIT claim, a separate claim against Australia at the World Trade Organisation remains pending, with a decision expected ‘not before the first half of 2016’, according to the WTO’s website.

Law Society welcomes ban on smoking in cars with children

https://www.lawscot.org.uk/news/2015/12/law-society-welcomes-ban-on-smoking-in-cars-with-children/

Smoking in cars where children are present will now be a criminal offence, after the legislation was passed by the Scottish Parliament today, 17 December.

The Smoking Prohibition (Children in Motor Vehicles) (Scotland) Bill was debated this afternoon at stage 3 by MSPs. When the legislation comes into force, it will be a criminal offence to smoke in a car where a child is present. An amendment to the bill tabled by Jackson Carlaw MSP proposed a review of the legislation after 5 years.

Alison Britton, convener of the Law Society of Scotland’s health and medical law committee said:

“The passing of this bill is great news for the health and wellbeing of children, the harmful effects of tobacco and smoking are undisputed, as well as the effects of second hand smoke. We had hoped that the legislation be extended to expressly prohibit the use of e-cigarettes as well as conventional cigarettes, especially in relation to young people, so it is disappointing to see this hasn’t been included.

“We also proposed a review of the legislation within five years to ascertain how well it was working, and we are disappointed that MSPs voted against such a review. Taking into account there will undoubtedly be an updating of research, not only into the effects of e-cigarettes, but the harmful effects of tobacco in general in the next few years, this would have potentially given us the opportunity to ensure that the legislation remained fit for purpose.”

Why smoking bans may have advantage over higher tobacco taxes

http://www.eurekalert.org/pub_releases/2015-12/osu-wsb121415.php

A first look at how city-level policies impact individual smokers

COLUMBUS, Ohio – If governments want to discourage smoking among young people, both high taxes and smoking bans do the job – but bans may have one key advantage.

A first-of-its-kind national study found that bans worked best at limiting smoking among more casual users: Those who smoked less than a pack a day. Heavy taxes worked best with those who smoked more than a pack a day.

“Both taxes and bans have their place. But bans might stop casual smokers from becoming heavy tobacco users,” said Mike Vuolo, lead author of the study and assistant professor of sociology at The Ohio State University.

“If you think of casual smoking as the beginning of the path to addiction, then bans might be the way to go.”

The study is the first to look at how city-level government policies – both taxes and bans – affected actual smokers.

“We’re not just looking at how state policies affect smoking rates in general. We were able to determine how individual smokers reacted to changes in government policies at the city level,” Vuolo said.

“We were never able to get to that level of detail before.”

Another key finding of the study was that combining smoking bans with high taxes didn’t reduce overall smoking rates in a city more than either of the policies by itself.

The study was published online Dec. 17, 2015 in the American Journal of Public Health. Vuolo conducted the study with Brian Kelly and Joy Kadowaki of Purdue University.

Data on smokers came from the National Longitudinal Survey of Youth 1997. This study included 4,341 people from 487 cities who were interviewed every year from 2004 to 2011. All participants were between the age of 19 and 31 during the study. The NLSY97 is conducted by Ohio State’s Center for Human Resource Research for the U.S. Bureau of Labor Statistics

Data on city-level smoking bans and tax rates came from the Americans for Nonsmokers’ Rights Foundation (ANRF) tobacco policy database.

The database told the researchers which participants lived in cities where there was a comprehensive smoking ban, which means that workplaces, bars and restaurants are 100 percent tobacco free with no indoor exceptions.

The database also includes information on the total state and local tobacco excise taxes for cigarette packs sold in each city.

The researchers found big changes in both bans and taxes from 2004 to 2011. The percentage living in a city with a comprehensive ban increased from 14.9 percent to 58.7 percent during that time, while average taxes increased from 81 cents to $1.65 per pack.

The cities with the highest rates of smoking were those that had no smoking bans and low or no taxes on cigarettes, Vuolo said.

Results showed that those residing in cities with bans were 21 percent less likely to currently smoke at all when compared to those who lived in cities without bans. But taxes did not have a significant effect on casual smokers.

“There’s a lot of evidence that casual, social smokers are influenced by their environment. If they can’t smoke inside with their friends at a restaurant or bar, they may choose not to smoke at all,” Vuolo said.

By contrast, those who smoked more than a pack a day were primarily deterred, not by the bans, but by the economic costs – in other words, higher taxes.

The fact that combining high taxes with smoking bans didn’t have an additional impact on smoking rates means that policymakers have several effective options for tobacco control, Vuolo said.

“They are both effective in different ways. Smoking bans might be more effective in preventing new smokers, but it definitely pays to do something,” he said.

“The worst case is not having bans or taxes.”

Boston hikes age for buying cigarettes, tobacco to 21

https://uk.finance.yahoo.com/news/boston-hikes-age-buying-cigarettes-21-231130985.html

Boston hikes age for buying cigarettes, tobacco products to 21, joining dozens of communities

BOSTON (AP) — Boston health officials voted Thursday to raise the minimum age for buying cigarettes and other tobacco products — including electronic cigarettes — from 18 to 21.

Mayor Marty Walsh said the city now joins more than 85 other Massachusetts cities and towns — as well as New York City and Hawaii — in hiking the age for purchasing cigarettes.

The Boston Board of Health also voted to increase the age for admission to adult-only retail tobacco stores and smoking bars to 21.

The changes will also limit the sale of flavored tobacco and nicotine products, other than menthol, to adult-only retailers.

“We know the consequences of tobacco use are real and can be devastating,” Walsh said in a statement. “These changes send a strong message that Boston takes the issue of preventing tobacco addiction seriously.”

The changes take effect Feb. 15.

A group representing convenience store and gas station owners opposed the age hike, saying it would hurt business while not addressing the problem of teen smoking.

Retailers said they have overwhelmingly been in compliance with current laws to keep tobacco away from children. They said Massachusetts should instead close loopholes in state law that allow adults, including parents and guardians, to provide tobacco products to teens below the current minimum purchase age.

New York City raised the minimum age for tobacco purchases to 21 in 2013. In June, Hawaii became the first state to do so, effective Jan. 1.

The Boston suburb of Needham in 2005 became the first U.S. town to impose a local ordinance setting the minimum age at 21.

Walsh said previous efforts to curb access to tobacco products among Boston high school students helped drive down the rate of cigarette use by young people from about 15 percent in 2005 to 8 percent in 2013.

But the mayor said the popularity of electronic cigarettes and flavored tobacco products is on the rise, leading to Thursday’s vote by the Board of Health. He said the vast majority of voters begin smoking before turning 21.

Walsh said the changes approved Thursday are aimed at preventing teenagers from starting smoking by removing the sources of tobacco products from their social networks. Boston health officials also pointed to a 2013 survey that they said found that the use of inexpensive cigars and cigarillos among youth in Boston had increased to 20 percent.

Massachusetts lawmakers are considering a bill that would make 21 the legal age for buying tobacco statewide.

Nearly 60 representatives and senators have signed on to legislation that would make it illegal to sell tobacco to people under 21, with penalties ranging from $100 up to $300 for repeat violations.

A change in the statewide minimum age could hurt state revenues.

In the last fiscal year, a cigarette excise tax raised $510 million for the state’s general fund. About $136 million went to the state’s health connector to help provide subsidized health care coverage, according to the Massachusetts Taxpayers Foundation.

Smoking in cars with children to be banned in the Republic of Ireland

http://www.bbc.com/news/world-europe-35122671

A ban on smoking in vehicles when children are present will come into effect in the Republic of Ireland on New Year’s Day, 1 January 2016.

Anyone caught smoking in a vehicle in front of a child or youth under the age of 18 will be fined 100 euros (£73).

Failure to pay the fine, or to stop a vehicle and give personal details to the police could lead to a prosecution and 1,000 euros (£727) penalty.

A similar ban is being considered by the Northern Ireland Assembly.

Earlier this month, Stormont Health Minister Simon Hamilton announced an amendment to a bill currently going through the assembly, which if passed, would now mean smoking in cars with children would be illegal anywhere on the island of Ireland.

‘Enclosed spaces’

The Irish government signed its ban into law this week, under the Protection of Children’s Health (Tobacco Smoke in Mechanically Propelled Vehicles) Act.

The details were announced by Minister for Children Dr James Reilly and Minister for Health Leo Varadkar.

Mr Reilly said it was a central part of his government’s “Tobacco Free Ireland” policy.

“The Irish Health Behaviour in School-aged Children (HBSC) Study 2014 found that nearly one in every five children between the ages of 10 and 17 years are exposed to toxic, carcinogenic smoke in cars,” he said.

“Even if windows of the car are open the young person is not protected from the harmful effect of second-hand smoke.”

Mr Varadkar said: “Children are more susceptible to the effects of second-hand smoke and may not be able to avoid exposure.

“Second hand smoke is particularly harmful to children in enclosed spaces, such as cars.”

Under the new law, drivers and passengers will be banned from smoking cigarettes, cigars or pipes when they are inside a vehicle with someone under the age of 18.

Drivers will also be held responsible if they allow their passengers to smoke in front of children.

The legislation does not apply to electronic cigarettes, which are exempt from the ban.

In Great Britain, a law banning smoking in vehicles carrying children came into force in England and Wales in October.

The Scotland government is planning to legislate on the issue next year.

Scotland to ban smoking in cars with children

http://www.bbc.com/news/uk-scotland-scotland-politics-35126453

Scotland is to ban smoking in cars that are carrying children after MSPs voted unanimously in favour of a change in the law.

The new legislation will mean fines of up to £100 for anyone who smokes in a car which has a passenger under the age of 18.

It aims protect children from the harmful effects of second-hand smoke.

The Smoking Prohibition (Children in Motor Vehicles) Bill was introduced by Liberal Democrat MSP Jim Hume.

Mr Hume’s mother died of cancer caused by second-hand smoke.

‘Healthiest start’

He told MSPs that the concentrations of harmful tobacco particles in the very close confines of a car were far greater than from smoke in bars, which had already been banned.

He added: “Around 60,000 children are put in this position each week in Scotland.

“This legislation will, of course, address that situation and help to ensure that all our children and young people have the best and healthiest start in life.”

The bill was backed by the Scottish government and opposition parties in the Scottish Parliament.

Public health minister Maureen Watt said the legislation would contribute to the Scottish government’s drive to cut the number of children exposed to second-hand smoke from 12% to 6% by 2020.

And she said that Scotland had shown itself to be a “world leader on tobacco control”.

Publicity campaign

A publicity campaign will be carried out to raise awareness of the change in the law.

The new legislation has also been supported by public health and anti-smoking campaigners, who have said that second-hand smoke can reach very high levels when someone lights up in a car.

They have also said that about a fifth of 13 and 15-year-olds in Scotland are exposed to tobacco smoke during car journeys.

Sheila Duffy, chief executive of health charity Ash Scotland, said: “This is a victory for doctors, nurses, parents and, most of all, for children.

“We know the immense harm done to children by second-hand smoke. Meningitis, lung cancer and even cot death have been linked to tobacco smoke.

“I’m delighted that we’ve introduced this sensible measure to protect children’s health.”

‘Strong signal’

Dr Peter Fowlie, officer for Scotland for the Royal College of Paediatrics and Child Health, said: “Scottish Parliament’s move to ban smoking in cars carrying children not only protects children from terrible conditions linked to second-hand smoke such as bronchiolitis, pneumonia and asthma, but also sends a strong signal that smoking is not cool – it kills.

“Today’s decision is something to be celebrated and we as paediatricians applaud parliamentarians for taking such bold steps to protect child health.”

But smokers’ group Forest had argued that the bill was the “worst kind of gesture politics” and represented a worrying intrusion into people’s private space”.

A ban on smoking in cars carrying under-18s came into force in England and Wales earlier this year.

Northern Ireland is also looking at introducing a similar ban.

Philip Morris Asia Limited Comments on Tribunal’s Decision to Decline Jurisdiction in Arbitration Against Commonwealth of Australia Over Plain Packaging

http://www.businesswire.com/news/home/20151217006627/en/Philip-Morris-Asia-Limited-Comments-Tribunal%E2%80%99s-Decision

Ruling Does Not Address Legality of Trademark Ban Under International Law

HONG KONG–(BUSINESS WIRE)–Philip Morris Asia Limited (PMAL), a Hong Kong company that is the parent of Philip Morris Australia, said today that an arbitral tribunal has declined jurisdiction to hear the merits of PMAL’s case against the Commonwealth of Australia under Australia’s 1993 Investment Promotion and Protection Agreement (IPPA) with Hong Kong.

“It is regrettable that the outcome hinged entirely on a procedural issue that Australia chose to advocate instead of confronting head on the merits of whether plain packaging is legal or even works”

“There is nothing in today’s outcome that addresses, let alone validates, plain packaging in Australia or anywhere else,” said Marc Firestone, Philip Morris International Senior Vice President and General Counsel. “It is regrettable that the outcome hinged entirely on a procedural issue that Australia chose to advocate instead of confronting head on the merits of whether plain packaging is legal or even works”.

PMAL filed its claims under the IPPA on November 21, 2011, when the Australian government passed plain packaging legislation. PMAL asserted that the sweeping ban on trademarks breaches the foreign investment protections that the Australian government guaranteed in its IPPA with Hong Kong.

Firestone continued, “This case has never been about a government’s undeniable authority to regulate in the public interest. Nor has there ever been any question that tobacco products merit strict oversight. In our view, the real point is simply this: Even when pursuing tobacco control objectives, governments are still accountable if they choose to use unlawful means. This is the essence of the rule of law.”

The Australian government’s tobacco packaging policy remains the subject of international disagreement. The World Trade Organization (WTO) is currently considering challenges to Australia’s legislation by four WTO Members. Separately, courts in Europe are also assessing plain packaging under national and international law. The decision on jurisdiction under the Australia-Hong Kong IPPA has no bearing on any of these proceedings.

Australia’s former Labor government made bold promises regarding the public health benefits that its excessive, expropriatory trademark ban — which it labeled a policy experiment – would yield.

Three years into the experiment, data from a range of sources consistently demonstrate that the promised outcomes are not being delivered.

PMAL is reviewing the Tribunal’s decision in detail and will determine any further course of action.

Philip Morris International Inc.

Philip Morris International Inc. (PMI) is the leading international tobacco company, with six of the world’s top 15 international brands, including Marlboro, the number one cigarette brand worldwide. PMI’s products are sold in more than 180 markets. In 2014, the company held an estimated 15.5% share of the total international cigarette market outside of the U.S., or 28.5% excluding the People’s Republic of China and the U.S. For more information, see www.pmi.com.

Philip Morris Asia Limited

Philip Morris Asia Limited (PMAL) manages PMI’s business in the Asia region. PMA is based in Hong Kong where the company was incorporated under the Hong Kong Companies Ordinance in 1994. PMAL owns the Australian affiliate, Philip Morris Limited (PML).

Philip Morris Limited

Philip Morris Limited (PML) began operations in Australia in 1954 as the first affiliate outside of the United States. Based in Melbourne, PML employs more than 500 people and is the second largest distributor of cigarettes in Australia. PML sells a number of well-known brands, including Marlboro, Alpine, Longbeach, Peter Jackson and choice. In 2014, PML held an estimated 34% share of the Australian cigarette market.