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January 19th, 2016:

Tobacco giant Philip Morris faces $2.2 billion Thai tax fine

Tobacco giant Philip Morris is facing an eye-watering $2.2 billion fine if found guilty of dodging tax on cigarette imports to Thailand, prosecutors said on Tuesday.

The allegations are part of a long simmering tax dispute between the kingdom and the local unit of the tobacco company, which has also clashed with authorities over plans to increase the size of health warnings on cigarette packets.

Thai prosecutors say Philip Morris, which owns the Marlboro and L&M brands, avoided around 20 billion baht ($551.27 million) tax by under declaring import prices for cigarettes from the Philippines between 2003 and 2006.

“Philip Morris as a corporation, as well as seven Thais, were indicted yesterday on custom tax evasion,” Somnuk Siengkong, a spokesman for Thailand’s Office of the Attorney General told reporters on Tuesday.

Chartpong Chirabandhu, deputy director general of the office’s special litigation department, said a court could impose a fine of up to 80 billion baht ($2.2 billion) if the company was found guilty.

Four foreign executives at the company have also been charged but are outside the country, prosecutors added.

Philip Morris Thailand Limited described the charges as “unjust” and vowed to fight them.

“The company intends to vigorously defend itself against these meritless charges and demonstrate that it is in full compliance with Thai law and international standards of customs valuation,” the company said in a statement.

The cigarette manufacturer added that their import valuations complied with World Trade Organization agreements and had been cleared by local Thai customs officials.

The investigation first surfaced in 2006 under the administration of Thaksin Shinawatra, shortly before his ousting in a military coup.

Thailand has since been hit by a decade of political instability with frequent government changes and a second coup in 2014.

In 2011, the attorney general at the time recommended against charging the tobacco giant, but the prosecution was restarted two years later.

That year Philip Morris was among leading cigarette firms to challenge in court plans by Thai health officials to increase health warnings on cigarettes.

The World Health Organization has accused the tobacco industry of deploying legions of lobbyists and lawyers to block packaging changes.

The tobacco lobby has also tried to block laws curbing advertising or raising taxes on cigarettes.

But more countries are adopting the approach with Thailand something of a regional leader on the issue in Southeast Asia.

Action on Smoking and Health Foundation Thailand says more than 50,700 people die every year from smoking-related diseases with around 13 million of the country’s 67 million inhabitants addicted to cigarettes, 2.2 million of whom are minors.

MP decries illegal tobacco trade

Akel MP Irene Charalambidou told the House Watchdog Committee that there exists a ring of illicit tobacco traffickers involving known members of the Cyprus elite.

Charalambidou criticised state authorities for lack of co-ordination between relevant departments and claimed these cases are handled in a particularly compromising way.

Speaking before the Watchdog Committee on Tuesday, Charalambidou said the man who was a key suspect in the case of illegal tobacco imports, which made headlines in 2009, is also involved in the record tobacco haul in Aradippou in October 2015.

In October, police raided a warehouse in Aradippou and found hauls of illegal tobacco worth €2million in unpaid taxes. Six people –including what investigators suspect is a Cypriot operations manager– were arrested in the joint operation between the customs officers and police.

Police later raided more warehouses – being run by a bogus company – seizing more illegal tobacco. The overall seizure has come to just under 20 tonnes making it the biggest haul ever recorded on the island.

Charalambidou had then spoken of a “cover-up” because the company owner had yet to be found while she also questioned why the foreign workers at the factory have all been deported from Cyprus.

The Cyprus Customs and Excise Department had denied all accusations.

Gov. Christie Fails to Lead by Vetoing Bill to Raise Tobacco Sale Age

Statement of Matthew L. Myers, President, Campaign for Tobacco-Free Kids:

Gov. Chris Christie’s veto of legislation to raise New Jersey’s tobacco sale age to 21 represents a failure of leadership and a terrible missed opportunity to protect young people from tobacco addiction and save lives. The main beneficiaries of his veto are tobacco companies that actively target young people as replacements for the more than 480,000 Americans their products kill each year.

Gov. Christie has spoken eloquently about addiction and his mother’s battle with lung cancer following decades of cigarette smoking that started in her teens. Unfortunately, when given the opportunity to prevent future such tragedies, he failed to do so. New Jersey will pay the price with more young people becoming addicted to tobacco, more lives lost and higher tobacco-related health care costs.

Despite enormous progress in reducing tobacco use, tobacco remains the nation’s No. 1 cause of preventable death. It kills nearly half a million people and costs $170 billion in health care expenses nationwide each year – including more than 11,500 deaths and $4 billion in health care bills in New Jersey alone.

Increasing the tobacco age to 21 will reduce tobacco use among youth and young adults – age groups when nearly all tobacco use begins and that are heavily targeted by the tobacco industry. We know that 95 percent of adult smokers began smoking before they turned 21. If we can get young people to age 21 as non-smokers, they almost certainly never will become smokers. Raising the age of sale to 21 will also help keep tobacco out of high schools, where younger teens often obtain tobacco products from older students. A March 2015 report by the prestigious Institute of Medicine concluded that raising the tobacco age to 21 would significantly reduce smoking among youth and young adults and have other health benefits.

The tobacco industry knows youth and young adults are susceptible to nicotine addiction and heavily targets these age groups, spending $9.6 billion each year – more than $1 million every hour – to market its deadly products. In New Jersey alone, tobacco companies spend more than $185 million every year.

There is growing momentum nationwide to raise the tobacco sale age to 21, with the state of Hawaii and at least 115 cities and counties having done so. By vetoing this legislation, Governor Christie has let down the young people of New Jersey

NJ Gov Chris Christie Will Not Sign Bill To Raise Tobacco Age

New Jersey Republican Governor Chris Christie has chosen not to act on a bill that would have raised the smoking age in NJ from 19 to 21. This is the second time that the Governor has chosen not to pass a bill passed by the New Jersey legislature that would have stripped away the rights for an adult to make an adult decision.

The bill would have fined retailers up to $1,000 if they did not adhere to the measure.

The move leaves Hawaii as the only state to raise the age to 21. There are currently 8 other states and Washington DC that have introduced similar measures. Additionally, there is also a Federal proposal that is looking to raise the age to 21 on a national level.

The news of the veto was first reported by the Associated Press.

School of Public Health Receives $867,000 Grant to Continue Tobacco Control Work in Chinese Cities

Georgia State University’s School of Public Health has received a grant of more than $867,000 from Pfizer Inc. to continue working with Chinese health officials to implement tobacco control programs in five major cities in China.

China produces more tobacco and has more smokers than any country in the world. The grant supports ongoing work with officials to develop policies and programs to protect non-smokers from second-hand smoke, encourage smokers to quit and prevent women, children and young adults from starting smoking.

The project is led by principal investigator Dr. Michael Eriksen, dean of the School of Public Health; Pam Redmon, executive director of the China Tobacco Control Partnership and administrative director of the School of Public Health’s Tobacco Center of Regulatory Science; and Dr. Jeffrey Koplan, vice president for global health at Emory University and former director of the Centers for Disease Control and Prevention.

Five Chinese cities were chosen for the effort based on their leaders’ readiness to support tobacco control efforts and the presence of public health organizations positioned to lead programs in their communities. They are Chongqing (with a population of 33 million), Chengdu, Wuhan, Xi’an (famous for its terracotta army) and Xiamen. Together, the five partner cities have a population of more than 69 million people.

“China’s cities have a unique opportunity to lead from the ‘bottom up’ to change tobacco use social norms,” Redmon said. “In fact, they may be the driving force in changing the landscape of smoking and curbing the tobacco epidemic in China.”

As China’s population continues to become more urbanized, the role of cities will only grow, Eriksen noted.

“The idea is to shift the social norms in China, to make smoking less socially acceptable,” Eriksen said. “Eventually, that will lead to more Chinese smokers wanting to quit, and fewer people taking up the habit. Targeting cities for these effort allows us to have the greatest impact on the largest number of people.”

The ongoing project, Diffusion of Tobacco Control Fundamentals to Other Large Chinese Cities, also includes partnerships with China’s National Health and Family Planning Commission (formerly the Ministry of Health), ThinkTank Research Center for Health Development, a nongovernmental group based in Beijing, and the China CDC.

This is the second year of funding from Pfizer to support the work in China. Last year, the company granted nearly $850,000 to the School of Public Health to fund the first year of the three-year project.

Sri Lankan President to forgo income from drug and tobacco to save country from drug menace

Sri Lankan President Maithripala Sirisena says he is ready to relinquish the income received by the government from the sale of drug and tobacco to save the country and the people from the drug menace.

Speaking at the concluding ceremony of the series of the programs of the 4th phase of the “Drug Free Country”, the National Program for Drug Prevention held Tuesday at the National Youth Services Council in Maharagama, the President said it is essential to prevent drug menace to build a disciplined country with a better economy.

“The government is working to face that challenge with the help of everybody,” the President said.

He said the instructions have been given to establish separate units in all government institutions for the prevention and control of drug and these units should have meetings once in three months.

“They should fulfill the responsibility to convey a message to the society to prevent people from drug use,” the President said.

The President further said that the existence of legal drugs, for which the government has granted licenses, and the illegal drugs pose a major challenge to the government as it is a social problem. He added that whether it’s legal or illegal, drug abuse does a great harm to human lives.

The Colombo district action plan for the prevention of drug abuse was presented to the President by the Colombo District Secretary Sunil Kannangara. The events of today’s program were based on Colombo District.

The President also presented awards to individuals for their commitment to eliminate the drug menace from the country.

Mr. Edward Mallawarachchi presented three books written by him regarding the chronic kidney disease and drug addiction, to the President at the event.

The Maha Sangha including Most Venerable Ittapane Dhammalankara Thera, Pathberiye Wimalagana Nayaka Thero, Minister Susil Premajayantha, MPs Jagath Pushpakumara, Eric Weerawardena, Western Provincial Councilor Gamini Thilakasiri and the others participated in the event.