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February 24th, 2016:

Anti-Contraband and Anti-Counterfeit Agreement

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EU questions ‘continued relevance’ of tobacco deal

A long-awaited report assessing an agreement between tobacco multinational Philip Morris International (PMI), the European Union and its member states says the deal “effectively met its objective”, but may not be fit for the future.

“The evidence suggests, even if no direct causality can be established, that the PMI Agreement has effectively met its objective of reducing the prevalence of PMI contraband on the illicit EU tobacco market, as shown by a drop of around 85% in the volume of genuine PMI cigarettes seized by Member States between 2006 and 2014,” the commission said in the report, published on Wednesday (24 February).

The agreement is due to expire in July, and the commission has promised to take the assessment into account in its decision over whether or not to attempt to renew it.

While the “technical assessment” published on Wednesday does not contain a decision in favour or against renewal, it questions “the continued relevance” of the deal.

The EU executive has assessed the costs and benefits of the tobacco agreement, which made the EU and PMI partners in the fight against cigarette smuggling and counterfeiting, and whose benefits have included payments from PMI to national budgets and the EU budget of around €1 billion, in total. The EU budget received 9.7 percent of this amount.

The report says that PMI used the agreement “on multiple occasions” to give national and EU anti-fraud authorities “information of direct investigative value”.

“This information has regularly led to seizures by Member States’ enforcement authorities, and in many cases to arrests and criminal indictments,” the report says, without quantifying what constitutes regularly.

“Transnational criminal organisations were dismantled and potential losses to Member States’ and the EU budget of several million euros were prevented,” the authors write. Elsewhere in the report, they say that cigarette smuggling is costing national and EU budgets more than €10 billion annually, in lost public revenue.

They also add “it can also be argued that PMI’s incentives in this type of assistance to enforcement might as well be independent from the existence of the PMI Agreement”.


There was little cost involved on the side of the EU, the report notes, but that is also because in the first ten years of the PMI-EU deal, the EU could have made better use of the investigative powers it was granted under the agreement.

“Low administrative costs were also partly due to the fact that the Commission has in the past underinvested in the full implementation of the PMI Agreement including the auditing of the compliance by PMI with the obligations under the Agreement, to which only limited resources were dedicated,” the report says.

“The Commission has in recent years brought improvements to the way how the PMI Agreement is managed in practice, even if resources remain stretched,” it adds.

In its assessment, the commission also says that while the deal may have worked well in the past, the world has changed since it was signed in 2004.

“The market and legislative framework has changed significantly since the entry into force of the Agreement,” it said. Many of the rules in the agreement are now EU law, and some parts of the deal contradict international obligations that are expected to come into force soon.

The report also acknowledges criticism that the deal allows too cozy a relationship between tobacco companies and the EU, but says this is “essentially a matter of political appreciation and falls outside the scope and mandate of this technical assessment”.

It does state dryly “that the tobacco industry has launched a legal challenge against the 2014 Tobacco Product Directive (TPD), which prompts some to question whether it is opportune for the EU to enter into a contract with an entity on policy issues related to the ones legally challenged”.


The assessment has been long-awaited by several members of the European Parliament, who have been critical of the deal.

The EU commissioner Kristalina Georgieva responsible for the deal is due to appear in front of the plenary session of the European Parliament on Thursday (25 February).

Last December, EUobserver published a four-part series of articles about the EU’s agreement with tobacco company PMI

Part one: Will EU renew $1.25bn deal with tobacco firm PMI?

Part two: EU sleuths ignore special powers on tobacco smuggling

Part three: Scant evidence EU tobacco deal curbed smuggling

Part four: How did the EU spend its €110 million in tobacco money?


  1. Technical assessment of the experience made with the Anti-Contraband and Anti-Counterfeit Agreement

Malaysia Gov’t plans to introduce plain packaging for tobacco

PETALING JAYA: The Health Ministry plans to introduce generic packaging for tobacco products with the aim of reducing brand recognition and ultimately reducing overall consumption, Malay Mail Online reported today.

According to the report, the Health Ministry’s director for the disease control division Dr Chong Chee Keong, said plain packaging would greatly impact the prevalence of smoking among new and light smokers.

Chong said there were plans to introduce the plain packaging using standardised colours and fonts in stages but that no specific date had been set as yet.

When asked if the Trans-Pacific Partnership Agreement (TPPA) would affect the plan, Chong said the treaty had yet to be tested.

In 2012, Australia became the first nation to mandate plain packaging for cigarettes, in a bid to reduce smoking rates among its citizens.

Other nations that adopted the move later were France and Britain, much to the unhappiness of big tobacco firms including Philip Morris International, British American Tobacco, Imperial Tobacco and Japan Tobacco International.

These firms have since launched legal challenges against such laws, arguing the move had impinged on their trademark intellectual property.

In Australia, four tobacco firms including Philip Morris lost their legal challenges against the law.

Parliamentary committee delivers 20 recommendations on e-cigarettes

E-CIGARETTES should be banned in non-smoking areas and retailers should not be allowed to sell the vaporisers to children, a parliamentary committee recommends.

Vaporisers also should feature health warnings and should not be decorated with “child-like aspects such as diamantés and cartoon characters” which may encourage young people to take up the habit of “vaping”.

For the same reason, the committee also urges against selling “sweet and confectionery flavoured e-liquids” to be used in the vaporisers.

It is believed about 20,100 South Australians use e-cigarettes — or about 1.2 per cent of the population — and the devices are growing in popularity.

The battery-operated devices vaporise a refillable cartridge of nicotine solution to create a vapour that the user inhales, simulating the action of smoking.

Some use flavoured liquids without nicotine.

E-cigarettes have been sold in Australia for about four years but legislation governing their sale and use varies around the nation.

Concerned at the confusion around the relatively new products, and the potential long-term health risks, Labor MP Annabel Digance moved in May to establish a Select Committee into E-Cigarettes.

The final report of the committee, tabled in Parliament today, makes 20 recommendations including:

BANNING e-cigarettes in areas where tobacco smoking is banned.
PREVENTING the sale of e-cigarettes to people aged under 18.
REQUIRING health warnings on e-cigarette devices and full lists of ingredients on e-liquid packaging.
REQUIRING childproof packaging on e-liquid containers.
BANNING advertising of e-cigarettes or offering pricing specials or promotions.
CALLING for more research on the effects of e-cigarettes on users, including pregnant women and foetuses, infants and children and people with respiratory illness or chronic illness.

Health Minister Jack Snelling has pledged to consider the recommendations in any future regulation of e-cigarettes.

There is strong debate over whether vaporisers encourage the habit of smoking or help people to quit by simulating the action without delivering the chemicals.

“We just don’t know whether e-cigarettes are effective in helping people to quit smoking without causing potentially new damaging health effects,” Ms Digance said.

She added that it was “unclear whether e-cigarettes could act as a gateway into smoking and nicotine dependence for our young people”.

“The younger a person starts smoking the more difficult it can be to quit later on,” Ms Digance said.

“While studies are under way to explore the health effects of e-cigarettes, it will be some time, possibly decades, before we really understand how they affect a person’s health.

“The World Health Organisation is calling on governments to regulate e-cigarettes until the safety of the devices and their peripheral components, such as the vaporised solution contained within them, are established.”

Opposition committee member Vincent Tarzia raised concerns that some of the recommendations would diminish the potential harm minimisation benefits of e-cigarettes.

“The research is clear that e-cigarettes are far less dangerous than smoking tobacco and there is a public health benefit if people choose to use e-cigarettes instead of smoking tobacco,” Mr Tarzia said.

“As a consequence there is a public health benefit if tobacco smokers are switching to e-cigarettes and any new regulations should not hinder that movement.

“The report’s recommendation that e-cigarettes shouldn’t be sold alongside tobacco products has the potential to undercut this public health benefit.”

Mr Tarzia supported calls for more research on the long-term health impacts of using the vaporisers.

The committee received 142 submissions and took evidence from 11 people, including from tobacco companies, e-cigarette retailers and users, and tobacco smokers.