EU assessing PMI anti-illegal trade agreement

The European Commission is expected to decide before the end of the year whether or not to renew the agreement concluded with Philip Morris International in 2004 on tackling contraband and counterfeiting, according to a story in the Bulletin Quotidien Europe.

The EU has agreements with PMI, Japan Tobacco International, British American Tobacco and Imperial Tobacco under which these companies make annual payments to EU member states and the Commission (through the European anti-fraud office, Olaf) to help in the fight against the illegal trade in tobacco products.

Each of these companies makes additional payments when more than 50,000 of its genuine (not counterfeit) branded cigarettes are found to have fallen into the illegal trade.

The Commission is currently considering whether it should extend the co-operation agreement with PMI, which is due to expire in July next year. (The JTI agreement is not due to expire until 2022 and those with BAT and ITL are set to run until 2030.)

Meanwhile, according to an EU Observer story, Olaf has, during the past 11 years, made little use of the investigative options made available under the EU agreement with PMI.

Documents uncovered via a freedom of information request by the Observer had shown that in most years, the tobacco company had not received any request for information from Olaf.

The agreement gave Olaf the power to request information that could help it investigate cigarette smuggling and counterfeiting.

For instance, PMI was said to have agreed to ‘encourage its employees and/or agents to make themselves available to Olaf for interviews and for the purposes of giving sworn statements, as reasonably requested and required by Olaf’.

However, according to the annual reports which PMI was obliged to send to the EU about its compliance with the agreement, the tobacco company has never received such a request from Olaf.

The agreement said also that PMI should inform Olaf, when requested, about how many cigarettes PMI held in tax and customs warehouses. PMI’s reports noted that Olaf never did so.