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COP calls for allocation of tax revenues to finance tobacco control programs

| October 16, 2014

The Conference of the Parties (COP) to the World Health Organization’s Framework Convention on Tobacco Control (FCTC) yesterday hurriedly adopted behind closed doors guidelines on tobacco-product price and tax measures, further demonstrating the FCTC’s habit of infringing on issues of national sovereignty, according to a press note from Japan Tobacco International.

COP6 is being held in Moscow this week.

“Public health authorities are not fiscal experts”, said Michiel Reerink, global regulatory strategy vice president at JTI. “Yet, one-size-fits-all decisions were rushed [through] in the absence of a vast majority of governments’ taxation experts, who should have the last say on their individual fiscal policies.”

The press note went on to say that the COP had once again shown a complete lack of respect for several Parties by blatantly ignoring their wish to express reservations about the guidelines, particularly those regarding the minimum benchmark tax of 70 percent and the allocation of tax revenues to finance tobacco control programs. Two years ago, at COP5 in Seoul, Korea, Parties had adamantly opposed the same recommendations. Despite this, the draft guidelines presented in Moscow were largely unchanged and adopted at record speed.

“While the guidelines are not binding for governments, ministries of finance will be under pressure to adopt them in their national law” said Reerink. “Yesterday’s decision not only represents an alarming attempt to erode countries’ sovereignty on taxation policies, but also violates COP6’s own requirement to make ‘every effort’ to reach agreement by consensus.”

When making decisions on tobacco tax policies, countries take into account a number of considerations: income growth developments, the impact of price increases on the affordability of tobacco products, the existence of illegal trade (and tax authorities’ ability to enforce compliance), inflation and regional sensitivities such as cross-border trade.

“Tax experts around the world recognize that ignoring these considerations is counterproductive and could lead to serious consequences, including a major increase in illegal trade, depriving governments of important tax revenues and undermining other government policy objectives – including public health”, said Reerink.

JTI reported that during the October 15 vote on FCTC’s Article 6, the public and the media were once again locked-out from the proceedings. It said, too, that there was a last minute decision to cancel press briefings.

India to impose huge health warnings

| October 16, 2014

India is set to impose new regulations that will see 80 percent of the front and back faces of tobacco packs covered with health warnings, according to a story by Sanchita Sharma for the Hindustan Times.

The new regulations will see, too, a ban on the manufacture and sale of electronic cigarettes.

Photographs of cancers will occupy 65 percent of the front and back of tobacco packs while 15 percent of the surfaces will be used for text warnings.

Four photographs have been shortlisted for the new warnings, which are expected to be included on packs by April 1 next year.

Currently, warnings appear only on one side of packs, covering 20 percent of the entire pack.

“These are part of stringent rules introduced to lower tobacco addiction among the young, such as increasing the legal age for tobacco use to 21 years,” said Union Health Minister, Harsh Vardhan.

The new rules on electronic cigarettes, meanwhile, seem merely to codify a ban that applies by default. “E-cigarettes are not approved by the Drug Controller General of India, therefore its sale and use is illegal in India,” an official of the directorate of health services was reported to have said.

Thailand bans e-cigarette imports

| October 16, 2014

Thailand’s Cabinet on Tuesday approved a ban on the import of hookah-style water pipes and electronic cigarettes, copying a move by neighboring Cambodia earlier this year, according to a Yahoo News story.

Deputy government spokesman major general Sansern Kaewkamnerd said the ban, which had been proposed by the Commerce Ministry, was imposed for health reasons.

The Public Health Ministry had originally suggested the move, saying these products were luring young people into smoking.

Those caught violating the ban face a maximum jail term of 10 years or a fine of five times the product’s value, or both.

Cambodia in February banned the import, sale and promotion of electronic cigarettes and shisha tobacco.

PMI a leader in carbon performance

| October 16, 2014

A new Global Leaders Report issued yesterday by the leading environmental non-governmental organization, CDP (formerly the Carbon Disclosure Project), awarded Philip Morris International a Band A rating, a Leadership Status for Carbon Performance and a 96 percent score for Carbon Disclosure based on the company’s activities to mitigate climate change in its supply chain during 2013, PMI reported in a note posted on its website.

This was said to be the best CDP ratings score for PMI, which was the only tobacco company to make the ‘A list’.

“Environmental sustainability is central to our business strategy,” said CEO, André Calantzopoulos. “We have established ambitious emission reduction targets and work closely with every participant in our value chain to deliver against these targets. Our excellent results in this year’s CDP Leaders Report are an important and welcome recognition of our efforts.”

PMI said that it was one of only three consumer staples companies to achieve ‘Performance Leadership Status’ in the 2014 CDP S&P 500 report. ‘For the first time, this year’s report also correlates a corporation’s environmental rating with their economic performance, using Return on Equity (ROE) as a key metric,’ said the press note. ‘PMI scores at the top of the premier quartile of S&P 500 companies in this ranking…

‘PMI today also announced its decision to support the CDP ‘Road to Paris 2015’ initiative to receive business community endorsement of long-term carbon emission reduction targets that are scientifically sound and consistent with limiting global warming.’

Tax payers excluded from COP meeting they fund as delegates discuss taxation

| October 15, 2014

The Conference of the Parties (COP) to the World Health Organization’s Framework Convention on Tobacco Control took a ‘hostile and alarming’ turn on Monday when the public was kicked out of the meeting, according to a story by Drew Johnson for the Washington Times. The sixth meeting of the COP is being held in Moscow from October 13 to 18.

None of the COP delegates believed that taxpayers from around the world had the right to attend a meeting that has devoured almost $20 million in public funds during the past two years in paying for salaries, travel expenses and other costs related to the biennial convention.

Johnson said that WHO officials and delegates argued that banning the public was necessary because of fears that tobacco growers and cigarette company operatives had infiltrated the meeting.

‘Not that it would have mattered if they had,’ Johnson wrote. ‘Public attendees are required to sit silently in the back of the huge convention hall, hundreds of feet from where the debates occur…

‘After the doors were slammed shut and the meeting resumed, it became clear why the delegates chased the public away: They wanted to work on passing a global tax on tobacco in secret.’

Johnson’s piece is at: http://www.washingtontimes.com/news/2014/oct/13/johnson-uns-health-agency-works-global-tobacco-tax/#!

Korea’s tobacco tax hike labeled a ‘trick’

| October 15, 2014

South Korea’s Health Ministry has come under fire for using the money raised from tobacco taxes for projects not related to smoking prevention, according to a story in The Korea Herald.

The criticism, which was levelled at the ministry during a two-day parliamentary audit session on Monday and Tuesday, came about a month after the ministry had announced it would raise tobacco prices by 80 percent in the name of improving public health.

According to Kim Yong-ik of the main opposition party, the ministry set aside WON990 million for telemedicine [the remote diagnosis and treatment of patients by means of telecommunications technology] from the National Health Promotion Fund, which is partly raised through tobacco taxes.

Telemedicine has been fiercely opposed by the nation’s health care providers and the lawmaker raised concerns about the legitimacy of the ministry’s recent push to hike tobacco prices by January 2015. “The National Health Promotion Fund is already being used for inappropriate purposes,” he said.

“This makes it even more questionable that the raised tobacco taxes, if implemented, will be used for the right purposes.”

The central government’s proposal on cigarette prices has been criticized by a number of politicians as a ‘trick’ to make up for a tax revenue shortage.

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