Brussels, 06/07/2016 (Agence Europe) - With just four days to go to the deadline, the European Commission indicated on Tuesday 5 July to the tobacco manufacturer Philip Morris that it no longer intended to extend their anti-contraband and anti-counterfeit agreement. The same will apply to the other major tobacco producers JTI, BAT and ITL, which are also party to these in kinds of agreement.
The context. For approximately ten years, the European Union has been collaborating with the major tobacco producing companies in the fight against contraband and counterfeit cigarettes on its territory (EUROPE 11497). In total, four agreements were signed with Philip Morris International (PMI), Japan Tobacco International (JTI), British American Tobacco (BAT) and Imperial Tobacco Limited (ITL) respectively. These agreements impose a number of obligations on the tobacco producers, including the introduction of product control and follow up protocols and sales restrictions based on legitimate demand. They also involve substantial sums of money to be paid by the tobacco producers (a minimum of €2.3 billion up until 2029). The first agreement was concluded with PMI in 2004 and this is also the first to expire on 9 July 2016. The others will expire on the following dates: 2022 for Japan Tobacco International and 2030 for American Tobacco and Imperial Tobacco.
"Cheap whites" in question. As EUROPE already explained two months ago, the Commission has finally taken the decision not to begin negotiations with PMI (EUROPE 11542). The Commissioner for the Budget, Kristalina Georgieva, explained this decision to the College of Commissioners meeting on 5 July in Strasbourg. She also justified her decision in a letter to member states and PMI, explaining, "that the PMI agreement has effectively met its objective of reducing the prevalence of PMI contraband on the illicit EU Tobacco market… At the same time the reduction of PMI contraband did not lead to an overall reduction of illicit products on the EU market". The Vice President of the Commission also explains that the market and legislative framework have significantly changed since the entry into force of the agreement. This allusion to the market is an explicit reference to the appearance of "cheap whites", cigarette brands that are not well known such as Gold Classic or Richman. These are legally produced outside Europe and introduced onto the European markets through smuggling. Kristalina Georgieva concluded that "the 2014 Tobacco Drug Products Directive (TPD) and the WHO Protocol to Eliminate Illicit Trading Tobacco Products, will in the future offer tools to better police the illicit tobacco trade". She pointed out that in compliance with the TPD directive, legal sales of cigarettes in the EU will be followed up and traced from now until May 2019. The protocol will offer ways in the future to better control the tobacco trade between participating countries. By way of this decision, the Commissioner is comprehensively respecting the resolution adopted by the European Parliament on 9 March (EUROPE 11508).
Skeleton regulatory framework. The Commission explained, however, that it would be concentrating its efforts on the "cheap white", implementation of the rules and international cooperation, as well as protocol implementation. In this sense, it may put pressure on member states to assume their responsibilities with regard to the Tobacco Products Directive and the WHO Protocol.
The expiry date for transposing the directive was set out for 20 May 2016. So far, only eight member states have entirely transposed the text into their national law. These countries include Germany, Ireland, Italy, Malta, Netherlands, Portugal, Slovakia and the United Kingdom. Ten member states have indicated to the Commission that they have partially transposed the text (Austria, Belgium, Bulgaria, Denmark, Estonia, France, Latvia, Lithuania, Finland and Sweden).
The WHO protocol for eradicating the illegal trading tobacco products is still far from being a reality. It was adopted in November 2012 by the Conference of Parties to the Framework Convention on Tobacco Control (WHO FCTC) and requires 40 ratifications to enter into force. Despite the passage of time, only nineteen countries have ratified this text so far (including five member states: Austria, Spain, France, Latvia and Portugal and the European Union). (Original version in French by Sophie Petitjean)