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8th Aug 2022

EU states 'unlikely to block new tobacco deal'

  • Will the European Commission renew the deal with PMI? (Photo: European Parliament)

If the European Commission decides to renew an anti-smuggling agreement with tobacco firm Philip Morris International (PMI), it is likely to get the go ahead from EU capitals, this website found after asking diplomatic sources from each member state.

Sources from over half of the 28 states responded to emailed questions about the tobacco deal, which will expire in July.

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Eastern EU states expressed straightforward support of continuing the EU-PMI deal, with only Estonian sources saying their country would oppose a renewal or extension.

Some countries said they would determine their support based on how the EU commission sells a renewal, but most countries said they were in principle in favour of continuing the agreement, or did not have strong objections.

“Although we don’t have any specific details so far, we could say that Greece, as many other countries, would not oppose to an extension/renewal of the agreement,” said a Greek diplomatic source, adding that the current deal had shown “positive results” in the fight against tobacco smuggling.

The anti-contraband and anti-counterfeit agreement was signed between the EU, member states, and PMI in 2004. It provided for annual payments by PMI into the coffers of national governments and the EU commission, amounting to a total of around €1 billion.

The deal also saw close cooperation between the multinational and the EU's anti-fraud agency, Olaf.

Several diplomatic sources referred to the positive feedback given by Olaf, which has previously hailed PMI for sharing valuable information.

“Illegal trade in cigarettes results in the loss of substantial tax and customs revenues each year and therefore such measures will benefit everyone,” said a Maltese source, adding that the island nation's customs confiscated nearly 16,000 last Friday.

'No alternative'

A Slovakian source said the EU had “no alternative mechanisms” to achieve the goals of the PMI deal.

Critics say that the EU should not sign deals with an industry that is not only responsible for the death of 700,000 Europeans last year, but also has sued the European Union for trying to implement a new tobacco products directive.

Within the commission, Lithuanian health commissioner Vytenis Andriukaitis is most vocally against renewing the deal.

His country, however, is in favour of a renewal or extension.

Andriukaitis has the European Parliament on his side. Last month, the EP plenary adopted a non-binding text calling on the commission not to renew or prolong the deal. Formally, consent from the parliament is not required.

Ahead of that vote, Andriukaitis said he expected the commission to take a decision at their weekly meeting on 16 March. But that date has come and gone.

Timing

The commission has still not said what it wants to do, less than three months before the PMI agreement ends.

It is unclear how much time would be needed for talks, or the potential deadline for those talks to conclude to make sure EU-PMI cooperation would continue after 8 July.

“We can’t speculate on timings, and it will be up to the commission to decide,” PMI told EUobserver in a written statement, adding that the company's priority was the continued existence of supply chain control measures “with or without the agreement”.

Last year, 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?

Tobacco firms defend value of EU deals

With an EU anti-smuggling deal with Philip Morris due to expire, EUobserver talked to tobacco lobbyists from two competing firms that have similar arrangements.

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