November 5, 2000

Philip Morris International responds to the announcement of US lawsuit by the EU Commission

Philip Morris Europe SA regrets that the European Commission apparently has chosen to file a lawsuit in the United States in which it seeks to recover revenues alleged to have been lost as a result of the importation of cigarettes into certain countries of the European Union without the payment of custom duties.

"Neither we nor our affiliates have seen the complaint that was allegedly filed on behalf of the European Commission in federal court in New York, and we cannot therefore comment on any of the allegations that it may contain. There are, however, certain points that are of fundamental importance", said David R. Davies, Vice President Corporate Affairs, Philip Morris Europe SA.

"Philip Morris Europe does not understand why, either as a matter of law or practice, the European Commission has chosen to address this issue in a US court rather than through regulatory and cooperative actions within the framework of the European Union", said David Davies.

"We are convinced that the far better approach would be for the Commission and all other interested parties to work together in the fight against trade in contraband, including counterfeit products, and we remain ready to cooperate with the European Commission and the Member States in that regard", said Mr. Davies. "Recent experience has shown that there are many measures available to government, with the cooperation of the private sector, to address the issue of contraband; indeed, available evidence indicates that there has been significant progress in curtailing the illegal trade in cigarettes in the European Union, including, for example, in Italy and Spain."

"We fully support the Commission's desire, and the Member States' efforts, to address the illegal trade in cigarettes, including the growing international trade in counterfeit cigarettes, and we will readily cooperate with all interested parties to continue to develop sensible solutions, appropriate to prevent illegal trade in our products. However, we will vigorously contest the Commission's unprecedented attempt to utilize American courts to impose liability upon us", concluded David Davies.

About philip morris international inc.

PMI is the world’s leading international tobacco company, with six ot the world’s top 15 international brands and products sold in more than 180 markets. In addition to the manufacture and sale of cigarettes, including Marlboro, the number one global cigarette brand, and other tobacco products, PMI is engaged in the developement and commercialization of Reduced-Risk Products (RRPs). RRPs is the term PMI uses to refer to products with the potential to reduce individual risk and population harm in comparison to smoking cigarettes. Through multidisciplinary capabalities in product development, state-of-the-art facilities, and indusrty-leading scientific substantiation, PMI aims to provide an RRP portfolio that meets a broad spectrum of adult smoker preferences and rigorous regulatory requirements.

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