LAUSANNE, Switzerland--(BUSINESS WIRE)--Jul. 3, 2013--
Philip Morris International (PMI) (NYSE/Euronext Paris: PM) welcomed the
decision by a World Bank arbitration tribunal to hear a claim that
Uruguay violated multiple provisions of its Bilateral Investment Treaty
(BIT) with Switzerland. In order to attract foreign investment, Uruguay
signed more than twenty BITs under which it made firm commitments to
respect intellectual property rights and the rule of law. At issue in
this case are extreme and unnecessary restrictions imposed on the sale
and packaging of tobacco products that conflict with Uruguay’s
obligations under the treaty.
Commenting on the ruling, PMI spokesperson Julie Soderlund said:
“This ruling holds Uruguay accountable to its international
obligations, accountability the country sought to avoid in domestic
courts and again before this Tribunal.
“The measures unjustifiably restrict legitimate businesses from
selling their products and using their trademarks while increasing
incentives for black market cigarettes, which already amount to a
quarter of all tobacco products consumed in the country.
“We look forward to a full and independent assessment of these
arbitrary and unnecessary regulations.”
At issue in this case are two regulations that Uruguay imposed in 2009:
1. ‘Single Presentation’ Ordinance: This regulation
restricts competition to the detriment of foreign investors because it
prohibits sales of more than one variation of cigarettes under a single
brand name. For example, Marlboro Red, Gold, Blue
and Green cannot be sold at the same time. Only one of those
variants may be in the market. As a result, PMI was forced to withdraw 7
out of 12 cigarette varieties from sale in the country.
2. 80% Health Warning Requirement: Until 2009,
health warning labels covered 50% of cigarette packaging in Uruguay, a
percentage that PMI did not oppose. Uruguay increased the size to 80% on
both the front and back of the pack, despite the fact that the 2009 Global
Adult Tobacco Survey found that the awareness of the health risks of
smoking is universal in the country. This requirement violates Uruguay’s
BIT agreement because it leaves virtually no space on the pack for the
display of legally protected trademarks.
In rejecting Uruguay's jurisdictional objections, the Tribunal cleared
the way for PMI to show that these two regulations are arbitrary,
unnecessary and violate the country’s international commitments.
The Tribunal will, in consultation with the parties, establish a
briefing schedule to address the merits of the dispute, followed by a
hearing. The hearing is likely to take place towards the end of 2014 or
in early 2015. It is expected a decision will be reached in 2 to 3 years.
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For further information, please visit: http://www.pmi.com/eng/media_center/company_statements/Pages/uruguay_bit_claim.aspx
About Philip Morris International Inc.
Philip Morris International Inc. (PMI) is the leading international
tobacco company, with seven of the world’s top 15 international brands,
including Marlboro, the number one cigarette brand worldwide. PMI’s
products are sold in more than 180 markets. In 2012, the company held an
estimated 16.3% share of the total international cigarette market
outside of the U.S., or 28.8% excluding the People’s Republic of China
and the United States. For more information, see www.pmi.com.
Source: Philip Morris International
Philip Morris International media office
+41 (0)58 242 4500