November 3, 2014

Philip Morris International Granted Right to Challenge EU’s Tobacco Products Directive Before the Court of Justice of the European Union

LAUSANNE, Switzerland--(BUSINESS WIRE)--Nov. 3, 2014-- Subsidiaries of Philip Morris International Inc. (PMI) (NYSE/Euronext Paris: PM) today obtained a green light from an English Court to challenge the EU’s Tobacco Products Directive (2014/40/EU) before the Court of Justice of the European Union (CJEU). Key questions regarding the Directive’s validity will be referred to the CJEU as ordered by Mr. Justice Turner during a hearing at the Royal Courts of Justice.

Commenting on the decision, Marc Firestone, Senior Vice President and General Counsel of Philip Morris International, said:

“This marks an important first step for our challenge of the EU’s Tobacco Products Directive. We believe the Directive disrupts the balance that the EU treaties establish between the Union and the Member States, and we are looking forward to a thorough, objective review by the EU’s highest court.

“There is no disagreement that tobacco products should be strictly regulated, but measures must honor the EU treaties. The Directive purports to improve the internal tobacco market, yet instead includes a mix of product bans, mandates, and delegations of authority that raise serious questions under the EU Treaties about consumer choice, the free movement of goods, and competition.”

PMI requested the reference to the CJEU when it filed its case on June 27, 2014. The company is seeking a review of whether the Directive complies with the EU Treaties in the following areas:

Legal Competence: The EU’s power to adopt the Directive under the EU Treaties is limited to measures that improve the internal market in tobacco products. While the Directive claims to serve that objective, it demonstrably lacks any real internal market rationale. For example, the Directive claims to be harmonizing differences in Member State laws by forcing Member States to ban menthol, even though menthol is legal in all 28 Member States. Meanwhile, it actively encourages disharmonization by inviting Member States to adopt a patchwork of other measures such as “plain packaging” even though they obstruct the free movement of goods and violate EU law. Provisions such as these ignore clear precedent from the CJEU establishing the limits of the EU’s authority under the Treaties, and create obvious incentives for illegal trade.

Fundamental Rights: The Directive appears to ban truthful and non-misleading claims on the packaging of tobacco products. PMI intends to seek review of whether this ban respects the fundamental rights of consumers to information about the products they are choosing.

Delegated Acts: The Directive delegates a number of powers to the Commission to enact rules on essential aspects of the Directive. PMI intends to seek review of whether these delegations of power comply with the EU Treaties.

The CJEU is expected to issue a judgment within two years.

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 2013, the company held an estimated 15.7% share of the total international cigarette market outside of the U.S., or 28.3% excluding the People's Republic of China and the U.S. For more information, see www.pmi.com.

Source: Philip Morris International

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