The deal was set up to curb the smuggling of tobacco in EU nations. (Representational Photo)
Brussels:
The EU will end a 12-year programme with Marlboro-maker Philip Morris that was intended to thwart cigarette smuggling after complaints by European lawmakers that it was ineffective and potentially corrupt.
EU Commissioner Kristalina Georgieva in a letter to Philip Morris said that new rules at the UN and in Europe now "offer the best regulatory means to fight illicit trade."
"Given this changed environment, our conclusion is that there is no need for a prolongation of the PMI agreement," said in the letter dated July 6 and seen by AFP on Thursday.
Set up in 2004 and expiring on Saturday, the deal was set up after the EU complained that the world's biggest tobacco companies were not doing enough to limit tobacco smuggling.
Under the deal, the company agreed to more carefully work with EU authorities against contraband cigarettes that hit the market free of customs duties and taxes, as well as pay a contribution to the EU.
This direct outlay reached an accumulated $1 billion over the life of the deal, the commission said.
Over the years, angry MEPs saw a dangerous conflict of interest with Phillip Morris through this financial contribution, which was used to finance the EU's anti-smuggling policies.
Anger against the deal intensified in 2012 when Malta's EU health commissioner John Dalli was forced to resign in a tobacco lobbying scandal involving Philip Morris.
"I am happy that our actions... have helped push back interference by tobacco industry in the work of government," said socialist MEP Gilles Pargneux, who helped lead the fight against the deal.
The commission, the EU's powerful regulatory arm, said the real battle today was no longer the contraband cigarettes manufactured by major companies, but those made by other small manufacturers.
"The agreement was innovative at the time and lessons have been learned..., especially in terms of global tracking and tracing," it said.
The EU has similar deals with British American Tobacco, Japan Tobacco and Imperial Brands, but these deals do not expire until 2022.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
EU Commissioner Kristalina Georgieva in a letter to Philip Morris said that new rules at the UN and in Europe now "offer the best regulatory means to fight illicit trade."
"Given this changed environment, our conclusion is that there is no need for a prolongation of the PMI agreement," said in the letter dated July 6 and seen by AFP on Thursday.
Set up in 2004 and expiring on Saturday, the deal was set up after the EU complained that the world's biggest tobacco companies were not doing enough to limit tobacco smuggling.
Under the deal, the company agreed to more carefully work with EU authorities against contraband cigarettes that hit the market free of customs duties and taxes, as well as pay a contribution to the EU.
This direct outlay reached an accumulated $1 billion over the life of the deal, the commission said.
Over the years, angry MEPs saw a dangerous conflict of interest with Phillip Morris through this financial contribution, which was used to finance the EU's anti-smuggling policies.
Anger against the deal intensified in 2012 when Malta's EU health commissioner John Dalli was forced to resign in a tobacco lobbying scandal involving Philip Morris.
"I am happy that our actions... have helped push back interference by tobacco industry in the work of government," said socialist MEP Gilles Pargneux, who helped lead the fight against the deal.
The commission, the EU's powerful regulatory arm, said the real battle today was no longer the contraband cigarettes manufactured by major companies, but those made by other small manufacturers.
"The agreement was innovative at the time and lessons have been learned..., especially in terms of global tracking and tracing," it said.
The EU has similar deals with British American Tobacco, Japan Tobacco and Imperial Brands, but these deals do not expire until 2022.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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