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Philip Morris International Seeks Judicial Review Of EU’s Tobacco Products Directive

Stocks in this article: PM

Subsidiaries of Philip Morris International Inc. (PMI) (NYSE/Euronext Paris: PM) today filed papers seeking review of the EU’s Tobacco Products Directive (2014/40/EU) by the Court of Justice of the European Union (CJEU).

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

"We believe that the EU’s Tobacco Products Directive disrupts the balance that the EU treaties establish between the Union and the Member States.

“The Directive claims to improve the internal market in tobacco products, but its provisions go in the opposite direction. The Directive 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.

“There is no disagreement that there should be strict regulation of tobacco products, but measures need to make sense and, above all, honor the EU treaties. We very much hope that this matter is referred to the EU’s highest court for a careful, objective review.”

PMI filed its papers in the English courts, which have proven to be a fast and efficient forum for private litigants to obtain references to the CJEU on issues involving EU law. PMI is seeking review of whether the Directive complies with the EU Treaties in the following areas:

Legal Competence: The EU has power to take measures that are genuinely intended to improve the internal market. PMI contends that several provisions in the Directive run counter that objective. For example, the Directive bans menthol cigarettes – a product that is currently legal in all 28 Member States. By making it illegal for adult smokers in the EU to purchase the product they prefer, the Directive disrupts the internal market and creates incentives for illicit 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 comply with the EU Treaties.

The review process is expected to take up to two to three years.

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