Alexa

EU nations agree to share out US$1 billion Philip Morris payment

EU nations agree to share out US$1 billion Philip Morris payment

European Union nations on Thursday settled two years of haggling over how to share more than US$1 billion (euro790 million) in damages paid by Philip Morris under a 2004 agreement to end a legal battle over black market cigarettes.
Italy will get 29 percent of the money and Germany 25 percent, with the rest divided up between eight other EU nations and the European Commission.
The commission secured a 9.7 percent portion despite previous opposition by Germany, which wanted the EU's executive branch to take less. The commission said its share of the money will be used to upgrade the fight against smuggling and counterfeit cigarettes.
Philip Morris has so far paid US$325 million (euro256.2 million), the EU said. The rest is due by 2016.
The 2004 out-of-court agreement ended a legal tangle over the sale of black market cigarettes that deprive manufacturers of income and governments of tax revenue.
Philip Morris International Inc., the manufacturer of Marlboro cigarettes, is a unit of U.S.-based tobacco and food group Altria Group Inc. EU regulators had claimed it intentionally supplied too many cigarettes to countries with low tobacco taxes, encouraging them to be smuggled into high-tax neighbors. Philip Morris has consistently denied the charges.
The settlement did not include any admission of liability or guilt by the tobacco company. Both the EU and Philip Morris say the money is not a penalty or fine, but a voluntary payment to forget past conflict and cooperate.