Govt sizes up Philip Morris WTO claim

Govt sizes up Philip Morris WTO claim

Commerce staff deny opposing lawsuit

The Office of the Attorney General has prepared to indict Philip Morris in a tax evasion case but a World Trade Organisation ruling is giving pause. (Bangkok Post file photo)
The Office of the Attorney General has prepared to indict Philip Morris in a tax evasion case but a World Trade Organisation ruling is giving pause. (Bangkok Post file photo)

The government is not sure whether a World Trade Organisation (WTO) ruling cited by tobacco giant Philip Morris will have any impact on a lawsuit it is set to file against the firm.

Philip Morris (Thailand) Limited (PMTL) is accused of making false declarations about the value of cigarettes it imported from the Philippines and depriving the government of an estimated 68 billion baht in tax revenue. 

According to a probe by the Department of Special Investigation (DSI) launched in 2005, PMTL under-reported the value of its products when declaring them to the Customs Department between 2003 and 2007.

Philip Morris claims the WTO ruling stems from a trade dispute between Thailand and the Philippines.

The company says the world trade body issued a ruling against Thailand in 2010 which clearly stated Thailand had no grounds to reject the import price of cigarettes from the Philippines.  

Deputy Prime Minister Wissanu Krea-ngam said Wednesday three issues arise over the ruling claims made by the tobacco giant.

First, he questioned whether the WTO really ruled against Thailand.

If Thailand really lost this dispute, it needs to consider whether it has something to do with Thailand's legal action against the company, Mr Wissanu said. 

The second is whether Thailand can still appeal against the ruling, and lastly what would happen if the country does not comply with the ruling, the deputy premier said. 

If it is worth ignoring the ruling, the country can take that risk, he said. 

Mr Wissanu said the Office of the Attorney-General (OAG) is due to indict the company on Nov 25, and he has informed the cabinet of current events. 

The company rejected the government's allegations.

"The media reports that resurfaced recently completely ignore the fact that PMTL's import prices have already been reviewed by various Thai and international agencies having the expertise and authority to address customs matters, and all of them concluded that PMTL did nothing wrong," Pongsathorn Ansusinha, director of PMTL's Corporate Affairs department, said.

The company welcomed the government's recent move to look at the dispute carefully before rushing to any decision, adding: "We believe that this is about Thailand's significant interest in the area of international trade."

Meanwhile, the Commerce Ministry dismissed media reports the ministry had urged the OAG not to indict the PMTL out of fear of a trade backlash. 

Commerce Minister Apiradi Tantraporn said the ministry has a clear stance that legal procedures intended to protect the national interest must not be violated by other countries or overseas parties.

"The WTO has no authority to interfere in the judicial procedures of its members in a case of tax evasion," Ms Apiradi added. 

Also on Wednesday, the Action on Smoking and Health Foundation Thailand (Ash) urged the government to ignore concerns that legal action against the company would affect Thai and US trade. 

Foundation executive director, Prakit Vathesatogkit,  said even US state agencies have filed lawsuits against Philip Morris in several cases.

"If the firm is confident it is innocent, it should prove it in court," he said.


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