Bangkok--2 Dec--Philip Morris (Thailand)
Philip Morris (Thailand) Ltd. (PMTL) will appeal a criminal court's decision finding inaccurate price declarations of cigarettes imported from the Philippines between 2003 -2006. The court dismissed all charges against the current and former PMTL employees named as individual defendants. The court determined there was a shortfall of THB 306,497,667.87 (Approximately USD10.1 million) and imposed a fine of four times the shortfall amount, resulting in a fine of THB 1,225,990,671.50 (Approximately USD 40.5 million) against PMTL. Philip Morris International Inc., PMTL's ultimate parent company, is neither a party to this case nor liable for the fine.
Gerald Margolis, Branch Manager of PMTL, said "We will promptly appeal today's decision as it flies in the face of an unbroken line of Thai customs and World Trade Organization rulings supporting PMTL's declared import values."
"It is unfathomable how the court could have ignored 15 years of consistent Thai and international decisions regarding these very imports and calculated a fine based on a theory involving prices in an entirely different market." added Margolis.
Over the last decade, both Thai and international authorities, including the Thai customs department itself, have reviewed PMTL import prices and arrived at the same conclusion, that PMTL declared the correct customs values.
Similarly, the World Trade Organization (WTO) has ruled repeatedly that Thailand acted inconsistently with international trade law by rejecting PMTL's declared import values and pursuing these criminal charges. As reported recently in the media, the Philippines government has indicated clearly its intentions to hold Thailand accountable for failing to comply with the WTO rulings through retaliatory measures that will have a significant adverse impact on Thailand's automotive exports.
This case raises once again the serious question of whether Thailand's long-criticized 'reward' system creates perverse financial incentives and conflicts of interest for Thai government officials who stand to personally gain millions when criminal fines are awarded to the government.
"This decision sends a strong negative signal on Thailand's treatment of law-abiding, employment and tax-generating, multinational companies and its lack of transparency in international trade. We will continue to challenge this unfair decision to protect the reputation and rights of PMTL," said Margolis.