Philippines optimistic on winning cigarette case against Thailand

The Philippines is optimistic the Appellate Body (AB) of the World Trade Organization (WTO) will rule in favor of the Philippines on a cigarette case versus Thailand.

“We are optimistic the Appellate body will uphold a WTO panel ruling on the Philippine cigarette case with Thailand,” said Trade and Industry undersecretary Adrian S. Cristobal Jr.

Cristobal himself went to Geneva last week to respond to an appeal filed by Thailand before the AB. Thailand’s move stemmed from the WTO Panel Report released last November. The WTO ruled in favor of the Philippines saying that Thailand acted inconsistently with the WTO rules in valuing Philippine cigarette exports for customs purposes and failing to treat imported cigarettes the same way as locally manufactured cigarettes.

Cristobal led the Philippine delegation including officials from the Permanent Mission of the Philippines to the WTO, DTI’s Bureau of International Trade Relations, and Philippine government counsel Sidley Austin LLP.

“We will continue to ensure that our exports are competitive. This is why we are strongly defending the WTO Panel’s ruling in favor of the Philippines. The hearing of the tobacco case with Thailand provided an effective opportunity to address both parties’ rights for due process and we are confident that the case will be resolved soon,” said Cristobal.

During the hearing, the Philippines countered the arguments used by the Thais seeking to reverse the Panel ruling.

In 2008, the Philippines requested the WTO to examine Thailand’s customs, fiscal, and health measures imposed on imported cigarettes. Following the substantive meetings, the WTO panel issued a report last year declaring that Thailand acted inconsistently with its WTO obligations.

Tobacco is among the fast growing resource-based exports of the Philippines. Data from the National Tobacco Authority showed that the country’s tobacco exports amounted to US148 million in 2010. Tobacco-growing in the Philippines began in the 16th century during the galleon trade.

Philip Morris Int'l CFO Waldemer

March's earthquake and tsunami in Japan offered up an opportunity for Marlboro cigarettes maker Philip Morris International.

Japan Tobacco Inc., the world's No. 3 tobacco maker, suspended shipments of cigarettes within the country because of disruptions in supply. It planned to halt shipments of all tobacco brands, including the popular Camel and Winston, from March 30 to April 10.

That helped brands sold by the world's biggest nongovernment cigarette maker, Philip Morris International Inc. It was able to minimize supply disruptions because all of its cigarettes for sale in Japan are produced outside the country and shipments at ports were being unloaded normally. A small number of its third-party distribution centers were closed because of damage.

The company's ability to keep its supply chain moving allowed it to sell brands like Marlboro cigarettes to customers who normally bought other brands.

Complicating the Japanese market for all tobacco companies is a 40 percent tax hike on cigarettes that went into effect in October last year.

In a conference call with analysts on Thursday regarding Philip Morris International's first-quarter earnings, Chief Financial Officer Hermann Waldemer discussed its business in Japan.

QUESTION: Are you seeing the events in Japan as a potential to grow and sustain market share in the country?

RESPONSE: Japan, of course, in terms of spending overall already before any of that happening was one of our focus markets. ... Our shares are developing very, very nicely. However, really, I think the Japanese situation with the country in trouble will lead to a different average behavior of a consumer. I believe that the retention levels probably will be lower than they would be in another country. Some of them, of course, we will be able to retain, I would think. To what extent, that today is just impossible to say.

Forest Hills Man Busted For Smuggling Foreign Cigarettes

A Forest Hills man was arrested for trying to smuggle 179 cartons of cigarettes into the country tax-free earlier this month, with an estimated tax value at just under $11,000.

Bobirjon Shakirov, of 110th Street in Forest Hills, allegedly arrived at Kennedy International Airport earlier this month after travelling in Uzbekistan. He brought along the dozens of cartons of cigarettes but did not disclose them to customs agents.

Shakirov was charged with a violation of New York State tax law 1814 and one count of first-degree falsifying records. He could serve up to four years in prison and faces a possible fine. He was released on his own recognizance and is currently awaiting trial.

A representative of the Queens District Attorney's office said the 36-year-old man checked a huge suitcase full to the brim with cigarette cartons, which turned up when the bag was searched by the Transportation Safety Administration.

All cigarettes sold in New York City and State require a tax stamp to prove that the companies selling them have paid the requisite fees. The stamps are also used to indicate which cigarettes have been tested for legal levels of tar, nicotine and the extinguishing mechanism required in American smokes.

Shakirov was just one of a alleged dozen smugglers busted trying to illegally move foreign cigarettes stateside, thanks to a new program spearheaded by the Queens District Attorney. Others from Middle Village and Flushing were caught in similar incidents over the course of the last month.

Queens District Attorney Richard Brown said that keeping the smoke smugglers from selling their goods could save the state millions of dollars every year.

“Cigarette smuggling to evade state and local taxes is a multi- million dollar industry. It is a highly profitable tax-free cash business for those involved in it. However, it cheats taxpayers who must dip into their pockets to pay higher taxes,” Brown said. “And it cheats the government as well by fueling an underground economy which does not pay much needed State and City taxes.”

Brown said that the 12 defendants recently arrested would have — if not caught — cheated the state and city out of more than a quarter of a million dollars in revenue.

All of the busts were made by the brand new Crimes Against Revenue Unit, designed to sniff out tax-dodgers across the borough.

“The addition of the Crimes Against Revenue Unit will enhance ongoing specialized efforts begun by this office in 2005, targeting tax evasion and other revenue and financial crimes, which has already returned to the State more than $5 million in sorely needed revenues,” Brown said.

Nebraska lawmakers advance cigarette legislation

A bill that would create a way for Nebraska to collect tobacco tax revenue from American Indian tribes advanced Wednesday through a first-round legislative vote.

The measure would call for state officials to reach compacts with tribes so they could collect money to comply with a national legal settlement with the four largest U.S. tobacco companies.

At stake is $46 million in settlement money for health care expenses. The four companies have claimed recently that states are failing to collect escrow payments from smaller tobacco manufacturers that were not part of the settlement. The escrow payments were required as part of the settlement to keep small manufacturers from having an unfair advantage.

Grand Island Sen. Mike Gloor said his bill is intended to keep Nebraska in compliance with the terms of the 1998 agreement to reimburse governments for tobacco-related health care costs. The settlement stemmed from a lawsuit filed by the attorneys general of 46 states, the District of Columbia, Puerto Rico and the Virgin Islands.

The settlement requires the four companies - Philip Morris USA, R.J. Reynolds Tobacco Company, Brown & Williamson Tobacco Corp. and Lorillard Tobacco Co. - to pay at least $206 billion over a 25-year period.

Gloor said one of the four, R.J. Reynolds Tobacco Company, withheld $2.5 million from its latest payment because it claims Nebraska is not complying with the settlement.

"We literally are at risk of having to pay back some of the money we use in the health care cash fund if we do not get compliant," Gloor said.

American Indian reservations and federal trust lands are generally considered sovereign nations, immune from state tobacco taxes. In March, Nebraska Tax Commissioner Doug Ewald apologized to the Ponca Tribe in Niobrara after state officials seized $14,000 worth of tribal cigarettes on the mistaken belief that they should have had a state tax stamp. The cigarettes were returned.

But the state can collect taxes on tobacco sales to non-tribal customers.

Wholesalers within the Winnebago Tribe in northeast Nebraska collect about $250,000 a year in tribal tobacco taxes. The chief executive of Ho-Chunk Inc., the tribe's economic-development arm, told the Legislature's Revenue Committee in March that tobacco and gas taxes account for tribe's entire tax base. Nebraska and the tribe already share tax revenue from gas sales.

Lance Morgan, the chief executive, told the committee that the bill was an attempt by the big tobacco companies to crush its competitors by eliminating their price advantage.

The bill advanced, 38-0, but requires two more votes before it clears the Legislature.

Businesses disgruntled by possible ban on menthol cigarettes

Businesses are not pleased about the push by Senator Richard Blumenthal LAW ‘73 to ban menthol cigarettes.

In an Apr. 18 letter, Blumenthal expressed his support for the United States Food and Drug Administration’s call to ban cigarettes with more than 0.3 percent menthol by weight. But six New Haven store proprietors interviewed said they were worried about how this move would negatively affect thier business profits. While business operators and smokers interviewed agreed that the potential ban would have public health benefits, they said business interests and personal freedom should also be considered.

Blumenthal defended the FDA’s push to ban menthol cigarettes in his letter and cited the health benefits the ban would bring, which were detailed in a March report by the Tobacco Products Scientific Advisory Committee.

“[Blumenthal] has advocated for a removal of menthol tobacco products from the marketplace, and hopes that the FDA will act swiftly to implement the committee’s findings,” said Kate Hansen, a spokesperson for Blumenthal. “While youth will still be susceptible to aggressive marketing by tobacco companies, removing menthol tobacco products from the marketplace is an important step in reducing harm and protecting public health.”

But six of seven businesses said the negative business impact outweighs the health benefits of a menthol cigarette ban.

At the two Sam’s Food Stores on Whalley Ave. and Kimberly Ave., employees said around 80 percent of cigarette sales are menthol-flavored, and sales might drop because not all customers would switch to alternatives if the ban were enacted. Employees said that although menthol cigarettes are priced similarly to non-menthol counterparts, there is still a higher demand for them. They added that customers of the product were roughly spread evenly across all age demographics.

Joe Lentine, the master tobacconist at the Owl Shop on College St., said that especially at smaller convenience stores that sell cigarettes, the ban could have a significant negative impact on business, explaining that such stores were popular with younger customers that liked menthol cigarettes. He added that the impact of a menthol cigarette ban on the Owl Shop would be minimal because of the store’s inventory and typical clientele.

One underage smoker near the Sam’s Food Store on Whalley Ave., who asked to remain anonymous because he had acquired his cigarettes illegally through older acquaintances, said that his underage friends smoked only menthol cigarettes.

“I don’t understand what Blumenthal’s going on about,” he said. “We have a God-given right to choose what we smoke.”

This smoker was one of nine New Haven smokers interviewed who said they did not support a ban of menthol cigarettes.

Justin Petrillo ’11, a member of the Committee for Freedom who has participated in a number of smoke outs this year, estimated that around 10 percent of smokers on Yale campus consume the menthol-flavored cigarettes.

Petrillo said he does not smoke menthol cigarettes but thinks a potential ban would be a “horrible idea.”

“[The damaging affects of smoking] ought to be tackled by awareness, not a ban,” he said. “I don’t think there is any reason that any sort of cigarettes should be banned or there should be a set age at which you can begin to smoke.”

City officials said they supported Blumenthal’s move, though there are other complexities that ought to be considered.

Ward 23 Alderman Yusuf Shah, who is the chair of the city’s Finance Committee, said that he supports Blumenthal’s call for the FDA to ban menthol cigarettes. He said that while businesses in his neighborhood could take a hit, this will be countered by the profit from illegal sales of “loosies” — which are individual cigarettes that citizens buy illegally because they cannot afford entire packets. These individual cigarettes are priced higher than buying whole packets, he added.

“I would prefer that people didn’t smoke at all, particularly in our area, where we have the hospital and other facilities,” he said. “But we know that’s not a reality, and I think this is a step in the right direction.”

Menthol cigarettes were first developed in 1927 and constitute 20 percent of the American cigarette market according to United States Federal Trade Commission’s latest Cigarette Report, issued in 2009.

Sentencing for Palo Alto hookah bar owner continued until June

The sentencing of a convicted Palo Alto hookah bar owner in the killing of his girlfriend has been continued until June 23, according to the Santa Clara County District Attorney's Office.
Judge David Cena on Tuesday rescheduled the sentencing of Bulos "Paul" Zumot from April 21 to the June date at the request of Zumot's attorney. Zumot could receive a sentence of life in prison.
The sentencing for Bulos "Paul" Zumot was originally scheduled for April 21 before it was continued, the district attorney's office said. A jury in February found Zumot guilty of first-degree murder and arson in the strangulation death of 29-year-old Jennifer Schipsi in October, 2009.
Police say the 37-year-old Zumot became upset with Schipsi the night before her death when he found text messages from a mutual male friend.
Zumot, the former owner of Da Hookah Spot in downtown Palo Alto, was arrested shortly after Schipsi's body was found during a fire in a cottage the two shared.
Authorities say the fire was deliberately set to cover up Schipsi's murder.
Prosecutors say the couple's two-year relationship was marred by domestic violence.

Patnaik to take on hookah parlours

Police commissioner Arup Patnaik, who was summoned by the Bombay high court on Monday, has assured that he will personally look into the menace of mushrooming hookah parlours in the city and take necessary action against the law offenders.

Patnaik, who appeared in the HC on Monday afternoon after a division bench of Chief Justice Mohit Shah and Justice D G Karnik summoned him, sought two days' time to reply to grievances made by social activist Vincent Nazareth, alleging inaction on the part of Khar police officers.

"The report (about Nazareth's complaint) has just come to me today. I will study it and do the needful by May 5," Patnaik told the court.

Chief Justice Shah told the top cop that Nazareth has filed a grievance that his complaints are not recorded and advance intimation is given to hookah parlour owners before a raid is conducted. Assistant government pleader K R Belosay informed the court that the police has taken serious note of the increasing number of hookah parlours in the city and 327 cases have been registered since January 1, 2010.

An affidavit filed by Rajkumar Vhatkar, deputy commissioner of police (DCP), operations, CP office, stated: "It is true that menace of hookah parlours is growing in Mumbai city. The police has swung into action immediately. Sixty eight parlours between Colaba, Dahisar and Mulund have been raided and 327 cases have been registered in the city since January 1, 2010under the provisions of the Bombay Police Act."

The affidavit further stated that a circular issued by the CP on December 9, 2010, directed all police stations to take strict action against hookah parlours and smoking in public places under the provisions of Cigarette and Other Tobacco Products Act. "Khar police (against whom petitioner has alleged inaction) raided 21 places in 2010. The police is very vigilant in this matter and is taking necessary action," stated the affidavit.


The court was hearing a public interest litigation (PIL) filed by NGO Crusade Against Tobacco and its member Vincent Nazareth. The PIL filed early this year says that several hookah parlours have come up in Mumbai in violation of the Cigarette and Other Tobacco Products (Packaging and Labelling) Act (COPTA). The PIL has mentioned that Sagar Restaurant at Pali Hill in Bandra also runs a hookah parlor, which is in violation of COPTA.

The petition said the restaurant was also serving hookah directly in the sheesha in a loose form and not packaged as required by the Packaging and Labelling Rules, 2008.