MercoPress, Uruguay

Philip Morris takes Uruguay to international court because of tobacco-ban policy

26 May 2011

One of the world’s biggest tobacco companies is launching a claim against Uruguay for considering the country’s legislation commercially damaging to the company. Philip Morris corporation has filed a claim at the International Centre for Settlement of Investment Disputes (ICSID), a World Bank branch.

US lawyer Paul Reichler assumed the defence of Uruguay at the ICSID US lawyer Paul Reichler assumed the defence of Uruguay at the ICSID

According to the claim, Uruguay’s policies on tobacco control are damaging the company’s performance in the small the South American country.

Former Uruguayan President Tabare Vazquez, an oncologist, banned smoking in public buildings four years ago. Tobacco advertising is also banned and cigarettes’ packets must carry large health warnings.

The rules, which also prevent the sale of products branded as “light,” put Uruguay at the vanguard of global anti-smoking laws.

Also at the vanguard of its business is Philip Morris. It is the first time that a tobacco company demands a State on an international forum.

At a press conference in the beginning of May, the Uruguayan Government reaffirmed the right to defend the public health of its citizens. This is the line the defence will follow according to the US lawyer Paul Reichler, who will assume the defence of the country in the litigation.

According to Reichler, the defence questions the agreement of protection of investments that the tobacco company says the country has violated based on an article that authorizes the government not to allow economic activities “that damage the public health”.

“The treaty establishes that by sovereignty Uruguay has the right to prohibit unhealthy activities (...). With its anti tobacco laws the country does not attack the investments of Philip Morris, it only imposes limits to an activity that is to promote and to commercialize harmful products ”, emphasized Reichler.