The Criminal Court has fined Philip Morris (Thailand) Limited US$40,375,600.00 for lowering the prices of its imported cigarettes to dodge duty in Thailand.
Prosecutors earlier told the court that Philip Morris declared unrealistically low prices of imported Marlboro and L&M cigarettes from July 28, 2003 and June 24, 2006.
The Department of Special Investigation later estimated that Philip Morris avoided import tax at more than 20 billion baht. Over US$600 Million dollars.
The court stated that Philip Morris declared the price for Marlboro cigarettes at 7.76 baht per pack and that for L&M cigarettes at 5.88 baht per pack. However DSI found that the actual prices of cigarettes from the Philippines should have stood at 13-19 baht a pack.
The company and its seven employees were defendants and the people were released on bail of 1 million baht each. All defendants showed up to hear the ruling.
While convicting and fining the company in its ruling delivered on Friday, the court acquitted its local employees. Finding that they had nothing to do with the price declarations, which were prepared in the United States.
Philip Morris (Thailand) managing-director Gerald Margolis said the company would appeal.
The case against Philip Morris (Thailand) began in 2006
Thailand’s state prosecutor filed criminal charges in 2017 against the cigarette company. Accusing it of evading more than 20 billion baht ($662 million) in taxes between 2003 and 2006.
The case triggered an international trade dispute, with the Philippines charging that Thailand’s import tariffs were unfairly used. Giving an advantage to the state-controlled Thailand Tobacco Monopoly. Manila won a ruling from the World Trade Organization that Thai customs authorities were unfair and had not acted according to WTO rules.
Philip Morris consistently maintained that the charges against it were merit-less. And that “both Thai and World Trade Organization authorities have confirmed that our declared import prices comply with Thai and international customs laws.”
The case began in 2006, when the Department of Special Investigation began an investigation after Thailand’s Excise Department filed a complaint. The case was dropped by Thai prosecutors in 2011 but launched again in 2013.