New Lawsuit Risks for Philip Morris International Inc. as EU Anti-Smuggling Deal Expires

Rich Duprey

The litigation risk of Philip Morris International (NYSE:PM) just rose exponentially as its decade-old agreement with the European Union to combat cigarette smuggling expires and the commission has opted to not extend it. With its cloak of legal protection now removed, investors ought to expect anti-smoking activists to launch lawsuits against the tobacco company for its alleged role in the illicit cigarette trade.

It’s been argued that as government taxation of tobacco products approached usurious levels, the tobacco companies sought to minimize the duties they had to pay by conspiring with smugglers who were often connected to organized crime to trade cigarettes on the black market.