“Signing of the amending agreement would be very advantageous for Lithuania in particular as the country is practically unable to claim payments for seized PMI cigarettes under the existing agreement with Philip Morris International,” the Finance Ministry said in a letter to the government.
The existing anti-contraband and anti-counterfeit agreement with Philip Morris, which Lithuania signed back in 2005, stipulates that the country may get monetary payments from Philip Morris for seized original company’s cigarettes not intended for its market provided that the share of illegal products on the market does not exceed the threshold set forth in the agreement.
This restriction will be lifted once the amending agreement is signed, which means that the monetary payments will not be linked to the share of illegal products on the market. The share of cigarettes smuggled to Lithuania well exceeds threshold values now, so the country is not eligible for monetary payments.
Moreover, the amending agreement will see the baseline amount increased to 450 million Philip Morris cigarettes seized per year, from current 90 million cigarettes. With seizures exceeding 450 million cigarettes per year, the amount of payments will be increased by 400 percent.
The Finance Ministry has proposed to the Cabinet to authorize Finance Minister Rimantas Šadžius to sign the agreement, a draft decision worked out by the ministry reads.
