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A Philip Morris-funded group has been attempting to interfere in the design of public policies in Costa Rica and other countries by opposing legislation that seeks to regulate cigarette smuggling, a report by Corporate Accountability has shown.

The Transnational Alliance to Combat Illicit Trade’s (TRACIT) interference also involved requesting the strengthening of the Joint Commission Against Illicit Trade, the report added.

“Tobacco companies are using a backdoor tactic to finance an organization like TRACIT in order to gain access to governments and influence policy,” said Michél Legendre, director of tobacco control at Corporate Accountability.

In August 2018, TRACIT representatives met with government officials who are members of the Joint Commission Against Illicit Trade, which also includes private sector delegates. At that meeting, organized by the U.S. Chamber of Commerce in Costa Rica (AmCham), TRACIT members who came to the country presented the Global Illicit Trade Environment Index, which they commissioned from The Economist Intelligence Unit.

The Global Illicit Trade Environment Index is sponsored by Amcham Costa Rica, the Industrial Association of the Dominican Republic, Authentix, Brand Protection Group of Brazil, British American Tobacco (BAT), BCIU, Coca-Cola, Crime Stoppers International, Diageo, Eurocham Myanmar, Ideas Matter, JapanTobacco International, Marazzi and Associates, NIS, NPIC, PernodRicard, Philip Morris International (PMI), PEFC, Procter & Gamble, Richemont, Unilever and Universal Music.

On that occasion, Jeffrey Hardy, Executive Director of TRACIT, was quoted as saying that the government should strengthen the work of the Inter-institutional Joint Commission [sic] that presides over the Ministry of Finance, which defines public policies that can be influenced by representatives of the private sector, including the tobacco industry.

In the minutes of the Joint Commission reviewed for its report, Corporate Accountability noted that the only company invited to the sessions is Philip Morris International (Mendiola & Cía. in Costa Rica). Specifically, on May 2, 2019, Susana Salas and Arturo Fernández, managers of External Affairs and Illicit Trade for Costa Rica and Central America, respectively, attended.

But that was not the only time he wanted to make his influence evident, the report noted.

On May 7, 2019, TRACIT addressed government and industry officials during a conference on illicit trade organized by the Latin American Anti-Trafficking Alliance (ALAC), another organization with a strong tobacco presence, to once again present the Global Illicit Trade Environment Index. Similar activities have been carried out in other Latin American countries, such as the Dominican Republic and Argentina (2019), Colombia and Ecuador (2018) and Panama (2017).

What is TRACIT?

TRACIT was officially launched on September 6, 2017, in New York, and was presented as a private sector initiative to enhance business collaboration with governments and
intergovernmental organizations to mitigate the social and economic damage of illicit trade.

In the same year of its creation, it began to receive funds from PMI, according to Uruguayan doctor Eduardo Bianco, Technical Director of the Centre for International Cooperation on Tobacco Control (CCICT) in Uruguay, based on research carried out by the British University of Bath, as can be corroborated by its Tobacco Tactics Project.

“In March 2019, the PMI IMPACT initiative awarded TRACIT US$21 million of the US$100 million it donated to 31 organizations that year. By 2017, it had already donated US$20 million to 29 projects, including TRACIT,” said Mr Bianco.

The University of Bath, in its Tobacco Tactics Report, has shown that Philip Morris International, British American Tobacco and Japan Tobacco International have all been
partners in TRACIT projects, providing funding directly or through their partnership with Crime Stoppers International.

“The tobacco industry uses TRACIT to reach out to governments and international organizations, in a ‘more credible’ way than if it did so directly, given its
tarnished international image,” Mr Bianco said.

“This allows it, indirectly, to be part of government bodies in charge of combating illicit trade or advising them, something it cannot do openly since it is forbidden by an express provision of the Framework Convention on Tobacco Control (FCTC) and its Protocol against Illicit Trade.”

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And its main objective, he said, is to discredit the most effective of all anti-smoking measures: applying high taxes, around 80 per cent of the price, to cigarette packs.

FCTC violation

Costa Rica has fully adhered to the tobacco control policy promoted by the WHO.

In 2008, it signed the FCTC, and in 2012 it approved the General Law on Tobacco Control and its Harmful Effects on Health (9028) and its Regulations. In 2013, the labelling of tobacco products was regulated and in 2016 the Protocol for the Elimination of Illicit Trade in Tobacco Products was approved.

“Costa Rica has made progress in tobacco control by reducing the prevalence of consumption to 8.9%. But it is not 100% protecting public health policies regarding tobacco control from the commercial interests of the tobacco industry,” said Nydia Amador of Costa Rica’s National Anti-Tobacco Network (RENATA).

“It is contradictory that tobacco companies that have been judicially convicted and fined in the European Union, the United States and Canada for being involved in the illicit trafficking of tobacco products are part of TRACIT and Amcham and are given space – through these organizations – in a Joint Commission that seeks to eliminate smuggling. It’s like watching out for cheese.”.

In its Article 5.3, the FCTC warns that in establishing and implementing their public health policies regarding tobacco control, Parties shall act in a manner that protects such policies from commercial and other vested interests of the tobacco industry, in accordance with national law.

Reina Roa, from the Panamanian Ministry of Health, said the Parties to the Protocol should not receive TRACIT or establish alliances with it, or with any other entity that has direct or indirect links with the tobacco industry.

TRACIT responds

Corporate Accountability said it contacted Mr Hardy, TRACIT’s Executive Director.

“After assuring him in two emails that he would answer a few questions, he finally did not,” the report stated.

“However, the information on the website is clear and its eleven partners are alcoholic beverage companies ABinBev, Heineken, Diageo and Pernod Ricard; pharmacist Novartis, tobacco company Philip Morris International, P&G, Richemont, PVH-Calvin Klein-Tommy Hilfiger, Syngenta and Universal Music Group.

“Membership costs a minimum of $25,000 per year, which does not mean much for companies with annual revenues exceeding $29.6 billion, as was the case with PMI in 2018.

TRACIT’s mission is to raise funds and expertise to advance its members’ initiatives and to interact with governmental and intergovernmental organizations, the report noted.

Michél Legendre said it is an old interference tactic of the tobacco companies: grouping tobacco with other industries and presenting a front entity.

“TRACIT is carrying out tobacco-related actions around the world and is using its reports and events to address decision-makers,” he said.

Mr Bianco added that because TRACIT has close connections with the tobacco industry, it provides a biased view of the illicit tobacco trade, ignoring or hiding the clear evidence of the tobacco industry’s involvement with the illicit tobacco trade.

“This is strategically important to tobacco companies, not so much because they may be losing out on profits, but because it is their main ‘workhorse’ in opposing the main measure to reduce tobacco consumption: price increases through tax increases.”

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