PUBLIC HEALTH OVER TOBACCO INTERESTS: A Challenge to the National Tobacco Administration’s Discriminatory Memorandum on Tobacco Products

Public health advocates have been deeply distressed by their discovery of a draft memorandum of the NTA amending regulations on the sale and distribution of imported tobacco products. Though justified as means to prevent illicit cigarette trade, careful scrutiny of the document reveals that its real intention is to insulate the domestic cigarette industry from increasing competition— and retain privileged access in marketing their deadly products to Filipino consumers.

At least 240 Filipinos are dying every day from cigarette smoking, yet in the face of this smoking epidemic, the memorandum reveals the NTA to be an apparent supporter, not of the public interest, but rather of the particularistic interests of domestic cigarette producers. In the statement below, the health advocates dare the NTA to align itself squarely with the greater interests at stake: the health and lives of millions of Filipinos.

WE, from the civil society coalition that supported the passage of the sin tax reform law (R.A. 10351), once again come together to express our opposition to a proposed memorandum circular from the National Tobacco Administration (NTA). We have obtained the draft of Memorandum Circular No. 003, Series of 2013, which masquerades as an illicit trade control measure but only serves to protect the vested interests of the domestic tobacco industry.

The Memorandum seeks to impose processing application requirements to permit the sale/distribution of imported tobacco products. As part of the requirements, sellers/distributors of imported tobacco products will be levied a license fee that amounts from one hundred (Php 100.00) up to six hundred pesos (Php 600.00), on top of the license fee previously levied. In addition, the said Memorandum imposes additional evaluation fees for what is already a redundant inspection mechanism on imported cigarette products.

The NTA claims that this proposed policy will “prevent smuggling, counterfeiting and illicit trading of imported tobacco products through proper supervision, monitoring and regulation in order to protect the consuming/smoking public”. On the contrary, however, we contend that the ulterior objective for the said proposal is only to perpetuate a discriminatory system that favors domestic cigarette producers.

Raising the evaluation fee and imposing redundant evaluation procedures on imported cigarettes will not reinforce the existing regulatory measures by the Bureau of Customs to curb illicit tobacco trade. Moreover, selective regulation that seeks to address only illicit trade of imported cigarettes will fail to resolve the greater and more alarming concerns of domestic smuggling by local cigarette companies.

Furthermore, the selective imposition of license fees and extraneous procedures to authorize the sale/distribution of imported cigarettes will be discriminatory against foreign products. As such, this proposed policy will violate the country’s commitment to international trade rules, specifically the General Agreement on Tariffs and Trade, which prohibits the use of internal fees or taxes to favor the domestic industry.

In view of our advocacy to protect the public from the health detriments of cigarette consumption, we challenge the NTA to prove the legitimacy of its intention to curb illicit cigarette trade, and not merely perpetuate discrimination against foreign products through the measures proposed under Memorandum 003-2013.

We call for a genuine smuggling-control policy that will address all threats of illicit trade, including counterfeiting and domestic smuggling— where cigarette companies themselves participate in the said activities, as experienced in Hong Kong and Canada. In place of the Memorandum’s propositions, the NTA should instead push for measures such as a tracking/tracing system to effectively monitor the movement of all tobacco products and support the government’s existing illicit trade control policies.

Even more importantly, from a tobacco-control perspective, we urge the agency to revise the Memorandum and apply the proposed measures to all cigarettes. Uniformly imposing higher evaluation and regulatory fees on both foreign-made and domestically produced cigarettes will discourage the sale of tobacco and, consequently, make the deadly products less accessible to the public.

We also call on government in general to introduce other tobacco-control measures that will supplement the sin tax reforms and advance the country’s health objectives.

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