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tobacco giant tries to haul Uruguay before court over smoking ban

2011

The Uruguayan government has is being sued in a tribunal by a tobacco company after it instituted a smoking ban.

The US-based Philip Morris has taken legal action seeking to bring Uruguay, which recently became the first South American country to ban smoking in enclosed public spaces, before the International Center for Settlement of Investment Disputes (ICSID), a branch of the World Bank.

ICSID is an institution established under an international treaty on investment disputes, and has a mandate to arbitrate in them. The company’s claim contends that the laws are damaging Uruguay’s commercial interests.

It is feared by some, however, that Philip Morris may be seeking to set a precedent against the global trend for tobacco regulation, in a small, underdeveloped country. Others, meanwhile, have questioned what business a foreign tobacco company has in questioning the economic wisdom of a country’s smoking laws.

Paul Reichler, who will assume the defence of Uruguay in the case, said: ‘The treaty establishes that by sovereignty Uruguay has the right to prohibit unhealthy activities.... With its anti tobacco laws the country does not attack the investments of Philip Morris, it only imposes limits to an activity that is to promote and to commercialize harmful products.’




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