European Union countries on Thursday ended two years of haggling over how to share more than US$ 1 billion in damages paid by Philip Morris under a deal made in 2004 to end a legal battle over black-market cigarettes.
 

Italy will get 29 per cent of the money and Germany 25 per cent, with the rest divided among eight other countries and the European Commission. The commission secured a 9.7 per cent portion despite previous opposition by Germany, which wanted the EU's executive branch to take less. The commission said its share of the money would be used to upgrade the fight against smuggling and counterfeit cigarettes.
Philip Morris has so far paid US$ 325 million, the EU said. The rest is due by 2016.
The out-of-court agreement in 2004 ended a legal tangle over the sale of black-market cigarettes, which deprived manufacturers of income and governments of tax revenue.
Philip Morris International, the manufacturer of Marlboro cigarettes, is a unit of the US-based tobacco and food group Altria. EU regulators claimed that it intentionally supplied too many cigarettes to countries with low tobacco taxes, encouraging them to be smuggled into neighbouring high-tax countries. Philip Morris has consistently denied the charges.
The settlement did not include any admission of liability or guilt by the tobacco company. Both the EU and Philip Morris say the money is not a penalty or fine, but a voluntary payment to forget past conflict and cooperate. (pi)