American tobacco giant Philip Morris' legal troubles in Thailand appear to have deepened, with a commerce ministry probe having determined that the firm likely breached the Foreign Business Act (FBA), a senior ministry source said.

The department of special investigation (DSI) earlier accused the firm of understating the prices of its imported cigarettes in order to minimise tax payments.
More recently, the DSI asked the ministry's business development department to investigate whether the company breached the FBA by distributing foreign-brand cigarettes, an activity beyond the scope of its agreement with the ministry. The ministry has already submitted the results of its investigation – which concluded that the firm had violated the act – to the DSI, which will conduct a more in-depth probe, the source said.
Philip Morris receives protections under the Treaty of Amity signed by Thailand and the United States in 1968. However, if the company is eventually found to have engaged in a business that is protected under the FBA, it will lose the treaty's protection. In its agreement with the ministry, the firm initially said it would conduct a survey of the Thai market, before importing and exporting tobacco products between Thailand and the US. However, the department found that the firm had breached its contract by acting as a distributor of Marlboro and L&M cigarettes produced in the Philippines.
Philip Morris faces prosecution by the DSI, which believes the company's alleged deceptive practices from 2003-2007 caused a loss to the country of nearly Bt 69 billion (EUR 1.47 billion) in taxes. (sra)