The importation of L&M cigarettes into Thailand was at the center of a lawsuit wending its way through the Thai courts as well as preceding dispute proceedings at the World Trade Organization.
Thailand's Appeal Court drastically cut a fine imposed on Philip Morris (Thailand) Ltd for customs violations involving cigarette imports from the Philippines from THB1.2 billion (US$34.6 million) to THB121 million.
The Thai public prosecutor filed charges in 2016 against Philip Morris Thailand and seven of its Thai employees, alleging under-reporting of the value of more than 270 entries of imported cigarettes from the Philippines from 2003-2006, which led to revenue losses of more than THB306 million (US$8.82 million). PMTL was accused of setting the price of L&M cigarettes imported from the Philippines at THB5.88, while other importers declared that brand of cigarettes at THB16.81 per packet. The firm also declared the cost, insurance, and freight (CIF) rate on Marlboro from the Philippines at THB7.76 baht per packet, far lower than the THB27.46 baht reported by other importers. The Office of the Attorney General (OAG) said such undervaluing of imports meant the company managed to avoid paying over THB20 billion (US$645 million) in taxes. THE OAG said the offense risked a fine worth four times the amount, or about THB80 billion.
The Criminal Court found PMTL guilty of tax evasion in November 2019 and ordered it to pay a THB1.2 billion fine while dismissing the charges against seven employees due to a lack of clear evidence. Both the Thai public prosecutor and the company appealed. The Appeal Court stood by the guilty ruling against PMTL but lowered the fine to a tenth of what the Criminal Court ruled.