This document summarizes a dispute between Philip Morris International and Uruguay over several of Uruguay's tobacco control laws. The laws require graphic health warnings on cigarette packs, restrict advertising and promotion of tobacco products, and limit brands per tobacco company. Philip Morris argues the laws harm its investments and violate intellectual property agreements between Uruguay and Switzerland. It has filed a lawsuit against Uruguay through ICSID. Uruguay defends the laws as protecting public health and reducing healthcare costs, while Philip Morris aims to preserve its market and branding. The outcome could influence other countries' tobacco regulations.

1. PHILIP MORRIS VS. URUGUAY

2. MAIN ISSUES Smoking in public closed places is forbidden Bill 285/05One cigarette type per brand Bill 514/0980% of cigarette pack surfaces be devoted to graphic warnings of the dangers associated with smoking Bill 287/10 reg. 466/10

3. HOW THE ISSUES AFFECT PHILIP MORRIS INTERNATIONAL (PMI)The labeling requirements and recent tax increase harm its investments and infringe on its trademarks in violation of the Switzerland-Uruguay bilateral investment treatyCounterfeit cigarettes (more than 50% of market) have a significant advantage because they are not regulated

4. ACTORSLeading international tobacco company,

5. 160 countries

6. Leading brand Marlboro

7. Net revenues $62,080 billion (2009)A country with a population of 3 million in South AmericaGDP $33,3 billion (2009)Economy based in the agro industryPMI doubles Uruguay’s GDP.

8. ACTORSUnions: Tobacco Workers UnionWorld Health Organization’s Framework Convention on Tobacco Control (WHO FCTC)General Public:

9. ACTORS (Cont.) These groups also offered to provide technical and legal assistance to the government of Uruguay.

10. INFORMATIONInelastic cigarrette consumption (10% price increase, 5% consumption decrease)Agreement on Trade-Related aspects of Intellectual Property rights (TRIPS) into BIT obligations between Uruguay and Switzerland, that was signed in 1988Market share

11. INFORMATION (cont.)Agreement with Organización Panamericana de la Salud regarding legislations to fight against tobacco consumptionStatistics:A consumer spends an average of $1.50 per day on cigarettes 800,000 consumersUs$438m per year is the industry size Us$ 100m are from PMI

12. INFORMATION (cont.)VAT (22%)Production taxes (70% of production costs)Production costs4% of taxes collected comes from cigarettes.

13. INFORMATION (cont.)Danger of Smoking25% fatality rate of smoking related cancer.4500 deaths per year caused by cigarettes

14. INFORMATIONSocial costs:Smoking-related health care spending Effects on worker productivity. Campaign to lower smoking rates among its population, as 50% Tabaré Vázquez, a trained medical doctor whose term as the country’s President ended March 1, promoted Uruguay’s anti-smoking laws. On the campaign trail and in declarations since his election, Mujica stressed that he will continue his predecessor's policies.

15. INTERESTSUruguayan Government Protect population´s health Reduce health costs Protect the country´s image of health concerned Increase Foreign direct investment

16. INTERESTS (cont.)SmokersEase of getting productLow PriceFreedom to smoke freelyBoxes of cigarettes without unpleasant picturesNon SmokersReduction of second-hand smoke in public places

17. Reduced availability of cigarette sales

18. Advertisements and promotions that deter minors