We, the undersigned international public health organizations, would like to express concerns to the Government of Ukraine regarding the Memorandum of Intent to Ensure Stability in the Tobacco Market and Maintain a Competitive Environment for All Its Participants, signed on 12 December 2019 by the Minister for Development of Economy, Trade and Agriculture Tymofiy Mylovanov and tobacco companies operating in Ukraine.
We respectfully emphasize that entering into an agreement with tobacco companies contradicts Ukraine’s international obligations under the WHO Framework Convention on Tobacco Control (FCTC), ratified by Ukraine in 2006. In addition, Ukrainian legislation (Article 4 of the Law № 2899 On Measures of Prevention and Reduction of Use of Tobacco Products and Their Harmful Influence on Population Health) protects the Government from any requirements of the tobacco industry for granting financial and other preferences and emphasizes, “the priority of health policy in comparison with the financial, tax and corporate interests of economic entities whose activities are related to the tobacco industry.”
Article 5.3 of the FCTC requires that “in setting and implementing their public health policies with respect to tobacco control, Parties shall act to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national law”.
Further, Article 5.3 Guidelines instructs Parties to protect the formulation and implementation of public health policies for tobacco control from the tobacco industry to the greatest extent possible, as the tobacco industry produces and promotes a product that has been proven scientifically to be addictive, to cause disease and death and to give rise to a variety of social ills, including increased poverty. Any preferential treatment of the tobacco industry would be in conflict with tobacco control policy.
According to the official website of the Ministry for Development of Economy, Trade and Agriculture of Ukraine, the Ukrainian government agreed to create a working group with the tobacco industry to avoid tax invasion and counteract illicit trade.
The international experience shows, that the tobacco industry profits from illicit trade in a number of ways:
1) stimulates consumption when the smuggled cigarettes are sold for prices lower than for legal cigarettes;
2) enables the tobacco companies to penetrate markets where it might otherwise be blocked.
3) the tobacco industry uses the presence of smuggled cigarettes to argue for a reduction in tobacco taxation, despite growing evidence of its own direct involvement in smuggling.
Even though cigarettes smuggled into Ukraine represented a relatively small share of the market, cigarettes smuggled out of Ukraine are a source of concern for many European countries.
Therefore, any interactions with the tobacco industry shall be limited to only when strictly necessary for the purposes of controlling, regulating and supervising the tobacco industry. Furthermore, any interaction with the tobacco industry on matters related to tobacco control or public health shall be accountable and transparent.
We do understand that effective steps towards implementation of tobacco tax policy and combating illicit trade are needed. However, the tobacco industry should not be involved in setting and implementing policies to protect public health from the inherent conflict of interests. As a Party to the FCTC, the Ukrainian government should not accept, support, or endorse any offer for assistance or proposed tobacco control legislation or policy drafted by- or in collaboration with the tobacco industry.
We therefore respectfully appeal to the Government of Ukraine to reconsider its intention for unnecessary cooperation with with the tobacco industry.