Lobbying, preferences, murders: how to curb the aggressive tobacco industry in Ukraine

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At the end of 2023, four dozen companies are still operating in Ukraine, recognized by the National Agency for the Prevention of Corruption (NACP) by the international sponsors of the war.

Two manufacturers of tobacco products Philip Morris International and Japan Tobacco International got into in the list of international sponsors of the war at the end of August.

They did not leave their business in the Russian Federation after the full-scale invasion and continue to pay more and more taxes to the budget of the terrorist country, which already reach billions of dollars a year.

This money goes, in particular, to the Russian military-industrial complex – to the production of missiles and drones, with which terrorists attack peaceful cities of Ukraine.

Does the presence of companies on the list of international sponsors of war have practical consequences?

But what to do with tobacco manufacturers, whose products kill tens of thousands of Ukrainians every year? Explains the EP together with the Center for Democracy and the Rule of Law.

Tobacco companies – international sponsors of war: what are the practical consequences

On August 24, it became known that tobacco companies Philip Morris International and Japan Tobacco International got into list of international war sponsors from the National Agency for Prevention of Corruption.

Pafter the start of the full-scale invasion, tobacco producers kept their business in the territory of the Russian Federation and pay insane taxes there.

“In 2023, the four largest companies transferred about 65 billion dollars to the budget of the terrorist country.

This money goes, in particular, to the military-industrial complex of the Russian Federation.

A dissonance arises: on the one hand, tobacco companies position themselves as good partners of Ukraine, investors in its economy, in recovery, but, on the other hand, the same tobacco companies earn money in Russia and pay huge taxes to the budget of the Russian Federation“, – the project manager explained the situation in a comment to the EP “Kyiv without tobacco smoke“lawyer of the Center for Democracy and Rule of Law Hleb Kolesov.

As the last four months have shown, the presence of companies in the list of international war sponsors does not affect their activities in Ukraine too much.

Regarding the practical consequences of the presence of companies on the list of international war sponsors, the European Parliament turned to the NAKC.

The department explained that such consequences are due to the fact that the world leaders in the world of compliance – Refinitiv WorldCheck and Doe Jones, whose data are used by leading banks, consulting, legal and auditing companies around the world – use the data of the portal.

The presence of the company in the list of international sponsors of the war also carries reputational losses: the information gets into the world media, which can significantly affect the image of the companies.

NAZK noted that various countries of the world are taking the initiative and reacting themselves to the inclusion of certain companies in the list of international war sponsors.

For example, the Finnish parliament stopped serving Pepsi, the Finnish railway carrier VR stopped selling Nestle products.

SAS and Norwegian Air, as well as a number of other businesses, have stopped selling Mondelez products.

The agency also added that the list of international war sponsors is a tool of direct democracy that does not carry any obligations.

Cooperate with the sponsors of the war or not – everyone’s choice. The department noted that Ukrainian business and our fellow citizens also join the boycott of companies that pay taxes to the budget of the aggressor country: for example, Work.ua has stopped providing any services to companies and brands that have not left the Russian market.

“The National Agency also supports the decision of the Antimonopoly Committee of Ukraine regarding the prohibition of public procurement through the Prozorro system of products of companies that are on the list of international war sponsors.” – added to NAZK.

Why Ukrainian legislation is loyal to the tobacco industry

At the same time, from July 11, 2023 in Ukraine began to act further restrictions on the production, sale and advertising of tobacco products.

However, despite these bans, manufacturing companies still find ways to promote their products by using loopholes in the law or even outright violating it.

As an example of aggressive marketing, Gleb Kolesov cites the involvement of stars and influencers by top producers of tobacco products to promote their products. According to him, such an example in Ukraine is TV presenter Lesya Nikityuk, who appears at many events and on social networks with GLO products.

“Despite the ban on advertising tobacco products, particularly on the Internet, the tobacco industry advertises its own products through social networks and other platforms.

For example, while watching football on MEGOGO, the IQOS banner often appears – an advertisement for a tobacco company’s product Philip Morris.

This is not legal, as the advertising of any tobacco products, in particular on the Internet, is prohibited according to the provisions of the law 1978-IX, which came into force on July 11 of this year“, – says the expert.

Another tool actively used by manufacturers of tobacco products is hidden advertising. For example, they post QR codes with links to their own pages or allegedly social messages in the style and colors of their own products.

Gleb Kolesov gives an example from last year, when he was in Kyiv, in particular on LED panels “Gulliver“hung huge banners with motivating and inspiring content.

As it turned out later, it was a hidden advertisement of IQOS – in the style and colors of the product.

How tobacco lobbying works and what they lobby for

Adopting tougher legislation regarding tobacco product manufacturers is an asterisk task for the Verkhovna Rada.

Companies spend enormous resources on their own lobbyists both around and within government.

“Tobacco lobbying” is both overt and covert.

During the voting of any restrictive regulation regarding tobacco producers, one or more alternative draft laws appear with weaker regulations or with their absence at all.

This is done in order to delay the process, because there is a requirement to consider alternative draft laws on the same level as the main one.

Another example is “amendment spam” – when the main draft law is flooded with a bunch of amendments from various people’s deputies.

These tools work in different areas“– explains Gleb Kolesov.

He adds that in other ways “tobacco lobbying“ there are statements from various non-governmental organizations that usually defend the interests of the tobacco industry.

Bills or government initiatives to increase excise taxes on tobacco products are always accompanied by critical statements from various “public“ organizations, they say that the innovations harm the investment climate, they are out of date, unnecessary, will lead to an increase in smuggling, etc.

““Tobacco lobbying” exists in other government bodies as well. It can be hidden or unintentional, for example, when the tobacco industry offers its help with good intentions, either in the form of buying ventilators during the coronavirus pandemic or with the purchase of ammunition for the military , but, despite the ban on advertising tobacco products, advertises its own brands in this way.

This creates positive associations in potential consumers“– says the lawyer.

At the same time, the Ukrainian government in some places “shoots himself in the foot“ – gives the tobacco industry illogical, but very pleasant preferences.

One such example is memorandum between the Cabinet of Ministers and the four largest producers of tobacco products, signed in 2019.

“The Ukrainian government, in fact, gave the tobacco industry guarantees in unhindered activity, in reducing pressure, in fact, promising not to introduce bans on the distribution of tobacco products in the future.

On the other hand, this memorandum was a purely declarative document and was not implemented in practice: excise taxes were increased, important laws were passed, in particular regarding the prohibition of tobacco advertising.

Ukraine continues to adhere to the seven-year plan to increase the excise tax on tobacco products, which is important in view of the integration of our economy and Ukraine’s accession to the European Union“– explains Gleb Kolesov.

Lobbying in Ukraine exists in a hidden form and is currently not regulated at the legislative level, the National Agency for the Prevention of Corruption explained in response to the EP’s request.

“Lobbying affects the results of public policy by promoting the interests of different groups or individuals.

If this influence is opaque or illegitimate, it can harm society.

NAZK is in favor of legislative regulation of lobbying as soon as possible and is the responsible state body in this matter.

As of today, public discussions of draft laws on honest lobbying and advocacy are already underway in Ukraine with the aim of developing effective and efficient legislation“– the department adds.

How to change the legislation so that tobacco producers do not have overflow

Regulation of the tobacco industry’s interference in the state policy of Ukraine is becoming more relevant today than ever. There is a solution.

One of the steps should be the implementation into Ukrainian legislation of the World Health Organization’s Framework Convention on Tobacco Control, which Ukraine ratified back in 2006, at which point the process stopped.

“This document was created with the aim of reducing the spread of tobacco products, as WHO recognizes nicotine addiction as one of the leading diseases that must be treated.

All states had to ratify it and implement it in their legislation, regulating both tobacco production (the content of nicotine, resins, and other dangerous substances) and certain aspects of the tobacco industry (advertising products, selling them to children).“– explains Gleb Kolesov.

Article 5.3 of the Regulation provides for a complete ban on tobacco industry interference in public health policy.

Also, according to the WHO FCTC implementation road map, the interference of the tobacco industry in the state policy on taxation is prohibited, so that the tobacco industry cannot influence the regulation of taxes and the increase of excise duties.

“Why is now the time to implement Article 5.3 into Ukrainian legislation?

We see the enormous influence of the tobacco lobby on health care and taxation decisions.

The solution is known: state control should be strengthened, as well as restrictions on the partnership between the state and the tobacco industry.

The regulation prohibits corporate social responsibility of the tobacco business: representatives of the industry will not be able to wash their reputation and create an image of a good partner of the state under good intentions.

A manufacturer of products that kills 85,000 Ukrainians annually cannot be such a partner a priori.

Every penny paid by the tobacco business as a tax will become a hryvnia that the state will spend on the treatment of diseases caused by smoking“– says the lawyer.

According to him, the implementation of Article 5.3 of the WHO FCTC and the legal ban on the interference of tobacco companies in the state policy of the country will help to change the logic of relations between the state and tobacco producers, which will not provide for any preferences and competitive advantages for the latter.

In general, Ukraine, building its policy regarding the tobacco industry, should focus on the experience of the world’s leading countries, says Hleb Kolesov.

“I can cite the example of New Zealand, Australia and some European countries, which have completely banned the display of tobacco products in places of sale so that children and potential buyers do not see these products.

It is also a good practice to introduce standardized packaging of the same green color with huge pictures and warning inscriptions for all manufacturers.

Some countries have gone even further: Denmark, for example, has banned the sale of tobacco altogether to people born after 2008. All these ideals can be implemented in Ukraine if there is political will and support in society.

The public supports such initiatives, because everyone understands that we need a healthy nation for a successful future“– summarizes the expert.

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