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Published by the UICC, April 2000

 

© 2000 by the International Union against Cancer

all rights reserved

 

Introduction

 

The Commission proposal is a 'recast' of three existing tobacco product directives which regulate tar yields, the sale of oral tobacco and the labelling of tobacco products. It is intended to streamline the existing Community law in this sector for the benefit of consumers, manufacturers and importers. It also complies with the declaration attached to the final act of the Intergovernmental Conference in 1997 calling for a rapid consolidation of legislative texts.

 

The Commission proposal for its new tobacco regulation directive is based on Article 95 EC, which is aimed at harmonising and completing the internal market. The Internal Market is defined as,

 

"(comprising) an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of this Treaty."

 

Article 95 EC provides the Community with its legal base for regulating the internal market.

 

Key aspects of Article 95 for the Commission proposal on tobacco products:

 

1.       …The Council shall, acting in accordance with the procedure laid down in Article 189b…adopt the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market.

 

3.   The Commission, in its proposals envisaged in paragraph 1 concerning health, safety, environmental protection and consumer protection, will take as a base a high level of protection, taking account in particular of any new development based on scientific facts. Within their respective powers, the European Parliament and the Council will also seek to achieve this objective.

 

10. The harmonisation measures referred to above shall, in appropriate cases, include a safeguard clause authorising the Member States to take, for one or more of the non economic reasons referred to in Article 36, provisional measures subject to a Community control procedure.

 

Why Article 95 is the correct legal base for the proposal

 

Tobacco products are one of the most widely traded and profitable products in the EU. Although certain aspects of tobacco products are already subject to EC regulation, for example tar yield levels and labelling,[1] others such as additives are not. Where there is no existing EC legislation mutual recognition applies but this sometimes leads to wide discrepancies between the laws of the various Member States. These discrepancies are capable of affecting trade between Member States and risk exposing consumers in one country to risks not suffered by consumers in another Member State. Given the dangers posed to consumers of tobacco products, such a situation must be remedied. The Commission proposal is a useful start to this process and Article 95 is the only legal base suitable for the task.

 

All previous EC tobacco regulation directives have been based on Article 95 (old 100a). Although the 1989 labelling directive was challenged by certain tobacco companies because of the size of the warning labels,[2] the actual choice of Article 95 (ex 100a) as the legal base of the directives has never been challenged in the European Court of Justice or any national court.

 

Legal principles applicable to the adoption of EU directives

 

·         Subsidiarity

 

When bringing forward proposals for new legislation, the Community legislator must comply with the principle of subsidiarity which states that a directive can only be adopted at EU level when the objectives of the proposed action cannot be sufficiently achieved by Member States' action in the framework of their national constitutional system and can therefore be better achieved by action on the part of the Community. In particular, action at Community level should produce clear benefits by reason of its scale or effects compared with action at the level of the Member States.

 

The Community has already adopted three directives regulating tar yields and labelling of tobacco products. It therefore enjoys exclusive competence in these areas. However, the recast also contains a proposal to allow the Community to set maximum yields for carbon monoxide and nicotine in cigarettes, to regulate certain aspects of the use of additives in tobacco products for the first time, to carry out further testing other than according to the ISO standards and to prohibit terms such as 'light and mild' except where authorised by the Member States.

 

Given that tobacco products are one of the most widely traded products in the EU it is clearly right for the Community to seek to regulate in areas which are currently subject to national law and mutual recognition only. The 1999 Commission Communication[3] provides ample evidence of the need for the Community to take action in these areas given the wide variations in legislation in this sector in the Member States. The test of subsidiarity is therefore met in this proposal.

 

Proportionality

 

In addition to complying with subsidiarity, the Community legislator must also comply with the principle of proportionality which consists of three elements:-

 

·         What is the objective to be pursued?

·         Are the means employed suitable for the achievement of that measure?

·         Do they go beyond what is necessary to achieve it?

 The stated objective of the Commission proposal is:

 

(…) the approximation of the laws, regulations and administrative provisions of the Member States concerning the tar yields of  cigarettes and the warnings regarding health to appear on packets of tobacco products, together with the approximation of the laws, regulations and administrative provisions of the Member States concerning carbon monoxide and nicotine yields and the ingredients of tobacco products, taking as a base a high level of health protection.

 

On the basis of this objective, this proposal is not disproportionate, bearing in mind that the ECJ has ruled on many occasions that the Community legislator has a wide discretion when considering the manner in which the objective pursued might be attained.

 

The Community tobacco products market accounts for millions of Euros in sales every year and tobacco products are consumed by approximately one third of EU citizens. Tobacco therefore forms a very important part of the internal market and the Community has a very clear duty to ensure that its consumers' health is  protected as much as possible in this sector. According to the WHO 500,000 EU citizens die of smoking related disease every year. On that criteria alone, nothing in this directive can be considered to be disproportionate. In fact, for many years tobacco products have not been subject to the same rigorous regulation as many other consumer products. This is remarkable given that it is the only product which kills 50% of its consumers when used as intended by manufacturers. 

 

It is also worth remembering that in 1992 the Community imposed an outright ban on the sale of oral tobacco products because of the dangers they posed to health. This ban has not been challenged in the courts and is accepted as being a proportionate response to a particular problem. If it is acceptable to ban one tobacco product outright, how can the provisions of this directive be considered to be disproportionate?

 

 

Health protection and Article 95

 

Article 95 (3) quite clearly states that the Community shall take as a base a high level of health protection when formulating internal market proposals. This is supplemented by Article 3 (o) EC which gives the Community the task of contributing to the attainment of a high level of health protection. Finally, Article 152 states that:

 

1. A high level of human health protection shall be ensured in the definition and implementation of all Community policies and activities.

 

Over the years, the European Community has adopted numerous directives in furtherance of the internal market which have as their objective health and consumer protection. Actions taken using the internal market legal base have included the regulation of food additives,[4] pharmaceuticals[5] and the manufacture of infant formulae.[6] None of these directives has been attacked for lack of a legal base, despite laying down often detailed rules on matters such as packaging and labelling. Indeed, since the BSE, dioxin and GMO food crises, health and consumer protection is increasingly seen as the main objective of internal market measures in order to ensure not just the free movement of goods throughout the Community, but the free movement of safe goods in the Community. After all, there is no point in harmonising the internal market if all we are doing is harmonising the free movement of harmful products. This would be nonsensical.

 

Some examples of recent developments

 

As a result of the BSE crisis in 1996, policy makers in the Community have been at pains to point out that the goal of free movement of goods in the Community, either as a result of mutual recognition or harmonisation measures, should not take place at the expense of health protection. This was highlighted as a problem in the Report of the Parliament's Temporary Committee of Inquiry into the BSE crisis. In fact, the Parliament rapporteur, Mr Medina Ortega, specifically criticised several Member States for putting economic interests before health protection:

 

"Public health concerns were insufficiently taken into account by comparison with the economic imperatives of the single market"

 

Since that time, Community legislative proposals have placed as much emphasis on health protection, where appropriate, as on the completion of the internal market. A striking example is the recent Commission proposal for a directive on azocolourants (COM/99/0620/final, adopted 10 December 1999) which states in its recitals:

 

 

"The first objective of the proposal is to protect public health.

The second objective is to preserve the internal market."

 

The sole legal base of the proposal is Article 95.

 

ECJ and CFI case law

 

(a) Conflicts between the internal market and health protection

 

The Courts of Justice of the European Community have also been active in confirming the priority to be given to public health protection over purely economic and internal market considerations. In the recent Boehringer case the Court of First Instance upheld a Council directive designed to prohibit the administration of beta-agonists to food-producing animals and insisted that protection of public health must take priority over all other considerations:

 

"The Court finds that the importance of the aims pursued, namely the protection of public health, is such as to justify adverse economic consequences, even of a substantial nature, for individual traders and that the maintenance of public health must take precedence over all other considerations."[7]

 

This ruling followed on from the decision of the President of the Court of First Instance in the Pfizer case for an interim order in June 1999 that:

 

"(…) there can be no question that the requirements of the protection of public health must take precedence over economic considerations."

 

(b) Where the scientific evidence is equivocal or inconclusive

 

The ECJ in the BSE case also confirmed that health protection should take priority over economic considerations, especially where the scientific evidence is inconclusive or new, stating:

 

"where there is uncertainty as to the existence or extent of risks to human health, the institutions may take protective measures without having to wait until the reality and seriousness of those risks become fully apparent."[8]

 

Some particular aspects of the proposal

 

(a)        Labelling

 

Experience has shown that the labelling requirements of the existing directives are not respected by tobacco manufacturers. Consumers find them difficult to read and an important health and consumer information message is being lost. The EU has a legal responsibility to ensure that consumers are given product information commensurate with the dangers posed by a product. This is already done in food, pharmaceuticals and cosmetics. For several years other countries such as Canada and Australia have required warnings on cigarettes to be printed in white and black only and to cover 25% or more of the pack surface. Poland now has warnings of 30%. This has been accepted as legal and proportionate in those countries. Canada is now introducing warning labels covering 60% of the pack surface.

 

It has been suggested that because the Community has already acted to regulate warning size, no further harmonising measure is needed under the internal market rules. This position is ridiculous. Why?

 

·         Because it implies that the Community is bound by its past actions and cannot do anything to change them;

·         Because it ignores the fact that the Community legislator is not omniscient and cannot predict all the consequences of a legislative act in the future;

·         Because scientific evidence is changing all the time and the Community legislator needs flexibility to respond to such changes;

·         Because such an attitude conflicts with the duty of the Commission laid down in most internal market directives to regularly review the effectiveness of existing legislation and to adapt it to scientific and technical change;

·         Because Parliament's role would be severely undermined if it were unable to respond to changing circumstances or to call for changes to ineffective legislation;

·         Because the CFI and the ECJ have consistently stressed that the Community legislator has a wide discretion when legislating which is nevertheless subject to judicial review for legality.[9]

 

As the ECJ held in Boehringer, when it becomes clear that one directive in a particular sector has not resolved all existing problems, it is entirely appropriate to harmonise further by means of an additional directive in order to improve 'the overall level of protection of human health.'[10] It should also be remembered that in December 1999 the Commission adopted a proposal amending Council Directive 76/769/EEC on restrictions on the marketing and use of certain dangerous substances and preparations for the 22^nd time and many other directives such as Directive 65/65/EEC on the authorisation of medicinal products have been subject to a substantial number of amendments over the years.

 

(b)        Additives

 

The Commission proposal aims to start the process of supplying information about the use of additives in tobacco products to Member State authorities. So far, only a few Member States have any legislation to regulate additives used in cigarettes and governments do not know why such additives are used or their effect on human health. It therefore makes legal sense for the Community to begin harmonising this aspect of tobacco production. However, the proposal in its current form intends to give the tobacco industry trade secrecy. This is not justifiable from a consumer and health protection point of view. Such secrecy is not extended to other products and should not be given to products as dangerous as tobacco. The Community has already recognised this principle concerning other products in Council Directive 92/59/EEC of 29 June 1992 on general product safety. Article 12 of the Directive provides professional secrecy 'except for information relating to the safety properties of a given product which must be made public if circumstances so require, in order to protect the health and safety of persons.' In addition, the tobacco industry has been obliged to publish such results in British Columbia and other jurisdictions and these are available globally on the website of the government of British Columbia.[11]

 

(c)        The use of terms such as 'light' and 'mild'

 

The Commission proposal prohibits the use of terms such as 'light' and 'mild' to describe tobacco products, except where Member States authorise such terms. These and all such terms are implied health claims and should not be permitted at all. The fact that they are implied heath claims is admitted by the tobacco industry in internal documents. Although there is no current Community law on implied health claims, the new Commission Food Safety White Paper proposes that such terms should be strictly regulated with regard to their use on food products. Given that tobacco is more intrinsically dangerous than food, this principle should be extended to tobacco.

 

It can also be argued that they are misleading product terms.  Misleading product descriptions are not permitted under EC law for other types of products.[12] For example,  existing Community legislation prohibits the use of terms denoting geographical origin such as champagne for products which do not come from that region. This is done on the grounds that the use of such terms is capable of misleading consumers about the nature or qualities of a product. If protection can be given in EC law to a geographical region, surely it is only right that similar protection should be given to consumer health.

 

(d)        The intellectual property aspects of Article 10

 

It has been argued that the Commission proposal interferes with the property rights of the tobacco manufacturers to make use of registered trademarks. This is not the case, as international trademark protection treaties such as the TRIPS agreement stipulate that signatory Member States may provide exceptions to the rights conferred by a trademark, such as fair use of descriptive terms, provided that such exceptions take account of the legitimate interests of the owner of the trademark and of third parties[13]. Again, the scale of the public health risks associated with the use of tobacco products demands that such prevention of and protection from such risks take priority over any commercial rights of tobacco manufacturers.

 

Furthermore, the Director-General of the World Intellectual Property Organisation (WIPO) has stated:

 

"The Paris Convention [for the Protection of Industrial Property] obliges its members to register a mark even where the sale of goods to which such mark is to be applied is prohibited, limited or subject to approval by the competent authorities of such states."

"Therefore, countries party to the Paris Convention remain free to regulate the sale of certain types of goods and the fact that a mark has been registered for such goods does not give the right to the holder of the registration to be exempted from any limitation of using the mark."[14]

 

(e)        Applicability of the directive to export markets

 

The Commission proposal provides that certain provisions will apply to products manufactured for export to third countries outside the Community. This has been challenged as illegal in certain quarters. However, such action has been taken before and upheld by the ECJ. In the BSE case (see above) the Court of Justice upheld the world wide export ban imposed on the export of British beef by the Commission on the ground of possible public health hazards caused by the risk of  'deflections of trade'.[15] The Court accepted Commission arguments that the risk of reimportation of such products back into the Community justified the ban. Given the growth in the global smuggling of tobacco products and the risk of importation of such products manufactured for export back into the Community, the same principle should apply here.

 

Finally, it should also be noted that this aspect of the proposal was accepted by all the Directorates-General of the Commission, including the Legal Service and Enterprise who gave the proposal a favourable opinion.

 

Other aspects of tobacco control not included in the Commission proposal

 

(a)        Legal options for action on smoking in work places and young people

 

The Commission proposal concerns only the regulation of tobacco products and contains no provisions on the protection of non-smokers in the workplace nor of young people specifically. However, it would be possible to bring forward a proposal for a directive to protect non-smokers in the workplace under Article 137. Measures to protect young people may be possible in the form of recommendations and in the public health protection programmes under Articles 152 and 153 or, where appropriate, under Article 95, as well as in the Community Fund for Research in Tobacco.

 

(b)        Liability of manufacturers and importers for failure to comply with the terms of the proposed directive

 

It has been suggested that manufacturers and importers should be made liable for any failure to comply with the terms of the proposed directive. This is not a new concept and such clauses are present in a number of existing EC directives. See for example, Article 5 of Directive 92/59/EC on general product safety, and Article 4 of the Misleading Advertising Directive 84/450/EEC.

 

The possibility of allowing third parties with a legitimate interest to take action against infringements of the directive should also be considered. Article 4 of Directive 98/43/EC on tobacco advertising contains such a provision.

 

Why we should not wait for the ECJ ruling on the tobacco advertising directive

 

Certain commentators have suggested that we should wait for the ruling on the legality of Directive 98/43/EC before proceeding with this proposal on tobacco product regulation. There is no legal justification for this. This proposal is a recast of three existing EC tobacco directives, all of which are legally based on the internal market Article 95 (100a) EC. The legality or otherwise of Directive 98/43/EC has no bearing on the Community's right to bring forward a further tobacco product directive. The legal base of the existing directives has never been questioned, despite their health protection aspect (and the fact that their recitals mention health many times, as do those of non-tobacco internal market harmonising directives such as 79/112/EEC; 76768/EEC and 92/28/EC).

 

In areas where the proposal legislates for the first time (nicotine yields and additives etc.), there is ample justification to do so, given the variations in national legislation.

 

Conclusion

 

The Commission proposal for a further tobacco product regulation directive is validly based on Article 95 EC and firmly respects the principles of subsidiarity and proportionality whilst continuing the harmonisation of the internal market and the protection of health and the consumer. Its provisions are consistent with previous tobacco product directives, subsequent treaty changes at Maastricht and Amsterdam and evolving ECJ case law.