Philip Morris Thai Unit Faces Tax Charges - Police

[churchill]

BANGKOK (Reuters) - The Thai unit of Philip Morris International Inc faces charges that it violated customs tax rules by understating the prices of imported cigarettes, a Thai police official said on Thursday.

Philip Morris (Thailand) denied the allegations.

The head of the Department of Special Investigation (DSI), Thewee Sodsong, told Reuters the case had been submitted to the public prosecutor, adding: "It's up to the prosecutor what the next step will be."

The distributor of Marlboro and L&M cigarettes is accused of deception from 2003-2007, causing a loss of 69 billion baht ($2.03 billion) in taxes.

If the Attorney General's office agrees with the DSI's submission, the case could go to court.

No one at Philip Morris (Thailand) was immediately available for comment, but the company issued a statement saying it was confident the prosecutor would conclude that its actions were in accordance with international and Thai customs valuation methods.

"The DSI's allegations concerning our declared customs values are no different than those first reported in the press in 2006 and we believe they have no merit," it said.

Thai media reported that 10 Thai executives of Philip Morris had been summoned by the DSI to acknowledge charges of breaching the Customs Act and the Tobacco Act on Oct. 2.

The DSI has also obtained arrest warrants for four foreign executives who have fled.

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-- Reuters 03/09/09