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Calls to reject tobacco traceability and security measures

22 November 2017

ITSA is urging EU Member States not to accept draft implementing regulations for track and trace, security features and data storage, proposed under the EU Tobacco Products Directive (TPD).

In its latest positioning paper on the proposed regulations, the global trade body for the tax stamp industry lays bare its concerns about the regulations and is calling on Member States to reject them unless they are substantially amended.

ITSA is particularly worried that, as the draft proposals currently stand, there will be no guarantee of independence from the tobacco industry, as well as no guarantee of a completely interoperable system based on open standards. Furthermore, the trade body believes the technology will not be able to provide the requisite levels of protection against the illicit trade in tobacco products.

In ITSA’s view, it is not acceptable that Member States should have to adopt a system that paves the way for tobacco manufacturers to manipulate pack-level unique identifiers for their own advantage, and use their own on-pack security features and data repository provider. Member States are being urged not to accept this system and instead press for substantive changes to be made to the draft regulations before it’s too late, in order to ensure independence from the tobacco industry.

ITSA says there’s already a precedent, with the French government opting for this route and rejecting the draft regulations, on the grounds that they are not in line with the WHO FCTC Protocol. This calls for a traceability system that is completely independent from the tobacco industry. A spokesperson for ITSA said: “The key issue is a lack of independence from the tobacco industry. There would be far-reaching negative consequences by accepting the regulations as they stand, compromising the integrity, security and effectiveness of the TPD. “It’s paramount to avoid such compromise, even if it means deferring the deadline for adopting the regulations.”

Another concern is that Member States are under undue pressure to decide on the draft regulations, on the basis that any further delay would put at risk the EU-wide implementation of a system before the 20 May 2019 deadline. ITSA believes that any governance model for a secure track and trace system designed to control a particular industry, should not be based on trusting that industry, because the underlying conflict of interest means that industry will likely find ways to circumvent those controls. This has been the case in the tobacco industry, and ITSA wants to see a potential solution for a secure and effective track and trace programme which combines a serialised unique identifier with material-based security features. Under its proposal, an identifier would be integrated into a tax stamp provided by a party that is independent of the tobacco industry – such as a government security printer.

Many tax stamps now carry unique identifiers with the potential to comply with the tracking requirements of both the FCTC Protocol and the TPD. These identifiers are often incorporated within a layered security structure on the stamps that combines overt and covert security features in line with the widely recognised principles and standards of high security protection and unique identification systems. The ITSA spokesperson added: ““We feel that it is possible to implement these systems quickly and successfully, especially in those countries which already have tax stamp programmes in place. “Over 140 billion tobacco and alcohol stamps in the form of securely affixed labels are issued every year by over 150 provincial and national revenue agencies around the world. Such devices, which are used by large and small tobacco producers in 23 EU states, can be adapted swiftly to meet TPD requirements. “We believe that only a combination of authentication and track and trace technologies, composed of both physical and digital features and operated by an independent third party, can effectively meet the needs of both the WHO FCTC Protocol and the EU Tobacco Products Directive.”


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