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Tax Stamp Body Briefs EU Government on Flaws In Tobacco Track and Trace Legislation

20 September 2017

THE international tax stamp industry will share its concerns over how the implementation of the track and trace and security feature requirements of the EU Tobacco Products Directive (TPD) is developing, at a meeting of key stakeholders next week.

ITSA, which represents those who produce tax stamps, product authentication and secure track and trace systems for tobacco and other products, believes the draft delegated acts contain flaws related to independence, interoperability, and security to counter illicit practices and trade. The trade body is so concerned about how the implementation of the track and trace and security feature requirements of the TPD is developing, that it has called the meeting on September 26.

The move, which comes as ITSA prepares to respond to the draft acts for track and trace and security features, will see MEPs, other government stakeholders and NGOs gather in Brussels to hear that the legislation gives no guarantee of independence from the tobacco industry, and nor does it provide strong authentication tools to controllers and consumers.

ITSA believes it is crucial that EU officials are made fully aware of these failings and loopholes. Drawing on its members’ practical experience ITSA will set out recommendations as to how the drafts can be changed to comply with both the TPD and WHO Framework Convention on Tobacco Control (FCTC). Juan Yañez, chair of ITSA welcomes the opportunity to highlight concerns to MEPs. “We have seen the recently released draft secondary legislation for Articles 15 and 16 of the TPD and, in common with the WHO and numerous NGOs, we are very concerned,” he says.

He points out that the legislation, as currently drafted, would mean manufacturers could ‘manipulate’ the unique identifier for track and trace purposes, by being able to print – or not – onto the cigarette packs themselves. Furthermore, the legislation appears to leave it up to manufacturers to select some of their own security features, which has ‘serious drawbacks’, according to ITSA. “Only one security feature out of five needs to be provided by an independent third party. So, what does that mean for the other four?” asks Juan Yañez. “We’re concerned that the draft legislation has serious flaws in terms of control, security, and independence from the tobacco industry. “It is not enough to claim to respect the intent of the WHO FCTC and its Protocol to Eliminate Illicit Trade in Tobacco Products; this has to be matched with provisions which work in practice. The current delegated acts do not. This message needs to be conveyed to MEPs, member states, and others, who will be interested to hear the necessary alternative voice.”

Over 140 billion tobacco and alcohol tax stamps in the form of securely affixed labels are issued every year by over 150 provincial and national revenue agencies around the world. Included in this number are 23 out of the 28 EU member states who use tobacco stamps.

“This means that many manufacturers are already equipped with tax stamp applicators on their production lines and the continued use of this equipment for track and trace purposes would be neither disruptive nor costly to manufacturers.We believe that only an interdependent combination of visual authentication and track and trace technologies, composed of both physical and digital features produced by an independent third party, and where the only intervention by tobacco producers consists of applying the features to the product, can effectively meet the needs of both the WHO FCTC Protocol and the EU Tobacco Products Directive.”

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ITSA was founded by several leading industry companies and stakeholders to ensure the better understanding of the benefits of tax stamp technology and to promote the highest professional standards within the sector.

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