ITSA wants EU to reject tobacco security measure plan

The international tax stamp industry has once again urged EU member states to reject the security measures proposed in the Tobacco Product Directive, saying they are not fit for purpose.

In its latest positioning paper on the proposals, the International Tax Stamp Association (ITSA) says they provide “no guarantee of independence from the tobacco industry, as well as no guarantee of a completely interoperable system based on open standards.”

The TPD – which was introduced in 2014 and became applicable in the EU Member States on 20 May 2016 – includes a requirement to implement new measures to combat the illegal trade in tobacco products. These are based on an EU-wide tracking and tracing system and a security feature composed of visible and invisible elements (e.g. holograms) intended to help law enforcement bodies, national authorities and consumers detect illicit products.

The measures are scheduled to become mandatory for cigarettes and roll-your-own tobacco on May 20, 2019, and to other tobacco products in 2024. Illicit trade in tobacco products is estimated to be a $40bn to $50bn-a-year problem.

A draft delegated regulation for the traceability and security measures – published in September – came to the end of a consultation process on October 2 but has come under fire for entrusting the tobacco industry with elements which should be under independent member states’ control, including the traceability proposals.

The tobacco industry has been pushing for the adoption of a serialised coding system – known as Codentify – that takes the form of a unique sequence of 12 numbers and letters that would be printed on the tobacco packs at the point of manufacture.

The ITSA maintains the technology will “not be able to provide the requisite levels of protection against the illicit trade in tobacco products,” and 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.”

The French government has already rejected the draft regulations, it notes, on the grounds that they are not in line with the WHO Framework Convention on Tobacco Control (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.”

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.

“It’s paramount to avoid such compromise, even if it means deferring the deadline for adopting the regulations,” said the spokesperson.