• March 29, 2024

Protocol and TPD ‘mismatches’

 Protocol and TPD ‘mismatches’

The International Tax Stamp Association (ITSA) said today it was seeking clarification of parts of the European Commission’s latest report on technologies that could be used to tackle the illegal trade in tobacco products.

The ITSA was responding to the EU Inception Impact Assessment of July 5, which is intended to help the implementation of traceability and security standards required by the revised Tobacco Products Directive (TPD).

While welcoming the report’s clarification of the issues to be faced in ensuring that tobacco products can be tracked and traced effectively, ITSA members said they had questions.

In particular, ITSA said it was concerned that the latest report did not seem to take into account the protocol to eliminate the illegal trade in tobacco products, which was put together by the World Health Organization’s Framework Convention on Tobacco Control (FCTC) and which the EU ratified in late June.

‘The protocol is designed to promote public health and safety through tackling the problem of illegally traded tobacco products, which has multiple negative consequences, including that of undermining price as a tool for tobacco control,’ the ITSA said. ‘By tackling this illicit activity the protocol also helps to secure tax revenues.

‘Although the report recognizes that certain policy options will require additional legal analysis to make sure they are compatible with both the TPD and the protocol, ITSA questions how these options properly reflect the obligations of the protocol. There are mismatches between the protocol and the directive, which have yet to be legally clarified.

‘In particular, the provisions of Article 8 of the protocol make it clear that the system to be put in place should be controlled by the appropriate statutory authorities and not performed or delegated to the tobacco industry. This puts into question the legitimacy of proposed options, which are based fully or partly in existing industry operated environments.

‘Furthermore, ITSA’s position is that only a combination of authentication and traceability systems, such as those already in use by governments in national authentication and traceability programs, possess the capability to meet the traceability, security and anti-tampering requirements of the EU.

‘In this respect, ITSA also wants to see clarified the apparent inconsistencies in the approaches and options set out in the EC’s 2015 Feasibility Assessment on tracking, tracing and security technologies capable of meeting the needs of the TPD.

‘For example, the Inception Impact Assessment’s suggestion that there is a possibility that affixed security features may be removed, potentially hampering the identification of genuine products, has been highlighted as incorrect by ITSA.

‘The Association points out that special adhesives are available that make it impossible to remove or alter a stamp without destroying it or compromising the product packaging. Furthermore, the tax stamps are most often applied under the cellophane wrap of the pack, which prevents them from being removed without removing the wrap.’

“We welcome the continuing interest and focus of the European Commission on the introduction of new measures aimed at securing the international supply chain for tobacco products,” said Nicola Sudan, general secretary of ITSA.

“However, now that the EU has ratified the WHO FCTC protocol it is essential that appropriate technical standards are developed that comply with the directives of the FCTC Secretariat.

“Tackling the illicit trade in tobacco products and its threat to government finances and to public health, represents a considerable challenge.

“In this respect, we firmly believe that the proven digital and physical solutions provided by tax stamp technology is uniquely placed to meet this challenge, and we will be continuing to make our case for the industry as part of the consultation process.”