BRUSSELS, 27 June 2017 – There is no Plan B for fighting illicit trade of tobacco products if the European Union adopts a tobacco industry-controlled tracking and tracing system, warned international experts and advocates. The calls were made during the High Level Conference on the Illicit Trade of Tobacco Products organised by the Smoke Free Partnership at the European Parliament in Brussels today. The conference was hosted by Francoise Grossetête MEP and co-hosted by MEPs Karin Kadenbach and Bart Staes, and aimed to bring to the forefront a public health perspective on the ongoing discussions.

The EU faces a tight adoption timeline of delegated and implementing acts to implement the standards for an EU system for tracking and tracing until the end of 2017, to be operational by mid-2019. As a proposal and impact assessment have not yet been published, public health organisations and international experts in illicit trade expressed concern on whether the EU will be able to comply with the requirements of the Illicit Trade Protocol, which the EU and 6 Member States have already ratified. If the EU adopted a non-compliant system, this would complicate the ratification and entry into force of the Protocol in other parts of the world.

There are two main ways in which the tobacco industry could influence the tracking and tracing system.

• The definition of “independence” of the tracking and tracing systems, which is called for in the Tobacco Products Directive and in the Protocol. SFP and international experts called for strict criteria for ensuring the independence of the operators, in particular to ensure that operators have no prior links with the tobacco industry.
• The level of complexity of the system - as the devil is in the detail, high complexity will prevent public health officials from inputting into the process because of its perceived technicality. This would leave the negotiations in the hands of technical experts who do not necessarily attach importance to the public health aspects or to the Protocol.

Against this background, the tobacco industry is actively promoting myths about the tracking and tracing system in order to promote its own system Codentify, now owned by Inexto, a company controlled by tobacco industry employees. These myths were discussed at length during the conference.

• The tobacco industry portrays the cost of the system as high on governments and offers its own system for free to encourage governments to adopt it. However the Illicit Trade Protocol provides clearly that each party can require the tobacco industry to bear any costs associated with the system.
• The tobacco industry portrays the perceived cost of the system as high on SMEs. However, these costs will fall on the tobacco manufacturers, which as per the Tobacco Products directive will have to provide economic operators with equipment. In addition, SMEs (retailers) will benefit from reduced illegal sales.
• The tobacco industry portrays the system as costly on retailers. However the TPD requirements for the tracking and tracing system do not apply to them. 
  In the coming weeks the European Commission will publish a proposal for delegated and implementing acts under Articles 15 and 16 of the Tobacco Products Directive. These will be discussed and adopted by representatives of Member States with an aim to adopt them before end of the year. On 12 July, the EP Committees on Budgetary Control and on Environment, Public Health and Food Safety will hold a joint exchange of views on this topic.

Quotes:

Deborah Arnott, Chief executive of Action on Smoking and Health (UK) said, “The EU is the first region in the world to develop a transnational tracking and tracing system of tobacco products, with the potential to control tobacco smuggling far more effectively than is currently the case. But any system has to be truly independent of the tobacco industry which for too long has allowed its cigarettes to be smuggled. There’s an old saying that you shouldn’t let the fox guard the henhouse, never more true than for an industry whose products kill millions, with blood on its hands.”

Dr. Hana Ross, Principal Research Officer, Professor Level, University of Cape Town, South Africa, and Emory University, Rollins School of Public Health, said: “The tracking and tracing system is based on the concept of mistrust as opposed to trust. Any solution that will rely on “trusting” an industry that has incentives to circumvent controls is bound to fail. If the controls are not robust enough, the system has the potential to do the opposite of what it is intended to do – providing a false sense of control where detection of fraud would be nearly impossible.”

Francis Thompson, Executive Director, Framework Convention Alliance, said: "International negotiations to control illicit trade in tobacco products were triggered by decades of tobacco companies profiting from smuggling, and the European Union played a key role in reaching a global agreement on the topic. It is ironic that, before that agreement comes into effect, the EU could hand power over critical aspects of its own smuggling-control systems to the tobacco industry."

Prof. Anna Gilmore, Professor of Public Health and Founding Director of the Tobacco Control Research Group (TCRG), University of Bath, said: “The EU has a simple question to answer: does it want hand control of a system intended to control tobacco smuggling to an industry with a long history of involvement in tobacco smuggling? Doing so would not only contravene and undermine a global treaty but it would diminish the EU’s standing in the rest of the world.”

IMPORTANT NOTES FOR EDITORS:

• Tracking and tracing refers to the determination of the current, past and future location of all tobacco packaging such as packs, cartons, master cases and pallets through the supply chain, from the manufacturer, importer, exporter, trader to distributor and retailer. It should also be sufficiently secure to prevent any unauthorised user from having access to confidential information, and specifically any access to information in the system which might disclose investigations and enquiries from enforcement authorities. The main purpose of a tracking and tracing system is the control and monitoring of tobacco products through the supply chain, enabling investigations by authorised enforcement authorities into tobacco smuggling. The system should enable the identification of the point in the supply chain where tobacco products that have been lawfully manufactured are diverted into the illicit market. It should enable the aggregation of data for the analysis of trends and characteristics of the tobacco market and of illicit trade.