When the European Commission (EC) published its final draft proposal on a cigarette track and trace (T&T) system, it was quickly criticized for leaving a backdoor for the tobacco industry. The EC sternly rejected the criticism, but condemnation continues to come in from all sides. The locus of the fiercest opprobrium is the fact that the system currently being explored would be a mixture between a third party-operated and an industry-controlled system. Since Big Tobacco naturally represents a vested interest, a system split in such a way would not just violate international agreements like the World Health Organisation (WHO) Framework Convention on Tobacco Control (FCTC) – it would also violate common sense.
Big Tobacco is already ensuring its smoky tentacles are clogging up the process. Katharina Kummer Peiry, a senior legal officer of the WHO’s FCTC Secretariat, has been accusing the tobacco industry of “interfering” to slow down the global FCTC ratification process. Industry representatives have also sought to convince several countries that the EU’s proposed system will be too complex and that the tobacco industry can offer a better one. They also insist that giving the job of overseeing the T&T project to an unrelated third party is tantamount to squandering “millions”, while stoking fallacious concern that independent “proprietary solution providers [will push] unproven solutions on to governments.”
That‘s quite a statement from an industry with a proven track record of trying to subvert international bodies and do exactly that. To do so, the four big tobacco companies – British American Tobacco (BAT), Imperial Tobacco Group, Japan Tobacco International and Philip Morris International (PMI) – joined hands to form the benign-sounding Digital Coding and Tracking Association (DCTA). Under its guise, the companies sought to turn the European Committee for Standardization (CEN) into a Trojan Horse to lobby for the use of its own tracing technology, Codentify – but were stopped in their tracks last year.
In 2016, Codentify’s ownership was transferred to French group Impala and rebranded as Inexto, supposedly fully independent of the tobacco industry. Given that the firm is run by former PMI heavyweights, this claim is hardly credible. Its managing director is Philippe Chatelain, the brains behind the Codentify system and PMI’s Director of Product Tracking Intelligence & Security for 14 years.
But one year on, the EC does not seem to have learned any lessons about tobacco’s trustworthiness. Not only has it caved to Big Tobacco’s pressure, but is so keen to pacify the tobacco sector that its proposal is violating its own standards. Article 8 of the “Commission Implementing Decision on technical standards for security features applied to tobacco products” is dedicated to the ‘independence of authentication element providers’ and notes several criteria a provider must fulfil to be considered independent. The draft regulation defines a company independent from undue influence if it gets no more than 20% of its income from the tobacco industry. Needless to say, Inexto cannot be said to meet any of them.
But the tobacco industry is not satisfied with this lobbying victory. It’s also taking aim at rival and favoured candidate for running the third-party segment of the T&T system, Lausanne-based company SICPA. A fierce campaign was unleashed against the company in the weeks before the proposal’s publication, arguing that if the Commission awards the contract to the printing technology firm, it would be granting it a monopoly over the track and trace sector – although that sector is by no means limited to tobacco and is a huge untapped market.
Big Tobacco’s motives were rather transparent here, for this is not the first time big tobacco has attempted to score points against SICPA when its own interests are at risk. An earlier campaign in Kenya backfired when BAT’s allegations only served to draw attention to its propensity to bribe officials, such as former Kenyan Justice Minister Martha Karua. She allegedly received around £50,000 in order to supply BAT with confidential information it could use against its competitors.
Yet bribery is only the tip of the iceberg. An investigation by The Guardian found that BAT, along with other multinational tobacco firms, has threatened governments in at least eight countries across Africa, demanding that measures designed to discourage smoking be watered down or abandoned. According to the report, even warning packets on cigarette packets, for example, were lambasted as “an unjustifiable barrier to international trade”.
Considering this amount of malicious activity, the problem is that the European Commission is trying to play nicely with an industry that has never and will never play nice. Tobacco’s aim remains profit over people, and it has demonstrated this time and time again. So the fact that the European Commission is diluting the application of the FCTC in Europe to tobacco’s benefit is nothing short of tragic.
The tobacco industry has a vested interest in ensuring that an independent tracing system is not all that independent. And although cigarette producers were found to be complicit in smuggling operations as recently as 2014, it looks increasingly like the EC will allow Big Tobacco to have its way and exert some influence over the technical side of its T&T.
Cigarette packs may well be tracked, but if the tobacco industry has its way, they won’t easily be traced.
Illicit tobacco trade: Nearly 370 million cigarettes seized in 2020
International operations involving the European Anti-Fraud Office (OLAF) led to the seizure of nearly 370 million illegal cigarettes in 2020. The majority of the cigarettes were smuggled from countries outside the EU but destined for sale on EU markets. Had they reached the market, OLAF estimates that these black market cigarettes would have caused losses of around €74 million in customs and excise duties and VAT to EU and member state budgets.
OLAF supported national and international customs and law enforcement agencies from across the world in 20 operations during 2020, in particular providing vital information on the identification and tracking of lorries and/or containers loaded with cigarettes misdeclared as other goods at the EU borders. OLAF exchanges intelligence and information in real time with EU member states and third countries, and if there is clear evidence that the shipments are destined for the EU contraband market, national authorities are ready and able to step in and stop them.
OLAF Director-General Ville Itälä said: “2020 was a challenging year in so many ways. While many legitimate businesses were forced to slow or halt production, the counterfeiters and smugglers continued unabated. I am proud to say that OLAF’s investigators and analysts played a vital role in helping to track and seize these illegal tobacco shipments, and that OLAF’s cooperation with authorities across the globe has remained strong despite the challenging conditions. Our joint efforts have not only helped save millions of euros in lost revenues and kept millions of contraband cigarettes of the market, they have also helped us get closer to the ultimate goal of identifying and closing down the criminal gangs behind this dangerous and illegal trade.”
A total of 368,034,640 cigarettes destined for illegal sale in the EU were seized in operations involving OLAF during 2020; of these 132,500,000 cigarettes were seized in non-EU countries (primarily Albania, Kosovo, Malaysia and Ukraine) while 235,534,640 cigarettes were seized in EU member states.
OLAF has also identified clear patterns with regard to the origins of this illicit tobacco trade: of the cigarettes seized in 2020, some 163,072,740 originated in the Far East (China, Vietnam, Singapore, Malaysia), while 99,250,000 were from the Balkans/Eastern Europe (Montenegro, Belarus, Ukraine). A further 84,711,900 originated in Turkey, while 21,000,000 came from the UAE.
The main cigarette smuggling operations reported by OLAF in 2020 involved collaborations with authorities in Malaysia and Belgium, Italy and Ukraine, as well as a number involving authorities from across the EU and elsewhere.
OLAF mission, mandate and competences
OLAF’s mission is to detect, investigate and stop fraud with EU funds.
OLAF fulfils its mission by:
- Carrying out independent investigations into fraud and corruption involving EU funds, so as to ensure that all EU taxpayers’ money reaches projects that can create jobs and growth in Europe;
- contributing to strengthening citizens’ trust in the EU Institutions by investigating serious misconduct by EU staff and members of the EU Institutions, and;
- developing a sound EU anti-fraud policy.
In its independent investigative function, OLAF can investigate matters relating to fraud, corruption and other offences affecting the EU financial interests concerning:
- All EU expenditure: the main spending categories are Structural Funds, agricultural policy and rural
- development funds, direct expenditure and external aid;
- some areas of EU revenue, mainly customs duties, and;
- suspicions of serious misconduct by EU staff and members of the EU institutions.
Tobacco Excise Directive consultation: 83% of submissions warning about higher taxes on vaping
The World Vapers’ Alliance strongly urges policymakers to stay away from equating smoking tobacco and vaping, especially when it comes to taxation. This comes off the heels of a recently ended consultation on the update of the Tobacco Excise Directive, which specified the European Commission’s intention to tax vaping products similarly to how cigarettes are taxed.
Commenting on the consultation, WVA Director Michael Landl said: “Making vaping less appealing to smokers by higher prices will discourage current smokers from switching to less harmful alternatives. This is certainly not going to be of any public health benefit. Additionally, high taxes on vaping products are particularly harmful to the lower income brackets of the population, which make up the largest proportion of current smokers.”
The consultation ended on 5 January and out of 134 responses from citizens, associations and industry, 113, or 84% referenced the positive impacts of vaping and the serious negative impact that taxing it the same as cigarettes would have.
Michael Landl added: “I am delighted by the overwhelming number of responses in favour of vaping to this consultation. It shows that many people know the potential for harm reduction of vaping. . What policymakers need now to understand is that tax hikes on vaping will lead to people switching back to smoking, an outcome absolutely nobody wishes for.”
Therefore, for the WVA it is important that non-combustible products are not regulated and taxed the same way combustible tobacco is. Lawmakers need to follow the scientific evidence and abstain from tighter regulation and higher taxation of vaping products.
“If we want to reduce smoking induced burdens on public health, access and affordability to vaping products need to be guaranteed,” Landl concluded.
Europe’s Beating Cancer Plan: Time to back vaping and beat cancer
Europe’s Beating Cancer Plan needs bold action on tobacco, and MEPs must Back Vaping to Beat Cancer, according to the World Vapers’ Alliance. The Special Committee on Beating Cancer (BECA) today identified that ‘tobacco use, in particular cigarette smoking is the main risk factor for cancer death in Europe’.
Commenting on the new document, World Vapers’ Alliance (WVA) Director Michael Landl said: “To succeed in its mission, the BECA committee and the European Parliament must be brave enough to endorse new approaches. Vapers across Europe are calling on policymakers to recognise the benefits of vaping, and its potential to massively reduce the harm of smoking. Policymakers cannot ignore the facts any longer.
"We appreciate the commitment from MEP Mrs. Véronique Trillet-Lenoir and the entire Special Committee on Beating Cancer to fight smoking-related cancer. The Europe Beating Cancer Plan needs to endorse vaping as an effective tool to help smokers move to a safer alternative. That’ Back vaping, beat cancer!”
The new working document presented in today’s Special Committee on Beating Cancer (BECA) by the Committee's rapporteur MEP Véronique Trillet-Lenoir states that: “Tobacco use, in particular cigarette smoking, is the main risk factor for cancer death in Europe. Various measures to fight against smoking appear heterogeneous and inconsistently implemented. Overall, the WHO Europe region is the global area with the highest tobacco consumption, with major discrepancies between Member States, as the proportion of smokers varies by a factor of up to 5 from one country to another.”
The European Parliament’s Special Committee on Beating Cancer (BECA) met for the second time today for an exchange of views with Health Commissioner Stella Kyriakides.
As part of the Committee’s work, a draft WORKING DOCUMENT on Inputs of the Special Committee on Beating Cancer (BECA) to influence the future Europe’s Beating Cancer Plan was released by the Committee and its rapporteur Veronique Trillet-Lenoir. It identifies that tobacco is the main risk factor for cancer death in Europe. You can find the document here.
The World Vapers’ Alliance (WVA) amplifies the voice of vapers around the world and empowers them to make a difference for their communities. Our members are vapers associations as well as individual vapers from all over the world. More information available here.
Michael Landl is the director of the World Vapers’ Alliance. He is from Austria and based in Vienna. He is an experienced policy professional and passionate vaper. He studied at the University of St. Gallen and worked for several public policy outlets and as well in the German Parliament.
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