“New rules help the fight against illegal tobacco products”

Tobacco products are not healthy, but must nevertheless meet legal requirements. Evelien de Boer (VWS) and Beppie Schoute Oud (Dutch Customs) on new possibilities for countering counterfeit cigarettes.

Under the terms of the European Tobacco Products Directive, as from 20 March 2019 all cigarette and hand-rolling tobacco packets must carry a safety feature stamp and a unique identifier. The new measures are intended to facilitate the fight against the smuggling of illegal tobacco products. To enforce them, the Dutch Ministry of Health, Welfare and Sport (VWS) – responsible for their implementation – wants to cooperate with Dutch Customs. A beneficial circumstance is that Customs’ current excise stamp meets the EU-requirements in full and can serve as a safety feature stamp.

“The excise legislation in itself was working well for us”, says customs officer Beppie Schoute Oud (right on the photo). “Based on the legislation we carry out checks on tobacco products, combat counterfeits and collect excise duty. We’re pleased that the European Tobacco Products Directive is providing us with extra powers of control and the option of imposing higher fines. The new measures also provide a consumer guarantee. Because although legal tobacco products are not healthy, they nevertheless meet all legal EU-requirements.”

Strictly outlined requirements
Evelien de Boer of VWS (left on the photo): “The European Tobacco Products Directive, which dates back to 2014, consists of various regulations. Some of these, like compulsory health warnings on packaging and a ban on cigarettes and hand-rolling tobacco with aromas have been in force since 2016. However, this does not apply to the articles intended to curb the illegal trade, like the European implementing regulation 2018/574 enacted at the end of 2017 and the 2018/576 implementation decision. For the time being, the new European rules will apply for all cigarettes and hand-rolling tobacco as from 20 May 2019, and for all other tobacco products, including cigars and waterpipe tobacco, from 20 May 2024. In the Netherlands, starting on 20 May next, all package units must bear a unique identifier and an unforgeable safety feature stamp. The requirements that these two need to comply with and when the stamps need to be placed have been specified in detail. Individual member states are free to decide who they contract to supply the unique identifier and how the measures are enforced. No overarching European system is going to be introduced to take care of all this.”

All movements recorded
“The precise appearance of the unique identifier, which will form part of a track and trace system, is not yet known”, says Schoute Oud. “There are different formats conceivable, like a barcode, a QR code or a hologram. Compare it to a post package that’s monitored from the sender to the recipient. In the case of a packaging unit, basic data will be recorded like the manufacturer’s name and the serial number of the machine that produces the cigarettes. Subsequently, all parties involved in marketing the tobacco, from the transporter to any storage location, will record their own steps in the logistics process using a hand scanner. The only party that will not need to register will be the end point, the street corner tobacconist’s shop, for example.”

Alleviating concerns
De Boer: “Initially, the new measures were met with resistance from the tobacco industry. Who would provide the codes? What would it all cost? And where would all the data on logistics chains be stored? I can imagine it being rather nerve-wracking for producers who still don’t know what’s going on while the deadline set by Brussels is fast approaching. We’ve done our best to alleviate all concerns. However, the Dutch government is bound by Article 5.3 of the World Health Organization framework convention on tobacco control. This makes requirements for our communication with the tobacco industry. We only inform the industry of how we are going to implement the European Tobacco Products Directive and tell them that businesses can tailor their own processes accordingly. In February this year, for instance, we were able to communicate that VWS had designated IT-specialist Atos as the party who producers and importers can directly apply to for the necessary identification codes. The company made a fast start and organized an information meeting for the tobacco sector, and will shortly present its own information site. A data warehouse is to be accommodated in Brussels where if so required, member states can obtain data for their supervisory activities. In addition, VWS has a separate website on this subject, set up in www.government.nl.”

Nonetheless, Schoute Oud too understands that the market would have liked to have been duly informed earlier on. “But we couldn’t have possibly informed all the players much faster. Although the Tobacco Products Directive has been around for longer, the implementing regulation and the implementation decision only took effect at the end of 2017. And it was only based on them that we could start thinking up concrete solutions. Furthermore, for various reasons, there was no immediate consensus in Brussels between the member states on all the ins and outs. One country produces more tobacco than the other one, for instance. But the EU has dealt with it well by organizing various webinars and meetings for the sector on the upcoming changes.”

Adopting existing solutions
And then there’s the excise stamp. “This stamp must have a number of visible and invisible characteristics and a semi-visible one, produced by specialists”, explains Schoute Oud. “The precise specifications are secret of course. To date, with the exception of a couple of clumsy copies, no forgeries have emerged. It’s a sound product that fully complies with the Tobacco Directive and covers 90 per cent of the market. Tax-free shops count for the other 10 per cent. The tobacco products sold there do not require an excise stamp. But in that area too, we were able to be helpful to VWS.”

De Boer: “In terms of content the safety feature stamp strongly resembles the excise stamp. Customs had the expertise required at their disposal, so the job was done quickly. When faced by a legislative trajectory with a strict deadline it’s preferable to look for existing solutions. Having said that, the safety feature stamp must be clearly distinguishable from the ordinary excise stamp, among other things in terms of colour. In addition, tobacco producers and the importers they want to use must first request our permission via a digital form. We will then ensure that an unforgeable safety feature stamp and a unique identifier are available on the 20th of May. Producers with questions can always contact VWS. All things considered we’ve got a lot done in such a short period.”

This interview also appeared in our recently issued overview ‘Dutch Customs in 2018’. Click here to read the full publication.

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