European Commission hit by fresh concerns over track and trace
November 29, 2019
The UK’s Association of Convenience Stores (ACS), alongside European trade association Independent Retail Europe, has gone to the European Commission with concerns over the implementation of a regional track-and-trace system for tobacco products.
“Several elements of the system remain unclear,” explained Independent Retail Europe director general Else Groen, “We needed…close cooperation with ACS on this issue to help reveal the gaps and create awareness… hopefully [the EU] will rapidly tackle and clarify these issues.”
Systems to monitor tobacco throughout its supply chain are essential to the global campaign, spearheaded by the World Health Organisation (WHO)’s Framework Convention on Tobacco Control (FCTC) and associated Protocol to Eliminate Illicit Trade in Tobacco Products, to crack down on the international illicit tobacco trade. The EU’s Tobacco Products Directive (TPD) represents Brussels’s bid to comply with the FCTC and its Protocol, but the directive’s implementation has come under fire from key stakeholders—even before the ACS and Independent Retail Europe’s latest broadside.
For one thing, retailers feel that important aspects of Brussels’s track-and-trace regulations have been left open to interpretation, including issues over the appeals process for claiming compensation, a lack of clarity over requirements for recording the sale of tobacco, operational disruptions due to the scanning and recording of tobacco sales, and uncertainty over the notification process if the tracking system goes offline.
“The regulations have been in place for over six months now but there are still plenty of unanswered questions about how they work in practice,” highlighted ACS chief executive James Lowman, “We need clarity from government as soon as possible.”
Retailers have also complained about receiving unclear guidance from the company tasked with rolling out the system in the UK, British banknote and passport maker De La Rue. De La Rue has been no stranger to controversy in recent years, having come under fire for financial mismanagement, suspected corruption in South Sudan and, almost ironically, losing a post-Brexit passport contract to a European competitor. Now tasked with domestic tobacco track-and-trace implementation, De La Rue has found itself in hot water once again.
In the lead up to a deadline for retailers to receive unique codes under track-and-trace legislation, De La Rue’s online registration forms were reportedly plagued with operational issues. Making matters worse, a number of retailers said their calls for assistance had so far gone unanswered by the company. With confusion over the potential implications of Brexit mounting, De La Rue has done little to instil confidence about its ability to deliver in the face of uncertainty.
Moreover, De La Rue has been quick to subcontract its mission to IT giant Atos, a company that has left fingerprints all over the smoking gun of Big Tobacco’s alternative track-and-trace “solution” Codentify. That Atos has any ties to the tobacco industry at all should have disqualified it immediately from De La Rue’s considerations; the fact that it has been chosen regardless exposes the dark underbelly of the entire British rollout.
The FCTC and its Protocol have been unequivocal about the importance of international tobacco control measures being completely independent from the tobacco industry. Indeed, parties to the agreement must ensure they are in full control of their traceability systems, including the storage of track-and-trace data.
“It is critical for States to ensure that the generation of these codes is kept out of the hands of tobacco companies,” clarified Dr. Filip Borkowski, an official from the European Commission’s Directorate General of the Health and Food Safety Unit, “It is also important that the unique identity codes are stored independently in a fully secured storage – so that tobacco companies cannot access or manipulate this data.”
De La Rue’s deference to the tobacco-coated Atos, then, represents a clear breach of the WHO Protocol’s independence requirements. Unfortunately, it doesn’t, however, breach the EU’s interpretation of the framework: the TPD actually allows for the delegation of obligations to third parties, including the longtime partners of tobacco companies, as long as the annual turnover they make with them does not exceed 20%.
As such, it isn’t just De La Rue’s rollout of track and trace in the UK which has fallen foul of transparency concerns. In the lead up to the first meeting of the FCTC Secretariat working group on the implementation of track and trace solutions, which just took place in Panama City, worries have surfaced that the EU’s system simply isn’t up to snuff.
Indeed, EU independence rules for third parties, including data storage companies, are reportedly easy to circumvent. Atos’s appointment—in addition to collaborating with De La Rue in the UK, Atos or its subsidiary Worldline are involved in track and trace systems in Denmark , the Netherlands, Lithuania and Czech Republic on top of the data storage contracts they still have with two of the biggest tobacco majors—serves as a glaring example of this loophole. Nor do EU regulations currently require fully independent security features; at present, just one out of five track-and-trace elements must imperatively be sourced by an independent provider, leaving the system open to manipulation by tobacco players.
It is becoming glaringly obvious that neither London nor Brussels are ready to implement a regional track and trace system that abides by the FCTC and its associated Protocol. Instead, European retailers appear forced to run in circles in an effort to comply with regulation that is itself non-compliant with global standards. If Big Tobacco is ever to be put in its place, European lawmakers need to seriously reconsider current track and trace efforts.