Tobacco Track and Trace System: Q&A - Delta Baco

Tobacco Track and Trace

Short Q&A and long answers for the EU Tobacco Track and Trace System

Delta BACO has indeed implemented the traceability of tobacco products across the European Union. This compliance ensures that the company’s tobacco products can be traced through the supply chain in line with EU regulations, which aim to combat illicit trade and safeguard public health.

The traceability system, which became mandatory in 2019 under the EU Tobacco Products Directive, requires all manufacturers, importers, and distributors to mark tobacco products with unique identifiers and track their movements across the supply chain. This system applies to all EU member states, including Spain, where Delta BACO operates extensively. (Portada – Mesa del Tabaco)

In Spain, the process has involved significant coordination between the tobacco industry and regulatory bodies such as the Commissioner for the Tobacco Market (CMT) and the National Mint and Stamp Factory (FNMT). These entities have worked together to ensure that all economic operators, including wholesale distributors like Delta BACO, comply with the traceability requirements. (Retailers for the Future)

Delta BACO, through its affiliation with KALYSIS IBERIA SL, has equipped itself to handle these requirements, ensuring that its operations align with EU standards and that it can continue to distribute its products legally and efficiently throughout Europe. (DeltaBaco)

Tobacco Track and Trace System : Why track and trace tobacco products in the EU market?

Tobacco harms health, fuels illicit trade, causes tax losses, and funds organized crime and terrorism.

What are the steps in setting up a traceability system?

Appoint an ID issuer, generate unique identifiers for packets, select data storage providers, and establish a secondary repository.

How does the tobacco track and trace system ensure independence from industry?

Control rests with national authorities, strict criteria for third-party involvement, and careful system architecture.

What are the requirements for the security feature?

Five authentication elements, including visible, invisible, and semi-covert features, applied through printing or affixing.

What measures protect against forgery?

Replacing compromised security features, formal guidelines on production and distribution, secure equipment, audits, and monitoring.

Who answer during the legal act preparation?

Extensive consultations with stakeholders, public input, workshops, expert advice, and engagement with Member States.

When will the new rules take effect?

By May 20, 2019, for cigarettes and roll-your-own tobacco, and by May 20, 2024, for other tobacco products.

Track and Trace Tobacco System – schema Source ESTA

Tobacco Track and Trace System: Q&A Long Answers

Why do tobacco products on the EU market need track and trace?

Tobacco use is extremely harmful to health. Smoking is the biggest cause of preventable death in the EU. Illicit trade amplifies its negative effects by making it easier for people including children and young adults, to buy tobacco products. Illicit tobacco products are often substantially cheaper than legal products, and they are less likely to comply with important rules, such as the obligation to carry combined health warnings.

Furthermore, illicit tobacco trade is responsible for millions of euros in tax revenue losses by EU countries every year. Measuring the extent of this illicit tobacco trade is extremely challenging, but the amount of duty that EU tax administrations lose to illicit trade has been estimated at about 11.1 billion a year[1]. Illicit tobacco trade becomes also a primary source of revenue for organised crime, and, in some cases, for terrorist groups.

To tackle illicit trade, the EU Tobacco Products Directive (2014/40/EU) provides for the establishment of an EU-wide track and trace system for the legal supply chain of tobacco products (article 15), as well as a system of security features to help detect illicit products (article 16).

What are the main steps in setting up a traceability system?

Each Member State must appoint an ‘ID issuer’ responsible for generating and issuing unique identifier codes to be applied to unit packets, and ensure the ID issuer’s independence from the tobacco industry. National authorities should notify the Commission of the appointment of the ID issuer and of its identification code within one month of their appointment and make this information publically available.

The appointed ID issuer must generate unique identifiers, composed of numbers and/or letters, for unit packets, and where requested, aggregated packaging. These unique identifiers need to be applied to the product within a period of six months. ID issuers can also be requested to issue ‘identifier codes’ for all relevant economic operators, facilities and machines, so they may be easily identified under the system.

T&T Contracts with Tobacco Track and Trace System

Manufacturers and importers contract a ‘primary’ repository to host traceability data exclusively for their products. Commission reviews and approves contracts and providers based on independence, technical capability. Provider is deemed approved if no Commission reply within timeframe.

Commission selects and approves provider for a ‘secondary’ repository, storing all traceability data. It ensures Member State access to a single data set, providing an overview of all product movements.

After completion of these key steps, the traceability system will begin to take shape. The products will begin to be marked with unique identifiers, and their movements scanned and recorded throughout the supply chain.

How does the system ensure independence of the Tobacco Track and Trace System from industry?

The Framework Convention on Tobacco Control (FCTC)’s Protocol to Eliminate Illicit Trade in Tobacco Products[2], which the EU ratified in 2016, requires the traceability system to be independent from the tobacco industry. The secondary legislation adopted by the Commission ensures full compliance with this rule by placing full control of the system in the hands of the national authorities (and not the tobacco industry).

The key task of issuing a part of the unique identifier is the responsibility of national competent authorities. This task in the course of the implementation process as most fundamental to system control, provides control over the supply of identifiers, and offers the possibility to ensure their uniqueness and best protects against manipulation.

Member States may either choose to issue unique identifiers themselves, or appoint third parties which would be subject to strict independence criteria, to carry out the task.

When contracting third parties for services like repository systems or anti-tampering devices, the Regulation outlines criteria to assess their independence from the tobacco industry. Member States and the Commission must apply these criteria.

The system’s independence exists through a thoughtfully designed architecture that covers all tobacco product movements. It defines reporting timelines and specifies a format for individual reports. The system aims to provide high-quality data, enabling effective control of the tobacco product supply chain and improved detection of illicit trade.

What are the main requirements for the security feature?

Security features should enable authorities and citizens to verify the authenticity of a tobacco product. To ensure security, they employ five types of ‘authentication elements’. At least one of these must be visible by the human eye or ‘overt’. At least one must be invisible and only detectable with purpose built tools or professional lab equipment or ‘covert’. There must have at least one ‘semi-covert’ feature. This is invisible but detected with non-specialist equipment such as a UV torch or a special pen. The security features appear in the packs by means of printing and/or affixing.

What are the measures to protect against forgery?

If a Member State suspects a compromised authentication element, they must replace or modify it. The national authority must inform manufacturers and importers within five days.

EU countries can establish guidelines and requirements for secure production and distribution procedures to prevent forgery or theft. This may include secure equipment usage, regular audits, production quantity monitoring tools, and secure shipping.

Who answer when preparing the legal acts?

The Commission conducted a thorough consultation process to prepare these acts. Relevant stakeholders’ views gathered through targeted and public consultations, stakeholder workshops, and website publication. Feedback received, analyzed and justified comments considered. Independent experts’ advice and external studies provided technical input. Ongoing discussions with Member States led to draft amendments. Implementing acts remain adopted by written vote with overwhelming majority.

When will the new rules of Tobacco Track & Trace System take effect?
Both the traceability system and the security features should be in place by 20 May 2019 for cigarettes and roll-your-own tobacco and by 20 May 2024, for all other tobacco products (such as cigars, cigarillos and smokeless tobacco products).

For more information:

https://ec.europa.eu/health/tobacco/tracking_tracing_system_en

[1] Study on measuring and reducing administrative costs for economic operators and tax authorities. So they obtain a higher level of compliance and security in imposing excise duties on tobacco products (‘The Ramboll Tobacco Study‘).

[2] https://www.who.int/fctc/protocol/en/