Sunday

22nd Apr 2018

Opinion

PMI: We have common ground with EU on tobacco smuggling

  • Branded cigarettes manufactured outside the EU for the sole purpose of smuggling now represents over 37 percent of Europe’s illicit tobacco trade. (Photo: wikipedia)

In recent months, there has been a great deal of talk in Brussels about the measures used to tackle the illegal trade in tobacco products, notably the 12-year anti-illicit trade agreement between the European Commission, member states and Philip Morris International (PMI), which ends later this year.

The question of whether or not the agreement is renewed has become the defining feature of this debate. Portraying this as an issue dividing interested parties into opposing camps may make for good headlines, but in reality, there is more common ground about what is needed to fight the illicit trade than is often assumed.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

One example of common agreement is the World Health Organisation’s Framework Convention on Tobacco Control (FCTC) Anti-Illicit Trade Protocol, which contains many of the measures in our agreement with the EU and shares our commitment to tackle this problem in every part of the world.

Another area of common ground is in Article 15 and 16 of the Tobacco Products Directive (TPD) dealing with traceability and tamper proof security features for tobacco products.

Huge reduction in seizures

We have legitimate, and well publicised concerns about parts of the TPD but we fully agree with the EU on the need for strong tracking and tracing systems. So much so that we have gone even further by extending their scope globally, without waiting for the TPD or the protocol to come into effect to do so.

The anti-illicit agreement with the EU has been a useful vehicle for far-reaching supply chain control measures, such as know-your-customer due diligence and tracking and tracing, which have so effectively reduced the flow of counterfeit and contraband cigarettes over the last 12 years. However, our priority is not the agreement; it is the measures contained within it.

Our shared efforts have delivered an 85 percent reduction in seizures of PMI counterfeit and contraband cigarettes, they have resulted in compliance training for 37,000 employees and 7,000 law enforcement officers across the EU, and led to at least 87 illicit trade factories being raided, inspected and shut down for good. Throughout this period, EU authorities have had free and unimpeded access to our factory data and product flows.

Critics who claim the agreement has failed are missing the point that the FCTC Protocol contains the very same measures that have been tried, tested and proven to reduce levels of illicit trade in the EU.

Another frequently debated issue is how to best track and trace the flows of legitimate cigarettes. Contrary to some reports, we are not in the track and trace business. Under the anti-illicit trade agreement, we were obliged to secure our product flows and developed the technology to do so at a time when no similar system existed.

The system we developed complies with all of the criteria set out in the TPD and FCTC Protocol, and can be controlled and run independently by state authorities, fully in line with Article 5.3 of the FCTC. However, we are not bound to one solution or system. Just like any commercial entity we look for the most effective and cost efficient solutions, and the best way of ensuring this is through a range of independently approved, open standard, systems competing in a free market.

Any track and trace system should be based on verification, not trust, and should be monitored by an independent auditor appointed by the authorities, as required by the TPD.

Looking ahead, there is broad recognition that the nature and composition of the illegal trade in cigarettes has changed. The reduction in flows of contraband and counterfeit cigarettes has been replaced by a huge increase in so-called illicit-whites, branded cigarettes manufactured outside the EU for the sole purpose of smuggling. This now represents over 37 percent of Europe’s illicit tobacco trade.

It is for the European Commission and member states to decide the future of the anti-illicit trade agreement. With or without its renewal, our priority remains the measures contained within it. Our ongoing commitment to continue our efforts and investments around the world to tackle illicit trade remain intact and stronger than ever.

Alvise Giustiniani is the head of Philip Morris International's Global Head of Anti-Illicit Trade Department

Investigation

Scant evidence EU tobacco deal curbed smuggling

A ‘landmark’ agreement with tobacco company PMI was supposed to bring down cigarette smuggling. But it is very difficult to estimate the success of the deal, which is up for renewal in 2016.

More commitment to renewables from Council, please

More and more consumers are likely to invest in solar panels in the future as it becomes simpler to produce one's own electricity, writes Monique Goyens, director general of BEUC, the European Consumer Organisation.

How to reset EU-Burma relations

Europe should go back to its pre-2012 policy, wipe away aid and trade benefits, and tie democratic efforts to the reinstatement of benefits.

News in Brief

  1. Audit office: Brexit 'divorce' bill could be billions higher
  2. MEPs urge better protection for journalists
  3. Dieselgate: MEPs back greater role for EU in car approvals
  4. European parliament adopts new organic farming rules
  5. EU granted protection to half million people in 2017
  6. Report: Facebook to carve 1.5bn users out of EU privacy law
  7. Greek court ruling permits migrants to travel to mainland
  8. Commonwealth summit hopes for trade boost after Brexit

Stakeholders' Highlights

  1. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  2. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  3. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  4. Martens CentreJoin Us at NET@WORK2018 Featuring Debates on Migration, Foreign Policy, Populism & Disinformation
  5. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  6. UNICEFCalls for the Protection of Children in the Gaza Strip
  7. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  8. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight
  9. Macedonian Human Rights MovementMacedonians in Bulgaria Demand to End the Anti-Macedonian Name Negotiations
  10. Counter BalanceThe EIB Needs to Lead by Example on Tax Justice
  11. ILGA EuropeTrans People in Sweden to be Paid Compensation for Forced Sterilisation
  12. International Partnership for Human RightsThe Danger of Standing Up for Justice and Rights in Central Asia

Latest News

  1. ECJ ruling set to end 10-year 'mouth tobacco' lobbying saga
  2. Whistleblowers, Syria and digital revolution This WEEK
  3. MEP friendship groups offer 'backdoor' for pariah regimes
  4. Macron and Merkel pledge euro reform
  5. Obscurity surrounds EU military fund's expert groups
  6. New EU party finance rules short circuit accountability
  7. Draghi to stay in secretive 'lobby' group
  8. Bulgaria offers lesson in tackling radical-right populists

Stakeholders' Highlights

  1. Mission of China to the EUChina and EU Must Work Together to Promote Global Steel Sector
  2. Swedish EnterprisesEU Tax Proposal on Digital Services Causes Concern for Small Exporting Economies
  3. Europea Jewish CongressCondemns the Horrific Murder of Holocaust Survivor Mireille Knoll in Paris
  4. Mission of China to the EUAn Open China Will Foster a World-Class Business Environment
  5. ECR GroupAn Opportunity to Help Shape a Better Future for Europe
  6. Counter BalanceControversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  7. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds
  8. Macedonian Human Rights MovementMeets with US Congress Member to Denounce Anti-Macedonian Name Negotiations
  9. Martens CentreEuropean Defence Union: Time to Aim High?
  10. UNESDAWatch UNESDA’s President Toast Its 60th Anniversary Year
  11. AJC Transatlantic InstituteAJC Condemns MEP Ana Gomes’s Anti-Semitic Remark, Calls for Disciplinary Action
  12. EPSUEU Commissioners Deny 9.8 Million Workers Legal Minimum Standards on Information Rights