Wednesday

26th Sep 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.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

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.

No chance of meeting EU renewable goals if infrastructure neglected

Following the 2030 renewable target of 32 percent, chair of the European Parliament's environment committee Adina Valean argues in order to reach our climate and energy goals, we need both public and private investment over the next decade and beyond.

News in Brief

  1. UN chief: World suffering from 'trust deficit disorder'
  2. Stalemate in Sweden as parliament ousts prime minister
  3. Migrant rescue ship heading to French port
  4. EU angry at British tabloids on Brexit
  5. UK to allow EU flights in no-deal Brexit
  6. Greek reporters arrested after story on 'mishandled' EU funds
  7. Austrian minister urges police to out foreign sex offenders
  8. ECB's Draghi set to clarify role in secretive G30 group

Will the centre-right stand up for EU values?

Time for Christian Democrats in the EP to show where they stand on Hungary and on the EU's founding principles, say Human Rights Watch and Amnesty International in a joint text.

Europe needs more modern leadership

If Europe wants to be a global leader, our political leadership has to change dramatically. Power needs a new face in Europe, and it needs to get legitimacy from the people, argues liberal MEP Sophie in 't Veld.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  2. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  3. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  4. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  5. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  6. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  7. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  8. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  9. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  10. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  11. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  12. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow

Latest News

  1. EU court delivers transparency blow on MEP expenses
  2. Russian with Malta passport in money-laundering probe
  3. Cyprus: Russia's EU weak link?
  4. Missing signature gaffe for Azerbaijan gas pipeline
  5. Every major city in Europe is getting warmer
  6. No chance of meeting EU renewable goals if infrastructure neglected
  7. Brexit and MEPs expenses in the spotlight This WEEK
  8. Wake-up call on European Day Against Islamophobia

Stakeholders' Highlights

  1. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  2. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  3. Mission of China to the EUChina: Work Together for a Better Globalisation
  4. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  5. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  6. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  7. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  8. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  9. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs
  10. Nordic Council of MinistersCooperation in Nordic Electricity Market Considered World Class Model
  11. FIFAGreen Stadiums at the 2018 Fifa World Cup
  12. Mission of China to the EUChina and EU Work Together to Promote Sustainable Development

Join EUobserver

Support quality EU news

Join us