The European Commission still needs to decide on the traceability and security system for tobacco products (Articles 15 and 16 of the Tobacco Products Directive) to fight illicit trade. Per the directive, the rules governing the system must be drafted by the end of 2017, but uncertainty remains about many of the key provisions.
Will it be an open standards system or a proprietary system run by a third-party provider? And what level of independent oversight will it have?
The decisions will result in huge contracts which will pit incumbents of the tobacco industry against third-party solution providers, with the former championing an open standards system that experts say will be cheaper than a proprietary solution.
One Swiss company, SICPA, who is involved in providing technology to Brazil, Kenya and several US states, has been leading the lobbying charge, pushing for its proprietary system to be in place with meetings with the Directorate for Heath and Consumers (SANTE) as far back as 2012.
The company is however entangled in an investigation of alleged bribery. SICPA’s project in Brazil has been at the centre of a major corruption investigation. Brazilian authorities are investigating the alleged payment of bribes totalling €27 million to Brazilian officials, to secure the €1.7 billion SICOBE contract. The official at the centre of the corruption allegation has been in jail for the past 6 months (along with his wife), and the contract for the SICOBE system has been voided.
In Kenya SICPA was previously accused of foul play but was given a clean bill of health by the public procurement regulatory authority, despite the Kenyan federation of consumers making pointed statements against the company. The issue of traceability in Kenya is complicated by the fact that British American Tobacco has also been accused of bribery in relation to the illicit tobacco trade.
With time running out for implementing the system, the Commission has scheduled a series of meetings before January; a workshop organised by DG SANTE on Monday 12 December for all interested stakeholders (from product manufacturers to health NGOs) and an expert meeting of Member States set to make crucial decisions on the parameters of the European system.
What system is chosen remains to be seen, but with the forced resignation of then European Commissioner for Health, John Dalli over the alleged seeking of a bribe from a tobacco products company, Swedish Match, being the biggest scandal in the European Commission’s history, and the criticism over the institution’s code of conduct, the Commission will need to be diligent about ensuring any decision and the resulting solution providers are beyond reproach.