Importance of Tax Stamps Acknowledged at Tobacco Control Summit

The World Conference on Tobacco or Health recently hosted a virtual summit, in partnership with – among others – the World Health Organisation, WHO FCTC Secretariat and Framework Convention Alliance.

The summit included a panel discussion on tobacco illicit trade, supported by a policy brief relating to the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products, which was made available during the discussion.

The brief was written by a working group consisting of Muthaura Karambu, Kenya Revenue Authority; Sheryl DennisWright, attorney-at-law, public health law and policy, Jamaica; Simone Haysom, Global Initiative Against Transnational Organized Crime, South Africa; Vladimir Stasko, World Customs Organisation; Roy Small, United Nations Development Program; Allen Gallagher, University of Bath, UK (who also moderated the panel discussion); and Kelvin Khow, FCTC Secretariat.

The brief included key recommendations for parties to the Protocol, as well as for IGOs and civil society organisations.

One recommendation that caught the eye of Tax Stamp & Traceability News™ (TSTN) was that in order to control smuggling and illicit production, parties were advised to use prominent tax stamps and local language warnings on cigarette packs, as well as aggressive enforcement and consistent application of penalties to deter smugglers.

It is interesting to note here that while an increasing number of relevant authoritative bodies (including the World Bank, International Tax Stamp Association and economic research group Tobacconomics), are recommending the use of tax stamps as part of a secure tobacco track and trace system, the Protocol itself does not specifically prescribe tax stamps. Rather, it applies broader requirements for ‘unique, secure and non-removable identification markings, such as codes or stamps’.

However, it is the hope of these various bodies that parties to the Protocol will nevertheless decide to use tax stamps as an integral part of their track and trace obligations.

Other recommendations contained in the policy brief included:

• That each party should consider creating a technical working group on illicit trade that collaborates with local universities and UN partners. Such a group could drive Protocol ratification and implementation, improve the quality of evidence-based data on the national realities of illicit trade, and monitor tobacco industry distortion and exploitation.

• That parties should ensure that Protocol implementation does not create opportunities for tobacco industry interference, and any industry-led approaches to tracking and tracing of illicit products should be rejected.

• That intergovernmental and nongovernmental organisations of relevance to the Protocol should apply to become observers to the Meeting of the Parties to the Protocol and contribute their expertise and competence in furthering the goals of the Protocol.

The policy brief also identified a range of research activities that academics would do well to explore in order to improve understanding of the illicit tobacco trade and how best to address it.

These included conducting independent estimations of the scale and nature of illicit tobacco trade in individual countries and regions worldwide, so that governments would have reliable data to hand, without having to rely on industry-funded research.

Another recommended activity was for academics to establish the relationship between tobacco companies and illicit tobacco trade. This could involve investigating tobacco company import and export practices to identify discrepancies pointing to illicit trade, and exploring tobacco supply chains in specific countries to examine how product travels from legal to illegal supply chains.

Finally, the policy brief raised the need for more academic research on the role of free trade zones in facilitating illicit tobacco trade. Research on this topic could involve case studies on specific free trade zones, as well as the mapping of existing zones, and the effectiveness of current controls on them.