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The intervention of the tobacco companies in tracking systems

February 14, 2019

On the research paper "Tobacco industry's elaborate attempts to control the global track and trace system and fundamentally undermine the Illicit Trade Protocol" (Gilmore et al, 2018), the authors examine the tobacco industry's objective to permeate the illicit trade protocol, specifically in the management of a tracking and traceability system to reduce tobacco smuggling. From a review of filtered documents of the industry, ownership of patents, among other data.

Gilmore et al expose how historically the tobacco industry has been involved in the issue of illicit trade. At the end of the 90's, it was known how the tobacco industry introduced its products to new markets through illicit channels. The authors explain that they ended up being guilty, as there were agreements between the European Union and four tobacco companies (Philip Morris International, British American Tobacco, Imperial Tobacco and Japan Tobacco International).

After the nineties, the tobacco companies went from being the illicit trade offer to being the victims and the solution to it. Using their data and influences, they exaggerated the issue of illicit trade and presented it as a consequence of tobacco control policies. Currently, they promote the authentication system created by them, Codentify, which has been strongly criticized by the same employees of the industry, academics and the secretary of the FCTC for not having the necessary security to be used as a tax assessor.

But how do tobacco companies benefit from smuggling? According to the authors, there are four ways in which tobacco companies benefit:

1. Smuggled tobacco is sold at a lower price for not including a tax, therefore sales increase.

2. Smuggling sabotages the effect of tobacco control measures on reducing smoking. For example, the tobacco tax does not cover smuggled products because they are under none tax jurisdiction.

3. Tobacco industry have used contraband as a vehicle to penetrate closed or highly protected markets. They usually suggest that smuggling is a sign that they must increase their investment in that market.

4. It is the best argument against tobacco control policies. Justifying that the demand for illicit products is the problem, and not the offer.

According to the authors, these incentives explain why illicit trade has not fallen. Gilmore et al (2018) explain that tobacco-independent tracking and tracing systems would be a great tool to prevent tobacco companies from supplying illicit markets. However, experience shows that it has been difficult to exclude tobacco companies from their participation in the regulatory measures of illicit trade.

The authors suggest governments move away from systems that are similar or connected to Codentify, which is being manipulated by the interests of the tobacco industry. Governments must assume that systems like this are harmful to achieve the objectives because their intellectual property belonged or belongs to the tobacco companies, therefor it would be incompatible with the illicit trade protocol.