ESTA appreciates the opportunity to share its views on the content of the draft proposals. The Commission's draft Regulation on the one hand sets technical standards where no competency exists and on the other fails to set standards where these are mandated and badly needed. Where it correctly sets standards, many are too complex making the standards unlikely to be internationally shared. The Commission’s draft Decision on the security feature completely ignores the Directive’s harmonisation purpose, and lacks setting uniform standards.
The proposed system of tracking and tracing and the security feature therefore will be prohibitively costly and unworkable for mid-sized and smaller firms. It obliges all companies in the tobacco supply chain to re-organise and modify their business and trading processes beyond what is necessary to establish a well-functioning tracking and tracing system as specified in Article 15 of the Tobacco Products Directive (2014/40/EU). The Commission’s draft Implementing Regulation raises many legal and practical questions. The following must be either clarified or amended appropriately:
• The Commission cannot base any measure or requirement on anything else than the delegation of powers as laid down in Articles 15 and 16 of the 2014 Tobacco Products Directive;
• Tobacco products manufactured in the EU but not placed on the market, including those for export, are not within the scope of the implementing Regulation, as they are not covered by the 2014 Tobacco Products Directive;
• The Unique Identifier must include the date and time stamp which can only be applied in real time on the packaging line. The regulation cannot derogate form Article 15.2.d of the Directive;
• The specification of information to be delivered to the third-party ID issuer includes information not mentioned in Article 15 of the 2014 Directive;
• The draft Regulation introduces a system based on production authorisation, which requires manufacturers to provide information and transmit financial information that is not known at the time of packaging;
• A too complex system will not be adopted by third countries. Cheap illicit whites are originating from some of these countries necessitating an interoperable system to effectively tackle the main source of illicit trade;
• The draft Regulation states that ID issuers will choose whether UIs will be delivered electronically or physically, thereby ignoring manufacturers’ needs and specificities and the required interoperability with tax stamps;
• The draft Regulation requires the data carrier to be composed of 50 alphanumeric characters, which is therefore too long and incompatible with current printing technologies, machinery and GS1 standards currently in use.
A well-functioning track and trace system can be established strictly following Article 15 of the 2014 Directive. Such a system needs to be fully integrated into the production process whilst being independently verified and controlled by Member States authorities. For the system to become operational by the May 2019 deadline, and for it to be compliant with competition law and national tender rules, the choice of the ID issuer should be that of the manufacturers based on standards set-, and audited by the Commission. Generating and applying the UI at the time of packaging is the only way to comply with the Directive and to overcome unnecessary complexity. The feasibility and efficiency of Track & Trace therefore depends on the ability of the Commission to adopt a uniform, feasible and clear protocol ensuring a harmonised application throughout the Union and allowing third countries to easily adopt it as well.
Export products must be excluded avoiding self-imposed trade barriers whilst export is already covered by the EMCS system.
For further information, ESTA has attached its detailed position.
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