1. The Protocol to Eliminate Illicit Trade in Tobacco Products: A new international treaty, open for ratification Ulrike Schwerdtfeger Legal Officer WHO FCTC Secretariat

2. WHO FCTC  The WHO Framework Convention on Tobacco Control: first global public health treaty.  Use of tobacco causes more than 6 million premature deaths around the world every year.  To protect current and future generations from the effects of tobacco consumption and to reduce tobacco use and exposure to tobacco smoke.  Membership: 178 Parties (incl. EU) to the FCTC  Out of 175 WCO Member States, only 15 are not Parties to the WHO FCTC

3. WHO FCTC – relevant obligations  Measures against illicit trade in tobacco products (Art. 15 FCTC) – basis for Illicit Trade Protocol  Prohibit tobacco sales to minors (Art. 16)  Establish national coordinating mechanism for tobacco control (Art. 5.2)  Parties to protect public health policies with respect to tobacco control from commercial and other vested interests of the tobacco industry (Art. 5.3)

4. Cooperation with WCO

5.  Convention Secretariat signed statement of intent with WCO in March 2014  Cooperation with WCO:  Raising awareness of the Protocol and promoting multisectoral dialogue for ratification of the Protocol;  Sharing information on illicit trade and measures to counter it;  Assistance to countries in assessing their regulatory frameworks in view of the Protocol;  Participation in each other's meetings

6. Illicit trade in tobacco products: the problem

7. Extent of illicit trade in tobacco products  Close to 10 % of the global cigarette trade is illicit;  Significantly higher in some low- and middle- income countries, up to 50% and more;

8. Consequences of illicit trade in tobacco products Illicit trade in tobacco products Public health: Increased accessibility, affordability and consumption of tobacco products Crime prevention: – organized crime – profits fund other criminal activity Loss in government revenue: up to USD 50 billion/ year globally nt

9. The solution – Protocol to Eliminate Illicit Trade in Tobacco Products

10.  First Protocol to the WHO FCTC.  Adopted in November 2012 in Seoul by the Conference of the Parties to the WHO FCTC.  New international treaty – ratification and implementation will require involvement of various government sectors, including public health, customs, law enforcement and justice.

11. Protocol status (1 July 2014)  Open for ratification/accession by all Parties to the WHO FCTC (178 Parties).  Entry into force requires 40 ratifications (plus 90 days).  Signatories: 54;  A number of Parties are in the process of ratification..

12. How does the Protocol work? 1) Prevention 2) Law enforcement 3) International cooperation

13. Aspect 1: preventing illicit trade – by securing the supply chain

14. Supply chain control (Part III):  Licensing (Art. 6),  Due diligence (Art. 7),  Tracking and tracing (Art. 8),  Record-keeping (Art. 9),  Security and preventive measures (Art. 10),  Sale by Internet (Art. 11),  Free zones and international transit (Art. 12),  Duty free sales (Art. 13).

15. Licensing (Art. 6) and due diligence (Art. 7)  Mandatory licensing for manufacture, import and export of tobacco products and manufacturing equipment;  Discretion for licensing of other activities, including retailing, tobacco growing, transporting commercial quantities;  Any person engaged in the supply chain of tobacco, tobacco products and manufacturing equipment has to conduct due diligence – incl. customer identification

16. Global tracking and tracing regime (Art. 8) Global tracking and tracing regime, with Global information-sharing focal point (at Convention Secretariat) (to be established within 5 years of entry into force) Party B, national central point Party A, national central point

17. National/regional tracking and tracing systems  National/regional tracking and tracing system will be established for  all tobacco products that are manufactured in or imported onto its territory;  National/regional central point (Art. 8.8) as a link with the global information-sharing focal point;  Each Party will require “unique, secure and non- removable identification markings” on unit packets and packages and outside packaging of cigarettes within 5 years of entry into force; within 10 years, marking of other tobacco products.

18. Tracking and tracing (Art. 8), cont'd  A set of data (Art. 8.4.1) has to be recorded at time of production, first shipment or import;  This data includes date and location of manufacture, manufacturing facility, information on the first customer, intended market of retail sale and intended shipment route;  This set of data will be accessible to the global information-sharing focal point on request through an interface with the national/regional central point.  Parties can access this data by making a query to the global information-sharing focal point;  Parties can request this data for the purpose of detecting or investigating of illicit trade.

19. Tracking and tracing – tobacco industry  "Obligations assigned to a Party shall not be performed by or delegated to the tobacco industry." (Art. 8.12)  "Each Party shall ensure that its competent authorities, in participating in the tracking and tracing regime, interact with the tobacco industry and those representing the interests of the tobacco industry only to the extent strictly necessary in the implementation of.." Article 8. (Art. 8.13)  "Each Party may require the tobacco industry to bear any costs associated with that Party's obligations under.." Article 8. (Art. 8.14)

20. Other measures to control the supply chain  All persons engaged in the supply chain shall be obliged to:  maintain complete and accurate records (Art. 9);  take measures to prevent the diversion of tobacco products into illicit trade channels, such as reporting of cross-border transfers of cash to the competent authority (Art. 10);  Transactions with regard to tobacco products via internet, telecommunication or other evolving technology are subject to all relevant Protocol provisions (Art. 11).  Parties shall consider banning retail sales of tobacco products through these modes of sales (Art. 11.2).

21. Free zones and duty free sales (Arts. 12, 13)  In free zones, Parties have to implement, within 3 years of entry into force, control measures for manufacturing and transactions in tobacco and tobacco products. (Art. 12)  Intermingling of tobacco products with non-tobacco products at time of removal from free zones shall be prohibited.  Duty free sales shall be subject to all relevant provisions of the Protocol. (Art. 13)

22. Aspect 2: law enforcement

23. Offences (Article 14)  Unlawful conduct to be established, including:  Manufacture, sale, transport of tobacco products contrary to the provisions of the Protocol (e.g., without a licence)  Manufacture, sale, transport of tobacco products without payment of duties, taxes and other levies, or without bearing applicable fiscal stamps,  Misdeclaring on official forms the description, quantity or value of tobacco products to evade payment of duties or taxes  The Protocol does not contain a catalogue of criminal offences - Parties have discretion in determining which conduct is a criminal offence (Art. 14.2).

24. Other enforcement measures  Establish liability of legal persons (Art. 15)  Seizure payments (Art. 17)  Effective and dissuasive sanctions (Art. 16),  Special Investigative Techniques (Art. 19),

25. Aspect 3: international cooperation

26. International cooperation  Exchange of enforcement information (Art. 21),  Providing technical assistance and cooperation in scientific, technical and technological matters (Art. 23)  Law enforcement cooperation (Art. 27)  Mutual administrative assistance (Art. 28)  Mutual legal assistance and extradition (Arts. 29- 31)

27. Cooperation with international entities  The Protocol makes specific reference to enhanced cooperation between the Convention Secretariat and the UN Office on Drugs and Crime (UNODC) and the World Customs Organization (WCO) and other bodies, as appropriate.

28. Process of ratification and entry into force

29. Ratification/accession  To become a Party to the Protocol, Parties to the WHO FCTC have to ratify or accede to it.  Ratify: FCTC Parties that have signed the Protocol  Accede: FCTC Parties that have not signed the Protocol  Ratification/accession: international act by which States establish on the international level their consent to be bound by a treaty.  Before ratifying/acceding, governments follow their internal procedure required under their respective constitutional systems to become a Party to a treaty.

30. Self-assessment checklist  For voluntary use by WHO FCTC Parties in assessing their legal, regulatory and policy frameworks in view of the Protocol requirements.  Covers Articles 4-19 of the Protocol (General obligations, Supply chain control, Offences)  Short introduction of main obligations for each section  It is available in 6 languages on a protected website. To access the website, please contact fctcsecretariat@who.int. fctcsecretariat@who.int

31. 14.1(c)Does the following conduct constitute an unlawful conduct in my country’s domestic law: 14.1(c)(i)any other form of illicit manufacture of: tobacco? tobacco products? manufacturing equipment? tobacco packaging bearing false fiscal stamps? tobacco packaging bearing false unique identification markings? tobacco packaging bearing false other required markings or labels?

32. More information: http://www.who.int/fctc/protocol/en/ For questions, please contact the Secretariat: protocolfctc@who.int