Global progress in implementation of the WHO FCTC: report by the Convention Secretariat

MEETING OF THE PARTIES TO THE PROTOCOL TO ELIMINATE ILLICIT TRADE IN TOBACCO PRODUCTS FCTC/MOP/2/5 13 July 2021 Second session Geneva, Switzerland, 15–18 November 2021 Provisional agenda item 3 13 Global progress in implementation of the Protocol to Eliminate Illicit Trade in Tobacco Products Report by the Convention Secretariat Purpose of the document This document presents the results from an analysis of implementation reports of the Parties to the Protocol to Eliminate Illicit Trade in Tobacco Products on implementation of the Protocol received in the 2020 reporting cycle. The full version of the 2021 Global Progress Report on implementation of the Protocol to Eliminate Illicit Trade in Tobacco Products is available at https://fctc.who.int/protocol/reporting/global-progress-reports/. Individual reports from the Parties for the 2020 reporting cycle are available at http://untobaccocontrol.org/impldb/. Action by the Meeting of the Parties The Meeting of the Parties (MOP) is invited to note this report. Contribute to the SDGs, if applicable: SDG3 and Target 3.a, SDGs 16 and 17. Link to the workplan and budget item: None. Additional financial implications if not included in the workplan and budget: None. Related document(s): None. FCTC/MOP/2/5 2 BACKGROUND 1. The Protocol to Eliminate Illicit Trade in Tobacco Products entered into force on 25 September 2018. Article 32 of the Protocol requires Parties to report on their implementation of the treaty. The First Session of the Meeting of the Parties to the Protocol (MOP1) was held in Geneva, 8–10 October 2018, and adopted decision FCTC/MOP1(10) that further guided the establishment of the reporting system for the Protocol. In accordance with the decision, the Convention Secretariat conducted the first reporting cycle for the Protocol in 2020, in conjunction with the reporting cycle of the WHO FCTC. 2. Thirty responses1 were received for the questionnaire for the 2020 reporting cycle. The respondents comprise 29 State Parties and the European Union (EU), which responded on its own behalf as a Party to the Protocol and on behalf of its 15 Member States that are State Parties to the Protocol. Twelve State Parties did not respond to the questionnaire.2 Additionally, two Parties updated some of their data on the reporting platform without formally submitting their report.3 3. Parties were requested to report by 31 March 2020 on their implementation of the Protocol. However, to accommodate the challenges related to the coronavirus disease 2019 (COVID-19) pandemic, the reporting timeline was extended, and the final data set used for the analysis was extracted from the reporting platform on 25 May 2020. 4. This document is based on the analysis of the first reports of the Parties to the Protocol and provides examples of implementation by the Parties. The structure of this report follows that of the Protocol and its reporting instrument. OVERALL STATUS IN THE IMPLEMENTATION OF THE PROTOCOL 5. Based on these initial data, implementation status seems to be uneven among various articles of the Protocol. Articles on which Parties focused their implementation are Article 6 (Licence, equivalent approval or control system), Article 14 (Unlawful conduct including criminal offences) and Article 16 (Prosecutions and sanctions). With regards to the implementation of the time-bound requirements under Article 8 (Tracking and tracing), 16 respondents4 informed the Convention Secretariat about the establishment of a tracking and tracing system. Lower implementation was observed for measures related to international cooperation under Articles 21 to 31. 1 The Parties that had formally submitted reports in the 2020 cycle are: Benin, Burkina Faso, Cabo Verde, Chad, Comoros, Congo, Costa Rica, Cote d’Ivoire, Ecuador, European Union, Fiji, Islamic Republic of Iran, Iraq, Kuwait, Mali, Mauritius, Montenegro, Nicaragua, Niger, Norway, Panama, Qatar, Samoa, Saudi Arabia, Senegal, Serbia, Togo, Turkey, United Kingdom of Great Britain and Northern Ireland and Uruguay. The report submitted by the European Union also covered the following 15 State Parties: Austria, Belgium, Croatia, Cyprus, Czech Republic, France, Germany, Latvia, Lithuania, Luxembourg, Malta, Portugal, Slovakia, Spain and Sweden. 2 At the time this report was prepared, the Protocol had 63 Parties, but only 57 Parties were required to report on their implementation of the Protocol provisions in 2020. 3 Madagascar and Gambia. 4 The respondents include the European Union, which responded on its own behalf as a Party to the Protocol and on behalf of its 15 Member States that are State Parties to the Protocol. FCTC/MOP/2/5 3 PROGRESS REPORTED BY THE PARTIES, BY PROVISIONS Protection of personal data (Article 5) 6. Several respondents1 have reported on their existing legislation to protect personal data related to the implementation of the Protocol. For example, the EU works to prevent, investigate, detect and prosecute criminal offences, and it has three different regulations in place to protect personal data of individuals as well as of natural persons. Likewise, a relatively new data protection regulation in Mauritius governs privacy rights of individuals in relation to requirements of collection, processing, storage, transfer and handling of personal information. Ecuador also adopted standards such as ISO 29001 to protect individuals when accessing their personal data. Supply chain control (Articles 6–13) 7. With regard to Article 6 (Licence, equivalent approval or control system), 25 respondents1 indicated having a licensing system in place for the import of tobacco products, 191 reported the same for the manufacture of tobacco products and 191 for the export of tobacco products. Licensing systems for the manufacture, import and export of manufacturing equipment – a mandatory requirement under Article 6 – were notably less common, reported only by 10 respondents. Twenty-one respondents1 indicated that they require licences for natural or legal persons to be engaged in tobacco wholesaling, warehousing or distributing. However, only 16 respondents reported licencing for tobacco retailing. 8. Twenty-four respondents1 reported that their competent authorities have the prerogative to issue, renew, suspend or revoke licences for tobacco import. A few Parties reported that in their jurisdictions, licence fees are collected annually (Burkina Faso, Cabo Verde, Fiji, Qatar, Samoa and Togo) or every two years (the Islamic Republic of Iran and Nicaragua). In some other Parties, licence fees are collected when licences are issued or renewed (Côte d’Ivoire, Montenegro, Serbia and Turkey). Finally, some Parties reported they do not collect any fees (the United Kingdom of Great Britain and Northern Ireland, and Uruguay). 9. Implementation of Article 7 (Due diligence) seems to have a lower implementation rate, as only 14 respondents indicated that they apply due diligence practices with regard to customer identification for actors in the supply chain of tobacco and tobacco products. As part of the due diligence process across the supply chain, 12 respondents require documentation or a declaration regarding any criminal records for customer identification purposes, while nine respondents indicated conducting due diligence in identifying bank accounts that are used for trade transactions. In the 2020 reporting cycle, only six Parties (Comoros, Fiji, the Islamic Republic of Iran, Iraq, Saudi Arabia and Serbia) reported that at least one legal or natural person was “blocked” as customers within their jurisdiction as a result of the due diligence process. 10. Under Article 8 (Tracking and tracing), Parties are expected to establish national tracking and tracing systems and require that unique identification markings are affixed or form part of all unit packets and packages and any outside packaging of cigarettes, within five years of entry into force of the Protocol for that Party.2 Seventeen respondents1 reported that they require unique, secure and non- 1 The respondents include the European Union, which responded on its own behalf as a Party to the Protocol and on behalf of its 15 Member States that are State Parties to the Protocol. 2 In case of other tobacco products, within 10 years of entry into the force of the Protocol for that Party. FCTC/MOP/2/5 4 removable identification markings, such as codes or stamps, to be affixed to or form part of all unit packets of cigarettes, out of which 16 respondents1 reported that they have established a tracking and tracing system in their jurisdictions. However, only 13 respondents1 indicated having a requirement of unique identification markings for other tobacco products. As part of the information collected or monitored by Parties, 22 respondents1 have available information on the location and the date of manufacture, either directly accessible or accessible by means of a link. A few respondents informed the Convention Secretariat that the importers of tobacco products need to purchase excise stamps and thus to bear partial costs associated with their systems, while a few others reported that the tobacco industry bears the manufacturing or installation costs of the tracking and tracing system. 11. In Ecuador, for example, the Internal Revenue Service established a system of identification, marking, authentication, tracking and fiscal traceability (SIMAR) for domestically produced cigarettes and some other products. In 2019, Serbia adopted a new Law on Trade that introduced the obligation to label goods, without exception, with a machine-readable tag that provides the ability to obtain product information and enables the tracking of the supply chain (GTIN identification, QR code, etc.), to address illicit trafficking effectively. 12. Regarding Article 9 (Record-keeping), it was generally reported that keeping certain records of export, import and transit is a mandatory requirement for the transnational movement of goods, as per the respective customs laws of the countries. However, only 19 respondents mentioned requiring that all natural and legal persons engaged in the supply chain of tobacco maintain complete and accurate records of all relevant transactions. Twenty respondents1 reported requesting the same for the supply chain of tobacco products and a much lower number, only seven respondents, have reported these requirements for supply chain of manufacturing equipment. 13. For example, in the Islamic Republic of Iran, a full set of information is collected and kept in records by the Ministry of Industry, Mine and Trade, including those on businesses and their operation. The EU has two directives and one regulation regarding information management for tobacco products. In addition, the EU indicated in its joint report that EU Member States have adopted national measures to ensure that relevant information, in line with Article 6 of the Protocol, is recorded and provided to authorities. In Fiji, the Tobacco Control Act requires records to be kept for two years. 14. Altogether 18 respondents1 indicated that they apply sanctions when licensees do not adhere to the provisions of Article 10 (Security and preventive measures). These sanctions usually take the form of penalties, criminal proceedings, license removal or a combination of those. For instance, in Togo, manufacturers and accomplices of any contraband or counterfeit activity in tobacco and tobacco products are liable to imprisonment for three months to two years and/or to a fine between 20 million and 100 million West African francs (US$ 35 000 and US$ 170 000, respectively). Moreover, the penalty can be combined with the confiscation and destruction of smuggled and counterfeit tobacco or derivative products, the revocation of the right to exercise trade activity and publication of a judicial decision. Similarly, in Saudi Arabia, financial fines of up to 20 000 Saudi Riyals (approximately US$ 5000) are imposed on offenders of the measures that would correspond to the requirements of Article 10 of the Protocol. 15. A total of 22 respondents1 reported applying the measures required under Article 11 (Sale by Internet, telecommunications or any other evolving technology) to all sales covered by this article, and 13 of them reported having a ban on online sales of tobacco products. Several Parties (Benin, Burkina 1 The respondents include the European Union, which responded on its own behalf as a Party to the Protocol and on behalf of its 15 Member States that are State Parties to the Protocol. FCTC/MOP/2/5 5 Faso, Congo, Cote d’Ivoire, Qatar, Saudi Arabia, Togo and Turkey) reported having specific legislation prohibiting the selling of tobacco products through Internet and other related technology, and in many cases, fines are also imposed on offenders. In Samoa, since the enforcement of Tobacco Control Act 2008, no case of tobacco sale on Internet was reported. 16. Overall, 17 respondents1 reported that they have authority to conduct controls in free zones in accordance with Article 12 (Free zones and international transit). Among these, 14 respondents informed the Convention Secretariat that they prohibit the intermingling of tobacco products with non-tobacco products in a single container or any other such similar transportation unit at the time of removal from free zones, as required by Article 12. Some of the Parties provided examples of controls implemented in free zones for a study, Examples of current practices on the implementation of Article 12 (Free zones and international transit) of the Protocol to Eliminate Illicit Trade in Tobacco Products, produced by the Convention Secretariat and available on its website.2 17. With regard to Article 13 (Duty free sales), 17 respondents1 reported that they allow duty-free sales in their jurisdiction, with no actual duty-free sales recorded in two Parties among those. On the other hand, 14 respondents1 reported implementing effective measures to subject any duty-free sales to relevant provisions of the Protocol. Offences (Articles 14–19) 18. Article 14 (Unlawful conduct including criminal offences) lists a series of acts of unlawful conduct. Generally, Parties consider as unlawful conduct the manufacturing of counterfeits, falsification of markings, smuggling, and tax evasion of tobacco and tobacco products. For 25 respondents1 these unlawful conducts constitute criminal offences. Further, 22 respondents indicated that intermingling tobacco products constitute an unlawful conduct. 19. Twenty-one respondents1 reported that they held legal persons liable for the unlawful conduct under Article 15 of the Protocol (Liability of legal persons), whereas 25 respondents1 reported having adopted or implemented measures to ensure that natural and legal persons held liable for the unlawful conduct are subjected to effective, proportionate and dissuasive criminal or non-criminal sanctions, in accordance with their national law, as per Article 16 (Prosecutions and sanctions). 20. With regard to Article 17 (Seizure payments), 15 respondents1 reported having adopted legislation or other measures to authorize competent authorities to levy an amount proportionate to lost taxes and duties from those involved in the illicit trade, such as the producer, manufacturer, distributor, importer or exporter of seized tobacco, tobacco products or manufacturing equipment. 21. Under Article 18 (Disposal or destruction), many Parties reported the seizure and destruction of tobacco products (including illegal planting) in their jurisdiction. Tobacco products seized are usually destroyed or disposed of in appropriate recycling facilities by burning, shredding and by making them completely worthless or unusable. 1 The respondents include the European Union, which responded on its own behalf as a Party to the Protocol and on behalf of its 15 Member States that are State Parties to the Protocol. 2 https://extranet.who.int/iris/restricted/bitstream/handle/10665/340212/9789240022171- eng.pdf?sequence=1&isAllowed=y&ua=1. FCTC/MOP/2/5 6 22. Under Article 19 (Special investigative techniques), 15 respondents1 confirmed that they use special investigative techniques to combat illicit trade in tobacco, tobacco product or manufacturing equipment, while 11 respondents1 notified the Convention Secretariat that they signed bilateral or multilateral agreements or arrangements for the use of such techniques when investigating the criminal offences established in accordance with Article 14 of the Protocol. International cooperation (Articles 20–31) 23. In relation to Articles 20 (General information sharing) and 21 (Enforcement information sharing), although a good number of Parties established daily exchanges of information related to the movement of cigarettes or on seizures, only eight respondents confirmed that they exchanged enforcement information with another Party on their own initiative or on the request of another Party. 24. In relation to Article 22 (Information-sharing: confidentiality and protection of information), 10 respondents1 indicated that they notified the Convention Secretariat of their designated competent national authority for the purposes of Articles 20, 21 and 24. 25. Under Article 23 (Assistance and cooperation: training, technical assistance and cooperation in scientific, technical and technological matters), both the provision and reception of financial or technical assistance to/by other Parties were uncommon. The most cited areas were tracking and tracing, law enforcement, and information gathering. Only two respondents1 notified the Convention Secretariat that they developed or conducted research on the possibilities of identifying the exact geographical origin of seized tobacco and tobacco products. Seven respondents1 confirmed that they have cooperated and exchanged relevant information on investigations and prosecutions with a view to eliminating illicit trade in tobacco products. No assistance provision was reported in the area of data protection. Seven respondents1 mentioned having cooperated and exchanged relevant information on investigations and prosecutions, as per Article 24 (Assistance and cooperation: investigation and prosecution of offences). 26. Thirteen respondents1 reported having adopted measures to establish jurisdiction in accordance with Article 26 (Jurisdiction) over the criminal offences established in Article 14. Concerning Article 27 (Law enforcement cooperation), 20 respondents1 confirmed that they established mechanisms for effective domestic cooperation among the relevant government departments, such as customs, police and other law enforcement agencies, for the benefit of information sharing, data exchange and law enforcement. In addition, eight respondents1 reported that they established channels of communication among each other and, among these, six respondents1 confirmed that they used bilateral or multilateral agreements as basis of the cooperation. 27. Article 28 (Mutual administrative assistance) has a low implementation rate, as only two respondents reported that they entered into a procedure of mutual administrative assistance with another Party when implementing Protocol provisions. 28. Regarding Article 29 (Mutual legal assistance), only seven respondents1 declared having designated a central authority for the purpose of mutual legal assistance in investigations, prosecutions and judicial proceedings. In most cases, the designated authority is located under ministries of justice. 1 The respondents include the European Union, which responded on its own behalf as a Party to the Protocol and on behalf of its 15 Member States that are State Parties to the Protocol. FCTC/MOP/2/5 7 29. Finally, with regard to Article 30 (Extradition), only one respondent reported using the Protocol for the purposes of extradition. PRIORITIES, NEEDS, GAPS AND CHALLENGES TO IMPLEMENTATION 30. Almost all respondents1 have enumerated priorities in implementing the Protocol. For many respondents, the highest priority is reported to be the implementation of a tracking and tracing mechanism for tobacco products (Article 8). Other measures considered as priorities by the respondents were the general obligations under Article 4 of the Protocol, including measures to control the supply chain, cooperation to enhance law enforcement, exchange information, increase the effectiveness of relevant authorities and services, and ensuring the availability of assistance, technical support and capacity building. 31. Eight respondents reported gaps between the resources available and the needs assessed for implementation of the Protocol. Of those eight, only four have provided details on the gaps identified. Three evoked the lack of resources (material, financial or human) for the implementation of the Protocol, and one Party mentioned their need for more research and training for the involved actors, while another Party indicated the lack of administrative capacity for reporting due to the COVID-19 pandemic. 32. Twenty-two respondents1 commented on constraints or barriers encountered while implementing the Protocol. Those constraints and barriers can be grouped under three main categories: (1) technical and capacity-related barriers; (2) barriers in terms of governance; (3) and policy-related obstacles. The lack of expertise in the government – as well as the lack of sufficient training and capacity-building – to implement and monitor the implementation of the Protocol was reported as an immediate barrier to implementation. Two respondents highlighted the lack of guidelines for the implementation of the Protocol articles – one Party specifically mentioned Article 8 – as an implementation barrier. The lack of effective regional and international collaboration, as well as information exchanges on best practices and experiences in relation to the Protocol, was mentioned by a few respondents as an additional technical and capacity-related barrier. Many respondents enumerated challenges in terms of governance and indicated a lack of inter-institutional coordination that could promote better implementation. Tobacco industry interference and the lack of policies (for example, legislation) were also reported as barriers by a few respondents. CONCLUSIONS 33. This Global Progress Report is the first report on the status of implementation of the Protocol since its entry into force, which highlights implementation successes that could serve as examples of implementation for the other Parties. 34. Considering the broad range of social and economic status, and geographical representation, implementation highly varies among Parties. 35. With regard to the time-bound measures included in Article 8, a handful of responses confirmed the establishment of a tracking and tracing system, which constitutes leverage for implementation of a wide range of other articles. The tracking and tracing systems that are already functional or in the process 1 The respondents include the European Union, which responded on its own behalf as a Party to the Protocol and on behalf of its 15 Member States that are State Parties to the Protocol. FCTC/MOP/2/5 8 of being established are key to the establishment and functioning of the global information-sharing focal point, mandated by the Protocol to be set up at the Convention Secretariat. 36. Many respondents mentioned the lack of technical capacities and poor coordination among government agencies as hindering the efficient implementation of the provisions. Several reports submitted by developing-country Parties and Parties in transition also refer to the mismatch between the level of financial resources and the actual needs for meeting their obligations under the Protocol. To address this, implementation of some requirements of the Protocol (such as Articles 6 and 36) could generate additional resources for governments. The identified barriers include the need to develop human capacities and the provision of adequate financial resources. Other barriers in terms of governance and political obstacles also pose challenges to full implementation. 37. Proper implementation of the articles under international cooperation might address some of the problems, for example, capacity support among Parties in scientific, technical and technological matters and in investigations and prosecutions, and have the potential to significantly increase the rate of implementation of the Protocol. ACTION BY THE MOP 38. The MOP is invited to note this report. = = =