Protocol to Eliminate Illicit Trade in Tobacco Products

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1 Protocol to Eliminate Illicit Trade in Tobacco Products

2 Outline Key provisions of the Protocol Process for ratification, acceptance, approval, formal confirmation and accession Work conducted prior to the entry into force

3 First protocol First protocol to the WHO Framework Convention on Tobacco Control (FCTC); Negotiated from by the Parties to the WHO FCTC; Adopted on 12 November 2012 at 5 th session Conference of the Parties to the WHO FCTC in Seoul, Rep. of Korea; Status of the Protocol: open for ratification, acceptance, approval, formal confirmation and accession (not in force).

4 Adoption of the Protocol at COP5

5 Illicit trade and tobacco control Illicit trade undermines price and tax measures for tobacco control; thereby increases the accessibility and affordability of tobacco products; adverse effects on public health and well-being, in particular of young people, the poor and other vulnerable groups; Disproportionate economic and social implications on developing countries and countries with economies in transition.

6 Extent of illicit trade About 9-11 % of the global cigarette market is illicit; In some countries, the illicit market is up to 50% and more; Loss in revenue for governments: If illicit trade were eliminated, governments worldwide could gain at least USD 30 billion/year in tax revenue.

7 Objective of the Protocol To eliminate all forms of illicit trade in tobacco products (Art. 3). Illicit trade is defined in Art. 1.6 as "any practice or conduct prohibited by law and which relates to the production, shipment, receipt, possession, distribution, sale or purchase, including any practice or conduct intended to facilitate such activity."

8 Protocol to Eliminate Illicit Trade in Tobacco Products: Key provisions

9 Key provisions, overview 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).

10 Licensing (Art. 6) and due diligence (Art. 7) Parties shall establish a mandatory licensing system for anyone manufacturing, importing or exporting: tobacco products or manufacturing equipment; Other activities such as retailing or tobacco growing can be made subject to licensing ("Each Party shall endeavour to license "); Any person engaged in the supply chain of tobacco, tobacco products and manufacturing equipment has to conduct due diligence.

11 Tracking and tracing (Art. 8) An international tracking and tracing (T&T) regime will be established, with a "global information sharing focal point" in the Secretariat; Within 5 years of entry into force of the Protocol; Parties establish national/regional T&T systems for all tobacco products manufactured in or imported onto its territory; Parties establish a national central point that will form the link between the national T&T system and the global information sharing focal point;

12 Tracking and tracing (Art. 8), cont'd Within 5 years of entry into force, Parties require "unique, secure and non-removable identification markings" (like codes or stamps) on unit packets and packages and outside packaging of cigarettes; of other tobacco products within 10 years. Information to determine the origin and point of diversion, and to monitor and control the movement of tobacco products and their legal status has to be recorded and made available; This information includes date and location of manufacture, manufacturing facility, information on the first customer, intended market of retail sale and intended shipment route (Art ).

13 Tracking and tracing (Art. 8) 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)

14 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); Persons subject to licensing (in accordance with Art. 6) shall be obliged to take measures to prevent the diversion of tobacco products into illicit trade channels, e.g., reporting of cross-border transfers of cash to the competent authority (Art. 10).

15 Transactions via Internet (Art. 11) Transactions with regard to tobacco products via internet, telecommunication or other evolving technology-based modes of sale 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).

16 Free zones and duty free sales (Arts. 12, 13) Effective control measures regarding manufacturing of and transactions in tobacco and tobacco products in free zones shall be implemented within 3 years of entry into force of the Protocol. (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)

17 Protocol to Eliminate Illicit Trade in Tobacco Products Other provisions

18 Other Protocol provisions include Use of terms (Article 1), including manufacturing equipment, supply chain, tracking and tracing and free zone. Offences, including unlawful conduct and criminal offences, seizure payments, disposal/destruction of confiscated products; International cooperation, including information sharing, and mutual administrative and legal assistance and extradition; Financing of the Protocol, governance and other institutional matters

19 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. Preamble, Article 1.8, Article 2.4.

20 Governance: Meeting of the Parties Meeting of the Parties (MOP) established as governing body of the Protocol (Art. 33); Sessions of the MOP shall be convened immediately before or immediately after the sessions of the Conference of the Parties (COP); First session of the MOP to be convened immediately before or after the next regular session of the COP following the entry into force of the Protocol.

21 Process of ratification and entry into force

22 Status of the Protocol 54 signatories (signature period closed on 9 January 2014): Austria, Belgium, Benin, Botswana, Burkina Faso, China, Colombia, Costa Rica, Côte d'ivoire, Cyprus, Democratic Republic of the Congo, Denmark, Ecuador, European Union, Fiji, Finland, France, Gabon, Germany, Ghana, Greece, Guinea-Bissau, Iran (Islamic Republic of), Ireland, Israel, Kenya, Kuwait, Libya, Lithuania, Madagascar, Mali, Mongolia, Montenegro, Myanmar, Netherlands, Nicaragua, Norway, Panama, Portugal, Qatar, Republic of Korea, Slovenia, South Africa, Sudan, Sweden, Syrian Arab Republic, the Former Yugoslav Republic of Macedonia, Togo, Tunisia, Turkey, United Kingdom of Great Britain and Northern Ireland, United Republic of Tanzania, Uruguay and Yemen. Ratifications: 2 (30 September 2014) Nicaragua, Uruguay

23 Signature Signature: act expressing political approval of the treaty concerned; raises an expectation that the appropriate domestic actions to become a Party will be taken. By signing, a State does not become a Party to the Protocol. Obligations for a signatory: to refrain from acts which would defeat the object and purpose of the treaty.

24 Ratification Ratification (act to become Party): international act by which States which have already signed a treaty establish on the international level their consent to be bound by it. Before ratifying (i.e., depositing the instrument of ratification), governments follow the internal procedure required under their respective constitutional systems to become a Party to a treaty. By depositing their instrument of ratification with the Depositary (the Treaty Section of the United Nations), States establish their consent to be bound by the Protocol.

25 Signature and ratification process Signature (until 9 Jan 2014) How? By signing the original of the Protocol (located at the Treaty Section of the UN Secretariat) Full powers required (except for head of State, head of Government or minister of foreign affairs) Ratification How? By depositing an instrument of ratification with the Depositary (Treaty Section of the UN Secretariat) Entry into force Protocol will enter into force on 90th day after deposit of 40th instrument of ratification Entry into force for each Party: on 90th day after depositing its instrument of ratification

26 Opening for signature

27 Work prior to entry into force Raising awareness and promoting entry into force (webinars, regional FCTC workshops, technical and legal advice), Coordination with international organizations with relevant expertise (such as UNODC and WCO), Study of the basic requirements of a tracking and tracing regime, Development of self-assessment checklist for Parties.

28 Self-assessment checklist A self-assessment checklist for Parties to assess their legal, regulatory and policy frameworks in view of the requirements of the Protocol was prepared by the Convention Secretariat in the six official languages of the COP. Parties are invited to utilize it at their convenience. The checklist is available on the Convention Secretariat's website:

29 Secretariat assistance More information: Model instruments are available for download on the website: WHO FCTC Parties can contact the Convention Secretariat with any questions

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