PMI product marking. Securing the supply chain and fighting the illicit trade by using effective tracking & tracing systems including Codentify TM

Transcription

1 PMI product marking Securing the supply chain and fighting the illicit trade by using effective tracking & tracing systems including Codentify TM

2 content Confronting illicit trade 4 Why illicit trade is 5 How PMI is 6 Tracking and tracing 7 The Codentify 8 Authentication 9 TM Introducing DTS (Digital Tax Stamp) 10 Tracking & tracing and Codentify 11 TM 3

3 confronting illicit trade why illicit trade is article 15, section 1 the spread of illicit trade is a real issue The World Health Organization s Framework Convention on Tobacco Control states: The European Anti-Fraud Office, OLAF, estimated in 2007 that the EU loses more than E6 billion in revenues annually from the illicit trade in cigarettes. OLAF estimated also that 65% of seized cigarettes in the EU are counterfeit. The elimination of all forms of illicit trade in tobacco products, including smuggling, illicit manufacturing and counterfeiting, and the development and implementation of related national law, in addition to sub-regional, regional and global agreements, are essential components of tobacco control. The impact of the illicit trade is dramatic: it not only damages tobacco sales through legitimate channels but it also weakens governments health objectives such as youth smoking prevention and causes losses in tax revenues to the tune of hundreds of millions of dollars each year. Phillip Morris International and its affiliates support the goals of Article 15 of the FCTC. 4 copyright: WHO/P. Virot We encourage all governments to enact and enforce legislation to achieve these goals. 5

4 how PMI is sharing the same goals how does effective work? We are determined to take responsible steps to see the illegal trade in both genuine and fake cigarettes stamped out. But we cannot do it alone. Effective law enforcement is critical to the success of any anti-illicit trade effort, and we will continue to work with governments and other organizations that share our commitment in the fight against illicit trade. At the beginning of 2000, Philip Morris International introduced Master Case Tracking Technology. Today it is a fully integrated system operating in 48 countries. GERMANY CZECH REPUBLIC Berlin & Dresden LITHUANIA POLAND Kutna Hora THE NETHERLANDS Klaipeda RUSSIA Izhora & Kuban Krakow Bergen-op-Zoom UKRAINE Kharkiv Our own efforts to combat illicit trade include: DOMINICAN REP. Extensive screening and monitoring of the people we do business with through a global program of know your customer checks Creating a Product Tracking Intelligence & Security team to develop, implement and use technologies enabling tracking & tracing and product and a Brand Integrity team dedicated to support law enforcement s efforts Conceiving awareness campaign for consumers and for the trade to deter purchases of illicit products Cooperating and exchanging information with law enforcement agencies to facilitate raids of counterfeit manufacturing facilities Pursuing civil actions & encouraging law enforcement to bring criminal prosecutions against counterfeiters and those who deal in counterfeits Securing destruction of seized illicit products and machinery used for counterfeiting Using technologies proven to be invaluable during product inspections and essential in understanding the flow of goods and related trends Performing market surveys to effectively measure the incidence of counterfeit and contraband in different markets Training external and internal stakeholders on counterfeit recognition and trends (over 2,800 law enforcement officers trained in 2008) Implementing effective market specific product security Using state of the art technologies to successfully implement worldwide tracking & tracing systems Cooperating closely with suppliers to deny access for illicit manufacturers to cigarette materials, machinery and spare parts Santiago KAZAKHSTAN SWITZERLAND ARUBA/CURACAO Almaty Neuchâtel Superior Tobacco Company PORTUGAL MEXICO GREECE Albarraque Guadalajara & Mexico City ROMANIA Guatemala City TURKEY SERBIA Guacara Pusan Bucharest Piraeus VENEZUELA GUATEMALA SOUTH KOREA Izmir PHILIPPINES Nis INDONESIA COLOMBIA Tanauan Bekasi Medellin COSTA RICA SENEGAL Heredia Dakar BRAZIL ECUADOR Santa Cruz Quito ARGENTINA URUGUAY Goyao & Merlo Montevideo PAKISTAN Karachi Kotri MALAYSIA Sahiwal Mandra Seremban & Sampoerna INDONESIA Surabaya (2 machines) (4 hand made) AUSTRALIA Moorabbin master case tracking The first step in is to identify each Master Case as it moves from the factory to the warehouse and into the supply chain. Every master case carries a unique barcode label and the system automatically links this code to the order from a distributor or wholesaler (1st layer customer). We have also extended voluntarily this to allow Master Case tracking beyond the first purchaser level through our second tier tracking system in high risk markets. This information is collected from shipments taking place all around the world and recorded in the central data base. Currently, more than 250 million Master Cases are tracked and the data can be accessed/queried by EU authorities, including law enforcement officials, as defined in the EC Agreement. [PMI s] Tracking and Tracing protocols have allowed OLAF and the Member States to rapidly re-create the route taken by genuine smuggled cigarettes from the factory into the hands of the smugglers. EC Press Release No. IP/06/735 (June 6, 2006) carton tracking 6 Most recently, we have applied the CodentifyTM to allow tracking at the carton level. By linking the unique CodentifyTM carton codes to the Master Case barcodes we are able to identify the first purchaser of a seized carton even if it is not found in its original master case. 7

5 the CodentifyTM secure & futureproof everyone can authenticate The basic principle of CodentifyTM is simple: a unique eye-readable code is printed directly onto packs or cartons during manufacturing. As well as detecting the diversion of legitimate products, CodentifyTM combats counterfeiting. It makes fast and easy for consumers, distributors, retailers and law enforcement officials. The solution works on standard equipment and is easily integrated into production processes. No special device is needed the code can be read by eye. All it takes is a phone call to a call center and the code on the product is authenticated within few seconds. During verification, the code is flagged in the system in order to detect any successive request on the same code. The validity of the code can be also verified through , SMS or dedicated internet platform. The ease of means that many more people, at all points in the supply chain, can verify the authenticity of the pack or of the carton. This significantly improves the chances of intercepting illicit products. CodentifyTM is currently in use in Germany, Ecuador, Peru, Panama, Portugal, Lebanon, and the Dominican Republic and will be rolled out on all our products worldwide. secure solution It is impossible for counterfeiters to replicate or steal a valid code because: Codes are securely generated online using algorithms. They look perfectly random from a virtually infinite number (2,386,420,700,000,000,000 possible combinations) It is impossible to guess sibling codes from one code Codes can only carry meaningful information if generated by a pair of valid keys Keys are activated through two uncoupled processes Additional protection for codes and keys is provided through encryption processes Codes are never physically stored in Database during production Information can only be decoded through the Central Information System Codentify moves the masses CodentifyTM is a highly robust system that works in both small and large scale production environments. 8 9

6 introducing DTS (Digital Tax Stamp) tracking & tracing and CodentifyTM an application of CodentifyTM effective T&T Paper tax stamps represent an outdated that can be easily copied. Counterfeiters have access to highly sophisticated printing equipment. All Master Cases marked with UNIQUE identifier worldwide Master Case Tracking and Tracing equipment and systems are installed in more than 700 locations including 300 distributors around the world More than 250 million Master Cases, containing 2.5 trillion cigarettes, recorded to date in the central Database Tracking and Tracing information up to the first customer level to all relevant markets in the world Tracking and Tracing information up to the second or the third customer level in several markets The CodentifyTM can replace paper stamps with marking which is secure. No special reading equipment is required and there is no risk of loss or theft. It creates a seamless verification loop between manufacturers, importers, third parties and governments, and it streamlines the fiscal control process. The is the 21st century alternative to paper based stamps and can make a real contribution to collect excises in an efficient and effective way and to fight against the illicit trade. advantages of CodentifyTM paper stamp process Applications Product Authentication Carton Tracking Digital Tax Stamp digital stamp process Easy integration System runs on standard and off-the-shelf equipment Already operational in real-life production environment since years Scalability Unique code can be authenticated by every stakeholder in the supply chain: authorities, distributors, retailers and consumers No need for costly training or verification devices Security Durable, secure, tamper proof and resistant to forgery Impossible to successfully replicate valid codes or hack the code generation To organize on site visits of the product marking performed in one of our factories please contact: productmarking@pmintl.com 10 11

7 concept: magic pencil photos: ryncki For more information: