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1、Review of Track and Trace Systems across Africa THE MACROECONOMIC OUTLOOK FOR AFRICAN MARKETS REPOR TOBACCO TRACK&TRACE SYSTEMS ACROSS AFRICA AUGUST 2023 A REVIEW OF TRACK&TRACE SYSTEMS WITH A FOCUS ON COMPLIANCE WITH THE PROTOCOL TO ELIMINATE ILLICIT TRADE IN TOBACCO PRODUCTS AND THE ROLE OF REGION

2、AL ECONOMIC COMMUNITIES Review of Track and Trace Systems across Africa 1 TABLE OF CONTENTS LIST OF ABBREVIATIONS.2 EXECUTIVE SUMMARY.3 1.INTRODUCTION.5 2.OVERVIEW OF INTERNATIONAL LEGAL INSTRUMENTS.6 2.1.WHO Framework Convention on Tobacco Control.6 2.2.WHO Protocol to Eliminate Illicit Trade in To

3、bacco Products(ITP).7 3.PROGRESS TOWARDS TRACK&TRACE SYSTEMS IN AFRICA.10 4.COMPLIANCE AND EFFECTIVENESS OF EXISTING SYSTEMS.12 4.1.Kenya.12 4.2.Tanzania.15 4.3.Burkina Faso.17 5.THE EU EXPERIENCE.20 5.1.Key Aspects of the EUs T&T System.20 5.2.The Systems Strengths.23 5.3.Shortcomings of the System

4、.24 6.REGIONAL APPROACH.26 7.CONCLUSION.28 REFERENCES.30 APPENDIX.32 A1:Signatories and Parties to the Convention from the African Continent.32 A2:Signatories and Parties to the Protocol from the African Continent.33 A3:Illicit Trade Protocol Article 8:Track and Trace Provisions.34 A4:Methodological

5、 Notes.35 Review of Track and Trace Systems across Africa 2 LIST OF ABBREVIATIONS AU African Union COMESA Common Market for Eastern and Southern Africa DGDA Direction Gnrale des Douanes et Accises EAC East African Community ECOWAS Economic Community of West African States ECTS Electronic Cargo Track

6、ing System EC European Commission EGMS Excisable Goods Management System EOI Expression of Interest EU European Union ETS Paper-based Electronic Tax Stamp FCTC Framework Convention on Tobacco Control FTZ Free Trade Zone GSP Global Information-sharing Focal Point ITP Protocol to Eliminate Illicit Tra

7、de in Tobacco Products KRA Kenya Revenue Authority MoF Ministry of Finance REC Regional Economic Community RFID Radiofrequency Identification SADC Southern African Development Community SKU Stock Keeping Unit STDA Excise Duties Traceability System T&T Tracking and Tracing TPD Tobacco Products Direct

8、ive TRA Tanzania Revenue Authority UI Unique Identifier WHO World Health Organisation Review of Track and Trace Systems across Africa 3 EXECUTIVE SUMMARY The illicit trade in cigarettes accounts for an estimated 10%of all cigarettes consumed globally,according to the World Health Organisation(WHO).C

9、onsumption of illicit cigarettes is significantly more prevalent in low-and middle-income countries such as those across Africa,and likely even more so given long porous borders between African countries which are difficult to control in addition to scarce resources for enforcement.As part of their

10、efforts to combat illicit trade,23 African countries have ratified the Framework Convention on Tobacco Controls(WHO FCTC)Protocol to Eliminate Illicit Trade in Tobacco Products(hereafter referred to as the ITP or the Protocol).The Protocol obliges its Parties to implement a number of measures to inc

11、rease oversight,transparency and enforcement along the tobacco supply chain.A foundational pillar of the Protocol is the agreement to implement a global tracking and tracing(T&T)regime,comprising national and/or regional T&T systems and a global information-sharing focal point(GSP)to secure the toba

12、cco product supply chain and to provide authorities with a platform to exchange information on the origin,transportation route,intended market of sale and potential point of diversion of legal tobacco products.The objective of this study is to review the progress some African countries have made in

13、implementing T&T systems,to assess the effectiveness of these systems,and to evaluate their compliance with the Protocol.The study then evaluates the regional T&T regime implemented across the 27 European Union(EU)countries and considers the potential advantages of a regional approach from an Africa

14、n context.Finally,it makes recommendations for African countries to improve the ITP compliance and the efficacy of their national T&T systems.KEY FINDINGS 1.Fully digital T&T solutions(i.e.,secure and unique codes printed directly on packaging of tobacco products)based on open standards are the only

15、 existing solutions that enable the recording and tracking of the movement of legitimate tobacco products through the supply chain,from the point of manufacture to when the product is sold to the first independent economic operator as required by the ITP.2.Fully digital T&T solutions can fulfil all

16、technical requirements of the ITP.Additionally,they offer a cost-effective and secure approach.It is surprising to see that many African countries,often with scarce foreign exchange reserves,have adopted systems that are far more costly than those in the EU countries,in some cases up to twenty times

17、 more expensive.3.Paper-based systems(i.e.,tax stamps with security features and pre-printed unique codes,still common in several African countries)can only act as an authentication tool.Despite the excessively high cost,they do not perform the track and trace functions through the supply chain requ

18、ired to comply with the ITP obligations.Moreover,paper-based systems are susceptible to counterfeiting,despite containing advanced security features(The Star,2022).4.Fully digital T&T solutions are accepted as the standard in other industries,including pharmaceuticals,and supported as a global polic

19、y proposal by the WHO(WHO,2021a).5.Africas Regional Economic Communities(RECs)should consider adopting a common interoperable T&T solution to enable cross-border sharing of data and close cooperation to eradicate illicit trade.The EUs digital T&T system provides a base model for Africas RECs Review

20、of Track and Trace Systems across Africa 4 to follow.It can be adapted to fit regional requirements,enables the seamless exchange of information,allows technological flexibility,interoperability and fulfils the obligations of the ITP.The conclusions above are based on an in-depth assessment of three

21、 African countries that have implemented systems to combat illegal cigarette trade:Kenya,Tanzania,and Burkina Faso,along with a comparison with the EUs T&T system.The table below reviews the technical compliance of these national systems against the requirements of the FCTC ITP:CATEGORY ITP ARTICLE

22、KENYA TANZANIA BURKINA FASO EU Unique Identification Markings(UIs)Article 8.3:Unique,secure,and non-removable identification markings(UIs)affixed Information Required Article 8.4.1:Necessary information available directly or via a link Article 8.4.2:Date&location of manufacture,manufacturing facilit

23、y,product description and intended market for sales form part of UI Time of Recording Article 8.5:Information recorded at the time of production,time of first shipment by manufacturer or time of import Information Availability Article 8.6:The information recorded is accessible by means of a link wit

24、h the UI marking Article 8.8:The information recorded is accessible to the Global Information Sharing Focal Point(GSP)on request CONSIDERATIONS MOVING FORWARD Based on a review of the FCTC ITP and solutions currently implemented in Africa and the EU,it is recommended that African nations implement f

25、ully digital T&T solutions and adopt a regional approach where possible.Secretariats of RECs are well placed to play a leadership and coordinating role in setting up and administering regional solutions.It is important to recognise that tracking and tracing is just one important measure that countri

26、es should take to combat the illicit trade in tobacco products.It is a tool,if implemented properly,to provide intelligence and improve authorities ability to identify criminal groups and intercept their supply of illegal tobacco.T&T systems should be accompanied by strong enforcement and border con

27、trols,and complement other supply chain control measures outlined in the ITP,such as licensing and due diligence,an effective customs and excise administration system,and a legal and judicial framework with strong penalties.Review of Track and Trace Systems across Africa 5 1.INTRODUCTION A number of

28、 African countries have committed to implement tracking and tracing(T&T)systems either in accordance with the Framework Convention on Tobacco Controls(WHO FCTC)Protocol to Eliminate Illicit Trade in Tobacco Products(ITP)or as part of their national strategy to combat illicit trade in tobacco product

29、s.The purpose of this study is to review progress towards implementing T&T systems across the continent,to assess the compliance of existing systems with ITP requirements and to investigate the potential benefits from a regional perspective to combating illicit trade.As a starting point,the study pr

30、ovides a brief overview of the relevant articles within the FCTC and ITP in section 2.Section 3 reviews progress towards implementing T&T systems(or other supply chain security solutions)across the continent more broadly focussing on countries which recently initiated steps to ratify the Protocol an

31、d/or moved towards the implementation of T&T solutions.The review highlights key issues that authorities need to consider when implementing these solutions.Section 4 provides an assessment of the countries that have reported to have implemented T&T regimes in accordance with the Protocol.A detailed

32、analysis is performed on Kenya,Tanzania,and Burkina Faso.This analysis is aimed at assessing the compliance of the current systems implemented against the requirements of the FCTC ITP,but also considers the effectiveness of these systems more specifically in addressing illicit trade challenges in ea

33、ch country.Section 5 reviews the T&T system in the European Union(EU),implemented under the Tobacco Products Directive(TPD)adopted in 2014.This assessment considers the main elements of the EUs T&T system,its strengths and its weaknesses.The analysis offers learnings to African countries considering

34、 the implementation of a regional T&T system.Section 6 offers a series of recommendations in support of T&T system implementation across Africa,based on the learnings from the review of existing systems in place and the EU system.Review of Track and Trace Systems across Africa 6 2.OVERVIEW OF INTERN

35、ATIONAL LEGAL INSTRUMENTS There are two global treaties that regulate tobacco products:the World Health Organisations(WHO)Framework Convention on Tobacco Control(FCTC)and the Protocol to Eliminate Illicit Trade in Tobacco Products(ITP).The ITP is the first Protocol adopted under the FCTC and is an i

36、nternational treaty in its own right.All FCTC Parties can become a Party to the ITP.Once countries ratify the ITP,they are obliged to implement its measures.Only the ITP provides detailed guidelines and obligations associated with the implementation of a T&T system.2.1.WHO Framework Convention on To

37、bacco Control The FCTC is the first international treaty to be negotiated through the WHO.The treaty was adopted by the World Health Assembly on 21 May 2003 and entered into force on 27 February 2005.Currently,182 states,with 49 in Africa,are party to the Convention1.The FCTC seeks to meet its tobac

38、co control objective through a series of demand and supply provisions,including a specific article Article 15 dedicated to fighting the illicit trade in tobacco products.Under Article 15,Parties to the Convention 1)recognise that the elimination of all forms of illicit trade in tobacco products and

39、that the implementation of related laws and regional agreements are essential components of tobacco control;and 2)agree to adopt measures to ensure that all unit packets and packages of tobacco products and any outside packaging of such products are marked to assist Parties in determining the origin

40、 and point of diversion of tobacco products.Parties must also monitor,document,and control the movement of tobacco products and their legal status.To achieve this,Parties agree that they will include a statement on unit packets or packages of tobacco products for retail and wholesale on its domestic

41、 market,or an effective marking which indicates the intended final destination of the product.They may consider developing a practical T&T regime that would further secure the distribution system and assist in the investigation of illicit trade.To this end,Parties agree to monitor and collect data o

42、n cross-border trade in tobacco products,and implement measures to monitor,document,and control the storage and distribution of tobacco products held or moving under suspension of taxes or duties within its jurisdiction.Importantly,Parties also agree to promote cooperation at regional and subregiona

43、l levels to combat illicit trade of tobacco products.Because the FCTC illicit trade provisions under Article 15 are not detailed,and are,in some cases,non-binding,FCTC Parties developed and adopted the ITP,which provided more detailed guidance and obligations for its Parties.1 United Nations Treaty

44、Collection(2023).See table in Appendix A1.Review of Track and Trace Systems across Africa 7 2.2.WHO Protocol to Eliminate Illicit Trade in Tobacco Products(ITP)Recognizing the significant threat posed by the illicit trade in tobacco products,and the need for greater international cooperation and coo

45、rdination in the fight against illicit trade,Parties to the FCTC negotiated a Protocol based on FCTC Article 15,known as the WHO Protocol to Eliminate Illicit Trade in Tobacco Products.The Protocol was adopted by consensus on 12 November 2012 and entered into force on 25 September 2018.Currently,67

46、states are party to the Protocol,including 23 African countries2.Eight African countries have also signed the Protocol(in other words,expressed their intention to take steps to be bound by the treaty at a later date)3.Figure 1:African countries who have signed or ratified the Protocol Source:United

47、Nations Treaty Collection(2023)2 This includes several member states of the EU,Brazil,and the United Kingdom,as well as 23 African countries.These African countries are depicted in Figure 1 and also listed in Appendix A2.3 These eight states include Botswana,the DRC,Guinea-Bissau,Libya,South Africa,

48、Sudan,Tanzania,and Tunisia.Review of Track and Trace Systems across Africa 8 Provisions of the Protocol which seek to secure the supply chain are summarised in figure 2 below:Figure 2:Summary of the provisions of the Protocol ITP Article 8,Tracking and Tracing,is one of the most critical among sever

49、al supply chain obligations included in the Protocol.The Protocols global T&T regime comprises of national and/or regional T&T systems and a global information-sharing focal point(GSP)located at the Convention Secretariat of the FCTC and accessible to all Parties,enabling them to make enquiries and

50、receive relevant information.T&T systems adopted by ITP Parties must meet the requirements outlined in the Protocol4 in order to ensure compliance with the Protocols international obligations.These obligations can be organized under four main categories:1)Unique Identification(UIs)Creation and Marki

51、ng of Cigarette Packs;2)Linking Information to Markings;3)Record Keeping;and 4)Data Accessibility and Sharing.4 See Appendix A3.Review of Track and Trace Systems across Africa 9 These four categories and the obligations associated therewith are shown in the table below:Table 1:Main tracking&tracing

52、requirements of the Protocol The figure below provides a visual representation of how an ITP compliant T&T system would be applied and operate in practice.Figure 3:An ITP compliant system in practice UNIQUE IDENTIFICATION MARKING CREATION AND APPLICATION Unique,secure and non-removable identificatio

53、n markings are affixed to each pack.Manufacture date,location,facility,the intended retail market and product description shall form part of Unique Identification Markings(UIs).INFORMATION LINKED TO MARKINGS In addition to the information built into UIs,in order for the key information set out by th

54、e ITP to be made available,there needs to be a link within the database or a way of accessing the data.INFORMATION RECORDED All manufacturing and distribution data is captured and recorded securely during production and shipment up to first non-affiliated Economic Operator(such as a distributor or w

55、holesaler).INFORMATION ACCESSIBLE TO AUTHORITIES All required data must be made accessible to authorities by means of a link with the UIs.It should be accessible to the GSP on request through a standard electronic secure interface with its national and/or regional central point.This includes movemen

56、ts of the products up to the retailer(through all distributions in the supply chain),however the ITP only requires tracking to the first non-affiliated Economic Operator.Review of Track and Trace Systems across Africa 10 3.PROGRESS TOWARDS TRACK&TRACE SYSTEMS IN AFRICA This section discusses the pro

57、gress made by African countries in implementing T&T systems and provides initial insights into factors that authorities are encouraged to consider when opting for tracking&tracing systems.The Convention and the Protocol have reporting requirements for Parties to follow.The results from the 2020 repo

58、rting cycle suggest that African countries have been slow to:Implement measures to advance the monitoring of the storage&distribution of tobacco products;Promote cooperation to eliminate illicit trade;Facilitate the exchange of information;and Improve the monitoring of cross-border trade.Furthermore

59、,African countries have been lagging in terms of implementing T&T solutions.10 out of 23 countries that ratified the Protocol still havent initiated the process of T&T implementation.Where self-reported progress has been made,systems or frameworks are still some way off from being compliant with the

60、 ITP.Progress is lacking especially when it comes to the implementation of the following:Unique identification markings(UIs);Affixing or printing UIs on all unit packets and packages and any outside packaging of cigarettes;Capturing information on the intended market for sale;Complete information re

61、garding the product description;and Information regarding storage,warehousing and shipping.Despite limited progress reported in 2020,more African countries are now beginning to take the initial steps towards the implementation of T&T systems.Countries such as Cote dIvoire,Republic of Congo,Senegal a

62、nd Mali have recently initiated administrative or legislative action to start the process.Ghana,meanwhile,announced enhanced security features to be added to its excise tax stamps in 2021,while Mauritius implemented excise stamps with certain authentication features.Egypt,which ratified the ITP in J

63、anuary 2021,currently has a tax stamp solution in place.Review of Track and Trace Systems across Africa 11 Countries which have signed but have yet to ratify the Protocol have also made some progress.Ethiopia,for example,has yet to introduce a T&T solution but has started exploring ways of doing so.

64、Meanwhile,in February 2020,the Democratic Republic of Congo(DRC)signed an agreement for the supply of a paper-based Electronic Tax Stamp(ETS)solution,locally referred to as the excise duties traceability system(STDA).Sudan,which signed the ITP Protocol in September 2018,also has a paper-based tax st

65、amp system in place that indicates whether the appropriate taxes have been paid.While some efforts have been made to implement T&T systems,the approach is fragmented across the continent and focused on authentication(tax-stamp based)and tax verification solutions,rather than tracking and tracing.The

66、se solutions are not compliant with the ITP requirements.Moreover,African nations have made decisions regarding supply chain security in isolation,despite a high prevalence of cross-border illicit tobacco trade.To be able to secure supply chains across shared borders,countries need to implement inte

67、roperable T&T systems based on open standards5 with adequate information-sharing capabilities.The compliance of systems with the ITP is crucially important towards ultimately reaching the objective of the Protocol,which is aimed at combating illicit tobacco trade.This is the focus of the next sectio

68、n,which entails an in-depth assessment of the countries that have reported to have implemented T&T regimes in accordance with the Protocol.The aim is to assess the compliance of these systems against the requirements of the ITP.5 The International Telecommunication Union(ITU)defines open standards a

69、s follows:Open Standards are standards made available to the general public and are developed(or approved)and maintained via a collaborative and consensus driven process.Open Standards facilitate interoperability and data exchange among different products or services and are intended for widespread

70、adoption.IBM further explains the use of open standards as:“Businesses within an industry share open standards because this allows them to bring huge value to both themselves and to customers.Standards are often jointly managed by a foundation of stakeholders.There are typically rules about what kin

71、d of adjustments or updates users can make,to ensure that the standard maintains interoperability and quality.”Review of Track and Trace Systems across Africa 12 4.COMPLIANCE AND EFFECTIVENESS OF EXISTING SYSTEMS This section entails an in-depth assessment of the countries that have reported to have

72、 implemented T&T regimes in accordance with the Protocol.The countries examined are Kenya,Tanzania and Burkina Faso.The analysis is aimed at assessing the compliance of the systems in these countries against the requirements of the ITP.It also considers the effectiveness of these systems more specif

73、ically in tackling illicit trade in tobacco products given the challenges each country is faced with.4.1.Kenya OVERVIEW OF TRADE IN TOBACCO Kenya is a net exporter of legal tobacco products6,due to the manufacturing facilities based in the country.Its US$136m of tobacco exports are predominantly to

74、neighbouring countries in the East African Community(EAC).Its largest imports of legal tobacco products are from Uganda.The significant tobacco product trade between Kenya and its neighbours highlights the need for Kenya and its neighbouring countries to jointly implement an interoperable T&T system

75、 which monitors the manufacturing and movement of tobacco products across the region.Kenya is also highly exposed to illicit tobacco products.Historically,Kenya experienced large quantities of locally tax-evaded cigarettes,which were produced for export but never left the country,alongside undeclare

76、d domestic cigarette production.These illicit cigarettes were sold domestically without the payment of taxes.Kenya successfully counteracted locally manufactured illicit tobacco products;however,illicit cigarettes today are more frequently smuggled in from neighbouring,lower-priced countries,such as

77、 South Sudan and Uganda.This again underpins the need for Kenya and its neighbouring countries to implement a fully interoperable T&T system.CURRENT SUPPLY CHAIN SECURITY SOLUTION The Kenya Revenue Authority(KRA)has repeatedly tried to address illicit trade in Kenya through various tax stamp and sup

78、ply chain solutions.Paper tax stamps were introduced in 2003,with serial numbers,serving as proof of tax payments.However,these stamps proved easy to both counterfeit and steal.Further attempts were made to control the supply chain,including the introduction of an Electronic Cargo Tracking System(EC

79、TS)which tracks cigarettes in transit.This system was aimed at ensuring that VAT and excise taxes could only be refunded once products reached their export destination and could not be locally tax-evaded7.6 Includes finished and unfinished tobacco products.7 Ross(2017).Review of Track and Trace Syst

80、ems across Africa 13 The current Electronic Goods Management System(EGMS)was introduced in 2013.It consisted of an Electronic Tax Stamp(ETS),with enhanced security features.These features included overt security(identifiable by the general public)and covert features,such as security inks,only identi

81、fiable by law enforcement.Each tax stamp has a code which needs to be scanned by a photosensitive reader,which must be placed on each manufacturing line.The data from each scan is sent to the KRA so that the volume of cigarettes produced can be reconciled with the tax paid.This requirement is only i

82、n place for cigarettes destined for sale in Kenya,with exported products covered under the already established ECTS.There are several weaknesses associated with the Kenyan system.Firstly,the information provided within the codes is limited,as these are purchased on the date of declaration,rather tha

83、n on the date of manufacture,meaning that they are not product specific and could be used for a range of different products.Secondly,there is no interoperability,meaning that any codes affixed to packs are meaningless to other national authorities.The system is not interoperable with other systems,s

84、uch as with the system in Uganda,where a large proportion of Kenyas illicit trade comes from(despite the Ugandan system being provided by the same operator).Finally,the system has significant cost implications,with the cost equating to$25.72 per 1,000 stamps8.This is a much higher price than alterna

85、tive T&T systems which offer a greater level of functionality.Furthermore,proposed costs for 2023 were$40 per 1,000 stamps,one of the most expensive in the world,adding to Kenyas foreign exchange pressures.KENYAS SYSTEM AND ITP COMPLIANCE Table 2 highlights the level of compliance across ITP require

86、ments,as defined by the specific articles which represent the core requirements of a T&T system.The compliance of Kenyas EGMS with the FCTC ITP is weak.This is mainly due to the lack of supply chain information and reporting capabilities which limit the information available to authorities,thus redu

87、cing supply chain oversight and diminishing their ability to combat illicit trade.Critically,paper-based electronic tax stamps are only applied to cigarette packs,which does not allow for aggregation to cartons,cases and pallets.This means that ETS only allows verification or authentication of a pac

88、k and if it is legally manufactured and whether taxes were paid,but it does not provide any information on who purchased the cigarettes,the shipment route and its intended destination creating supply chain security issues and delays in inspections.8 CTI(2021).Review of Track and Trace Systems across

89、 Africa 14 Table 2:Kenya EGMS ITP compliance CATEGORY ITP ARTICLE COMPLIANCE NOTES Unique Identification Markings(UIs)Article 8.3:Unique,secure,and non-removable identification markings(UIs)affixed The paper stamps incorporate unique codes and removal will result in visible damage counterfeiting rem

90、ains possible.Information Required Article 8.4.1:Necessary information available directly or via a link System does not capture various information elements,such as first customer not affiliated with manufacturer,etc.Article 8.4.2:Date&location of manufacture,manufacturing facility,product descripti

91、on and intended market for sales form part of UI Date of declaration not always aligned with manufacturing date.Market of sale shown as KRA on stamp.Manufacturing facility not shown;only manufacturer name.UI is pre-printed hence is not specific to product applied.Time of Recording Article 8.5:Inform

92、ation recorded at the time of production,time of first shipment by manufacturer or time of import Stamp is affixed and UI activated on the production line,although not all information is captured.Information Availability Article 8.6:The information recorded is accessible by means of a link with the

93、UI marking Information linked to KRA and can be scanned using a mobile application from the KRA,but not all information recorded and available.Article 8.8:The information recorded is accessible to the GSP on request Because system is proprietary it is not clear what information can be shared in whic

94、h format.Also,not all information captured so it wont be able to provide certain data.EFFECTIVENESS OF THE SYSTEM In addition to not complying with ITP requirements,Kenyas EGMS does not appear to have been effective in combating illicit trade.Around 80%of illicit cigarettes enter the country from Ug

95、anda,where lower-priced cigarettes are sold and then smuggled over the border.Both Uganda and Kenya use the same ETS provider,however,the systems are not compatible.Considering this,an interoperable digital T&T system shared by Kenya and Uganda(and other countries within the region)may enable author

96、ities to identify the supply chain weaknesses that enable Ugandan cigarettes to be smuggled into Kenya.However,this would require the support of and coordination between local law enforcement authorities.More effective monitoring capabilities would have improved the systems ability to curb illicit t

97、rade in tobacco products.In its current form,the system does not allow for the meaningful monitoring of tobacco products.As there is no aggregated level codes and requirement to track to the first customer,authorities cannot identify the diversion point from the legal supply chain.Furthermore,the la

98、ck of information stored,coupled with the lack of any ability to interoperate the system with Review of Track and Trace Systems across Africa 15 other national or international systems prevents Kenya from being able to use the system to tackle illicit trade in any meaningful way.The fact that the sy

99、stem is also very costly and operated by the same provider as the system in Uganda(the major source of illicit trade to Kenya)also raises concerns about whether the system is correctly designed to curb cross-border illicit activity.The paper-based nature of Kenyas EGMS system adds unnecessary admini

100、strative and maintenance-related complexities in addition to being significantly more expensive than digital solutions,which offer more functionalities.4.2.Tanzania OVERVIEW OF TRADE IN TOBACCO As one of the worlds major tobacco leaf exporters,Tanzania exports large quantities of raw tobacco,but has

101、 limited domestic production of tobacco products outside of the products manufactured by the Tanzania Cigarette Public Limited Company(TCC Plc).The majority of TCC Plcs cigarettes are consumed domestically,with the remainder of the market covered by another local cigarettes manufacturing company(Mas

102、termind Tobacco(T)Ltd)and others imported from international manufacturers.Historically the level of illegal tobacco trade in Tanzania has been low,and mainly comprised of flows of cheap“illicit white”cigarettes from Zambia and Uganda,meaning tobacco products manufactured for the sole purpose of bei

103、ng smuggled and sold in another market.Since 2021,smuggling of cigarettes into Tanzania from these countries increased and was complemented with counterfeit cigarettes from Burundi and illegal beedies from the DRC.The increasing trend of illegal tobacco trade generates lucrative profits for smuggler

104、s and illegal local traders,while depriving government of excise tax revenues,deceiving consumers in Tanzania and undermining legitimate trade.CURRENT SUPPLY CHAIN SECURITY SOLUTION Tax stamps were first introduced in 1998 by the Tanzania Revenue Authority(TRA)to tackle the emergence of cigarettes o

105、n which no taxes were paid.They were an administrative tool fully paid for by the government,and in this respect the TRA secured low-cost,high-quality stamps from the German government national printers(Bundesdruckerei).The stamps were regularly updated with new security features and technology and

106、served their purpose for over twenty years.In 2018,TRA selected a new supplier for a system called Electronic Tax Stamps(ETS).Similar to the previous system,ETS is a paper-based solution with advanced security features.As in Kenya,each tax stamp has a code which is scanned by a reader placed on a ma

107、nufacturing line.This allows authorities to monitor the produced volume and reconcile the volume with the tax paid.The main difference between the previous and current ETS systems is the cost,the latter being around 400%more expensive(i.e.,$18.2 per 1,000 stamps).Industry stakeholders claim a signif

108、icant reduction in profit,which adversely impacts government revenue through lower corporate taxes.Moreover,the previous requirement of direct payment in foreign currency for stamps meant additional pressure on Tanzanias foreign reserves.Therefore,the TRA negotiated a change in payment terms in 2022

109、 to Tanzanian Shillings rather than US dollars.Review of Track and Trace Systems across Africa 16 The cost of the system can still be considered a much higher price than alternative T&T systems which offer a greater level of functionality.TANZANIAS SYSTEM AND ITP COMPLIANCE Tanzania has not yet rati

110、fied the ITP;however,the compliance of its ETS system with the ITP is still analysed given that Tanzania is an FCTC Party,and may choose to ratify the ITP in the future.Similar to the Kenyan system,Tanzanias ETS system does not appear to comply with ITP provisions.That said,Tanzanian authorities are

111、 currently reviewing the current system against alternatives and are consulting on more effective solutions.The Tanzanian solution has a number of critical weaknesses.First,the proprietary software makes the system inflexible and prevents regional interoperability.Second,the system lacks aggregation

112、 capabilities,meaning that stamps are only applied to cigarette packs and are not linked to cartons,cases or pallets.Stakeholders have also raised concerns about the relatively high cost of the stamps.These shortcomings prevent the ETS solution from effectively counteracting illicit trade.Table 3:Ta

113、nzania ETS ITP compliance CATEGORY ITP ARTICLE COMPLIANCE NOTES Unique Identification Markings(UIs)Article 8.3:Unique,secure,and non-removable identification markings(UIs)affixed While the stamps have unique codes that cannot be removed without being damaged,their paper-based nature make them suscep

114、tible to counterfeiting.Information Required Article 8.4.1:Necessary information available directly or via a link Various information required by the ITP,such as first customer not affiliated with manufacturer,is not currently captured.Article 8.4.2:Date&location of manufacture,manufacturing facilit

115、y,product description and intended market for sales form part of UI Stamp only includes date of activation,which does not always align with manufacturing date.Market of sale shown as TRA,and only the manufacturers name is included.Time of Recording Article 8.5:Information recorded at the time of pro

116、duction,time of first shipment by manufacturer or time of import Although the stamp is affixed and UI activated on the production line,not all required information is captured.Information Availability Article 8.6:The information recorded is accessible by means of a link with the UI marking Informati

117、on linked to TRA and can be scanned using a mobile application from the TRA,but not all information available.Article 8.8:The information recorded is accessible to the GSP on request Because system is proprietary it is not clear what information can be shared in which format.Also,not all elements ca

118、ptured so it wont be able to provide certain information.Review of Track and Trace Systems across Africa 17 EFFECTIVENESS OF THE SYSTEM Given the numerous similarities between Tanzanias and Kenyas paper-based ETS solutions,both systems have a similar level of effectiveness.The paper-based nature of

119、Tanzanias ETS system adds unnecessary administrative and maintenance-related complexities in addition to being more expensive than digital solutions,which offer more functionalities.The systems monitoring capabilities are limited,as no information in the supply chain is captured after the activation

120、 on the production line.This means that no actual tracing of the pack takes place,as no additional information is captured as the product moves through the supply chain.Moreover,information sharing between Tanzania and its neighbours is negligible,limiting any opportunities to control the cross-bord

121、er flow of tobacco products.As the stamps are physically shipped,they are susceptible to theft.Additionally,counterfeiting is still possible,as illicit stamps and packs appear legitimate to the naked eye.This problem is in line with the increasing trend of counterfeit products with fake stamps infil

122、trating Tanzania from neighbouring countries.4.3.Burkina Faso OVERVIEW OF TRADE IN TOBACCO Burkina Fasos tobacco market is largely dominated by local production.Situated in the centre in West Africa,the country is also a transit corridor for illicit cigarettes,in part because it shares porous border

123、s with Togo,Benin,Ghana,and to a lesser degree with Cte dIvoire,Niger and Mali.To fight against illicit tobacco traffics,Burkina Faso has adopted a ministerial order,like Benin,Niger,and Mali,strengthening the control on imported and transiting products.In addition,Burkina Faso implemented a fully d

124、igital T&T solution reducing the flow of illegal tobacco products into and through Burkina Faso to neighbouring countries.CURRENT SUPPLY CHAIN SECURITY SOLUTION In December 2015,the government adopted an inter-ministerial decree to adopt a digital T&T solution aimed at increasing revenues and combat

125、ting illicit cigarette trade.The system was implemented 18 months later and went live in June 2017.It followed a phased approach from digital volume verification(serving the same purpose as traditional tax stamps by using digital Unique Identifier codes directly on packaging)to a fully-fledged T&T s

126、ystem,including the functionality to monitor product movement along the supply chain.The system is currently the only one in Africa that satisfies the ITP requirements and can track products up to the first independent economic operator who is not affiliated with the manufacturers or importers.UI co

127、des are printed directly on packs,using hardware installed into production lines.These printers are controlled by software that can halt production if codes are not correctly printed directly onto packs.Codes are purchased by the manufacturers from the vendor contracted by the government.The cost,at

128、 US$4.00 per 1,000 packs in 2021,is considerably lower than the other supply chain security systems analysed in Kenya and Tanzania,whilst the information stored and accessible to authorities is more comprehensive.Review of Track and Trace Systems across Africa 18 The system is based on the internati

129、onally recognized GS19 standard,which could enable future cross-border information sharing.A smartphone mobile application can be used to scan the UI on a pack of cigarettes,irrespective of where in the world the product is.This means that the system allows information sharing between countries.If w

130、idely implemented in other African countries,the GS1 based systems have substantial potential to assist authorities in controlling cross-border smuggling,which is a prominent issue in the region.BURKINA FASOS SYSTEM AND ITP COMPLIANCE Burkina Fasos T&T system is highly compliant with the FCTC ITP.As

131、 a digital system it offers the ability for T&T integration across the continent as implementation increases.The cost-effectiveness of the system also minimises the impact on the price of legitimate tobacco products,thereby limiting the incentive for increased illicit market activity.The system also

132、 strengthens the oversight of Burkina Fasos tobacco supply chain by providing near real time supply chain information to authorities,a functionality lacking in other systems reviewed in this study.Table 4:Burkina Faso T&T system ITP compliance CATEGORY ITP ARTICLE COMPLIANCE NOTES Unique Identificat

133、ion Markings(UIs)Article 8.3:Unique,secure,and non-removable identification markings(UIs)affixed The UI codes are embedded in the packaging of the tobacco product,making it more difficult to counterfeit and impossible to remove without causing damage.Information Required Article 8.4.1:Necessary info

134、rmation available directly or via a link The required information is available via a link as the UI is scannable.Article 8.4.2:Date&location of manufacture,manufacturing facility,product description and intended market for sales form part of UI All information required by the ITP is included in the

135、UI.Time of Recording Article 8.5:Information recorded at the time of production,time of first shipment by manufacturer or time of import Information is recorded in accordance with this requirement,beyond the point of production.Information Availability Article 8.6:The information recorded is accessi

136、ble by means of a link with the UI marking There is hardware and a mobile application that makes it possible to obtain information by scanning the UI.Article 8.8:The information recorded is accessible to the GSP on request As software adheres to open standards(GS1),information sharing with the GSP i

137、s possible but not yet in practice.9 The GS1 standard forms a common foundation for business by uniquely identifying,accurately capturing,and automatically sharing vital information about products,locations,assets and more.Review of Track and Trace Systems across Africa 19 EFFECTIVENESS OF THE SYSTE

138、M Burkina Fasos system is flexible enough to be able to be modified and improved according to technological developments to address the ever-changing illicit trade supply chain issues.As a digital system,logistical and administrative complexities are reduced,and UIs are easily applied to the product

139、ion line.The codes are generated on demand(which serves as licensing system)and the information is updated in real time,therefore the system maximises the control of authorities for production and beyond.Tobacco products can also be tracked through the supply chain as information is recorded up unti

140、l the first independent economic operator who is not affiliated with the manufacturers or importers,making it possible to determine if there is a deviation from the legitimate tobacco supply chain.While the system does not currently share information with other national or global authorities,it has

141、the capabilities to do so.Therefore,were other African nations to introduce similar approaches it would greatly increase the value of the system.It must be noted,however,that Burkina Faso represents a key transit route for illicit trade through the region,again underlining the need for a regional sy

142、stem to be introduced to reinforce domestic capabilities.Review of Track and Trace Systems across Africa 20 5.THE EU EXPERIENCE The EU Tobacco Products Directive(TPD)entered into force on 19 May 2014 and introduced the requirement of an EU-wide T&T system for the legal supply chain of tobacco produc

143、ts.The T&T regime,based on a digital and data-driven approach,requires a security system which enables authorities and consumers to verify the authenticity of a tobacco product as well as track and trace its movements along the supply chain throughout the EU.The EUs T&T system is the first regional

144、system compliant with the Protocol and came into effect on 20 May 2019 for cigarettes and roll-your-own tobacco.It will cover all other tobacco products by 20 May 202410.This section will first discuss the main elements of this regional T&T system,then review the strengths and weaknesses of the syst

145、em.Lastly,the section will identify ways in which African countries might leverage the EU regional T&T approach to enhance the fight against illicit trade.5.1.Key Aspects of the EUs T&T System UNIQUE IDENTIFIER Each Member State of the EU must appoint a provider which is independent from the tobacco

146、 industry,to generate and issue UI codes that are applied to unit packets.Every unit that is manufactured in or imported into the bloc(including products that will be re-exported)has to be marked with a unit level UI consisting of(a)the UI issuer identification code;(b)an unpredictable serial number

147、;and(c)a product code.The information provided by the UI must include:(i)the place and time of manufacturing(ii)the facility at which it was manufactured (iii)the machine used in the manufacturing process (iv)the product description(v)the intended market of retail sale (vi)the intended shipment rout

148、e(vii)where applicable,the importer.The UIs must consist of numbers and/or letters for unit packets and where necessary,aggregated packaging.Economic Operator Identifier codes(EOIDs)are issued for all economic retailers involved in the supply chain so that the codes can be easily identified under th

149、e system11.Using this EOID,all supply chain movements are recorded from the manufacturer to the last economic operator before the first retail outlet.10 EU TPD(2014).11 Official Journal of the European Union(2017a).Review of Track and Trace Systems across Africa 21 DATA STORAGE Every producer and im

150、porter of tobacco products must establish an agreement with a data storage provider(primary repository)to store the traceability data solely related to their products.While producers select and pay for the primary repositories,the repositories must pass an independence test and be approved by the Eu

151、ropean Commission(EC).Alongside these repositories the Commission built a secondary repository which stores a copy of all traceability data from the primary repositories for legally manufactured tobacco products within the EU.The secondary repository contains all traceability data on the EU level an

152、d makes the data accessible to the EU authorities and to the EC.It also hosts“the Router”,to which all the relevant economic operators send their scanning data.The secondary repository allows Member States and the EC to access and query the data stored in the repository12.Figure 4:The EUs track&trac

153、e system explained13 Source:EU Directorate-General for Health and Food Safety(2018)12 Official Journal of the European Union(2017b).13 The EU also requires unit packets of tobacco products placed on the market to carry a tamper-proof security feature composed of visible and invisible elements.Securi

154、ty features do not play any role in terms of product movement monitoring,and the majority of Member States use their existing tax stamps as security features(EU TPD Article 16).Review of Track and Trace Systems across Africa 22 ANTI-TAMPERING DEVICES In order to ensure that all movements of the unit

155、 packets can be recorded and transmitted,manufacturers and importers should verify the unique identifiers so as to ensure their correct application and readability.To control this critical process for the unit level unique identifiers,anti-tampering devices,which are to be supplied by an independent

156、 third party,should be installed on the devices used for verification purposes14.AUDIT Producers and importers of tobacco products need to select and pay an external auditor,which needs to be approved by the EU,to monitor all the third-party activities including the data repositories.The external au

157、ditor shall submit an annual report to the competent authorities and to the Commission,assessing in particular any irregularities in relation to access15.Table 5:EU T&T system ITP compliance CATEGORY ITP ARTICLE COMPLIANCE NOTES Unique Identification Markings(UIs)Article 8.3:Unique,secure,and non-re

158、movable identification markings(UIs)affixed The UI codes are embedded in the packaging of the tobacco product,making it impossible to remove without causing damage.Information Required Article 8.4.1:Necessary information available directly or via a link The required information is available via a li

159、nk as the UI is scannable.Article 8.4.2:Date&location of manufacture,manufacturing facility,product description and intended market for sales form part of UI All information required by the ITP is included in the UI.Time of Recording Article 8.5:Information recorded at the time of production,time of

160、 first shipment by manufacturer or time of import Information is recorded in accordance with this requirement,from production to the last economic operator before the first retailer.Information Availability Article 8.6:The information recorded is accessible by means of a link with the UI marking The

161、re is hardware and a mobile application that makes it possible to obtain information by scanning the UI.Article 8.8:The information recorded is accessible to the GSP on request As software adheres to open standards(GS1),information sharing with the GSP is possible but not yet in practice.14 Official

162、 Journal of the European Union(2017a).15 EU TPD(2014);Official Journal of the European Union(2017c).Review of Track and Trace Systems across Africa 23 5.2.The Systems Strengths EFFECTIVE CONTROL OF THE SUPPLY CHAIN The main strength of the EUs T&T system is that all movements of tobacco products in

163、the Union are recorded and identification codes are provided to all economic operators,all facilities,and all production lines.This provides a unique opportunity for collaboration among all the Member States by providing a real time and comprehensive set of data on product movements among all the le

164、gitimate supply chain operators.The system enables the competent authorities to have visibility and control of the legitimate supply chain in near real-time.Codes are reported multiple times along the supply chain,and their location cannot change without prior notification;the system rejects any dup

165、licates in line with the validation rules.All supply chain events must be reported within a certain amount of time(e.g.,within 24 hours prior to the occurrence of the event).The system introduces several measures that make the EU traceability codes highly secure.These include randomized serializatio

166、n,verification processes by anti-tampering devices and time stamps,which enable further methods of monitoring(by providing exact time and date of product manufacturing)16.The UI codes provide a greater level of information to authorities and include information about the product,its place of manufac

167、turing,including machine,intended market of resale and intended shipment route ahead of being delivered to the distribution facility.The EU system goes beyond the ITP requirements by covering the transactions among all economic operators in the tobacco products supply chain up to the first retail ou

168、tlet.While this can be quite ambitious for countries who are planning to implement track and trace systems in more challenging technological environments,it is in line with Article 8.10 of the Protocol,which recommends the broadening of the scope of the applicable system in a manner up to the point

169、that all duties,relevant taxes,and where appropriate,other obligations have been discharged at the point of manufacture,import or release,from customs or excise control.COST-EFFECTIVENESS OF THE SYSTEM Under the EU TPD,member states are allowed to charge fees to manufacturers or importers for genera

170、ting and issuing UIs.The EU also requires the costs charged to be fair,reasonable,and proportionate to:(a)the services rendered;and(b)the number of UIs requested over a given period of time by the manufacturer or importer concerned.16 Official Journal of the European Union(2017c).The average price o

171、f UIs in the EU is around$1.4 per 1,000 packs,which is on average twenty times cheaper than the paper-based tax stamps implemented in some of the African countries,despite offering a greater level of control and security.Review of Track and Trace Systems across Africa 24 INDEPENDENT SERVICE PROVIDER

172、S In the EU system,none of the ITP obligations are delegated to the tobacco industry.The manufacturers are obligated to select independent data repositories and external auditors,where the selection is subject to approval of the EU Commission based on a pre-defined independency criteria.Also,the ID

173、issuers are also independent which ensures the codes printed by manufacturers originate from a secure source.In addition,the EU system is based on a precise set of rules defining responsibilities and requirements for Member States,independent service providers and the tobacco industry.Instead of a s

174、ingle provider of a turnkey system,the EU system allows for the coexistence of multiple service providers of various technical blocks allowing competition and driving down costs.REGIONAL T&T COORDINATION While it is not exclusive to tobacco products,the EU has several mutual administrative assistanc

175、e agreements in place that allow for the comprehensive application of customs legislation across the region.It is also aimed at effectively preventing,investigating,and combatting customs irregularities and fraud.EU member states have access to information stored under the traceability system throug

176、h a regional data repository(i.e.,secondary repository)and the excise movement control system.This allows for synchronicity among systems,despite each member state appointing its own ID issuer.AGGREGATION&DISAGGREGATION CAPABILITIES The EUs T&T system requires digital codes on all packs and aggregat

177、ed shipping containers.Aggregation defines the relationship between the parent and child allowing the receiver of the product to scan one code and understand exactly what is in the whole shipment.This means that UIs for cartons,master cases,or pallets are linked to lower-level UIs including individu

178、al packs and hence can be tracked and traced in bulk.Being able to track product movements at an aggregated level alleviates the operational burden on economic operators,especially wholesalers and distributors,who would otherwise have to scan each pack of cigarettes that is handled.5.3.Shortcomings

179、of the System CODING REQUIREMENTS FOR EXPORT PRODUCTS The EU TPD requires all products manufactured within the EU to be marked with a UI regardless of the destination of the products.As more countries adopt similar digital systems in their own jurisdictions,this could create barriers to trade.While

180、some countries(e.g.,the UK,United Arab Emirates,Saudi Arabia)implemented systems that allow EU codes to be paired with the codes generated by their systems through virtual code-pairing,other countries(e.g.,Russia,Kazakhstan)require their own codes to be printed on packs destined to their countries.R

181、eview of Track and Trace Systems across Africa 25 Because the EU system lacks code pairing capabilities it makes it impossible for manufacturers to produce products for these export countries,thus creating barriers to trade that reduce export opportunities.OVERCOMPLICATION MAKES IMPLEMENTATION MORE

182、CHALLENGING The two-layer database structure in the EU(i.e.,primary and secondary repositories)adds further cost and complexity which can lead to data consistency issues.The maintenance of two separate databases might lead to communication errors that adversely impact manufacturing and/or shipment o

183、perations through delays without providing any additional enforcement benefits.It is estimated by the industry that approximately half of the database errors are a result of synchronization mistakes between the primary and secondary databases which are beyond the control of manufacturers.Following B

184、rexit,the UK consolidated primary and secondary databases into one independent database to eliminate synchronization errors and improve operational efficiency and accuracy17.This appears to offer a more simplified system which could serve as a useful example for African countries.17 UK HMRC(2019).Re

185、view of Track and Trace Systems across Africa 26 6.REGIONAL APPROACH There are 54 countries on the continent,but many African countries are attempting to combat illicit trade in isolation,without addressing the root cause of the problem which relates to cross-border illicit trade from neighbouring c

186、ountries.Track and trace implementation efforts lack cooperation and information sharing between countries.Systems implemented so far have not always succeeded in curbing illicit trade on a sustainable basis.In this context,increased cooperation between countries,or at a regional level could help co

187、untries to more effectively fight illicit trade.There are a number of Regional Economic Communities(RECs)18 across the African continent centred on driving integration,ultimately with regional objectives being aligned with the African Unions(AU)Agenda 2063 which aims to“achieve an integrated,prosper

188、ous and peaceful Africa,driven by its own citizens and representing a dynamic force in the international arena.”In this regard,REC Secretariats could facilitate information management and tobacco supply chain monitoring,in the same way that the EU does.Implementing a regional track and trace system

189、would help African countries to share technical resources while minimizing cost.By working together,countries can pool their resources to develop effective T&T systems.This would allow countries to save money on the development,implementation and ongoing maintenance of the system.Additionally,countr

190、ies can share best practices,which can help to improve the effectiveness of the system.Such a solution will not only alert member nations of illicit tobacco trade within its borders,but crucially also allow for determining the origin of illicit tobacco products.Timely information will provide law en

191、forcement with intelligence to better protect and control border posts or cross-border routes.This is especially important given law enforcements limited resources.Outdated information,on the other hand,will allow illicit traders sufficient time to change both trading patterns and supply and market

192、entry routes.Hence,real-time and digitalised T&T systems will be best suited in this respect.A regional administrative control centre will ensure that a platform exists for strategising,information sharing and the facilitation of required training and other joint initiatives agreed between member na

193、tions.18 The AU recognises eight RECs,which include the Common Market for Eastern and Southern Africa(COMESA),the East African Community(EAC),the Southern African Development Community(SADC),the Arab Maghreb Union(UMA),the Community of SahelSaharan States(CENSAD),the Economic Community of Central Af

194、rican States(ECCAS),the Economic Community of West African States(ECOWAS)and the Intergovernmental Authority on Development(IGAD).Review of Track and Trace Systems across Africa 27 There are several RECs across Africa,which could coordinate the efforts of its members to implement interoperable T&T s

195、ystems(e.g.,EAC,SADC,SACU).Given their wide coverage across the continent,RECs such as ECOWAS and COMESA are well-placed to take a leadership role in adopting regional T&T systems,which can then expand to include an increasingly larger part of the African continent.Figure 5:COMESA and ECOWAS members

196、 cover a wide area across Africa Sources:COMESA,EAC,SADC,ECOWAS Review of Track and Trace Systems across Africa 28 7.CONCLUSION The illicit trade of tobacco products has several negative consequences for Africa,including:Loss of revenue:Governments in Africa lose substantial revenue each year due to

197、 illicit trade of tobacco products.This revenue could be used to fund important public services,such as healthcare and public education.Increased crime:Illicit trade of tobacco products can be linked to other forms of crime,such as smuggling,corruption,and funding terrorism and violence.Non-complian

198、t Product:Illicit tobacco products do not follow strict regulatory requirements.This means they may not respect health warnings,product standards and can contain illegal substances e.g.harmful chemicals,and toxins.Hindering smoking cessation efforts:Illicit tobacco products are usually cheaper than

199、legal tobacco products making them more accessible to people who are trying to quit or more attractive to minors.It is therefore crucial for African countries to take the necessary steps to secure their tobacco supply chains.In this regard,the following concluding remarks are important to consider:C

200、onclusion 1 More African nations should ratify and implement the Protocol to assist them in fighting illicit trade in tobacco products.The first step African Nations should take is to ratify the Illicit Trade Protocol,which sets the international standards on fighting illicit trade in tobacco produc

201、ts.49 African nations have ratified the FCTC,but only 23 have ratified the Protocol.Countries that are not yet Party to the Protocol should strive to adopt policies and T&T systems compliant with ITP requirements.This will not only assist in combating illicit trade,but will also enable these countri

202、es to accede to the Protocol in the future.Conclusion 2 Paper-based tax stamp systems act as an authentication tool and lack the critical elements needed to be a compliant and effective track and trace system.The analysis demonstrates that paper-based systems can verify the authenticity and origin o

203、f a product,yet they do not track the products through the supply chain to detect and prevent diversion.They are not SKU-specific and do not incorporate the required product information.Secondly,paper-based systems in Africa lack aggregation and disaggregation capabilities.To effectively record and

204、track all forms of packaging,systems need to allow pack level UIs to be aggregated into UIs of cartons,master cases and/or pallets(as seen in the EU and Burkina Faso).Thirdly,paper-based systems are susceptible to counterfeiting,despite the inclusion and continuous rotation of advanced security feat

205、ures.Finally,paper-based systems are significantly more expensive,and when the system provider requires direct payment in foreign currency for stamps it may exert pressure on the often-fragile foreign reserves of African countries.Review of Track and Trace Systems across Africa 29 Conclusion 3 Regio

206、nal T&T systems based on open standards could enable African countries to pool key financial and technical resources to successfully implement T&T systems in the most effective way.If African countries want to ensure effective regional collaboration,they must coordinate and develop interoperable T&T

207、 systems,based on open standards,as early as possible.Currently,authorities are operating in isolation,which prevents coordination,allowing illicit market activity to persist.Interoperable solutions will allow governments to independently choose their own T&T suppliers and operators while simultaneo

208、usly ensuring that coordination is possible.A regional approach eventually followed by continent-wide cooperation will enhance traceability across Africa and fortify the fight against illicit tobacco trade.This is also in line with the aim of ITP,which is to coordinate efforts to secure supply chain

209、s through a global information-sharing focal point.To this end,the EU T&T solution provides an appropriate blueprint for Africas T&T solution.Cost-effective digital systems will improve information sharing and interoperability across the continent a critical aspect of combatting illicit market activ

210、ity.In terms of implementing T&T systems on a larger scale,Africa should look to leverage its existing RECs,as the existing trade ties and legislative and institutional frameworks will ensure a swifter and more aligned implementation.This approach also feeds into the objectives of the AfCFTA agreeme

211、nt,as it will promote integration across the continent.It is important that a large and well-established REC takes a leadership role in coordinating the adoption of a regional T&T system,potentially expanding to include an increasingly larger part of the African continent.With this in mind,COMESA an

212、d ECOWAS could be well-placed to coordinate regional systems.Conclusion 4 While T&T systems are an effective tool if implemented properly,they are not a silver bullet that will counteract illicit trade on their own.It is important to recognise that tracking and tracing is just one of the measures th

213、at countries should take to combat the illicit trade in tobacco products.No T&T solution can address the illicit trade in tobacco products on its own.In order to effectively fight against illicit trade,strong enforcement and cross-border control remain of key importance.Moreover,T&T systems must be

214、complemented by additional supply chain controls as outlined in the ITP i.e.,licensing,due diligence and a legal framework consisting of deterrent sanctions and penalties.Review of Track and Trace Systems across Africa 30 REFERENCES COMESA Business Council(CBC),2015.Promoting manufacturing competiti

215、veness in COMESA:Towards the establishment of a framework for combating illicit trade in COMESA.Available here.Confederation of Tanzania Industries(CTI),2021.Impact assessment report:Consultancy services for a review of the impact of electronic tax stamps(ETS)for the Tanzania manufacturing industry.

216、October 2021.EU Directorate-General for Health and Food Safety.2018.Systems of traceability and security features for tobacco products in the EU.Stakeholder manual.Available here.Global Initiative Against Transnational Organized Crime,2021.Where theres smoke,theres fire:investigating the illicit cig

217、arette trade from Tanzania to Kenya.Available here.International Coalition of Medicines Regulatory Authorities(ICMRA),2021.Recommendations on common technical denominators for traceability systems for medicines to allow for interoperability.Available here.Kameja,E.&Kamuzora,F.,2019.Combating counter

218、feiting through electronic tax stamps.November 2019.Available here.Observatory of Public Sector Innovation(OPSI),2019.Protecting public health and reducing the availability of illicit tobacco products through the establishment of an EU-wide supply chain control system.Available here.Official Journal

219、 of the European Union,2017a.Commission Implementing Regulation(EU)2018/574 on technical standards for the establishment and operation of a traceability system for tobacco products.15 December 2017.Available here.Official Journal of the European Union,2017b.Commission Delegated Regulation(EU)2018/57

220、3 on key elements of data storage contracts to be concluded as part of a traceability system for tobacco products.15 December 2017.Available here.Official Journal of the European Union,2017c.Commission Implementing Decision(EU)2018/576 on technical standards for security features applied to tobacco

221、products.15 December 2017.Available here.Official Journal of the European Union,(EU TPD)2014.Directive 2014/40/EU of the European Parliament and of the Council of 3 April 2014 on the approximation of the laws,regulations and administrative provisions of the Member States concerning the manufacture,p

222、resentation and sale of tobacco and related products and repealing Directive 2001/37/EC.Available here.Review of Track and Trace Systems across Africa 31 Ross,H.,2017.Tracking and tracing tobacco products in Kenya.Preventative Medicine Vol 105:15-18.The Star.2022.Fake excise stamps,short-supply hits

223、 water bottlers in Kenya.Available here.UK HMRC,2019.The Tobacco Products(Traceability and Security Features)Regulations 2019.Explanatory Memorandum.2019 No.594.Available here.United Nations Treaty Collection,2023.WHO Framework Convention on Tobacco Control.Available here.World Bank,2019.Confronting

224、 illicit tobacco trade:A global review of country experiences.Available here.WHO Convention on Tobacco Control(WHO FCTC),2023.Implementation database.Available here.WHO Convention on Tobacco Control(WHO FCTC),2022.2021 Global progress report on implementation of the protocol to eliminate illicit tra

225、de in tobacco products.World Health Organisation.Available here.WHO Convention on Tobacco Control(WHO FCTC),2013.Protocol to eliminate illicit trade in tobacco products.World Health Organisation.Available here.World Health Organisation(WHO),2021a.Policy paper on traceability of medical products.Avai

226、lable here.World Health Organisation(WHO),2021b.2021 Global progress report on implementation of the WHO Framework Convention on Tobacco Control.Available here.World Health Organisation(WHO),2003.WHO Framework Convention on Tobacco Control.Available here.Review of Track and Trace Systems across Afri

227、ca 32 APPENDIX A1:Signatories and Parties to the Convention from the African Continent WHO Framework Convention on Tobacco Control Participant Signature Ratification*Participant Signature Ratification*Algeria 20-Jun-03 30-Jun-06 Lesotho 23-Jun-04 14-Jan-05 Angola 29-Jun-04 20-Sep-07 Liberia 25-Jun-0

228、4 15-Sep-09 Benin 18-Jun-04 03-Nov-05 Libya 18-Jun-04 07-Jun-05 Botswana 16-Jun-03 31-Jan-05 Madagascar 24-Sep-03 22-Sep-04 Burkina Faso 22-Dec-03 31-Jul-06 Mali 23-Sep-03 19-Oct-05 Burundi 16-Jun-03 22-Nov-05 Mauritania 24-Jun-04 28-Oct-05 Cabo Verde 17-Feb-04 04-Oct-05 Mauritius 17-Jun-03 17-May-0

229、4 Cameroon 13-May-04 03-Feb-06 Morocco 16-Apr-04 Central African Republic 29-Dec-03 07-Nov-05 Mozambique 18-Jun-03 14-Jul-17 Chad 22-Jun-04 30-Jan-06 Namibia 29-Jan-04 07-Nov-05 Comoros 27-Feb-04 24-Jan-06 Niger 28-Jun-04 25-Aug-05 Congo 23-Mar-04 06-Feb-07 Nigeria 28-Jun-04 20-Oct-05 Cte dIvoire 24

230、-Jul-03 13-Aug-10 Rwanda 02-Jun-04 19-Oct-05 Democratic Republic of the Congo 28-Jun-04 28-Oct-05 Sao Tome and Principe 18-Jun-04 12-Apr-06 Egypt 17-Jun-03 25-Feb-05 Senegal 19-Jun-03 27-Jan-05 Equatorial Guinea 17-Sep-05 Seychelles 11-Sep-03 12-Nov-03 Eswatini 29-Jun-04 13-Jan-06 South Africa 16-Ju

231、n-03 19-Apr-05 Ethiopia 25-Feb-04 25-Mar-14 Sudan 10-Jun-04 31-Oct-05 Gabon 22-Aug-03 20-Feb-09 Togo 12-May-04 15-Nov-05 Gambia 16-Jun-03 18-Sep-07 Tunisia 22-Aug-03 07-Jun-10 Ghana 20-Jun-03 29-Nov-04 Uganda 05-Mar-04 20-Jun-07 Guinea 01-Apr-04 07-Nov-07 Tanzania 27-Jan-04 30-Apr-07 Guinea-Bissau 0

232、7-Nov-08 Zambia 23-May-08 Kenya 25-Jun-04 25-Jun-04 Zimbabwe 04-Dec-14*Ratification,Acceptance,Approval,Formal confirmation,Accession,Succession Source:United Nations Treaty Collection(2023)Review of Track and Trace Systems across Africa 33 A2:Signatories and Parties to the Protocol from the African

233、 Continent WHO Protocol to Eliminate Illicit Trade in Tobacco Products Participant Signature Ratification*Benin 24-Sep-13 06-Jul-18 Botswana 01-Oct-13 Burkina Faso 08-Mar-13 30-Mar-16 Cabo Verde 16-Oct-19 Chad 13-Jun-18 Comoros 14-Oct-16 Congo 14-May-15 Cte dIvoire 24-Sep-13 25-May-16 DRC 9-Dec-13 E

234、gypt 10-Sep-20 Eswatini 21-Sep-16 Gabon 10-Jan-13 01-Oct-14 Gambia 26-Sep-16 Ghana 24-Sep-13 22-Oct-21 Guinea 09-May-17 Guinea-Bissau 24-Sep-13 Kenya 29-May-13 04-May-20 Libya 10-Jan-13 Madagascar 25-Sep-13 21-Sep-17 Mali 08-Jan-14 17-Jun-16 Mauritius 26-Jun-18 Niger 12-Jul-17 Nigeria 08-Mar-19 Rwan

235、da 19-May-23 Senegal 31-Aug-16 Seychelles 07-Jan-20 South Africa 10-Jan-13 Sudan 30-Sep-13 Togo 09-Jan-14 31-Jan-18 Tunisia 11-Jan-13 United Republic of Tanzania 24-Sep-13 *Ratification,Acceptance,Approval,Formal confirmation,Accession,Succession Source:United Nations Treaty Collection(2023)Review o

236、f Track and Trace Systems across Africa 34 A3:Illicit Trade Protocol Article 8:Track and Trace Provisions At the heart of the Protocol lies securing the supply chain of tobacco products.To achieve this,it requires the establishment of a global T&T regime within five years of entry into force on 25 S

237、eptember 2018 i.e.,by 25 September 2023(Article 8.1).The global T&T regime must comprise national and/or regional T&T systems this is captured in Article 8.2 which states that each Party will establish a T&T regime for all tobacco products that are manufactured in or imported onto its territory.The

238、national T&T regime will be controlled by the Party(Article 8.2).Furthermore,the global T&T regime will incorporate a GSP located at the Convention Secretariat of the WHO FCTC(Articles 8.1 8.2).To establish an effective global T&T regime,each Party must ensure that unique,secure,and non-removable id

239、entification markings referred to as UI markings either form part of or are attached to all unit packets and packages and any outside packaging of cigarettes.This UI marking can take the form of a code or a stamp.It should be attached to unit packets and packages and any outside packaging of cigaret

240、tes within a period of five years of entry into force of the Protocol for that Party.For other tobacco products,it must be attached within ten years(Article 8.3).To assist Parties in determining the origin of products,the point of diversion,and to monitor and control the movement of tobacco products

241、 and their legal status(Article 8.4),each Party must allow for the following information to be available,either directly or accessible by a link:a.date and location of manufacture b.manufacturing facility c.machine used to manufacture tobacco products d.production shift or time of manufacture e.the

242、name,invoice,order number,and payment records of the first customer who is not affiliated with the manufacturer f.the intended market of retail sale g.product description h.any warehousing and shipping i.the identity of any known subsequent purchaser j.the intended shipment route,the shipment date,s

243、hipment destination,point of departure and consignee(Article 8.4.1).Furthermore,the UI marking described in Article 8.3 shall include information on the date and location of manufacture(a),the manufacturing facility(b),the product description(g),and where available,the intended market of retail sale

244、(f)(Article 8.4.2).Where information on the intended market of retail sale(f)is not available at the time of marking,such information must be included on the product in compliance with Article 15.2(a)of the WHO FCTC.Article 15.2(a)of the Convention requires that the statement“sales only allowed in(i

245、nsert name of the country,subnational,regional,or federal unit)”is included on unit packets and packages of tobacco products for retail and wholesale use on the domestic market,or that the products carry an effective marking which indicates the intended final destination of the product.Review of Tra

246、ck and Trace Systems across Africa 35 The information contained above in bullets(a)to(j)must be recorded at the time of production or at the time of the first shipment by any manufacturer or at the time of import onto its territory(Article 8.5).The information must also be included in a format estab

247、lished or authorised by the Party and its competent authorities(Article 8.7).Furthermore,it must be accessible to the GSP on request,through a standard electronic secure interface with its national and/or regional central point(Article 8.8).The accessibility of the information through the GSP is sub

248、ject to various provisions laid out in Article 9,which sets rules around who can access the information,how often and when they can access it,and how it may be used.The T&T system should be developed to the point where all duties,relevant taxes,and other obligations are discharged at the point of ma

249、nufacture,import,or release from customs or excise control(Article 8.10).Provisions on cooperation between Parties to the Protocol,as well as with international organisations for sharing and developing best practices for T&T systems are also included(Article 8.11).This extends to knowledge and skill

250、s transfer,training&capacity-building,and technology development.Furthermore,the tobacco industrys role in the implementation of a T&T system is described(Articles 8.12-8.14).The obligations assigned to Parties to the Protocol,which are outlined above,should not be performed by,or delegated to the t

251、obacco industry.That said,interaction between the competent authorities of the Parties and the tobacco industry and those representing its interests is not strictly prohibited but should only occur when strictly necessary.Parties may require the tobacco industry to bear any costs associated with the

252、 T&T system.A4:Methodological Notes This assessment was conducted through desktop research of publicly available information.This included country policies,laws,and guidelines available through revenue authorities and other government institutions as well as credible information available through ot

253、her sources such as think tanks,academic literature,or publications by multilateral organisations.However,due to data and information gaps,interviews were held with industry representatives as well as with other stakeholders.Questionnaires and surveys were also circulated and completed by in-country

254、 industry representatives.The information received via the questionnaires,surveys and interviews was independently verified as much as possible through publicly available and other sources.The study also indicates where information from industry sources were utilised through referencing where deemed applicable and appropriate.Review of Track and Trace Systems across Africa 36