Denise Mitchell (Dublin Bay North, Sinn Fein)
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179. To ask the Minister for Finance the status of actions taken as part of the WHO Protocol to Eliminate Illicit Trade in Tobacco Products; and if he will make a statement on the matter. [19560/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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Overall responsibility for the WHO Protocol to Eliminate Illicit Trade in Tobacco Products rests with my colleague, the Minister for Health.  However, I am in a position to advise the Deputy on planned traceability and security feature systems intended to secure the supply chain of tobacco products, which is one of the key elements of the Protocol.  The EU Tobacco Products Directive (2014/40/EU) was influenced by the Protocol and it provides for the introduction of a mandatory ‘traceability’ system alongside a ‘security feature’ system for tobacco products supplied on EU markets.  The traceability and security features (TSF) systems required by the Directive are to be in place by 20 May 2019 in respect of cigarettes and Roll-Your-Own tobacco, and by 20 May 2024 in respect of all other tobacco products.

The ‘traceability’ system requires that all tobacco products manufactured in, or imported into, the EU must be marked with what is referred to as a ‘unique identifier’.  The unique identifier will be scanned at each stage in the legitimate tobacco supply chain by the importer, wholesaler or distributor concerned using specialised equipment.  The EU Commission has noted that the data collated from this process will give an EU-wide picture of the quantity of tobacco products supplied to each member state market, up to the last point before retail sale.  All tobacco products will also, under the Directive, be required to carry a security feature which will verify the authenticity of the product concerned. 

The key developments to date in the implementation of TSF systems for tobacco products in Ireland are as follows:

- EU legislation in form of delegated and implementing acts specifying the measures to be implemented by Member States were adopted in May 2018.  The Department of Health and Revenue represented Ireland during the detailed technical work of finalising this legislation.

- In July 2018, the Government approved the appointment of Revenue as the competent authority for the implementation of TSF systems in Ireland.

- In September 2018, Revenue notified tobacco manufacturers and importers that the Irish tax stamp, used for the collection of tobacco excise on cigarettes and roll your own tobacco products, may be used as the ‘security feature’ for tobacco products under the TSF regime.   

- In March 2019, Revenue appointed Allexis s.r.o. as the ‘ID issuer’ for tobacco products in Ireland following an open procurement process.   The main functions of the ID issuer are to assign specific identifier codes to each economic operator involved in the tobacco supply chain and to generate unique identifiers for each individual tobacco product placed on the market.  The costs are borne by tobacco manufacturers and importers.  

- Revenue continues to work closely with the Department of Health, the EU Commission and other EU Member States on the introduction of TSF systems.  In addition, Revenue has consulted with manufacturers, importers, distributors, and retail bodies on the introduction of the TSF systems.  These consultations are necessary to ensure the smooth implementation of the TSF systems and to ensure continued efficient collection of tobacco excise receipts.  Revenue also maintains a contact and updates web page on its activities in this area on www.revenue.ie. 

Following the adoption of the relevant Directive in 2013, there was a delay of approximately three years before a satisfactory model for the TSF systems was agreed at EU level.  This has created challenges in meeting the start date of 20 May 2019 for the TSF systems across the EU.  Revenue has advised that notwithstanding this delay preparations are proceeding satisfactorily and that it will continue to work closely with the industry to ensure that the TSF systems are introduced on schedule.  It will take up to two months after 20 May 2019 before tobacco products which comply with the TSF regime enter Irish supply chains. It will be from that point that economic operators in Ireland will have to be registered with the ID Issuer in order to receive supplies of tobacco products.