December 30, 2016

Market-Driven Consortia Standards: The Road to Reigning in Illicit Tobacco

Editor’s Note: Cross-posted from the Counterfeit Cigarette Enforcement Forum.

The European Union will be implementing a European-wide track-and-trace system “to prevent the smuggling and counterfeiting of cigarettes, which costs €10 billion a year. . . .” Under the new system, all tobacco pack are “marked with a unique identifier,” and with a special security stamp, so that the packet can be tracked from the factory to the shop floor.”

The key issue that remains unresolved is whether obstructionists who oppose the existence of the tobacco industry will be allowed to participate in operating the track-and-trace system.

Developing the track-and-trace standards and conformity assessment processes via a market-driven consortia would solve the problems of both the EU and the tobacco industry. Market-driven consortia processes allows the industry to operate the system  while also allowing for structured public participation but doing so in a way that prevents hostile tactics from interfering with the process.

Market-driven consortia are alliances of “firms and organisations, financed by membership fees, formed for the purpose of co-ordinating technology development and/or implementation activities. . . .Its outcomes are publicly available, multi-party industry specifications or standards. Usually its members are large companies, which indicates that the resulting standards are likely to be very relevant for the market.” [Final Report to the European Commission (pp. 11-12) citing the Center for Regulatory Effectiveness (2000).] The standards produced by market-driven consortia are “developed through a streamlined, non-consensus process that usually includes representation from only a limited range of interests.”

A Final Report to the European Commission stated that the “common feeling is that standards consortia work more effectively than the formal standards bodies do.” The Report was commissioned to determine how the EU could take advantage of consortia standards while managing concerns that the streamlined processes were undemocratic.

The United States and Canada both suffer from a growing plague of illicit tobacco including the extensive cross-border smuggling of tobacco and cigarettes.

The Center for Regulatory Effectiveness is developing a Framework for a cross-border, North American track-and-trace standards based on market-driven consortia standards and conformity assessment processes. United States Government policy “establishes that agencies may use market-driven consortia standards” in regulatory, procurement, and science applications.

CRE will present our illicit tobacco track-and-trace Framework to regulatory authorities in Canada and the US via the Canada-US Regulatory Coordination Commission.

Stakeholders interesting in assisting with the Framework should send their comments to Bruce Levinson, Center for Regulatory Effectiveness,

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