REEP hosts Track and Trace specialist at brownbag seminar

In early December 2024, REEP hosted Jérôme Duperrut, Director of Economic Analysis & International Institutions at SICPA. SICPA is a Swiss-based company that provides secure tracking and tracing systems (TTS) for excisable products like tobacco, alcoholic and non-alcoholic beverages, sugar, and fuel.

Within the context of very high illicit tobacco trade in South Africa, Jérôme’s insights about a TTS are very useful.

Below is an abstract of his presentation:

An increasing number of countries that are parties of the Framework Convention on Tobacco Control (FCTC) have also signed the related WHO’s Protocol to Eliminate Illicit trade in Tobacco Products. Article 8 of the Protocol obliges parties to establish a TTS, independent of the tobacco industry, and entirely controlled by the government. According to the Protocol, the cost of the TTS should be borne by the industry, not the government. However, the TTS is owned by Government agencies, like the Ministry of Finance, Tax Authority, and/or the Ministries of Health and Trade.

A secure TTS must be able to identify the legitimate products in the supply chain and ensure its integrity. Excisable products are identified with a unique identifier such as a tax stamp or a direct marking. These stamps or markings include multiple authentication mechanisms, such as color-shift labels polarization, filler effects, QR codes and various overt and covert markings. These elements make the secure tax stamp or markings almost impossible to reproduce, modify, or re-use. Markings also permit one to trace the history of a product at any point of the supply chain. High digitalization throughout the system enables real-time data collection, secure storage in a database instantly accessible to tax authorities, and advanced data analytics. Inspection and enforcement tools enable controls of the excisable products by the authorities in the distribution chain, which facilitates audit and sanctioning. Lastly, consumers are empowered, thanks to a phone app, to check the validity of their purchase and to report any product that is not properly registered, or does not carry a valid stamp.

A growing number of African countries – including Côte d’Ivoire, the Democratic Republic of Congo, the Gambia, Kenya, Malawi, Morocco, Sierra Leone, Tanzania, Togo, and Uganda – have implemented or are in the process of establishing a tracking-and-tracing system. The system has been praised by international organizations (IMF, World Bank, OECD, UNCTAD, WTO) and NGOs for its ability to significantly improve revenue collection and reduce corruption. For instance, the Kenya Revenue Authority cites is track-and trace system as a significant source of the growth in tax revenue. Indeed, revenue gains typically extend beyond excise to value-added tax and corporate income tax.

Please contact Estelle at Estelle.dauchy@uct.ac.za to obtain a copy of Jérôme’s presentation.

Jérôme can be contacted at Jerome.Duperrut@sicpa.com.