Prevention of illicit trade
One of the Tobacco Products Directive’s goals is the prevention of illegal tobacco trading. To achieve this goal, a traceability system has been established and security features have been added to products to ensure authenticity. With these methods, it is possible to limit the availability of illegal tobacco products and influence the ubiquity of smoking. The prevention of illegal tobacco trading is therefore important for public health, the national economy, and the equality of business operators.
This system also requires the marking of every tobacco retail package with a unique identifier. And, to verify authenticity, every tobacco retail package must be marked with a security feature.
Valvira and the municipalities monitor the compliance of tobacco retail packages. The Police, Customs and other authorities also monitor illegal trade.
The markings to prevent illegal trading on retail packaging have been required for cigarettes and loose tobacco from 20 May 2019. This requirement will be extended to other tobacco products on 20 May 2024.
Traceability
The traceability system exists to prevent the illegal trade of tobacco products by enabling, among other things, product tracking from manufacturing to the first point of retail. In practice, traceability is implemented in two ways. Retail packages must be marked with a unique identifier, and tobacco product sellers must keep records on the movement of the products. Tobacco product manufacturers and importers can acquire the unique identifiers for the Finnish market from the issuer appointed by the Ministry of Social Affairs and Health (STM), and then add the unique identifier to the tobacco product’s retail package. Applying for identification codes and additional information on applying for the identifiers is available on the issuer’s website.
In the first stage, a unique identifier is required for cigarettes and loose tobacco retail packages from 20 May 2019. In the second stage, from 20 May 2024, a unique identifier is required on all tobacco products’ retail packages. This means that all products that include the tobacco plant as an ingredient must be marked with a unique identifier. Before said date, tobacco products manufactured in or imported to the EU without a unique identifier may be traded freely until 20 May 2026. Thereafter, tobacco products without a unique identifier on their retail packaging may no longer be sold on the market.
Tobacco product movements must be recorded through the supply chain, from manufacturing to retail sales. The records must indicate, among other things, transportation events regarding the products (such as shipping of tobacco products from a facility) and transaction events (such as sending invoices and receiving payments). The industry must provide the devices required for product tracking records to participants in the tobacco product trade. In practice, this duty for record-keeping requires that every economic operator that participates in the tobacco product supply chain must apply for identifier codes that are used to identify every operator and location. These codes can effectively identify every buyer and the tobacco products’ actual transportation route from the manufacturing facility to the first place of sale. A wholesaler may only sell cigarettes and loose tobacco (and from 20 May 2024, other tobacco products) to an operator that has the required identifier codes.
An operator must immediately notify the issuer of identifiers of terminating their operations as well as of possible changes to the information provided. Notifications can be made to the issuer through their provided interface. Requesting and receiving identifier codes is free of charge.
A tobacco product retailer is required, in addition to the retail permit, to have the identifier codes for the traceability system. This is necessary for other operators in the tobacco product sales chain to fulfil their duties regarding product transportation and payment records and submission of the data into the traceability system. However, a retailer is not required to record tobacco product transportation events, as these are the duty of other operators in the tobacco product sales chain.
Sellers (and retailers) of tobacco products other than cigarettes and loose tobacco are also required to have the required identifier codes from 20 May 2024. Wholesalers are not allowed to sell tobacco products to a retailer that does not have the identifier codes required by the traceability system. A holder of a retail permit may report the matching identifier codes of the operator and facility to the municipality issuing the permit.
A holder of a sales permit must report the end of their operations to the municipality’s supervisory authority (issuer of the retail permit) and to the issuer of the identifier codes. The notification of termination may be submitted to the municipality by email to the address specified, and to the issuer of the identifiers through their interface.
There are three types of codes: for operators, for facilities, and for machines.
The operator identifier code must be acquired by all operators that participate in the tobacco product trade (including exports). This duty applies not only to manufacturers and importers but also to logistics companies and every wholesaler and retailer.
A facility refers to a location, building or vending machine that is used to manufacture, store, or sell tobacco products. The facility identifier code is therefore sought for tobacco product wholesale and retail locations as well as for the storage buildings of tobacco products. For instance, a wholesale or retail operator of tobacco products with two sales points must apply for an operator identifier code (for the company) and two facility identifier codes (to identify the sales points).
The machine identifier code is sought for the machines and parts thereof that are used in the industrial manufacturing of tobacco products.
A unique identifier must include all the predetermined data, such as the product’s manufacturing location and time, and its destination. This makes it possible to identify, locate, and trace the product through the entire supply chain as well as to transfer the product transportation data to the records system. The unique identifier must be a minimal-length alphanumerical string, the length of which may not exceed 50 characters. The unique identifier is coded into a machine-readable data carrier. The data carrier may, for instance, be an optical barcode or a QR code that is added to the package in a permanent and non-removable manner. It is possible to add a time stamp to the unique identifier in a human-readable format (yymmdd). The format of the unique identifiers is discussed in detail in the EU Commission’s Traceability Regulation (EU 2018/574).
Wholesales packages for tobacco products must also be marked with a unique identifier (wholesale-level unique identifier). Unique identifiers for the wholesale level are available from the issuer, or created by the operator. If the unique identifier for a wholesale package is created by the operator, it must be an ISO/IEC 15459–1:2014 or ISO/IRC 15459–4:2014 (or more recent version) compliant, unique retail package code. The unique wholesale package identifier must be electronically included in the unique identifier of each retail package within. The format of the unique identifiers is discussed in detail in the EU Commission’s Traceability Regulation (EU 2018/574).
Safety feature
Retail packages of tobacco products in the EU market must include a safety feature, which consists of both visible and invisible factors. The safety feature markings help both consumers and the authorities to determine whether the product on sale is an authentic or illegal tobacco product.
The safety feature marking must be added either by attaching or print, or by a combination thereof, to the package so that it is impossible to replace, reuse, or alter it in any way. Placement of the safety feature on a retail package may not hinder the visibility of the health warning label. Neither may it be covered by price markings or similar labels. The Ministry for Social Affairs and Health (STM) has issued a regulation on the traceability and safety features of retail tobacco product packages (290/2019), which lays out the placement and marking of the safety features on a package, among other things.
In the first stage, safety features are required on cigarettes and loose tobacco retail packages from 20 May 2019. In the second stage, from 20 May 2024, the safety features are required on all products’ retail packages. Before said date, tobacco products manufactured in or imported to the EU without the safety features may be traded freely until 20 May 2026. Thereafter, tobacco products without safety features on their retail packaging may no longer be sold on the market.
The safety features of tobacco products for the Finnish market consist of the following five authenticity factors:
- a thinline pattern
- colour-changing ink
- paper that does not reflect ultraviolet rays
- microprinting
- hidden safety fibres
Frequently asked questions: traceability
Apply for identifier codes from the Ministry’s named issuer. Additional information and instructions on applying for the identifier codes is available on the issuer’s website. Requesting and receiving identifier codes is free of charge.
As a tobacco product retailer, you may ask another operator (so-called third party) to apply for the operator and facility codes on your behalf. Such a third party must be registered in the traceability system, which means that it must have acquired its own codes beforehand. Third-party registrations must always be done with the consent of the retail sales point operator. The third-party must report all the registration data to the retailer, including all the codes that have been issued.
All operators in the tobacco product sales chain are required to have identifier codes. These include manufacturers, importers, logistics companies, wholesalers and retailers. These codes are used to identify tobacco product buyers and the products’ actual transportation route from the manufacturing facility to the first place of sale, among other things. The purpose of the system is to prevent illegal tobacco product trading. Wholesalers are not allowed to sell tobacco products to a retailer that does not have the identifier codes required by the traceability system.
An operator that only sells tobacco products other than cigarettes and loose tobacco is required to acquire the necessary identifier codes on 20 May 2024.
Every retailer is required to acquire identifier codes, regardless of whether the tobacco products for sale are purchased from another retailer (in such a case, the seller acts as a wholesaler, i.e. sells tobacco products for resale instead of to consumers). If a tobacco product retailer has not acquired the identifier codes for their company and sales point (facility), the retail packages sold at the sales point cannot be traced all the way to the retail sales point, which is a requirement. Non-compliant activities may lead to your retail permit being revoked.
Chapter 2, section 1.4 of the Traceability Regulation’s (EU 2018/574) annex II sets forth the data that an operator must provide when requesting a facility identifier code. For mobile retail outlets, the application process is otherwise the same as regular outlets, but you select type 4 (“Other”) in the “Type of facility (F_Type)” field (regular retail outlets select type 3). After selecting “Other,” enter in the following field, “Description of other facility” (F_Type_Other), for instance, in the case of a shop bus, enter that your store is a bus and enter the vehicle registration number (e.g. Shop bus, license plate UYT-998).
Terminating the activities of an operator that owns the identifier codes (business) or a sales point (facility) must be reported to the competent issuer. This way, the identifier codes can be removed from the issuer's register. You can file such a notification in the issuer’s system by following the detailed steps in the instructions. Keep in mind that identifier codes may not be given to another operator upon the end of your own operation. You must also report the expiration of a retail permit to the municipality the retail outlet is located in.