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Tobacco: Excise Duties

HM Treasury written question – answered on 15th March 2016.

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Photo of Baroness Crawley Baroness Crawley Labour

To ask Her Majesty’s Government what assessment they have made of the risk that HMRC's current pilot of the Codentify system would give tobacco companies an unfair advantage in any future tender process.

Photo of Baroness Crawley Baroness Crawley Labour

To ask Her Majesty’s Government, in the light of HMRC's pilot of the Codentify system, why no other companies or systems have been asked to participate in such a pilot.

Photo of Baroness Crawley Baroness Crawley Labour

To ask Her Majesty’s Government what have been the full costs to date, including staff time, of HMRC's pilot of the Codentify system.

Photo of Baroness Crawley Baroness Crawley Labour

To ask Her Majesty’s Government what assessment they have made of whether HMRC's current pilot of the Codentify system is consistent with their obligations under the World Health Organisation's Framework Convention on Tobacco Control.

Photo of Baroness Crawley Baroness Crawley Labour

To ask Her Majesty’s Government whether HMRC's current pilot of the Codentify system takes account of any known weaknesses of Codentify for the purpose of authentication.

Photo of Baroness Crawley Baroness Crawley Labour

To ask Her Majesty’s Government what have been the interim results of HMRC's pilot of the Codentify system, when that pilot is due to end, when the final results will be assessed and published, and what benchmarks they have used in that pilot.

Photo of Lord O'Neill of Gatley Lord O'Neill of Gatley The Commercial Secretary to the Treasury

HM Revenue and Customs (HMRC) takes the restrictions in the World Health Organisation Framework Convention on Tobacco Control (FCTC) very seriously. These require that the development, implementation and enforcement of tobacco policies as part of public health policies should be protected from the influence of the tobacco industry.

Codentify is a system, developed and introduced by the major tobacco manufacturers on their own initiative through the Digital Coding and Tracking Association (DCTA). HMRC played no part in the development or introduction of the system nor did HMRC require that it be introduced. Codentify codes already feature on packs and are there regardless of any HMRC use of them. The trial HMRC is undertaking is to see whether these existing codes could help officers in the field to authenticate products and help tackle illicit tobacco. No other companies currently provide such codes.

The use of Codentify by HMRC is not part of an exercise to evaluate the wider use of potential tools available on the market. Any such exercise would be undertaken in the context of the implementation of the EU Tobacco Products Directive track and trace security feature requirements, which will be implemented by May 2019 for cigarettes and hand-rolling tobacco.

The European Commission is still considering, with Member States, proposals for new pan European security features and track and trace systems, and has yet to determine any technical specifications. HMRC are not evaluating Codentify as a track and trace tool or potential security feature; the aspects of the system being used are entirely separate from the requirements of the Directive.

The use of Codentify is not a formal pilot and there will not be reports or results to publish. Instead the trial will identify the strengths, weaknesses and usefulness of using Codentify to HMRC as an authentication tool in the field. HMRC will review this later in 2016. Some resource has been spent providing access to the system and training officers in the use of the tool. However, this has been minimal and has not been separately identified. The Department of Health leads on public health policy and has been consulted on this initiative. HMRC sees no conflict between its current use of the Codentify system and FCTC requirements.

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