Brussels 20 February 2026
Since its entry into force in 2005, the WHO Framework Convention on Tobacco Control (FCTC) has provided the global framework for tobacco control policies.
In recent years, Article 5.3 has sparked increasing debate in the European policy environment going beyond its original intent. Some interpretations suggest that it requires the systematic exclusion of the tobacco industry from any interaction with policymakers, regardless of the policy area.
Tobacco Europe believes that this trend warrants clarification.
Article 5.3 was designed “[…] to protect [public health] policies from commercial or vested interests of the tobacco industry […]”. It is not intended to justify the blanket exclusion of lawful economic operators from regulatory discussions that directly affect them. Nor does it extend to unrelated policy areas such as environmental legislation, customs enforcement, taxation, financial regulation or other non-health matters This interpretation was further clarified by the Court of Justice of the European Union in February 2022, in its judgment in Case C-160/20 concerning emission measurement methods. The Court stated:
“It is clear from the very wording of that provision that it does not prohibit all participation of the tobacco industry in the establishment and implementation of rules on tobacco control but is intended solely to prevent the tobacco control policies of the parties to the convention from being influenced by that industry’s interests.”
This confirms that Article 5.3 aims to prevent undue influence in public health policies, not to prohibit engagement, information exchange or dialogue , and especially not to extend its scope to unrelated areas of policymaking.
Tobacco Europe believes that a correct interpretation of Article 5.3 provides an opportunity to strengthen transparency, accountability and integrity in decision-making. These objectives are fully aligned with EU and OECD principles of Better Regulation, which emphasise openness, stakeholder consultation and evidence-based policymaking.
Ensuring transparency does not require exclusion. On the contrary, structured and accountable dialogue with all affected stakeholders supports more robust, balanced and legally sound policymaking.
Tobacco Europe and its members operate legally within the European Union. They are subject to extensive regulation and are directly impacted by legislative and regulatory initiatives across multiple policy fields. As such, they are legitimate, transparent and accountable stakeholders in European policymaking and should be able to engage with the European institutions.
Brussels, 4 February 2026
Tobacco Europe wrote to DG ENVI requesting clarification on Section 7 of the Guidelines, which addresses interactions between authorities and economic operators regarding tobacco filter litter: TE letter SUPD Guidelines Clarification
Brussels, 20 November 2025
Tobacco Europe was pleased to take part in today’s European Parliament hearing on the revision of the Tobacco Excise Directive, organised by the FISC Committee.
We appreciated the opportunity to share our perspectives and to contribute to a lively and constructive debate with MEPs and other stakeholders. Exchanges like this are essential to ensure that the ongoing discussions around tobacco taxation are informed, balanced and reflective of the realities across Member States.
Our slides and opening statement from the hearing are available below:
Brussels, 24 October
On 22 October 2025, the World Health Organization (WHO) published a news release entitled “Tobacco industry targets WHO FCTC COP and MOP negotiations: Parties urged to stay vigilant” (available here).
In this communication, the WHO Secretariat of the Framework Convention on Tobacco Control (FCTC) alleged that the tobacco industry was attempting to “interfere” with upcoming negotiations ahead of the Tenth Conference of the Parties (COP11) in Geneva, including by “placing sympathetic actors in delegations” and “spreading misleading research.”
These accusations were later reported by media outlets, among which Politico in its Morning Health Care newsletter on 23 October.
Tobacco Europe firmly rejects these unfounded allegations and the characterisation of the industry’s engagement. The statement below reiterates our organisation’s commitment to transparency, evidence-based policymaking, and respect for democratic processes.
Read our full statement here: Tobacco-Europe-Statement-on-COP11-lobby.pdf (1115 downloads )
Brussels, Monday 8 September
Tobacco Europe’s statement on France’s ban of nicotine pouches
Tobacco Europe takes note of the French government’s decision to ban nicotine pouches as of March 2026.
We regret that France has chosen a prohibitionist approach, rather than engaging in a science-based debate about the role of less harmful nicotine alternatives in reducing the burden of smoking. Evidence from several European countries shows that nicotine pouches, when properly regulated, can contribute to reducing smoking prevalence by offering adult smokers alternatives to continued cigarette use.
Banning an entire category of products denies adult consumers access to alternatives to traditional tobacco products for smoking. This policy risks being counterproductive for public health objectives to reduce smoking prevalence, and will likely lead to an increase in illicit trade.
Tobacco Europe continues to support the development of proportionate regulation for all nicotine products, with strict rules on quality, safety, marketing, and youth access prevention. Such an approach can both protect young people and support adult smokers who would otherwise continue to smoke.
We urge European policymakers to ensure that future regulations are proportionate – guided by scientific evidence, consumer needs, and the goal of reducing tobacco-related disease – rather than by prohibition.
21 August 2025
Statement on the Public Consultation for feedback on the review of the Tobacco Excise Directive
On 16 July 2025, the European Commission published its proposal for the revision of the Tobacco Excise Directive (TED). The proposal introduces significant changes to the existing framework, with direct implications for consumers, businesses, and public financial actors across the EU.
Five weeks after its adoption, however, the public consultation for feedback has not yet been opened. According to the Better Regulation Guidelines (SWD(2021) 305, Tool #54), stakeholders should normally be offered eight weeks to submit their views on adopted proposals. This step is a cornerstone of the EU’s transparency and inclusiveness framework, ensuring that feedback from all interested parties can inform the work of the co-legislators.
The absence of a public consultation for the TED revision is therefore inconsistent with established practice and risks undermining confidence in the EU’s commitment to transparent, predictable, and participatory policymaking.
Tobacco Europe strongly believes that:
- Public consultations are essential to ensure a balanced debate where all stakeholders — including consumers, businesses, and civil society — can share their views.
- Such consultations support accountability, as they allow stakeholders to highlight potential impacts, identify unintended consequences, and provide constructive recommendations.
- Consistency with the Better Regulation Guidance is fundamental to preserving trust in EU decision-making processes and in ensuring high-quality legislation.
For this reason, Tobacco Europe calls for the immediate opening of the public consultation on the TED revision so that the EU’s established rules on transparency and inclusiveness are respected.
Brussels, July 18,2025
Tobacco Europe takes note of the European Commission’s proposal to revise the Tobacco Excise Directive, published on 16 July 2025. TE welcomes the effort to create greater harmonisation across the EU, notably through the establishment of separate excise categories for electronic cigarettes, heated tobacco products, and tobacco-free nicotine pouches.
However, TE has serious concerns regarding the proposed minimum rates, which we believe are set too high for both combustible tobacco and newer nicotine products. The levels suggested go beyond what is justified by consumer income evolution and economic evidence, risking unintended consequences such as reduced excise revenue and increased illicit trade, particularly in lower-income Member States.
Importantly, an excessive increase to minimum rates applied to tobacco products will substantially compromise the tax rate setting sovereignty of national governments in most Member States. This will hinder those governments from pursuing the nuanced policies required to balance revenues with other political objectives and it will impose huge price shocks on millions of consumers in the EU.
TE urges EU policymakers to consider a more balanced approach that:
- Respects Member States’ ability to tailor excise rates to local economic conditions and purchasing power;
- Applies genuine purchasing power parity adjustments rather than arbitrary formulas;
- Adopts more moderate increases in minimum rates, aligned with inflation and income growth since the last Directive update;
- Focuses on monitoring flows of raw tobacco to fight fraud, without imposing unnecessary tax burdens on semi-processed tobacco.
Tobacco Europe stands ready to engage constructively in the legislative process and remains available to support EU institutions and Member States in ensuring a fair, effective, and economically sound excise framework.
Brussels, 19 May 2025
Tobacco Europe is increasingly alarmed about the growing number of dangerously misleading statements at EU level about vaping products. Most recently, during Monday 12 May’s exchange with the ENVI Committee, Commissioner Várhelyi stated that “vaping has created completely new health risks that are comparable or even bigger than smoking itself” and called for action “even beyond the Council recommendation”. This echoes earlier comments by Commissioner Hoekstra, who claimed that “vaping kills”.
Another worrying statement was made by Commissioner Várhelyi to the fact that vaping is causing ‘popcorn lung’. Importantly, Tobacco Europe would like to stress that popcorn lung risks are linked to unregulated, illicit products that may contain banned substances (such as diacetyl). Our members fully comply with EU and national safety standards, which notably prohibit such ingredients. In our views, effective enforcement is key to protecting public health – not prohibition. Tobacco Europe believes that such statements constitute dangerous misinformation that misleads EU citizens and potentially put lives at risk.
In addition, Tobacco Europe and its members share the justified concerns regarding underage people accessing all types of tobacco and nicotine products. It is not acceptable. While the issue needs to be dealt with urgently, as well as tackling the lack of enforcement, supporting the positive impact of alternatives for smokers is paramount. This requires better regulation backed by an overview of all science and data available.
These statements, alongside recent remarks made by the Belgian Health Minister and his cabinet – both in the press and during Council discussions – reinforce a troubling narrative. They also raise serious concerns about the direction of tobacco and nicotine policy discussions at a time when the European Commission is still conducting its evaluation of the Tobacco Products Directive. Tobacco Europe contends that such statements, lacking proper science-based justification, will undermine the Commission’s attempts to achieve “better regulation” as they are ungrounded in evidence and do not reflect industry realities.
Importantly, the companies we represent manufacture and market only products that fully comply with all applicable rules. The presence of non-compliant products in the Belgian market in no way reflects the responsible approach of our members, who strictly adhere to the rules in place.
The presence in Belgium of non-compliant products is a matter of enforcement by the authorities. It is their responsibility to ensure that rules are properly implemented and that illicit products are removed from the market.
The statements only reinforce what Tobacco Europe has long argued: Prohibitionist approaches are counterproductive. Bans and overly restrictive measures, such as Belgium’s ban of nicotine pouches and disposable electronic cigarettes, do not eliminate demand – they simply shift it to unregulated and illicit channels, undermining public health objectives, aggravating enforcement challenges, and resulting in state revenue losses.
The European Commission is running an evaluation of the Tobacco Products Directive. The steps taken afterwards should be based on robust evidence and in full consultation with the co-legislators, industry, and civil stakeholders. Premature and inflammatory political statements risk pre-empting this process and diminishing its credibility. Having acknowledged that their own initiatives have yet to deliver, we trust policymakers will honour – and not pre-empt – the integrity of the legislative process.
We welcome dialogue with national authorities. The persistence of illicit products is not only due to enforcement gaps but also to the exclusion of compliant industry stakeholders from regulatory discussions. This exclusion prevents policymakers from benefiting from our sector’s expertise, technical insight, and practical experience in building effective, enforceable solutions. Tobacco Europe´s members’ commitments go further than what is legally required, following a strict Code of Conduct that includes additional safeguards and responsible marketing practices to ensure products are sold and used appropriately.
Brussels, February 6
Following Tobacco Europe’s complaint lodged in March 2024, the Ombudsman has finally issued a decision on the 4th of February and informed us that they were closing the inquiry as the “the Ombudsman found that no further inquiries are justified in this case”.
While deciding that there is no cause for a financial conflict of interest, the Ombudsman’s findings confirm what Tobacco Europe has long argued: the Commission failed to acknowledge ENSP’s vested interests and concealed the bias in the legislative process involving the Tobacco Products Directive currently under evaluation.
The Ombudsman herself stated:
“It is regrettable that the Commission did not acknowledge ENSP’s interest in tobacco control in its exchanges with the complainant and then failed to explain how it assessed this interest in view of the ENSP’s role under the framework contract.”
This case highlights a deeper issue: the Commission’s selective interpretation of conflict-of-interest rules. While industry links are heavily scrutinized, ideological and institutional biases within NGOs remain unchecked. To the point where the Ombudsman reminds the Commission NGOs must be subject to the same conflict of interest standards:
“It is relevant to recall that the Commission must make a conflict of interest assessment in relation to all bidders in a procurement procedure, including non-governmental organisations” (emphasis added).
The Ombudsman’s decision serves as a wake-up call—EU-funded NGOs must be subject to the same transparency and accountability standards as all other stakeholders.
Find attached to this article the decision of the Ombudsman, and Tobacco Europe’s reactive statement to it.
TE Reactive Statement Ombudsman_ENSP_OE Final clean 05 02
DECISION_202400517_20250204_104705
Brussels, 17 September 2024
Download the statement here: 24.09.17 Tobacco Europe’s statement to the Publication of the Smoke- and Aerosol-Free Environments’ recommendation
On September 17, the outgoing Commission put forward a proposal for the revision of the non-legislative Council Recommendation on Smoke-Free Environments, just days after publishing the ‘Draghi’ Report to revamp European competitiveness.
Tobacco Europe considers that the inclusion of emerging products within the scope of the Recommendation lacks scientific basis and views the extension to open and semi-open areas (such as hospitality terraces) as disproportionate.
Tobacco Europe wrote to the Commission expressing concerns about the process. No evaluation was performed in line with the Better Regulation guidelines. No new impact assessment was conducted relying instead on the 2008 one, which did not cover emerging products and focused only on indoor spaces.
Additionally, the Commission had committed to publishing a ‘synopsis report’ summarizing stakeholders input at the conclusion of the consultation. Instead, it released the report simultaneously with the proposal denying us and +200 stakeholders the opportunity to assess how the input was considered ahead of the proposal.
Tobacco Europe wished the outgoing Commission had acted in transparency and in accordance with the principles of Better Regulations.
Brussels, July 23rd
Background: On 13 March, Tobacco Europe lodged a complaint with the Ombudsman concerning the evaluation process of the legislative framework for tobacco control, highlighting specific concerns about both: the European Network for Smoking and Tobacco Prevention (ENSP) and Open Evidence, both contractors involved in the framework contract on tobacco control policy.
Following our submission, the Ombudsman initiated an investigation on 25 April, focusing on how the European Commission addressed alleged conflicts of interest within a framework contract on tobacco control policy, specifically on ENSP.
Update: In June, Tobacco Europe received confirmation from the Ombudsman that a meeting with the Commission on this case would be held on 28 June. A draft report will be prepared, and shared with Tobacco Europe for any additional comments. Such report will serve as the basis for the Ombudsman to formulate a position on the matter. Although the timeline remains unclear, we anticipate receiving feedback by end of July.
Concerning our complaint to DG SANTE sent on both 13 March and 8 May on the potential conflict of interest involving Open Evidence, the leading consultant in the consortium contracted by the Commission for services concerning EU actions in tobacco control, including the ongoing revision of the Tobacco control acquis, DG SANTE has failed to reply within the stipulated time frame as outlined under the European Code of Good Administrative Behaviour, which mandates that institutions respond to correspondence from citizens and organizations within a reasonable time frame, typically set at 15 working days. It notably stipulates that a decision on every request or complaint to the institution is taken within a reasonable time-limit, without delay, and in any case no later than two months from the date of receipt.
In parallel, Tobacco Europe observes that a numerous of other conflict of interests have popped up recently, impacting various industries and for which the Commission and the Ombudsman have been taking taking a clear stance, notably in pharma, big techs, as well as another case involving a consultancy specialised in competition law, in which the element of professional conflict of interest was considered.
Tobacco Europe will continue providing regular updates on this matter.
Tobacco Europe is surprised by the claims made by Minister Vandenbroucke on Monday 29 January during the exchange with the ENVI Committee, holding the industry responsible for the delay of the proposal’s publication.
Tobacco Europe, as legitimate and transparent stakeholder, effectively took part in the European Commission’s consultation process, namely the Call for Evidence in July 2022, the Targeted Consultation in March 2023 and finally the Targeted Stakeholders’ Workshop in April 2023.On the latter, Tobacco Europe never received minutes from the consultant and therefore is not aware of the feedback transmitted to the Commission. As Tobacco Europe, we have always acted in a transparent manner; hence, we cannot agree with Minister Vandenbroucke’s remarks, nor we are aware of any official statement concerning possible delays from the Commission.
We reiterate our interest and commitment to engaging transparently and publicly in decision-making processes affecting our members’ businesses.
Brussels, 6 September 2023
TPD review: Final step of the consultation process
Tobacco Europe has been invited to a workshop organized by the Commission’s consultant (Open Evidence) in charge of the ongoing consultation process on the Evaluation of the Tobacco Control Acquis. The possibility of such a workshop was publicly stated in the consultation strategy outlined in the Call for Evidence. To our understanding, the main purpose of this workshop will be to focus on the results of the stakeholder’s consultation’s activities, Following this final consultation’s process, Open Evidence will issue its final validation report to feed the Commission’s evaluation report (initially due to be published Q3 2023).
Tobacco Europe is very much looking forward to taking part in this event.
Should you have any additional question, please contact Tobacco Europe directly at info@tobacco- europe.eu
(Brussels, 2 September 2019) Europe’s cigarette industry today enters a new chapter in its history with the launch of ‘Tobacco Europe’.
‘CECCM’ – a well-known brand on the Brussels scene for over 30 years is being replaced by a new identity, complemented by a new logo connecting our industry more closely with our agricultural heritage.
The new name and logo will be rolled out across all communications tools as from today demonstrating an exciting evolution for the organisation, which proudly represents Europe’s cigarette manufacturing sector.
The name Tobacco Europe ensures that the organisation is immediately identifiable to its members and to the outside world, as the body representing cigarette manufacturers’ interests at European level. The change to Tobacco Europe comes at a timely moment with the many changes taking place in the EU institutions.
Our new logo and website symbolise our close connection to the environment, and with it, our commitment to playing our part in sustainable development, across our entire value chain.
Tobacco Europe’s Director General, Alisdair Gray, commented “This is an exciting moment for Europe’s cigarette industry as we unveil our new identity that will be more immediately identifiable to the outside world. Our new identity demonstrates our commitment to openness, partnership and dialogue, in order to help tackle the socio-economic and environmental challenges of the future.”
Alisdair Gray
Director General
BRUSSELS: One year on from the UK’s implementation of plain packaging on cigarette cartons, the Confederation of European Community Cigarette Manufacturers (CECCM) sees no reliable evidence that shows the experiment is contributing to improving public health.
This is a similar story to other countries wherever the measure has been introduced, such as Australia and France.
Alisdair Gray, Secretary General of CECCM said: “It has not reduced smoking uptake by young people or encouraged quitting. Expert opinion continues to show that the main reasons for adolescents to smoke are sensation-seeking, peer and family-influence, not packaging”.
24/05/18
CECCM1 Briefing note: the Eko-Tabak judgment and the smoking test provided by the CN Explanatory notes
1. CECCM concerns over diverging interpretations following Eko-Tabak judgment
A. The Judgment on Case C-638/15 – Eko-Tabak vs. General Directorate of Customs, Czech Republic
The Court of Justice of the European Union (CJEU) delivered its judgment on 6 April 2017 (here) relating to a request for preliminary ruling on the interpretation of Articles 2 & 5 of Directive 2011/64/EU (“Excise Directive”) on the definition of smoking tobacco.
In this preliminary ruling, the CJEU ruled that Articles 2 and 5 of the Excise Directive “must be interpreted as meaning that dried, flat, irregular, partly stripped leaf tobacco and/or parts thereof which have undergone primary drying and controlled dampening, which contain glycerine and which are capable of being smoked after simple processing by means of crushing or hand-cutting, fall within the definition of ‘smoking tobacco’ for the purpose of those provisions”.
In addition, the CJEU quoted the definition of “smoking tobacco” in the context of the Excise Directive as “tobacco which has been cut or otherwise split, twisted or pressed into blocks and is capable of being smoked without further industrial processing”.
Taking together the definition in the Excise Directive2 and the operative part of the CJEU judgment, “smoking tobacco” may only be understood as a product that fulfils the following two cumulative conditions:
1. “That the tobacco be cut or otherwise split, twisted or pressed into blocks”;
2. “That it is capable of being smoked without further industrial processing”
The CJEU clarified when tobacco may be regarded as being cut and otherwise split in the context of the first condition.3
With reference to the second condition, it is important to note that the CJEU found that this condition is satisfied when tobacco products have undergone primary drying and controlled dampening, contain glycerine and are capable of being smoked after simple processing by means of crushing or hand-cutting. Tobacco raw materials do not contain glycerine which is usually added during manufacturing process of semi-finished or final tobacco products.
With regard to the concept of “industrial processing” the CJEU concluded that “manufactured tobacco which is ready or can easily be made ready [after simple processing by means of crushing or hand-cutting] to be smoked must be considered to be capable of being smoked without further industrial processing”. Industrial processing, on another hand, takes place in the designated premises using specialized machinery.
1 Confederation of European Community Cigarette Manufacturers, representing British American Tobacco (BAT), Imperial Tobacco Brands (IMB) and Japan Tobacco International (JTI).
2 See Case C-638/15, Eko-Tabak, ECLI:EU:C:2017:277, para. 25, which focuses on the two cumulative conditions found in the Excise Directive.
3 Case C-638/15, Eko-Tabak, ECLI:EU:C:2017:277, para. 28 of the judgment: “[…] in so far as the products […] consist […] of tobacco leaves which have been partly stripped in order to remove the petiole, those products must be regarded as tobacco which has been cut or otherwise split within the meaning of Article 5(1)(a) of Directive 2011/64”.
Further, an important fact in the CJEU’s analysis (and under the relevant Czech law) is that the smoking tobacco was “prepared for sale to the final consumer”.4 The judgment is designed to respond to a specific illicit trade activity (tax evasion) by the Czech company. In fact, the company provided the smoking tobacco for sale to final consumers yet illegitimately claimed that it was raw tobacco in its failed attempt to escape payment of the excise duty on smoking tobacco under the Excise Directive. As the CJEU states, “[…] those products were, in their entirety, intended for sale to the final consumer”5. This is further supported by the Czech court which noted that the smoking tobacco was offered to final consumers who were even able to avail themselves of a leaf cutting machine on the counter of the shop6.
The Eko-Tabak judgment sets the guidance to counter a clearly illicit activity which is different from legitimate movement by economic operators of raw tobacco that is destined and in fact is used to manufacture finished tobacco products (which are then subject to relevant excise tax and VAT).
Considering the above, the authorities of the Member States have now sufficient guidance and grounds to levy excise duty when cut and split tobacco is destined for sale to final consumers.
Unfortunately, we notice that the judgment is misused in day-to-day practice by the authorities of some Member States who generally consider raw tobacco (not destined for sale to final consumer but for further processing in authorized tobacco manufacturing plants) as subject to excise based upon the provisions of the Article 5(1)(a) of the Excise Directive. With the following, we give a couple of examples and explain the practical consequences for the member companies of CECCM.
B. Different issues CECCM Members face in EU Member States
1. Germany
In September 2017, the Ministry of Finance issued guidelines to all German Main Customs Offices to ensure a common approach in assessing shipments of tobacco falling under the category of (other) smoking tobacco in line with the provisions of the German Tobacco Tax Law.
As a direct consequence, the number of the physical controls increased on the shipments of raw tobacco, with the authorities taking samples of the tobacco and seizing / confiscating the cargo in certain cases.
On 28 February 2018, the German Ministry of Finance also informed the main national tobacco trade federations (Deutscher Zigarettenverband, Verband der Rauchindustrie and Bundesverband der Zigarrenindustrie) that they will interpret the terms “smoking tobacco” very broadly. In fact, going forward, they will treat any tobacco that is somehow broken, cut or split as being capable of being smoked without further industrial processing which consequently means that these products are going to be treated as excisable.
This interpretation overlooks several phases of industrial processing other than “cutting or otherwise splitting” such as, inter alia, the necessary addition of glycerine in smoking tobacco, as recognized by the CJEU in the operative part of its Eko-Tabak judgment, and it creates obstacles to the free movement of goods to other EU countries where these goods are rightly considered as non-excisable and are generally subject to national monitoring measures.
4 Case C-638/15, Eko-Tabak, ECLI:EU:C:2017:277, para. 7, 8, 15.
5 Case C-638/15, Eko-Tabak, ECLI:EU:C:2017:277, para. 8.
6 Eko-Tabak, s. r. o. vs. Generální ředitelství cel (General Customs Directorate), Nejvyšší správní soud (Supreme Administrative Court, Czech Republic), Brno, 24 August 2017, paras. 8, 37.
2. Sweden
Sweden has faced during recent years a growing issue with raw tobacco sold at retail. The Eko-Tabak judgment provided the basis to tackle this issue; however, the manner chosen by the local authorities harmed the legitimate snus producers also.
For instance, a snus7 producer had its tobacco scrutinized and, although the customs classification under 2401 heading was upheld, some of the tobacco materials were considered as being subject to excise because Swedish Customs believed that they could be smoked without further industrial processing.
2. CECCM’s views on the use of the smoking test to classify products for excise purposes
When it comes to customs and the import of goods into the EU, the Common Customs Tariff applies, which represents a combination of the classification of goods for customs purposes and the duty rates that apply depending on the economic sensitivity of the products.
Classification of the goods for customs purposes is determined based on the Combined Nomenclature (“CN”) of the European Union which itself is based upon the Harmonized System (“HS”), a coding system for commodities which is applied by most of the trading nations around the globe, under the auspices of the World Customs Organization. Application of the CN is supported by Explanatory Notes to the HS and to the CN8, which provide guidance on the classification of products.
On the 6th of April 2016, an amendment to the CN has been published in the Official Journal of the EU, providing for a smoking test designed to distinguish between manufactured tobacco of heading 2403 and unmanufactured tobacco of heading 2401.
CECCM would like to express deepest concerns regarding whether or not the smoking test for tobacco and tobacco products should be used when determining if a certain tobacco material is capable of being smoked or can be smoked, in the meaning of Article 5 of the Excise Directive.
As expressed on earlier occasions, we regard the smoking test as unsatisfactory in its current form and welcome the opportunity to have it reviewed and refined. In this particular case, the smoking test may be used in practice to classify tobacco products as excise goods in breach of the definitions of the Excise Directive. This is done because the MS authorities may regard it as the only scientific tool available to indicate whether tobacco and tobacco products are ready for smoking without any further industrial processing.
An example of where the smoking test has been used to determine excisability is Sweden.
Swedish Customs detained five containers of raw tobacco for use in the snus factory of one of CECCM’s members in August 2017. The purpose of this detainment was to take samples and determine if the tobacco fell within the description of smoking tobacco and should thus be
7 A type of moist powdered tobacco, held in the mouth between the lips and gums.
8 Explanatory notes to the Combined Nomenclature of the European Union, Official Journal of the European Union, C 76, 04.03.2015.
classified under a different customs tariff heading subject to a customs duty rate of 74.9%. We believe the motivation behind this unreasonable change in customs classification purposes derives from misapplication of the “smoking test” referred to in the CN Explanatory Notes.
Upon examination, three of the containers were found by Swedish Customs to contain goods determined to be classifiable as raw tobacco. Two containers, however, were found to allegedly contain material determined to be classified as smoking tobacco of heading 2403. Aside from the higher rate of customs duty, Swedish
Customs determined that because of the customs classification of “smoking tobacco” it was also considered appropriate that the goods should be subject to excise duty and accordingly subject to associated excise controls.
Advocate General Kokott has already established that, in order to assess whether or not tobacco goods are covered by the Council Directive 2011/64/EU (the Excise Directive) and are therefore liable to excise duty, “the determinative element is not the Combined Nomenclature, but Directive 2011/649”.
3. Conclusion
All in all, it is important to note that the EU Commission, in its January 2018 report on the review of a possible revision of Directive 2011/64 opposed the application of excise duties to raw tobacco as a measure to fight illicit trade10. Application of a smoking test designed for customs classification purposes to determine that excise tax should allegedly be applied to raw tobacco meant for manufacture into finished goods is clearly against the Commission’s recent guidance on this matter.
Importantly, as highlighted in the key findings of Economisti Associati study11, illicit trade of raw tobacco in the EU is estimated in a range between 0.8% to 1.2% of the EU raw tobacco market, and lost revenues on the amount of cigarettes which can be produced with illicit raw tobacco would amount to €1.2 to 2 bn (that is 1.6% to 2.7% of the current revenues from cigarettes).
Administrative and compliance costs for growers and first processors are expected to be significant and would represent a cost increase of 35% compared to the current price of raw tobacco. With respect to the EU raw tobacco market, additional regulatory costs would amount to 8% of its value. Therefore, the inclusion of raw tobacco among excisable products seems to be a disproportionate response, given the amount of costs associated.
4. CECCM’s suggestions to the Member States
In the light of all the above, we therefore respectfully suggest to the Member States:
1. To properly apply the two cumulative conditions outlined in EU law and discussed above (and not to rely on customs classification rules) when analysing whether some tobacco products are “smoking tobacco” for excise purposes.
2. To consider the Eko-tabak judgment in its context, which was to tackle the abuse of the system (intentional misdeclaration by a manufacturer of goods that were manufactured and prepared for retail sales; i.e. as unmanufactured tobacco to evade excise duties). In particular, the industrial processing of primary drying, controlled dampening and addition of glycerine should be given due relevance in such analysis.
9 Opinion of Advocate General Kokott in Case C-409/14, Schenker, ECLI:EU:C:2016:76 para 82.
10 Report from the Commission to the Council on Directive 2011/64/EU on the structure and rates of excise duty applied to manufactured tobacco, COM(2018) 17 final, Brussels, 12.1.2018, pp. 4-5.
11 Economisti Associati Study on Council Directive 2011/64/EU on the structure and rates of excise duty applied to manufactured tobacco, Final Report, May 2017, p.163.
3. To avoid unnecessary complexity to enforcement of excise legislation as well as the legitimate manufacturing processes.
4. To properly enforce the existing legislation – this approach would solve many issues (e.g. direct sales at retail with machines in shops to cut the tobacco or instructions how to do it at home).
5. In case increased monitoring of the supply chain would be desired, to consider an alternative which is more efficient than the inclusion of unmanufactured tobacco under EMCS, i.e. a licensing system at Member State level. Such systems are currently successfully applied in Denmark, Ireland, the UK, Czech Republic, Poland and Romania – and have solved the local problems by penalising those involved in the handling of unmanufactured tobacco outside the licensing system.
Please see the attached presentation prepared for a meeting with DG Taxud, 10 April 2018:
CECCM Eko-Tabak_Smoking Test 10.04.18
BRUSSELS: The Confederation of European Community Cigarette Manufacturers (CECCM) has today called on any European governments considering plain tobacco packaging to rethink their approach.
Speaking on the 1st anniversary of the French plain packaging law¹, Alisdair Gray, Secretary General of CECCM said: “Official sales of cigarettes in France have not shifted since the adoption of the law. Incredibly, France’s own Health Minister now publicly admits that plain packs do not stop smokers from smoking².
In France, where plain packaging has been in force since 1 January 2017, data published by the public authority OFDT³ indicates that tobacco products shipped to retailers have remained largely identical for the first nine months of 2017 (year on year).
Gray added: “The data clearly demonstrates that the introduction of plain packaging, even in combination with the EU Tobacco Products Directive, has failed to reduce sales of tobacco. In Australia, where the extreme measure has been in force for five years, the latest government data has shown a stall in the long-term downward trend in smoking, despite massive increases in excise.”
“The vast majority of EU countries are still unconvinced that plain packaging will work. Around a third of EU member states even raised concerns about the introduction of such pack changes when first proposed by the French government”.
It is high time for other governments to recognise that this form of heavy handed regulation simply does not work”.
ENDS
2 Assemblée Nationale Article 12
BRUSSELS: The Confederation of European Community Cigarette Manufacturers (CECCM), the largest tobacco industry Association in Europe, has today declared the plain packaging experiment for tobacco products a failure.
Speaking on the 5th anniversary of the Australian Tobacco Plain Packaging Act, Alisdair Gray, Secretary General of CECCM said: “There is no reliable or robust evidence that shows that plain packaging is contributing to improving public health. It has not reduced smoking prevalence or uptake by young people”.
“If anything, evidence shows that the main reasons for adolescents to smoke are sensation-seeking, peer and family-influence, not packaging¹.
In France, where plain packaging has been in force since 1 January 2017, data published by the public authority OFDT² indicates that tobacco products shipped to retailers have remained largely identical for the first nine months of 2017 (year on year).
Gray added: “The data clearly demonstrates that the introduction of plain packaging, even in combination with the Tobacco Products Directive, has failed to reduce sales of tobacco wherever it has been introduced”.
ENDS
¹ Attitudes of Europeans Towards Tobacco
Tracking and tracing of tobacco products helps fight the illegal trade by identifying the point of diversion from the legal supply chain. To be efficient a track & trace system should allow the tracing of products across borders and therefore any legislation should only prescribe recognized international standards and ensure that global operators are free to choose their preferred system and suppliers. This will reduce costs and guarantee free competition while offering a state of the art tool for control by law enforcement agencies.
