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.
On August 11, 2Firsts published an exclusive interview of Nathalie Darge, Tobacco Europe's Director, to gather insights on "the EU Nicotine Sector's Greatest Challenges".
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.
Tobacco Europe is thrilled to invite you to our hybrid session “Eyes on Brussels”* at EVO NXT on Friday 4 April between 12:00 and 12:30.
Our association represents the leading tobacco and nicotine products manufacturers within the EU. During this interactive session, we will provide an update on the latest key policy developments in Brussels and across the EU, and their impact on the tobacco and nicotine industry.
Our presentation will tackle the most relevant regulatory discussions. Join us to learn how the latest updates from Brussels and the wider European landscape may influence our industry and engage in a discussion on what’s next for stakeholders.
Tobacco Europe is thrilled to be part of this edition of Evo Nxt, an insightful innovative business fair, during which the major industry associations will provide visitors with the latest insights. Listen to representatives from the Independent European Vape Alliance (IEVA), the UK Vaping Industry Association (UKVIA), the Alliance for Tobacco-Free Enjoyment (BfTG), the German Tobacco and Novel Products Association (BVTE), the European Confederation of Tobacco Retailers (C. E.D.T.), the Nordic Nicotine Pouches Alliance (NNPA.EU), the European Cannabis Association (ECA) and the Electronic Cigarette Professional Committee of the China Electronics Chamber of Commerce (ECCC).
>>> The entire EVO NXT programme is available here.
>>> Tickets for EVO NXT are available in the online shop.
* The Eyes on Brussels is a live platform for information that exists for 2 years now.
Once a month, on a Friday and from 12:00 to 12:30, Tobacco Europe convenes a 30 minute live online session to provide participants with the latest updates on policies and regulations impacting the industry at the EU level.
Typically, we cover topics such as the revisions of the Tobacco Products Directive and the Tobacco Excise Directive, but also impacting milestones such as COP and MOP, which are directly related to our industry.
The classification of e-cigarettes in the 2022 WCO Harmonized Commodity Description and Coding System
The Confederation of European Community Cigarette Manufacturers (CECCM) urges EU Member States to: • support only those proposals for creating new headings and subheadings in the WCO HS2022 classification that make a clear distinction between e-cigarettes (which do not contain tobacco) and tobacco products; • continue to support the WCO/WHO classification proposal which does make such a distinction; and • oppose the WCO Secretariat proposal which would classify the liquids used with e-cigarettes and certain tobacco products very closely together.
At the next World Customs Organization (WCO) Harmonized System Committee (HSC) meeting in March 2019, the WCO Secretariat’s proposal for the new Chapter 24 title, headings and subheadings will be discussed.
The European Commission seeks a mandate for this meeting from the EU Member States on the 25th of January in the EU Customs Union Working Party.
The Commission’s preferred option is to support the WCO/WHO proposal.
However, the Commission also recognises that the WCO Secretariat’s intention is to discuss only its own proposal at the HSC meeting and for the WCO/WHO proposal to not be considered. In order to not block the decision-making process, the Commission has suggested that the EU Member States should agree to the proposal put forward by the WCO Secretariat, even though it is, in their opinion, an inferior option.
The WCO Secretariat’s intention that only its proposal will be discussed is despite a continued lack of consensus between the WCO’s contracting parties:
• In the September 2018 HSC meeting, the WCO Secretariat proposal received 53% of the total votes cast, only marginally more than the support for the WHO / WCO Secretariat’s joint proposal.
• At the Review Sub-Committee (RSC) in November 2018, several contracting parties continued to object to the WCO Secretariat’s proposal, spoke in favour of other proposals, and no consensus was reached.
The WCO Secretariat’s proposal would:
• move the liquids used with e-cigarettes into Chapter 24 of the HS that deals with tobacco products; and
• classify e-liquids (2404.12) under the same heading as products intended for inhalation without combustion that contain tobacco (2404.11).
The new headings and subheadings being proposed by the WCO Secretariat pose serious concerns for the e-cigarette industry and for public health.
A range of taxes on e-cigarette products are significantly affected by their customs classification. Import tariffs are determined directly by a product’s customs coding. And, as the WCO acknowledges, national taxes, such as excise duties, are also influenced by a product’s customs classification.
Classifying products containing tobacco and products not containing tobacco under the same heading – as in the WCO Secretariat’s proposal – may be seen as an endorsement for an increase in import duties and excise on e-cigarettes, as well as the harmonization of regulation between e-cigarettes (which contain no tobacco) and tobacco products.
This could damage the sale of e-cigarette products, undermine the international trade in them and have negative effects for public health. The main purpose of the WCO’s classification system is to facilitate international trade in products. In fact, it risks doing the precise opposite for e-cigarettes.
The WCO Secretariat’s proposal would also be inconsistent with a significant, and growing, body of evidence from independent experts1 that e-cigarettes are potentially significantly less harmful than combustible tobacco. Many influential studies have concluded that e-cigarettes are only 5% (or less) as harmful as smoking tobacco.
Because of the emerging evidence on their potential harm reduction compared to combustible tobacco products, a number of high-profile governmental reviews have recently called for a different treatment of e-cigarette tax and regulation from tobacco products:
• In an ongoing review of the European Union’s Council Directive 2011/64/EU, which defines the product categories, structure and minimum rates for excise duties on manufactured tobacco in the EU, responses received by the European Commission show a clear consensus that e-cigarettes should not be taxed like tobacco products. Out of the total 11,410 responses submitted to the consultation2: 88% of respondents agreed that e-cigarettes are much less harmful than conventional tobacco products; 85% agreed that e-cigarettes may support smoking cessation; 77% disagreed that e-cigarettes should be subject to the same excise treatment as conventional cigarettes; and 87% agreed that e-cigarettes are not tobacco products so should not be subject to tobacco excise legislation.
• A Command Paper published in December 2018 by the UK’s Secretary of State for Health and Social Care3 confirms the government’s firm belief in the reduced risk profile of e-cigarettes and calls for proportionate regulation of e-cigarettes based on the reduced risk profile of these devices. Recommendation 6 of the Command Paper endorses the UK’s current practice of treating e-cigarettes as consumer products for taxation purposes, subject only to the 20% Value Added Tax.
• Adopting the WCO Secretariat’s proposal in its current form would contradict discussions that took place in October 2018 at the eighth Conference of the Parties (COP8) to discuss the WHO Framework Convention on Tobacco Control (FCTC). The FCTC is a treaty signed by 168 countries, legally binding in 181 countries, and for all intents and purposes serves as the global blueprint for tobacco regulation. The parties to the treaty agree that heated tobacco products are covered under the auspices of the FCTC. But attempts to bring e-cigarettes under the umbrella of the convention were rejected at COP8. It would be inappropriate to classify e-cigarettes closely together with tobacco products in the customs classification system before any agreement is reached on their global regulatory treatment under the FCTC.
Additionally, in a 2016 case, the Court of Justice of the European Union ruled that: “… electronic cigarettes display different objective characteristics from those of tobacco products.4” This ruling was reiterated in the Court of Justice of the European Union’s judgement in November 20185. Therefore, two recent judgements by the EU’s most senior court confirmed that the objective characteristics of e-cigarettes are different, in law, to those of tobacco products. It would be anomalous for the customs classification of e-cigarettes to be similar to those of any tobacco product.
It is important that the decisions made by customs authorities do not contradict the approach by other government departments at both a national and international level. If the WCO Secretariat’s proposal was adopted in its existing form, it would clearly do so.
Moreover, another important purpose of the HS is: “… to promote as close a correlation as possible between import and export trade statistics and production statistics …”6 Should the WCO Secretariat’s proposal be adopted in its current form, production statistics for heading 24.04 would be flawed insofar as they would include both products that contain tobacco and products that contain no tobacco.
1 See Public Health England (PHE) report at https://www.gov.uk/government/publications/e-cigarettes-and-heated-tobacco-products-evidence-review
See Royal College of Physicians’ report at https://www.rcplondon.ac.uk/news/promote-e-cigarettes-widely-substitute-smoking-says-new-rcp-report
2 See https://circabc.europa.eu/sd/a/e6a09ea7-1c96-4d2b-9e53-ff10bef7be94/Tobacco%20public%20consultation%202018%20statistical%20report.pdf and https://circabc.europa.eu/faces/jsp/extension/wai/navigation/container.jsp
3 See https://assets.publishing.service.gov.uk/government/uploads/ system/uploads/attachment_data/file/762847/government-response-to-science-and-technology-committee_s-report-on-e-cig.pdf and https://vaporproductstax.com/2019/01/02/government-supports-taxation/
4 Case C-477/14, Pillbox 38 (UK) Limited, trading as Totally Wicked v Secretary of State for Health, ECLI:EU:C:2016:324, para. 36, http://curia.europa.eu/juris/document/document.jsf?text=&docid=177723&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=6455726
5 Case C 151/17, Swedish Match AB v Secretary of State for Health, ECLI:EU:C:2018:938, para. 29, http://curia.europa.eu/juris/document/document.jsf?text=&docid=207969&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=6473289
6 http://www.wcoomd.org/en/topics/nomenclature/instrument-and-tools/hs_convention.aspx
In summary, an inappropriate customs tariff classification of e-cigarette products risks the unintended consequences of damaging the international trade in them. There is, in stark contrast, absolutely no downside to either the WCO or to individual customs departments from a much clearer separation of e-cigarettes from tobacco in the customs system.
Furthermore, introducing no further changes to the HS, by retaining the status quo, would be a preferable option to the WCO Secretariat’s proposal. This would avoid the risk of e-cigarettes being unduly regulated and taxed like tobacco products in certain countries.
If this cannot be achieved, the mandate for the Commission should be broad enough to capture changes to the WCO Secretariat proposal that would allow amendments that are more in line with the WCO/WHO proposal.
THE CUSTOMS CLASSIFICATION OF TOBACCO HEATING PRODUCT CONSUMABLES AND THE CHEMICAL PREPARATIONS USED IN ENDS IN THE WCO’S HARMONIZED SYSTEM TARIFF NOMENCLATURE
Please find attached a CECCM paper, prepared in advnace of the Harmonized System Committee’s (HSC) 62nd Session meeting on 17th – 28th September 2018 to discuss the customs classification in the Harmonized System (HS) nomenclature for implementation in 2022 of:
a. tobacco used with Tobacco Heating Products (THPs); and
b. the chemical preparations used for e-cigarettes or electronic nicotine delivery systems (often called ‘e-liquids’).
The HSC has been invited to discuss the following four proposals on “Possible amendments to the nomenclature to create a new heading for nicotine products and novel tobacco products”:
CECCM opinion on WCO HSC-RSC options 23.08.18
THE APPROPRIATE CUSTOMS CLASSIFICATION IN THE WCO’S HARMONIZED SYSTEM TARIFF NOMENCLATURE OF TOBACCO HEATING PRODUCT CONSUMABLES AND THE CHEMICAL PREPARATIONS USED IN ENDS SUMMARY OF PROPOSED NEW HEADINGS AND SUB-HEADINGS FOR THE CLASSIFICATION OF THP CONSUMABLES AND CHEMICAL PREPARATIONS USED IN ENDS
• Tobacco Heating Products (THPs) heat tobacco, but do not combust it, to produce a nicotine-containing aerosol.
• Electronic nicotine delivery systems (ENDS) heat a chemical preparation (often, but not always, in liquid form, known as an ‘e-liquid’), to create an aerosol which is fundamentally different in its physical composition to both tobacco smoke and to the aerosol created by THPs. Although some chemicals in e-liquids, including nicotine and some soluble flavourings, may be derived from tobacco, e-liquids do not contain tobacco.
• The WCO’s Review Sub-Committee (RSC) is currently considering several proposals for creating new headings or subheadings for both THPs and e-liquids under the Harmonized System Tariff Nomenclature (the HS) in the year 2022. These proposals are flawed because they are inconsistent with the fundamental principle by which products are classified for customs purposes based on their essential physical characteristics.
• The Confederation of European Community Cigarette Manufacturers (CECCM) and its members1 propose that THPs should be classified in the HS under a new subheading 2403.92 as follows:
2403.92 Tobacco products for heated delivery without combustion
• CECCM proposes that the chemical preparations used with ENDS, including e-liquids, should be classified in the HS under a new 4-digit level heading 38.27:
38.27 Chemical preparations, whether or not containing nicotine or flavouring substances and whether or not contained in bottles or special cartridges or capsules, for use with electronic devices heating these preparations without combustion in order to produce an aerosol:
3827.10 – containing nicotine
3827.20 – not containing nicotine
• It would not be appropriate for the chemical preparations used with ENDS to be treated in the same way as THPs in regulation, excise or customs classification. THPs are tobacco products, whereas the chemical preparations used in ENDS contain no tobacco – they are fundamentally different in their essential physical composition.
• These proposed new headings / subheadings adhere to the fundamental principles by which products are classified for customs purposes based on their essential physical characteristics. They maintain simplicity within the existing system. And they will allow the WCO and its contracting parties to achieve all the stated objectives of the HS: to facilitate international trade; to facilitate the collection, comparison and analysis of trade statistics; and to promote the standardisation of trade documentation and the transmission of data.
1 CECCM represents the common views of major European–based cigarette manufacturers such as British American Tobacco (BAT), Imperial Brands (IMB), and Japan Tobacco International (JTI).
DEFINITION OF TOBACCO HEATING PRODUCTS AND ENDS
• Tobacco Heating Products (THPs) are products in which the tobacco is heated rather than combusted to produce a nicotine-containing aerosol.
o THPs contain tobacco – they are different to electronic cigarettes which do not contain tobacco.
o Several types of THP are currently sold across a range of countries. The most widely available THPs are electrically heated tobacco products. Also available in some countries are: THPs that heat a tobacco rod using a lit carbon tip; and hybrid products that heat an e-liquid to create an aerosol that, when passed over a tobacco pod, heats the tobacco to provide additional flavours and nicotine.
o The category is rapidly evolving, and it seems likely that other types THPs will be developed in the future. However, the common feature amongst all THPs will remain that they heat tobacco and do not combust it.
• Electronic nicotine delivery systems (ENDS) are comprised of two elements:
o First, a chemical preparation, often in liquid form known as an ‘e-liquid’. Although some chemicals in the chemical preparations used in ENDS, including nicotine and soluble flavourings, may be derived from tobacco, they do not contain tobacco.
o Second, an electronic device which heats the chemical preparation to create an aerosol which is fundamentally different in its physical composition to tobacco smoke. THE CURRENT CLASSIFICATION OF TOBACCO HEATING PRODUCTS AND THE CHEMICAL PREPARATIONS USED IN ENDS
• THP consumables, as a tobacco product, are classified in Chapter 24 of the HS (“Tobacco and Manufactured Tobacco Substitutes”). In October 2017, the WCO Harmonized System Committee (HSC) considered the appropriate classification of Electrically Heated Tobacco Product (EHTP) consumables in the 2017 HS. A large majority of contracting parties voted for classification of these products in subheading 2403.99.
• In September 2011, the HSC agreed that cartridges for ENDS “whether or not containing nicotine, could not be regarded as tobacco substitutes.” Consequently, it decided to classify them under heading 38.24 of the HS (in the chapter covering “Miscellaneous Chemical Products”). TOBACCO HEATING PRODUCTS MUST BE
CLASSIFIED IN CHAPTER 24 OF THE HS AND THE CHEMICAL PREPARATIONS USED IN ENDS MUST BE CLASSIFIED IN CHAPTER 38
• For customs classification, two criteria must be considered.
o First, the essential physical characteristics of the product.
o Second, in some cases, their intended use.
• The consumables used with tobacco heating products should continue to be classified under a subheading in 2403.9 of the HS nomenclature (under which there is currently 2403.912 or 2403.993).
o THPs contain tobacco, so it follows that they must be classified in Chapter 24 of the HS, covering “Tobacco and manufactured tobacco substitutes”.
2 “Homogenised” or “reconstituted tobacco”.
3 Other manufactured tobacco that is not intended for smoking.
o The WCO Secretariat has indicated that two factors are relevant to defining the essential characteristics of the consumables used with electrically heated tobacco products (EHTPs). First, the tobacco used in these products is entirely reconstituted tobacco (combustible tobacco products contain much smaller amounts of reconstituted tobacco). Second, the product’s intended use is not to be smoked. The WCO Secretariat stated that if Contracting Parties accept these as the defining essential physical characteristics of EHTP consumables, they should not be classified under the same subheadings as combustible tobacco (i.e. under either heading 24.024, or under subheadings 2403.115 or 2403.196, all of which are for types of smoking tobacco).
o Moreover, EHTPs cannot be classified under heading 24.01, which covers unmanufactured tobacco.
o It follows that EHTPs must be classified in the part of heading 24.03 that covers finished tobacco products that are not intended for smoking.
• The chemical preparations used in ENDS, including e-liquids, should continue to be classified under Chapter 38 of the HS nomenclature.
o The chemical preparations used in ENDS, including e-liquids, exhibit profound differences in their material composition and physical characteristics to the tobacco products that are classified under Chapter 24 of the HS2017.
o Since e-liquids (and other chemical preparations used in ENDS) are chemical solutions which, even when partly derived from a tobacco plant, contain no tobacco, they must continue to be classified in HS Chapter 38 (“Miscellaneous chemical products”).
o And because ENDS cartridges / liquids do not display similar physical characteristics to tobacco products, the chemical preparations used in ENDS should not be classified in the same chapter of the HS as tobacco products.
o Please see Appendix 1 for a legal opinion that provides further background.
PROPOSAL FOR NEW SUBHEADINGS FOR TOBACCO HEATING PRODUCT CONSUMABLES IN CHAPTER 24 OF THE HS IN THE YEAR 2022
• Our proposal for the customs classification of THP consumables in the HS is to create a new subheading 2403.92.
• This approach has several practical benefits:
o It is wholly consistent with the general principles by which products are classified in the HS according to their essential physical characteristics.
o It is consistent with the recent guidance from the WCO Secretariat regarding the essential characteristics of EHTP consumables.
o It is commensurate with the likely scale of global trade in THP consumables relative to other tobacco products. Notably, since cigarettes containing tobacco are classified under a subheading (2402.20) and do not have their own 4-digit heading, it would seem inappropriate for THPs to be classified under anything other than a 6-digit subheading.
• Our proposal for this new sub-heading is as follows:
2403.92 Tobacco products for heated delivery without combustion
• The wording of this proposed new sub-heading is similar to the recent proposal by the Australian customs authority. However, our proposed location in the HS – especially when taken together with our proposed new heading for the chemical preparations used with ENDS – is more logical given the general principles by which products are classified in the HS according to their essential physical characteristics.
4 Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes.
5 Water pipe tobacco.
6 Other smoking tobacco.
• Please see Appendix 2 for a legal opinion that provides further background.
PROPOSAL FOR A NEW HEADINGS FOR CHEMICAL PREPARATIONS USED WITH ENDS IN CHAPTER 38 OF THE HS IN THE YEAR 2022
• Our proposal for the customs classification in the HS of chemical preparations used with ENDS (including e-liquids) is to create, at the 4-digit level, a new heading 38.27.
• This approach has several practical benefits:
o It is wholly consistent with the general principles by which products are classified in the HS according to their essential physical characteristics. Unlike the recent proposals by Australia, it therefore avoids creating inconsistencies between the classification of ENDS chemical preparations and how other products are classified in the HS.
o It would make ENDS chemical preparations stand out within Chapter 38 more forcefully than by creating new subheadings under heading 3824.
o It would leave more room for future subheadings as and when new products are developed.
• Our proposal for the new heading / sub-headings is as follows:
38.27 Chemical preparations, whether or not containing nicotine or flavouring substances and whether or not contained in bottles or special cartridges or capsules, for use with electronic devices heating these preparations without combustion in order to produce an aerosol:
3827.10 – containing nicotine
3827.20 – not containing nicotine
• Please see Appendix 2 for a legal opinion that provides further background. OUR PROPOSALS FOR A NEW SUBHEADING FOR TOBACCO HEATING PRODUCTS AND A NEW HEADING FOR THE CHEMICAL PREPARATIONS USED WITH ENDS WILL ALLOW ALL THE STATED REQUIREMENTS OF THE HS TO BE MET IN FULL
• The three main objectives of the HS are to:
o facilitate international trade;
o facilitate the collection, comparison and analysis of trade statistics; and
o promote the standardisation of trade documentation and the transmission of data.
• The new headings and subheadings we propose for THPs and ENDS chemical preparations would allow each of these objectives to be met in full. Critically, moving the classification of e-liquids from Chapter 38 to another chapter of the HS would not fundamentally improve the ability of customs authorities to achieve any of these objectives. It would, however, be inconsistent with the fundamental principle by which products are classified for customs purposes based on their essential physical characteristics.
BACKGROUND AND SUMMARY
• Australia’s Department of Immigration and Border Protection (Australia) has submitted a proposal to the Harmonized System Review Sub-Committee (RSC) of the World Customs Organization (WCO). Australia proposes amendments to Chapter 24 of the Harmonized Commodity Description
and Coding System (HS System), which currently consists of headings and sub-headings for the classification of “Tobacco and manufactured tobacco substitutes.”
• Australia proposes to amend Chapter 24 of the HS to create a new heading for inter alia chemicals that are tobacco-free, such as liquid solutions, with or without nicotine, for use with electronic nicotine delivery systems (ENDS).
• Chemical solutions for use with ENDS – i.e. so-called e-liquids – are chemical mixtures that generally contain nicotine1, propylene glycol, glycerin water, and soluble flavorings. As such, they are, and have consistently been, classified under Chapter 38 of the HS (Miscellaneous chemical products). This has been confirmed by classification opinions issued by the WCO and adopted by the Contracting Parties to the HS Convention, including the EU and the United States.
• Yet, Australia proposes to amend Chapter 24 of the HS to create a new heading for, inter alia, tobacco-free e-liquids.
• For the reasons explained in greater detail below, CECCM (Confederation of European Community Cigarette Manufacturers)2 do not support the creation of new headings under Chapter 24 of the HS for the classification of tobacco-free chemicals, such as e-liquids.
CHAPTER 24 OF THE HS SHOULD NOT BE AMENDED TO INCLUDE CHEMICALS
• E-liquids should continue to be classified under Chapter 38 of the HS nomenclature. For customs classification, two criteria must be considered. First, the essential physical characteristics of the product. Second, in some cases, their intended use. The composition and intended use of e-liquids render them significantly different to products currently classified in Chapter 24 of the HS (“Tobacco and manufactured tobacco substitutes”). In particular, e-liquids do not contain tobacco
and there is no combustion involved in their use. Since e-liquids are chemical solutions that do not contain tobacco, they must continue to be classified in HS Chapter 38 (“Miscellaneous chemical products”).
• The above approach is consistent with the practice of officials responsible for tariff classification issues. At its 48th Session in September 2011, the Harmonized System Committee (HSC) of the WCO adopted a classification opinion in which it decided that, due to their composition and use, cartridges for electronic cigarettes, “whether or not containing nicotine, could not be regarded as tobacco substitutes.”
• In addition, in November 2016, the EU’s Customs Code Committee agreed, with no dissenting voices, that cartridges and refills for so-called Electronic Nicotine Delivery Systems (ENDS) should be classified in Chapter 38 of the HS, and the devices for their use should be classified in Chapter 85 of the HS.
• In the United States, the Committee for Statistical Annotation of Tariff Schedules—comprising representatives from USITC, U.S. Customs and Border Protection (CBP), and the U.S. Census Bureau (Census) – established six new statistical reporting numbers for e-cigarette devices, parts, and liquid in the Harmonized Tariff Schedule of the United States. These reporting numbers took effect in 2016. The reporting numbers for e-cigarette devices and parts are placed under Chapter
85, while the reporting numbers for liquids are placed under Chapter 38.
• The inclusion of chemical solutions under the same Chapter of the HS system as tobacco containing products would lead to an obvious lack of physical commonality among these diverse products. Yet it is a well-established principle that classification under the HS nomenclature must clearly reflect the physical properties of a product.
THE OBJECTIVES OF THE HS NOMENCLATURE CAN BE MET IN FULL IF E-LIQUIDS CONTINUE TO BE CLASSIFIED UNDER HS CHAPTER 38
• The three main objectives of the HS are to: (i) facilitate international trade; (ii) facilitate the collection, comparison and analysis of international trade statistics; and (iii) promote the standardization of trade documentation and the transmission of data. Shifting the classification of e-liquids from Chapter 38 of the HS to Chapter 24 of the HS would not improve the ability of customs authorities to achieve any of these objectives.
• According to Australia, its proposal is motivated by a desire to “enable data collection on the trade” of nicotine products for human consumption. However, if Contracting Parties to the HS Convention are interested in improving the collection of statistics on the international trade of e-liquids, they can consider amending Chapter 38 of the HS system to create a new six-digit subheading specifically for e-liquids. Alternatively, individual countries can already achieve this objective
nationally and in full by creating new 8 or 10 digit subheadings in their national nomenclatures under existing HS code 3824.99. We note in this regard that the United States, for example, has specific 10 digit sub-headings for “e-cigarette liquid that contains 5 percent or more by weight of nicotine” (3824.90.2840) or “less than 5 percent by weight of nicotine” (3824.90.9280). Other WCO members could certainly adopt a similar approach.
CONCLUSION
• For the above reasons, CECCM (Confederation of European Community Cigarette Manufacturers) representing the common views of major European–based cigarette manufacturers such as British American Tobacco (BAT), Imperial Brands, and Japan Tobacco International (JTI) as well as 13 national Manufacturers’ Associations, do not support the creation of new headings under Chapter 24 of the HS for the classification of tobacco-free chemicals, such as e-liquids.
