White Paper

Delivering Health Protection by Combating Illicit Trade

September 2019

Executive Summary

Why health legislation matters

Global trade trends and their impact on health

Delivering citizen protection

Delivering an end-to-end solution

Ensuring tax verification

Ensuring traceability

Ensuring due diligence

Delivering measurable results

Delivering projects

Appendices

References

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Contents 2

Executive Summary 3

Illicit Trade

Smuggling, counterfeiting and tax evasion are persistent and growing threats. Global trade – both legal and illegal – knows few boundaries as smart phones and e-commerce connect more and more of the world’s most remote communities. New technology can create counterfeit goods at a fraction of the price and at ever-increasing speeds. Traditional boundaries have blurred and the dark web and black market are thriving.

This growth in illicit trade, which is in direct opposition to the Sustainable Development Goals adopted in 2015, results in harmful consumption, preventable deaths and large economic costs to society. It is also responsible for substantial losses in government revenues and contributes to the funding of international criminal activities.

More than 10 million premature deaths each year – about 16 percent of all deaths in the world – could be prevented by reducing consumption of three products: tobacco, alcohol, and sugary beverages 1.

Tobacco is the largest and best-documented health risk, accounting for 8 million deaths a year. 1 Some developed countries are seeing a reduction cigarette consumption but this ‘success’ gives a restricted view of the global picture. In other parts of the world such as Asia Pacific, rising disposable incomes, an

Illicit trade is a harmful, persistent and growing threat, as technology, the global economy and e-commerce open new opportunities for dangerous counterfeit products and criminal activity.

increased focus on marketing from tobacco companies and increasingly hectic and stressful lifestyles are catalysing the growth of the cigarette market.

Globally, the market was worth US$888 Billion in 2018 and is further projected to reach a value of US$1,124 Billion by 2024, growing at a CAGR of nearly 4% during 2019–2024 2.

It is estimated by the World Health Organization that 1 in every 10 cigarettes and tobacco products consumed globally is illicit 3.

Whilst lower than tobacco, preventable deaths and health problems such as obesity and diabetes resulting from the consumption of alcohol and sugar are also rising and research indicates most of these deaths occur in low-and-middle-income countries. The story is familiar, rising incomes and sustained marketing messages are making these products more affordable and available.

In truth, consumption of all three products is rising and this has a knock-on effect on the growth of the illicit market. Supported by various players, ranging from petty peddlers to organized criminal networks involved in arms and human trafficking, it poses major health, economic and security concerns around the world.

Governments have a financial and moral duty protect their citizen’s health by ensuring that they are purchasing and consuming genuine products. By restricting the quantity and movement of harmful counterfeited goods, they can limit both the damaging effects on consumers and the impact of those products on national health systems.

181 countries now have a legally binding commitment to the World Health Organization’s Framework Convention on Tobacco Control 2005 (FCTC) and the Protocol to Eliminate Illicit Trade in Tobacco Products (ITP). Whilst they have been effective in setting the global standard, evidence shows that more must be done to implement the findings and recommendations of these Framework’s in order for Government’s to see an improvement in health outcomes.

Industry can support governments in the provision, implementation and maintenance of security solutions for nations; enabling them to tackle illicit trade and helping to ensure they comply with the national and international health legislations.

Government’s role in ensuring citizen protection

4

Tax Verification of tobacco products through Secure Marking of legitimate products

Protecting and expanding tax revenues provides the opportunity governments need to create widespread and impactful social and health programmes and outcomes.

With an increase in both tax evasion and illicit trade, it is becoming increasingly vital to protect tax revenues and facilitate efficient collection against the increase in both tax evasion and illicit trade.

In line with FCTC ITP requirements, dual government-revenue solutions have been developed which consist of a physical label combined with a unique digital code.

Tracking and Tracing of tobacco products through Supply Chain Tracking and Data Management Flow

Tax stamps help domestic governments to ensure that their own tobacco tax revenue streams are protected. However, tobacco product supply chains cross borders, so the tracking and tracing of these products is an international process.

An international track-and-trace regime allows authorities to monitor the movement of tobacco products internationally, to avoid their diversion into illegal markets and to ensure that the relevant taxes and duties have been paid.

Identification and Verification of those engaged in the tobacco supply chain through Product Authentication and Inspection

Due to the large margins, profits and high taxes associated with tobacco revenue, it is prudent to apply the practice of due diligence for those operating in the tobacco product and manufacturing supply chain.

Any organisation or individual licensed to operate in the tobacco supply chain is required to be authenticated, and may need to produce a licence that can also be verified. The FCTC parties have an obligation to ensure that verification procedures and processes are robust, in order to meet the requirements of these FCTC due-diligence provisions.

Executive Summary

Industry solutions have been developed around three core elements:

5

De La Rue helps reduce illicit trade across the globe

Our solutions focus on:

Tax verification

We offer dual government-revenue solutions that combine a physical label with a unique digital code that can be interrogated in real time, and provide a complete history of the label and product. This combination of a physical and digital marking system is the most comprehensive and effective way to meet the requirements of the FCTC ITP and to help curb illicit trade in tobacco.

Track and trace

The De La Rue solution for tax stamps and authentication labels includes the collection of data from across the supply chain providing our customers with a complete picture of production. This enables governments to apply the appropriate safeguards and controls.

Identification and verification

The De La Rue solution is role-based, allowing full control of all parties licensed within the supply chain, from manufacturers and distributors to importers and printers, in line with the FCTC ITP. Real-time reports that allow empowered stakeholders to carry out due diligence in an instant are also an integral part of our solution.

Executive Summary

De La Rue is a trusted partner of governments and their agencies and affiliates, and has helped to reduce illicit trade across the globe. While addressing complex global problems, De La Rue focuses on getting results that deliver for every one of its customers, individually. This means implementing tailored solutions on time and to budget. With over 150 years of experience, De La Rue has developed a record and reputation that nations can rely.

6Why health legislation matters

8 million80%

7 million

1.2 million

Around 8 million people die each year from tobacco abuse 4

80% of these premature deaths are in low/middle income countries 3

1 in 10 cigarettes are illicit 1

Total economic cost of smoking estimated at $1.4 trillion, equivalent to 1.8% of the world’s annual GDP – 40% of that cost

occurs in developing countries 4

Hinders economic development

Puts a strain on national health resources

7 million of these deaths are the result of direct tobacco use 4

are the result of non-smokers being exposed to second-hand

smoke 4

US$1.4 trillion

7Global trends and their impact on health

Governments have a duty of care to protect citizens from harmful counterfeit goods.

Around 80% of the world’s 1.1 billion smokers live in low- and middle-income countries. 3

The world population stands at over 7.7 billion 5 and is forecast to grow to 9.8 billion by 2050. 6

The expansion of both population and international trade creates economic growth for countries and, as a result, greater affluence and spending power for its citizens. Consultants McKinsey report that countries failing to build on economic growth are missing a “tremendous opportunity to improve the quality of life for their citizens. In a rapidly developing economy, a 10 to 15 per cent increase in tax revenues often translates into an ability to double expenditures on, for example, health care or education.” 7

With around 80% of the world’s 1.1 billion smokers living in low- and middle-income countries 3, there is a significant opportunity to change health outcomes thorough the implementation of tax revenue programmes. There is also a duty of care to protect vulnerable citizens from the negative impact of harmful counterfeit goods.

Illicit Trade

The same forces that expand international trade, such as growing populations, improved communication and global information exchange also facilitate illicit trade and the operations of criminal syndicates. This dark side to globalisation stands in direct contrast to the UN’s Sustainable Development Goals.

The Sustainable Development Goals (SDGs), also known as the Global Goals, were adopted by all United Nations Member States in 2015 as a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.

The 17 goals, which include good health and wellbeing and responsible consumption and production, are integrated – that is, they recognise that action one area will affect outcomes in others and that development must balance social, economic and environmental sustainability. 8

Illicit trade undermines the security of nations and communities, impacts on excise revenues and restricts the funds available to governments to invest in infrastructure, health or education. At the same time, it damages law-abiding, tax- paying businesses and harms public health. The growth in illicit trade has now reached macroeconomic proportions, with goods being manufactured on one continent, trafficked in another and sold and consumed on a third.

The World Economic Forum values leakages from illicit trade at $2.2 trillion, nearly 3% of the world’s economy. 9

“ If illicit trade were a country, its economy would be larger than Brazil, Italy and Canada combined.” 9

The independent KPMG “Stella Report,” commissioned by PMI, revealed that in 2018 the black market for cigarettes in the European Union (EU) cost governments a total of 10 billion euros in lost tax revenues.

According to the report, illicit cigarette consumption in 2018 was estimated at 8.6 percent of total consumption, representing 43.6 billion cigarettes. 10

8Global trends and their impact on health

With a view to eliminating illicit trade, governments should increase their focus on adopting and implementing the key legislative measures to enable authentication of products and monitor their movement.

Guidelines and Legislation

Governments have a financial and moral duty to minimise the impact of illicit trade and are supported by an increasing number of domestic, regional and international obligations and guidelines that advise action.

Various international organisations are addressing aspects of the problem:

— World Customs Organisation (WCO) has produced guidelines on controlling free trade zones;

— INTERPOL is focused on criminal enforcement of the organised criminal elements behind illicit trade;

— OECD (Organisation for Economic Co-operation and Development) has produced a report on the impact of counterfeiting on economies and has set up a Charting Illicit Trade Taskforce with a sub-taskforce focused on tobacco;

— World Trade Organization (WTO) administers the Trade Related Intellectual Property Rights agreement (TRIPS);

— The UN Office for Drugs and Crime has produced a risk assessment of trafficking crime and the rule of law.

More than 10 million premature deaths each year – about 16 percent of all deaths in the world – could be prevented by reducing consumption of three products: tobacco, alcohol, and sugary beverages. 1

Tobacco is the largest and best documented health risk accounting for 8 million deaths a year. 4

The issue of illicit trade in tobacco is the explicit focus of the world’s first health treaty developed by the World Health Organisation (WHO). The Framework Convention on Tobacco Control was introduced in 2016 along with the Protocol to Eliminate Illicit Trade in Tobacco Products (ITP).

These two treaties form the international framework that guides national governments to address the issues associated with tobacco consumption and illicit trade. The EU have also introduced supporting legislation, namely the Tobacco Product Directive which seeks to drive the exchange of information across member states as well as raise issues associated with changes in the tobacco industry, such as electronic cigarettes.

Whilst lower than tobacco, preventable deaths and health problems such as obesity and diabetes resulting from the consumption of alcohol and sugar are also rising and research indicates most of these deaths occur in low-and-middle-income countries.

Whether in the world’s poorer or wealthier nations, unregulated and illicit alcohol has the greatest impact on the poorest and most vulnerable in society. Therefore, bringing unregulated alcohol into the regulated sector can contribute to breaking the cycle of ill health and to reducing health inequalities.

Low income 45%

Lower-middle income 41%

Upper-middle 25%

High income 8%

Unregulated alcohol is disproportionately prevalent in lower-income countries

Alcohol in the Shadow Economy, IARD, June 2018 11

9Global trends and their impact on health

Progress is being made but there is more to do

With regard to tobacco, the seventh WHO Report on the global tobacco epidemic analyses national efforts to implement the most effective measures from the FCTC that are proven to reduce demand for tobacco.

These measures, include the “MPOWER” interventions which give six tobacco control strategies, including raising taxes on tobacco. This is the most cost-effective method, with tobacco tax revenues on average 250 times higher than spending on tobacco control, based on available data.(13). There has been measurable success as a result (population coverage from this policy has almost doubled from 8% in 2016 to 14% in 2018) but only 38 countries, with 14% of the world’s population, have introduced taxes on tobacco products so that at least 75% of the retail price is tax. 12

In short, many governments still have a significant opportunity to improve health outcomes through adopting this important recommendation.

Implementing product authentication and track and trace programmes helps governments on a number of levels. From ensuring compliance with global guidelines and diversifying revenue sources to raising tax revenues. In turn this will enable greater investment in public services and infrastructure and thereby help to reduce health risks and increase levels of trust amongst citizens.

When it comes to alcohol, there remains a need for governments, communities and industry to combine their resources to tackle the production, trade and consumption of illicit and illegal alcohol. In particular, Industry can contribute through the provision of suitable track and trace solutions that help protect the supply chain of regulated alcohol.

Product authentication and track-and-trace solutions can help address the challenges of illicit trading in cigarettes and alcohol and once established, the solutions can be used on other products such as sugary drinks.

10Delivering citizen protection

The secure collection, use and management of data, combined with physical product markings in the form of tax stamps or authentication labels and unique codes, provides countries with the means to meet their national and international obligations.

Illicit trade

Illicit trade is broadly defined in the FCTC treaty as any practice or conduct prohibited by law which relates to production, shipment, receipt, distribution, sale or purchase – including any practice or conduct intended to facilitate such activity (Article 1). This encompasses smuggling, counterfeiting and tax evasion. Together these result in the reduction of excise revenues, damage to legitimate business and harm to consumer health.

Smuggling involves the movement of products between tax jurisdictions, either on a small scale by individuals or by highly organised gangs trading very large quantities. Understanding where a product has been – its traceability – is therefore a crucial element in identifying smuggled goods.

Counterfeiting of goods requires access to raw materials and equipment, and often involves large-scale manufacturing. As well as taking sales and excise revenue that should be obtained by governments from legitimate goods, counterfeited products have none of the safeguards of legitimate products. Often, they have increased toxicity levels or incorrect ingredients – both of which put citizens’ health at risk. Distinguishing authentic products from fake ones, either through physical markings or digital means, is essential.

Tax evasion can result from undeclared, overproduction in-country – so-called ‘Third

Shift’ production – or from falsification of shipping and taxation documents, which allows criminals to take advantage of differing tax levels between territories without necessarily physically moving the products. Volume verification of production, through the use of tax markings or data analysis, can ensure that excise revenues are correctly aligned with the actual volume of goods manufactured.

The FCTC Protocol to Eliminate Illicit Trade in Tobacco Products (the Illicit Trade Protocol or ITP) was introduced to control the undermining effect that illicit trade has on price and tax measures, health objectives and the overall economy.

Combating illicit tradeDe La Rue helps governments to tackle the growing problem of illicit trade. In doing so, it plays a vital role in assisting governments with their efforts to meet their FCTC and EU TPD obligations to ensure those persons (individuals or entities) licensed to access the tobacco supply chain are correctly identified and authenticated. It is in these areas that De La Rue is well positioned to partner with governments to bring about positive, measurable results.

At present 181 governments – all but 13 member states – have a legal obligation under Article 15 of the FCTC to consider their

national tracking and tracing system, making use of secure codes that contain relevant information to enable ease of monitoring and control of the supply chain for tobacco products. In addition, having recently taken part in the multilateral negotiations for the FCTC ITP, the same governments need to be assessing and preparing for implementation of their obligations under the FCTC ITP-specific provisions.

The EU TPD has introduced an EU-wide tracking and tracing system for the legal supply chain of tobacco products with visible and invisible security features, which should improve the verification of illicit products.

De La Rue can assist governments in meeting their national and international health obligations in three key areas:

1. Tax Verification of tobacco products.2. Tracking and Tracing of tobacco products.3. Identification and Verification of those

engaged in the tobacco supply chain.

The secure collection, use and management of data, combined with physical product markings in the form of tax stamps or authentication labels and unique codes, provides countries with the means to meet their national and international obligations.

11Delivering an end-to-end solution

Ensuring a project meets FCTC legislation is more than simply delivering a secure tax stamp scheme. It requires a multi-faceted approach that integrates physical products, hardware, data and digital security with government systems, delivering a scalable solution that protects and controls the flow of legitimate products through the supply chain.

De La Rue’s solutions are designed on a strict compliance matrix, with project functionality mapped according to each FCTC requirement.

Governments can protect their citizens and trade, through meeting the key FCTC requirements, by implementing a scheme developed by De La Rue around three core elements:

De La Rue Solution

Secure marking of legitimate products

Supply chain tracking and data management flow

Product authentication and inspection

FCTC Requirement

Tax verification of tobacco products

Tracking and tracing of tobacco products

Identification and verification of those engaged in the tobacco supply chain

12Ensuring tax verification

Obligation 1: Tax verification of tobacco products

A significant component of total tax levied on tobacco products is excise tax. In many parts of the world the average excise tax is 60–70% of the retail price. When VAT or sales tax is also added, the tax component of a pack of cigarettes is even higher.

FCTC Article 6 – Price and Tax, encourages governments to increase tobacco taxation in order to reduce consumption of tobacco products. While higher tax – and higher prices – can reduce consumer demand, if the appropriate national balance is not achieved or maintained, it can create an incentive to evade taxation. Consumers may seek out cheaper products to purchase, while criminals look to benefit from supplying them.

It is widely acknowledged that there must be a balance between tax policy and health policy to ensure that revenues are maximised and public health policy aims are maintained. However, there is also the growing dimension of illicit trade that is destabilising that policy balance in most parts of the world. The result is an increase in illicit trade and a reduction in government revenue.

It is vital for governments to protect their tax revenues, to ensure that their budgets and public expenditure forecasts are reliable and robust. In order to do this, it is essential that tax is collected efficiently and not compromised by criminal activity. However, many governments are experiencing an increase in the illicit trade in tobacco products, particularly with tax-evaded tobacco products and counterfeit tobacco products, and both of these have a significant negative impact on government revenue.

Solution: Secure marking of legitimate products

Working closely with governments to help resolve the challenges created by illicit trade, De La Rue designs, produces and manufactures tax stamps and authentication labels.

Ordered, applied and paid for by industry, tax stamps and authentication labels ensure that illicit products are easy to identify and that they are removed from the market and replaced by genuine products that contribute the correct taxes to the government. These stamps ensure that the correct level of revenue has been paid and help governments to verify that products are genuine.

In line with the FCTC ITP requirements, De La Rue offers a dual government revenue solution. It consists of a physical label combined with a unique digital code that can be interrogated in real time, and provides a complete history of the label and product.

The joining of a physical and digital marking system is the most comprehensive and effective way to meet the requirements of the FCTC ITP requirements and to help curb illicit trade in tobacco.

A technical report produced by experts in the WHO’s Tobacco Free Initiative for the FCTC Intergovernmental Negotiating Body (INB), states that in order to minimise tax evasion, up-to-date technologies should be adopted, and in particular a state-of-the-art monitoring, tracking and tracing system that involves tax stamps.

The World Bank also recommends the use of tax stamps or markings along with other initiatives: “…governments can adopt effective policies to control smuggling. Such policies include prominent tax stamps and local-language warnings on cigarette packs, as well as the aggressive enforcement and consistent application of tough penalties to deter smugglers.”

De La Rue offers a dual authentication solution consisting of a physical and a digital marking system.

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Obligation 2: Tracking and Tracing of tobacco products

Tax stamps are domestic in nature – they help a government to ensure its own tobacco tax revenue streams are protected – but the tracking and tracing of tobacco products is an international process. This is because tobacco product supply chains cross borders. The setting up of an international tracking and tracing regime for tobacco products is one of the core elements of the FCTC ITP.

Article 15.2 (b) of the FCTC requires governments to consider implementing a national tracking and tracing regime, to secure the tobacco supply chain and prevent illicit trade in tobacco products. This obligation is currently in force by all governments that have ratified the FCTC (181 countries).

Article 8 of the FCTC ITP, outlines specifically how that might be achieved: the requirement for a national tracking and tracing system, based on a secure mark placed on the packaging of tobacco products (packs, cartons and master-cases of 10,000 cigarettes) and on the machinery used to produce tobacco products.

The FCTC requires that, in the case of seizure, the marking is readable in such a way that it could be used to address a query to a system (a clearing house) that would provide the data elements relating to the tracking and tracing of seized tobacco products.

The purpose of an international track-and-trace regime is to allow authorities to monitor the

movement of tobacco products internationally, to avoid their diversion into illegal markets and to ensure that the relevant taxes and duties have been paid. It also enables authorities to identify where the tobacco products were diverted into illegal channels. The WHO FCTC ITP technical papers state that a secure, unique product code or stamp that identifies the product is the main component of any tracking and tracing regime.

Exact identification of a product is not possible with only the shipping or transport documents which might accompany the goods. In order for the regime to be effective, a product must be marked with information that will help determine where it is to be sold and when and where it was manufactured.

The FCTC ITP requires that a global tracking and tracing regime be established within five years however low- and middle-income countries have been slow to implement the FCTC and continued investment is needed.

This means that national track-and-trace systems will form what is to be known as the global tracking and tracing regime. All tobacco products manufactured or imported into a country must be tracked and traced via a national system that incorporates unique identification markings (codes or stamps) carrying specified information about the tobacco products. This national system will encourage the sharing of global information and data.

The codes or stamps must be secured so that they can’t be removed, and must form part of all unit packs and packages as well as any outside packaging. This is to be achieved within five years for cigarettes and within ten years for other tobacco products, for entry into force of the ITP for that Party.

In the event of a seizure of a tobacco product, the FCTC ITP requires certain data be accessible via the codes or stamps: the date of manufacture; manufacturing facility; machine used to manufacture tobacco products; production shift of manufacture; the name, invoice, order number and payment record of the first customer who is not affiliated with the manufacturer; the intended market of retail sale or the intended country of installation or use of manufacturing equipment; product description; any warehousing and shipping; the identity of any known subsequent purchaser; and the intended shipment route, the shipment date, shipment destination, point of departure and consignee. It is expected that the printed marking should include a human-readable element. Article 9 of the FCTC ITP requires that all persons engaged in the supply chain should maintain complete and accurate records.

Each country is expected to decide which system to adopt, depending on its own national requirements, as long as the system is secure and capable of appropriate data flow and information exchange with the international tracking and tracing regime.

Ensuring traceability

The FCTC requires governments to consider implementing a national tracking and tracing regime, to secure the tobacco supply chain and prevent illicit trade.

14Ensuring traceability

Solution: Supply-chain tracking and data management flow

Each tax stamp or authentication label and code provides the capability to track a product throughout the supply chain. Data is collected and managed at each stage, through the systems provided by De La Rue, to build a complete picture of production.

Our systems control every aspect of code usage, from order management and code generation through to verification and traceability. The combination of a physical stamp or label with a generated digital code is the most comprehensive method to meet the tracking and tracing requirements of the FCTC ITP.

The De La Rue code management system generates secure codes in a format that they can be configured to meet specific data requirements set out in the FCTC ITP. The De La Rue system has a full audit trail capability. It enables code verification throughout the process, and voided codes are accounted for.

De La Rue’s tracking and tracing offering meets the technical specifications required by the FCTC ITP as follows:

Requirement 1: Serialisation of all tobacco products to the level of the smallest saleable unit De La Rue uses specifically constructed unique codes printed in human- and machine-readable (2D matrix) format. These are applied directly to

tobacco products. Where a government does not specify a code format, we use international standards to describe the code (such as international GS1 standards), and where governments define the code construct we use that dictated structure. Our systems are able to interface directly to the appropriate data sources to generate the elements of the standardised SGTIN (serialised global trade item number) code structure for electronic product coding and serialisation.

Requirement 2: Common numbering standards for serialisation Unless specified by the government, our number construct is already common across all of our tracking and tracing implementations. If governments agree to move to a common or internationally agreed construct, we are able to comply.

Requirement 3: Human-readable printing/labelling of serialisation numbers on all traded units This already occurs on all De La Rue implementations where tracking and tracing is an element of the solution required.

Requirement 4: Establishment of parent-child relationships between different packaging units (aggregation) Our system already aggregates through our own production processes. However, legislation

needs to be in place in any territory to ensure that appropriate technologies can be installed in production sites serving that territory. This is so that the required data elements can be gathered, relationships built and data transmitted back to a central system.

Requirement 5: Recording of any shipping and receiving events along the supply chain.This requires identification of all logistics operators involved in the supply chain and interfacing to their systems through standard Application Programming Interfaces (APIs). The De La Rue system is based on standard database technologies with a Service Oriented Architecture (SOA) and a message transport backbone. It has built-in ‘programming hooks’ to facilitate easy extension to other systems for data interchange and interrogation.

Requirement 6: A standard as a protocol for transferring queries and data, such as EPCIS De La Rue can configure its system to communicate using any standard required or established due to the architectural nature of the solution. Currently De La Rue’s solutions communicate with a multitude of third-party applications for data extension, reporting and management. At present most other systems on the market do not provide the full requirements of FCTC ITP Article 8.

15Ensuring due diligence

Obligation 3: Identification and verification of those engaging in the tobacco products supply chain.

Due to the large margins, profits and high tax associated with tobacco taxation revenue, it makes sense to apply the practice of due diligence for those operating in the tobacco product and manufacturing supply chain. For this reason, governments took the decision in the FCTC ITP negotiations to create Article 7, which requires that due diligence be carried out on all participants operating in the tobacco supply chain. It also requires measures to ensure that anyone engaging in the tobacco supply chain is authorised and licensed to do so: “Parties shall establish a mandatory licensing system for anyone manufacturing, importing or exporting tobacco products or manufacturing equipment.”

The FCTC ITP (Articles 6 and 7) requires that due diligence be conducted before commencement and during the course of a business relationship — including those licensed to operate within the tobacco supply chain.

Those licensed to operate in the tobacco supply chain are required to be verified, and may need to produce a licence that can also be verified. The FCTC parties have an obligation to ensure that verification is robust in order to meet the requirements of these FCTC due-diligence provisions.

Solution: Product authentication and inspection

The combination of secure collection, usage and management of data, and physical product marking enables the relevant parties to verify that products are authentic and to validate production. It also facilitates the collection of corresponding excise revenues: from trained customs officials validating the tax stamps or labels to the monitoring of shipment and containers that are identified by the data flow as being at risk, excise revenues are protected.

The De La Rue solution is roles-based, allowing full control of all parties licensed within the supply chain, ranging from manufacturers and distributors to importers and printers, in line with Article 6 of the FCTC ITP. In addition, the solution has a full suite of real-time reports that allow empowered stakeholders to carry out due diligence in an instant.

De La Rue believes that a practical way to deal with the requirement to identify those engaging in an official capacity in the tobacco supply chain would be to issue an identity card to people who are authorised or licensed, once the due diligence requirements had been carried out.

This identity card could be issued by the designated government licensing authority in the form of a digital photo ID. It would enable fast verification of people with the authority to act officially (in a licensed capacity) in the tobacco supply chain, such as within the Free Trade Zone.

De La Rue produces sophisticated identity cards, passports and security documents, and works closely with governments to determine the exact requirements needed to ensure appropriate authentication within its jurisdiction. To our knowledge, there are currently no governments using identity cards or documentation to meet the due diligence obligations of FCTC ITP Article 7.

The FCTC ITP requires that due diligence be conducted before commencement and during the course of a business relationship.

16Delivering measurable results

Article 6 of the FCTC states that price and tax measures are an effective and important tool for reducing tobacco consumption, which ultimately delivers health benefits. It has been established that when these taxes increase, fewer people use tobacco; people who do use it consume less; people who have stopped smoking are less likely to start again; and the young are less likely to take it up.

In the EU a BMC Public Health report of 2017 found that a rise of 10% in cigarette price would significantly reduce consumption as well as the total death toll caused by smoking. The report also recommended all EU countries levy higher tobacco taxes to increase prices, and thus in effect reduce consumption. The subsequent increase in tobacco tax revenues would be instrumental in covering expenditures related to tobacco prevention and control programmes. 13

In April 2019, The Task Force for Fiscal Policy and Health reported that Colombia’s recent experience with both tobacco and alcohol taxes has had a significant impact on consumption and revenues. In 2016, Columbia increased the specific tax on cigarettes by 200% and established a 4-percentage point annual increase on top of inflation.

Cigarette consumption decreased by 23% in 2017 relative to 2016, while tobacco revenues increased 54%.1

Packs Sold and Tobacco Tax Revenue Before and After Tax Increase, Columbia 2016–2017 1:

The Task Force also commissioned a study to estimate health and revenue effects from increasing excise taxes on tobacco. The researchers modelled what the impact would be if all countries implemented a tax increase large enough to raise prices by between 20 and 50% from their current levels. The impact of these tax increases was assessed over a 50-year period (2017 – 2056) and show important health benefits and substantial revenues.1

Projected Health and Revenue Impact of Tax Increased on Tobacco 2017 – 2056 1:

Price Deaths Years of Change in increase averted life gained tax revenuedue to (millions) (millions) (trillions,$2016higher tax discounted)

20% 10.8 212.0 1.6

30% 16.3 321.4 2.2

40% 21.8 428.60 2.6

50% 27.2 535.7 3.0

The WHO Framework Convention on Tobacco Control states: “Price and tax measures are an effective means of reducing tobacco consumption.”

Cigarette excise revenue collected (Million USD)

2016 2017

54% increase in excise revenure

195

301

23% decline in cigarettes sold

Cigarette consumption (Million packs)

2016 2017

674

521

17Delivering measurable results

De La Rue enables governments to provide the governance required to maximise the effectiveness of their programmes. However, the key to ensuring that tax increases reduce consumption is for these increases to be part of a system which is in place to facilitate, regulate and monitor collection of this revenue from authentic products. While higher tax, and prices, can reduce consumer demand, if the appropriate national balance is not achieved or maintained it can create an incentive to evade taxation, as consumers may seek out cheaper products to purchase.

The WHO recognises that while higher taxes do not mean more smuggling, a rigorous collection system is imperative for countries to see benefits: “Contrary to industry claims, increased smuggling does not automatically follow tax increases. Tax evasion correlates more closely with poor governance than it does with high levels of taxation. A streamlined system under a single taxation authority that focuses on manufacturers, with strong tax administration and customs enforcement, facilitates compliance. Stringent law enforcement costs only a small fraction of the additional revenue earned from higher tobacco taxes. Large financial penalties should be imposed for large-scale tax evasion and smuggling operations.”

Revenue Generated and Lives Saved with Elimination of Global Illicit Trade

Current Situation

Total illicit cigarette market (% of consumption)

Total illicit cigarette market (cigarettes per year)

Total revenue lost to governments

Estimated deaths in 2030

If this Illicit trade were eliminated

Immediate gain in revenue

Lives saved in 2030 and annually thereafter

Global

11.6%

657 billion

$40.5 billion

8.3 million

$31.3 billion

164,000

High Income

Countries

9.8%

124 billion

$17.6 billion

1.5 million

$13 billion

32,000

Low and Middle

Income Countries

12.1%

533 billion

$22.9 billion

6.8 million

$18.3 billion

132,000

The organisation further states that tax evasion and smuggling can be reduced through effective government record-keeping; improved border security and inspection procedures; banking controls to reduce laundering and better communication among finance, customs and other agencies involved in tax collection and enforcement; and affixing tax stamps to every package intended for retail sale.

De La Rue enables governments to maximise the effectiveness of their governance programmes in all these key areas.

1 in 10cigarettes are illicit 3

“If the global illicit trade was eliminated, governments would gain at least $31 billion, and from 2030 would save over 160,000 lives a year.”

18

From the outset, we work with governments and all their stakeholders to define, develop and implement a cost-effective, fit-for-purpose project plan that is unique to a country’s specific needs.

Delivering projects

De La Rue’s approach to customers’ projects is our key differentiator.

From the outset, we work with governments and all their stakeholders to define, develop and implement a cost-effective, fit-for-purpose project plan that is unique to a country’s specific needs and also meets the requirements of national and international legislation.

This approach, combined with our experience in handling complex and critical projects for countries, ensures that our solutions deliver.

By defining the needs, engaging all parties and providing a practical and relevant system solution we can help countries to protect their revenue, trade, and the wellbeing of citizens.

Project understanding – Map, engage and consult Each project begins with De La Rue’s support and advice, as consultants, ahead of the design of an FCTC compliant scheme – providing everything from reviews of manufacturers’ production facilities through to assistance in drafting the necessary legislation that ensures the legal basis for such a scheme.

Our comprehensive analysis across technology, stakeholders and legislation

enables us to advise on the necessary requirements, identifying gaps and supporting governments so that they can develop and deliver their project plan on time and to budget.

In addition, our expertise in project management, engaging all stakeholders and providing advice and support across government and industry, enables us to deliver a solution that minimises the need for initial investment from countries. This allows governments to realise the benefits of introducing a new FCTC compliant scheme.

Project management methodology

To ensure all the components of a successful project, De La Rue uses a structured Project Management Framework (PMF). We have developed a PMF, utilising all our experience of delivering effective solutions, which is based on the applicable subsets of PMI’s PMBOK® and PRINCE2®.

The De La Rue PMF uses a phased approach, which brings structure and clarity to projects.

1 Project initiation– Outline requirements

2 Feasibility study and conceptual design– Initial analysis– Outline planning– Outline design

3 Project delivery and implementation– Detailed analysis– Detailed planning– Execution, monitoring and control

4 Project Support– Operations– Maintenance– Customer services processes– Review

Project Management Framework

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19Delivering projects

Product manufacturers plan their production and calculate the volume of tax stamps they require, informing the government of their future production plans, and ensuring that all payments, licenses and approvals are in place.

Product manufacturers place an order for tax stamps in a secure online Order Management System (OMS) and the order is sent to the government for approval.

Government approves the order and transfers it to its stamp personalisation and production centre, to be supplied to the manufacturer.

De La Rue produces stamps and ships to locations under terms approved by government.

The product manufacturer applies the stamps to its goods, then declares the production to the government for reconciliation, releasing products to the marketplace where they can be inspected.

Our revenue-protection workflow ensures that there is minimal cost to government – only the administration cost of approving the orders – and that full control of stamp delivery is maintained. A complete audit trail of orders, approvals, deliveries and additional data is also assured, therefore meeting the obligations set out by the FCTC.

1 2 3 4 5Typical workflow

De La Rue’s core product workflow connects a country’s government with product manufacturers. This means that control remains with the government, but also that the legitimate concerns of industry are addressed. The main steps are as follows:

Appendix 1:FCTC – Article 15Illicit Trade in Tobacco Products

Currently 181 governments have a legal obligation under Article 15 to consider their national tracking and tracing system

1. The Parties recognize that the elimination of all forms of illicit trade in tobacco products, including smuggling, illicit manufacturing and counterfeiting, and the development and implementation of related national law, in addition to sub-regional, regional and global agreements, are essential components of tobacco control.

2. Each Party shall adopt and implement effective legislative, executive, administrative or other measures to ensure that all unit packets and packages of tobacco products and any outside packaging of such products are marked to assist Parties in determining the origin of tobacco products, and in accordance with national law and relevant bilateral or multilateral agreements, assist Parties in determining the point of diversion and monitor, document and control the movement of tobacco products and their legal status. In addition, each Party shall:

(a) Require that unit packets and packages of tobacco products for retail and wholesale use that are sold on its domestic market carry the statement: “Sales only allowed in (insert name of the country, subnational, regional or federal unit)” or carry any other effective marking indicating the final destination or which would assist authorities in determining whether the product is legally for sale on the domestic market; and

(b) Consider, as appropriate, developing a practical tracking and tracing regime that would further secure the distribution system and assist in the investigation of illicit trade.

3. Each Party shall require that the packaging information or marking specified in paragraph 2 of this Article shall be presented in legible form and/or appear in its principal language or languages.

4. With a view to eliminating illicit trade in tobacco products, each Party shall:

(a) Monitor and collect data on cross-border trade in tobacco products, including illicit trade, and exchange information among customs, tax and other authorities, as appropriate, and in accordance with national law and relevant applicable bilateral or multilateral agreements;

(b) Enact or strengthen legislation, with appropriate penalties and remedies, against illicit trade in tobacco products, including counterfeit and contraband cigarettes;

(c) Take appropriate steps to ensure that all confiscated manufacturing equipment, counterfeit and contraband cigarettes and other tobacco products are destroyed, using environmentally friendly methods where feasible, or disposed of in accordance with national law;

(d) Adopt and implement measures to monitor, document and control the storage and distribution of tobacco products held or moving under suspension of taxes or duties within its jurisdiction; and

(e) Adopt measures as appropriate to enable the confiscation of proceeds derived from the illicit trade in tobacco products.

5. Information collected pursuant to subparagraphs 4(a) and 4(d) of this Article shall, as appropriate, be provided in aggregate form by the Parties in their periodic reports to the Conference of the Parties, in accordance with Article 21.

6. The Parties shall, as appropriate and in accordance with national law, promote cooperation between national agencies, as well as relevant regional and international intergovernmental organizations as it relates to investigations, prosecutions and proceedings, with a view to eliminating illicit trade in tobacco products. Special emphasis shall be placed on cooperation at regional and sub regional levels to combat illicit trade of tobacco products.

7. Each Party shall endeavour to adopt and implement further measures including licensing, where appropriate, to control or regulate the production and distribution of tobacco products in order to prevent illicit trade.

Appendix 2:FCTC – Article 6Price and Tax

De La Rue advises that a secure mark is used to provide verification of genuine tobacco products, to ensure that Article 6 achieves the appropriate outcome to reduce overall tobacco consumption, rather than encourage tax evasion

1. The Parties recognize that price and tax measures are an effective and important means of reducing tobacco consumption by various segments of the population, in particular young persons.

2. Without prejudice to the sovereign right of the Parties to determine and establish their taxation policies, each Party should take account of its national health objectives concerning tobacco control and adopt or maintain, as appropriate, measures, which may include:

(a) Implementing tax policies and, where appropriate, price policies, on tobacco products so as to contribute to the health objectives aimed at reducing tobacco consumption; and

(b) Prohibiting or restricting, as appropriate, sales to and/or importations by international travellers of tax- and duty-free tobacco products.

3. The Parties shall provide rates of taxation for tobacco products and trends in tobacco consumption in their periodic reports to the Conference of the Parties, in accordance with Article 21

Appendix 3:FCTC Protocol ITP – Article 8 Tracking and tracing

The code generated by the De La Rue solution is globally unique – a critical requirement for governments to guarantee authentication on an item-by-item basis, and facilitate traceability

1. For the purposes of further securing the supply chain and to assist in the investigation of illicit trade in tobacco products, the Parties agree to establish within five years of entry into force of this Protocol a global tracking and tracing regime, comprising national and/or regional tracking and tracing systems and a global information-sharing focal point located at the Convention Secretariat of the WHO Framework Convention on Tobacco Control and accessible to all Parties, enabling Parties to make enquiries and receive relevant information.

2. Each Party shall establish, in accordance with this Article, a tracking and tracing system, controlled by the Party for all tobacco products that are manufactured in or imported onto its territory taking into account their own national or regional specific needs and available best practice.

3. With a view to enabling effective tracking and tracing, each Party shall require that unique, secure and non-removable identification markings (hereafter called unique identification markings), such as codes or stamps, are affixed to or form part of all unit packets and packages and any outside packaging of cigarettes within a period of five years and other tobacco products within a period of ten years of entry into force of this Protocol for that Party.

4.1 Each Party shall, for purposes of paragraph 3, as part of the global tracking and tracing regime, require that the following information be available, either directly or accessible by means of a link, to assist Parties in determining the origin of tobacco products, the point of diversion where applicable, and to monitor and control the movement of tobacco products and their legal status:(a) Date and location of manufacture;(b) Manufacturing facility;(c) Machine used to manufacture tobacco products;(d) Production shift or time of manufacture;(e) The name, invoice, order number and payment records of the first customer who is not affiliated with the manufacturer;(f) The intended market of retail sale;(g) Product description;(h) Any warehousing and shipping;(i) The identity of any known subsequent purchaser; and(j) The intended shipment route, the shipment date, shipment destination, point of departure and consignee.

4.2 The information in subparagraphs (a), (b), (g) and where available (f), shall form part of the unique identification markings.4.3 Where the information in subparagraph (f) is not available at the time of marking, Parties shall require the inclusion of such information in accordance with

Article 15.2(a) of the WHO Framework Convention on Tobacco Control.

5. Each Party shall require, within the time limits specified in this Article, that the information set out in paragraph 4 is recorded, at the time of production, or at the time of first shipment by any manufacturer or at the time of import onto its territory.

6. Each Party shall ensure that the information recorded under paragraph 5 is accessible by that Party by means of a link with the unique identification markings required under paragraphs 3 and 4.

7. Each Party shall ensure that the information recorded in accordance with paragraph 5, as well as the unique identification markings rendering such information accessible in accordance with paragraph 6 shall be included in a format established or authorized by the Party and its competent authorities.

8. Each Party shall ensure that the information recorded under paragraph 5 is accessible to the global information-sharing focal point on request, subject to paragraph 9, through a standard electronic secure interface with its national and/or regional central point. The global information-sharing focal point shall compile a list of the competent authorities of Parties and make the list available to all Parties.

9. Each Party or the competent authority shall:(a) Have access to the information outlined in paragraph 4 in a timely manner by making a query to the global information-sharing focal point;(b) Request such information only where it is necessary for the purpose of detection or investigation of illicit trade in tobacco products;(c) Not unreasonably withhold information;(d) Answer the information requests in relation to paragraph 4, in accordance with its national law; and

(e) Protect and treat as confidential, as mutually agreed, any information that is exchanged.

10. Each Party shall require the further development and expansion of the scope of the applicable tracking and tracing system up to the point that all duties, relevant taxes, and where appropriate, other obligations have been discharged at the point of manufacture, import or release from customs or excise control.

11. Parties shall cooperate with each other and with competent international organizations, as mutually agreed, in sharing and developing best practices for tracking and tracing systems including:(a) Facilitation of the development, transfer and acquisition of improved tracking and tracing technology, including knowledge, skills, capacity and expertise;(b) Support for training and capacity-building programmes for Parties that express such a need; and(c) Further development of the technology to mark and scan unit packets and packages of tobacco products to make accessible the information listed in paragraph 4.

12. Obligations assigned to a Party shall not be performed by or delegated to the tobacco industry.

13. Each Party shall ensure that its competent authorities, in participating in the tracking and tracing regime, interact with the tobacco industry and those representing the interests of the tobacco industry only to the extent strictly necessary in the implementation of this Article.

14. Each Party may require the tobacco industry to bear any costs associated with that Party’s obligations under this article.

Appendix 4:FCTC Protocol ITP – Article 7Due diligence

The De La Rue Solution has a full suite of real time reports that allows empowered stakeholders to carry out due diligence in an instant

1. Each Party shall require, consistent with its national law and the objectives of the WHO Framework Convention on Tobacco Control, that all natural and legal persons engaged in the supply chain of tobacco, tobacco products and manufacturing equipment:

(a) Conduct due diligence before the commencement of and during the course of, a business relationship;

(b) Monitor the sales to their customers to ensure that the quantities are commensurate with the demand for such products within the intended market of sale or use; and

(c) Report to the competent authorities any evidence that the customer is engaged in activities in contravention of its obligations arising from this Protocol.

2. Due diligence pursuant to paragraph 1 shall, as appropriate, consistent with its national law and the objectives of the WHO Framework Convention on Tobacco Control, include, inter alia, requirements for customer identification, such as obtaining and updating information relating to the following:

(a) Establishing that the natural or legal person holds a licence in accordance with Article 6;(b) When the customer is a natural person, information regarding his or her identity, including full name, trade name, business registration number (if any), applicable tax registration numbers (if any) and verification of his or her official identification;

(c) When the customer is a legal person, information regarding its identity, including full name, trade name, business registration number, date and place of incorporation, location of corporate headquarters and principal place of business, applicable tax registration numbers, copies of articles of incorporation or equivalent documents, its corporate affiliates, names of its directors and any designated legal representatives, including the representatives’ names and verification of their official identification;

(d) A description of the intended use and intended market of sale of tobacco, tobacco products or manufacturing equipment; and

(e) A description of the location where manufacturing equipment will be installed and used.

3. Due diligence pursuant to paragraph 1 may include requirements for customer identification, such as obtaining and updating information relating to the following:

(a) Documentation or a declaration regarding any criminal records; and

(b) Identification of the bank accounts intended to be used in transactions.

4. Each Party shall, on the basis of the information reported in paragraph 1(c), take all necessary measures to ensure compliance with the obligations arising from this Protocol, which may include the designation of a customer within the jurisdiction of the Party to become a blocked customer as defined by national law.

Appendix 4:FCTC Protocol ITP – Article 6Licence, equivalent approval or control system

The De La Rue Solution is roles based and allows full control of all parties licensed within the supply chain

1. To achieve the objectives of the WHO Framework Convention on Tobacco Control and with a view to eliminating illicit trade in tobacco products and manufacturing equipment, each Party shall prohibit the conduct of any of the following activities by any natural or legal person except pursuant to a licence or equivalent approval (hereafter “licence”) granted, or control system implemented, by a competent authority in accordance with national law:

1. (a) Manufacture of tobacco products and manufacturing equipment; and 2. (b) Import or export of tobacco products and manufacturing equipment.

2. Each Party shall endeavour to license, to the extent considered appropriate, and when the following activities are not prohibited by national law, any natural or legal person engaged in:

1. (a) Retailing of tobacco products; 2. (b) Growing of tobacco, except for traditional small-scale growers, farmers and producers;

3. With a view to ensuring an effective licensing system, each Party shall:

(a) Establish or designate a competent authority or authorities to issue, renew, suspend, revoke and/or cancel licences, subject to the provisions of this Protocol, and in accordance with its national law, to conduct the activities specified in paragraph 1;

(b) Require that each application for a licence contains all the requisite information about the applicant, which should include, where applicable:

(i) Where the applicant is a natural person, information regarding his or her identity, including full name, trade name, business registration number (if any), applicable tax registration numbers (if any) and any other information to allow identification to take place;

(ii) When the applicant is a legal person, information regarding its identity, including full legal name, trade name, business registration number, date and place of incorporation, location of corporate headquarters and principal place of business, applicable tax registration numbers, copies of articles of incorporation or equivalent documents, its corporate affiliates, names of its directors and of any designated legal representatives, including any other information to allow identification to take place;

(iii) Precise business location of the manufacturing unit(s), warehouse location and production capacity of the business run by the applicant;

(iv) Details of the tobacco products and manufacturing equipment covered by the application, such as product description, name, registered trade mark if any, design, brand, model or make and serial number of the manufacturing equipment;

5. ( v) Description of where manufacturing equipment will be installed and used;

6. (vi) Documentation or a declaration regarding any criminal records;

(vii) Complete identification of the bank accounts intended to be used in the relevant transactions and other relevant payment details; and

(viii) A description of the intended use and intended market of sale of the tobacco products, with particular attention to ensuring that tobacco product production or supply is commensurate with reasonably anticipated demand;

(c) Monitor and collect, where applicable, any licence fees that may be levied and consider using them in effective administration and enforcement of the licensing system or for public health or any other related activity in accordance with national law; (d) Take appropriate measures to prevent, detect and investigate any irregular or fraudulent practices in the operation of the licensing system;

(c) Transporting commercial quantities of tobacco products or manufacturing equipment; and

(d) Wholesaling, brokering, warehousing or distribution of tobacco and tobacco products or manufacturing equipment; (e) Undertake measures such as periodic review, renewal, inspection or audit of licences where appropriate;

(f) Establish, where appropriate, a time frame for expiration of licences and subsequent requisite reapplication or updating of application information;

(g) Oblige any licensed natural or legal person to inform the competent authority in advance of any change of location of their business or any significant change in information relevant to the activities as licensed;

(h) Oblige any licensed natural or legal person to inform the competent authority, for appropriate action, of any acquisition or disposal of manufacturing equipment; and

(i) Ensure that the destruction of any such manufacturing equipment or any part thereof, shall take place under the supervision of the competent authority.

4. Each Party shall ensure that no licence shall be assigned and/or transferred without receipt from the proposed licensee of the appropriate information contained in paragraph 3, and without prior approval from the competent authority.

1. The Task Force on Fiscal Policy for Health (2019)

Health Taxes To Save Lives https://www.bbhub.

io/dotorg/sites/2/2019/04/Health-Taxes-to-

Save-Lives.pdf

2. IMARC Group (2019) Cigarette Market:

Global Industry Trends, Share, Size, Growth,

Opportunity and Forecast 2019-20243.

3. World Health Organization (2019) Tobacco Fact

Sheet https://www.who.int/news-room/fact-

sheets/detail/tobacco

4. World Health Organization (2019) Tobacco

Overview https://www.who.int/health-topics/

tobacco

5. United Nations (2019), World Population

Prospects https://population.un.org/wpp/

Download/Standard/Population/

6. United Nations (2017) News, World Population

Projections https://www.un.org/development/

desa/en/news/population/world-population-

prospects-2017.html

7. McKinsey & Company, Unlocking Tax Revenue

Collection in Rapidly Growing Markets

8. World Trade Organization (2019) New and Events

Press Release https://www.wto.org/english/

news_e/pres19_e/pr837_e.htm

9. World Economic Forum (2019) Illicit Trade and

the Sustainable Sevelopment Goals https://

www.weforum.org/agenda/2019/07/illicit-trade-

sdgs-environment-global-danger/

10. Packaging Europe (2019) New Report Exposes

Continued Impact of Illicit Trade in the

European Union https://packagingeurope.com/

new-report-exposes-continued-impact-of-

illicit-tobacco-trade/

11. International Alliance for Responsible Drinking

(2018) Alcohol in the Shadow Economy http://

www.iard.org/wp-content/uploads/2018/06/

Alcohol-in-the-Shadow-Economy.pdf

12. World Health Organization (2019) WHO

Launches New Report on the Global Tobacco

Epidemic https://www.who.int/news-room/

detail/26-07-2019-who-launches-new-report-

on-the-global-tobacco-epidemic

13. BMC Public Health (2017) The effects of a rise

in cigarette price on cigarette consumption,

tobacco taxation revenues, and of smoking-

related deaths in 28 EU countries-- applying

threshold regression modelling https://www.

ncbi.nlm.nih.gov/pmc/articles/PMC5607587/

References

The Founder’s Head Device and De La Rue are registered trade marks of the De La Rue Group of Companies.

Whilst we have made all reasonable efforts to ensure the accuracy of the information provided in this literature, the description of the products is one made in good faith to illustrate possible uses of our product(s). It is not intended to be relied upon for any specific purpose or use nor does it constitute a definitive or complete statement of the product itself unless it is expressly agreed in a formal contract.

De La Rue plc Registered No.3834125, De La Rue Holdings plc Registered No 58025 and De La Rue International Limited Registered No 720284 are all registered in England with their registered office at: De La Rue House, Jays Close, Viables, Hampshire RG22 4BS

© De La Rue International Limited 2019

If you would like to find out more, please email marketing@uk.delarue.com or visit www.delarue.com