Counterfeiting, piracy, smuggling, and other forms of illicit trade prevent markets from reaching their full economic potential by eroding consumer confidence and offsetting the benefits of fair and open trade mechanisms. Illicit trade is enjoying an economic boom thanks to a lack of coordinated resources and tools, such as product traceability solutions, necessary to counter its ever-evolving and increasingly capable global network; as well as its persistence, partly driven by a too often favorable calculation of risk versus reward.
The European Union plays a leading role in addressing these issues and has recognised the urgency in which organizations and individuals must act in order to combat illicit trade. While this billion-dollar illegal business, organized by criminal enterprises that continue to expand worldwide, the EU must further strengthen its role, as the world’s largest trade block, in leading multi-lateral efforts to confront this challenge. Should the EU prove successful in these efforts, the health of its citizens will undoubtedly benefit, the tax revenues of its Member States will likely increase, and the emergence of a new technology sector will likely occur.
The EU has already demonstrated its capable leadership in tackling illicit trade by adopting a number of measures to improve enforcement, cooperation, and prevention capabilities amongst its Member States. However, it still has a very important role to play when it comes to introducing policies that support the implementation of interoperable tracking and tracing technologies based on open standards. Such relatively low-cost technologies can be rapidly scaled and seamlessly implemented across borders, sectors and throughout the majority of economic actors. In addition, cutting-edge technologies offering secure mass serialization, such as INEXTOR®, support rapid scaling while simultaneously protecting the system from hacks or a loss of code control by guaranteeing secure code creation at the instant time and location the product is discreetly produced. Such advanced approaches avoid the distribution and/or storage of codes, thereby preventing the likelihood of their compromise.
A more recent example within the EU of this approach is under the Falsified Medicines Directive (FMD), a mandate applied since 2013 which includes an obligatory mass serialization specification whereby a unique code must be printed on every discreet retail product.
Another important step by the EU, under its Tobacco Product Directive (TPD), will include the introduction of a tracking and tracing system on tobacco products sold within its territory. This system is envisioned to trace each discreet tobacco product along every stage in its movement, from manufacturer to the last economical operator prior to the point of sale. An effective coupling of discreet identification with authentication of each individual product is envisioned to defend all legitimate stakeholders, from sovereign governments to manufacturers and consumers, against the threat of illicit trade in tobacco.
Effective policy in the fight against illicit trade is a vital component within the EU’s efforts to support sustainable economic growth. Its regulatory initiatives under the FMD and TPD are two instances where mass serialization technology is now positioned to support key areas, ranging from consumer health and consumer safety to fiscal growth.
Expert analyses assert that a connected digital market has the potential to generate €250 billion in growth for the EU over a five-year period. Furthermore, the implementation of standards, as clearly defined and established by GS1, and real interoperability (EPCIS) in the traceability sector will drastically support legitimate revenue growth and cost savings.
Through a combination of knowledge, responsibility and commitment, the EU and its Member States can effectively spearhead the fight against illicit trade throughout Europe and beyond. In turn, this can help drive fair, open and transparent competition amongst suppliers and technology providers; cultivating innovation that remains critical to the EU and its goal to remain the world’s leading trade block.
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