E-stamps technology presentation at Imperial Tobacco Ukraine's factory

The 'green light' has been given to electronic excise stamps for tobacco products based on Codentify technology personally by the Head of the State Fiscal Service of Ukraine Ihor Bilous during the recent technology presentation at Imperial Tobacco's factory in Kyiv.

Next year the electronic excise stamps will be printed on all packs of cigarettes as a part of pilot project, and the traditional paper stamps still remain the main fiscal control instrument. The pilot project will allow to analyse the efficiency of this solution and to define the practicability of electronic excise stamps based on Codentify technology. It means that the tobacco industry has got a chance to refuse to use expensive and inefficient paper stamps in the future.

The range of the attendees of the presentation included: the Heads of the State Fiscal Service of Ukraine, Secretariat of the Cabinet of Ministers of Ukraine, the Ministry of Agricultural Policy and Food of Ukraine, the Ministry of Economic Development and Trade of Ukraine, the Head of Business Council at the Cabinet of Ministers of Ukraine, the representatives of the Tax and Customs Committee of the Supreme Council of Ukraine Verkhovna Rada. The Director of Digital Coding and Tracking Association Matteo Mattei and the Director of Ukrtiutiun Association Valentyna Khomenko, as well as the representatives of Fracture Code integrating company, of the leading tobacco companies have offered a new digital solution to the honoured guests.

During the meting, the system was demonstrated in operation at the Kyiv factory, where the officials could personally get familiar with the electronic excise stamp printing process based on Codentify technology. At present, all international tobacco products manufacturers have already started testing the new technology at their own production facilities. In the manufacturers' and experts' opinion, the electronic excise stamp based on Codentify technology is an effective instrument in combating illegal sales of tobacco products, and printing of new stamps will not lead to an increase in the cost of finished products.

We would remind that the excise stamps based on Codentify technology combine both the possibility to control the tobacco products manufacture and sales volumes, excise tax assessment and payment, products authenticity approval and their turnover monitoring. The technology consists in marking the cigarette packs with enciphered twelve-symbol alphanumeric and dot codes which are randomly generated from almost infinite combinations.

Each code has enciphered data which makes the country able to control the tobacco products overall production, the excise tax assessment and payment, the product name, the date, time and place of manufacture, maximum retail price etc. As the electronic excise stamps based on Codentify technology are unique and generated in the process of manufacture, it is impossible to steal or predefine them. The system allows the consumer and the inspection body's representative to check the product authenticity by several methods: using web portal, smart phone with special devices, SMS and call-centre.

Ihor Bilous, the Head of the State Fiscal Service of Ukraine:

'We support printing of the electronic excise stamps - we launch the pilot project. It shall help us understand whether this technology is feasible in the real process. If it shows the efficiency, if we develop the double control system and notice the increase in the state budget revenues - these would be the right result. For my part, I would like to give the 'green light' to the pilot project, especially since we would be interested to find out how we can modernize our processes into the digital ones. "

Oleh Strekal, the Director of Corporate Affairs at Imperial Tobacco in Ukraine, Moldova and Caucasian countries (Azerbaijan, Georgia, Armenia):

"Two important solutions have been brought into the tobacco industry in November 2014. First of all, the Government representatives supported the implementation of Electronic Excise Stamp Based On Codentify Technology pilot project, which is a resolute step toward the elimination of the illegal market of tobacco products. I hope that in the short run we would be able to show the advantages of the system over the traditional paper stamp. Secondly, the Cabinet of Ministers of Ukraine has adopted a resolution to reduce the cost of the paper stamp which was unreasonably overstated and unjustified. These steps are indicative of the Government's desire to solve the issue of excisable products marking and make business practice codes transparent and clear."