Russia Tackles Illicits
Russia’s national digital track-and-trace system, Chestny ZNAK, has achieved a 25 percent reduction in illegal tobacco within a year of implementation, according to the Center for Research and Perspective Technologies in Moscow. Furthermore, it contributed to the legalization of 18 tobacco production and the dismantlement of 45 illegal ones.
Russia’s accomplishments were recognized during the 10th Conference of the Parties (COP10) to the World Health Organization’s Framework Convention on Tobacco Control in Panama City this week.
Chestny ZNAK tracks each cigarette pack in real-time, from the point of production to final consumption. The technology relies on digital data matrix codes assigned to each pack. This code contains information including production point, date, expiration and licensing documents. The information is updated at every stage of the product’s lifecycle until final sale. Illegal products are flagged by cash registers in stores, making them impossible to sell.
To empower citizens and enhance transparency, a sophisticated mobile application has been introduced. This application allows users to verify the legality of various products, including tobacco and 16 other categories such as pharmaceuticals, dairy, footwear and photographic equipment.
The system has also helped other sectors protect their businesses against brand piracy, contributing to a 12-fold decrease in substandard dairy products, a 20 percent reduction in the illegal perfume trade, and a more than a two-fold decrease in the illicit tire market, among other advances.
Authorities estimate the tax impact of the system to be nearly RUB500 billion ($5.5 billion) and expect this figure to at least triple by 2025.