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Belgium: A new Royal Decree to regulate Ecigs

The regulation of vaping products was paused in Belgium after the early 2016 Royal Decree was suspended last March. The Royal Decree published today in Le Moniteur definitely repeals the former and finally gives the e-cigarette its legal frame, not as disappointing as before but still more stringent than initially required by the EU.

The new Royal Decree has been published on November 17, 2016 in the official journal, Le Moniteur, and will come into force in two months, on January 17, 2017. The former Royal Decree had been published on February 15, 2016 and is repealed and replaced by the present one.

Ban on distant sales is confirmed by the Decree

The major point of this decree is the ban on distant sale of e-cigarette and e-liquids. This measure was left at the discretion of Member States by the EU, and Belgium decided to beyond TPD’s recommendations in its transposition. This strictness contrasts with the legal age (16 years old) that remains the same as for combustible cigarettes, the lowest in Europe while some American States recently raised the legal age for tobacco (including vaping) products to 21.

In the Belgian law, an e-cigarette is described as a product or a part of a product (including the cartridge or tank) that can be used to inhale nicotine vapor thanks to a mouthpiece. E-cigarettes can be disposable or refillable.

Electronic notifications must be submitted 6 months before marketing the products with a cost of € 165 per product

The provisions require a manufacturer or an importer (if the manufacturer has no headquarter in Belgium) submits a notification for any vaping product that is intended to reach the Belgian market at least 6 months before its release. The notification must be submitted electronically to the Directorate-general Animals, Plants and Foodstuffs of the Federal Public Service for Public Health, Food-Chain Security and Environment (DGAPF-FPSPH-FCSE). The information contained in the submitted file is not different from what is mandated by the EU TPD .

If a product (e-cigarette or refill bottle) was already on the market before January 17, 2017, it can remain in store but a notification file must be submitted for this product before July 17, 2017.

In case of a substantial modification, a change in the name or brand of the product, any change in the volume (refill bottle, cartridge or tank) on any change that may affect the quality of the emissions, a new notification will have to be submitted.

The DGAPF-FPSPH-FCSE can ask for a complement information if the submission is judged not complete by the agency. Product information will be accessible to consumers on the internet. Sensible commercial information will remain confidential according to the EU TPD provisions.

Each year, the manufacturer or the importer will be required to report different types of information, as required by the TPD; the Royal Decree specifies that such document must be provided in english.

Provisions on nicotine e-liquids:

Refill nicotine e-liquid bottles must not exceeding 10 ml,
Nicotine e-liquids can come in either disposable e-cigarettes or cartridges,
Tanks and disposable cartridges must not exceed 2 ml,
Maximum nicotine strength is 20 mg/ml.
The provisions regarding additives, child safety requirements and nicotine delivery are the same as in the TPD but in contrast to the EU requirements, health warnings must appear in each of the three official languages (Dutch, French and German) on a distinct line.

Labelling of vaping products more stringent than for conventional tobacco cigarettes

They must specify that the product is not intended to non-smokers and young people and bear the legal information required by the TPD (toxicity, safety warnings, side effects, list of ingredients) as well as a list of ingredients in decreasing weight order, batch number,… Legal labelling must read (in the three official languages) the sentence “The nicotine contained in this product creates a strong dependence. Its use by non-smokers is not recommended“.

Any claim of a benefit compared to other types of products or in the absolute is forbidden. The product must not ressemble to another food or cosmetic product. No suggestion can be made that an e-cigarette or a refill bottle would more easily biodegradable or is better for the environment.

The provisions exclude the possibility of commercial offers like “50% off on a second product” or coupons. Finally, the Ministry of Health can lawfully add requirements regarding the presentation of legal information and their content.

A bitter pill for professionals and users

Compared to the February decree, the lower cost of notification fees is not sufficient to cool down the electric climate that the Belgian government set up in the small world of vaping.This information is not new and was released during a press conference given on June 14, 2016 by the Health Minister before vaping professionals and associations.

From an exorbitant € 4,000 fee per product, the cost is now adjusted to € 165 in Belgium, sensibly the same amount than in the UK. Belgium’s choice was to not set up a transition period while The Netherlands gave manufacturers and importers up to November 20, 2016 to notify their product at no cost. In the Netherlands, the cost of a notification will be €44.85 with no upper limit while in France, another neighbour member state, this fee is capped to €7,600 per submission.

The definition of an e-cigarette is now tightly linked to the presence of nicotine (nicotinic alkaloides) in Belgium. Historically, their sale was not restricted in stores before the TPD but nicotine e-liquids were not allowed and Belgian vapers were obliged to turn to foreign countries to purchase their juices.

Uncertainties remain

An uncertainty is whether Belgian professionals will have to register their businesses on a yearly basis and how much it would cost them. No more complementary information regarding vaping bans or bans on advertising were provided in the final Royal Decree. Advertising e-cigarette will be illegal on January 17, 2017 like any type of propaganda about the product. Will vapers be allowed to try their e-liquids in vape shops? Apparently not although the Dutch law authorizes vapers to do so in this neighbour Member State, under particular constraints and the price of € 0.10 per e-liquid flavor.

No mention is made on potential taxation projects on nicotine e-liquids or on devices, as some other Member States already decided to milk vapers. The EU Commission, itself, is considering the question as the e-cigarette officially obtained the golden status of tobacco product for the administration last May without funding back the European Treasury with excises on tobacco.

Official support by the Belgian Cancer Foundation

The Belgian Cancer Foundation released a pro-vaping video on the e-cigarette that gives a piece of hope for the product in Belgium despite the many questions that come to mind with more-than-necessary regulation that will be enforced next year.

Will Belgian importers and manufacturers financially and administratively survive to the notification procedure?

Is there a risk, given the small market that Belgian vapers represent (only 2% of the population), that foreign manufacturers disregard the stringent local regulation and deprive Belgian smokers of a healthier alternative to smoking?

Brussels blocks Big Tobacco lobbying push

Cigarette makers tried to influence Commission deliberations through a backdoor.

The European Commission has derailed an attempt by the tobacco industry to use a low-profile industry standards organization to sway Brussels on proposed changes to cigarette packaging.

Big Tobacco planned to use the outside group as a Trojan horse to push its preferred packaging technology over that of its competitors, according to documents obtained by POLITICO. The Commission faces a looming deadline to implement controversial and expensive “track and trace” measures that are intended to fight tobacco counterfeiting and smuggling.

The tobacco companies’ move backfired, the documents show. A top Commission health official intervened to scuttle the campaign and told the European Committee for Standardization (CEN) to keep out of the way. The organization, established by industry to set common standards for consumer goods, backed down and said it would defer to the Commission.

The behind-the-scenes clash is the latest skirmish between the tobacco lobby and the Commission, and comes at a politically trying time for cigarette makers. It follows the adoption of new EU laws through the 2014 Tobacco Products Directive that force tobacco companies to change their packaging to make them possible to trace through the distribution chain. The Commission must also choose from a range of high-tech digital watermarks to prevent counterfeit.

Big Tobacco’s lobbying efforts are an attempt to promote the industry’s in-house technology, called Codentify, over systems pushed by the world’s largest printers and packaging companies.

Codentify was developed by a consortium of the world’s top four tobacco companies: British American Tobacco, Imperial Tobacco Group, Japan Tobacco International and Philip Morris International.

A senior Commission official said the Commission is waiting on the results of a second feasibility study and hasn’t made up its mind about which one to back. In the meantime, Commission officials refuse to see any lobbyists on the issue, tobacco lobbyists say.

The unusual and complex fight, which took place out of the public eye, highlights the creative lengths that the tobacco industry is going to in order to influence the EU when officials in Brussels are under political pressure to keep them at arm’s length.

It comes against the backdrop of another battle playing out in European capitals over the introduction of so-called “plain packaging” for tobacco products. The 2014 reforms did not mandate plain packaging but allowed EU member governments to adopt their own legislation to remove branding from cigarette packets.

Backdoor lobbying push

According to tobacco industry insiders who have spoken to POLITICO, the four companies backing Codentify, acting in a consortium called the Digital Coding and Tracking Association, were behind a push to involve CEN. The organization established a working committee to examine packaging standards under consideration in what was an attempt to influence the Commission’s own decision-making process.

One of three European, independently-run standardization organizations to have been recognized by the EU, CEN represents 33 national organizations. Its contributions often shape the implementation of EU laws across the bloc.

CEN announced its plan to examine packaging standards last July. The decision followed a formal request from a national standards body, Belgium’s Bureau for Standardization, but sources with direct knowledge of the decision said that request was driven by the tobacco industry’s Digital Coding and Tracking Association.

None of the four tobacco companies behind the Digital Coding and Tracking Association responded to requests for comment. The European Commission declined to comment.

While the Commission’s review considered a wide range of technologies and viewpoints, CEN documents reveal that the proposed committee would have focused on packaging. CEN recommended that a range of European groups with ties to the industry — as well as the Digital Coding and Tracking Association — be part of the panel.

Four of the seven industry bodies listed in CEN’s proposal said they had no idea that their organizations had been put forward and some expressed concern about being included.

“We were not involved in CEN’s request to establish this committee,” said Henri Barthel, the vice president of GS1, an industry organization that deals with global standards for consumer goods, including tobacco products. “They did not ask us to participate. It was not our request.”

“The initiative to request the creation of a CEN technical committee came from the [tobacco] industry,” Barthel added. “The [Belgian Bureau for Standardization] wouldn’t simply wake up one morning and decide to set up a committee.”

The Bureau for Standardization didn’t respond to a request for comment.

Some tobacco industry groups were surprised to find they had been named. “I was not aware that [we] had been proposed as a member of any such committee,” said Antonella Pederiva, from the Confederation of European Community Cigarette Manufacturers.

Others objected to CEN’s exclusion of non-industry groups, in spite of its stated commitment to open the process up to “all stakeholders,” with a particular reference to “law enforcement, customs and other market surveillance authorities.”

“We do not understand why CEN has not questioned the involvement of [the tobacco industry] in the setting up of a ‘possible’ committee,” said members of the Smoke Free Partnership, an NGO that wrote a scathing letter to CEN over its plans to establish a committee.

“Let us remind you that economic operators have been, and continue to be, involved in the illegal trade of their own products,” the letter reads, referring to long-standing accusations that the tobacco industry had been aware of, and in some cases encouraged, the smuggling of its products to dodge taxes.

Smoke Free Partnership Director Florence Berteletti said she had no objection to the creation of common standards for tracing EU cigarette packages, but such decisions “should be made by independent experts, not by the tobacco industry trying to push for Codentify.”

Commission strikes back

While the correspondence obtained by POLITICO does not include the response from Andrzej Rys, a director at the Commission’s directorate general for health and food safety, CEN’s letter refers to Rys “expressing some concerns” about the “incompatibility of standardization processes” and the Commission’s legislative timetable.

“It is of course not our intention to duplicate any technical work or procedure, or to infringe any legislation,” CEN’s Elena Santiago Cid wrote to Rys. “However, your conclusion regarding the (in)compatibility of our standardization process and the legislative ones seem to be contradictory to [EU regulation].”

Industry insiders suggest CEN had not understood the political implications of establishing a technical body that would shadow work being done by the Commission. Rightly or wrongly, officials saw CEN’s push as interference by the tobacco lobby in the regulatory process and made sure the proposed committee never saw the light of day.

By late November 2015, CEN had backed away from its demands, telling the Commission it would abandon plans to form the technical committee and wait until the Commission finished its own consultations.

“For CEN … this is a question of principle,” Santiago Cid told POLITICO in an email. “We are convinced about the benefits of a coherent European legal framework, the voluntary nature of European standards and the complementary and different roles of standards and legislation.

These concepts did not seem to be well differentiated in the … legal documents.”

This backflip left industry observers aghast. “Frankly, it does not happen that often that the Commission manages to put a technical committee on ice,” said an expert working on standards.

Another prominent CEN member and tobacco lobbyist said the Commission saw the standards organization’s intervention in political terms, while in this person’s view the industry wanted to engage in the technical side of the “track and trace” requirements.

“We are going to have to redesign our packaging machines to include identification marks and number systems — we need a whole IT system behind us,” the lobbyist said. “We are facing a May 2016 deadline and it would have been nice to have some idea of what is expected of us.”

Lobbyists said the tobacco industry has been left in the dark about the changes. “What is always lost in the heat of the debate is whether changes are technically possible or not,” the lobbyist said.

“It might be a great idea — but what is its impact on industry?”

Other observers said the politics of the decision before the Commission can’t be ignored. “I am not surprised the Commission argued against CEN’s request,” said Barthel, from GS1. “At the end of the day, this is a business and political issue, rather than a technical one.”

British American Tobacco and Stella Artois among 35 companies ordered to cough up £524m in unpaid taxes after Belgian ‘excess profit’ dodge is ruled illegal

• Stella Artois among 35 companies ordered to pay more than half a billion pounds in unpaid taxes
• European Commission competition officials said Belgium had wrongly given tax breaks worth 700million euros (£524m)
• Instead of paying tax on their full profits, companies were taxed on hypothetical profits of smaller companies

The makers of Stella Artois and Benson & Hedges were last night among 35 companies ordered to stump up more than half a billion pounds in unpaid taxes after deals they had with the Belgian government were ruled illegal.

European Commission competition officials said Belgium had wrongly given tax breaks worth 700million euros (£524m) under a scheme that helped multinationals reduce their taxable profits by up to 90 per cent.

British American Tobacco, which makes Dunhill, Lucky Strike and Pall Mall, and brewer AB Inbev, whose brands include Budweiser, Corona and Beck’s, were named as among the companies that had benefited.

Competition Commissioner Margrethe Vestager said: ‘The European Commission has concluded that selective tax advantages granted by Belgium under its “excess profit” tax scheme are illegal under EU state aid rules.

‘Belgium has given a select number of multinationals substantial tax advantages that break EU state aid rules. It distorts competition on the merits by putting smaller competitors who are not multinational on an unequal footing.’

Under the tax scheme, launched in 2005 with the tagline ‘Only in Belgium’, international companies were encouraged to invest in the country with the promise they could cut their tax bills.

Instead of paying tax on their full profits, companies were taxed on hypothetical profits of what it was estimated a smaller company without their international scale and global brand recognition would earn.

The EU tax investigation follows those looking at Apple’s deals with Ireland, coffee-shop chain Starbucks’s arrangements with The Netherlands and McDonald’s with Luxembourg.

In October, the Commission decided that Luxembourg and the Netherlands had granted unfair tax advantages to Fiat and Starbucks, respectively, and ordered the firms to repay some taxes.

EU rules say some tax breaks offered to big companies breach the bloc’s rules on state aid, as they amount to a government subsidy that is aimed at attracting multinationals to do business in certain countries.

Belgian finance minister Johan Van Overtveldt yesterday said: ‘At this point we do not exclude any option. This also applies to the possibility of an appeal against the decision.’

An AB Inbev spokesman said: ‘While we are disappointed by this decision, we remain confident that our tax rulings are in full compliance with the EU jurisprudence on state aid and that we have always complied with Belgian and international tax provisions.

‘We will consider our options, taking into account the reactions by the Belgian authorities.’

British American Tobacco did not respond to a request for comment.

British American Tobacco whacked with £650,000 fine by HMRC for “oversupplying” Belgium cigarette market

British American Tobacco (BAT) has been hit with a fine of £650,000 by HM Revenue & Customs for oversupplying cigarettes to Belgium, which has substantially lower tobacco taxes than Britain.

Apparently, that causes more low-cost cigarettes to be smuggled into the UK.

According to papers seen by the Wall Street Journal, it is the first time a big tobacco company has been fined for “oversupply of products to high-risk overseas markets”, high-risk markets being classified as those that sell cigarettes much cheaper than in the UK.

The penalty for such practises can be up to £5m. But BAT has rejected the charge of oversupplying Belgium and intends to challenge the fine in court. A pack of cigarettes in Britain will set you back £8.47, whereas in Belgium it costs £4.75, according to the Tobacco Manufacturers’ Association.

The Exchequer estimates one in 10 cigarettes sold in the UK is counterfeited, and the government loses as much as £2.5bn each year to the black market. Cigarettes and their producers are seen as an easy target for chancellors seeking to raise money. It has become par for the course in Britain to expect almost every budget to include a rise in tobacco duty.

However, the high price of cigarettes in Britain combined with strong demand has proved an enticing prospect for smugglers. Many cigarette manufacturers fear the scope for black market activity may increase further as a result of the EU tobacco products directive, which will be implemented into national law by mid-2016.

The measures ban flavoured cigarettes, such as menthols, as well as certain pack types like those which contain only 10 cigarettes. In total 45 per cent of the market is set to be impacted by the tobacco products directive.