Outsmarting Illicit Trade with Digital Tracking for European Commission

The European Union authorities and the European Commission are governing bodies responsible for enacting and enforcing legislation across 27 member states. These institutions require robust and highly scalable systems to monitor complex transnational activities and ensure compliance on a continental scale while protecting public revenues and safety.

Around one in ten tobacco products sold globally are illicit, which deprives governments of billions in excise tax revenue and funds criminal activities. The main challenge was gaining clear visibility into where illicit activities occur and identifying the culprits. Authorities needed a massive tracking system to monitor the movement of legal products and pinpoint where diversions to the illicit market happen.

This colossal undertaking presented a major opportunity to establish an unprecedented supply chain control mechanism. Given the immense scale and complexity of coordinating across multiple countries, it was clear that governments could not tackle this alone without the advanced expertise of our specialists.

Our specialists stepped in to design and implement the central platform of the EU system, providing essential validation and data intelligence tools. The sheer scale of tracking over 30 billion individual products annually across the entire industry landscape was the most significant challenge.

Relying solely on internal government resources would have been impossible, making us an indispensable partner. The solution is a massive digital traceability platform where every tobacco pack carries a unique identifier embedded in a data carrier like a barcode. This allows field authorities to read information using scanners or smartphones.

The architecture includes multiple decentral data repositories and a single central Secondary Repository managed by us. Our experts successfully integrated advanced data analytics and automatic compliance checks, transforming passive storage into active intelligence that flags noncompliant products in real time. Ultimately, this system implemented by us aims for a potential 20 percent reduction in illicit trade, bringing estimated economic and social benefits of around 4 billion EUR every single year.