Fuel Authentication & Traceability through the Supply Chain: Advancing Quality & Sustainability

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By Yanos Michopoulos, Managing Director, Oil & Gas, Authentix

The Oil and Gas industry is facing increasing pressure to take urgent actions toward a low-carbon future. Some have responded already by setting bold Net Zero and other ambitious Sustainability targets by 2050. With the current geopolitical landscape, the industry continues to be challenged to innovate in navigating climate and environmental issues driven by constantly changing policy and regulations.

To emphasize the seriousness of the industry’s need to address climate issues, the Energy Institute recently focused on the energy transition as the key theme at IP Week 2020, held in London this February. As a key conference speaker on behalf of Authentix, I had the opportunity to share unique insights on how physical and digital fuel authentication technologies can help reduce emissions, protect the environment, and enable a more sustainable future, while also removing manipulation throughout the supply chain.

Fuel Adulteration’s Impact on the Environment

Fuel adulteration has proven to increase emissions of harmful pollutants from vehicles and worsen urban air pollution that lead to adverse impacts on human health. For example, kerosene, which when illegally added to a nation’s fuel supply, increases levels of carbon monoxide (CO) by as much as 50%. CO is one of the most common adverse by-products caused by adulterants often added to gasoline and diesel supplies to dilute taxable fuels with non-taxed or extremely low-cost materials.

To assess the level of impact of fuel adulteration on emissions, a study was conducted by the Journal of Civil Engineering and Environmental Technology in India, a country where this continues to be a significant and ongoing problem. The study concluded that gasoline adulterated with five percent kerosene was found to have a CO value of 16.4%, while gasoline with a 55% adulteration factor increased the CO value to 51.6%, an alarming increase.

In many countries, fuel adulteration using harmful by-products, waste oils, etc. can make up to 30% of the total volume of gasoline or diesel sold. It’s no secret that petroleum products present a lucrative opportunity for those who wish to deliberately manipulate fuel supplies for illicit monetary gain. Such activity is a huge environmental and financial problem for oil companies and governments alike. In fact, the annual worth of illicit fuel trade is estimated to be $133 billion and growing.

How Fuel Integrity Can be Compromised

Fuel manipulation can occur in multiple ways. If you consider the complex downstream supply chain, there are intentional or accidental vulnerabilities at many points that provide opportunities for fuel adulteration. These include:

  • Diversion
  • Dilution or substitution
  • Theft
  • Human error
  • Equipment malfunctions

When any of these factors occur, it can result in the wrong product used in the wrong application.  Without a traceability solution of some kind, it then becomes difficult to determine where and when the wrong product entered the supply chain.

Finding the Right Solution: Balancing Performance and Cost

To mitigate these challenges, oil companies and government agencies must be able to track and validate the quality and authenticity of their fuel at all points in the supply chain. This requires advanced technologies that can not only authenticate the fuel, but also identify and record meaningful data for product insights to be gained from terminal to retail station.

Marking fuel by inserting an extremely low dose (parts per billion) chemical marker into a petroleum product has become one of the most trusted solutions for enabling the detection of adulterants and to understand where this problem is happening. To provide the highest level of security and effectiveness, Authentix currently provides dozens of governments and branded fuel companies with proprietary and unique covert marker systems that vary in complexity and scope. Detection and measurement can occur in the field, in a laboratory, or both depending on the needs of the organization.

While fuel integrity programs are an effective way to combat adulteration, questions may remain about the quality and legitimacy of the fuel being refined or imported. To address this uncertainty, organizations and governments typically perform fuel quality assurance testing using ASTM standards via third-party laboratories. While ASTM testing is a longstanding and accepted method, it can be very expensive, and results are delayed as organizations struggle to find the balance between performance and cost.

For organizations looking for a more affordable and faster alternative to traditional lab-based ASTM testing, Authentix provides solutions for field use leveraging portable devices using sophisticated chemometric models, which can identify fuel composition and predict the overall quality and chemical properties. Applying this method, field enabled inspectors can simultaneously measure the density and the spectrum of fuel samples modeled to ASTM properties without the expensive and slower lab-based methods. These portable measurement devices can be used for a wide variety of fuels, including gasoline, diesel, jet, and other specialized fuels. In addition, IOT sensors can be installed in downstream locations for monitoring fuel volumes, which aid inspectors to audit consumption, shortages, and assist in demand forecasting.

In many cases, quality, volumetric, and usage data can complement a fuel integrity program with variable-time monitoring and actionable intelligence – enabling testing and visibility at any and all points in the supply chain.

Using Data Intelligence to Bring it Together

The magic bullet is not just the chemical marker itself nor the fuel quality testing method if used independently. But imagine the ability to collect, correlate, and analyse multiple data points from different sources that feed into a single data platform, providing a unique and actionable dashboard view into all elements of the fuel supply chain. As digital transformation continues to permeate the oil and gas industry, Authentix is accelerating its digital technology to provide this platform. The Authentix Information System, or AXIS®, is a cloud-based, integrated set of software applications designed to provide comprehensive and insightful data for our customers to make remediation and enforcement decisions, thereby giving them the ability to rapidly take preventative or corrective action.​

AXIS® report showing month-over-month view of failure results

 

 

AXIS® report showing geographical view of location of stations tested and pass/fail rates

Looking Ahead

The move to a more sustainable future, decarbonization, and lowering adverse impacts of climate change will no doubt take an incredible allocation of time, technology, and resources. By having full visibility and control over the fuel supply chain, our customers are able to deter illicit activity and reduce unauthorized fuels in the market. Therefore, implementing a fuel integrity program has shown to directly improve emissions, reduce pollutants, and improve overall consumer health and safety. In our view, this becomes an important piece of the solution and should become a key component of any Net Zero or Sustainability Plan going forward.

About Authentix

As the authority in authentication solutions, Authentix thrives in supply chain complexity. We provide advanced authentication solutions for governments, central banks and commercial companies, ensuring local economies grow, banknote security remains intact, and commercial products have robust market opportunities. Our partnership approach and proven sector expertise inspires proactive innovation, helping customers mitigate risks to promote revenue growth and gain competitive advantage.

To learn more, email yanos.michopoulos@authentix.com.

The Assurance of a Well-Designed, Secure Spirits Packaging Solution

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The right brand protection solutions to protect your product.

 

In a recent article, produced for Beauty Packaging, we introduced the shift in implementing security features to protect your products. There has always been a struggle between brand owners and marketing on where to place a security feature: on-product/in-product or on-package/in-package. The article served as a reminder that today’s technology, combined with the
right domain experience in ink technologies and printing techniques, expands the concept of how to protect products against counterfeiters. It highlighted that different areas of the business, like the marketing team and packaging engineers,
can feel confident that selected security features will not interfere with the packaging aesthetics or production.

Our latest discussion focuses on what is readily available to you and what you can learn about your products to make better business decisions. Two questions you want to be able to answer:

  • Do the benefits of including security features create a positive ROI for the company?
  • Does anyone in the company know how to properly estimate the costs of product adulteration or fraud?

A risk assessment strategy will help answer the above questions by revealing critical data points associated with your high-value products. This assessment will lead to a brand protection solution that is right for you. With the right brand protection solution, you can really ascertain how much your bottom line is impacted by counterfeit activities.

Play defense by using a multilayered approach

At Authentix, we have discovered that the most effective way to protect your branded products is by utilizing a multilayered approach which provides a combination of security features (overt, covert, forensic, digital). This provides a masterful defense against counterfeiting efforts, as detection can be done quickly in the field and enforcement can be rapid—thus limiting the exposure and extent of a problem. Let’s review the various solutions by security feature.

Overt security – holograms, specialty inks, color-shifting inks—features you can see without devices. Well-known effects include:

  • Tamper-evident poly seals, shrink sleeves and induction seals
  • Secure holography with image shift on angular variables (OVD)
  • Security inks such as color-shifting inks—also known as optically variable inks (OVI)
  • Specialty substrates such as UV- or IR-emitting security fibers
  • Digital QR or other visible code
  • Substrate or ink tactile effects
  • Security graphics / overt complexity (print effects/varnish plate anomalies, etc.)

The global economic value of counterfeiting and piracy could reach US$2.3 trillion by 2022.
(Source: International Chamber of Commerce).

Covert security – Ultraviolet inks [UV], infrared [IR] inks, invisible taggants embedded in substrates, and inks with other specialized markers—features you can see only with proprietary devices. These features include:

  • Thermally or magnetically activated inks
  • Pantographs or anti-copy features
  • Visually discernable microtext
  • Scrambled indicia
  • Coin-reactive inks

Visible Digital Codes with hidden secure graphics covert solutions—features are invisible to the average person but detected upon inspection by a trained individual utilizing a specific device.

  • Invisible security inks activated by illumination in invisible spectral wavelengths
  • Hidden images or digital watermarks
  • Micro taggants (machine readable or visible on high magnification)
  • Hidden microtext or micro printing
  • Marks in die-cut profile
  • Deliberate mistakes in small printing fonts or other marks

Forensic – Molecular taggants, DNA, nanoparticle coatings—features only detectable with laboratory equipment.

  • Forensic markers
  • DNA-type inks for forensic examination
  • Spectrographic signature analysis

Digital – A host of solutions, which can include the above, relating to numeric values or digital symbology that enable users to look up related product authentication data either via the internet or through a proprietary localized database.

Most highly secure overt and covert inks available today are compatible with essentially all conventional or digital printing, and applicable on most substrates such as labels, seals, closures, etc. They are also customizable in a variety of colors and coating types.

A winning appearance

Today’s anti-counterfeiting and brand protection technology advancements embody the aesthetic qualities for which your brand is recognized. Beyond maintaining an attractive package on the shelf, it is important to understand what authentication features will satisfy the key stakeholders within your organization. And how will you be able to detect counterfeiting in the field and enforce the law when needed? All of these factors need to be considered and prioritized when working through the various options.

We understand the challenges you face and can help identify and rapidly implement the product security that makes sense. Our 25 years of experience have helped us to design our many technologies to seamlessly integrate within existing ecosystems, such as packaging, printing, manufacturing and other production partners, with the primary goal of limited disruption to existing processes. Contact us to get started.

Download the PDF

The Assurance of a Well-Designed, Secure Health & Beauty Packaging Solution

     |     

The right brand protection solutions to protect your product.

 

In a recent article produced for Beauty Packaging, we introduced the shift in implementing security features to protect your products. There has always been a struggle between brand owners and marketing on where to place a security feature: on-product/in-product or on-package/in-package. The article served as a reminder that today’s technology, combined with the
right domain experience in ink technologies and printing techniques, expands the concept of how to protect products against counterfeiters. It highlighted that different areas of the business, like the marketing team and packaging engineers,
can feel confident that selected security features will not interfere with the packaging aesthetics or production.

Our latest discussion focuses on what is readily available to you and what you can learn about your products to make better business decisions. Two questions you want to be able to answer:

  • Do the benefits of including security features create a positive ROI for the company?
  • Does anyone in the company know how to properly estimate the costs of product adulteration or fraud?

A risk assessment strategy will help answer the above questions by revealing critical data points associated with your high-value products. This assessment will lead to a brand protection solution that is right for you. With the right brand protection solution, you can really ascertain how much your bottom line is impacted by counterfeit activities.

Play defense by using a multilayered approach

At Authentix, we have discovered that the most effective way to protect your branded products is by utilizing a multilayered approach which provides a combination of security features (overt, covert, forensic, digital). This provides a masterful defense against counterfeiting efforts, as detection can be done quickly in the field and enforcement can be rapid—thus limiting the exposure and extent of a problem. Let’s review the various solutions by security feature.

Overt security – holograms, specialty inks, color-shifting inks—features you can see without devices. Well-known effects include:

  • Tamper-evident poly seals, shrink sleeves and induction seals
  • Secure holography with image shift on angular variables (OVD)
  • Security inks such as color-shifting inks—also known as optically variable inks (OVI)
  • Specialty substrates such as UV- or IR-emitting security fibers
  • Digital QR or other visible code
  • Substrate or ink tactile effects
  • Security graphics / overt complexity (print effects/varnish plate anomalies, etc.)

The global economic value of counterfeiting and piracy could reach US$2.3 trillion by 2022.
(Source: International Chamber of Commerce).

Covert security – Ultraviolet inks [UV], infrared [IR] inks, invisible taggants embedded in substrates, and inks with other specialized markers—features you can see only with proprietary devices. These features include:

  • Thermally or magnetically activated inks
  • Pantographs or anti-copy features
  • Visually discernable microtext
  • Scrambled indicia
  • Coin-reactive inks

Visible Digital Codes with hidden secure graphics covert solutions—features are invisible to the average person but detected upon inspection by a trained individual utilizing a specific device.

  • Invisible security inks activated by illumination in invisible spectral wavelengths
  • Hidden images or digital watermarks
  • Micro taggants (machine readable or visible on high magnification)
  • Hidden microtext or micro printing
  • Marks in die-cut profile
  • Deliberate mistakes in small printing fonts or other marks

Forensic – Molecular taggants, DNA, nanoparticle coatings—features only detectable with laboratory equipment.

  • Forensic markers
  • DNA-type inks for forensic examination
  • Spectrographic signature analysis

Digital – A host of solutions, which can include the above, relating to numeric values or digital symbology that enable users to look up related product authentication data either via the internet or through a proprietary localized database.

Most highly secure overt and covert inks available today are compatible with essentially all conventional or digital printing, and applicable on most substrates such as labels, seals, closures, etc. They are also customizable in a variety of colors and coating types.

A winning appearance

Today’s anti-counterfeiting and brand protection technology advancements embody the aesthetic qualities for which your brand is recognized. Beyond maintaining an attractive package on the shelf, it is important to understand what authentication features will satisfy the key stakeholders within your organization. And how will you be able to detect counterfeiting in the field and enforce the law when needed? All of these factors need to be considered and prioritized when working through the various options.

We understand the challenges you face and can help identify and rapidly implement the product security that makes sense. Our 25 years of experience have helped us to design our many technologies to seamlessly integrate within existing ecosystems, such as packaging, printing, manufacturing and other production partners, with the primary goal of limited disruption to existing processes. Contact us to get started.

Download the PDF

Beautiful and Secure Spirits Packaging

     |     

Brand protection solutions that allow design and security features to live in harmony.

For the brand manager, packaging designer or packaging engineer, there are many factors to consider when designing new artwork, graphics and security for product packaging. Incorporating higher security and brand protection features into product packaging is becoming more of a priority for many companies because of the  ongoing threat of counterfeiting.

However, it is challenging to mix effective brand protection, great branding and regulatory needs into one design. With different stakeholders involved, there are numerous factors affecting the perspective:

  • Ease of implementation into existing packaging and print lines
  • Regulatory compliance
  • Brand marketing preferences

Those same stakeholders can’t ignore that the resulting impact of consumer reaction can also be critical. How can brand owners navigate these challenges and satisfy multiple stakeholders, while enabling the necessary security features and maintaining the beautiful appearance desired? Today, implementing security or brand protection solutions is possible and the impact doesn’t have to be obtrusive to your packaging medium.

Why You Can’t Ignore the Need for Security

Counterfeit operations have evolved into large, well-funded, sophisticated organizations with their tentacles in multiple countries. They survive on easy access to technology and domain expertise to compete with legitimate and other counterfeit businesses.

Companies have learned (many the hard way) that not implementing product authentication solutions and monitoring for leakage adversely affects the bottom line and potentially the health and well-being of their loyal consumers. More specifically, brand owners have discovered that adding security features on packaging can greatly mitigate:

  • Lost revenue and declining market share
  • Patient or consumer safety and related liability
  • Recalls due to product adulteration and fraud
  • Long-term erosion of consumer confidence and brand value

Counterfeiting a branded product has become easier as the supply chain expands to a global model where product visibility decreases, resulting in more opportunities for illegal activities. For years, many consumers knew of counterfeiting in terms of fake designer handbags, clothing and jewelry. Now, more consumers are becoming aware of counterfeit beauty products such as makeup, hair products, sunscreen and more. Even ‘man’s best friend’ isn’t safe from counterfeit pet food, prescriptions and over-the-counter medicines. (Source: Fake goods are not fake news, Denver Business Journal, Oct. 2018)

Flexible Security Features in Today’s Market

Product security has shifted in the last 30-35 years. In the 1980’s, the first mass deployed authentication feature, in the form of secure holography, began to show up in the industry. Early adopters were major pharmaceutical, wine/spirits and consumer electronics firms. Today, brand protection is on the radar of any company with a significant investment in high-end branded products.

Brand protection begins with the understanding that it is a process and not a product. A product undergoes the product life cycle stages: introduction, growth, maturity and decline. Brand protection as a process is a series of actions, changes and functions all directed toward the pursuit of a return on investment (ROI).

Different levels of security, varying ink technologies, and numerous covert and overt physical features can be applied to all types of packaging to challenge counterfeiters and help you stand out against your competition.

The first step of any brand protection platform is a risk assessment strategy based on the three risk dimensions: product-specific, geographic and supply chain. This then leads to solutions that match the needs recognized by that assessment.

When thinking about a multilayered approach, there are several elements to consider, starting with the type of packaging being used. The types of packaging range from flexible, barrier and decorative to promotional, rigid or dispensing. Keep in mind that no matter the type of packaging, there is an appropriate security feature to apply.

One approach in a  multilayered solution is to utilize visible color-shifting inks with hidden machine-readable covert components within the ink blend (incorporate photo of our folding carton). The overt feature is a recognizable first line of defense, while the covert elements ensure evidence of authenticity. Even deeper, a molecular level marker can be added to create a forensic and court-defensible component. Most higher-security overt and covert inks are available in a wide variety of printing capabilities, including digital, offset, rotary and flexographic, and are hard to reproduce.  These solutions are applicable to most substrates and customization is available in a variety of colors and coating types.

Brand Protection with Good Design—All Stakeholders Benefit

Today’s brand owners have more security choices than ever before, and should realize there are effective ways to combine brand protection, great branding and regulatory needs into one design. With domain guidance and expertise, brand owners can leverage the right functional authentication feature combination that also satisfies key stakeholders within the organization. Some of the most common interests and outcomes sought by primary stakeholders are:

  • Brand Protection: Desire to protect a product (brand) against counterfeiters, diversion and illicit trade. The solutions that help detect, quantify and remediate through one or more enforceable actions create a positive return on investment for the company.
  • Packaging: Security solution that won’t slow down the production line or existing process. Be sure to consider the effects of implementation before selecting the solution, including graphic design, printing processes, manufacturing processes, and risk to production interruption or delays.
  • Marketing: Features that don’t take away from the aesthetics of the artwork or design. The marketing department has worked hard to come up with the preferred design, color schemes and budget considerations for packaging – therefore, it’s best to only make minimal changes when adding security features to the brand.

The challenge of incorporating effective brand protection with great branding has gotten easier with the flexibility of multilayered authentication solutions. These solutions won’t jeopardize the look of the packaging; in fact, they can add to the product appeal.

Download PDF Here

Beautifully Secure Packaging for Health & Beauty Products

     |     

Brand protection solutions that allow design and security features to live in harmony.

For the brand manager, packaging designer or packaging engineer, there are many factors to consider when designing new artwork, graphics and security for product packaging. Incorporating higher security and brand protection features into product packaging is becoming more of a priority for many companies because of the  ongoing threat of counterfeiting.

However, it is challenging to mix effective brand protection, great branding and regulatory needs into one design. With different stakeholders involved, there are numerous factors affecting the perspective:

  • Ease of implementation into existing packaging and print lines
  • Regulatory compliance
  • Brand marketing preferences

Those same stakeholders can’t ignore that the resulting impact of consumer reaction can also be critical. How can brand owners navigate these challenges and satisfy multiple stakeholders, while enabling the necessary security features and maintaining the beautiful appearance desired? Today, implementing security or brand protection solutions is possible and the impact doesn’t have to be obtrusive to your packaging medium.

Why You Can’t Ignore the Need for Security

Counterfeit operations have evolved into large, well-funded, sophisticated organizations with their tentacles in multiple countries. They survive on easy access to technology and domain expertise to compete with legitimate and other counterfeit businesses.

Companies have learned (many the hard way) that not implementing product authentication solutions and monitoring for leakage adversely affects the bottom line and potentially the health and well-being of their loyal consumers. More specifically, brand owners have discovered that adding security features on packaging can greatly mitigate:

  • Lost revenue and declining market share
  • Patient or consumer safety and related liability
  • Recalls due to product adulteration and fraud
  • Long-term erosion of consumer confidence and brand value

Counterfeiting a branded product has become easier as the supply chain expands to a global model where product visibility decreases, resulting in more opportunities for illegal activities. For years, many consumers knew of counterfeiting in terms of fake designer handbags, clothing and jewelry. Now, more consumers are becoming aware of counterfeit beauty products such as makeup, hair products, sunscreen and more. Even ‘man’s best friend’ isn’t safe from counterfeit pet food, prescriptions and over-the-counter medicines. (Source: Fake goods are not fake news, Denver Business Journal, Oct. 2018)

Flexible Security Features in Today’s Market

Product security has shifted in the last 30-35 years. In the 1980’s, the first mass deployed authentication feature, in the form of secure holography, began to show up in the industry. Early adopters were major pharmaceutical, wine/spirits and consumer electronics firms. Today, brand protection is on the radar of any company with a significant investment in high-end branded products.

Different levels of security, varying ink technologies, and numerous covert and overt physical features can be applied to all types of packaging to challenge counterfeiters and help you stand out against your competition.

Brand protection begins with the understanding that it is a process and not a product. A product undergoes the product life cycle stages: introduction, growth, maturity and decline. Brand protection as a process is a series of actions, changes and functions all directed toward the pursuit of a return on investment (ROI).

The first step of any brand protection platform is a risk assessment strategy based on the three risk dimensions: product-specific, geographic and supply chain. This then leads to solutions that match the needs recognized by that assessment.

When thinking about a multilayered approach, there are several elements to consider, starting with the type of packaging being used. The types of packaging range from flexible, barrier and decorative to promotional, rigid or dispensing. Keep in mind that no matter the type of packaging, there is an appropriate security feature to apply.

One approach in a  multilayered solution is to utilize visible color-shifting inks with hidden machine-readable covert components within the ink blend (incorporate photo of our folding carton). The overt feature is a recognizable first line of defense, while the covert elements ensure evidence of authenticity. Even deeper, a molecular level marker can be added to create a forensic and court-defensible component. Most higher-security overt and covert inks are available in a wide variety of printing capabilities, including digital, offset, rotary and flexographic, and are hard to reproduce.  These solutions are applicable to most substrates and customization is available in a variety of colors and coating types.

Brand Protection with Good Design—All Stakeholders Benefit

Today’s brand owners have more security choices than ever before, and should realize there are effective ways to combine brand protection, great branding and regulatory needs into one design. With domain guidance and expertise, brand owners can leverage the right functional authentication feature combination that also satisfies key stakeholders within the organization. Some of the most common interests and outcomes sought by primary stakeholders are:

  • Brand Protection: Desire to protect a product (brand) against counterfeiters, diversion and illicit trade. The solutions that help detect, quantify and remediate through one or more enforceable actions create a positive return on investment for the company.
  • Packaging: Security solution that won’t slow down the production line or existing process. Be sure to consider the effects of implementation before selecting the solution, including graphic design, printing processes, manufacturing processes, and risk to production interruption or delays.
  • Marketing: Features that don’t take away from the aesthetics of the artwork or design. The marketing department has worked hard to come up with the preferred design, color schemes and budget considerations for packaging – therefore, it’s best to only make minimal changes when adding security features to the brand.

The challenge of incorporating effective brand protection with great branding has gotten easier with the flexibility of multilayered authentication solutions. These solutions won’t jeopardize the look of the packaging; in fact, they can add to the product appeal.

Download PDF Here

Authentix® UK Named in This Year’s York Top 100 Business List

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ADDISON, Texas, November 14, 2019 — Authentix, the authority in authentication and information services is proud to be part of this year’s York Top 100 Business list. Moving up from 85 in 2018 to 50th position is a testament to the hard work and dedication of the York, UK based team and all those who support them in delivering advanced authentication solutions.

As a joint effort ofYork Business School at York St. John University, Make It York and The Press, the York Top 100 Business List has been in publication for three years. This year’s process involved a thorough framework that included defined search parameters and a public financial reporting database software platform for data collection containing information on more than 11 million companies in the UK and Ireland.

The search and review process included companies within the City of York Council boundary and some postal codes adjacent to the city boundary. York Business School looked at elements such as turnover, balance sheet and/or shareholder funds, profit levels, growth rate over the past two years, and headcount.

“We are honored to be a thriving part of the York business community. Being recognized in the York Top 100 Business List is a testament to the commitment of the entire Authentix York team, and all of our employees who are focused on our clients and the communities we serve,” said Kent Mansfield, chief sales and marketing officer. “With our new position this year and being part of the top 50 Firms, our team is motivated to continue our company’s strategic focus to expand our reach as a global organization helping to create a world of confident commerce.”

About Authentix:

As the authority in authentication solutions, Authentix helps customers thrive in supply and distribution chain complexity. Authentix provides advanced authentication solutions for governments, central banks and commercial companies, ensuring local economies grow, banknote security remains intact and commercial products have robust market opportunities. The Authentix partnership approach and proven sector expertise inspires proactive innovation, helping customers mitigate risks to promote revenue growth and gain competitive advantage.

Authentix, Inc. has offices in North America, Europe, Middle East, and Africa serving clients worldwide. For more information, visit https://www.authentix.com. Authentix® is a registered trademark of Authentix, Inc.

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European Tobacco Products Directive: A Cautionary Note

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By Tim Driscoll, Senior Vice President and General Manager, Currency & Tax Stamp, Authentix

To achieve compliance with the World Health Organization’s Framework Convention for Tobacco Control (FCTC), the European Union’s Tobacco Products Directive (EUTPD) became applicable in member states on May 20, 2016. The FCTC, like many overarching regulatory directives, leaves many of the implementation details up to the signatories. Enforceable as of May 20, 2019, EUTPD involves a wide range of stakeholders — security feature providers, secure document printers, tobacco manufacturers, tobacco distributors, data collection and storage companies, traceability solutions providers — and, of course, member state authorities. The EUTPD chose a disaggregated implementation model with multiple stakeholders supporting different parts of the program. Following a disaggregation strategy can help one to select a collection of best practices, which provide an optimal solution for their challenge. Unnecessary disaggregation of the solution, however, can introduce delays and confusion as well as an increased possibility of program fraud. The distributed nature of the EUTPD should be avoided by other countries or economic unions as they consider how to implement their own tobacco track and trace programs.

Centralization: The Key to an Effective Excise Tax Recovery Program

The EUTPD requires that each tobacco product is marked with a unique identifier (ID) to be generated by ID issuers that are financially and legally independent of the tobacco industry. The directive also calls for tamper-proof security features comprised of visible and invisible elements that will allow authorities to determine if the product is genuine or illicit. The tax stamp/security seal must have a combination of overt, semi-covert and covert features and include information such as the unique ID, location and date of manufacture, destination, etc. In the EU model, the three critical responsibilities of ID issuance, stamp design and printing, as well as data collection and storage providers, can be filled by three separate companies.

The International Tax Stamp Association (ITSA) has commented on various short comings of the EUTPD related to the lack of specificity regarding feature selection and the degree of responsibility provided to the tobacco companies.1, 2 Authentix concurs with many of the concerns expressed by ITSA and would like to add the following points to consider.

Unnecessary Disaggregation

The EUTPD system contains three separate databases:

  1. Economic Operator and Unique IDs managed by the ID issuer
  2. A primary repository for the management of production data by a third party under contract with the tobacco manufacturer
  3. A second repository that serves as a surveillance data store for member states and their competent authorities to evaluate the program and identify cases of illicit trade.

As a result of how the primary repository was defined, a member state is unable to select a single supplier to manage the data associated with the generation of the unique IDs and their supply chain events.

Designing a program with multiple databases managed by multiple suppliers creates the possibility of conflict between suppliers. Confusion or disagreements may arise when suppliers follow slightly different implementation approaches to the same standard. Also, troubleshooting issues often become more difficult when parties with shared responsibilities are involved. A comprehensive excise tax recovery program is a complex system. For other countries or economic unions considering FCTC compliance, we strongly recommend that the system is not designed to be unnecessarily complicated.

Role of Tobacco Affiliated Companies

It is clear that some program activities, such as the application of authentication and traceability elements onto the packaging, are best fulfilled by tobacco manufacturers. Other responsibilities such as controlling the production data and issuing aggregation codes have also been assigned in the EUTPD to tobacco companies and companies with strong ties to tobacco. And while many of these entities are compliant participants wanting to leverage these programs to protect their revenues from losses due to illicit trade, some are not.

For those starting to consider their approach to the FCTC compliance, this issue can be avoided by centralizing the program and selecting a single trusted partner. Even if one does not believe that there is a significant amount of illicit tobacco trade in their countries, why even introduce the possibility or concern that tobacco affiliated companies may be exploiting the system? Questions of fraud will persist in an implementation model where the manufacturers manage the production data; whereas if a single service provider is managing a central database, concerns of undue influence are eliminated.

Recommended Approach

Getting the implementation of a tobacco track and trace program right is critical as the recovered lost taxes fund government programs intended to empower citizens, create opportunities and change lives. Authentix believes the best way to achieve these goals is to implement a comprehensive excise tax recovery program involving a single third-party partner responsible for registering the members, generating the unique IDs, and collecting and managing the data in a central database with surveillance controlled by the government.

Authentix – A Comprehensive Tax Stamp Solutions Provider

Authentix collaborates with finance ministries, revenue agencies and custom departments to better understand their tax collection challenges and the complexity of supply and distribution chains operating within their country. Leveraging our experience as a provider of comprehensive tax stamp solutions, Authentix works with FCTC signatories to help them comply with the Protocol. In addition, as a stakeholder in the EUTPD, Authentix enables a European Ministry of Finance to serve as the designated ID issuer for two EU Member States. As a result, we have developed effective implementation and execution strategies to meet WHO and individual signatory mandates.

With the recent acquisition of UK-based secure printing company Security Print Solutions Limited (SPS), Authentix has expanded its security document design and printing capabilities while greatly enhancing its existing tax stamp program proficiency. This relationship strengthens our ability to design tax stamps that resonate with each government and enables us to incorporate a combination of highly effective security features at competitive pricing. Serving as a single source provider of registration, ID issuance, tax stamp creation, printing, data collection and analysis, we collaboratively partner with our customers to help them thrive in supply and distribution chain complexity. Authentix’s flexibility also enables us to provide services individually, seamlessly integrating with existing operations and third-party systems.

The Authentix Difference

The Authentix difference is driven by the Authentix Information System (AXIS®), our data collection, analysis and reporting software platform. AXIS consumes data collected through the life cycle of the unique IDs (generation, printing, delivery, application and activation, supply chain distribution, and retirement) and correlates it with additional data sources to highlight various patterns and abnormal events. This increases customer awareness of illicit trade, the efficacy of track-and-trace programs, and anticipates potential threats before they happen.

Authentix has deep experience in implementing new programs driven by government regulations. As an organization that provides authentication and traceability solutions to both commercial and government clients, we work effectively with all parties as we strive for the optimal balance between compliance and production operation realities. This ability allows us to smooth the way for our customers’ success and deliver on our mission to safeguard the integrity of global commerce.

For more information, please visit authentix.com/governments/taxstamp.

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1 ”Tracking and Tracing of Tobacco Products: Defining Roles and Responsibilities in Compliance with the FCTC Protocol” 2 ”How to Make Unique Identifiers for Tobacco Track and Trace Secure and Independent from the Tobacco Industry: A Standards-Based Approach

Complying With WHO’s Framework Convention for Tobacco Control

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By Tim Driscoll, Senior Vice President and General Manager, Currency & Tax Stamp, Authentix

World Health Organization’s Framework Convention on Tobacco Control

 

“The WHO Framework Convention on Tobacco Control (WHO FCTC) is the first treaty negotiated under the auspices of the World Health Organization. The WHO FCTC represents a paradigm shift in developing a regulatory strategy to address addictive substances; in contrast to previous drug control treaties, the WHO FCTC asserts the importance of demand reduction strategies as well as supply issues.

The WHO FCTC was developed in response to the globalization of the tobacco epidemic. The spread of the tobacco epidemic is facilitated through a variety of complex factors with cross-border effects, including trade liberalization and direct foreign investment. Other factors such as global marketing, transnational tobacco advertising, promotion and sponsorship, and the international movement of contraband and counterfeit cigarettes have also contributed to the explosive increase in tobacco use.”WHO Framework Convention on Tobacco Control

The WHO FCTC treaty was enacted in 2005 and passed its last milestone on May 20, 2019, which focuses on compliance directives and guidelines. To date, the treaty has 168 signatories and is legally-binding in 181 ratifying countries.

Following the treaty’s ratification, the WHO realized the issue of illicit trade in tobacco and tobacco-related products (e.g., smuggling) required its own treaty. The WHO’s second international treaty, The Protocol to Eliminate Illicit Trade in Tobacco Products (the Protocol), builds upon and complements Article 15 (see call out below) of the FCTC which addresses means of countering illicit trade in tobacco products and the measures member states must take to take to eliminate it.

Article 15 concerns the commitment of Parties to eliminate all forms of illicit trade in tobacco products. The Protocol to Eliminate Illicit Trade in Tobacco Products builds on this article. It includes obligations concerning the marking of tobacco packaging to enable tracking and tracing, the monitoring of cross border trade, legislation to be enacted, and confiscation of proceeds derived from the illicit trade in tobacco products. Parties are also required (in accordance with national law), to cooperate with each other and with international organizations in combating illicit trade

The Protocol was adopted in 2012 and open for signature January 2013–2014. It went into effect September 25, 2018 after the mandatory 40 member states had acceded to, ratified, accepted or approved it.

The Protocol: Track and Trace Programs

The Protocol focuses on the global tobacco epidemic from both a demand reduction and supply regulation position. It requires that signatories not only monitor and regulate manufacturers and distributors, but also apply other measures that address how the public interacts with tobacco and tobacco-related products (e.g., education, cessation programs, transitioning farmers from tobacco to other crops).

A key component in the Protocol (Part 3, Article 8) is the supply chain track-and-trace program which requires all tobacco and tobacco-related products to have a unique ID placed on the packaging. This ID enables products to be tracked throughout the supply and distribution chain (track), from manufacturer to first retail sale. Those movements are recorded and the data is stored with independent data storage providers. This data must be made available to government entities to help them determine where the item has been in the supply chain (trace) and support enforcement purposes.

Benefiting the Public

By eliminating the illicit trade in tobacco products, the track-and-trace program can help revenue authorities recover lost taxes needed to fund public programs. Fundamental is its efforts to protect the health and welfare of the public, particularly young people, by curbing tobacco use and protecting them from the even more harmful aspects of contraband cigarettes. It addresses issues from secondhand smoke exposure to lobbying standards to Air courier / freight forwarder or shipping service concept : Boxes, a truck, white plane flies over a laptop, depicts customers order things from retailer sites via the internet and ship worldwide.social economic programs to seizing contraband. Compliance with the FCTC promotes these efforts, helps protect public health and welfare, and enables a safer market for legal tobacco products − and that’s good news for everyone.

Choosing the Right Authentication Partner

To comply with the FCTC, signatories must use an independent party to register entrants and generate and issue ID codes for tobacco products. However, choosing the right authentication partner that understands your country’s challenges, supply chain, tax revenue laws and the types of illicit trade impacting your citizens, can seem daunting. Authentix collaborates with finance ministries, revenue agencies and custom departments to better understand their tax collection challenges and the complexity of supply and distribution chains operating within their country. Leveraging our experience as a provider of comprehensive tax stamp solutions, Authentix works with FCTC signatories to help them comply with the Protocol. In addition, as a stakeholder in the EU’s Tobacco Products Directive (EUTPD). Authentix enables a European Ministry of Finance to serve as the designated ID issuer for two EU Member States. As a result, we have developed effective implementation strategies to meet WHO and individual signatory mandates.

Our experience combined with AXIS®, our data collection, analysis and reporting software platform, enables us to provide actionable insights to our customers, delivering a deeper understanding of the collected data to help refine tax stamp programs and improve compliance, increase tax revenue and prevent fraudulent activities.

Authentix has been implementing excise tax recovery programs for more than 25 years. As an independent provider, our position allows us to effectively work with all involved parties, including both tobacco manufacturers and government agencies. This ability enables us to reduce the friction inherent in any compliance program and smooth the way for our customers’ success.

With the recent acquisition of Security Print Solutions Limited, the United Kingdom’s leading tax stamp printer, Authentix is further expanding its capabilities and technologies for an even stronger partnership with Finance Ministry and Revenue Agency customers.

Authentix. The Authority in Authentication.

Authentix provides advanced authentication solutions for governments, central banks and commercial products, ensuring local economies grow, banknote security remains intact and commercial products have robust market opportunities. Authentix offers both comprehensive tax stamp programs as well as customized point solutions to assist in tax collection.

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Advanced Technology: Informing & Empowering Fuel Authentication Programs

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The financial impact of fuels stolen or adulterated every year is estimated to be over $133 billion, creating fuel manipulation and fraud concerns for commercial fuel companies and government agencies. Fuel manipulation has a significant impact on branded fuel companies, decreasing revenue and threatening brand reputation and competitive advantage. Similarly, fuel fraud affects governments through lost tax revenue and the exploitation of subsidies. These concerns can be mitigated through advanced technologies for fuel markers, devices and the resulting data and analytics.

Methods of Fuel Manipulation

“The financial impact of fuels stolen or adulterated every year is $133 billion.”Ernst & Young Fraud Report on Oil & Gas, 2017

While fuel manipulation can occur accidentally through equipment failures or human error, it is most often an intentional act of adulteration, substitution, diversion or smuggling.

ADULTERATION — adding a lower quality product to the fuel in an attempt to increase profits. Adulterants may include:

  • Lower taxed or subsidized fuels
  • Inferior products (e.g., waste oil, solvents)
  • Lower grade products
  • Stolen petroleum products

SUBSTITUTION — substituting one product for another and misrepresenting its quality or classification to sell for a higher price, typically non-branded or differentiated fuel sold as premium.

DIVERSION/SMUGGLING — diverting product from the intended supply chain and recipient as it crosses various points in the supply chain, including national and state boundaries or between control points. Transport is one of the biggest risks in fuel supply chain management:

  • Subsidized products are diverted during transport and sold as premium
  • Fuels are smuggled to higher priced markets

Fuel Markers, Devices & Analytics: The Technology Behind Fuel Authentication

An effective fuel authentication program uses advanced technologies to help governments and commercial fuel companies improve operations, increase revenue, diminish toxic emissions and protect the integrity of fuel in the supply chain. The concept is simple − by adding a unique marker, the fuel obtains a unique fingerprint. Using the appropriate analyzer, the fuel is then identified as legal or adulterated.

Fuel markers are used to distinguish different types or brands of fuel and can take different forms, each serving a specific purpose. For example, markers injected into the fuel can allow for end-to-end supply chain tracking. When the fuel reaches its destination, quality control processes test for markers to ensure the supply chain hasn’t been disrupted and the fuel isn’t compromised. Quality control testing can take place in the field (station or terminal) with handheld or mobile devices or in a laboratory setting, depending on the needs of the organization.

OVERT VS COVERT — Overt markers are typically colored dyes that are visible to the eye and may be imitated or replicated. Covert markers, on the other hand, can only be identified by a highly sensitive detection device. At Authentix, we develop and employ only proprietary and unique covert markers to ensure the highest security and effectiveness.

RECOGNITION, OPTICAL AND MOLECULAR — Authentix offers three different categories of covert markers which vary in complexity and use.

  • Recognition markers are captured by custom-matched antibodies and are then detected by a reader or test kit. Detection can be in the field (qualitative) or laboratory (quantitative). Industry accepted and commercially proven, these markers provide a substantial barrier to entry and use low marking levels.
  • Optical markers use covert organic chemicals that emit a detectable fluorescent light when excited and are visible only with a highly sensitive field detection device that provides near-instantaneous results.
  • Molecular markers exploit the unique mass spectrum of chemical entities, enabling lab-based qualitative and quantitative analysis. The forensic lab device used by Authentix is a customized gas chromatography mass spectrometer (GC-MS), the globally recognized gold standard for court-defensible forensic analyses.

FIELD VS LABORATORY — Devices and analyzers can vary in the types of results produced, as well as the location the analyses occurs. In the field, for example, Authentix uses handheld devices and mobile applications that are easy to use and can collect large amounts of data quickly that is then uploaded to an information system. The Authentix Information System (AXIS®) rapidly produces actionable insights that flag suspicious results, increasing the chances of preventing future manipulation. Lab-based testing is often used if a fuel sample collected in the field produces a ‘failed’ or ‘suspect’ result. Conducted under strict guidelines, this testing can provide excellent forensic analysis or confirmation.

Key Considerations of Fuel Protection Programs

QUALITATIVE VS QUANTITATIVE

A qualitative analysis is used to quickly verify the presence of a marker by producing yes/no results. A quantitative analysis provides additional insight into an amount (percent) of dilution or adulteration that may have occurred. Authentix works with its customers to determine the need for instantaneous results or more detailed results, or in some instances, both.

PORTABILITY

Manipulation and fraud decrease dramatically when overseers are in place, enabling real-time enforcement. Authentix can deploy teams equipped with user-friendly devices into wide geographic areas to serve as an effective deterrent.

ENVIRONMENTAL COMPLIANCE

Fuel authentication programs can also help decrease the impact fuel manipulation can have on the environment and public health. As a rule, all Authentix markers comply with the United States Clean Air Act, comprising carbon, hydrogen, oxygen and nitrogen (CHON) which allows marked fuels to retain their performance specifications, emissions characteristics and environmental compliance.

PROPRIETARY VS PATENTED MARKERS

When choosing a program, it’s important to know if the solution uses patented or proprietary markers. When applying for a patent, for example, the composition of the markers is accessible to anyone who wishes to detect or replicate them. To further increase marker security, Authentix only uses proprietary markers that are confidential and virtually impossible to reverse engineer.

DATA & ANALYTICS

A monitored and digitized fuel integrity program provides useful data to mitigate the risks of fuel moving through the supply chain. Using AXIS®, Authentix collects and analyzes data from different applications and disparate data sources. Insights gained help anticipate future challenges, identify new threats and accelerate detection, providing a significant competitive advantage through predictive analytics.

Authentix. The Authority in Authentication.

Working with governments, central banks and commercial companies, Authentix provides custom authentication solutions tailored to meet specific business challenges. Our core capabilities in developing and manufacturing proprietary chemical markers, designing analytical instruments and devices, and applying interdisciplinary chemometric models are enhanced by data integration, analytics and program management.

With over 25 years of experience in government and commercial fuel authentication, Authentix helps ensure local economies grow, banknote security remains intact and commercial products have robust market opportunities. Visit www.authentix.com.

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Digital Advancements Improve Fuel & Data Integrity — And Answer Tough Supply Chain Questions

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Fuel integrity failures lead to significant revenue losses, brand damage, environmental pollution, poor vehicle performance and increased consumer complaints. To avoid these industry challenges, many branded fuel companies and government agencies are implementing fuel authentication programs throughout the supply chain. As more of these programs are implemented worldwide, stakeholders are finding significant return on investments as fuel quality is greatly improved, revenue and tax collections increase, and the overall integrity of the downstream supply chain is confirmed.

Digital Transformation in the Fuel Supply Chain — Right Data, Right Time

“Digital transformation in fuel authentication programs such as Wi-Fi-enabled mobile devices that communicate directly with our data analysis and reporting platform, AXIS®, can reduce data collection and reporting time in the field by 50 percent or more. The automated data uploads increase the speed and accuracy of data entry, eliminating errors resulting from manual processes used in the past.”Jeff Conroy, Chief Technology Officer, Authentix

The responsibility of managing the complex fuel supply and distribution chain falls on multiple stakeholders within a commercial brand or governmental agency. The value added through a reliable flow of accurate and timely data provides actionable insight for these stakeholders to measure and reconcile information quickly and enforce, react and remediate fuel fraud. In national fuel integrity programs for example, the agencies responsible for the collection of fuel excise taxes use data analytics to quickly detect the introduction of illicit fuel in the supply chain and, through fast enforcement action, increase tax collections and provide tremendous societal benefits.

Additionally, reliable digital data flow enables branded fuel owners to answer critical business questions about their downstream retail operations. Using a fuel marking program, coupled with digital data analytics, can ensure that premium additized fuel products are being distributed correctly under the right brand retail operations.

“Only one in four (25%) professionals believe they have the data needed to assure their brand’s fuel integrity.”Downstream Fuel Manipulation: The threats that could cost you, Oil & Gas IQ, 2018

Authentix has been a pioneer in combining physical fuel marking programs and the collection and automated analysis of supply chain data, and it has led the way on this digital transformation.
Advancements in digital technologies have made fuel authentication programs and the resulting data analytics easier to collect, secure and provide both enterprise and mobile reporting capabilities for its customers, driving improved supply chain security and integrity. Instead of gathering, entering and storing data manually, as in the past, Authentix field inspectors use portable, handheld analyzers digitally connected to the cloud. These advanced mobile
devices record supply chain data and communicate directly with our cloud-based data analysis and reporting platform, AXIS® (Authentix Information System).

The slow collection and reporting velocity of manually supplied data greatly increases the risk of fuel manipulation. Today, with advances in mobile or electronic telemetry data collection technology, AXIS® can enable users to quickly correlate fuel supply chain data with other correlated data from field devices and lab-based results for rapid response capability. For over 20 years, Authentix has been executing data reporting for our customers in real-time, analyzing supply chain results and creating actionable insights for improved program management and decreased opportunities for fuel manipulation or adulteration.

How Does AXIS® Work?

AXIS® is an integrated set of software applications designed to aggregate, store, analyze and present data from multiple and disparate sources to solve for potential supply chain integrity problems. Accessible through a remote web application, the system also presents dashboards and user-configurable reports to enable data-driven decisions and confident actions. Collected data could include geolocation, date and time of collection, retail or terminal IDs, and other identifiers and contextual data.

These identifiers ensure data integrity by establishing a chain of custody and providing contextual informa- tion to ingest and analyze. The correlation and analysis processes generate alerts and insights to ensure any needed revisions and optimization. For example, contextual data (e.g., truck tracking, bills of lading, retail pricing, etc.) provides insights beyond simply providing fuel integrity confirmation. It can also help determine how, when and where fuel supply chain fraud has occurred.

The insights and analytics provided by a robust information system like AXIS® can help prevent supply chain interruptions, program stoppage and lost revenue, while employing strict cybersecurity controls to ensure IT environment security. By generating answers and recommended actions through data analytics, AXIS® helps commercial brand owners and governments better understand and secure their fuel supply chains for the long-term.

Understanding Your Fuel Supply Chain

  • What has happened? Historical data is gathered — including store and terminal IDs, and date and time stamps — and correlated with similar data. Through data analysis, patterns and anomalous behavior become evident, potentially indicating manipulation or fraud. These descriptive insights are used to flag those incidents.
  • Why did it happen? Diagnostic insights from sales and supply chain data can help determine how a retail location received illegal or illicit fuel and point to specific transactions and individuals involved. Using that data, AXIS® can help users ascertain if all the non-compliant retail stations in a designated region received their fuel from the same terminal, implying that the exceptions noted could be quality control problems and not fraud. Data such as temperature and voltage records also help field inspectors monitor portable device performance, flagging potential servicing requirements that may be needed.
  • What will happen? Authentix is accelerating digital transformation for customers with a focus on advancing predictive analytics capabilities. For example, AXIS® can correlate and analyze program data and other external data sources to spot patterns and anomalous behaviors. This provides unique insight into new threats and accelerates detection and learning to provide a significant competitive advantage.
  • Can it be repeated? Prescriptive insights can help define possible actions needed to prevent fraud, enabling branded fuel companies and governments to create processes and improve supply chain management.

Leveraging Data Analytics to Drive Actionable Insights

Organizations often discover illicit fuel in certain markets, such as tax-evaded fuel sold as premium or transit fuel outside of an intended designated region. Comprehensive, end-to-end fuel authentication programs — from marker injection at the terminal down to field or lab testing results, and data analytics and resulting actionable insights — empower organizations to discover the origin of illicit fuels and prevent these events from happening in the future. By providing contextual information, Authentix fuel authentication programs help pinpoint trouble spots in the fuel supply chain that would not be discovered through normal security audit processes. With the technology to collect, upload and aggregate data using portable web-based devices, the workflow becomes truly automated, assuring greater fuel and data integrity through increased insights and accuracy.

“There is still a global underestimation of the vulnerability of paperwork, and many of the world’s largest companies are failing to recognize the risk of fraudulent or inaccurate documentation — not just their products.”

— Downstream Fuel Manipulation: The threats that could cost you, Oil & Gas IQ, 2018

Authentix: Accelerating Digital Transformation for Competitive Advantage

Authentix’s 25 years of industry experience and advanced technology provides customers with a distinct competitive advantage. Our secure marking technology, flexible implementation, proactive program support and actionable insights through the AXIS® platform, help customers thrive in a global economy. For more information, visit authentix.com.

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