Tag: authentix

Elevating Your Brand Protection Strategy with Multilayered Security Solutions

     |     

Author: Andree Bourgeois

By: Jeff Conroy, Chief Scientist, Authentix

Many companies are thinking more broadly about how to implement coordinated anti-counterfeiting, anti-diversion strategies across their brands and throughout different regions of the world. Just as tamper-evident seals on bottles of pills and liquid formulations became more common due to a tampering scare in the 1980s, attitudes toward anti-counterfeiting technologies are beginning to evolve.

Once viewing such measures narrowly as an “extra feature” that only “added cost” to the bottom line, brand owners are beginning to realize the importance of protecting the integrity of their brands and the most important part of the equation: protecting the safety of consumers. As serialization technologies continue to evolve, the tracking of individual units through the supply chain could enable very secure and traceable evidence of authentic products being supplied by manufacturers and distributors to end users.

Different Features, Different Purpose

Anti-counterfeiting features that can authenticate products are both overt and covert, and they can be applied in numerous ways: on labels, onto closure seals, on cartons where containers of products are stored, into plastic parts of individual packaging, and even onto metal and glass components of packaging.

The different types of features all serve a different purpose, from enabling end users to quickly identify a branded product as genuine, to covert markings that enable a manufacturer or inspector to identify the source of diversion or other illicit activity. When combined with the careful design and production quality controls used in authentic product manufacturing, these features raise the bar of complexity for counterfeiters and make the product a less attractive target.

With that said, it’s worth considering the value of individual security features versus a multilayered approach.

Overt security features: Visible security features serve a valuable purpose in the authentication stack. They offer a way for individuals to inspect packaging without any specialized tools, and the specialized color-shifting inks (similar to those used on currency) are often difficult to reproduce using scanners or reprographic methods. There are other types of optically variable features as well, including holograms, micro-optics (like the blue stripe found on the current US $100 bill), and reflective features.

Visible security features are a starting point, but counterfeiters are extremely creative and clever. Even if a visible authentication feature is hard to recreate perfectly, a counterfeiter only needs to copy it closely enough to confuse a consumer who just gives a package a quick glance. Additional features create layers of security.

Covert security features: High security covert features can be embedded into labels, closure seals, or other features of product packaging. Although such markers are invisible to the naked eye, they can be detected using specialized handheld surface spectrophotometers. Field instruments use proprietary excitation and detection optics and detection algorithms for rapid, secure field authentication. Additional forensic layers of security are also embedded into the materials and can be confirmed through more extensive laboratory analysis. This additional layer of security proves very difficult for the counterfeiter, but easily verified by field inspectors.

Serialization: In the serialization process, a company marks individual units at the point of manufacture (giving each a unique serial number) and implements stations to read those markings, capture the tracking data, and drop that information into a managed database that allows authorized personnel to monitor where products go after they leave the manufacturing facility. You’re probably most familiar with this process as it applies to shipping a package overnight, when you can track it on the Internet until it reaches its destination.

An effective anti-counterfeiting solution contains multiple, layered components

As a brand owner, it’s good to have options. However, the counterfeiter also has options. Fortunately, technology continues to evolve to help you protect your end users. Today’s reality is that one level of security isn’t enough.

Recently a number of technologies have become available that offer the benefit of not having to add any additional features to the packaging, but the imaging requirements on the production lines can be quite demanding and difficult to implement at speed. Once captured, the identification of the package can take place with conventional cameras, allowing widespread authentication and tracking by inspectors, retailers, or even consumers.

Any combination of covert or overt features or serialization enhance your anti-counterfeiting, anti-diversion strategies. Click here to learn more about brand protection. You can also contact Authentix at info@authentix.com.

Inspector Led Authentication’s Contribution to Brand Protection Programs

     |     

Author: Andree Bourgeois

By: Andrzej Hornostaj, VP Brand Solutions, Authentix

Identification of an at-risk product and implementing an authentication solution is not the end of the story, it is just the beginning. Constant inspection of the product in the supply chain and marketplace is required to ensure useful actionable insights is generated to minimize counterfeit and diversion practices while protecting your brand and bottom line.

Let’s Begin with Inspection Design

Inspection design is determined by the objectives of the inspection. Let’s consider two relevant approaches. Will the inspection be reactive to a specific counterfeit event, or proactive determining the scale of counterfeiting and generating actionable insights?

Ideally, inspections, like any investigation, should follow a holistic approach involving several stakeholder teams including product, brand protection, investigative, and legal. Each team has its own requirements for the actionable insights generated from an inspection. Some critical stakeholder questions may be as follows:

Product: What’s the scale and location of the counterfeiting problem for a product?

Brand protection: What’s the level of sophistication of the counterfeit operation (production and logistics)? Are security features being copied? Are packaging design changes required?

Investigative: Can the right data be gathered to support investigations into the counterfeit’s supply chain and to identify the manufacturing source? Is the evidence strong enough that it can be passed on to legal and law enforcement to perform raids and prosecutions?

Who will conduct the inspections?

The boots on the ground can either be members of the brand owner’s staff or third-party inspection agencies working on their behalf. Ideally, to infer useful insights from an inspection, the more data collected the better. This need pushes the brand toward engaging a third-party that can provide the coverage and inspector numbers to achieve data volume.

As always, inspector safety is paramount and consideration should be taken as to whether the inspector needs to be accompanied by law enforcement representatives.

Where to direct initial inspection efforts?

I would suggest initial efforts begin at the retail level where products of interest are typically more accessible to covert inspection. This type of insight helps to determine the scale or extent of the problem and generates a suitable baseline against which further inspections and remediation efforts may be compared. As pharmaceuticals are usually not accessible at pharmacies, other locations in the supply chain should be the initial focus.

Once a baseline is established, then testing of supply chain integrity should be performed. Keep in mind, some obstacles may be encountered at this stage as it is not always possible to accurately track the route by which products reach the end user beyond the first tier distributors.

To assist access / auditing of stock at distributors, brands should ensure that cooperation agreements allow for inspections with short notification times. This will prevent suspect items from being removed from the audit location by a guilty party.

Which inspection tools should be used?

Having the right tools during an inspection to automatically capture the data required for each stakeholder is important and ensures that repeat testing is minimised. With the right type of reader paired with a smart device, inspectors are equipped to not only identify counterfeit products, but also capture location data and photographs of the packaging. This complete picture of the scale and sophistication of the counterfeit operation can form the basis of effective enforcement actions.

Click here to learn more about brand protection. You can also contact Authentix at info@authentix.com.

Technology Progression in Fuel Marking

     |     

Author: Andree Bourgeois

Stop Fuel Smuggling Series

By: Jeff Conroy, Chief Scientist, Authentix

Branded fuel suppliers began to use colorants in the 1950’s as a means to indicate fuel type, grade, or brand in the downstream petroleum industry, and this approach continues with wide-spread acceptance today. As fuel taxes and subsidies came into use around the globe, it was an easy extension to use this approach as an indication of taxes paid (or exempted).

The use of overt and covert dyes and field kits and devices to read them continue to be a backbone of many fuel marking programs. They are relatively inexpensive and allow non-technical personnel such as police and revenue inspectors to have some level of rapid field indication of illicit activity. This enforcement work is usually backed up by laboratory testing to confirm the identity and amount of marker present in the fuels in support of prosecution.

While visual colorants are low cost and easily implemented, as tax markers they have several disadvantages, including their ease of replication and removal from the fuels. In addition, because many fuels have some inherent color, visual determination is made difficult for many people, especially those with some degree of color misperception.

Making Tests More Reliable

Markers evolved to include more proprietary compounds, designed and developed for fuel marking. To overcome the shortcomings of a human visual assessment, machine readable features that are easy to use and give unambiguous results were developed. The application of portable devices for analysis of fuel markers also enabled a more rigorous quantitative analysis, making dilution detection in the field more reliable. Systems which utilize fluorescence (Forshee 2012) or absorbance (Banavali 2007) of invisible markers have been described. These devices are small, simple to use, and require very little maintenance.  Further enhancements of these types of devices have led to very sophisticated fuel analyzers, capable of analyzing multiple markers, in various fuel matrices, with little to no operator intervention to enable accurate measurement. Coupled with modern smart devices such as phones and tablets, these analyzers can give real-time GPS verified results and integrate with applications to manage workflows and data capture.

The Need for Quantitative Results

Because fuel integrity programs are often instituted to meet a wide range of objectives, each implementation is different.  For example, a country may choose to deploy a “national marker” program, indicating that all taxes have been fully paid on fuels.  In essence, the marker serves as a “chemical tax stamp” for all taxed fuels.  In this type of deployment, inspectors will be looking for the dilution of the fully taxed fuel due to the addition of a lower-taxed or diverted petroleum products, which do not contain a marker.  In this case, accuracy of a quantitative result is paramount.  To maintain program integrity, it is essential that the security of the marker is maintained with regular audits to maintain program integrity.

Another typical application is where a country needs to protect the use of subsidized petroleum products that can be used outside of their intended subsidized market.  In this case, the fuels would need to be treated with laundering resistant markers to prevent criminals from potentially removing the markers to prevent detection.  The simple presence of the marker in a non-subsidized fuel application could be enough to indicate illicit activity, reducing the need for quantitative results on the test.

Field versus Central Laboratory Testing

Some have advocated a “forensic test” in the field approach.  Such an approach requires “portable” instruments that require support (e.g. power, gases, and environmental control) from the vehicle in which they are mounted.  This approach can limit the number of testing systems deployed due to cost of the platform that includes a vehicle and the associated support.  In addition, the idea of deploying a forensic test into the field as opposed to performing the test under laboratory controlled conditions is yet to be defended in courts, where the approach may find considerable challenges.

In fact, two of the largest marker programs, the EU’s Euromarker and the United States Internal Revenue Service’s red dye marker have published reference methods (Linsinger, et al. 2004) (ASTM International 2009) and collection protocols required to support enforcement and prosecution.  The proper collection, chain of custody, and analysis of samples for support of litigation is well documented for many forensic activities such as drug enforcement, crime scene investigation, and environmental monitoring.  Following similar procedures for fuel sampling allows authorities to continue to deploy relatively cost effective field enforcement tests like covert machine readable features, while providing forensic evidence with a proven laboratory test protocol.

In the laboratory, GC-MS is used for analysis of fuel markers for over twenty years to provide unequivocal forensic level support of fuel marking program enforcement. Markers designed to exploit GC-MS offer definitive forensic evidence of the origin and condition of a fuel.  The markers are covert and robust, resistant to laundering agents, and compliant with the most stringent environmental regulations.  The analysis is very accurate, with limits of detection in the low parts per billion (or lower in some fuels) and very good accuracy and precision, as good as +/- 1% on the analytical method itself.

The Right Solution for the Right Outcome

Fuel marking technologies have evolved from the use of colorants and dyes to covert markers and machine readable features.  Field portable analyzers have greatly increased the accuracy of enforcement, and reduced the burden on personnel by making test results definitive and quantitative.  Markers have become more robust and resistant to laundering and meet the most stringent environmental, health and safety regulations.  Finally, the development of powerful laboratory controlled forensic molecular marker sets based on GC and GC-MS have strengthened the legal standing of these programs, enabling government agencies to enforce laws that protect subsidies and taxes on petroleum products.

Click here to learn more about how Authentix’s Vigilant® offering is helping governments prevent fuel fraud. You can also learn more about Assure™, our brand protection fuel marking program for oil marketing companies.

 

References:

ASTM International. 2009. “Standard Test Method for Determination of Solvent Red 164 Dye Concentration in Diesel Fuels.” ASTM Standard D6258 . West Conshohocken, PA: ASTM International.

Banavali, Rajiv M. & Ho, Kim Sang. 2007. Pyrazinoporphyrazines as markers for liquid hydrocarbons. United States. Patent 7,157,611. Published January 2 2007.

Forshee, Philip, & Kottenstette, Peter. 2012. Tagged petroleum products and methods of detecting same. United States Patent 8,129,190. Published March 6 2012.

Linsinger, T., G. Koomen, H. Emteborg, G. Roebben, G. Kramer, and A. and Lamberty. 2004. “Validation of the European Union’s Reference Method for the Determination of Solvent Yellow 124 in Gas Oil and Kerosene.” Energy & Fuels 18: 1851-1854.

Responsible Fuel Supply Chain Management Just Makes $ense

     |     

Author: Andree Bourgeois

Illegal Fuel Trade, Supply Chain Integrity and Technology

By: Erwin Dorland, Advisory Program Delivery Manager, Authentix

When addressing the problem of fuel smuggling or fuel fraud, responsible fuel supply chain management isn’t just a simple question of doing the right thing – it makes financial sense.

Responsible management and minimising risks within the fuel supply chain will ensure quality and security of the supply chain.

Financial gain is often the key motive behind supply chain infiltration, as illegal practices can be extremely lucrative1. Often the legal and regulatory framework is weak, the risks are low and the financial gains can be high. As mentioned in a previous BLOG, in many cases, organised crime is involved, which contributes to the growth of this type of fraud.

Most countries have significant problems with lower taxed fuels being sold at higher taxed prices. For example, in Europe, diesel is sold at a lower tax rate for agricultural use, but is illegally used by road users, who are supposed to purchase higher taxed diesel. This type of fraud is preventing governments from collecting the right amount of taxes, which impacts government programs, the well-being of all citizens and the environment in which we live. In my experience, there are four key areas of focus to ignite action against the business of illicit fuel trade.

Visibility2, 3

Visibility refers to the ability to see what is going on within the supply chain. Fundamentally, having access to information will enable managers to make better decisions.

Information technology is at the root of supply chain management. With the advent of the Internet and the Cloud, information exchanges can involve many stakeholders and enables access to critical data 24/7.

Traceability

Traceability is closely related to visibility and refers to the ability to track the fuel’s provenance and maintaining a record of activities of the product flow.

Several tools are available to ensure traceability as fuel moves through the supply chain. The advancements in technology now allow stakeholders to tap into a variety of information sources for a balanced view of supply chain participants and risks. The fuel industry has a number of tools available, such as visible dyes, covert dyes, chemical markers, sealing of tankers, GPS tracking of trucks, dipping of trucks, and wet stock control to track products, to ensure quality and prevent fraud.

Integrity

National governments are increasingly being held accountable for policy actions and therefore the governments’ awareness of and commitment to high principles and business practices is increasing.

The exposure of irresponsible practice in the supply chain can result in severe damage to national governments’ reputation and citizens’ trust. For example, governments not collecting the available taxes and having the appropriate system in place to do so, might have a negative standing with citizens.

Transparency

Transparency refers to national governments’ engagement and communication with external stakeholders. Such engagement is designed to share the national governments’ practices with those that have an interest in the governments’ behaviour, including environmental and social performance. Supply chain issues are becoming more and more visible to citizens and stakeholders. Therefore, developing transparent information systems and processes to communicate sustainable supply chain practices is vital. For example, governments can use social media to inform and educate citizens about their approach to responsibility, by promoting supply chain transparency.

 

Ready for Action

To really support the initiative to stop fuel smuggling and fuel fraud, making the supply chain more resilient to supply chain risk involves attaining a good understanding of the supply chain and conducting analysis of the potential threats and the level of risk4. Technology can be used to verify fuel authenticity and tampering. The resulting information will need to be captured using the appropriate information technology and made visible to the appropriate stakeholders.

Among the considerations of the technologies to be used, must be the ability for the technology to pay for itself. Government and policy makers need to be educated regarding the risks of fuel adulterations and how the legal and regulatory framework need to work hand-in-hand with the introduction of technologies. Awareness needs to be created that no technology will provide absolute supply chain security, as there are always weaknesses to be exploited. The key is to understand the key risks and put tools in place to collect the appropriate information, so those risks can be managed.

Click here to learn more about how Authentix’s Vigilant® offering is helping governments prevent fuel fraud. You can also learn more about Assure™, our brand protection fuel marking program for oil marketing companies.

 

References

  1. Illicit Trade, Supply Chain Integrity, and Technology – www3 … – Illicit Trade, Supply Chain Integrity, and Technology, J Picard and C.A. Alvaranga
  2. https://dupress.deloitte.com/dup-us-en/topics/operations/supply-chain-transparency.html – The path to supply chain transparency, D Linich, University of Tennessee
  3. creating a transparent supply chain best practices – Global Supply ……  – Creating a Transparent Supply Chain – Best Practices, University of Tennessee
  4. Manage your supply chains responsibly – Business in the Community – How to: Manage your supply chains responsibly, Business in the community

How to Create a Secure, High-Quality Fuel Supply

     |     

Author: Andree Bourgeois

Introduction to Stop Fuel Fraud Blog Series

Every country around the globe is dependent on the use of petroleum products to move people and goods around, generate power and generally keep their economies growing. Because of this ubiquity in the economy, most governments have developed fuel taxation systems to fund essential services for the benefit of their citizens and at times, provide subsidies to lower prices for certain essential fuels.

The differential in price between taxed, high-cost fuels and subsidized, low-cost fuels creates an incentive for criminally-minded people to perpetrate fuel fraud. The money generated by this illicit activity has been used to fund drug cartels and other organized crime[1] as well as terrorists[2].

Fuel fraud happens in a variety of ways. One form is smuggling in fuel from a neighboring country where prices are low. A striking example is Guyana, a small country in South America that shares a border with Venezuela, where the price of diesel is subsidized down to US$ 0.01 per liter. Guyana follows the prevailing market price for diesel, selling it at about US$ 0.70 per liter, so the incentive to bring fuel via ship or overland from Venezuela is quite strong.

Fuel fraud also occurs when high-priced, taxed product is diluted with cheaper or low-tax fuel products. An example of this is when diesel fuel intended for use in agriculture or mining carries a no- or low-tax rate and is diverted into the high-tax road diesel fuel supply.

Adulteration is a common type of fuel fraud that occurs when other types of hydrocarbons are introduced in the fuel supply. These are typically low- or no-value inferior products such as solvents or waste oils, which then adulterate the fuels meant for vehicles. These adulterants are both a source of additional air pollutants and can cause malfunctions, component failure and safety problems for engines that combust these compounds.

Fuel fraud is a rampant problem in the world, siphoning off needed tax revenues, harming air quality and damaging vehicle engines. This is the first in a series of articles about the ramifications of fuel fraud and a detailed review of the many ways it can occur. Stay tuned through the end of the series to learn how a well-designed, comprehensive fuel marking program – the introduction of environmentally-safe chemical markers into the fuel supply chain – can pay for itself in recapturing lost tax revenue while providing timely, actionable insights that allow government enforcement personnel to combat illicit fuel trade in their countries.

A secure, high quality fuel supply strengthens confidence in the government, provides a level playing field for the companies that sell and distribute fuel in the country and keeps vital funds out of the hands of the bad guys.

 

By: Gail Moser, Director of Marketing, Authentix

 

[1] https://www.nytimes.com/2017/04/26/world/americas/mexico-fuel-theft-crisis.html?_r=0

[2] https://www.usnews.com/news/the-report/articles/2015/11/23/financing-terror-where-does-the-islamic-state-group-get-its-money

Fuel Quality is on the Rise In Africa

     |     

Author: Andree Bourgeois

The African Refiners and Distributors Association (ARA) held its annual conference in Cape Town, South Africa last week. The meeting’s theme was “Achieving Clean Fuels in Africa”, a topic that has received much attention lately. In September of 2016 in a report released by the African Centre for Energy Policy (ACEP) partner, Public Eye, it was revealed that Swiss commodity trading firms are exploiting lax regulatory standards to sell to African consumers. (1) The long and comprehensive report documents the way certain traders take advantage of fuel standards in Africa that allow for high contents of sulfur that would not meet modern environmental regulations in Europe and other developed markets. The results are poor air quality in many African cities that have far less fuel consumption than major European metropolitan areas.

The report was not without its critics, including the Ghanaian National Petroleum Authority (NPA). (2) The now former CEO of the NPA, Moses Asaga said much of the criticism of the African authority was borne out of a lack of understanding of the authority’s responsibilities. While the report highlighted that many African nations, including Ghana, have sulfur standards that range as high as 300 times the levels in Europe and the United States, it did not comment on the costs associated with bringing nations into compliance with lower standards. For example, the NPA estimates that it would cost Ghana about 300 million US dollars to bring infrastructure into compliance to produce low sulfur diesels. These types of policy decisions therefore are not solely up to petroleum agencies like the NPA, but have economic impacts that go far beyond the operating budgets of such agencies.

And there is good reason to believe the NPA and other agencies do take their fuel quality seriously. For the past 4 years, the NPA has run a comprehensive fuel marking program aimed at ensuring stations are providing good quality fuel to consumers. (3) A side benefit of this program has been the reduction of subsidy abuse of kerosene and marine diesel, as well as tax evasion of on-road diesel and petrol by dilution. The program is working with technology provided by Authentix, with an estimated savings to the Ghanaian government of over $11 million, while ensuring the nations fuel supply is of high quality having minimal environmental impact.

This is a great example of how governments can effectively reduce fuel fraud and minimize subsidy abuse by adopting programs to improve the quality of the fuel supply chain. Effective fuel fraud prevention programs are designed and put in place to reveal the quality and condition of the supply chain. Often, merely shedding light on the various stages that make up the supply chain will improve the flow of fuel in the country by deterring fraudulent activities that thrive in the shadows. Ensuring integrity of the fuel supply chain also ensures minimal environmental impact by keeping fuels up to specification at the retail pump.

The most successful fuel marking programs involve a number of best practices which are adjusted and modified to meet the unique requirements of each country via an interactive program design phase followed by full implementation and operation. Regular program reviews and audits ensure the program is meeting or exceeding its stated objectives and return on investment (ROI). By stopping illicit trade of fuels through monitoring retail outlets for diverted subsidized fuels or diluted fuels, environmental impact of automobiles is kept to a minimum.

And that is why the focus of the ARA annual meeting was so promising. Ultimately, further raising environmental conditions in many Africa nations will require investment in the infrastructure of the fuel refining industry to produce low sulfur fuels. That investment will come from investors when they have confidence in a strong independent regulatory function in these countries that ensure the investments made in low sulfur diesel infrastructure will pay returns. With the good governance shown by agencies such as Ghana’s NPA, as new regulations are adopted, investors should feel good that there are strong independent agencies already in place to enforce and maintain these new standards.

1. https://www.publiceye.ch/fileadmin/files/documents/2016_DirtyDiesel_A-Public-Eye-Investigation_final.pdf
2. http://citibusinessnews.com/index.php/2016/09/17/acep-displayed-ignorance-in-dirty-diesel-report-moses-asaga/
3. http://www.imaniafrica.org/2016/04/21/imani-africa-report-prevent-fuel-fraud-africa/

↑Back To Top