Holograms and the fight for authentication in Africa

Dr Paul Dunn, Chair, International Hologram Manufacturers Association (IHMA) considers the development in authentication and anti-counterfeiting holograms in Africa as the technology marks its 75^th anniversary.

Since its invention in 1947 by the Hungarian/British engineer and physicist Dennis Gabor, the hologram has emerged against a background of growing global piracy, counterfeiting and diversion as one of the most successful overt anti-counterfeiting technologies available today.

It is critical in the fight to preserve brand integrity, consumer safety and corporate reputations.

Today, holograms are used as a highly effective anti-counterfeiting feature on nearly half the world’s banknotes and fiscal stamps.

They are also used for passport and ID document protection and, over the years, have seen their role expand to protect the world’s largest software brands, automotive parts, pharmaceuticals, cosmetics and industrial goods against counterfeiters and organised crime.

Advances in production techniques and nano-technology based visual effects make it difficult to accurately copy an authentic hologram.

This has ensured its success – the hologram acts as an alarm bell, alerting authorities and law enforcement to the possibility that all is not what it seems and the product could be a counterfeit.

In other words, the role of a hologram is not to prevent counterfeits – that would be impossible – but to act as an effective detection device, making it easier for the trained eye to distinguish the real thing from a fake.

And, thereby, an effective deterrence.

Ongoing threats, increased illicit trade and counterfeiting will continue to drive hologram growth, particularly for authentication purposes.

Indeed, growth in security devices such as holograms appears ‘strong and potentially lucrative’, following ‘The Future of Anti-Counterfeiting, Brand Protection and Security Packaging to 2026’ and other reports predicting increasing incidences of global counterfeiting alongside heightened awareness of tracing technologies.

The inexorable rise in counterfeiting is a result of several factors: The globalisation of manufacture, industry and trade; extended supply chains; the growth of brands, inadequate enforcement and weak criminal penalties; the rise of the internet as a conduit for counterfeit goods and the advent of modern reprographic equipment that makes the reproduction of such brands – and in particular their packaging – so easy and lucrative.

The current global economic situation, with a cost-of-living crisis, soaring inflation, shortages of commodities and OEMs and many countries on the cusp of recession, if not already in one, only exacerbates the problem.

Myriad applications for holograms

Despite the challenges, holography is responding and today we see its myriad deployment across the security industry.

For example, governments and passport agencies continue to be impacted to the tune of billions of dollars each year in lost revenue by counterfeit documents and ID fraud.

Recently, the problem has been exacerbated by the impact of COVID-19, which has accelerated digital transformation in every industry, accompanied by a dramatic increase in fraud. 

Providing innovative and sophisticated solutions for security documents requires not only a design that will make a document attractive; it also means enhancing the intrinsic security of that document.

Secure document conception can be achieved for ID cards and passports by integrating security features with exclusive designs that highlight attack attempts and facilitate controls, for example, checking that an ID document matches the bearer.

Holograms protect and authenticate, alerting issuers and those checking the documents to counterfeiting attempts.

Indeed, in the wake of the pandemic, countries around the world continue to examine ways to make their document(s) more secure.

This has paved the way for a new generation of high security holograms that push the envelope when it comes to ID document security and protection, providing highly effective tools to help law enforcement to better fight the criminals.

Holography has helped to bring smartphone digital interaction in the brand protection and authentication space closer as the technology discovers new outlets and innovative applications.

In turn, this is driving continued expansion as increasing numbers of organisations accept the advantages holograms offer and invest in digital-based interactive solutions for products to protect against global brand piracy and counterfeiters.

In particular, we are seeing opportunities appearing for brand protection and anti-counterfeiting through hologram validation using computer vision on smartphones; the use of smartphones with integrated cameras has been transformative and image and video content captured on these devices dominates so much of contemporary life through social media, entertainment, recognition and validation.

‘Computer vision’ has become both ubiquitous and familiar; a powerful tool for the validation and recognition of holograms when linked with the connectivity of smartphones to central data repositories against which the hologram and other information can be matched

For example, the consumer can validate the integrity of a holographic tax stamp on a wine bottle while a unique identifier links it to an information system (track and trace) which will confirm the authenticity, or not, of the product.

Furthermore, the use of a mobile app in the consumer’s smartphone can ‘interrogate’ the hologram and search for all the embedded security elements by examining the interaction via reflected light.

Tax stamps

Excise duty on cigarettes and other tobacco products is a critical source of government revenue across Africa while providing a way of controlling and limiting consumption.

However, illicit smuggling and counterfeiting cost treasuries billions of dollars a year in lost revenue.

And the cost is not just a financial one affecting governments. Tobacco manufacturers can see brands tarnished, revenues tumble and market capitalisation dented through fake copies of their products.

It is against this global backdrop that holograms are widely deployed as an invaluable weapon in the war on smuggling and counterfeiting.

Egypt is the biggest African market for tax stamps in terms of volume while Rwanda has been using alcohol stamps since 2012.

In 2017, the Rwanda Revenue Authority migrated from a simple tax stamp with no traceability features to a stamp with a unique identifying code for track and trace, provided by Madras Security Printers.

The security features used on the tax stamps include UV-dull security paper, a hologram (on the alcohol stamp only), other overt, covert and forensic features, a visible and invisible encrypted QR code and12-digit alphanumeric code and a die-cutting feature for anti-tampering purposes.

Zambia Revenue Authority introduced tax stamps on cigarettes in 2006, and since that time, the stamps have been provided by Madras Security Printers.

They include a holographic stripe and unique numbering.

There is currently a tax stamp inventory control system in place and plans are underway to upgrade the program to a full track and trace system.

Indeed, in Africa, where Mozambique is the latest country to adopt new holographic tax stamps, the opportunity for growth remains among those countries either considering or currently adopting new tax stamp schemes and should any one of these highly populated places decide to move forward, then the volumes and the value of tax stamps in circulation would escalate significantly.

Now, all beer released by manufacturers and importers is required to carry either a directly marked digital tracking code or a full-face OVD tax stamp supplied by OpSec and carrying the tracking code.

In 2017, Mozambique introduced a new tobacco tax stamp programme on products manufactured, imported and sold on the domestic market, as the first phase in a three phase process – with phase II being the introduction of stamps for wine and spirits and phase III for beer and ready to drink packaged beverages.

The stamps are provided by OpSec Security and are equipped with over 20 security features at overt, covert and forensic level.

The main overt feature is a copper holographic stripe containing two different OVD technologies: OpSec’s patented Equinox feature which creates a non-diffractive black and white switch over 90 degrees and its two-channel switch technology.

This technology creates a second 90-degree switch between the customs crest logo and the letters ‘MZ’.

The stamps also carry an alphanumeric number that is unique to each stamp and replicated in a datamatrix code.

Prior to the launch of the tax stamp programme, 60% of alcoholic drinks consumed in Mozambique were reported to be illicit and neither customs officials nor retailers had the ability to identify whether the source of the product was legitimate.

As a result, it was estimated that $324m were lost as a result of unpaid taxes on cigarettes and alcohol.

One year after the launch of the program, wine and spirits excise revenues grew by 85% and tobacco products by 24%.

In May 2022, the Mozambique Tax Authority entered a new phase of combating excise tax evasion with the introduction of a direct digital marking system on beer and ready to drink beverages.

Also in Mozambique, OpSec is working alongside Mozambique-based CSET and government entity, Instituto Nacional das Comunicações de Moçambique (INCM), to begin marking all communication equipment entering the country.

This will include mobile phones, routers, laptops and all other products that transmit a communications frequency.

The high security tracking stamps will carry an e-beam originated OVD, advanced digital security print alongside OpSec InSight tracking identifier and the approved INCM issued Homologation code.

In Egypt, the state security printer NASPS (National Company for Advanced Industries and Integrated Strategic Printing Solutions), which is the sole IHMA member in Africa, is also pushing the boundaries for holograms on the continent, with one of the most advanced sovereign security production facilities in the world.

This investment has allowed Egypt to become independent from foreign companies in printing state and ID documents.

These include tax stamps for imported and domestic cigarettes, alcoholic beverages and hookah products, all of which carry holographic features.

NASPS is also working with the Egyptian Ministry of Health and Population on multiple projects such as vaccine cards, which again carry holographic security.

Other countries in Africa continue to embrace holographic technologies on their national ID cards.

In Morocco, an eID has been introduced by the General Directorate of National Security that features a security hologram of the map of the country.

This reverses colours when the card is rotated at a 90-degree angle.

The card, which won the Best New National ID Card at the High Security Printing (HSP) EMEA conference earlier this year, is designed to tackle ID counterfeiting, which is one of the biggest scourges authorities across the continent continue to tackle.

Nigeria and Ghana have both brought in national programs in recent times that have taken advantage of holographic security devices to make ID documents and ePassport much harder to fake while South Africa continues to integrate its Smart ID card.

This represents a sophisticated system of data management as well as being a precursor for eliminating paperwork in government operations.

It is a quantum leap from its paper-based predecessor in terms of secure technology and goes a long way towards preventing identity theft and fraud.

Countering currency counterfeiting

In addition to their use on identity document and tax stamps, holograms are also widely used on banknotes.

In Africa, there are 43 currencies with 243 denominations between them. Of these, 21 currencies have a hologram on one or more denomination – generally the higher denominations: 62 in total.

They are applied as a patch or, more frequently, as a stripe or windowed thread.

One of the most recent examples, Malawi’s 5,000 kwacha, issued in February 2022, and incorporating a complex stripe combining holographic and micro-mirror effects, was the winner of the Best New Banknote at the HSP EMEA awards earlier this year.

In the wider context of tackling illicit healthcare activity, Africa’s law enforcement agencies are urged by the IHMA to step up their investment in anti-counterfeiting measures to stem the trade in fake COVID-19 treatments.

This followed reports by the Institute for Security Studies of seizures of illicit vaccines and the epidemic in the trafficking of counterfeit vaccines in South Africa over the last few years threatened to engulf other countries in the wake of rising cases.

WHO has said that a growing volume of fake medicines are available in the continent, where the high demand for medicines and lack of local production in many countries is opening up opportunities for counterfeit products.

Counterfeiting is a multi billion dollar problem but the situation in Africa is of concern to the IHMA as criminals took advantage of a continent-wide vaccine roll out plan that lagged behind demand.

However, packaging featuring security devices can ensure quality and check the distribution and smuggling of illicit products, while items not displaying security devices like holograms can be quickly seized and destroyed.

In South Africa and other places across the continent, we are seeing authorities inexorably moving towards the inclusion of biometric technology in their anti-counterfeiting plans, in an effort to stem the rising tide of identity fraud. 

Holograms used for these applications protect customers from worrying safety, quality and reliability issues surrounding counterfeit products.

Innovation in this form can help also to remove the financial risks associated with the counterfeiters’ use of sub-standard materials and tolerances leading to shortened equipment life, higher running costs and potential threat to life through fire or catastrophic equipment failure.

Africa heralds exciting opportunities for holograms with the continued use of the technology.

Moreover, the use of well designed and properly deployed authentication solutions, as advocated by the ISO 12931 standard, enables those with brand protection responsibilities to verify the authenticity of a legitimate product, differentiating it from counterfeits.

Even those that carry a fake authentication feature can be distinguished from the genuine item if the latter carries a carefully thought-out authentication solution.

The advantages holography offers will only continue as ever more advanced digital and mobile-based technologies gain more and more traction.

IHMA

The IHMA is made up of more than 80 of the world’s leading hologram companies.

Members include the leading producers and converters of holograms for banknote security, anti-counterfeiting, brand protection, packaging, graphics and other commercial applications around the world.