EDAPS Tax Stamp System Enables Ukraine to Lead in Combating Illegal Tobacco Sales

KIEV, Ukraine, April 1, 2010 - The most recent authoritative global study confirms that the Ukraine,
with a population of 45 million people and despite porous borders, has the
extremely low rate of 1.7% of its total market in contraband tobacco. The
Tobacco Atlas, released by the American Cancer Society and World Lung
Foundation, ranks nations on their success in combating illegal sales of
cigarettes and tobacco products. The Ukraine utilizes the EDAPS Tax Stamp
System to control the illicit sales of products.

The Ukraine rate of 1.7% is 8 times better than the results in
Switzerland, 7.5 times better than the UK, 15 times better than Italy, 3.5
times better than the United States, 20 times better than Brazil, 23 times
better than Greece, 15 times better than Malaysia, 8 times better than
Turkey, 46 times better than Iran and 13 times better than neighboring
Russia.

The 2009 edition of the Atlas concludes: "Cigarettes are the world's most
widely smuggled legal consumer product. In 2006, about 600 billion smuggled
cigarettes made it to the market, representing an enormous missed tax
opportunity for governments, as well as a missed opportunity to prevent many
people from starting to smoke and encourage others to quit."

In the years studied, one of the largest areas of trade in illegal
cigarettes was Eastern and Central Europe as shown by 607 seizures of 100,000
or more counterfeit cigarettes. In the Commonwealth of Independent States, 20
percent of all cigarettes consumed - some 100 billion - were illicit. Yet
among 196 nations studied, the Ukraine has one of the lowest percentages of
illicit cigarettes consumed.

The well-established EDAPS Tax Stamp System utilized by the Ukraine has
resulted in more than doubling the legitimate sale of tobacco, alcohol and
other products, and has resulted in billions of dollars in savings for that
nation. By comparison, tax stamp systems deployed in other nations have
resulted in annual tobacco tax losses: USA - US$5 billion, Canada - US$2.4
billion, UK - pounds Sterling 4.5 billion, Germany - US$7.2 billion, Malaysia
- 0.6 billion.

"By combining state of the art holograms with our enforcement methodology
and Track & Trace System, we are enabling government agencies to
substantially increase their revenues from the sales of excisable products
while shutting down illegal uses that often fund transnational criminal and
terrorist activities," said Alexander Vassiliev, Chairman of EDAPS.

The Secretary General of the prestigious World Customs Organization has
previously singled out the Ukrainian system of protecting goods with tax
stamps with holographic security elements developed by EDAPS. "This system is
a good example for other states," said Michel Danet at a Global Congress on
Combating Counterfeiting & Piracy.

"The key role of our organization is to provide reference information and
inform government institutions of the methods of protecting goods from
counterfeiting. These methods become more complicated while shadow market
dealers develop new methods of counterfeiting not only products, but security
elements as well," the Secretary General concluded.

EDAPS offers Digital Tax Stamps but with overt security (such as
holograms). Digital Tax Verification systems from other vendors are easily
imitated - relying on a number (printed as a 2D barcode and/or a
human-readable number to be verified on-line or by phone). A counterfeiter
can print a similar tracking number, provide a false toll-free phone number &
website, so an inquiry sent there will yield responses required by the
counterfeiter. In the absence of a comprehensive enforcement methodology,
overt security and due to the fact that very few will bother to call or check
on-line the cigarette pack number, digital tax verification from other
vendors has not delivered any significant results anywhere in the world. A
comprehensive solution by EDAPS has a proven track-record of overcoming these
obstacles and generating billions of dollars in additional tax revenue.

Challenging economic conditions around the world have motivated many
nations to review their tax stamp operations in an effort to hold back losses
and convert to a solid profit picture.

edaps.ua/en/

Olga Lubimova , +38044-5612570/11, Fax: +38044-5612545