COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 111/2005 laying down rules for the monitoring of trade between the Community and third countries in drug precursors
Date: 2012-09-27
Institutions: European Commission
Subjects: drug traffic, export monitoring, market supervision, medicinal product, psychotropic substance, surveillance concerning imports, third country

EUROPEAN COMMISSION 

Brussels, 27.9.2012  
SWD(2012) 267 final 

COMMISSION STAFF WORKING DOCUMENT 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

Regulation of the European Parliament and of the Council 

amending Council Regulation (EC) No 111/2005 laying down rules for the monitoring of 
trade between the Community and third countries in drug precursors 

{COM(2012) 521 final} 
{SWD(2012) 268 final} 

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COMMISSION STAFF WORKING DOCUMENT 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

Regulation of the European Parliament and of the Council 

amending Council Regulation (EC) No 111/2005 laying down rules for the monitoring of 
trade between the Community and third countries in drug precursors 

1. 

PROBLEM DEFINITION 

1.1.  What is the problem? 

Ephedrine and pseudoephedrine are chemical substances used for the manufacture of cold or 
allergy medicines. These two substances are also the main precursors for the manufacture of 
methamphetamine.  In  order  to  prevent  their  diversion  from  legal  trade  to  illicit  drug 
production a specific regulatory framework has been set up (both on international level1 and 
in  the  EU2)  in  order  to  identify  suspicious  transactions.  However,  this  is  not  the  case  for 
medicinal  products  containing  ephedrine  or  pseudoephedrine.  As  the  ephedrine  and 
pseudoephedrine  contained  in  medicinal  products  can  be  easily  extracted  (by  using  cheap 
home-made  equipment  and  through  a  simple  chemical  process),  these  products  are 
specifically targeted by drug traffickers as a source of precursors for the illicit manufacture of 
methamphetamine.  The  fact  that  medicinal  products  for  human  use  containing  ephedrine  or 
pseudoephedrine  are  excluded  from  the  provisions  of  Regulation  (EC)  111/2005,  which 
applies  to  trade  between  the  EU  and  third  countries,  has  led  to  a  situation  where  these 
products  could  not  be  stopped  or  seized  by  Member  States'  competent  authorities  when 
products were exported from or transiting through the Union customs territory, even though it 
was very likely that they would be misused for the illicit manufacture of methamphetamine in 
their country of destination. The EU is expected to close the loophole in the current legislation 
as  regards  the  powers  conferred  to  customs  and  police  authorities  who  can  stop  and  seize 
ephedrine  and  pseudoephedrine  but  cannot  stop  and  seize  medicinal  products  containing 
ephedrine or pseudoephedrine. 

The underlying drivers of the problem can be summarised as follows: 

-  the  control  measures  over  ephedrine  and  pseudoephedrine  (the  substances)  have  been 
strenghtened worlwide. Some countries of the world have gone to the extent to prohibit the 
imports of these substances. 

-  therefore,  the  need  for  traffickers  to  look  for  alternative  sources  of  ephedrine  and 
pseudoephedrine to manufacture methampethamines; 

-  as  a  result,  traffickers  are  targeting  medicinal  products  containing  these  substances  which 
are not subject to strict control measures; and 

1 

2 

United  Nations  Convention against  the  Illicit  Traffic  in Narcotic  Drugs  and  Psychotropic Substances, 
available at: HTTP://WWW.INCB.ORG/PDF/E/CONV/1988_CONVENTION_EN.PDF 
Regulation (EC) No 273/2004 of the European Parliament and of the Council of 11 February 2004 and 
to Article 32 of Council Regulation (EC) No 111/2005 on the implementation and functioning of the 
Community legislation on monitoring and control of trade in drug precursors 

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-  the  strenghtening  of  control  measures  over  these  medicinal  products  containing  ephedrine 
and  pseudoephedrine  in  other  regions  of  the  world.  As  a  reaction,  traffickers  target  those 
regions where there are less control measures over these products, when exported or in transit, 
such as the EU. 

From  2007  until  2010,  seizures  of  methamphetamine  precursors  contained  in  medicinal 
products  containing  ephedrine  or  pseudoephedrine  by  EU  Member  States'  competent 
authorities at the borders  have  fluctuated considerably. While in 2007 hardly any medicinal 
products were recorded out of the overall quantities seized (0.3 mt3 out of 8 mt), in 2008 and 
2009  the  amount  of  medicinal  products  out  of  the  total  quantities  seized  increased  sharply 
(respectively  1.8  mt  out  of  3.5  mt  and  0.6  mt  out  of  1.4  mt).  Even  though  this  amount 
decreased  considerably  in  2010  (0.1  mt  out  of  2.9  mt),  many  Member  States  and  the 
International  Narcotics  Control  Board  (INCB)  are  concerned  that  the  mechanisms  of 
Regulation (EC) No 111/2005 for the control of medicinal products containing ephedrine or 
pseudoephedrine are not sufficient.  

1.2.  Who is affected 

-  Third  countries,  where  methamphetamine  are  produced,  whose  control  measures  over 
medicinal  products  containing  drug  precursors  are  not  effective  if  not  reciprocated  by 
exporting and transiting countries; 

- Manufacturers and distributors located either inside or outside of the Union, as suppliers or 
traders of these medicinal products containing ephedrine and pseudoephedrine; and 

- Customs authorities, police and health authorities, as the enforcement authorities designated 
within each Member State to implement the drug precursors legislation. 

2. 

ANALYSIS OF SUBSIDIARITY 

Regulation (EC) No 111/2005 is based on Article 207 TFEU (formerly Article 133 TEC). It 
lays  down  rules  for  the  monitoring  of  trade  between  the  Community  and  third  countries  in 
drug precursors.  

Currently  EU  Member  States  customs  authorities  seize  medicinal  products  containing 
ephedrine or pseudoephedrine on the basis of national anti-drugs laws or of the customs code, 
resulting in different control actions at the EU external borders. Moreover, they try to curtail 
the  diversion  of  these  medicinal  products  through different types of national measures, thus 
leading to differing legal requirements for EU economic operators. 

3. 

OBJECTIVES 

General policy objectives 

• 

• 

• 

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To contribute to the world-wide combat against the illicit manufacture of drugs.  

Specific policy objectives 

To  fight  the  illicit  manufacture  of  methamphetamine,  by  controlling  the  supply  of 
ephedrine/pseudoephedrine  contained  in  medicinal  products  that  are  exported, 
imported or transiting between the Union and third countries through preventing their 
diversion, while not hampering legitimate trade in these products; 

To  maintain  the  free  flow  of  medicinal  products  containing  ephedrine  or 
pseudoephedrine for legitimate purposes between the Union and third countries; 

Mt= metric ton = 1000 kg. 

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• 

To  avoid  disproportionate  administrative  burdens  on  national  competent  authorities 
(customs,  police,  health)  and  on  the  industry  involved  in  the  trade  of  medicines 
containing ephedrine/pseudoephedrine. 

Operational objective 

To  achieve  and  maintain  a  downward  trend  of  diversion  attempts  of  medicinal  products 
containing ephedrine or pseudoephedrine, intended for illegal purposes. 

4. 

POLICY OPTIONS 

Option 1: taking no new legislative action (baseline option) 

Regulation (EC) No 111/2005 will not be modified. Under this Regulation medicinal products 
containing  ephedrine  or  pseudoephedrine  are  not  controlled.  Therefore,  Member  States’ 
authorities  cannot  stop  or  seize  these  products  when  they  enter  or  leave  the  Union  customs 
territory based on EU legislation, even though it is likely that they would be misused for the 
illicit manufacture of methamphetamine.  

Option 2: Recommending voluntary measures to Member States 

The  Commission  would  make  a  Recommendation  listing  a  number  of  measures  for  the 
control  of  medicinal  products  containing  ephedrine  and  pseudo-ephedrine  from  which  each 
Member State can "pick and choose" as they deem it appropriate. 

Option 3: Increasing the powers of competent authorities 

Medicinal  products  containing  ephedrine  or  pseudo-ephedrine  would  be  covered  by  the 
provisions  of  Article  26  of  the  current  Regulation  (Powers  of  competent  authorities).  This 
would  enable  EU  competent  authorities  to  stop  transactions  involving  these  medicinal 
products  when  there  are  reasonable  grounds  for  suspecting  that  these  products  might  be 
misused in the illicit drugs manufacture, whether they are exported, imported or in transit.  

Option  4:  Increasing  the  powers  of  competent  authorities  and  introducing  the  use  of 
pre-export notifications 

EU Member States' competent authorities would have a legal basis not only to stop and seize 
medicinal  products  containing  ephedrine  and  pseudo-ephedrine  (as  in  option  3)  but  also  to 
send pre-export notifications for these products to the country of destination via PEN online 
(Pre-Export Notification).  

Option 5: Subjecting medicinal products containing ephedrine and pseudoephedrine to 
the same control requirements as ephedrine and pseudoephedrine 

Medicinal products containing ephedrine or pseudo-ephedrine would be included in the list of 
scheduled  substances  of  category  1.  They  would  therefore  be  subject  to  the  same  control 
requirements  to  which  scheduled  substances  of  category  1,  such  as  ephedrine  and 
pseudoephedrine,  are  currently  submitted:  i.e.  pre-export  notification,  export  authorisation, 
license, etc.  

Option  6:  Banning 
pseudoephedrine 

trade  of  medicinal  products  containing  ephedrine  and 

In  this  option,  import,  export  and  transit  of  medicinal  products  containing  ephedrine  or 
pseudoephedrine  to,  from  and  through  the  Union  customs  territory  would  no  longer  be 
possible.  
Before  considering  a  trade  ban,  other  control  measures,  such  as  those  foreseen  in  the 
legislation, should be explored. These measures have been analysed under option 5.  

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Therefore, option 6 has been discarded without further analysing its impacts. 

5. 

ASSESSMENT OF IMPACTS 

This  initiative  respects  the  fundamental  rights,  freedoms  and  principles  contained  in  the 
Charter  of  Fundamental  Rights  of  the  Union.  In  particular  Article  35  of  the  Charter 
guarantees  to  everyone  the  right  of  access  to  preventive  health  care  and  the  right  to  benefit 
from medical treatment. Empowering competent authorities to act over medicines, as foreseen 
under options 3, 4 and 5, will not reduce the access to medicines for the public.  

No environmental impact can be associated with this problem.  

It is difficult to determine whether there would be any specific impact on SMEs or micro-
enterprises,  as  it  was  not  possible  to  target  in  the  consultation  those  marketing  specifically 
medicinal products containing ephedrine or pseudoephedrine. However, SMEs were consulted 
as part of the pharmaceutical associations. The absence of their replies confirms that they are 
not  much 
trade  of  medicinal  products  containing  ephedrine  or 
pseudoephedrine  or  are  working  for  the  multinational  companies  that  are  active  in  this 
segment. Therefore, it could be assumed that SMEs would not be affected by this proposal. 

involved 

the 

in 

International  impacts:  Diversion  of  drug  precursors  is  a  global  problem  which  requires  a 
global response. If stronger control measures over medicinal products containing ephedrine or 
pseudoephedrine were taken at EU level, this would match efforts made by other countries in 
the world, thus contributing to the international objective of strengthening controls over these 
products.  

For policy options 3, 4 and 5, the administrative burden for the competent authorities has 
been quantified using the EU 'Standard Cost model' and on the basis of the data gathered from 
the stakeholders' consultation. The additional administrative burden for the industry could 
be only partially assessed as no data were provided by the pharmaceutical trade associations 
and  companies  that  submitted  a  reply  to  the  online  consultation,  given  that  they  were  all  in 
favour of no legislative action. 

Option 1: taking no new legislative action (baseline option) 

Effectiveness 

The  identified  weakness  of  the  current  legislation  with  regard  to  the  diversion  of  medicinal 
products  containing  ephedrine  and  pseudo-ephedrine  would  remain,  allowing  traffickers  to 
continue targeting medicinal products to source ephedrine and pseudoephedrine for the illicit 
manufacture of methamphetamine. Therefore, this option will not contribute to fighting the 
illicit  manufacture  of  methamphetamine  by  reducing  the  supply  of  ephedrine  and 
pseudoephedrine contained in medicinal products.  

The  free  trade  flow  of  these  products  for  legitimate  purposes  between  the  Union  and  third 
countries will be maintained. 

Furthermore,  the  EU  will  continue  to  be  criticised  at  international  level  for  remaining 
"inactive" despite continued calls by the INCB for stepping up the control of its external trade 
legislation.  

Efficiency 

This option does not impose any additional administrative burden on European level on either 
businesses  or  national  competent  authorities.  As  the  “business  as  usual  costs”  will  remain 
unchanged, the administrative costs will also remain unchanged.  

Option 2: Recommending voluntary measures to Member States 

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Effectiveness 

This  option  will  not  provide  for  an  EU  response  to  the  identified  problem.  It  will  however 
guide  those  Member  States  which  do  not  have  any  control  measures  in  place,  to  establish 
some on the basis of the good practice in other Member States which have already taken some 
and have proven to be effective in reducing the supply of ephedrine and pseudoephedrine for 
the illicit manufacture of drugs. 

The  trade  flow  of  these  products  between  the  Union  and  third  countries  will  not  be 
affected. 

This option will not comply with the UN Resolutions inviting all Contracting Parties to 
the 1988 UN Convention to strengthen controls over this type of products. 

Efficiency 

Whatever  measure  they  may  decide  to  implement,  one  can  assume  that  it  will  imply  some 
administrative  burden  on  the  national  level.  The  additional  administrative  burden  of  any  of 
these  national  measures  is  not  assessed  in  the  present  initiative  as  it  is  unclear,  which 
measures Member States might take. 

Option 3: Increasing the powers of competent authorities 

Effectiveness 

This  option  will  increase  the  chances  to  prevent  the  diversion  of  these  products,  thus 
reducing  the  supply  of  ephedrine  and  pseudoephedrine  for  the  illicit  manufacture  of 
methamphetamine. As this option will establish within the drug precursor legislation a legal 
basis  for  Member  States'  competent  authorities to  stop  or  seize  a  consignment  of  medicinal 
products  containing  ephedrine  and  pseudoephedrine,  the  Member  States'  competent 
authorities will no longer have to rely on different national laws where they exist to stop or 
seize these products.  

The  trade  flow  of  medicines  containing  ephedrine  or  pseudoephedrine  will  not  be 
hampered. 

It  will  reduce  the  criticism  expressed  by  the  INCB  concerning  the  EU  lack  of  action  in 
imposing control measures over these products. 

Efficiency 

Controls will thus be performed both at export/import and in transit in all Member States, on 
the basis of risk analysis. Since this will be part of the normal work of customs, where risk 
criteria  vary  according  to  trends,  the  additional  administrative  burden  is  expected  to  be 
minimal.  As  regards  traders,  customs  controls  being  part  of  the  normal  risk  they  take  in 
trading goods internationally, the impact is also considered as minimal.  

Option  4:  Increasing  the  powers  of  competent  authorities  and  introducing  the  use  of 
pre-export notifications 

Effectiveness 

This option builds on the previous one, thus maintaining all the benefits already outlined. In 
addition, the use of the PEN-online system will minimise the risk of diversion, as this system 
ensures a systematic and consistent monitoring of trade in drug precursors globally. Thanks to 
this  tool,  this  option  will  enhance  the  chances  to  prevent  the  diversion  of  medicinal 
products  containing  ephedrine  or  pseudoephedrine  for  the  illicit  manufacture  of 
methamphetamine. 

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The use of pre-export  notifications (PEN online) for medicinal products by Member States’ 
competent  authorities  will  be  praised  by  the  INCB  who  has  repeatedly  encouraged  the 
Union to do so over the last few years through their annual reports. 

Since  its  creation,  PEN-online  has  never  been  recorded  as  slowing  down  or  hindering 
trade transactions as confirmed by the fact that a growing number of countries in the world 
use it. 

Efficiency 

The additional administrative burden for competent authorities in relation to the controls they 
will  perform,  under  the  amended  Article  26,  will  remain  minimal.  The  average  additional 
administrative burden for competent authorities for sending one pre-export notification for a 
category  1  substance  amounts  at  €15.  The  add itional  administrative  burden  will  mainly 
depend  on  the  volume  of  the  licit  trade  for  these  products  in  each  Member  State.  In  this 
respect, it can be assumed that this additional administrative burden is relatively low and that 
it  can  be  borne  by  Member  State's  competent  authorities  given  that  several  Member  States 
have already been sending them voluntarily over the last three years during the international 
operational initiatives under Project Prism. 

Option 5: Subjecting medicinal products containing ephedrine and pseudoephedrine to 
the same control requirements as ephedrine and pseudoephedrine 

Effectiveness 

This  option  will  strengthen  considerably  controls  over  medicinal  products  containing 
ephedrine or pseudoephedrine, which would be submitted to the same control regime imposed 
by the drug precursor legislation to the raw substances they contain.  

This option  will increase  the  chances  to prevent diversion,  thus reducing the  supply of 
ephedrine and pseudoephedrine for the illicit manufacture of methamphetamine. 

The  requirements  that  would  be  applicable  to  these  medicinal  products  would  be 
disproportionate to the objective pursued by the present initiative.  

The  trade  flow  of  these  products  between  the  Union  and  third  countries  might  be 
hampered by the increased requirements with which operators will be obliged to comply in 
order to export or import these products. 

Furthermore,  this  option  would  imply  the  amendment  of  the  same  article  in  the  Regulation 
governing intra-EU trade in drug precursors.  

This  option  will  comply  with  the  CND  Resolution  inviting  amongst  others  the  Union  "to 
apply  similar  control  measures  for  pharmaceutical  preparations  containing  ephedrine  and 
pseudoephedrine as those for bulk (raw) precursor chemicals"4.  

Efficiency 

There  are  four  main  administrative  requirements:  license,  import  authorisation,  export 
authorisation  and  pre-export  notifications.  The  additional  administrative  burden  stemming 
from the requirement of PEN-online has been calculated under option 4. 

As  regards  licensing,  the  current  average  administrative  burden  per  competent  authority  for 
cat 1 substances is €861 per ye ar. Therefore, the current administrative burden per competent 

4 

Resolution  E/CN.7/2011/L.5/Rev.1  on  "Strengthening  international  cooperation  and  regulatory  and 
institutional  frameworks  for  the  control  of  precursor  chemicals  used  in  the  illicit  manufacture  of 
synthetic drugs". 

http://www.unodc.org/documents/commissions/CND-Res-2011to2019/CND54_8e1.pdf 

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authority to issue a licence for these products would be the same as for any other substance of 
category 1, therefore € 49.  

As  regards  the  import  authorisations,  the  current  average  administrative  burden  per 
competent authority for cat 1 substances is €1236 per year. The curren t administrative burden 
to grant an import authorisation is € 28.  

As  regards  the  export  authorisations,  the  average  administrative  burden  per  competent 
authority for cat 1 substances is €995 per year . The current administrative burden to grant an 
export authorisation is € 29.  

The  administrative  burden  per  company  to  obtain  a  licence  is  €  77  (DG  ENTR  impact 
assessment)5. 

6. 

COMPARISON OF OPTIONS 

The  following  table  indicates  the  effectiveness  and  cost  efficiency  of  each  option,  thus 
contributing to the analysis of the most preferred one.  

Table 1: Comparing the options 

Options 

Effectiveness 

Cost Efficiency 

Overall 
Assessment

Reducing 
supply of 
EPH/PSE 
contained 
in 
medicines 
by 
preventing 
their 
diversion 

Maintaining 
the free 
flow of 
EPH/PSE 
medicines 
between the 
EU and 
third 
countries  

- 

-/+ 

+ 

++ 

+ 

+ 

+ 

+ 

+++ 

+/- 

1 

2 

3 

4 

5 

Compliance 
with UN 
Resolutions 

Additional 
administrative burden 

Per 
authority 

Per 
industry 

- 

- 

+ 

+ 

+ 

€ 0 

€ 0 

€ 0/+ 

€ 0/+ 

-  

- 

€ 0/+ 

€ 0/+ 

++ 

€ 1500 * 

NA 

+++ 

Exports = 
€9300 

Licence = 
€77 

++ 

Imports = 

5 

Administrative  costs  and  administrative  burdens  imposed  by  amendments  of  EU  drug  precursor 
legislation, Final Report, EIM, October 2011, page 24. 

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€7700 

Even  though  the  baseline  scenario  does  not  imply  any  additional  administrative  burden, 
retaining  this  option  should  be  excluded  if  the  Commission  is  to  respond  adequately  to  the 
Council's  request  to  address  the  weaknesses  identified  in  the  control  system  of  the  drug 
precursor legislation and to concerns expressed by the international community. 

Non-legislative  measures,  unless  adopted  across  all  Member  States,  would  only  partially 
address the identified problem. Moreover, it will not enable competent authorities to stop or 
seize, be it at export or in transit, medicinal products containing ephedrine or pseudoephedrine 
due  to  the  lack  of  a  clear  legal  basis  on  these  specific  goods.  The  measures  contemplated 
under  this  option  would  only  to  a  certain  extent  prevent  the  diversion  of  the  medicinal 
products containing ephedrine and pseudoephedrine. 

Options  3,  4  and  5  would  all  provide  a  clear  legal  basis  for  competent  authorities  to  stop 
and/or seize medicinal products containing ephedrine or pseudoephedrine at export from or in 
transit through the Union customs territory, when there are reasonable grounds for suspecting 
that these products are intended for the illicit drugs manufacture. They would all reduce the 
criticism  expressed  by  the  INCB  concerning  the  EU  lack  of  action  in  imposing  control 
measures over these products and would all increase the chances to prevent the diversion of 
these  products,  thus  reducing  the  supply  of  ephedrine  and  pseudoephedrine  for  the  illicit 
manufacture of methamphetamine, though to different degrees. 

When  comparing  these  three  options  providing  for  legislative  amendments,  option  3  would 
generate  only  minor  administrative  burden;  the  same  can  be  expected  for  option  4,  while 
option 5 would impose the highest administrative burden for both competent authorities and 
economic operators. Even though option 5 could be considered the most effective insofar as it 
applies the strictest controls, it would impose too many control requirements that would seem 
disproportionate to the objective pursued by the present initiative. The added value provided 
by option 4 if compared to option 3 is that, under this option, the synergy of the two combined 
measures  increases  the  effectiveness  of  each  individual  measure,  with  a  limited  additional 
burden given that the pre-export notification system is up and running and that the number of 
pre-export notifications that could be seemingly sent per year by Member States' competent 
authorities  is  relatively  small.  Moreover,  as  pre-export  notifications  are  already  compulsory 
for scheduled substances of category 1, it would seem logical to make them compulsory also 
for  the  products  containing  them,  such  as  medicinal  products  containing  ephedrine  or 
pseudoephedrine. 

Option 4 would thus seem the most preferred one: it would provide for an efficient control, 
would impose only one extra control requirement and it would generate hardly any additional 
administrative burden. 

7. 

MONITORING AND EVALUATION 

The Commission envisages:  

• 

• 

Collection,  analysis,  and  reporting  of  Member  States'  annual  statistics  of 
seizures and stopped shipments. 

Support  the  implementation  of  the  amended  Regulation  through  the  Drug 
Precursors Working Group and through updating the existing guidelines, the e-
learning tool, FAQ document. 

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• 

• 

• 

• 

Implementation  of  a  database  currently  being  developed  to  facilitate  the 
collection and analysis of statistics. 

Creation of a specific tariff code in the Combined Nomenclature for medicinal 
products containing ephedrine or pseudoephedrine. 

Organisation  of  awareness-raising  activities  involving  competent  authorities 
and economic operators. 

Exchange of information, including about trends, with the governments of third 
countries. 

The  Commission  could  undertake  an  evaluation  of  its  new  provisions  five  years  after  their 
adoption,  examining  the  results  achieved  against  the  objectives  set  and  assessing  any 
implications of future options. It could then submit a report on the evaluation.  

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