COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a 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) 268 final 

COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a 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) 267 final} 

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TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

2.3. 

3. 

3.1. 

3.2. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

Introduction .................................................................................................................. 5 

Procedural issues and consultation of interested parties .............................................. 6 

Internal consultations ................................................................................................... 7 

Stakeholder consultation .............................................................................................. 7 

Scrutiny by the Commission Impact Assessment Board ............................................. 8 

Policy Context.............................................................................................................. 9 

International context..................................................................................................... 9 

EU context.................................................................................................................. 10 

Problem definition...................................................................................................... 11 

Scope of the problem ................................................................................................. 11 

Scale of the problem (methamphetamine and its precursors) .................................... 14 

Underlying drivers of the problem............................................................................. 17 

Foreseen evolution of the problem............................................................................. 17 

4.5.  Who is affected by the identified problem? ............................................................... 18 

4.6. 

EU right to act ............................................................................................................ 18 

5. 

5.1. 

5.2. 

5.3. 

5.4. 

6. 

6.1. 

6.2. 

6.3. 

6.4. 

6.5. 

6.6. 

Objectives................................................................................................................... 19 

General policy objectives........................................................................................... 19 

Specific policy objectives .......................................................................................... 19 

Operational objectives................................................................................................ 19 

Consistency with other policies and objectives ......................................................... 19 

Policy options............................................................................................................. 20 

Option 1: taking no new legislative action (baseline option)..................................... 20 

Option 2: Recommending voluntary measures to Member States............................. 22 

Option 3: Increasing the powers of competent authorities......................................... 22 

Option 4: Increasing the powers of competent authorities (Option 3) and introducing 
pre-export notifications .............................................................................................. 23 

Option 5: Subjecting medicinal products containing ephedrine or pseudoephedrine 
are subject to the same control requirements as ephedrine and pseudoephedrine ..... 24 

Option 6: banning trade of medicinal products containing ephedrine and 
pseudoephedrine......................................................................................................... 24 

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7. 

Analysis of impacts .................................................................................................... 25 

7.1. 

Option 1: taking no new legislative action (baseline option)..................................... 26 

7.1.1.  Effectiveness .............................................................................................................. 26 

7.1.2.  Cost efficiency ........................................................................................................... 27 

7.2. 

Option 2: Recommending voluntary measures to Member States............................. 27 

7.2.1.  Effectiveness .............................................................................................................. 27 

7.2.2.  Cost efficiency ........................................................................................................... 28 

7.3. 

Option 3: Increasing the powers of competent authorities......................................... 28 

7.3.1.  Effectiveness .............................................................................................................. 28 

7.3.2.  Cost efficiency ........................................................................................................... 29 

7.4. 

Option 4: Increasing the powers of competent authorities and introducing pre-export 
notifications................................................................................................................ 29 

7.4.1.  Effectiveness .............................................................................................................. 29 

7.4.2.  Cost efficiency ........................................................................................................... 30 

7.5. 

Option 5: Subjecting medicinal products containing ephedrine or pseudoephedrine to 
the same control requirements as ephedrine and pseudoephedrine ........................... 31 

7.5.1.  Effectiveness .............................................................................................................. 31 

7.5.2.  Cost efficiency ........................................................................................................... 31 

8. 

9. 

9.1. 

9.2. 

Comparing the options ............................................................................................... 33 

Monitoring and evaluation ......................................................................................... 35 

Measuring the fulfilment of objectives ...................................................................... 35 

Monitoring the implementation of the new legislative measures .............................. 35 

9.2.1.  Collecting, analysing and publishing statistics .......................................................... 35 

9.2.2.  Monitoring difficulties in the implementation ........................................................... 36 

9.2.3. 

Involvement of stakeholders ...................................................................................... 36 

9.2.4.  Supporting the implementation of the new legislative measures............................... 36 

9.2.5.  Guidelines .................................................................................................................. 36 

9.2.6.  Activities .................................................................................................................... 36 

9.3. 

9.4. 

10. 

Monitoring results and exchange information with the third countries concerned.... 36 

Overall evaluation ...................................................................................................... 37 

ANNEX...................................................................................................................... 37 

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COMMISSION STAFF WORKING DOCUMENT 

IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a 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. 

INTRODUCTION 

Drug  precursors  are  chemical  substances  having  a  wide  variety  of  licit  uses,  such  as  in  the 
synthesis  of  plastics,  pharmaceuticals,  cosmetics,  perfumes,  detergents,  or  aromas.  They  are 
traded for legitimate purposes on regional and global markets, but some of them can also be 
diverted from the licit distribution channels for the illicit manufacture of narcotic drugs and 
psychotropic substances. In other words, "there is no production of illicit drugs without drug 
precursors". 

Therefore, controlling drug precursors is a key component in the fight against narcotic drugs. 
Taking  into  account  the  wide  legitimate  uses  of  drug  precursors,  their  trade  cannot  be 
prohibited. A specific regulatory framework, both at international and at EU level, has been 
put  in  place  to  monitor  their  legal  trade  and  to  identify  suspicious  transactions,  thus 
preventing  their  diversion  for  illicit  use.  An  effective  cooperation  between  the  competent 
authorities and the industry is key to the implementation of this regulatory framework. 

These  chemicals  are  rarely  produced  by  criminals  that  intend  to  use  them  for  their  illicit 
purposes as their production often requires substantial infrastructure. Criminals tend to either 
smuggle  or  divert  them  from  the  licit  trade  by  exploiting  weaknesses  of  national  control 
systems to their benefit. The weakness identified in the control system of international trade in 
drug precursors concerns medicinal products containing ephedrine or pseudoephedrine1 (drug 
precursors)  exported  from  or  transiting  through  the  Union  customs  territory  which  are 
diverted for the illicit manufacture of methamphetamines2 in other countries of the world. The 
EU  is  criticized  internationally  for  not  taking  adequate  control  measures  across  Member 
States  to  tackle  this  weakness.  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. 

By  imposing  EU  control  over  these  medicinal  products,  we  are  aiming  to  make  it  more 
difficult, expensive and risky for criminals to source the chemicals they need to manufacture 

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2 

The  term  'medicinal  products  containing  ephedrine  or  pseudoephedrine'  will  be  used  throughout  the 
text,  as  this  is  the  term  used  in  the  EU  legislation.  However,  other  terms  are  used  to  refer  to  these 
products,  in  particular  in  case  of  quotations  from  international  sources,  such  as:  'pharmaceutical 
preparations'  containing  ephedrine  or  pseudoephedrine  or  'medicines'  containing  ephedrine  or 
pseudoephedrine. 
Methamphetamine is a synthetic drug which belongs to the amphetamines-group. 

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drugs.  This  proposal  should  work  as  a  deterrent:  it  focuses  on  preventing  the  diversion  of 
precursors.  It  does  not  aim  to  solve  health  problems  and  reduce  criminality  related  to  drug 
abuse; it concentrates on the supply reduction of the chemicals to make drugs and not on the 
supply of the drugs for the consumers. 

The  present  impact  assessment  refers  to  measures  to  address  this  specific  weakness 
concerning  the  trade  in  drug  precursors  between  the  Union  and  third  countries,  under 
Regulation  (EC)  No  111/20053,  which  is  under  the  responsibility  of  DG  Taxation  and 
Customs Union (DG TAXUD). Another impact assessment, carried out in parallel, concerns 
intra-EU trade in drug precursors, Regulation (EC) No 273/20044, under the responsibility of 
DG  Enterprise  and  Industry  (DG  ENTR)  and  focuses  on  strengthening  controls  over  acetic 
anhydride, the main heroin precursors, within the Union. 

2. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES  

The proposal to amend Council Regulation (EC) No 111/2005 of 22 December 2004 laying 
down  rules  for  the  monitoring  of  trade  between  the  Community  and  third  countries  in  drug 
precursors was announced in the 2011 Commission Work Programme and further scheduled 
in the 2012 Commission Work Programme. 

initiative  follows  on  from 

This 
functioning  and 
implementation  of  the  EU  drug  precursor's  legislation5  inviting  the  Commission  "to  set  a 
work programme to address the identified weaknesses in the legislation in co-operation with 
Member States and to propose legislative amendments before the end of 2011 after carefully 
assessing their potential impacts on Member States’ authorities and economic operators". 

the  Council  Conclusions  on 

the 

The  Council  conclusions  were  based  on  the  Commission  Report  to  the  Council  and  the 
European Parliament issued in January 20106. The underlying evaluation to the Commission 
report  had  been  carried  out  by  the  Commission  Services,  with  the  assistance  of  a  group  of 
experts  from  competent  national  authorities,  which  had  been  established  for  the  evaluation 
purposes. In addition, the Commission had mandated an external contractor, the consultancy 
RPA to gather further information7. 

2.1. 

Internal consultations 

The preparation of this Impact Assessment was monitored by an Inter-service Steering Group, 
composed of Directorates General TAXUD, ENTR, HOME, JUST, OLAF and SANCO and 
from  the  Legal  Service  and  the  Secretariat-General.  The  Steering  Group  met  on  four 
occasions. Its last meeting was convened on 14 December 2011.  

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4 

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Council Regulation (EC) No 111/2005 of 22.12.2004 laying down the rules for the monitoring of trade 
between the EU and third countries, OJ L 22 of 26.1.2005, p. 1. 
Regulation (EC) 273/2004 of the European Parliament and the Council on drug precursors, OJ L 22 of 
26.1.2005, p.1. 
3016th Competitiveness Council meeting Brussels, 25 May 2010 - . 
Report  from  the  Commission  to  the  Council  and  the  European  Parliament  pursuant  to  Article  16  of 
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, COM(2009)709 final 
Ad  hoc  Study  to  be  used  in  the  evaluation  of  the  Community  legislation  on  drug  precursors,  Final 
Report,  prepared  for  the  European  Commission,  RPA,  February  2009.  Available  in  pdf  format  on 
demand. 

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2.2. 

Stakeholder consultation 

A  stakeholder  consultation  was  held  from  30  June  to  13  September  2011.  This  was  not  a 
public consultation, given the sensitivity and the peculiarity of the matter at stake. On the one 
hand,  the  subject  matter,  drug  precursors,  is  not  widely  known  and  would  have  most  likely 
entailed responses concerning the overall drug situation, which would have been irrelevant for 
this exercise. On the other hand, the problem at stake and the envisaged options only affect a 
very  specific  aspect  of  drug  precursor  control.  Only  the  most  concerned  stakeholders  were 
therefore consulted. The responses of the stakeholders were treated confidentially; they have 
not  been  published  on  the  Commission  website  to  avoid  providing  sensitive  information  to 
traffickers.  All  the  contributions  have  been  taken  into  consideration  for  the  analysis  in  this 
impact assessment. 

The consultation consisted of two types of questionnaires8, one targeted to national authorities 
and  one  targeted  to  the  pharmaceutical  industry,  including  small  and  medium-sized 
enterprises. The questionnaires were introduced in the Interactive Policy Management (IPM) 
tool of the Commission. The link to these questionnaires was sent to the specific stakeholders, 
namely  Member  States'  competent  authorities  (customs,  police  and  health)  and  economic 
operators  (9  pan-European9  pharmaceutical  associations  representing  the  major  components 
of  the  pharmaceutical  industry).  Two  of  these  pharmaceutical  associations  with  a  high 
proportion of SME member companies were consulted, as it was not possible to target only 
those  SMEs  marketing  medicinal  products  containing  ephedrine  or  pseudoephedrine  (the 
databases currently available are devised for commercial purposes and do not allow selecting 
this  kind  of  information).  Small  and  medium-sized  enterprises  were  also  consulted  through 
the Enterprise Europe Network. 

In response to this consultation the Commission received 31 contributions. Of these, 22 were 
from  national  authorities  (3  of  which  were  partial  replies)  and  8  from  the  industry  (6 
manufacturing  companies  and  2  pharmaceutical  associations).  From  the  absence  of  replies 
from  SMEs  and  as  confirmed  by  the  industry,  SMEs  are  not  much  involved  in  the  trade  of 
medicinal  products  containing  ephedrine  or  pseudoephedrine,  or  are  working  for  the  few 
multinational firms that are active in this segment.  

Chart 1 here below shows that the industry is unanimous in favouring the baseline scenario as 
they take the stance that this is not an EU-wide problem but rather a regional one. Subsequent 
consultations with the Association of European Self Medication Industry (AESGP) revealed 
that  options  3  and  4  would  not  be  opposed  by  industry  since  the  administrative  burden  on 
exporting  companies  would  be  minimal  or  even  inexistent.  However,  Member  States' 
competent  authorities  are  equally  split  among  the  various  options;  two  thirds  plead  for  an 
amendment of the legislation, though to different degrees; one third is in favour of no change 
in  the  legislation,  considering  that  their  drug  legislation  provides  for  the  possibility  for 
customs and police authorities to stop and seize products, which are likely to be used for the 
illicit  drug  manufacture, 
including  medicinal  products  containing  ephedrine  or 
pseudoephedrine. Results concerning option 2 do not appear in this Chart because this option 
lists a series of measures for which stakeholders were asked only to assess the degree of their 
effectiveness.  

Chart 1. Options selection - Overview 

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Stakeholders questionnaires are reproduced in Annex 1. 
EU Member States and other European countries such as Norway, Switzerland, Croatia. 

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Options selection - Overview

Industry

Competent authorities

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Option 1 

Option 3

Option 4

Option 5

Options

The Commission maintained regular contacts with the competent authorities of the Member 
States  throughout  the  review  process  in  the  last  year  and  there  was  an  active  dialogue  to 
identify the main problems and the possible options to address them, notably: 

-  through  the  Drug  Precursors  Working  Group  meetings,  composed  of  Member  States' 
representatives and the Commission which meets twice per year; 

- through the "Drug Precursors Project Group" created under the Customs 2013 Programme, 
composed of operational experts from Member States which meets twice per year; and 

-  at  a  "Roundtable  on  medicinal  products  containing  ephedrine  and  pseudoephedrine", 
composed  of  Member  States'  competent  authorities  for  drug  precursors  and  for  medicinal 
products which was held on 7 December 2009. 

The main results of these consultations are summarised in Annex 2. 

2.3. 

Scrutiny by the Commission Impact Assessment Board 

The  Impact  Assessment  Board  of  the  European  Commission  assessed  a  draft  version  of  the 
present  impact  assessment  and  issued  its  opinion  on  29  February  2012.  The  Impact 
Assessment  Board  made  several  recommendations  and,  in  the  light  of  the  latter,  the  final 
impact assessment report: 

- presents the scope of the proposal more clearly; 

-  indicates  the  volume  of  licit  trade  of  medicinal  products  containing  ephedrine  and 
pseudoephedrine at European and at global level; 

- explains how these products are diverted for the illicit manufacture of methamphetamine; 

- gives an overview of the drug legislation in the Member States and of the powers of their 
customs and police authorities; 

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- considers a sixth option which consists in a trade ban of these products; 

-  strengthens  the  analysis  of  impacts  through  better  emphasizing  the  cost-efficiency  and 
effectiveness criteria; and 

- provides an overall evaluation review exercise, as well as specific progress indicators. 

3. 

POLICY CONTEXT 

3.1. 

International context 

The United Nations Convention against the Illicit Traffic in Narcotic Drugs and Psychotropic 
Substances  contains  in  its  Article  12  specific  reference  to  measures  to  prevent  diversion  of 
drug precursor chemicals for use in the illicit manufacture of narcotic drugs and psychotropic 
substances. Tables I and II of the 1998 Convention contains the list of 23 drug precursors (so-
called "scheduled substances") which are controlled by the Convention because they are most 
frequently used in the production of illicit drugs. 

The  EU  is  a  Contracting  Party  of  Article  12  of  the  1988  UN  Convention,  which  has  185 
Parties  including  all  major  chemical  producing  countries.  The  EU  has  implemented  its 
obligations  through  legislation  and  voluntary  measures  applied  by  the  public  and  private 
sectors. 

The United Nations’ International Narcotics Control Board (INCB) is an independent control 
body which closely monitors the implementation of the United Nations drug conventions. It 
publishes annual technical reports containing diversion statistics and their analysis as well as 
recommendations to the countries concerned. 

According to the 2009 INCB report, 70% of all identified instances of suspicious shipments 
or diversions of methamphetamine precursors currently involve ephedrine or pseudoephedrine 
in tablet form.10 This trend was further confirmed by the results of the activities under Project 
PRISM11  with  an  emphasis  on  pharmaceutical  preparations  containing  ephedrine  or 
pseudoephedrine12,  as  outlined  in  the  2010  INCB  report13.  In  particular,  of  35  cases  of 
seizures  of  ephedrine  and  pseudoephedrine  during  Operation  Crystal  Flow,  40  cases  during 
Operation Ice Block and 139 cases during Operation Pila, 11%, 27.5% and 67% respectively 
were in the form of medicinal products. Some countries have therefore strengthened measures 
to  control  these  products:  e.g.  Malaysia  and  Thailand  request  to  receive  pre-export 
notifications for transactions involving these products and require an import/export licence for 
all  import/export  of  these  products  in  the  same  way  as  the  substances  they  contain.  Other 
countries,  such  as  Mexico,  several  Central  American  countries,  and  Colombia  entirely 
prohibit  imports  of  these  products.  The  United  States  also  control  medicinal  products 
containing ephedrine or pseudoephedrine as List I chemicals under the Controlled Substances 
Act. This means that these products are submitted to the same control regime imposed to the 

10 

11 

12 

13 

INCB 2009 Annual Report on Precursors: p.xii 
http://www.incb.org/pdf/precursors-report/2009/English/Precursors_Report_09_english.pdf 
Project PRISM (Precursors Required In Synthetic drugs Manufacturing) is a United Nations/INCB-led 
project to address diversion and trafficking of amphetamine-type stimulants (AES) precursors. 
This is the term internationally used to refer to medicinal products or medicines containing these two 
drug precursors. 
INCB 2010 Annual Report on Precursors: p. 6 
http://www.incb.org/pdf/precursors-report/2010/en/PrecursorsReport2010_E_V10579291.pdf 

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raw  substances  they  contain,  which  are  List  I  chemicals.  They  are  controlled  regardless  of 
their form – bulk substances (raw material) or tablets. 

Since 2006, the Commission on Narcotic Drugs14 (CND), the central drug policymaking body 
within  the  United  Nations,  adopted  various  Resolutions  inviting  all  Contracting  Parties  to 
strengthen  controls  over  this  type  of  products  (the  latest  at  the  2011  CND  meeting15),  in 
particular to adopt regulatory framework to control these products containing precursors and 
to encourage the use of the pre-export notification system for these products so as to favour 
the  rapid  identification  of  new  patterns  of  diversion.  CND  Resolutions  shape  global  drug 
control policy and direct the work of the UN Office of Drugs and Crime (UNODC) and of the 
INCB on these matters.  

3.2. 

EU context 

Since  the  early  nineties  the  EU  has  put  in  place  legislation  to  ensure  that  diversion  of  drug 
precursors is prevented through control and monitoring of their legitimate trade. The existing 
legislation aims at striking a balance between necessary actions to prevent diversion of drug 
precursors  and  allowing  their  legitimate  trade  without  creating  unnecessary  administrative 
burdens.  

The EU legislation on drug precursors, just like the 1988 United Nations Convention, covers 
the  same  23  drug  precursors  which  are  divided  in  three  categories  according  to  their 
sensitivity: 

- Category 1 covers the most sensitive substances (12 substances); 

- Category 2 covers less sensitive substances and “pre-precursors”16 (5 substances ); 

- Category 3 covers bulk chemicals that can have different types of uses in the manufacturing 
process, such as feedstock, but also solvents and impurities remover (6 substances). 

The  extent  of  control  of  operators  and  of  trade  transactions  depends  on  the  Category 
concerned:  the  strictest  control  applies  to  category  1  substances,  while  the  least  control  is 
imposed on substances of category 3. A summary table comprising the obligations is attached 
in Annex 3. 

Furthermore, the legislation builds upon the key principle of partnership between authorities 
and operators in identifying diversion attempts; a voluntary monitoring system is in operation 
for non-controlled substances, providing flexibility17 for rapidly changing diversion patterns. 

The control of drug precursors is part of the EU Drugs Strategy18 and the EU Drugs Action 
Plan (2009-2012)19, which sets out the objective to reduce the diversion and trafficking in/via 
the EU of drug precursors used for the illicit manufacture of drugs. 

14 

15 

16 
17 

Established in 1946, the Commission on Narcotic Drugs reviews and analyses the global drug control 
situation,  considering  the  interrelated  issues  of  prevention  of  drug  abuse,  rehabilitation  of  drug  users 
and supply and trafficking in illicit drugs. It takes action through resolutions and decisions. 
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 
Substances which are used to produce another precursor. 
Non-scheduled substances can be added or withdrawn form the voluntary monitoring list upon request 
of one Member State and by decision of the Drug Precursors Working Group. 

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The responsibility for drug precursors in the Commission is shared between DG TAXUD and 
DG ENTR. DG TAXUD is in charge of Council Regulation (EC) No 111/2005 governing the 
trade in drug precursors between the EU and third countries, while DG ENTR is in charge of 
Regulation (EC) 273/2004 of the European Parliament and the Council relating to the trade in 
drug precursors within the EU. 

As  mentioned  under  point  2  above,  the  European  Commission’s  Report  COM(2009)709 
assessed  the  functioning  of  the  existing  EU  legislation  on  drug  precursors  and,  while 
concluding  that  the  system  overall  functions  well,  it  also  identified  some  weaknesses  in  the 
existing  control  system  of  trade  in  drug  precursors  both  within  the  Union  and  between  the 
Union and third countries. 

As  announced  in  the  Introduction,  two  impact  assessments  on  the  European  drug  precursor 
legislations are carried out in parallel by DG TAXUD in respect of extra-EU trade and by DG 
ENTR in respect of intra-EU trade. 

Even  though  both  initiatives  concern  the  drug  precursors'  legislation,  they  tackle  two  issues 
which  are  not  interlinked.  This  is  the  reason  why,  despite  the  common  background,  two 
separate  initiatives  have  been  put  forward.  The  two  DGs  have  nevertheless  ensured 
coordination  all  through  the  procedure  of  preparation  and  writing  of  the  respective  impact 
assessments. 

4. 

PROBLEM DEFINITION  

4.1. 

Scope of the problem 

Ephedrine and pseudoephedrine are chemical substances used for the manufacture of cold or 
allergy medicines as they are effective nasal decongestant. These two substances are also the 
key  precursors  for  the  manufacture  of  methamphetamines.  While  the  raw  substances, 
ephedrine  and  pseudoephedrine,  are  internationally  controlled  according  to  the  1988  UN 
Convention,  medicinal products containing ephedrine or  pseudoephedrine  are not controlled 
as  they  are  excluded  from  the  scope  of  the  UN  Convention.  Based  on  the  1988  UN 
Convention, 
the  control  of  ephedrine  and 
pseudoephedrine  but  it  does  not  provide  for  the  control  of  medicinal  products  containing 
ephedrine  or  pseudoephedrine  for  human  use20.  These  products  are  regulated  in  accordance 
with Directive 2001/83/EC on the Community code relating to medicinal products for human 
use21 and belong to the category of over-the-counter medicines22 or non-prescription drugs.  

legislation  also  provides  for 

the  EU 

The  focus  of  this  impact  assessment  is  not  on  over-the-counter-medicines  as  a  category  but 
only  and  exclusively  on 
the  medicines  for  human  use  containing  ephedrine  or 
pseudoephedrine (drug precursors). 

18 

19 
20 

21 
22 

EU  Drugs  Strategy  2005-2012,  endorsed  by  the  European  Council  of  November  2004  (15074/04 
CORDROGUE 77 SAN 187 ENFOPOL 187 RELEX 564). 
EU Drug Action Plan for 2009-2012 (2008/C 326/09). 
Medicinal  products  containing  ephedrine  or  pseudoephedrine  for  veterinary  use  are  instead  not 
excluded in the EU drug precursor legislation.  
OJ L 311 of 28.11.2001, as amended. 
Over-the-counter  or  OCT  drugs  are  medicines  that  may  be  sold  directly  to  a  consumer  without  a 
prescription from a healthcare professional, as compared to prescription drugs, which may be sold only 
to consumers possessing a valid prescription. 

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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  methamphetamines.  There  is  a  growing  international  concern  about 
increased diversion of ephedrine and pseudoephedrine when contained in medicinal products - 
this is one of the findings of the ad hoc study for the evaluation of Community legislation on 
drug precursors of 2009. 

Diversion of precursors from licit trade can occur at any stage of handling, as illustrated in the 
chart here below: 

intermediary activities
(brokerage…)

production

import/export

sale

transport

processing

recycling

destruction

© GÜS Wiesbaden

Traffickers  have  several  modus  operandi  to  divert  chemicals.  The  list  here  below  is  not 
exhaustive but gives an overview of the main patterns. 

Criminals  often  try  to  cover  their  true  identity,  for  instance,  by  using  false  names  and 
addresses; by using front-men, front companies or corrupt companies; by misusing bona-fide 
names of well-known international companies. 

They often use criminal means to obtain chemicals, for instance, bribery or coercion of legal 
companies,  blackmailing employees;  theft of chemicals; falsification of  documents (e.g.  use 
of false licences). 

They often disguise and blur the destination and the consignee of a transaction, for instance, 
by offering cash-payment, by using unconventional means of money transfer or transport; by 
destroying documents relating to the transaction; by picking up the chemicals themselves. 

They  often  disguise  the  nature  of  the  substance  intended  to  be  diverted,  for  instance,  by 
making use of or asking the supplier to put wrong, falsified, modified or no labels; by making 
use of or asking the supplier to use generic names for the substance (e.g. “solvent”, "thinner"). 

According to the 2010 INCB Report, the EU is still being used as a transhipment23 point, with 
Germany,  the  Netherlands,  Spain  and  the  United  Kingdom  of  Great  Britain  and  Northern 
Ireland having been associated with shipments from South and South-East Asia destined for 

23 

The  terms  'transhipment'  and  'transit'  are  used  interchangeably  in  the  INCB  Reports,  as  the  act  of 
shipping goods to an intermediate destination prior to reaching their ultimate end-use. 

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Belize,  Guatemala  and  Mexico24,  where  large  scale  illicit  methamphetamine  manufacture 
takes  place.  The  2009  INCB  report  already  stated  that  the  route  by  which  tableted 
preparations were shipped to destinations in Central America passed through countries of the 
European  Union.  In  October  2008,  French  authorities  seized  three  consignments  of 
pseudoephedrine preparations, the largest of which involved 11 million tablets transiting from 
the Syrian Arab Republic to Honduras. The other two shipments were destined for Guatemala, 
one originating in India and the other in Vietnam25. 

The fact that medicinal products for human use containing ephedrine or pseudoephedrine are 
excluded from the provisions of Regulation (EC) 111/2005 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, 
as  proven  by  the  results  of  the  international  operational  initiatives  launched  under  Project 
PRISM26.  Some  Member  States  customs  authorities  have  however  been  using  provisions  of 
national anti-drugs laws or the customs code to stop or seize such goods, with more or less 
success. Drug traffickers therefore use the loophole in the drug precursor legislation to source 
this type of products. 

Without  a  specific  legal  basis  in  the  drug  precursor  legislation,  several  Member  States 
that  customs  control  over  medicinal  products  containing  ephedrine  or 
consider 
pseudoephedrine when exported or in transit cannot be performed with a view to seizing or 
stopping  these  products.  For  example,  in  2008  eight  airfreight  consignments  of  medicinal 
products  for  human  use  containing  ephedrine  were  exported  from  the  EU  to  Mexico  and 
another sea container was exported to Belize. These transactions presented a combination of 
risks indicators that would have urged the competent authorities to prevent the export of the 
products,  had  they  had  the  legal  ground  to  perform  them.  This  would  have  prevented  these 
products from being diverted to the illicit manufacture of methamphetamine in Mexico, as it 
was established by the investigation carried out a posteriori. 

4.2. 

Scale of the problem (methamphetamine and its precursors) 

In Europe27 illicit methamphetamine production is concentrated in the Czech Republic and in 
Slovakia.  In  recent  years,  methamphetamine  has  also  appeared  on  the  drug  market  in  other 
countries in the north of Europe (Norway, Sweden, Latvia and Finland), where it appears to 
have partially replaced amphetamine, the two substances being virtually indistinguishable to 
users  of  the  drugs.  In  2009  almost  7400  seizures  of  methamphetamine,  amounting  to  about 
600  kg  of  the  drug  were  reported  in  Europe.  Both  the  number  of  seizures  and  quantities 
increased over 2004-2009. In 2009 illicit methamphetamine laboratories were seized for the 
first  time  in  several  European  countries,  including  Austria,  Lithuania,  Netherlands,  Poland, 
Portugal and Belarus. This is an indication that methamphetamine markets may be expanding 
in Europe. 

At  global  level,  in  2009,  North  America  accounted  for  44%  of  global  seizures  of 
methamphetamine, due to the continued high level of seizures in the United States (7.5 mt28, 

24 

25 

26 
27 
28 

INCB 2010 Annual Report on Precursors: Point 41, p. 7 
http://www.incb.org/pdf/precursors-report/2010/en/PrecursorsReport2010_E_V10579291.pdf 
INCB 2009 Annual Report on Precursors: Point 55, p. 9 
http://www.incb.org/pdf/precursors-report/2009/English/Precursors_Report_09_english.pdf  
See section 3.1 paragraph 4. 
EMCDDA 2011 Annual report on the state of the drugs problem in Europe (data of 2009), pages 14-15. 
Mt = metric tons. 1 mt = 1000 kg 

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compared with 7.4 mt in 2008) as well as to a sharp increase in methamphetamines seizures in 
Mexico which reached a comparable level (6.1 mt, up from 341 kg in 2008). The Asia-Pacific 
region (Cambodia, Laos, Myanmar, Thailand, Viet Nam and China) continued to be affected 
by manufacture, trafficking and consumption of methamphetamine on a large scale. In 2009, 
seizures  in  East  and  South-East  Asia  rose  by  more  than  one  third,  from  11.6  mt  in  2008  to 
15.8  mt.  There  are  signs  that  methamphetamine  is  reaching  the  region  from  Africa  and  the 
Islamic Republic of Iran. West Africa is also emerging as a new source of methamphetamine 
for the illicit Asian markets, with couriers transiting Europe, West Asia or East Africa29. 

Ephedrine  and  pseudoephedrine  are  the  main  precursors  for  methamphetamine.  From  2007 
until 2010, seizures of methamphetamine precursors contained in medicinal products by EU 
Member States' competent authorities at the borders have fluctuated considerably (see Chart 2 
below):  while  in  2007  hardly  any  preparations  were  recorded  out  of  the  overall  quantities 
seized  (0.3  mt  out  of  8  mt),  in  2008  and  2009  the  amount  of  preparations  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). In 2010 this amount decreased considerably (0.1 mt out of 2.9 mt) even though increased 
quantities  of  ephedrine  and  pseudoephedrine  (raw  material)  were  seized  compared  to  the 
previous  years.  Even  though  this  amount  decreased  considerably  in  2010,  many  Member 
States and the International Narcotics Control Board (INCB) are concerned about the absence 
the  medicinal  products  containing  ephedrine  and 
of  a  control  mechanism 
pseudoephedrine. 

for 

Chart  2:  EU  seizures  of  ephedrine  and  pseudoephedrine  in  raw  material  and  in  the  form  of 
preparations 

EU seizures of Ephedrine and Pseudoephedrine in raw 
material and in the form of preparations

9000

8000

7000

6000

5000

4000

3000

2000

1000

0

Preparations pseudoephedrine
(kg)

Preparations ephedrine (kg)

Pseudoephedrine raw material
(kg)

Ephedrine raw material (kg)

2007

2008

2009

2010

Source: DG TAXUD on the basis of the figures from the UNODC World Drug Report 2011. 

29 

UNODC World Drug Report 2011, pages 156, 160 and 166. 

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Global  seizures  of  methamphetamine  precursors  have  fluctuated  significantly.  From  2007 
until 2009, the following amounts were seized: 53 mt of these precursors of which 10% were 
in the form of pharmaceutical preparations; 49 mt of which 30% in the form of preparations; 
53  mt  of  which  67%  were  preparations;  and  89  mt  of  which  75%  were  in  the  form  of 
pharmaceutical preparations30. 

After the continued increase of seizures of pharmaceutical preparations from 2007 to 2009, as 
a  result  of  strengthened  controls  of  pharmaceutical  preparations  containing  ephedrine  and 
pseudoephedrine  in  several  countries,  particularly  in  Mexico  and  countries  in  Central 
America,  the  total  amount  of  preparations  seized  worldwide  has  decreased  in  2010.  The 
amount of pseudoephedrine in the form of pharmaceutical preparations accounted in 2009 for 
38%  and  in  2010  for  25%  of  total  pseudoephedrine  seized  worldwide.  In  south-East  Asia 
pharmaceutical preparations are increasingly used for the manufacture of methamphetamine. 
A recent case shows that large quantities of cold medicines containing pseudoephedrine have 
gone missing from hospitals in Thailand. The drugs are thought to have been sent across the 
border  to  Myanmar  and  Laos  where  they  are  used  in  the  production  of  methamphetamines 
which  are  then  smuggled  back  into  Thailand  for  sale.  From  2008  to  the  present,  Thai 
authorities have seized more than 48 million cold pills containing pseudoephedrine. The pills 
were stolen from the public health system (hospitals and drug stores). It is believed there is 
still a large amount of stolen pills that have not been recovered31. Oceania remains a common 
destination  for  smuggled  ephedrine  and  pseudoephedrine  in  both  forms.  Together,  Australia 
and  New  Zealand  accounted  for  1.7  tons,  mostly  seized  in  the  form  of  pharmaceutical 
preparations.  Diversion  of  pharmaceutical  preparations  containing  pseudoephedrine  from 
pharmacies remains the primary source of precursors used in the high number of small-scale 
illicit methamphetamine laboratories in the United States. 

It  appears  that  even  though  seizures  are  decreasing  in  the  EU,  they  are  instead  increasing 
globally.  However,  the  increasing  or  decreasing  level  of  seizures  is  only  one  indicator  to 
illustrate that illicit manufacture is taking place in a given part of the world. Another indicator 
could be the amount of precursors diverted in comparison with the volume of the licit trade 
for a given precursor and/or of medicinal products containing ephedrine or pseudoephedrine. 
For any of the precursors under international and European control, it is possible to determine 
the volume of trade as each precursor has a specific tariff code in the customs nomenclature 
allowing to target that specific substance. For the purpose of this initiative, it would be useful 
to  determine  the  volume  of  trade  of  medicinal  products  containing  ephedrine  or 
pseudoephedrine  in  order  to  determine  the  percentage  which  is  diverted  for  illicit  uses.  As 
there  are  no  specific  Harmonised  System  codes32  (yet)  for  medicinal  products  containing 
ephedrine  and  pseudoephedrine,  Governments  are  not  in  a  position  to  track  their  trade 
systematically. 

The only indicator that can currently be used to determine the licit trade of these products is 
the  information  annually  reported  by  the  Governments  on  the  Form  D33.  Unlike  the 
mandatory reporting on seizures and illicit trafficking of precursors, Form D reporting on licit 
trade  is  voluntary,  pursuant  to  resolution  1995/20  of  the  Economic  and  Social  Council. 
Therefore, the licit trade data reported on the Form D can be partial and have to be interpreted 
with caution. 

30 
31 
32 
33 

Source: intelligence data from INCB. 
Source: The Bangkok Post newspaper, published on 26 March 2012. 
Further details under section 6.1. 
Form D is a specific form used by the INCB to request Governments to provide annual information on 
substances  frequently  used  in  the  illicit  manufacture  of  narcotic  drugs  and  psychotropic  substances, 
from their licit trade to their seizures, and methods of diversion. 

EN 

14 

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Table: Licit trade based on the 2010 Form D data: 

2010 Form D data 

IMPORTS (kg) 

EXPORTS (kg) 

EU 

Global 

EU 

Global 

Ephedrine 

raw 

26299 

99954 

18296 

106719 

material 

Ephedrine 

3114 

3986 

2439 

5704 

preparations 

Pseudoephedrine 
material 

raw 

39899 

898251 

239288 

838708 

Pseudoephedrine 

753 

44546 

1003 

50938 

preparations 

According  to  the  2010  Form  D  data  reported  to  the  International  Narcotics  Control 
Commission, the EU imported 3114 kg of ephedrine preparations while the global figure was 
close to 4000 kg. The EU figure accounts for about 78% of the global imports of ephedrine 
preparations.  

As  regards  the  exports  of  ephedrine  preparations  in  2010,  EU  exported  2439  kg  which 
accounts for about 43% of the global exports reported.  

In 2010, EU imports and exports of pseudoephedrine preparations amount to about 2% of the 
global imports and exports reported.  

to  determine 

An  attempt  could  be  made 
the  existing  demand  of  ephedrine  and 
pseudoephedrine  for  the  purpose  of  methamphetamine  production  by  making  a  back-
calculation from the use of methamphetamine in specific high-prevalence countries. However, 
this  would  be  misleading  as  methamphetamine  can  also  be  produced  with  other  drug 
precursors such as BMK or phenyl acetic acid. 

4.3. 

Underlying drivers of the problem 

The drivers can be summarised as follows: 

-  control  measures  over  ephedrine  and  pseudoephedrine  (the  substances)  have  been 
strengthened worldwide. Some countries of the world34 have gone to the extent to prohibit the 
imports of these substances. 

- therefore, traffickers need to look for alternative sources of ephedrine and pseudoephedrine 
to  manufacture  methamphetamines;  they  are  targeting  medicinal  products  containing  these 
substances which are not subject to strict control measures; and 

34 

Mexico, Colombia and several Central American countries. See Annex 4 for further details. 

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15 

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

4.4. 

Foreseen evolution of the problem 

It is difficult to foresee the evolution of future diversion trends, as traffickers rapidly adapt to 
pressure from regulatory and law enforcement authorities by changing their modus operandi 
using  alternative  trafficking  routes  and  manufacturing  methods  in  order  to  circumvent 
legislative controls. 

It  is  likely  that  strengthening  controls  over  export  and/or  transit  of  medicinal  products 
containing  ephedrine  and  pseudoephedrine  in  the  EU  legislation  will  result  in  traffickers 
targeting  other  parts  of  the  world  where  there  are  no  or  weaker  control  measures  on  these 
products  and/or  sourcing  alternative  substances  which  can  be  used  to  manufacture 
methamphetamines.  However,  in  case  of  no  action  at  the  Union's  level,  it  is  likely  that 
traffickers  will  keep  on  targeting  the  EU  for  diverting  these  products  when  exported  or  in 
transit. 

Moreover, the EU will continue to be pressured by the UN to take action as it is the case since 
2006 when the issue first arose.  

4.5.  Who is affected by the identified problem? 

The identified problem may affect: 

-  third  countries,  where  methamphetamines  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; 

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

4.6. 

EU right to act 

The European Union has exclusive competence in the area of common commercial policy, as 
provided  for  in  paragraph  1  of  Article  3  of  the  Treaty  on  the  Functioning  of  the  European 
Union  (TFEU).  Article  207  of  the  TFEU  defines  common  commercial  policy  and  trade  in 
drug precursors falls within this definition. 

In some of its policy options this initiative suggests regulating medicinal products containing 
ephedrine  and  pseudo-ephedrine  which  are  already  regulated  by  Directive  2001/83/EC.  The 
preamble  to  Directive  2001/83/EC  states  that  the  essential  aim  of  any  rules  governing  the 
production, distribution and use of medicinal products, must be to safeguard public health and 
that this must be attained without hindering the development of the pharmaceutical industry 
or trade in medicinal products within the Community. However, the directive does recognise 
that special measures may be required to control the distribution of narcotic and psychotropic 
substances  within  the  territory  of  Member  States.  In  any  case  the  objective  pursued  in  this 

EN 

16 

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initiative  differs,  without  contradicting  from  those  pursued  by  the  Directive.  The  control 
mechanisms foreseen in Directive 2001/83/EC and in Regulation (EC) 111/2005 are different 
as they pursue different goals. It is important, however, that any amendments do not present 
unnecessary obstacles to patients' legitimate access to authorized medicinal products.  

EU  Member  States  currently  try  to  curtail  traffickers'  attempts  to  divert  medicinal  products 
containing ephedrine or pseudoephedrine through different types  of national measures, such 
as strengthening control measures for these products by amending the national legislation in 
areas  of  national  competence,  such  as  for  drugs  or  medicines.  This  leads  to  potential 
distortions, resulting from differing legal requirements for EU economic operators. Whether 
such measures have had an impact on the export of medicinal products containing ephedrine 
or pseudoephedrine potentially diverted to methamphetamine production in third countries is 
not  documented.  Other  national  measures,  such  as  the  seizure  of  medicinal  products 
containing ephedrine or pseudoephedrine by customs in some Member States on the basis of 
national anti-drugs laws or the customs code also result in a difference of control approaches 
and  actions  at  the  EU  external  borders.  It  is  not  always  possible  to  qualify  the  offence  and 
apply the penalties foreseen for activities related to drug trafficking, in particular when goods 
are seized under the customs code. 

5. 

OBJECTIVES

35 

5.1. 

General policy objectives 

In  line  with  the  EU  Drug  Strategy  2005-2012,  the  general  objective  of  this  initiative  is  to 
contribute to the world-wide combat against the illicit manufacture of drugs. 

5.2. 

Specific policy objectives 

To  fight  the  illicit  manufacture  of  methamphetamines,  by  controlling  the  supply  of 
ephedrine/pseudoephedrine  contained  in  medicinal  products  that  are  traded  between  the 
Union and third countries by 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; 

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. 

5.3. 

Operational objectives 

In  order  to  contribute  to  the  fight  against  the  illicit  manufacture  of  methamphetamines,  the 
operational  objective  is  to  achieve  and  maintain  a  downward  trend  of  diversion  attempts  of 
medicinal products containing ephedrine or pseudoephedrine from the licit trade. 

5.4. 

Consistency with other policies and objectives 

The  objective  of  achieving  an  effective  prevention  of  diversion  of  drug  precursors  to  the 
production of illicit drugs is ultimately aimed at reducing the supply of illegal drugs. It is thus 

35 

See table in Annex 5. 

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17 

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consistent with the drug policy outlined in the EU Drugs Strategy 2005-2012, providing for 
action to reduce the supply of precursors, and, thereby, decrease the production of drugs.  

In some of its policy options this initiative suggests regulating the external trade in medicinal 
products containing ephedrine and pseudo-ephedrine which are already regulated by Directive 
2001/83/EC. However, the objective pursued by the Directive is to safeguard public health by 
controlling medicinal products in order to ensure their quality, safety and efficacy. Therefore, 
the control mechanisms foreseen in Directive 2001/83/EC and in Regulation (EC) 111/2005 
are different as they pursue different goals. 

The  medicinal  products  legislation  has  recently  been  amended  by  Directive  2011/62/EU 
which relates to the prevention of the entry into the legal supply chain of falsified medicinal 
products.  The  Directive  addresses  inter  alia  the  distribution  chain  for  medicines  within  the 
EU,  importation  of  active  pharmaceutical  ingredients,  and  'introduction'  of  medicines,  i.e. 
medicines  brought  into  the  customs  territory  without  the  intention  of  placing  them  on  the 
market. These provisions are focused on preventing products that fall within the definition of 
falsified  medicinal  products  from  entering  the  legal  supply  chain.  Given  that  the  principal 
issue with drug precursors is one of legitimately produced products leaving the legal supply 
chain, it is unlikely that these new provisions will make a significant contribution to tackling 
the  issue  of  controlling  medicinal  products  containing  ephedrine  or  pseudoephedrine  being 
exported or transiting through the EU. 

6. 

POLICY OPTIONS  

Five policy options have been identified. The baseline scenario is outlined as option 1 to map 
out how the situation could be expected to develop if no remedial action was taken. Option 2 
considers  contributing  to  improve  the  situation  through  voluntary  measures  by  Member 
States, while options 3, 4 and 5 consider resolving it through compulsory control measures. 
The last three options have been built as a crescendo depending on the number and strength of 
the  control  measures  suggested.  These  policy  options  were  presented  to  stakeholders  for 
comment.  A  further  policy  option  has  been  considered  after  this  consultation  and  has  been 
discarded  for  the  reasons  explained  below.  Therefore,  no  further  analysis  of  its  impact  has 
been carried out. 

6.1. 

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

In this option, no measure will be proposed. In the current legislation drug precursors, such as 
ephedrine  and  pseudoephedrine  are  subject  to  specific  control  requirements,  with  regard  to 
external trade, while medicinal products containing these precursors are not. Therefore, under 
the current drug precursor legislation, Member States’ authorities cannot stop or seize these 
products  when  they  enter  or  leave  the  Union  customs  territory,  even  though  it  is  likely  that 
they would be misused for the illicit manufacture of methamphetamines.  

This  has  been  proven  by  the  results  achieved  during  the  international  activities  organised 
under Project PRISM since 2007 which focused on trade in ephedrine and pseudoephedrine, 
including medicinal products containing these two substances36. 

Member  States  who  are  particularly  affected  by  the  diversion  of  these  products  on  their 
market have taken some measures to control the distribution of these products. For instance, 

36 

See section 3.1 paragraph 4. 

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18 

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Poland  has  recently  restricted  purchases  of  over-the-counter  medicines  containing 
pseudoephedrine  to  a  total  of  720  mg  of  pseudoephedrine  salts  in  one  or  more  medicinal 
products per transaction by amending their Drug Prevention Act. This measure will not be an 
impediment  to  purchasing  medicinal  products  for  the  purpose  of  treating  infections  of  the 
respiratory  tract.  It  will,  however,  prevent  bulk  purchasing  of  medicinal  products  by  some 
consumers for non-medical purposes. Another example is given by the Czech Republic where 
pharmacies must enter all ephedrine and pseudoephedrine sales in a central register to verify 
that the product has not been sold to that particular person in the same week and purchase of 
these products over the internet by mail order has been prohibited. 

As  mentioned  above,  some  Member  States  customs  seize  medicinal  products  containing 
ephedrine  or  pseudoephedrine  on the  basis  of  national  anti-drugs  laws  or  the  customs  code. 
This results in a difference of control approaches and actions at the EU external borders. It is 
also not always possible to qualify the offence and apply the penalties foreseen for activities 
related  to  drug  trafficking,  in  particular  when  goods  are  seized  under  the  customs  code 
because they have been misclassified37.  

While  drug  precursor  control  is  an  area  of  Union  competence,  drug  is  instead  an  area  of 
shared  competence.  This  implies  that  each  Member  State  develops  its  own  drug  legislation, 
even if they all pursue the objectives enshrined in the five-year EU Drug Strategy. From the 
overview given in Annex 6, it appears that in one third of Member States the drug legislation 
allows  customs  authorities  to  stop  and  seize  medicinal  products  containing  ephedrine  or 
pseudoephedrine  when  it  can  be  proven  that  they  might  be  misused  for  the  illicit  drug 
manufacture. The customs authorities of two thirds of Member States are not empowered for 
this by their respective drug legislation.  

The  INCB  has  recently  requested  the  World  Customs  Organisation  (WCO)  to  create  in  the 
Harmonised System (HS) a specific tariff code for medicinal products containing respectively 
ephedrine, pseudoephedrine and nor-ephedrine in order to better monitor their licit trade. For 
the  time  being,  these  products  fall  within  the  category  of  medicinal  products  containing 
alkaloids; therefore, they cannot be targeted for specific purposes. Even though the decision to 
create  these  new  tariff  codes  will  be  taken  in  the  near  future,  the  new  codes  will  only  be 
applicable as from 1 January 2017. It is consolidated practice that the Harmonised System is 
amended  every  5  to  6  years.  The  latest  amendment  entered  into  force  in  2012  and  was  the 
fourth  one  since  1996.  Meantime,  the  European  Commission  has  undertaken  to  create  new 
tariff  codes  in  the  EU  Combined  Nomenclature  to  identify  medicinal  products  containing 
respectively ephedrine, pseudoephedrine and nor-ephedrine, through the relevant Committee 
in  accordance  with  the  Rules  of  Procedure  of  the  Customs  Code  Committee38.  Once  these 
codes are in place, companies exporting and importing these medicines will have to indicate 
them in the customs declaration. This will allow determining the volume of trade (import and 
exports) of these specific products. These codes will be available as of January 2013 through 
the  amendment  of  Commission  Regulation  (EU)  No  1006/2011  of  27  September  2011 
amending  Annex  1  to  Council  Regulation  (EEC)  No  2658/87  on  the  Tariff  and  Statistical 
Nomenclature and on the Common Customs Tariff. This Annex is updated annually in order 
to  take  into  account  any  changes  that  have  been  agreed  at  international  level,  either  at  the 
World  Customs  Organisation  with  regard  to  the  nomenclature  at  HS  level,  or  within  the 
framework of the World Trade Organisation with regard to conventional rates of duty. 

37 
38 

The tariff classification indicated in the customs declaration does not correspond to the product. 
Customs Code Committee – Tariff and Statistical Nomenclature section (Agricultural/Chemical sector). 

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Currently  trends  and  diversion  patterns  of  medicinal  products  containing  ephedrine  or 
pseudoephedrine  can  be  determined  thanks  to  the  regular  exchange  of  information  between 
the  EU  and  third  countries  in  the  framework  of  their  bilateral  agreements  on  drug 
precursors39. 

The  stakeholders'  consultation  showed  that  this  option  is  favoured  by  those  Member  States 
who  consider  themselves  as  not  directly  affected  by  the  diversion  of  medicinal  products 
containing  ephedrine  or  pseudoephedrine,  either  because  they  have  no  seizures  or  because 
they have drug legislation in force which already allow them to stop and seize these products.  

6.2. 

Option 2: Recommending voluntary measures to Member States 

In this option, the Commission would make a Recommendation to encourage Member States’ 
authorities  to  exchange  best  practices  for  the  control  of  medicinal  products  containing 
ephedrine and pseudo-ephedrine, following the existing examples (see option 6.1). 

Measures to be considered under this option are the following: 

-  restricting  the  availability  of  purchases  of  over-the-counter  medicines  containing 
ephedrine/pseudo-ephedrine through compulsory prescription; 

-  raising  awareness  of  pharmacies  concerning  the  risk  of  diversion  of  medicinal  products 
containing ephedrine and pseudo-ephedrine through a national campaign; 

- enhancing cooperation between competent authorities and pharmaceutical companies: these 
companies  are  well  placed  to  notify  the  authorities  of  any  suspicious  order  for  export  of 
medicinal products, thus allowing an early detection of possible misuse of the products; 

-  increasing  cooperation  among  EU  Member  States  authorities  and  with  the  European 
Commission,  on  a  voluntary  basis,  by  exchanging  data  on  licit  exports  from  the  EU  and 
products  that  have  been  found  by  customs  as  smuggled,  and  inspections  on  companies 
established in several Member States; 

This list is not exhaustive. Other measures could be developed in cooperation with Member 
States in the future, drawing from the "Information Package on the control of precursors- for 
use by competent regulatory and tax enforcement authorities only"40. 

A  Commission  Recommendation  would  thus  list  a  number  of  measures  from  which  each 
Member State can "pick and choose" as they deem it appropriate. These measures are not in 
themselves a solution to the diversion of medicinal products being exported from or transiting 
through the EU. However, if followed in all Member States, they may have a deterrent effect 
of  pushing  traffickers  seeking  methamphetamine  precursors  out  of  the  EU  borders.  They 
could  also  support  the  non-EU  countries  in  their  identification  of  suspicious  transactions 
involving the EU customs territory.  

The same Member States, who consider themselves as not directly affected by the diversion 
of  medicinal  products  containing  ephedrine  or  pseudoephedrine,  are  also  in  favour  of  this 
option  as  they  consider  that  it  is  not  an  EU-wide  issue  and  should  therefore  be  left  to  their 

39 

40 

The  EU  currently  has  concluded  ten  agreements  on  drug  precursors,  namely  with  Turkey,  the  United 
States, Mexico, Chile, Bolivia, Colombia, Ecuador, Peru, Venezuela and China. 
E/INCB/2011/WP.5 – this document is confidential. 

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discretion  whether  they  deem  necessary  to  implement  certain  control  measures  on  their 
market.  

6.3. 

Option 3: Increasing the powers of competent authorities 

In  this  option,  powers  would  be  granted  to  EU  competent  authorities  to  stop  transactions 
involving  not  only  scheduled  substances  but  also  medicinal  products  containing  ephedrine 
and  pseudoephedrine,  when  there  are  reasonable  grounds  for  suspecting  that  these  products 
are  intended  for  the  illicit  drugs  manufacture,  whether  they  are  exported,  imported  or  in 
transit.  

This can be achieved by amending article 26 §1 so that it applies also to medicinal products 
containing  ephedrine  or  pseudo-ephedrine  and  thereby  derogating  from  the  exclusion  of 
medicinal products for human use in Article 2 (a)41. 

Those Member States who consider themselves directly concerned by the diversion of these 
medicinal  products  (either  because  they  have  seizures  or  because  they  have  no  other 
legislation  in  place  allowing  their  authorities  to  stop  and  seize  these  products)  favour  this 
option.  Most  member  States  are  also  in  favour  of  the  following  option  (option  4)  as  they 
consider the use of pre-export notification has an added value to the overall control system.  

6.4. 

Option  4:  Increasing  the  powers  of  competent  authorities  (Option  3)  and 
introducing pre-export notifications 

In this option, competent authorities would have power not only to stop and seize medicinal 
products containing ephedrine and pseudo-ephedrine (as in option 3) but would also send pre-
export  notifications  for  these  products  to  the  country  of  destination  via  PEN  online  (Pre-
Export Notification). 

Currently,  Member  States’  competent  authorities  have  the  obligation  under  Article  1142  to 
send pre-export notifications for all exports of category 1 substances, as well as for exports of 
certain category 2 substances, to the competent authorities of the country of destination. This 
system enables these authorities to verify the licit purposes of the transaction and to refuse, in 
case of suspicion, to import the consignment within a period of 15 working days. In case of 
no reply, it is assumed that the consignment is licit and can be exported. Moreover, simplified 
pre-export notification procedures can be applied by competent authorities when they believe 
that this will not result in any risk of diversion.  

PEN-online,  developed  by  the  International  Narcotic  Control  Board  in  2006,  is  an  internet-
based,  automated  system  allowing  real-time  exchange  of  information  concerning  legitimate 
trade in chemicals between trading countries.  

This  system  is  currently  used  for  import  and  export  of  scheduled  substances.  However,  it 
could  potentially  be  used  to  inform  the  country  of  transit,  when  known,  about  a  future 
transaction but this feature of the system is currently not exploited. 

This  option  can  be  achieved  by  amending  Article  26  (as  in  option  3)  and  Article  11  of 
Regulation (EC) 111/2005 so that it applies also to medicinal products containing ephedrine 

41 

42 

This Article includes the definitions of the main terms used in the Regulation. The entire Article 2 is 
reproduced in Annex 7. 
The entire Article 11 is reproduced in 7. 

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or pseudo-ephedrine. Under this option, for an intended export of medicinal products, the EU 
competent  authorities  will  be  filling  in  the  pre-export  notification  with  the  information 
provided by the exporting company in the customs declaration, which is the document which 
must  be  presented  to  customs  at  import  or  export.  The  pre-export  notification  will  be  sent 
through PEN-online to the authorities of the importing country, as declared by the exporting 
company. Once the authorities of the importing country have confirmed that the transaction is 
licit, the exportation can take place. 

6.5. 

ephedrine  or 
Option  5:  Subjecting  medicinal  products 
pseudoephedrine are subject to the same control requirements as ephedrine and 
pseudoephedrine  

containing 

In this option, medicinal products containing ephedrine or pseudoephedrine would be subject 
to  the  same  control  requirements  to  which  scheduled  substances  of  category  1,  such  as 
ephedrine and pseudoephedrine, are currently submitted. 

Trading in these substances entails a series of obligations for the operators: they must notify 
suspicious transactions or orders to the competent authorities; they must appoint a responsible 
officer  who  ensures  compliance  with  the  legislation;  they  must  obtain  a  licence;  they  must 
also obtain an export or import authorisation; they must document and label all transactions 
and  keep  records  for  3  years  and  report  annually  to  the  competent  authorities  on  exports, 
imports and intermediary activities43. The obligations on the operators imply a series of tasks 
to  be  performed  by  the  competent  authorities,  i.e.  to  grant  an  export  and/or  import 
authorisation; they must issue a licence. The competent authorities will also have to check the 
legitimacy of an order before sending a pre-export notification to the country of destination.  

Medicinal products containing ephedrine and pseudoephedrine would therefore be subject to 
the control mechanism and obligations foreseen for scheduled substances of category 1 by: 

- amending Article 2 (a) of Regulation (EC) 111/2005 through specifying that the exclusion of 
medicinal  products  defined  by  Directive  2001/83  does  not  apply  to  medicinal  products 
containing ephedrine or pseudoephedrine; and 

-  amending  the  Annex  to  this  Regulation  by  including  medicinal  products  containing 
ephedrine or pseudoephedrine in the list of category 1 substances. 

The  competent  authorities  of  a  few  Member  States  would  like  to  see  these  products  being 
controlled  as  the  substances  they  contain,  even  though  they  are  aware  of  the  administrative 
burden that would be imposed.  

6.6. 

Option  6:  banning  trade  of  medicinal  products  containing  ephedrine  and 
pseudoephedrine 

In  this  option,  import,  export  and  transit  of  medicinal  products  containing  ephedrine  or 
pseudoephedrine to, from and through the Union customs territory will no longer be possible.  

This would go beyond the measures in force under the current drug precursor control system, 
where no substance has been banned so far. The existing legislation allows for monitoring the 
licit  trade  in  drug  precursors  and  preventing  diversion  by  targeted  interventions  by  public 

43 

More details on how the control system works can be found in the "Guidelines for operators" (page 8) - 
Annex 3. 

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authorities, such as the seizure of substances that are suspected of, or the result of a diversion 
for producing illicit narcotic drugs. Additionally, to be effective, a ban on international trade 
in  the  EU  would  have  to  be  complemented  by  a  ban  on  production  and  commercialisation 
within the EU.  

The  proportionality  of  a  ban  needs  to  be  assessed  against  the  consequences  on  legitimate 
producers  and  users  of  the  medicinal  products  concerned,  including  the  possibilities  of 
substitution of the banned products. 

Ephedrine  and above all pseudoephedrine are  nasal decongestants  contained  in many cough 
and  cold  medicines  sold  over-the-counter  in  most  EU  Member  States.  In  the  EU,  non-
prescription medicines represent 50% of pharmaceutical products in volume, cough products 
representing one of the main categories. The impact of a ban on these products on the market, 
i.e. for the pharmaceutical industry and subsequently the patients, would be very significant. It 
would  be  necessary  to  find  an  appropriate  substitute  chemical  for  the  production  of  these 
widely and commonly used medicinal products, which would require clinical tests that could 
last several years. Phenylephrine has been marketed as a substitute for pseudoephedrine in the 
production  of  cold  medicines  in  those  Central  America  countries  which  have  gone  to  the 
extent  to  prohibit  both  the  substances  (ephedrine  and  pseudoephedrine)  and  the  medicinal 
products containing them. However, there are claims that oral phenylephrine may be no more 
effective as a decongestant than a placebo44.  

Before considering a trade ban, other control measures, such as those already foreseen in the 
legislation, should be explored. These measures have been analysed under option 5. 

7. 

ANALYSIS 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.  Medicines 
will continue to be available to the public under the conditions established by national laws 
and practices. Therefore, consumers of these medicines will not be affected by any of these 
options. 

No  environmental  impact  can  be  associated  with  this  problem.  The  only  environmental 
aspect  of  the  problem  could  be  linked  to  the  destruction  of  the  medicinal  products  seized. 
However,  these  products  will  be  subject  to  the  same  procedures  and  rules  foreseen  for  the 
destruction of all seized goods in the Community Customs Code. 

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  (the  databases  currently 
available  are  devised  for  commercial  purposes  and  do  not  allow  selecting  this  kind  of 
information). However, SMEs were consulted as part of the pharmaceutical associations and 
also  through  the  Enterprise  Europe  Network.  From  the  absence  of  their  replies  and  as 
confirmed  by  the  pharmaceutical  associations  to  which  they  belong,  they  are  not  much 
involved  in  the  trade  of  medicinal  products  containing  ephedrine  or  pseudoephedrine  or  are 

44 

F.  Horak,  P.  Zieglmayer,;  R.  Zieglmayer,  P.  Lemell,  R.  Yao,  H.  Staudinger,  M.  Danzig,  (2009).  "A 
placebo-controlled study of the nasal decongestant effect of phenylephrine and pseudoephedrine in the 
Vienna Challenge Chamber". Annals of Allergy, Asthma & Immunology. 

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working for the multinational companies that are active in this segment. Therefore, it could be 
assumed that SMEs as such would not be affected by this proposal. 

International  impacts:  Diversion  of  drug  precursors  is  a  global  problem  which  requires  a 
global response. Therefore, control measures over drug precursors should be harmonized, to 
the  extent  possible,  at  international  level  so  that  weak  controls  in  one  country  do  not 
jeopardize the efforts of neighboring countries where controls may be more effective. In this 
respect international co-operation between the EU and third countries has a very significant 
role  to  play  in  preventing  relevant  chemicals  from  ending  up  in  the  illicit  manufacture  of 
drugs.  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.  Annex  8  presents  the  data  and  methodology  on  how  the 
additional  administrative  burden  of  the  different  options  was  calculated.  The  additional 
administrative  burden  for  the  industry  could  only  be  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.  Subsequent 
consultation  with  the  Association  of  European  Self-Medication  Industry  (AESGP)  revealed 
that options 3 and 4 would not be opposed by the industry since the administrative burden on 
exporting companies would be minimal or even inexistent. They had initially feared that this 
proposal might have an impact on their sales and also limit the access to these medicines.  

Options 1 to 5 are assessed in terms of their effectiveness in meeting the objective to prevent 
the diversion of medicinal products at stake for the illicit manufacture of methamphetamine. 
Three  indicators  have  been  used  to  determine  the  effectiveness  of  each  option,  namely  the 
reduction of the supply of ephedrine and pseudoephedrine, the maintenance of the free flow of 
trade  of  ephedrine/pseudoephedrine  medicines  and  the  compliance  with  the  international 
regulatory framework. Options 3, 4 and 5 are also assessed in terms of cost efficiency with the 
aim  to  avoid  disproportionate  administrative  burden  for  competent  authorities  and  the 
industry. Option 6, as previously mentioned, has been discarded and is not further assessed. 

7.1. 

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

7.1.1.  Effectiveness 

In this option the identified weakness of the current legislation with regard to the diversion of 
medicinal  products  containing  ephedrine  and  pseudoephedrine  would  remain,  allowing 
traffickers to continue targeting medicinal products to source ephedrine and pseudoephedrine 
for the illicit manufacture of methamphetamines. 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. 

The  seizures  made  over  the  past  few  years  show  fluctuation  trends  (as  already  shown  in 
section 4.2 Scale of the Problem). It can be assumed that these fluctuations may continue.  

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Diversion attempts concerning medicinal products containing ephedrine and pseudoephedrine 
have been experienced in the past to very different degrees by Member States. According to 
last  years'  EU  statistics  (2008  to  2010)45,  Austria,  Bulgaria,  Czech  Republic,  Finland, 
Germany, Sweden and UK are the most concerned Member States. Some of these countries 
have  introduced  control  measures  tailored  to  their  needs.  The  argument  has  been  made  - 
mainly  by  the  industry  but  also  by  some  Member  State  authorities  –that  diversion  is  not  a 
"European-wide" issue and the solution does  not need  to be  enforced as a strict "European-
wide"  approach,  which  legislative  amendments  to  the  European  drug  precursor  legislation 
would enforce. However, there is no demonstration of any impact of these national measures 
on  external  trade  in  these  products,  and  on  the  extent  to  which  they  may  have  helped  to 
prevent  the  exportation  and  diversion  of  such  products  to  other  countries.  Moreover,  such 
national  measures  do  not  address  the  problem  of  transit  of  pharmaceutical  preparations 
containing ephedrine and pseudoephedrine through the EU territory. National measures tend 
to encourage traffickers to target their sourcing activities in Member States where no or little 
control  measures  are  implemented.  In  addition,  in  the  Single  Market  where  goods  circulate 
freely, the effectiveness of national control measures is limited since goods can be supplied 
from another Member State where such measures do not exist. Finally, problems related to the 
EU external trade in goods can only be addressed at the EU level. 

At the same time, under this option, the European Union will continue to be criticised at 
international  level  for  remaining  "inactive"  and  for  neglect  of  the  continued  calls  by  the 
INCB to step up legislative control of its external trade46. 

7.1.2.  Cost efficiency 

This  option  provides  for  no  changes  in  the  legislation,  nor  does  it  impose  any  additional 
administrative  burden  on  European  level  on  either  businesses  or  national  competent 
authorities. As there is no additional administrative burden and the “business as usual costs” 
will remain unchanged, the administrative costs will also remain unchanged.  

7.2. 

Option 2: Recommending voluntary measures to Member States 

7.2.1.  Effectiveness 

In this option, the Commission would suggest to Member States' competent authorities a set 
of measures which can be effective in preventing the diversion of these medicinal products. 
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 methamphetamine (in one of the examples provided under option 
6.2,  in  the  Czech  Republic  purchase/sale  of  these  medicinal  products,  after  imposing 
restrictions, have dropped by 80% while not restricting legitimate access to those products). 

In  this  option,  if  one  Member  State  strengthens  control  over  medicinal  products  containing 
ephedrine  or  pseudoephedrine,  other  Member  States  where  no  control  measures  over  these 
products  are  in  place  will  automatically  be  targeted  by  traffickers  seeking  to  source  the 
substances  necessary  for  the  manufacture  of  methamphetamines.  The  absence  of  a 

45 

46 

EU Annual reports:  
http://ec.europa.eu/taxation_customs/customs/customs_controls/drugs_precursors/seizures/index_en.htm 
INCB Annual Reports: 2008, 2009 and 2010. 

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homogeneous  EU  response  will  encourage  traffickers  to  exploit  potential  differences  of 
national control systems and will alter the level-playing field for economic operators who will 
be facing different requirements within the Union. 

The  trade  flow  of  these  products  between  the  Union  and  third  countries  will  not  be 
affected.  However,  these  specific  products  may  be  submitted  to  some  restrictions  on  the 
market, depending on the measures taken. 

It  should  be  noted  that  the  measures  envisaged  under  this  option  would  only  address  the 
aspect of exportation of medicinal products from the EU territory, not the transit cases.  

Finally,  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. 

7.2.2.  Cost efficiency 

This  option  leaves  the  choice  of  which  measure  to  be  applied  to  the  discretion  of  Member 
States, depending on the scale of the problem at national level. Whatever measure they may 
decide  to  implement,  one  can  assume  that  it  will  imply  some  administrative  burden  at  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. 

7.3. 

Option 3: Increasing the powers of competent authorities 

7.3.1.  Effectiveness 

This  option  will  establish  within  the  drug  precursor  legislation  a  legal  basis  for  Member 
States'  competent  authorities  to  stop47  or  seize  a  consignment  of  medicinal  products 
containing ephedrine and pseudoephedrine in case they have doubts as to the legitimacy of the 
consignment.  

Under this option, Member States' competent authorities will no longer need to look for other 
legal bases to stop or seize these products, such as national Drug Acts. The revised legislation 
will apply throughout the Union in the same way, thus providing consistency across Member 
States. 

The  creation  of  a  tariff  code  at  EU  level  for  medicinal  products  containing  ephedrine  and 
pseudoephedrine will contribute to better targeting these goods for the purpose of controls. 

This option  will increase the chances to prevent diversion,  thus reducing the supply of 
ephedrine and pseudoephedrine for the illicit manufacture of methamphetamines. This could 
result in a reduced offer of methamphetamine on the market, and reduce its abuse.  

However,  the  effect  would  tend  to  be  temporary  as  criminals  will  turn  towards  other 
precursors to manufacture methamphetamine or towards the manufacture of other drugs that 
can be produced with other substances which are not under international control. Medicinal 
products containing ephedrine and pseudoephedrine could also transit through other parts of 
the world between their place of origin and their final destination. Drug consumers could also 
turn their attention to other drugs more widely available. 

47 

Stopping a consignment means that the delivery doesn't take place, the transaction (import/export) is not 
carried out. 

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The  trade  flow  of  medicines  containing  ephedrine  or  pseudoephedrine  will  not  be 
hampered.  Controls  will  be  performed  on  these  products  in  the  same  way  as  they  are 
generally carried out on the precursors they contain, according to the general provisions of the 
Community Customs Code. 

Moreover,  it  will  reduce  the  criticism  expressed  by  the  INCB  concerning  the  EU  lack  of 
action  in  imposing  control  measures  over  these products. By reducing the risk  of diversion, 
the measure is expected to be positive for the third countries to which the goods are destined 
and where they may be used for the illicit manufacture of methamphetamines. 

7.3.2.  Cost efficiency 

As this option would establish a clear legal basis for competent authorities to act over these 
products, controls will be performed both at export/import and in transit on the basis of risk 
analysis48 as already used in respect of other sensitive goods internationally traded. 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 minimal.  

7.4. 

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

7.4.1.  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 further minimise the risk of diversion by 
ensuring  systematic  and  consistent  monitoring  of  trade  in  drug  precursors  globally.  The 
effectiveness  of  this  system  is  proven  by  the  growing  number  of  notifications  sent  globally 
per  year:  7900  notifications  in  2007  increased  to  25600  in  201049.  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.  

The use of pre-export notifications (PEN online) for medicinal products by Member States’ 
competent  authorities  will  be  praised  by  the  INCB  which  has  repeatedly  encouraged  the 
Union to do so over the last years.50 

The systematic  use of PEN-online  by  Member  States’ authorities will also be welcomed by 
the  international  community  as  a  whole  and  in  particular  by  those  countries51  that  have 
already  introduced  legislative  measures  making  the  use  of  pre-export  notifications  for  this 
kind  of  products  compulsory.  Preventing  the  diversion  of  these  products  is  considered  a 
global  problem  which  requires  a  global  response.  The  more  countries  use  PEN  online,  the 
more  effective  this  tool  will  be,  as  this  creates  an  unbroken  chain  of  monitoring  of 
international trade. This option will contribute to this international goal. 

48 

49 
50 
51 

Risk analysis in the context of Customs control is a working method that aims to maximise the use of 
Customs resources while minimising the risk. It aims to concentrate controls on goods of highest risk 
while at the same time leaving the majority of trade to flow relatively freely through Customs.  
Source: extract from the PEN-online system by INCB. 
INCB Annual Reports on Precursors: http://www.incb.org/incb/precursors_reports.html 
Thailand, Malaysia and the United Arab Emirates 

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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  –  to  date  126  countries  out  of  the  184  countries  which  are  Parties  to  the  1988  UN 
Convention.  This  system  provides  for  adequate  monitoring:  in  cases  where  shipments  are 
suspended, appropriate action is taken rapidly by all concerned to verify the legitimacy of an 
individual  transaction52.  Therefore,  if  its  use  were  to  be  extended  to  medicinal  products 
containing  ephedrine  and  pseudoephedrine,  it  will  not  be  an  impediment  to  the  legitimate 
trade.  Moreover,  no  changes  to  the  online  system  will  be  necessary  as  it  already  allows 
indicating whether the chemicals are in raw form or in the form of preparations. 

Without  the  legal  basis  enabling  competent  authorities  to  stop  and  seize  suspicious 
consignments  (amendment  of  Article  26),  the  PEN  system  cannot  be  used  to  reduce  the 
supply of precursors for the illicit drug manufacture. 

7.4.2.  Cost efficiency 

The additional administrative burden for competent authorities in relation to the controls they 
will  perform,  under  the  amended  Article  26,  as  explained  under  option  6.3,  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.  This  amount  has  been 
calculated on the basis of data provided by 12 Member States concerning the time spent on 
processing one PEN, the number of pre-export notifications sent per year and the hourly tariff 
per administration. It can be assumed that the additional administrative burden to send a pre-
export  notification  for  medicinal  products  containing  ephedrine  and  pseudoephedrine  would 
be the same as for any other substance of category 1, should these products be included in this 
category. The additional administrative burden will mainly depend on the volume of the licit 
trade for these products in each Member State. 

However, it can be assumed that this additional administrative burden will be low and that it 
can be borne by Member States competent authorities given that over the last three years they 
have  already  been  sending  information  voluntarily  over  the  last  three  years  during  the 
international operational initiatives under Project Prism53. 

As previously mentioned, the additional administrative burden for the industry could not be 
assessed  as  no  data  were  provided  by  the  industry  through  the  stakeholders'  consultation. 
However,  the  pre-export  notification  is  a  task  for  competent  authorities  and  not  for  the 
industry. This notification is filled in on the basis of the information already provided by the 
operators  in  the  customs  declaration  they  are  obliged  to  submit  prior  to  export.  Once  the 
authorities  of  the  importing  country  have  confirmed  that  the  transaction  is  licit  or  for  a 
maximum  of  15  working  days54,  the  exportation  can  take  place.  The  potential  costs  for  the 
involved  operators  due  to  the  delayed  export  are  the  same  as  any  other  potential  costs  they 
would  incur  should  customs  interrupt  the  transaction  to  perform  controls  such  as  those 
generally  carried  out  on  other  goods  submitted  to  other  restrictive  measure  applicable  to 
external trade. 

52 
53 

54 

E/INCB/2011/WP.5 this document is confidential. 
For the period of reference 2009-2011, nine Member States sent an average per year of 40 pre-export 
notifications for medicinal products containing ephedrine or pseudoephedrine 
As established by Article 11 of Regulation No 11/2005. Further details under section 6.4 

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7.5. 

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

containing 

7.5.1.  Effectiveness 

This  option  will  strengthen  considerably  controls  over  medicinal  products  containing 
ephedrine  or  pseudoephedrine,  which  are  currently  not  controlled  for  the  purpose  of 
preventing their diversion, as they will be submitted to the same control regime imposed by 
the drug precursor legislation to the raw substances they contain. These substances are listed 
in Category 1, which covers the most sensitive substances ("key precursors"), as outlined in 
the Introduction to this initiative. 

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

However, it has been argued by the industry and by some Member State's authorities that the 
requirements  that  would  be  applicable  to  these  medicinal  products  in  this  option  would  be 
disproportionate  to  the  objective  pursued  by  the  present  initiative,  considering  that  their 
diversion is not an EU-wide problem. 

Moreover, 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. 

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"55.  

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

7.5.2.  Cost efficiency 

As  medicinal  products  would  be  submitted  to  the  same  control  regime  as  category  1 
substances,  the  current  and  the  additional  administrative  burden  per  requirement  have  been 
calculated on this basis. 

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. 

Licence (data available from 9 Member States' authorities). As the amount of licences issued 
per year varies significantly among Member States, the administrative burden for competent 
authorities to issue a licence for category 1 substances also varies considerably. The current 
average administrative burden per competent authority is € 861 per year.  

55 

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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29 

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It  can  be  assumed  that  the  additional  administrative  burden  to  issue  a  licence  for  medicinal 
products  containing  ephedrine  and  pseudoephedrine  would  be  the  same  as  for  any  other 
substance of category 1, should these products be included in this list. Given that currently the 
average time spent to issue a licence is 88 min and that the current average tariff of human 
labour  per  min  is  €  0,55,  the  current  administra tive  burden  to  issue  a  licence  is  €  49.  This 
figure  should  serve  as  a  basis  to  assess  the  additional  administrative  burden  for  issuing 
licences,  generated  by  the  inclusion  of  medicinal  products  in  the  category  1  list,  which 
ultimately depends on the volume of trade in those products in each Member State. 

Import  authorisation  (data  available  for  10  Member  States'  authorities).  As  the  amount  of 
import  authorisations  per  year  varies  significantly  among  Member  States,  the  current 
administrative burden for competent authorities to grant an import authorisation for category 
1  substances  also  varies  considerably.  The  current  average  administrative  burden  per 
competent authority is therefore € 1236 per year.  

As previously, it can be assumed that the additional administrative burden to grant an import 
authorisation for medicinal products containing ephedrine and pseudoephedrine would be the 
same as for any other substance of category 1, should these products be subjected to the same 
requirements. Given that the current average time spent to grant an import authorisation is 48 
min  and  that  the  current  average  tariff  of  human  labour  per  min  is  €  0.59,  the  current 
administrative burden to grant an import authorisation is € 28. This figur e should serve as a 
basis to assess the additional administrative burden for granting import authorisations, which 
depends on the volume of trade in those products in each Member State. 

Export authorisation (data available for 9 Member States' authorities). Likewise, the amount 
of  export  authorisations  per  year  varies  significantly  among  different  Member  States. 
Therefore, the current administrative burden for each Member State also differs. The average 
administrative burden per competent authority is € 995 per year. 

Once  more,  it  can  be  assumed  that  the  additional  administrative  burden  to  grant  an  export 
authorisation for medicinal products containing ephedrine and pseudoephedrine would be the 
same  as  for  any  other  substance  of  category  1,  should  these  products  be  included  in  this 
category. Given that the current average time to grant an export authorisation is 51 min and 
that the current average tariff per min is € 0.56,  the current administrative burden to grant an 
export  authorisation  is  €  29.  This  figure  should   serve  as  a  basis  to  assess  the  additional 
administrative  burden  for  granting  export  authorisations,  which  depends  on  the  volume  of 
trade in those products in each Member State. 

Due to the fact that a realistic forecast cannot be made without knowing the volume of trade 
in  medicinal  products  containing  ephedrine  or  pseudoephedrine  per  Member  State,  for  the 
sake of this impact assessment, the calculations have been made on the assumption that 100 
exports or imports of medicinal products are performed per year per competent authority (see 
Table 1. Comparing the options). 

As  far  as  the  industry  is  concerned,  despite  the  fact  that  no  data  were  received,  costs  for 
obtaining  the  licence  could  be  assumed  on  the  basis  of  the  licence  fee  charged  by  the 
competent  authorities.  The  price  range  for  the  licence  varies  considerably  among  Member 
States, ranging from € 0 to as much as € 4348 (a verage: € 399). Moreover, the administrative 
burden per company to obtain a licence has been calculated in the framework of the impact 
assessment carried out by DG ENTR56, this figure (€ 77) has been taken over in this impact 

56 

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

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30 

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assessment. As costs for obtaining an import authorisation or an export authorisation were not 
notified in response to the consultation addressed to the industry, it may be assumed that these 
costs  are  marginal.  As  regards  pre-export  notification,  as  previously  explained,  this  is 
primarily a task for competent authorities and not for the industry and, therefore, any burden 
for the industry will not be significant. 

For the purpose of comparing the options, the additional administrative burden for competent 
authorities  was  calculated  on  the  administrative  costs  generated  by  import  and  export 
operations. An export operation implies administrative costs for a licence (€ 49), for an export 
authorisation (€ 29) and for a pre-export notific ation (€ 15), while an import operation implies 
administrative  costs  for  a  licence  (€  49)  and  an  import  authorisation  (€  28).  Thus  the 
additional administrative burden of one competent authority dealing with one export operation 
is € 93. For an assumption of 100 operations, the  administrative cost would be € 9300. For an 
import  operation,  the  costs  would  be  respectively  €  77  and  €  7700  as  shown  in  Table  1. 
Comparing the options. 

8. 

COMPARING THE OPTIONS 

The  following  table  has  therefore  been  drawn  in  order  to  show  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

Compliance 
with UN 
Resolutions 

Additional 
administrative burden 

Per 
authority 

Per 
industry 

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 

- 

-/+ 

+ 

++ 

+ 

+ 

+ 

+ 

+++ 

+/- 

- 

- 

-/+ 

+ 

+ 

- 

- 

++ 

+++ 

++ 

€ 0 

€ 0/+ 

€ 0/+ 

€ 0 

€ 0/+ 

€ 0/+ 

€ 1500 * 

NA 

Licence = 

€77*** 

Exports = 
€9300** 

Imports = 
€7700 

* 
export notifications per year. 

As the volume of trade is not known, these calculations have been made on the assumption on 100 pre-

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31 

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** 
As  the  volume  of  trade  is  not  known,  these  calculations  have  been  made  on  the  assumption  on  100 
export  operations  (licence,  export  authorisation,  pre-export  notification),  100  import  operations  (licence  and 
import authorisation) and 100 licences per year. 

*** 
(import/export) they perform.  

The  same  company  only  needs  one  licence  independently  from  the  number  of  transactions 

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.  A  compulsory  application  of  these  measures  cannot  be 
enforced by the instrument foreseen under option 2. 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. They 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 methamphetamines, 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 a legal basis, would 
impose  only  one  extra  control  requirement  and  it  would  generate  hardly  any  additional 
administrative burden. 

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9. 

MONITORING AND EVALUATION 

9.1.  Measuring the fulfilment of objectives 

The  Commission  will  continue  to  collect  from  Member  States  statistics  of  seizures  and 
stopped  shipment  of  medicinal  products  containing  ephedrine  or  pseudoephedrine.  These 
statistics will show whether under the new legislative measures a downward trend of seizures 
of diverted medicinal products and of stopped shipments (indicating diversion attempts) can 
be observed. A downward trend can also potentially imply that traffickers are avoiding the EU 
customs territory, as a consequence of strengthened measures on that territory. Comparing the 
amount of medicinal products seized or stopped to the overall quantity of medicinal products 
containing ephedrine or pseudoephedrine traded between the EU and third countries will be a 
first indicator of the percentage of diversion of these products. This will be possible as from 
2013  at  EU  level  when  the  relevant  tariff  codes  will  be  created  in  the  Combined 
Nomenclature  and  as  from  2017  at  global  level  when  the  same  codes  will  be  created  in  the 
Harmonised  System.  Moreover,  the  Commission,  in  cooperation  with  Member  States,  will 
collect annually the number of pre-export notifications sent by competent authorities for these 
products,  including  details  about  the  quantities  and  the  countries  where  the  products  were 
destined. These progress indicators are outlined in Annex 5. 

9.2.  Monitoring the implementation of the new legislative measures 

Should  Regulation  (EC)  No.  111/2005  be  amended,  the  Commission  will  ensure  that  the 
system  put  in  place  is  monitored  in  order  to  assess  its  correct  functioning.  This  will  be 
achieved through the following mechanisms. 

9.2.1.  Collecting, analysing and publishing statistics 

As in previous years, the Commission will analyse the data provided by EU Member States 
which  forward  results  relating  to  the  licit  and  illicit  trade  of  drug  precursors  to  the 
Commission  on  a  quarterly  basis  and  will  report  yearly  on  statistics  of  customs  seizures  of 
precursors used in the illicit manufacture of drugs. These data also include medicinal products 
containing  ephedrine  or  pseudoephedrine,  thus  allowing  assessing  if  a  downward  trend  of 
diversions of these products is achieved in the short term and maintained in the long term. In 
order  to  evaluate  to  what  extent  the  new  legislative  measures  contribute  to  the  operational 
objective  of  reducing  the  number  of  attempts  to  divert  medicinal  products  containing 
ephedrine  or  pseudoephedrine,  the  Commission  will  request  Member  States'  competent 
authorities via the Drug Precursors Working Group to collect data concerning the number of 
notifications of suspicious transactions, as well as the number of pre-export notifications sent 
for transactions involving medicinal products containing ephedrine or pseudoephedrine  

The  system  will  be  improved  with  the  implementation  of  an  electronic  system,  which  is 
currently being developed by the Commission that shall facilitate the collection and analysis 
of statistics. This system is scheduled to become operational in the beginning of 2013. 

The European Commission has undertaken to create new tariff codes for medicinal products 
containing  ephedrine  and  pseudoephedrine  in  the  Combined  Nomenclature,  through  the 
Customs Code Committee, Tariff and Statistical Nomenclature section, in accordance with the 
relevant  Rules  of  Procedure,  which  will  allow  determining  the  volume  of  trade  (import  and 
exports) of these specific products.  

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9.2.2.  Monitoring difficulties in the implementation 

The  Drug  Precursors  Working  Committee,  composed  of  the  Member  States  and  the 
Commission,  will  continue  to  analyse  any  issue  related  to  the  implementation  of  the 
Regulation, including the new measures it will provide for. 

9.2.3. 

Involvement of stakeholders 

The Commission will  ensure that  all  stakeholders are given  the opportunity to  express their 
views  and  concerns  with  regards  to  the  application  of  the  Regulation,  including  the  new 
measures it may provide for, through the appropriate channels. In particular, the stakeholders 
(pharmaceutical  industry)  will  be  invited  to  participate  in  a  meeting  of  the  Drug  Precursors 
Working  Group/Committee  together  with  the  Commission  and  representatives  of  Member 
States. 

9.2.4. 

Supporting the implementation of the new legislative measures 

The  Commission  will  develop,  together  with  Member  States  experts  and  interested 
stakeholders, a number of accompanying activities to facilitate the implementation of the new 
measures. 

9.2.5.  Guidelines 

The Commission will update existing guidelines for the implementation of the Regulation by 
competent authorities and economic operators. 

9.2.6.  Activities 

The  Commission  will  organise  awareness-raising  activities  involving  both  competent 
authorities  and  economic  operators  as  described  under  section  6.2  outlining  the  non-
legislative option. 

9.3.  Monitoring  results  and  exchange 

information  with  the  third  countries 

concerned 

To  maximise  the  impact  of  the  measures  proposed,  it  would  be  useful  to  continue  the 
exchange  of  information  and  trends  with  the  governments  of  third  countries,  in  particular 
those concerned by the production and consumption of methamphetamines. For example, the 
Commission is in the process of re-launching the cooperation with Latin American countries 
under  the  existing  bilateral  agreements  on  the  control  of  drug  precursors.  This  cooperation 
will offer the opportunity to evaluate the effectiveness of the measures taken at EU level and 
assess  whether  the  EU  continues  to  be  a  transit  platform  for  medicinal  products  containing 
ephedrine  and  pseudoephedrine  destined to Latin  America.  Continued dialogue with the US 
and China will also be pursued on this matter.  

9.4. 

Overall evaluation 

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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10. 

ANNEX 

Annex 1: 

Stakeholders' questionnaires 

Annex 2: 

Summary of stakeholder consultation 

Annex 3: 

Guidelines for operators (page 8) 

Annex 4: 

Ephedrine/Pseudoephedrine Laws in Central America 

Annex 5: 

Objectives 

Annex 6: 

Drug legislation in the Member States 

Annex 7: 

Articles 2(a), 11 and 26 of Council Regulation (EC) No 111/2005 

Annex 8: 
options 

Methodology  for  calculating  the  additional  administrative  burden  of  the 

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