Source: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52012SC0279
Timestamp: 2016-12-08 12:32:23
Document Index: 663708599

Matched Legal Cases: ['Art. 10', 'Art. 10', 'Art. 10', 'Art. 10', 'Art. 10', 'Art. 12', 'Art.\n12', 'Art. 10', 'Art. 20', 'Art. 20', 'Art. 6', 'Art. 11', 'Art. 4', 'Art. 8', 'Art. 29', 'Art. 16']

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COMMISSION STAFF WORKING PAPER IMPACT ASSESSMENT Accompanying the document Draft Proposal for a Regulation amending Regulation (EC) No 273/2004 on drug precursors /* SWD/2012/0279 final */
Disclaimer: This report commits only the Commission’s services involved in its
preparation and does not prejudge the final form of any decision to be taken by
issues and consultation of interested parties 3
2.1. Identification 3
and timing 3
and expertise 3
2.4. Scrutiny
by the Commission Impact Assessment Board 6
3. Context 7
3.1. Illicit
legislation and developments 7
3.3. EU
legislation and institutional context 8
problem that requires action 9
4.2. EU
right to act 18
5. Objectives 19
policy objectives 19
5.2. Specific
and operational policy objectives 20
with other policies and objectives 20
6.1. Option
1: no action: the current EU legislation will remain unchanged (baseline
option) 21
6.2. Option
2: strengthened reporting obligations 22
3: strengthened rules and obligations on operators related to customer
declarations from end-users 22
6.4. Option
4: require operators to systematically notify new end-users to the authorities
to allow verification 23
6.5. Option
5: require registration for end-users and reinforce requirements regarding
6.6. Option
6: move AA from category 2 to category 1 24
of impacts 24
of costs 25
7.2. Benefits 27
7.3. Option
1: no action 27
7.4. Option
2: strengthened reporting obligations 29
7.5. Option
declarations from end-users 32
7.6. Option
to allow verification 36
7.7. Option
7.8. Option
6: move AA from category 2 to category 1 42
the options 46
8.1. Qualitative
assessment of benefits 46
8.2. Assessment
of costs 47
and evaluation 51
9.1. Measuring
the fulfilment of objectives 51
9.2. Supporting
the implementation of the new legislative measures 52
A large number of chemicals are used in a
wide variety of legitimate and important industrial processes (e.g. in the
synthesis of plastics, pharmaceuticals, cosmetics, perfumes, detergents and
aromas). Those chemicals are traded for these licit uses on regional and global
markets, but some of them can also be misused for the illicit manufacture of
narcotic drugs and psychotropic substances. The chemicals produced for a licit
purpose, which can be misused in the illegal drug production are called drug
Drug precursors are rarely produced by
the criminals that intend to use them in the illicit manufacture of drugs, as
their production often requires substantial infrastructure. Therefore,
criminals try to divert these substances from the licit trade.
The trade in drug precursors is not in
itself prohibited because of their important legitimate uses. In order to
prevent their diversion to illicit drug production, a specific regulatory
framework has been set up (both on international level and in the EU). The main
aim of the regulatory framework is to monitor the trade in drug precursors and
to identify suspicious transactions. The most important actors in the
prevention of diversion are the operators engaged in the licit trade (the manufacturers,
distributors, brokers, importers, exporters and wholesalers): the legislation
requires them to take measures against theft, check their customers, detect
suspicious transactions and alert the authorities. An effective industry-authority
partnership is key to the implementation of the regulatory framework.
Public authorities monitor that companies dealing with drug precursors properly exercise their
obligations under the legislation by conducting on-site inspections and via
administrative procedures such as granting licences and registrations.
Traffickers purchase the drug precursors
they need from different regions in the world and exploit weaknesses of control
to their benefit. This impact assessment aims to addresses a specific weakness which
has been detected in the European Union, when large quantities of acetic
anhydride ("AA"), the main drug precursor for heroin, were diverted
from the EU-internal trade: in 2008, the EU alone seized 75% of the global
seizures of AA. Even though the quantities have decreased very substantially
since that year[1], the EU has been and
continues to be under international criticism that the European legislative
control measures are not sufficiently strong to prevent the diversion of the
main heroin precursor from the intra-EU trade.
The present impact assessment concerns
the intra-EU trade in drug precursors, which is governed by Regulation (EC) No
273/2004 under the responsibility of DG ENTR, and more specifically the
diversion of acetic anhydride, the main precursor for the production of heroin.
A second impact assessment has been conducted concerning the control of
extra-EU trade of drug precursors, which is governed by Regulation (EC) No 111/2005
under the responsibility of DG TAXUD), and more specifically a possible
control of export/transit of medicinal products containing ephedrine or
pseudoephedrine, precursors for methamphetamines. Even though both
initiatives concern the drug precursor legislation, they tackle different
substances and different issues which are not interlinked, and are therefore
best dealt with separately. Nevertheless, the two DGs have ensured close
coordination throughout the preparation of the respective impact assessments.
issues and consultation of interested parties 2.1. Identification Lead DG: DG Enterprise and
Industry (DG ENTR)
Other involved DGs: TAXUD, JUST, SANCO, HOME, RTD, SG, SJ and OLAF.
Planning Reference: 2011/ENTR/021
The work on the present impact assessment
started in mid-2010 when six policy options were developed by the Commission
Services and a written consultation of Member States and industry stakeholders
was carried out. An impact assessment steering group (IASG) was created on
28 January 2011 together with DG TAXUD to oversee the preparation of
the respective impact assessments and to ensure consistency between them.
The IASG met four times (on 7 February,
23 June, 27 October and 14 December 2011).
2.3. Consultation and expertise
On 7 January 2010, the European
Commission adopted a Report on the implementation and functioning
of the existing EU legislation on drug precursors[2]. The underlying
evaluation had been carried out by the Commission Services, with the assistance
of a group of experts from national competent authorities, which had
been established for the evaluation purposes. In addition, the Commission had
mandated an external contractor, the consultancy RPA, which gathered
information from all relevant stakeholders (competent authorities and industry
operators) including quantitative data where available, analysed the impacts of
the current legislative requirements on the trade in drug precursors, and
collected proposals for improving the system in place.[3]
While the Commission’s evaluation
concluded that the legislation is overall functioning well[4],
it identified some weaknesses and made five recommendations how to address these:
1) Improving harmonised implementation of the current legislation; 2) Enhancing operator reporting on legal transactions in order to
provide authorities with a better basis for carrying out their control and
monitoring duties;
3) Modifying some requirements for category 2 substances (either
specifically for AA or for all category 2 substances) in order to discourage
diversion from the internal market;
4) Ensuring appropriate control of pharmaceutical preparations
containing ephedrine or pseudo-ephedrine in order to enable customs authorities
to stop exports of pharmaceutical preparations to be used for illicit drug
5) Improving and adjusting procedural requirements for pre-export
notifications depending on the risk of diversion.
The legislation on intra-EU trade is
affected by the first three recommendations of the Commission Report (while
recommendations 4 and 5 concern the legislation on external trade). The first
recommendation has been implemented by organising workshops and seminars to
facilitate an exchange of best practices among competent authorities.
Recommendations 2 and 3 are addressed in the present impact assessment.
In reaction to the Commission’s Report,
the Council adopted conclusions in May 2010, which recognise the
importance of continuing active co-operation among authorities and industry and
of improving the implementation of the European legislation. Furthermore, the Council
invited the Commission to set up a work programme to address the identified
weaknesses of 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[5].
The Commission Services (DG ENTR) consulted
in 2009 and early 2010 industry stakeholders through
their EU associations[6] on the weaknesses identified
in the Commission's Report (notably the difficulties in preventing diversion of
AA) and how to best address them. The Commission subsequently developed six possible options. In June 2010, these options were
discussed with the Member States and industry representatives in a special meeting
of the Drug Precursor Working Group.
Subsequently, Member States and industry stakeholders
were consulted on the six options via a written consultation, carried out from
23 July to 18 October 2010. Three main target groups were identified:
manufacturers and traders (operators), end-users and competent authorities of
Member States. In addition, an SME-consultation has been carried out via the
Enterprise Europe network from 1 October until 24 November 2010. This specific
consultation was chosen to ensure that the concerns of a specific target group
– end-users of drug precursors most of which are SMEs – could be considered[7].
Table 1 contains an overview of the responses received.
to questionnaires on drug precursors
Target group || Total number of responses (n) Operators || 54 End-users || 106 SME end-users || 60 Competent Authorities of Member States || 17 The targeted consultation included a
range of questions on the elements required to carry out a calculation of administrative
costs of the possible options. The addressees were also asked to identify the
option that they would consider most efficient to prevent the diversion of AA
from legal trade. The results of this consultation are summarized in Table 2 below.
Table 2 : Best option according to different
stakeholders (in %) || Operators (n=54) || End-users (n=106[8]) || SME end-users (n=60) || Member States (n=17) Option 1 || 15% || 27% || 48% || 6% Option 2 || 2% || 3% || 7% || 19% Option 3 || 4% || 5% || 8% || 6% Option 4 || 2% || 10% || 7% || 13% Option 5 || 7% || 3% || 15% || 56% Option 6 || 2% || 4% || 2% || 13% No opinion || 69% || 48% || 13% || 13% A very large proportion of enterprises
did not have any opinion whether the European legislation should be
changed (69% of operators, 48% of end-users and 13% of SME end-users). The
baseline scenario was favoured by 15% of operators, 27% of end-users and 48% of
SMEs. These differences between the three enterprise groups level out, however,
if one looks only at those enterprise which did express an opinion on
the preferred option, within these groups, 48% of operators, 52% of end-users
and 55% of SMEs prefer not to modify the existing legislation. In that context,
however, it is worth noting that the two major European industry associations
have consistently supported the view that a (reasonable) strengthening of European
legislation is to be preferred over diverging national obligations.
For Member States, only a minority
prefers keeping the EU legislation unchanged (6% [7% if "no opinion"
is disregarded]), whereas a large majority (56% [64% of “no opinion is
disregarded”]) preferred option 5, the registration of end-users, as the most
suitable option to prevent diversion[9].
The data collected in the consultation was
analysed and complemented in a further study by the external consultant EIM,
who carried out additional interviews with competent authorities and industry
stakeholders. Based on the consultation, EIM provided the Commission with a
study on administrative costs (“EIM Report”)[10].
The Commission Services opted for the
above-described targeted consultations, rather than for a general public
consultation, for several reasons: firstly, in view of the sensitive nature of
the subject (preventing traffickers from obtaining the key chemical substance
for the illegal production of heroin), the potential problems and possible
solutions should not be publicised among traffickers/criminals. Secondly, the
proposed policy options concern business-to-business trade of a limited group
of companies producing, trading or using a specific group of chemical
substances. Citizens and civil society groups are actually not affected by the
choice of policy options, and it would have been unlikely that they could have
provided information on the costs and benefits of the options. Lastly, the
options developed under the present impact assessment have to be distinguished
from the overall drug problem and how to address it as part of the general
European Drug Policy, on which the Commission has recently carried
out a public consultation[11].
2.4. Scrutiny by the Commission
Commission assessed a draft version of the present impact assessment and issued
its opinion on 17/02/2012. The Impact Assessment Board made several
recommendations and, in the light of the
latter, the final impact assessment report:
- provides a more detailed overview of the market players and of
the individual measures taken by Member States to prevent the diversion of drug
precursors and on that basis provides a more detailed presentation of the
baseline scenario; - strengthens the subsidiarity analysis to better justify the need
for EU action;
- provides more information with regard to the assessment of the
costs and effectiveness of the policy options examined;
- reports the views of stakeholders in more details.
drugs Drug precursors are
involved in the illicit production of both plant-based drugs (such as heroin and
cocaine) and synthetic drugs, which are produced entirely from chemicals (such
as amphetamine, methamphetamine, and ecstasy). Annex 2 contains an overview of
the major drug precursors and the illicit drugs produced. In other words: there
are no illicit drugs without drug precursors. The term “drug precursor” (or
just “precursor” in the international context) refers to different types of
substances: chemicals that are "precursors in the strict sense", i.e.
substances which become incorporated into the molecule of the drug, or other
chemicals which are reagents[12] or solvents[13],[14].
3.2. International legislation and developments
Convention against the Illicit Traffic in Narcotic Drugs and Psychotropic
Substances (“1988 UN Convention”)[15] 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 UN Convention set out a 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 to 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.
International Narcotics Control Board (“INCB”) is an independent control body
which closely monitors the implementation of the United Nations drug
conventions. It publishes annual reports containing diversion statistics and
their analysis as well as recommendations to the Parties concerned.
In its 2009 annual
report, the INCB considered that the measures applied to monitor the internal
trade of AA in the EU could be improved[16]. In the 2010 annual
report, the INCB noted that progress has been made in the EU, but upheld its call
on the EU to take further measures to prevent diversion in the EU[17]
(see section 4.1.2 for further details).
3.3. EU legislation and institutional context
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 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. Based on the 1988 UN
Convention, the European legislation contains a list of 23 scheduled
substances, which are divided into three categories[18]:
o Category 1 covers the most sensitive substances;
o Category 2 covers less sensitive substances and
so-called “pre-precursors” (substances which are used to produce other
precursors);
o Category 3 covers bulk chemicals that can have
different types of uses in the manufacturing process (feedstock, but also
solvents, impurities remover, etc).
The severity of control
imposed on companies dealing with the drug precursors in question depends on
the category concerned: the strictest control applies to category 1 substances,
while the least control is imposed on substances in category 3. A summary of
the obligations under the legislation is attached in Annex 3. The legal
obligations for scheduled substances are complemented by a voluntary monitoring
scheme for additional substances (so-called non-scheduled substances[19]),
which provides the flexibility required to respond to rapidly changing
diversion patterns.
on the key principle of partnership between authorities and operators in
identifying diversion attempts. Companies having received suspicious orders
have to inform the authorities. They may decide not to ship the ordered
substances (so-called 'stopped shipments') either temporarily until the
doubts regarding the transactions can be resolved, or – if the doubts remain –
definitely refrain from executing the order. Another possibility is that there
is an agreement between the operator and the authorities that delivery should
proceed under monitoring of the authorities to track down trafficker networks
(so-called 'controlled delivery'). Authorities may also seize shipments
that have been dispatched by a company that did not identify an order as
suspicious, if they have sufficient indications from other sources (e.g.
police, customs etc.) that a shipment is being diverted for drug production
(so-called 'seized shipments'). 4. Problem
definition 4.1. The
problem that requires action
4.1.1. Diversion
of the main drug precursor for heroin within the EU internal market
diversion of drug precursors from legitimate trade is one of the main goals of
the 1998 UN Convention and is the objective of the European legislation on drug
of the diversion of Acetic Anhydride (AA),
the key drug precursor for the production of heroin, has been the main
problem over the last years under the applicable legislation for drug
precursors circulating in the internal market. AA is licitly used
as an acetylating agent[20] for producing plastics,
textiles, dyes, photochemical agents, perfumes, explosives and aspirin. AA is used
illegally mainly for the production of heroin[21]
but it can also be illegally used for manufacturing amphetamine, methaqualone
and in some areas it is used as a reagent to produce coca paste and cocaine[22].
According to industry[23], it would be difficult
to find a substitute for the licit uses of AA, which would present as
favourable characteristics in terms of environmental impact on occupational
health. In addition, it is precisely the acetylating function which is also
used during the illicit drug production, so that replacing AA with another
acetylating agent would mean that the replacement chemical could also be
Heroin consumed in
Europe originates predominantly in Afghanistan, which accounts for most
of the global illicit opium output. Other producing countries include: Burma/Myanmar,
which mainly supplies markets in east and south-east Asia, Pakistan and Laos,
followed by Mexico and Columbia, which are considered to be the larges
suppliers of heroin to the United States[24].
Heroin use has been a contributing factor to public health problems in
Europe since the 1970s. It still accounts for the greatest share of morbidity
and mortality-related drug use in the European Union.
AA diverted from legal trade in Europe is trafficked
via the so-called "Balkan Route" to Afghanistan, thus
following the "reverse route" of heroin trafficked from Afghanistan
to Europe. The Balkan Route is the largest opiate conduit in the world with
long established criminal networks smuggling significant amounts of heroin from
Afghanistan through Iran and Turkey towards the European market and – in a
reverse course – trafficking acetic anhydride towards Afghanistan[25].
The second major route is the "Southern Route" via Pakistan towards
Asia by sea, including some road transportation through China and also through India
(to a lesser extent). The third, more secondary, route is the "Northern
Route" via former GUS States which developed following the opening of
borders after the dissolution of the Soviet Union[26].
Figure 1 contains a graphic illustration of the main transport routes.
Figure 1: Global
heroin flows from Asian points of origin[27]
4.1.2. The
Seizure data are a commonly used indicator of trends in illicit markets.
However, interpreting acetic anhydride seizure data is challenging since, in
any given year, seizures constitute a very small percentage of what is
estimated to be traded[28]. Globally, over 2 million
tons of acetic anhydride is produced annually. Estimating that illicit
acetic anhydride demand in Afghanistan is 380-570 tons per annum, only a
tiny percentage (0.02%) of the global production would need to be diverted and
trafficked to Afghan heroin laboratories. These figures can be further narrowed
for more accurate risk analysis, since as much as two thirds of global acetic
anhydride production is utilized for intra-company industrial use (i.e. use by
so-called "end-users" for the production of other products – the AA
involved is thus not sold or traded). It is the remainder (329,000 tons in
2009) which is traded internationally and presents a potential target for
diversion by traffickers. Traffickers therefore have flexibility to seek the
fraction of AA which they require from the legal trade from the least-protected
areas of the markets[29].
competent authorities in the EU seized about 151,000 litres (163 tons)[30]
of AA which represented approximately 75% of world-wide seizures. In addition,
about 72,000 litres (78 tons) of AA were stopped in the EU (before
delivery) because the orders had been suspected to be intended for illicit drug
production. Added together, the total quantities of AA seized or stopped in
2008 amounted to 223,000 litres (241 tons)[31].
With this quantity, it would have been possible to produce approximately 150,000
-223,000 kg of heroin, as it is assumed that producers use 1-1.5
litres of acetic anhydride for every kilogram of Afghan heroin[32].
these figures in perspective of the total Afghan heroin production: in 2009, Afghanistan
produced 6,900 tons of opium, of which an (estimated) 2,700 tons
were transformed into about 380 tons of heroin. This production
requires between 380 and 570 tons of acetic anhydride smuggled into the
country[33]. Therefore, it can be
assumed that the quantities of AA seized and stopped in Europe in 2008 would
have satisfied about 50% of the yearly Afghan demand for AA to be used in heroin
production. Drug users in Western and Central Europe, for whom Afghanistan is
the main source for heroin, consume about 70 tons of heroin, which amounts
to about 18 % of the total yearly Afghan heroin production of
Seizure statistics of
the subsequent years 2009-2010 have shown a clear and sharp decline
of AA stopped and seized in the EU: 33 tons / 31,000 litres in
2009 and 21 tons / 19,000 litres in 2010. With these amounts, it
would have been possible to produce approximately 20.4 – 31 tons of heroin in
2009 and 13 - 19 tons of heroin in 2010. 4.1.3. Underlying
Despite the recent more
promising trend of AA seizures and stopped shipments in the EU, a large number
of Member States’ competent authorities have consistently voiced their concern that
the control mechanisms provided under the European legislation for the control
of AA - which is a scheduled substance under category 2 - do not provide the
authorities with sufficient tools to prevent AA diversion. Notably, these
authorities have pointed to the following difficulties:
- Lack of registration requirement for end-users
of AA – and hence lack of knowledge of the competent authorities about
companies claiming to be only end-users of AA, in contrast to the registration
requirement for operators placing scheduled substances in category 2 on
- No licence required for operators trading AA,
but only a (less stringent) registration requirement. A licence is only
required for operators of scheduled substances in category 1.
- Lack of control if substances are traded below
the minimum threshold (for AA: 100 litres per year). Below this threshold,
operators are exempted from a number of obligations under the Regulation. - Difficulties for operators to verify information
contained in the customer declaration, mainly:
§ whether the customer is legitimate when claiming
to be only an end-user (cf. above: lack of registration number to be indicated
on customer declarations);
§ when the customer is established in another
Member State, the information in the customer declaration cannot be checked as
easily as for customers in the operator’s own Member States.
While some Member
States have addressed these difficulties with additional controls on national
level[34] acting under Art. 10 of
Regulation (EC) No 273/2004, which requires Member States to adopt national
measures necessary to enable the competent authorities to perform their control
and monitoring duties, other Member States have considered that the required
additional controls would go beyond the scope of Art. 10 and that the necessary
additional measures would have to be adopted at the European level.
AA is subject to the same control standards as applicable to all scheduled substances
in category 2[35]. Considering that the
above-described characteristics (no registration of end-users, difficulties to
verify information contained in customer declarations, etc) apply to all
scheduled substances in category 2, the question arises whether the driver
for the problem ´diversion of AA´ is an inadequate control mechanism for AA
only or for all scheduled substances in category 2. Looking
at the European seizure statistics for category 2 substances, there is evidence
that only for the substance AA diversion has not been adequately
prevented[36]. In the 2010 stakeholder
consultation, both, Member States and enterprises have reported more than
double the amount of suspicious transactions for AA alone than for the four other category 2 substances combined[37]. It is the
main principle of the European legislation that different levels of control
apply to different substances – depending of the particular diversion risk
of each substance concerned, so that an increased diversion risk for one
particular substance does not automatically point to ineffective control
mechanisms for other substances within the same category.
A lack of operators’
compliance with the legislation has not been identified as a problem
in the consultation process (even though it cannot be excluded as a
contributing factor in specific cases). However, some diversion cases have
shown that the authority-operator cooperation in the Member State concerned
could still be improved. The underlying drivers
of the problem and the direct and indirect consequences are visualised in
Figure 2. Figure
2: Drivers, problem and
consequences of the diversion of AA
DRIVER PROBLEM DIRECT INDIRECT CONSEQUENCES CONSEQUENCES
4.1.4. Who is affected, in what ways and to what extent?
are affected by inadequate prevention of the diversion of AA from the intra-EU
4.1.4.1. Member States
affected by diversion when conducting enforcement actions on diverted
substances, for instance detecting and monitoring traffickers' storage
sites, destroying seized substances etc. These activities may be very
labour-intensive and costly for the authorities. To give an example: UNODC has
been informed by a national enforcement authority that it costs almost € 1,000
per day to observe an AA storage site; another authority reported to UNODC to
have spent € 250,000 for storage of 93 tons of seized AA[38].
Member States have
experienced diversion attempts for AA to different degrees. At the peak
of European AA seizures in 2008 (151,000 litres), Central European Member
States were particularly targeted (86,100 litres in Slovenia and 63,600 litres
in Hungary). This geographical trend could already be observed in 2007, where
total EU seizures amounting to 7,700 litres took place also in central EU Member
States (Slovenia seized 6,500 litres and Romanian 1,200 litres)[39].
These Member States are, due to their geographical location, particularly
attractive to traffickers using the “Balkan Route”[40].
argument has been made that traffickers are exploiting the benefits of the
internal market, diverting from internal trade from the weakest-controlled
distributor in the EU to the least-controlled exit point, in order to smuggle
the substances outside the EU[41].
More indirectly, Member
States are affected by the effect of drugs being produced with
diverted substances. Via their social security systems, they bear the health
costs resulting from the use of heroin and other drugs. In addition,
there are significant costs to the public from drug-related crime[42].
4.1.4.2. Citizens
EU citizens are
affected through the supply of drugs which have been illicitly produced
with the diverted drug precursors and also through drug-related crime.
AA being available to
criminals/traffickers from diversion in Europe can be an important contributing
factor to heroin production, mainly in Afghanistan. A substantial part of this
heroin (almost 20%) is then sold on the European market. The ultimate
consequence of diversion of AA in Europe is an aggravation of the health and
social problems associated with heroin use in regions throughout the world,
including a substantial part in Europe.
The above analysis is,
however, to be taken with caution. As set out in section 4.1.2, diverted AA is
only a small fraction of worldwide AA production. While it is true that there
is no production of illicit drugs without (diversion of) chemical precursors, a
better prevention of diversion in Europe may lead traffickers to source
the substance in other regions of the world and, in consequence may have
little effect on the total heroin production and, consequentially, very
little effect on the supply of heroin to EU citizens. Furthermore, drug
users can, in case of reduced heroin supply, switch to other drugs so
that the effect of reduced diversion of AA in the EU on the overall health
situation in Europe may be very limited.
possibilities of substitution, the EU is committed to continue its efforts to
prevent diversion within its territory, in order not to contribute to the
production of illicit drugs. In addition, joined efforts on a world-wide level in
the framework of the 1988 UN Convention are aimed at curbing the global
production and supply of illicit drugs, including also prevention of diversion
of precursors from legal trade in all countries.
4.1.4.3. Companies
In the EU, over 5,000 companies
are currently registered or licensed to dealing with the legitimate production
and distribution of drug precursors (all scheduled substances combined)[43].
More specifically for the substance AA, approximately 1,600 companies are
registered as “operators”, i.e. being either manufacturers or traders of AA. AA
production in the EU is concentrated in only four Member States Greece, Italy,
UK and Spain[44] and in less than 10
companies[45]. This means that over
99% of operators are traders. Based on the consultation carried out by the
Commission services in 2010, the majority of traders are SMEs[46].
About 2,500 companies in
Europe are estimated to be AA end-users[47], not selling
AA themselves, but only using it for production in sectors such as perfume
production, food flavouring, metal cleaning, colouring, bleaching, water
cleaning, etc. According to the consultation in 2010, the number of AA
end-users is particularly high in some of the larger Member States (France,
Germany) and in some central European countries (Czech Republic, Hungary).[48]
The consultation also confirmed that the majority of AA end-users are SMEs.[49]
AA may experience diversion (attempts) at any stage of handling of the
chemical substance. Diversion may occur in the production facilities, during
transportation, sale, processing, recycling and even destruction.
Apart from securing
premises and processes against theft / unintentional disappearance of the
substance, companies producing and trading AA have to be vigilant with regard
to the customers who order the substance and have to critically asses whether these
customers use the substance only for the claimed licit purpose[50].
Under current European legislation it is an obligation for all operators
involved in the production and sale of AA, to notify any suspicious
circumstances to the authorities. End-users so far have only limited
obligations, in particular providing a customer declaration when placing orders
for substances of category 2.
Changes of the drug
precursor legislation would affect many companies
active in the production, trade and further processing of the chemical
substances concerned. Changes imposed on operators dealing with AA would
affect approximately 1,600 companies in the EU. If, on the other hand, the
current problem was addressed on a more horizontal level, with changes imposed operators
dealing with all scheduled substances in category 2, approximately 4,000
companies would be affected in the EU; most of them are based in the larger
Member States (Spain, United Kingdom, Germany and France).[51]
A strengthening of the
obligations imposed on end-users of AA would particularly affect about
2,500 companies in the EU who are only users (not manufacturers or traders) in
sectors such as perfume production, food flavouring, metal cleaning, colouring,
bleaching, water cleaning, etc. If obligations would be strengthened for end-users
of all scheduled substances in category 2, about 8,500 companies would be
affected in the EU[52].
4.1.5. Foreseen evolution of the
foresee the evolution of future diversion trends, as traffickers’ behaviour
changes over time, and depends on many factors, including insufficient
implementation of existing legislation, insufficient international cooperation,
or an inadequate legal framework. The statistics on
diversion of acetic anhydride in the EU do not show a clear trend
over the last decade. There have been two brief spikes in seizures, in
2001 (100,000 litres: 65,000 in the UK, 16,000 in Italy, 9,000 in Slovenia
and 9,000 in Belgium) amounting to 55% of global seizures and in 2008
(151,000 litres: 86,000 in Slovenia and 64,000 in Hungary) amounting to 75%
of global seizures[53]. However, as explained
in section 4.1.2, according to the statistics for 2009-2010, there has been a
clear and sharp decline of AA stopped and seized in the EU: the quantities of
AA seizures dropped in 2009 to 900 litres only, amounting to less than 5% of
global seizures. Seizures and stopped shipments combined dropped to 31,000
litres in 2009 and 19,000 litres in 2010.
From these statistics, two
different assumptions can be made in order to forecast the future diversion of
AA in Europe:
4.1.5.1. Better
implementation by itself will solve the problem
One assumption would be
that the activities by Member States over the last years have shown their
success. Notably, Member States reported in a workshop organised by the
European Commission in June 2011[54] about activities they
have been carrying out since 2008 in order to better prevent the diversion of
· Reinforcing cooperation between the industry and
the authorities: Member States authorities have participated in annual industry
conferences or have organised training of and visits to key economic players;
· Promoting the EU e-learning tool to economic
· Inspecting operators on a risk-based approach;
· Improving cooperation activities a) between
different authorities within the same Member State (inter-agency approach) and
b) between authorities of different Member States (cross-border cooperation);
· Making use of the EU alert systems (AM[55],
RIF[56]) to facilitate the rapid
exchange of information on diversion (attempts) among authorities across the
The success already
achieved with these measures is evidenced by the dramatic decline of AA
seizures over the last two years. It could, therefore, be concluded that traffickers
have shifted their attention from the EU to other areas, so that AA diversion
from EU-internal trade will not be an issue anymore in the future.
4.1.5.2. Traffickers
continue to target the EU – Member States will react by increased national control
however, would be that the decrease in seizures shows that traffickers have
learned from the enforcement successes in 2008 and have become more
sophisticated. They continue to target the EU-internal market for diversion of
AA by exploiting the weaknesses of the current legislation. This view is in
line with informal reports received from national enforcement bodies, which
report continued activities aiming at diverting AA in the EU.
Indeed, a significant number of Member States have criticised that
without adequate legislative tools on European level their control possibilities
remain inadequate, especially regarding their means to control end-users. Not
acting on European level would mean that the weaknesses of the current legislation
would persist and that Member States who feel a need for acting not only by
better implementation, but also by "more legislation" would (within
the limits of Art. 10 of Regulation (EC) No 273/2004) adopt more
stringent measures on national level to deal with the risk of diversion. In
fact, several Member States have put in place extensive additional measures[57]. This would, on the one
hand, lead to a fragmentation of the Internal Market affecting the wide variety
of legitimate industrial uses of AA. On the other hand, the combination of
different control standards risks by itself creating loopholes: for
instance Member States requesting registration of end-users in their own
territory cannot avoid fraudulent companies placing orders in that territory,
when operating as end-users in another Member State and thereby avoiding
registration. Assuming that a Member State obliges its operators to notify
all new end-users to the authorities, a fraudulent company will avoid this
obligation by placing orders in another Member State which does not ask for
4.2. EU right to act
273/2004 on drug precursors is based on Article 114 TFEU (formerly Article 95
TEC). The Regulation has set common requirements for monitoring and control of
the trade in drug precursors, in order to ensure the free licit trade of these
chemicals within the EU. Nevertheless, the legislation requires Member States
to adopt national measures which are necessary to enable the competent
authorities to perform their control and monitoring duties (Art. 10 of
Regulation (EC) No 273/2004). Many Member States have used this basis for
procedural rules only. In fact, some Member States feel legally prevented
from adopting national control measures going beyond the EU legislation
(e.g. Germany and the Slovak Republic). In particular, the argument has been
made by these Member States that the EU legislation subjects only operators
to control measures (no obligations are imposed on end-users), which should be
understood as a deliberate and binding decision of the EU-legislator that
end-users should not be subject to the control of the drug precursor
also based substantive national controls on Art. 10. As set out in the previous
section, different approaches of control in different Member States are,
firstly, detrimental to the functioning of the Internal Market and,
secondly, risk creating loopholes, which weaken the effectiveness of
controls. If the EU-wide structural deficits of the legislation remain
unaddressed, isolated actions in individual Member States risks shifting the
problem from one Member State to the next, as traffickers will exploit the
“weakest link” in the Internal Market. Also, historically, the Member States
targeted have been different: in 2001 mainly the United Kingdom, Italy and
Belgium, then in 2008 mainly Slovenia and Hungary. These examples show that a
combination of different national measures is not as effective as a harmonised
approach at EU-level. This is also confirmed by that fact that both, Member
States and industry have called on the Commission to act to preserve the
internal market with a level playing field, and not to rely too much on supplementary
national measures.
While efforts to implement
the control mechanism to a similar standard throughout the EU and for an
improved cooperation among competent authorities need to continue, these efforts
for better implementation will not be sufficient to address the
structural weaknesses of the legislative system. There would be a need for stricter
EU legislation to ensure a uniform standard to adhere to by the competent
authorities in the different Member States. The latter view has, for years,
been expressed by INCB who has criticised the EU for non-action and it
is very likely that this criticism will continue in the future, if the European
legislation remains unchanged.
In conclusion, an
effective strengthening of the control and monitoring mechanism, which would
neither create loopholes nor unduly hinder the licit trade of drug precursors
in the EU would have to be adopted at the European level. 5. Objectives 5.1. General policy objectives
objectives pursued with the present imitative: (1) To
contribute to the world-wide combat against the illicit traffic in narcotic
drugs and psychotropic substances. Preventing the
diversion of drug precursors is an important element by which the EU fulfils
its obligations under Art. 12 of the 1988 UN Convention.
ensure a proper functioning of the internal market for drug precursors, by ensuring that operators are subject to the same, harmonised
rules within the EU whilst avoiding unnecessary obstacles to legitimate trade
and administrative burden for enterprises and competent authorities.
5.2. Specific and operational policy objectives
(1) Linked to the first general objective, the present
initiative aims at preventing diversion from the EU internal market,
thus achieving a downward trend of diversion attempts and
seizures of AA, and thereby limiting the input of diverted AA
originating from the EU to the production of illicit drugs, namely heroin. (2) Linked
to the second general objective, the initiative aims at avoiding market
distortions by introducing a uniform, effective and efficient
standard of controls for drug precursors within the EU and thereby limiting
the costs for operators involved in the licit drug precursor value chain.
5.3. Consistency with other policies and objectives
The control of drug
precursors is part of the EU Drugs Strategy 2005-2012[58] and the EU Drugs
Action Plan (2009-2012)[59],
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.
As the drug problem is
a complex phenomenon, it requires a multidisciplinary approach of combining demand
and supply reduction[60]. Preventing
the diversion and trafficking of drug precursors aims at reducing the supply
of illegal drugs – the ultimate objective being a high level of protection,
well-being and social cohesion of EU citizens by preventing and reducing drug
use, in line with the EU Drug Strategy. The European Commission Services are
currently carrying out an evaluation of the 2005-2012 EU Drugs Strategy; in
preparation of the EU Drug Strategy from 2013[61]. This
evaluation is, however, not questioning the pillar ´supply reduction` (which includes
the prevention of diversion of drug precursors) and the Union being a Party to Art.
12 of the 1998 UN Convention[62] is in any case bound to work
towards the objective of preventing the diversion of drug precursors.
A high level of human
health protection is a basic principle of the Treaty, which shall be
ensured in the definition and implementation of all policies and activities of
the EU. The control of drug precursor diversion contributes to the protection
of human health, specifically in the area of drugs-related health damage where
the Treaty invites the Union to complement Member States’ action on prevention
of drug-use[63].
initiative is also in line with the principle of the Treaty that the Union
shall endeavour to ensure a high level of security through measures to
prevent and combat crime, and through measures for coordination and cooperation
between police and other competent authorities[64].
options Based on the weaknesses
identified during the evaluation of the existing legislation, the Commission
Services (DG ENTR) developed six possible policy options which would address
the identified problem drivers. The options were discussed with stakeholders in
the Drug Precursor Working Group. The main problem driver being the
insufficient control by competent authorities over all economic players
involved in the (legal) trade with drug precursors, all identified options
seek to improve that control via enhanced reporting, notification or
registration obligations imposed on the economic players. The following policy
options have been analysed:
option) In this option, the
existing EU legislation will not be modified. This means that, notably the
following provisions already aimed at controlling the trade of AA (and other
drug precursors) will remain unchanged:
o Category 1 substances are subject to a more stringent control regime than category 2
substances. The Regulation requires a licence for any dealing with the
substance, including possession, end-use and sale. The EU legislation contains
detailed requirements for granting a licensing number and imposes obligations
on the applicant to provide the authorities with documentation on a number of
obligations, such as measures taken to secure premises, a description of all
places of storage, manufacturing and processing, a description of the envisaged
operation with the substance. Furthermore, a copy of the customer declaration
has to accompany any transport of category 1 substances within the EU.
o Only operators for category 2 substances need
to be registered if they place substances on the market. End-user
customers of category 2 substances are not registered with the
competent authorities. o The EU Regulation does not lay down requirements
with regard to the granting of a registration number, so that some Member
States give a registration number to any applicant for registration without
particular verifications. Some even consider that registrations cannot be
o Customer declarations: operators supplying category 1 or 2 substances have to obtain a
declaration from each customer, which contains the name, address, registration
details (if applicable) and the intended use of the substance[65].
New customers of category 2 substances are treated in the same way as
long-standing customers, i.e. solely the obligation to obtain the customer
declaration applies.
operators are currently under the obligation to inform the competent
authorities once a year about scheduled substances used or supplied[66].
Member States will continue efforts to improve the implementation of current
rules, following-up on the results of the ‘Best Practice’ workshops which the
Commission organised on how AA diversion can be prevented. As detailed above
under section 4.1.5.2, Member States could adopt further national legislation
in accordance with Art. 10 of Regulation (EC) No 273/2004 if they consider this
necessary. Draft national measures would have to be notified in accordance with
Directive 98/34/EC, to allow other Member States and the Commission to verify
that they are in compliance with the requirements of the EU Treaty. 6.2. Option
2: strengthened reporting obligations The existing reporting
obligations could be strengthened to allow Member States to use the (more
comprehensive) reporting by operators to increase their knowledge, target
inspections and other enforcement activities, and exchange this information
among competent authorities. To avoid unnecessary burdens, the reporting
obligations could be reduced or abolished for holders of a special licence or a
special registration[67].
Two sub-options could
be distinguished (which could be applied either separately or in combination):
the frequency of reporting (for example from once to four times per year)
the scope of reporting (including substances received and produced and requiring
explicit reporting when no transactions are made over a given time).
declarations from end-users
The Regulation could be
modified to establish that operators placing scheduled substances in category 2
on the market are not allowed to send a consignment following an order unless
the customer declaration is completely filled in and they have conducted
themselves a verification that the end-user has genuine motives for placing the
order (e.g. verification that the end-user is a registered company active in
the area of business mentioned under the ‘intended use’ of the customer
declaration). When unable to conduct such verifications themselves, operators
would have to involve their authorities.
customer declaration and the verification of the information would have to be
documented in the records to be kept in accordance with Article 5 of the
Regulation. Furthermore, a requirement could be introduced that a copy of the customer
declaration should accompany scheduled substances in category 2 similar to what
is already foreseen for substances in category 1. The option could be
reinforced by reducing or abolishing the threshold of minimum quantities
foreseen in Article 6 of the Regulation.
be differentiated: a) new obligations will apply only to AA
b) new obligations will apply to all or some category
2 substances 6.4. Option
to allow verification
operators placing scheduled substances in category 2 on the market would be
obliged to systematically notify all orders from end-users who are first time
customers to the competent authorities, and would only be allowed to ship the
consignment, after having received the agreement of the authorities. The authorities would
verify the legitimate motives of the end-users, if necessary by co-operating
with the authorities of another Member State, if the new customer is established
in that other Member State. The option could be
2 substances 6.5. Option
registration In this option,
end-users for scheduled substances in category 2 would be required to register[68]
and obtain a registration number to be used when submitting a customer
declaration in the context of an order for substances. This could give
reassurance to operators placing the substances on the market that orders are
legitimate, provided, of course, that they can easily verify that registration
numbers are genuine (and not fake).
has to be given to the verification that competent authorities conduct before
granting a registration number to end-users (or operators in general): in its
current form, the legislation does not lay down particular requirements with
regard to the granting of registration numbers[69]. In order to ensure
that registration of end-users will be an effective tool in combating diversion
of scheduled substances, authorities will have to verify that end-users who
register have genuine business activities – otherwise the registration number,
which will appear on customer declarations of end-users, could give a false
impression of proven legitimacy to operators receiving orders from registered
end-users. European legislation could specify more detailed requirements and
conditions for the granting, refusal and withdrawal of registration of end-users
(and of operators in general).
The option could be
foreseen in Article 6 of the Regulation, and/or foresee exemptions for certain
categories of end-users, such as universities or research institutions.
be differentiated:
a) new obligations will apply only to AA
2 substances 6.6. Option
6: move AA from category 2 to category 1
In this option, AA
would be moved from category 2 to category 1, which would mean that all those
involved in the trade and use of AA would need to obtain a licence before they
possess or place AA on the market, and would have to comply with all other
requirements of licensed operators (see Annex 3 for an overview of these
of impacts In this chapter the
impacts of the six identified options and their sub-options to introduce new
requirements for AA only or for all substances in Category 2, respectively, are
analysed. However, the possibility foreseen to reinforce options 3, 4, and 5 by
reducing or abolishing the threshold of minimum quantities[70]
has not been further examined for the following reasons: in the consultation,
only a minority of Member States commented on this issue. For those who did, half
wanted to keep the threshold, about one third wanted to reduce it and only one
sixth wanted to abolish the threshold. Those providing reasons for their choice
argued in favour of keeping the threshold by pointing out that there were a
very large number of users of small quantities and abolishing the threshold
would amount to a disproportionate burden. Furthermore, all known diversion
attempts for AA have targeted larger shipments well above the current threshold
of 100 litres. The possibility considered under options 2 and 5 to foresee exemptions
for certain categories of users (such as holders of special
licences/registrations or of universities/research institutions) has not been
analysed due to very limited information received during the consultation[71].
The most relevant economic
impacts include the administrative costs/burdens on businesses and public
authorities; they have been quantified in the present report. For the preferred
option(s), the IA will also assess impacts on SMEs and competitiveness.
Social impacts, including those on public health and safety as well as crime and
security, are of less direct character than economic impacts, as they are
related to the total amount of heroin supplied to the EU. While they therefore correlate
with the effectiveness of each option to prevent diversion of the
heroin precursor AA, it has to be noted that heroin would even be supplied to
the EU if all of the diversion of European AA was effectively stopped, because
traffickers may switch to other AA sources in the world[72].
Another factor of uncertainty in this respect are the actions of third
countries[73], which may, either in
response to a strengthening of controls in the EU or independently thereof,
also improve control of diversion. Social impacts have, therefore, not been
analysed for the individual policy option as it would not have been possible to
quantify them or describe differences in a qualitative way other than the
assessment of the effectiveness of the policy options in preventing diversion. There
are no environmental impacts associated with the problem identified and
any of the options to address the problem. The only environmental aspect
concerns the destruction of diverted drug precursors that have been seized.
This is regulated by the applicable waste legislation and the rules foreseen
for the destruction of seized goods in the Community Customs Code.
Nevertheless, reducing the quantities of drug precursors seized will also
reduce the amounts that have to be destroyed.
While administrative
cost/burdens have been fully monetized in the present report, this was not
possible for benefits (i.e. the effectiveness of the options); these have
therefore been assessed qualitatively.
7.1.1. Methodology
As the main problem to
be addressed by the present initiative is the insufficient control by competent
authorities over the economic players involved in the (legal) trade with drug
precursors, all identified options seek to improve that control via
enhanced reporting, notification or registration obligations imposed on the
economic players – hence increasing administrative burdens on them, with
variations as to the degree of that burden and to the group of economic players
and authorities concerned. The administrative
costs and administrative burdens stemming from the six policy options for
enterprises and the competent authorities of the Member States are quantified,
based on calculations carried out by an external contractor (EIM) using the
Standard Cost Model (for detailed calculation tables please see Annex I of the final
report of the study[74]). EIM based its
calculations on a dataset created from the responses received by the Commission
during the written consultation carried out in 2010 and further validated them through
a series of targeted interviews.
an increase in administrative burden, would, to a certain degree, even be
expected under the baseline scenario where existing tendencies of Member States
to develop supplementing national legislation would be expected to continue, and
hence lead to a risk of fragmentation of the internal market, which would also have
detrimental effects on operators.
Therefore, the key
question for the analysis of impacts is not whether there will be an increase
of burden for industry but rather which kind of increase would be most
proportionate in view of the expected benefits.
The administrative cost
study has been based on the following main assumptions:
- Clustering of Member States according to blocks for extrapolation
As there is data from only
17 Member States, Member States have been dived into 3 blocks on the basis of
the total number of licensed and registered operators. In each block, Member
States have a similar number of licensed and registered operators. It is
assumed that Member States within the same block need equal amounts of time to
comply with their monitoring obligations, and this assumption is used to
extrapolate data from one Member State for which data is available to another Member
State in the same block for which there is no information available[75]
– and eventually to the entire EU. For the calculation of administrative
burdens in the present impact assessment, only the aggregated data for the
entire EU have been used.
- Hourly tariffs
For enterprises, a tariff of approximately €
26 per hour[76] has been used for
quantifying the administrative costs, which is the (rounded) average of the
tariffs for the target group ‘professionals’ in all 27 Member States[77]
- under the assumption that the enterprise staff performing the activities required
to comply with information obligations fall into the target group
For Member States, the average (rounded)
tariff has been calculated for each of the above-mentioned blocks, based on the
Member State tariffs contained in each block[78]. - Number of enterprises
enterprises affected varies under the different options and sub-options.
Options 2, 3b, 4b have an impact on operators dealing with all scheduled
substances of category 2. For these options the total number of registered
operators is used: 4,056[79].
Options 3a and 4a have impacts
only on registered operators dealing with AA. Based on the answers provided by
Member States during the consultation carried out in 2010, 40% of the total
number of registered operators are assumed to be affected[80], corresponding to 1,622
Option 5a affects
end-users of AA. According to the consultation carried out in 2010, this figure
is estimated at 2,473 enterprises. Option 5b affects end-users of all category
2 substances. According to the 2010 consultation, this figure is estimated at 8,548
enterprises. Option 6 affects (1)
all currently registered operators dealing with AA (1,622) and, all end-users
of AA, which are currently under no registration requirement (2,473). In total 4,095
enterprises would be affected.
- Calculated costs are maximum costs It should be noted that
a number of Member States have, over the last years, adopted national measures
(in order to prevent diversion of acetic anhydride) which partly implement elements
of the options analysed in this impact assessment. Therefore, the costs
calculated are expected to be maximum costs, as in those Member States where
presently already some / part of the options are applied, the costs for both
operators and Member States for enacting the option in question would be lower
than calculated here – specific examples will be mentioned as appropriate for
The benefits of the identified
options essentially relate to the expected likelihood that the option will be
effective in meeting the operational objectives, namely to decrease diversion
and diversion attempts of AA and avoiding distortions in the internal market.
They will be described qualitatively. 7.3. Option
7.3.1. Costs
administrative burden would be imposed on European level on either
enterprises or competent authorities. However, a possible increase of
administrative burdens at national level could be expected should Member
States introduce complementing national measures. Drug precursors are used
widely for a large variety of legitimate industrial uses. A system which would
subject operators to different control standards depending on the Member State
they are selling to/from would arguably be more difficult to handle for
economic operators than a moderate increase of control applicable uniformly
throughout the EU. In fact, a number of Member States have introduced national
measures that lead to additional costs for the companies concerned.
For example, in Denmark, Belgium and Spain, end-users of all
category 2 substances above a threshold of 100 l/year purchase are obliged to
be registered with the authorities (following from an interpretation of the
Regulation that the term 'operators' includes end-users). Additionally, in
Denmark, operators with transaction volumes below the threshold are encouraged
to register voluntarily with the authorities.
In the Czech Republic, all operators have been requested
(without legally binding basis) to provide the authorities with information
about their new customers, including also cases where orders have not been
executed. The same request has been made in Germany by the competent
Hungary has increased national reporting
rules for the category 2 substances AA and Potassium permanganate to every two
months. Furthermore, operators have been requested to notify the authorities
three days before all delivery of AA either a) above 20 litres or b) to a
Italy requires its companies to notify
every single transaction to a national database before delivery takes place.
The requested information also involves providing the authorities with
information on end-users, so that authorities claim to have full knowledge on
end-users and that, effectively, all end-users are registered via the national
there is quite a large disparity in the EU on how operators (and in case of
Belgium, Denmark, and Spain: also end-users) are controlled. Control standards
vary between registration requirements (BE, ES, DK) notification requirements
before delivery (IT, HU) or additional reporting obligations (CZ, DE, HU), all
of which lead to additional costs. For operators selling in more than one
Member State, these different obligations are a substantial burden, plus a
competitive disadvantage for operators located in these Member States compared
to those in others.
7.3.2. Benefits
On the one hand, no
action at European level could be justified by the fact that diversion attempts
concerning AA have targeted only a rather limited number of Member
States, mainly in central Europe (see section 4.1.4). Therefore, it could at
first sight be assumed that the problem is not 'EU-wide' and thus does not need
to be addressed at European level. Also, in terms of effectiveness
of the option in preventing diversion, the recent statistics of seizures and
stopped shipments have shown a clear downward trend, which suggests that the
efforts of achieving a better implementation (notably to strengthen the
authority-industry cooperation, to conduct specific industry-training
activities and to increase vigilance of operators and enforcement authorities –
see above under Section 4.1.5.1 on measures already taken by Member States) have
already brought about a tangible improvement of the effectiveness of the
current legislation in preventing diversion. It can be reasonably expected that
the enforcement activities will continue to contribute to better
prevention of diversion in the future, if Member States, the Commission and
operators maintain their vigilance.
might be expected from the implementation of the European database that
the Commission is currently preparing, which will facilitate reporting of and
access to information relating to seizures and stopped shipments by Member
States, and allow easier verification of the status of potential clients
through a list of registered operators (and possibly also trusted end-users).
The database is expected to start being operational from the beginning of 2013.
is to be expected that the identified structural weaknesses of the
current legislation with regard to the diversion of the main heroin precursor
AA (and possibly other drug precursors of scheduled substances in category 2) would
persist – even though these may be reduced by efforts of better
implementation of the current provisions as can be seen from the latest trends
with regard to stopped and seized shipments (see Section 4.1.5).
If considered
necessary, Member States could adopt further national measures under
Article 10 of the current Regulation to reinforce control of trade in drug
precursors. However, while this would be effective with regard to the objective
of preventing the diversion of AA, it would be counterproductive with regard to
the objective of avoiding fragmentation of the internal market. Indeed, a
number of Member States have already introduced national control measures which
have led to disruptions of the Internal Market (see previous section for
details). This is why, during the consultations carried out by the Commission
Services during 2010, several stakeholders and Member States held the view that
diverging national rules should be avoided as there would be no longer a level
playing field for all operators in the EU.
Finally, the international
criticism of the EU as remaining "inactive" despite continued
calls for stepping up the control of its internal market legislation would
persist. In all of its recent annual reports, the INCB has called on the
Commission to propose amendments to the existing legislation in order to
eliminate the detected weaknesses[81] – failure to do so might
reinforce the criticism voiced by the INCB, which will probably also be shared
by several Member States.
2: strengthened reporting obligations
7.4.1. Costs
7.4.1.1. Enterprises
Operators would become
subject to increased administrative costs by additional reporting obligations. The
results of the EIM Report are summarised in Table 3. Under sub-option 2a the
frequency of reporting would be increased from once to four times a year, which
would cause additional annual costs of ca. € 5.6 million. Under sub-option 2b
the scope of reporting would be increased, leading to annual cost of ca. € 1.45
million. If both sub-options were implemented the total annual costs would
amount to € 11.4 million (€ 5.6 million plus 4 x € 1.45 million).
Table 3 Administrative burdens for registered operators under Option
|| || Total costs per year Policy option || Sub-option || Time spent/ action || Average price / action || Total number of actions/year || Number of firms || Administrative costs (AC) 2 || Strengthened reporting obligations || 2a) Increasing frequency of reporting by operators (quarterly) || 18h || € 461.34 || 3 || 4,056 || € 5,613,585 2b) Extending the scope of reporting (including substances received, produced) || 14h || € 358.82 || 1 || 4,056 || € 1,455,374 || || 2a) + 2b): extending the scope and increasing the frequency || 18h 14h || € 461.34 € 358.82 || 3 4 || 4,056 4,056 || € 5,613,585 + € 5,821,496 = € 11,435,081 7.4.1.2. Competent authorities
costs for Member States' competent authorities as calculated in the EIM Report are
set out in Table 4. Under sub-option 2a (quarterly reporting) the additional annual
costs are € 1 million/year. Under sub-option 2b (increased scope) the
annual costs for the authorities would be more limited (€ 0.27 million/year).
If both sub-options were implemented the total annual costs would amount to € 2.1
million (€ 1 million + 4 x € 0.27 million, as the information under
the extended scope will have to be reported 4 times/year).
though, that according to the results of the consultations, Hungary has already
increased its national reporting rules for two of the category 2 substances (AA
and potassium permanganate): the frequency has been increased from 1 to 6
times/year. An even further-reaching system has been enacted in Italy, where
all transactions have to be registered in a national database before delivery
takes place. For operators and competent authorities in these two Member
States, the introduction of more frequent reporting rules would thus be less
costly than calculated in this section.
Table 4 Administrative burdens for authorities under Option 2
|| || || Total costs per year Policy option || Sub-option || Time spent/ action || Average price/ action || Total number of actions/year || Administrative costs (AC) 2 || Strengthened reporting obligations || 2a) Increasing frequency of reporting by operators (quarterly) || 11,722h || € 342,306 || 3 || € 1,026,918 2b) Extending the scope of reporting (including substances received, produced) || 9,377h || € 273,845 || 1 || € 273,829 || || 2a) + 2b): extending the scope and increasing the frequency || 11,722h 9,377h || € 342,306 + € 273,829 || 3 4 || € 1,026,918 + € 1,095,316 = € 2,122,234 7.4.2. Benefits
effectiveness of the option in preventing diversion, competent authorities could
expect to have a better knowledge of the legal trade flows – this could allow
them to detect more easily unusual trade patterns which could indicate
diversion to illicit channels. By having a more complete picture of the trade
flows (by including not only substances supplied and used, but also substances
produced and received, by making explicit notifications to the authorities also
if no transactions have been made in the reporting period) authorities could
compare data received from different operators and thereby find conflicting
information which could point at diversion to illicit drug production. By
getting the reported information more regularly (quarterly instead of yearly)
the data would be of more relevance to detect recent diversions than if that
data is already one year old.
However, a majority
Member States’ competent authorities has been sceptical about the real benefits
of this option. In order to be able to match trade data from all operators
within the EU, a very large amount of data would need to be collected and would
have to be matched across EU-internal borders. Even under the assumption that
this collection and cross-matching of data could be done, the assumed benefits
for detecting diversion of AA were considered not very high. It has to be born
in mind, that only 0.02% of AA production is potentially diverted, so that a
general "check all transactions" approach is less promising than more
targeted, risk-based actions.
objective of preserving the internal market, the situation would probably be
similar to Option 1: Member States might still consider that it would be
necessary to adopt further national measures under Article 10 of the
current Regulation to reinforce control of trade in drug precursors. While this
would also be effective with regard to the objective of preventing the
diversion of AA, it would be counterproductive with regard to the objective of
avoiding fragmentation of the internal market
7.5.1. Costs
7.5.1.1. Enterprises
For an assessment of the
costs of this option for enterprises it has been assumed that operators'
obligations will no longer be limited to obtaining a customer declaration but,
in addition, the legislation would require them to conduct the verification
that the information filled in is both complete and genuine, i.e. the
registered customer is indeed in possession of the declared registration number
or (for the end-user customer) he is indeed active in the declared business.
This administrative cost (in form of carrying out verifications) is calculated
to amount to 6 hours, plus an additional 1 hour of documenting the verification
conducted. The (yearly) frequency of this operation depends on the average
number of customer declaration, which each operator obtains per year.
Sub-option a): the new obligations will apply only to AA. With 52 customer
declarations / year, the yearly administrative costs (including business as
usual costs) for all operators dealing with AA would amount to € 15.1
requirement that a copy of the customer declaration should accompany the
substances when transported in the EU which is currently not the case for
schedule 2 substances, would amount to an additional € 0.2 million[82].
Sub-option b): the new obligations will apply to all category 2 substances: with
116 customer declarations / year, the yearly administrative costs (including
business as usual costs) for all operators dealing with substances of
category 2 would amount to over € 84.4 million. The requirement that
a copy of the customer declaration should accompany the substances when
transported in the EU, would amount to an additional € 1 million. It is debatable,
however, to what extent the administrative costs resulting from this option
could be considered business as usual costs, as diligent operators do
actually conduct the verifications already today. Therefore, two different
scenarios will be considered.
SCENARIO 1: 100% business as usual costs for customer verification
The EIM Report suggests
that, according to the interviews the consultancy carried out, operators declared
that they did only conduct business with companies that are known to them and for which
they can check the authenticity, their activities and creditworthiness. Under
this scenario, the costs linked to the main obligation under option 3,
verification of the customer declaration, could be considered 100% business as
usual costs and there would be no additional administrative burdens.
administrative costs would be the costs involved in sending a copy of the
customer declaration. This would amount to € 0.2 million for sub option a) and €
1 million under sub-option b). A summary of the calculations is set out in Table
Table 5 Administrative burdens for registered operators under option
3, SCENARIO 1 (100% business as usual for verification of customer declarations)
|| || Total costs per year Policy option || Sub-option || Administrative costs (AC) || Business as usual costs (in % of AC) || Additional administrative burdens 3 || Strengthened rules and obligations on operators related to customer declarations from end-users (completely filled in customer declaration, verification - if necessary by authorities, copy of customer declaration on substances in category 2) || 3a) Verification of the authenticity of the customer declaration data for AA only || € 15,132,157 || 100% || €0 3b) Verification of the authenticity of the customer declaration data for all substances of category 2 || € 84,411,687 || 100% || €0 3a ) Send a copy of the customer declaration only for AA || € 180,145 || 0% || € 180,145 3b) Send a copy of the customer declaration for all substances || € 1,004,901 || 0% || € 1,004,901 SCENARIO 2: 70% business as usual costs for customer verification
The assumption made in
the EIM Report that all operators only do business with customers which they
have thoroughly checked could be challenged as not realistic, given that there
are still cases of diversion which have not been signalled to the authorities
(as evidenced by seizures). In an alternative
assumption, 30% of operators do currently not act in an ideal way and would
have to increase their efforts under Option 2. This would lead to higher administrative
burdens as detailed in Table 6: € 4.7 million (4.5 million + 0.2 million) for
sub-option a), and € 26.3 million (25.3 million + 1 million) for sub-option b).
Table 6 Administrative burdens for registered operators under option
3: SCENARIO 2 with 70% business as usual for verification of
|| || Total costs per year Policy option || Sub-option || Administrative costs (AC) || Business as usual costs (in % of AC) || Additional administrative burdens 3 || Strengthened rules and obligations on operators related to customer declarations from end-users (completely filled in customer declaration, verification - if necessary by authorities, copy of customer declaration on substances in category 2) || 3a) Verification of the authenticity of the customer declaration data for AA only || € 15,132,157 || 70% || €4,539,647 3b) Verification of the authenticity of the customer declaration data for all cat. 2 substances || € 84,411,687 || 70% || € 25,323,506 3a) Send a copy of the customer declaration for AA only || € 180,145 || 0% || € 180,145 3b) Send a copy of the customer declaration for all cat. 2 substances || € 1,004,901 || 0% || € 1,004,901 7.5.1.2. Competent authorities
The costs for competent
authorities under this option would depend on whether / how often operators have
to involve their authorities because they cannot check the legitimacy of their
customers by themselves. SCENARIO 1: No involvement of competent authorities
The EIM Report assumes
that enterprises are able to verify themselves the data concerning their
customers via sources such as Chambers of Commerce, banks, and others and that
there is hence no need to involve competent authorities in this
verification exercise. Consequently, there would be no additional costs for
SCENARIO 2: Occasional involvement of competent authorities An assumption of no
involvement of authorities contradicts one of the key findings in the
Commission’s own evaluation of the functioning of the current legislation,
where it was found, and subsequently confirmed by competent authorities on
several occasions, that it was very difficult – even for competent authorities
themselves – to verify data on customers in other Member States, particularly
if those customers claimed to be end-users which are not registered. It is,
therefore, assumed that also for operators themselves, it is difficult to
verify the accuracy of information provided in a customer declaration, if the
customer is based in another Member State, in particular if that customer
claims to be an end-user. Under scenario 2, it is,
therefore, considered plausible that competent authorities would need to invest
the similar amount of time (per request) for a verification of a customer on
request of an operator as they would under option 4 (assessed under Section 7.6.1.2
below) according to which authorities would have to verify all new end-user
customers before giving an agreement for delivery. The time per verification (1
hour) amounts – as under option 4 – to an average administrative cost per
verification of about € 26 in the EU.
frequency, it is assumed that about 10% of all customer declarations
would require verification by authorities, because operators cannot conduct
full verification themselves. Combined with the relevant number of customer
declarations received per operator in the EU (52/year for customer declarations
for AA only; and 116/year for customer declarations for all category 2
substances); the administrative costs for the involvement of authorities would
amount to € 0.2 million (sub-option a), and € 1.2 million (sub-option
b) per year.
Table 7 Administrative costs competent authorities under option 3 – SCENARIO
2 (10% of customer declarations verified by authorities)
|| || Total costs per year Policy option || Sub-option || Time spent/ action || Average price/ MS action || 10% of AA customer declarations / operator || Number of operators || Administrative costs 3 || || 3a) Only for AA || 1h || € 25.63 || 5.2 || 1,622 || € 216,174 3b) For all substances cat. 2 || 1h || € 25.63 || 11.6 || 4,056 || € 1,205,881 7.5.2. Benefits
objective of preventing diversion of AA, option 3 would increase the
responsibility of operators for the choice of their customers. The legislation
already requires customers to fill-in a customer declaration with
details including: the company name and address, its registration details (if
applicable), and the intended use of the substance. However, the
legislation does not add expressis verbis a mirroring responsibility for
operators to prevent them from delivering the substance ordered if the customer
cannot demonstrate genuine motives for placing an order or if the customer
declaration is incomplete. This option would remove this uncertainty. It should be noted that
diligent operators and authorities do already conduct these verifications under
the current Regulation – hence, the effectiveness of the option in preventing
diversion is probably comparable to that of Option 1 (in particular in the
assumption of a 100% Business as Usual Scenario). Still, it can be
expected that the clarification of the legal text as foreseen in this option
would lead to an increased vigilance of operators to verify the genuine motives
of clients placing orders with them (in particular also for those who do not
act as diligently as they should) and would increase the number of cases where
operators would contact their authorities to signal suspicious transactions,
e.g. when customer declarations are incomplete and/or when the indicated uses
and quantities of substances ordered do not match the profile of the company
having placed the order.
This option would be
fully in line with the spirit of the current legislation, which intends to
emphasize the responsibility of operators. The co-operation between economic
operators and authorities – which is a cornerstone for the success of the drug
precursor legislation – might intensify and improve. However, this will only
work if operators are prepared to genuinely verify the content of customer
declarations (rather than limit themselves to a 'tick-box' check of completeness
without verification of the content of the customer declaration). Good and fast
responsiveness of authorities to requests for assistance from operators will
also be crucial as otherwise the climate of good co-operation might deteriorate
quickly – this could become an issue where potential clients are based in other
Member States and the 'inquiry chain' would have to involve the authorities of
several Member States, which could easily lead to delays. On the other hand, this
option will not prevent traffickers from trying to find a 'weak link' and place
orders with many different operators, hoping to find at least one who will not
put too many efforts in verification of customer declarations before delivering
the order. With regard to the
avoiding fragmentation of the internal market.
7.6. Option 4: require operators to systematically notify new
end-users to the authorities to allow verification
7.6.1. Costs
7.6.1.1. Enterprises
As detailed in Table 8,
option 4 would cause administrative burdens of about € 0.04 million to notify
all new end-user customers for AA to the authorities (sub-option a). The
obligation to notify new end-user customers for all scheduled substances in
category 2 to the authorities (sub-option b) would cost operators about €
Table 8 Administrative burdens for registered operators under Option
|| || Total costs per year Policy option || Su- option || Administrative costs (AC) || Business as usual costs (in % of AC) || Administrative burdens (AC – BAU) 4 || Require operators to systematically notify new end-users to the authorities to allow verification and request agreement for delivery from CA || 4a) Only for AA || € 41,572 || 0% || € 41,572 4b) For all substances cat. 2 || € 467,799 || 0% || € 467,799 7.6.1.2. Competent
competent authorities would need about 1 hour for each new end-user verification.
As detailed in Table 9, this would involve an annual cost of € 0.005 million
in the EU for the verification of notified new AA end-user customers and
authorisation of delivery (sub-option a). If the verification and
authorisation were required for new end-users of all category 2 substances (sub-option
b), the annual costs would amount to € 0.03 million.
Table 9 Administrative costs competent authorities under Option 4
|| || || Total costs per year Policy option || Sub-option || Member States || Administrative costs (AC) || || 4a) Only for AA || All MS (27) || € 4,939 4b) For all substances cat. 2 || All MS (27) || € 26,725 It should be noted that
Hungary has already requested its operators to make a notification to the
authorities three days before any delivery to a new customer. In the Czech
Republic and in Germany, operators have recently been requested to provide the
authorities with information about their new customers. A notification of all
(not only new) customers to the authorities is part of the national
legislations of Italy and happens voluntarily in Austria. Consequently, in all
of these Member States, the costs incurred by the proposed option 4 are
expected to be lower than calculated above, depending on the details of the
current notification to the authorities.
7.6.2. Benefits
This option has the
potential to be very effective in preventing diversion while keeping the
administrative burden both for operators and authorities directly proportionate
to the risk. It is reasonable to assume that long-standing customer relations
between a supplier and distributor or end-user of a substance have a very low
risk of diversion. In such situations the 'know your customer' principle is
fully complied with. On the other hand, new customers – in particular those
claiming to be end-users and hence not having a registration number attributed
by an authority – always present a bigger challenge for operators in terms of
verification of their genuine motives for placing an order. The risk that
operators limit their efforts for verification of a new client is relatively
high as delays in their acceptance of an order can lead to the result that the
order is lost and placed elsewhere. The obligation to
systematically notify all new clients to the authorities will ensure that the
authorities themselves can conduct all appropriate verifications – if necessary
also involving their homologues in other Member States – and in case of doubt
they can prevent the operator from delivering the order and/or they can monitor
delivery. It would also be more difficult for traffickers to try to find 'a
weak link' in the EU as they should be subject to the same scrutiny by
authorities in all Member States. As set out above, Hungary has already
implemented this option by requesting notification of every transaction of AA
with a new customer (or above a certain threshold) and has reported to find this
measure very effective. Germany, however, which recently also requested its
operators to provide them with information on new end-users, considered the
systematic registration of all end-users to be more effective. On the other hand, this
option would entail the risk of de facto creating different control standards
between end-users that have been involved in trade with drug precursors for a
long time and new market entrants. Whilst it is true that an end-user who
changes supplier will become a new customer for the new supplier (and then be
reported to the authorities) this will not happen if the end-user does not
switch his long-standing supplier(s). On the other hand, new market entrants
(i.e. companies starting to buy for the very first time), will always be
reported to the authorities, possibly even multiple times if they start
ordering from several suppliers. This might even become a barrier for new
market entrants. Furthermore, during the
consultations, some stakeholders held the opinion that option 4 could also lead
to some counter-productive effects. The drug precursor legislation relies on the
sensitisation of the industry to the risks of diversion to illicit uses of the
substances and a (mainly voluntary) cooperation of the industry. A systematic
notification of new customers to the authorities could weaken this effect of
self-responsibility of the industry for detecting suspicious orders indicative
of a diversion attempt. In fact, operators already now voluntarily involve the
authorities, if they are uncertain about a particular order. This happens in
particular for orders from new customers[83].
instead shift the responsibility to authorities who would ultimately decide on
the fate of potential new business relationships. If authorities were slow in
replying to operators with the results of their verifications, operators might
lose potentially genuine business which could create incentives to not comply
with the notification obligation and the option could thus become ineffective.
Also, some comments in the consultation added that it was only possible for the
authorities to respond quickly, if the end-users had previously been registered
with the authorities, so that authorities would have the information available.
According to these views, a notification of new end-user customers would only
be effective if combined with an end-user registration[84].
There could be further negative
effects for the monitoring of the non-scheduled substances (loss of
effectiveness of industry cooperation), which is entirely voluntary and
necessary to be able to react to new diversion trends.
objective of preserving the internal market, Option 4 would increase the
knowledge of authorities related to a part of the end-users (i.e. those placing
orders for the first time with operators). This would probably reduce somewhat
the likelihood that Member States consider that it would be necessary to adopt further
national measures under Article 10 of the current Regulation to reinforce
control of trade in drug precursors. However, given that Member States would
still not know all end-users (i.e. not those having long-standing business
relations with operators), some could still consider it necessary to adopt
additional national control measures, which would be detrimental for the
Internal Market. 7.7. Option 5: require registration for end-users and
reinforce requirements regarding registration 7.7.1. Costs
7.7.1.1. For
As detailed in Table 10,
option 5 would create considerable one-off costs for the registration of
all existing end-users: € 0.16 million under sub-option 5a (for AA
end-users only) and € 0.5 million under sub-option 5b (for all
end-users of category 2 substances).
option involves low annual costs for enterprises, with
€ 0.01 million/year if the new registration requirements would apply
only to AA end-users (sub-option a) and € 0.07 million/year for a
registration requirement for end-users of all category 2 substances (sub-option
Table 10 Administrative
burdens for registered end-users under Option 5
|| || Total costs (per year for ongoing costs) Policy option || Sub-option || Administrative costs (AC) || Business as usual costs (in % of AC) || Administrative burdens (AC – BAU) 5 || Require registration for end-users and reinforce requirements regarding registration || 5a) One off costs end-user registration (current end-users only AA) || € 158,457 || 0% || € 158,457 5b) One off costs end-user registration (current end-users all subst. cat. 2) || € 547,713 || 0% || € 547,713 5a) Ongoing costs end-user registration (new end-users only AA) || € 12,559 || 0% || € 12,559 5b) Ongoing costs end-user registration (new end-users all subst. cat. 2) || € 65,357 || 0% || € 65,357 However, it cannot be
excluded that Member States' authorities will charge registration fees to pass
on the administrative costs which they will have to bear under Option 5 for
granting the registration to enterprises (see next section for details). So
far, only few Member States have already introduced registration fees, in order
to carry over their costs to the companies concerned[85],
but it cannot be excluded that the significant costs for authorities from
Option 5 would lead others to follow this example. Should Member States decide
to levy fees for registration of end-users, the costs for enterprises would
increase by the amounts calculated in Section 7.7.1.2. As micro-SMEs might be
disproportionately affected by such a 'roll-over' of Member States' costs, it
might be necessary to consider mitigation measures if Option 5 was implemented,
e.g. the legislative proposal could prevent Member States from imposing
registration fees on micro-SMEs.
7.7.1.2. Competent
As detailed in Table 11,
registration of all existing AA end-users (sub-option a) would create one-off
costs of € 0.4 million for authorities for registration of all exiting
end-users of AA and annual costs of € 0.05 million for registration
of new end-users of AA. In sub-option b,
competent authorities would have to bear one-off costs of € 1.8 million
for the registration of existing category 2 end-users and, in addition, annual
costs of € 0.2 million for registration of new category 2 end-users.
previous section, competent authorities could decide to pass on these costs to
end-users in the form of registration fees. In that case, they would have no
additional costs to bear.
Table 11 Administrative costs for competent authorities under Option
|| || || Total costs (per year for ongoing costs) Policy option || Sub-option || Member States || Administrative costs (AC) || || 5a) One off costs only for AA || All MS (27) || € 392,559 5b) One off costs for all substances cat. 2 || All MS (27) || € 1,801,674 5a) Ongoing costs only for AA || All MS (27) || € 47,934 5 b) Ongoing costs for all substances cat. 2 || All MS (27) || € 236,190 It should be noted that
Belgium, Denmark and Spain register end-users already under the current
national legislation. An introduction of a registration requirement at European
level would, to the extent that the current national system is comparable in
terms of registration requirements, involve considerably fewer costs for the
companies and competent authorities concerned in these Member States.
7.7.2. Benefits
option has been proposed by several Member States who have repeatedly stated during
the consultations that the main difficulty which currently precludes Member
States’ competent authorities from effectively preventing diversion is their
lack of control and knowledge over end-users. As end-users are not registered
under the present European legislation, they are “unknown” to the authorities
who have, hence, difficulties to control them.
Member States who have
experience with an end-user registration requirement either from past[86]
or current[87] national legislation
reported that the end-user registration has proved to be an effective tool. As is
already required for operators, it will allow Member States to verify
the genuine motives of end-users with regard to the use of drug precursors
during the registration process and thus before they can place any
orders to purchase drug precursors. This would also facilitate the tasks of
operators to verify that their customers have genuine motives as end-users
placing an order would have to provide a customer declaration including also an
official registration number attributed by an authority. In line with these
experiences, option 5 is the most favoured option by Member States according to
the consultation carried out in 2010: 58% of MS considered option 5 to be the
best option to effectively prevent diversion.
However, the expected
improvements in preventing diversion will only materialise if Member States do
in fact control applicants for registration before attributing a registration
number. Information provided during the consultations has cast some doubt on
whether this actually happens: in fact, several Member States have claimed that
the current wording of Article 3 (6) in Regulation (EC) No 273/2004 does not
allow them to refuse registration – an opinion not shared by others or the
Commission Services. In order to eliminate any doubts, it would therefore be
necessary to amend Article 3 (6) and, in addition, to agree certain minimum
requirements with regard to registration including also a visit to the premises
Secondly, the option
will only have the intended effect, if operators maintain their vigilance and
verify that registration numbers of their (potential) clients are genuine and
do not accept them at face value when they appear on a customer declaration.
Otherwise, the fact that presumably official registration numbers appear on
customer declarations of end-users could actually lead to decreased vigilance
as operators would (wrongly) believe that the indication of the registration
number does automatically legitimise the client. Consequently, operators will
have to conduct the same efforts as described under option 1 (or even 3),
involving, where necessary also the authorities. The Commission's intention to
provide a data base with all registered operators (and also end-users in this
option) would facilitate such verification.
objective of preserving the internal market, Option 5 would greatly increase
the knowledge of authorities related to end-users and this would strongly
reduce the likelihood that Member States consider it necessary to adopt further
control of trade in drug precursors. Option 5 would thus be very effective in
preserving the Internal Market.
7.8.1. Costs
7.8.1.1. Enterprises
As detailed in Table 12,
option 6 involves one-off costs of € 0.3 million for all
existing operators and end-users of AA for obtaining a licence to possess or
sell AA within the EU. In addition, the option
involves yearly costs for licensing new AA operators and new end-users. The
number of new AA end-users has been calculated based on the Member
States' survey as 196 per year[88]), which (based on the
total number of AA end-users of 2,473) amounts to a ratio of 8% fluctuation per
year. The answers to the survey did not contain information on the number of new
AA operators per year. However, applying the same ratio of 8% fluctuation
to the total number of AA operators in the EU 1,622, the number of new AA
operators can be estimated at 49 per year[89]. Based on
these calculations, 245 (196+49) companies per year would need to be considered
for the yearly costs of this option. Combined with the calculated price under
this option for obtaining a licence (€ 76.89), the ongoing costs would amount
to just under € 20,000.
cost of € 180,000 has to be added for the obligation of operators to stamp
and date a copy of the customer declaration and have it accompany AA shipments being
moved within the EU.
Additional yearly
costs would be incurred by companies if the change
of category would also be considered under Regulation (EC) No 111/2005 concerning
external trade. Under Art. 20 of that Regulation, import
authorisations are required for each individual import consignment of category
1 substances. According to the consultation carried out in 2010, enterprises
spend 55 minutes/year to obtain an import authorisation and they obtain on
average 3 individual import assignments for AA. An obligation to obtain import
authorisations for AA would amount to additional yearly costs of € 0.3 million.
These costs would be
further increased if Member States passed on the administrative costs which
they bear for granting licences to enterprises. So far, some Member States have
already introduced licensing fees, in order to recover their costs from the
companies concerned[90]. In such a scenario, the
costs for authorities as calculated in the next section would have to be added
to the costs for enterprises calculated above. As micro-SMEs might be
might be necessary to consider mitigation measures if Option 6 was implemented,
licensing fees on micro-SMEs
Table 12 Administrative burdens for licensed companies under Option 6
|| || Total costs (per year for ongoing costs) Policy option || Costs per activity || Labour costs per action || Number of actions || Administrative burdens 6 || Move AA from category 2 to category 1 || One off costs obtaining a license for AA || € 76,89 || 4,095 || € 314,865 Ongoing costs obtaining a license for AA || € 76,89 || 245 || € 18,838 Ongoing cost: operators must stamp and date a copy of the customer declaration and accompany it with AA being moved within EU || € 2,13 || 84,344 || € 180,145 || If move of category is also considered under external trade || Ongoing costs for obtaining import authorisations for each consignment of AA || € 28.83 || 12,285 || € 292,793 7.8.1.2. Competent authorities
Option 6 involves one-off
costs of € 1.7 million for competent authorities for licensing
all existing companies handling AA, which is almost equivalent to the one-off
costs for the authorities under option 5b.
In addition, the option
involves yearly costs for licensing new AA operators and new end-users. According
to the calculation above (section7.8.1.1) 245 companies need to be licensed by
the authorities each year (i.e. all new AA end-users and all new AA operators).
The average price per action (issuing a licence for AA) in the EU has been
calculated at € 414. As a result, the total yearly costs of option 6
amount to about € 0.4 million as detailed in Table 13.
costs would be incurred by competent authorities if
the change of category would also be considered under Regulation (EC) No 111/2005
concerning external trade. Under Art. 20 of that Regulation, import
1 substances. According to the consultation carried out in 2010, Member States
spend 648 hours /year for granting 679 import authorisations for category 1
substances[91]. Based on the estimates
provided by enterprises, 12,285 individual import authorisations would have to
be granted for AA each year. A requirement to obtain import authorisations for
AA would thus amount to additional yearly costs of € 0.1 million.
Table 13 Administrative costs competent authorities under Option
|| || Total costs (per year for ongoing costs) Policy option || Costs per activity || Authorities' average costs per action || Number of actions || Administrative costs 6 || Move AA from category 2 to category 1 || One off costs obtaining a license for AA || € 414 || 4,095 || € 1,697,070 Ongoing costs obtaining a license for AA || € 414 || 245 || € 101,534 || If move of category is also considered under external trade || Ongoing costs for obtaining import authorisations for each consignment of AA || € 24.38 || 12,285 || € 299,549 7.8.2. Benefits
The benefits of option
6 in terms of a reduced likelihood of diversion of AA from legal trade are
expected to be similar or even higher than those of option 5a. A change of
category for AA from category 2 to category 1, would automatically subject all
end-users of AA to the direct control of the authorities, as these end-users
would now need to be licensed (which involves even stricter requirements than a
registration). In addition, also operators of AA would be
subjected to the stricter regime of a licence, instead of the current
Option 6 would thus
enable a better control of competent authorities over both end-users and operators
of AA than the baseline scenario or any other option.
However, this improved
control is linked to the substance AA only. This can be seen as beneficial in
the sense that any increase in administrative burden is limited to that
substance for which high volumes of diversions and diversion attempts have been
shown in the past. On the other hand, however, limiting the option to AA means
that the detected structural weaknesses of the regime for category 2 substances
are not addressed. In case the focus of traffickers should shift from AA to
another substance in category 2, the legislative changes carried out under
option 6 would not be able to address this changed diversion trend[92].
objective of preserving the internal market, Option 6 would greatly increase
control of trade in drug precursors. Option 6 would thus be very effective in
Table 14[93] compiles the information regarding expected benefits (in terms of
effectiveness to achieve the operational objectives) and costs for each of the
(sub-)options. 8.1. Qualitative
assessment of benefits The effectiveness
scores of Option 1 (baseline scenario) have been set at "0", both for
the prevention of diversion and the preservation of the internal market.
The analysis for Option
2 (increased reporting) has revealed that it is not an effective tool to prevent
the diversion of AA (Option 2a) or of all category 2 substances (Option 2b),
as competent authorities would not have the means to check very large datasets
on legal transactions to find a relatively small percentage of diverted
substance (0.02% of totally produced AA is diverted). This leads to a '0'
Option 3 (increased
obligations on operators relating to checking of customer declarations) would
require operators 'expressis verbis' not to deliver any orders if the
customer declaration has not been correctly filled in. Even though diligent
operators will already now do these checks, the option will provide legal
clarity on the obligation to do so and is therefore considered to bring about
some improvement in preventing diversion (score: +). With regard to the
preservation of the internal market, Member States are likely to consider it
equally necessary under option 2 and option 3 to adopt national measures, so
that the score for both options would be "0", as in the baseline
Options 4 and 5 have both
the potential to be very effective in preventing diversion, but with
conceptually different approaches: Option 4 focuses on new end-user customers,
which are placed under scrutiny through a notification obligation of operators
(to authorities) for their new end-user customers. This has the advantage that
the authorities focus their limited resources on the group of "most risky
customers", the ones not previously known to the operator. This focussed
risk-based approach could be considered more efficient than a general
"register all end-users" approach under option 5, where fraudulent
customers may be lost in the higher numbers of many licit end-user customers.
On the other hand, option 4 entails the risk of creating different control
standards for end-users, who are new market entrants or switch suppliers,
compared to well-established end-users, who remain with existing suppliers,
whilst option 5 has the advantage of providing the authorities with a complete
overview of all end-users in their territories. In case of need, this enables
them to act quickly and target enforcement actions on some of these end-users
following specific market intelligence (i.e. to carry out an individual
risk-based measure). As a result, it is
considered that options 4 and options 5 can be considered as having almost an
equivalent score of effectiveness in preventing diversion (++), option 4
scoring arguably slightly weaker if one factors in that it does imply different
control standards, which has been indicated as (+[+]) in the table. In terms of
preserving the internal market, however, due to the overwhelming preference of
Member States for option 5, option 4 involves a non negligible risk of national
measures being adopted in addition. Therefore Option 5 scores better (+++) than
option 4 (++) in this respect. Under option 6, the
strongest tools available under the current legislation would be applied to AA.
Therefore it has the highest effectiveness score for preventing diversion (+++)
and, together with option 5, the highest score for preserving the internal
market (+++).
When comparing the
costs to the expected effectiveness, Option 2 can be discarded as
it will trigger significant costs – in particular for companies – without clear
benefits in terms of reducing the risk of diversion of drug precursors in
category 2 from legal trade. For options 3, 4, and
5, a choice has to be made whether the options should apply to all scheduled
substance in category 2 or to AA only, whereas option 6 is targeted at AA
exclusively. At first sight, it may seem more consistent to apply the options
to all substances in the same category as the weaknesses identified in
the prevention of diversion (especially insufficient control of end-users)
apply equally to all substances in that category. However, the sub-options
affecting all category 2 substances subject a considerably higher number of
companies to obligations and create significantly higher additional
administrative burdens and costs, whilst only AA has been consistently
identified by both the INCB and Member States' competent authorities as
problematic during the consultation process. In addition, the main principle of
the legislation is that there are different levels of control for different
substances – depending on the particular diversion risk of each substance
concerned. Therefore, the choice should be limited to options addressing AA
only. Consequently, sub-options 3b, 4b and 5b should be eliminated.
The cost calculation of Option 3a distinguishes
two alternative scenarios. The EIM Report suggested that all (100% of)
enterprises are already verifying the legitimacy of their customers' business
before delivery (scenario 1: no additional costs for enterprises), and that
enterprises never need to involve their authorities in this verification
(scenario 1: no additional costs for authorities). As explained under Section
7.4, under a more realistic assumption only 70% of operators do already act in
an ideal way and verify their customers before delivery (scenario 2 for
enterprise costs), and for 10% of all customer declarations, enterprises need
to involve their authorities (scenario 2 for authority costs). Based on scenario
2, option 3a has the highest total yearly costs from the remaining
options (€ 4.7 million), without clear benefits both for reducing
diversion and for preserving the internal market and should therefore be
Table 14 Comparative table on costs and benefits
Option || Benefits/Effectiveness || Costs for companies || Costs for authorities || Total Costs Prevent diversion || Preserve int. market 1 || 0 || 0 || € 0 Risk of fragmented market || € 0 || € 0 2 || 2a || 0 || 0 || € 5.6 mio/year || € 1 mio/year || € 6.6 mio/year || 2b || 0 || 0 || € 1.5 mio/year || € 0.3 mio/year || € 1.8 mio/year || 2a+2b || 0 || 0 || € 11.4 mio/year || € 2.1 mio/year || € 12.5 mio/year 3 || 3a (AA only) || + || 0 || Scen. 1 (100% business as usual): Scen. 2: (70% business as usual): || € 0.2 mio/year € 4.7 mio/year || Scen. 1: (no authority involvement) Scen. 2: (authorities involved in 10% of cases) || € 0 € 0.2 mio/year || Scen. 1: Scen. 2: || € 0.2 mio/year € 4.9 mio/year || 3b || + || 0 || Scen. 1: Scen. 2: || € 1 mio/year € 26.3 mio/year || Scen. 1: Scen. 2: || € 0 € 1.2 mio/year || Scen. 1: Scen. 2: || € 1 mio/year € 27.5 mio/year 4 || 4a (AA only) || +[+] || ++ || € 0.04 mio/year || € 0.005 mio/year || € 0.05 mio/year || 4b || +[+] || ++ || € 0.5 mio/year || € 0.03 mio /year || € 0.53 mio/year 5 || 5a (AA only) || ++ || +++ || Alt. Scen: (company registration fees) || € 0.16 mio + € 0.01 mio/year € 0.55 mio + € 0.06 mio/year || Alt. Scen: || € 0.39 mio +€ 0.05 mio/year € 0 || Alt. Scen: || € 0.55 mio + € 0.06 mio/year € 0.55 mio + € 0.06 mio/year || 5b || ++ || +++ || Alt. Scen: (company registration fees) || € 0.5 mio + €0.07 mio/year € 2.3 mio + € 0.3 mio/year || Alt. Scen: || € 1.8 mio + € 0.2 mio/year € 0 || Alt. Scen: || € 2.3 mio + € 0.3 mio/year € 2.3 mio + € 0.3 mio/year 6 (AA only) || +++ || +++ || [or: incl. ext. trade Alt. Scen:(company licensing fees) || € 0.3 mio + € 0.2 mio/year + 0.5 mio/year] € 2.0 mio + € 0.3 [or + 0.9] mio/year || [or: incl. ext. trade Alt. Scen: || € 1.7 mio + € 0.1 mio/year + 0.4 mio/year] € 0 || [or incl. ext.tr. Alt. Scen: || € 2.0 mio + € 0.3 mio/year + 0.9 mio/year] € 2.0 mio + € 0.3 [or + 0.9] mio/year Options 4a, 5a and 6 have similar benefits,
both in preventing diversion and in preserving the internal market. However, Option
6 can be singled out for creating very high additional costs: it
involves one-off costs of € 2.0 million (against € 0.55 million for
option 5a and none for option 4a) and yearly costs of at least 0.3 million[94]
(against € 0.06 million for option 5a and € 0.05 million for option
4a). Looking at the costs for companies only, the differences between Option 6
and options 4a/5a are even more striking. In terms of cost efficiency, option 6
therefore scores as least favourable and can also be excluded.
Options 4a and 5a remain as most promising. The overall costs for Option 5a compared to its benefits are
clearly higher than for Option 4a. However, this is mainly due to the 'one-off'
costs for the registration of a high number of existing end-users – the main
part of these registration costs will be for the authorities: € 0.39 million
compared to € 0.16 million for companies.
Based solely on the overall
cost/benefits-ratio for authorities and companies combined (and including the
one-off registration costs) Option 4a would prevail as the preferred option.
However, leaving the fixed costs aside (they
can be disregarded once all existing companies have been registered), cost
differences are less pronounced: Option 5a is better from the perspective of
companies (Option 5a amounts to only 25 % of the yearly costs expected for
Option 4a), whereas Option 4a is advantageous from the perspective of
authorities (only 10% of the yearly costs expected for Option 5a).
Considering that Option 5a thus involves
lower annual costs for companies and that it has, at the same time, the
greatest political support from the majority of Member States would be an argument
for choosing Option 5a as the preferred option. The argument of lower
annual costs for companies would, however, no longer be true if Member States
decided to recover their costs from registrants by charging registration fees,
as for example the UK has introduced recently. The effects of a potential
passing-on of the authorities' costs to companies have therefore been
calculated as an "alternative scenario" under Option 5.
However, putting the combined total yearly costs
of either option (€ 0.05 million for Option 4a and € 0.06 million
for Option 5a into perspective with the total European market value of
AA (> € 257 million/year[95]), their impact is quite
limited. Also the one-off costs of € 0.16 million for companies and of
€ 0.29 million for authorities are low in comparison.
In conclusion, both Options 4a and 5a are
considered good choices to address the identified objectives. The selection of
either of them is primarily a political choice. The strong political support
which Option 5a has from most Member States, combined with views expressed on
international level that a more systematic control of (all) AA end-users is
lacking in the European legislation may tip the balance in the end in favour of
Option 5a. An additional argument for Option 5a would be considering the
specific impacts on SMEs (see below). Competitiveness
check and SME check In view of the relatively low costs of either
option in relation to the overall market value of the European AA production, a
tangible impact of the competitiveness of European industry is not
The preferred options would both have effects
on SMEs. SMEs dealing with AA are primarily end-users. SMEs have been
involved in the consultation with a targeted consultation via the Enterprise
Europe network[96]. While about 50% of them
expressed a preference for not changing the legislation at all, option 5 was
the second preferred option (15% or respondents), while options 2, 3 and 4 were
chosen by respectively 7-8% of the respondents. This result is in line with the
analysis that option 5 would be less burdensome than option 4 in terms of
annual costs for enterprises (provided authorities do not pass on all costs to
registrants), an argument which is particular relevant for SMEs.
The present initiative would, under none of
the options, envisage a general exclusion of micro-companies, as this
would create an easy possibility of circumventing the controls of the
legislation. Traffickers could establish themselves as micro-entities in order
to evade controls by the authorities. It should, however, be born in mind that micro-companies
are most likely to benefit from the existing thresholds under the current
legislation: Art. 6 of Regulation (EC) No 273/2004 foresee that companies
with sales/purchases of drug precursors below the maximum yearly quantities[97]
are excluded from most of the obligations under the legislation[98].
Finally, as mentioned
in Section 7.6.1.1 a specific protection of micro-SMEs would be foreseen in
option 5 to prevent Member States to impose registration costs on micro-SMEs.
and evaluation 9.1. Measuring
the fulfilment of objectives
The Commission will continue to collect
Member States' annual statistics of seizures and stopped shipment of drug
precursors diverted in the EU[99]. These statistics will
show whether under the new legislative measures a downward trend of seizures of
diverted substances and of stopped shipments (indicating diversion attempts)
can be observed. These statistics will have to be compared to the overall
quantity of AA produced and traded in the EU.
The extent to which Member States will
legislate in addition to the European legislation[100]
will provide the Commission with an indication whether the objective of
ensuring a proper functioning of the internal market will be achieved.
the implementation of the new legislative measures
develop, together with Member States experts and interested stakeholders, a
number of accompanying activities to facilitate the implementation of the new
measures, such as an update of the existing guidelines, e-learning tool, FAQ
document and other awareness-raising activities.
Member States will have
to continue their ongoing monitoring activities with regard to the correct
implementation of Regulation (EC) No 273/2004, which will include the amended provisions.
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 stopped
or seized shipments of AA.
improved with the implementation of the database, which is currently being
developed by the Commission that shall facilitate the collection and analysis
of statistics. The database is expected to start being operational in the
The Drug Precursors
Committee/Working Group, 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.
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, through the appropriate channels. In particular, if considered
appropriate, stakeholders will be invited to participate in a meeting of the
Drug Precursors Working Group/Committee together with the Commission and
the implementation of the legislative amendments, the Commission Services
intend to carry out an evaluation in consultation with Member States and
stakeholders, to assess whether the amended legislation will have been effective
to prevent the diversion of AA.
Annexes Annex 1 : Summary of stakeholder consultation and SME consultation
Annex 2 : Overview of major drug precursors, their legitimate and
Annex 3 : Summary of obligations for drug precursors
Annex 4 : Statistics of seizures and stopped
shipments for all scheduled substances in category 2
Annex 1: Summary
of stakeholder consultation and SME consultation
a) Member States
Results Member States survey
consultation (operators and end-users)
c) SME consultation
A) Profile of your company || || || || In which country is your company based? Please indicate: || Number of requested records || % Requested records(60) || % of total number records(60) || Austria || 4 || 6,67% || 6,67% || Belgium || 3 || 5,00% || 5,00% || Bulgaria || 0 || 0,00% || 0,00% || Cyprus || 0 || 0,00% || 0,00% || Czech Republic || 0 || 0,00% || 0,00% || Denmark || 0 || 0,00% || 0,00% || Estonia || 1 || 1,67% || 1,67% || Finland || 0 || 0,00% || 0,00% || France || 0 || 0,00% || 0,00% || Germany || 13 || 21,67% || 21,67% || Greece || 0 || 0,00% || 0,00% || Hungary || 1 || 1,67% || 1,67% || Ireland || 2 || 3,33% || 3,33% || Italy || 4 || 6,67% || 6,67% || Latvia || 0 || 0,00% || 0,00% || Lithuania || 9 || 15,00% || 15,00% || Luxembourg || 0 || 0,00% || 0,00% || Malta || 0 || 0,00% || 0,00% || Netherlands || 0 || 0,00% || 0,00% || Poland || 8 || 13,33% || 13,33% || Portugal || 0 || 0,00% || 0,00% || Romania || 0 || 0,00% || 0,00% || Slovakia || 0 || 0,00% || 0,00% || Slovenia || 0 || 0,00% || 0,00% || Spain || 4 || 6,67% || 6,67% || Sweden || 7 || 11,67% || 11,67% || United Kingdom || 0 || 0,00% || 0,00% || Other || 4 || 6,67% || 6,67% || || || || || 2. How many employees does your company employ? || Number of requested records || % Requested records(60) || % of total number records(60) || a) 0-9 || 17 || 28,33% || 28,33% || b) 10-49 || 21 || 35,00% || 35,00% || c) 50-250 || 22 || 36,67% || 36,67% || || || || || 4. For what purposes are drug precursors used in your business?(more than 1 choice possible) || Number of requested records || % Requested records(60) || % of total number records(60) || • plastics || 6 || 10,00% || 10,00% || • rubber || 1 || 1,67% || 1,67% || • textiles || 2 || 3,33% || 3,33% || • dyes || 7 || 11,67% || 11,67% || • photochemical agents || 3 || 5,00% || 5,00% || • perfumes || 0 || 0,00% || 0,00% || • explosives || 0 || 0,00% || 0,00% || • pharmaceuticals || 13 || 21,67% || 21,67% || • biocides and plant protection products || 4 || 6,67% || 6,67% || • cleaning || 11 || 18,33% || 18,33% || • bleaching || 6 || 10,00% || 10,00% || • disinfectant || 5 || 8,33% || 8,33% || • deodorants || 1 || 1,67% || 1,67% || • food || 3 || 5,00% || 5,00% || • flavouring || 2 || 3,33% || 3,33% || • other (please specify): || 23 || 38,33% || 38,33% || || || || || B) Questions in relation to option 1: no changes of EU legislation || || || || 5. Have you ever noticed anything suspicious, or have you noticed negligent behaviour, when you were offered scheduled substances for purchase? || Number of requested records || % Requested records(60) || % of total number records(60) || % of total number records(59) a) Yes || 3 || 5,00% || 5,00% || 5,08% b) No (go to question 6) || 56 || 93,33% || 93,33% || 94,92% N/A || - || - || 1,67% || - || || || || 5.a) How many times have such situations occurred, on average, per year? || Number of requested records || % Requested records(3) || % of total number records(60) || a) 0 times || 0 || 0,00% || 0,00% || b) 1-2 times || 2 || 66,67% || 3,33% || c) 3-5 times || 0 || 0,00% || 0,00% || d) 6-10 times || 0 || 0,00% || 0,00% || e) more than 10 times || 0 || 0,00% || 0,00% || || || || || 5.b) For which substances? (more than one choice possible) || Number of requested records || % Requested records(3) || % of total number records(60) || a) acetic anhydride (AA) || 0 || 0,00% || 0,00% || b) phenylacetic acid || 0 || 0,00% || 0,00% || c) anthranilic acid || 0 || 0,00% || 0,00% || d) piperidine || 0 || 0,00% || 0,00% || e) potassium permanganate || 2 || 66,67% || 3,33% || || || || || 5.c) Have you contacted the authorities regarding suspicious or negligent behaviour? || Number of requested records || % Requested records(3) || % of total number records(60) || a) Yes || 1 || 33,33% || 1,67% || b) No || 1 || 33,33% || 1,67% || || || || || i. How many times, on average, per year? || Number of requested records || % Requested records(1) || % of total number records(3) || 0 times || 0 || 0,00% || 0,00% || 1-2 times || 1 || 100,00% || 33,33% || 3-5 times || 0 || 0,00% || 0,00% || 6-10 times || 0 || 0,00% || 0,00% || more than 10 times || 0 || 0,00% || 0,00% || || || || || ii. How much time have you spent on such contacts, on average, per year? || Number of requested records || % Requested records(1) || % of total number records(3) || • up to 30 min || 0 || 0,00% || 0,00% || • 30 min to 1 hour || 1 || 100,00% || 33,33% || • 1-2 hours || 0 || 0,00% || 0,00% || • 3-5 hours || 0 || 0,00% || 0,00% || • 6-10 hours || 0 || 0,00% || 0,00% || • more than 10 hours || 0 || 0,00% || 0,00% || || || || || || || || || C) Questions in relation to option 3: Strengthened rules and obligations related to the customer declarations from end users || || || || 6. How much time do you spend, on average, to fill in one customer declaration for purchases of scheduled substances in category 2? || Number of requested records || % Requested records(60) || % of total number records(60) || % of total number records(27) a) up to 15 min || 8 || 13,33% || 13,33% || 29,63% b) 15-30 min || 14 || 23,33% || 23,33% || 51,85% c) 30 min to 1 hour || 3 || 5,00% || 5,00% || 11,11% d) 1-2 hours || 2 || 3,33% || 3,33% || 7,41% e) more than 2 hours || 0 || 0,00% || 0,00% || 0,00% N/A || - || - || 55,00% || - || || || || 7. How many customer declarations do you fill in, on average, per year? || Number of requested records || % Requested records(60) || % of total number records(60) || % of total number records(53) a) 0 || 15 || 25,00% || 25,00% || 28,30% b) 1-2 || 15 || 25,00% || 25,00% || 28,30% c) 3-5 || 12 || 20,00% || 20,00% || 22,64% d) 6-10 || 4 || 6,67% || 6,67% || 7,55% e) more than 10 || 7 || 11,67% || 11,67% || 13,21% N/A || - || - || 11,67% || - || || || || D) Questions on possible benefits of changing the legislation || || || || 8. Did you experience specific cases of diversion or diversion attempts of scheduled substances in category 2? || Number of requested records || % Requested records(60) || % of total number records(60) || % of total number records(54) a) Yes || 3 || 5,00% || 5,00% || 5,56% b) No (go to question 9) || 51 || 85,00% || 85,00% || 94,44% N/A || - || - || 10,00% || - || || || || a) Please specify, whether the diversion or diversion attempts related to: || Number of requested records || % Requested records(3) || % of total number records(60) || • acetic anhydride, and/or: || 1 || 33,33% || 1,67% || • other scheduled substance in category 2 || 2 || 66,67% || 3,33% || || || || || b) Please describe the specific circumstances of the diversion or diversion attempts, such as: i. Which market participants were involved (more than one choice possible): || Number of requested records || % Requested records(3) || % of total number records(60) || • producers of drug precursors || 0 || 0,00% || 0,00% || • traders || 1 || 33,33% || 1,67% || • end-users || 2 || 66,67% || 3,33% || || || || || iii. In case diversion was not prevented, what were the reasons? || Number of requested records || % Requested records(3) || % of total number records(60) || Lack of industry collaboration || 1 || 33,33% || 1,67% || Lack of knowledge by market participants || 0 || 0,00% || 0,00% || Lack of information flow (please specify from where to where): || 0 || 0,00% || 0,00% || Lack of supervision (please specify by whom): || 0 || 0,00% || 0,00% || Other reasons? || 0 || 0,00% || 0,00% || || || || || 9. Which of the described option(s) would in your opinion be most efficient to achieve a better prevention of diversion of acetic anhydride (AA) or other scheduled substances in category 2? (For a short description of all options please refer to the background document) || Number of requested records || % Requested records(60) || % of total number records(60) || % of total number records(52) • Option 1 || 29 || 48,33% || 48,33% || 55,77% • Option 2 || 4 || 6,67% || 6,67% || 7,69% • Option 3 || 5 || 8,33% || 8,33% || 9,62% • Option 4 || 4 || 6,67% || 6,67% || 7,69% • Option 5 || 9 || 15,00% || 15,00% || 17,31% • Option 6 || 1 || 1,67% || 1,67% || 1,92% N/A || - || - || 13,33% || - Annex 2: Overview of major drug precursors ("scheduled
substances") and their main legitimate and illicit uses
1. CATEGORY 1 || NAME: Other Names: CAS Numbers: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || EPHEDRINE alpha-[1-(methylamino)ethyl]-benzene-methanol, alpha-[1-(methylamino)ethyl]benzyl alcohol, 2-methylmino-1-phenyl-1-propanol, 1-phenyl-1-hydroxy-2-methylaminopropane, 1-phenyl-2-methylaminopropanol, alpha-hydroxy-beta-methylaminopropyl-benzene. 299-42-3 29394100 206-080-5 C10H15NO Production of methamphetamine and N-methylcathinone. Used in manufacturing of bronchodilators, as a nasal decongestant, to test blood pressure. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || ERGOMETRINE Ergonovine, dextrolysergic acid, 1-(hydroxymethyl)ethylamid, ergobasine, ergotocine. 60-79-7 29396100 200-485-0 C19H23N3O2 Production of LSD. Medical use such as the treatment of migraine. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || ERGOTAMINE 5’alpha-benzyl-12’-hydroxy-2’-methylergotaman-3’,6’,18-trion 113-15-5 29396200 204-023-9 C33H35N5O5 Production of LSD. Medical use such as the treatment of migraine. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || LYSERGIC ACID 9,10-didehydro-6-methylergoline-8-beta-carboxylic acid. 82-58-6 29396300 201-431-9 C16H16N2O2 Production of lysergide (LSD). Used in organic synthesis and medical investigations. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || 1-PHENYL-2-PROPANONE phenyl-2-propanone, phenylacetone, P2P, benzyl methyl ketone, methyl benzyl ketone, BMK. 103-79-7 29143100 203-144-4 C9H10O Production of amphetamine and methamphetamine. Production of propylhexedrine. Used in organic synthesis. NAME: Other Names: CAS Numbers: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || PSEUDOEPHEDRINE alpha-[1-(methylamino)ethyl]-benzenemethanol, 2-methylamino-1-phenyl-1-propanol, 1-phenyl-1-hydroxy-2-methylamino-propane, alpha-hydroxy-beta-methylaminopropylbenzene, alpha-[1-(methylamino)ethyl] benzyl alcohol, PSE. 90-82-4 29394200 202-018-6 C10H15NO Production of methamphetamine and methcathinone. Manufacturing of bronchodilators and nasal decongestants. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || N-ACETYLANTHRANILIC ACID Orto-acetamidobenzoic acid, 2-acetamidobenzoic acid. 89-52-1 29242300 201-914-4 C9H9NO3 Production of methaqualone and mecloqualone. Used in the manufacture of pharmaceuticals, plastics and fine chemicals. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || 3,4-METHYLENEDIOXYPHENYLPROPAN-2-ONE 1-(1,3-benzodioxol-5-yl)propan-2-one, 3,4-methylenedioxybenzyl methyl ketone, 1-(3,4-methylenedioxyphenyl)-2-propanone, 5-acetonyl-1,3-benzodioxole, 1-(acetonyl)-3,4-methylenedioxybenzene, 1,3-benzodioxol-5-yl-propane-2-one, 1-(1,3-benzodioxal-5-yl-)-2-propanone, 3,4-MDP-2P, PMK 4676-39-5 29329200 225-128-6 C10H10O3 Production of MDA, MDMA, MDE and N-hydroxy-MDA Perfume industry. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || ISOSAFROLE 1,2-(methylenedioxy)-4-propenylbenzene, 5-(1-propenyl)-1,3-benzodioxole. 120-58-1 29329100 204-410-2 C10H10O2 Ring-substituted derivatives of amphetamine and methamphetamine, production of MDMA. Used in the manufacture of piperonal (heliotropin), fragrances and artificial food flavourings. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || PIPERONAL 3,4-(methylenedioxy)benzaldehyde, heliotropin, piperonylaldehyde 120-57-0 29329300 204-409-7 C8H6O3 Production of ring-substituted derivatives of amphetamine and methamphetamine, production of MDMA. Used in perfumery, in cherry and vanilla flavours, mosquito repellent. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: NAME: Other Names: Harmonized Code: Legitimate uses: || SAFROLE 5-(2-propenyl)-1,3-benzodioxole, 4-allyl-1,2methylenedioxybenzene, allylcatechol methylene ether. 94-59-7 29329400 202-345-4 C10H10O2 Production of ring-substituted derivatives of amphetamine and methamphetamine, production of MDMA. Used as a flavouring agent, preservative and in the production of other chemicals. SASSAFRAS OIL (contains a large share safrole, can be obtained from several plant varieties) ocotea cymbarum, ocotea pretiosa, sassafras albidum, sassafras officinale 330129 Perfumes and flavours. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || NOREPHEDRINE Phenylpropanolamine, PPA. 14838-15-4 ex 29394900 211-850-9 C9H13NO Production of amphetamines, methamphetamines and phenmetrazine. Pharmaceutical industry. 2. CATEGORY 2 || NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || ACETIC ANHYDRIDE Acetic oxide, acetyl oxide, ethanoic anhydride. 108-24-7 29152400 203-564-8 C4H6O3 Acetylating agent in the production of heroin, P2P and N-acetylanthranilic acid, methaqualone and mecloqualone. Precursor for n-acetylanthranilic acid, reagent for heroin. Acetylating agent used in chemical, photographic and pharmaceutical industry. It is used in making plastic, textile, dyes, photochemical agents, perfumes, explosives and aspirin. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || ANTHRANILIC ACID Ortho-aminobenzoic acid, 1-amino-2-carboxybenzene, vitamin L1, 2-aminobenzoic acid, ortho-carboxyaniline. 118-92-3 29224300 204-287-5 C7H7NO2 Production of methaqualone and mecloqualone. Production of n-acetylanthranilic acid. Manufacturing of dyes, pharmaceutical industry, perfumes and insect repellents. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || PHENYLACETIC ACID Benzeneacetic acid, alpha-tolyic acid. 103-82-2 29163400 203-148-6 C8H8O2 Production of methamphetamine and P2P. Used in chemical and pharmaceutical industry, perfumes, herbicides, penicillin, cleaning solutions and flavouring agent for foods. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || PIPERIDINE Hexahydropyridine, hexazane, pentamethyleneimine. 110-89-4 29333200 203-813-0 C5H11N Manufacturing of phencyclidine and its analogues. Precursor for thienylcyclohexylpiperidine (TCP). Solvent and reagent in chemical and pharmaceutical industry. Used in rubber products, plastic manufacturing and flavours. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || POTASSIUM PERMANGANATE Permanganic acid potassium salt, chameleon mineral, PP. 7722-64-7 28416100 231-760-3 KMnO4 Oxidizing agent to remove impurities in coca paste (cocaine). Reagent in organic, photographic chemistry, bleaching applications, disinfectants and deodorizer. 3. CATEGORY 3 || NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || ACETONE Dimethyl ketone, beta-ketopropane, pyroacetic ether, 2-propanone. 67-64-1 29141100 200-662-2 C3H6O Cocaine, heroin, lysergic acid diethylamide (LSD), methcathinone, ring-substituted derivatives of amphetamines and methamphetamines, used as a solvent in the production of chlordiazepoxide, diazepam, UB329, MDA, phenmetrazine, trimetoxyamphetamine and TMA. It is used as a solvent in chemical, pharmaceutical and photographic industries, used in manufacturing of plastics, also used as a nail polish remover, etc. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || ETHYL ETHER 1,1’-oxybisethane, ethyl oxide, diethyl oxide, ethoxyethane, sulphuric ether, diethyl ether. 60-29-7 29091100 200-467-2 C4H10O Heroin, cocaine, amphetamine, methamphetamine, lysergide (LSD), methaqualone, mecloqualone. Used as a solvent in the production of DOB, 4-methoxy-2,5-dimethoxyphenylethylamine, chlordiazepoxide, diazepam, 2,5-dimethoxyamphetamine, dimethyltryptamine, hydromorphone, JB318, JB329, JB336, MDA, mescalin, methadone, PCP, PCE, PHP, phenmetrazine, BMK, psilocin, STP, TCP, TMA. Widely used as a solvent in the extraction of waxes, fats, oils, perfumes and dyes, and to manufacture other chemicals. It has also been used as an anaesthetic. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || METHYL ETHYL KETONE 2-Butanone, ethyl methyl ketone, 2-oxobutane, methyl acetone, MEK. 78-93-3 29141200 201-159-0 C4H8O Heroin, solvent used in cocaine hydrochloride production. Manufacturing of coatings, lacquers, resins, etc. Used in the photographic industry. Commonly used as solvent. Secondary uses in perfumes and flavours. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || TOLUENE Methylbenzene, toluol, phenylmethane, methacide. 108-88-3 29023000 203-625-9 C7H8 Solvent used in the production of cocaine hydrochloride and heroin, and other controlled substances like amphetamine, methamphetamine, lysergide (LSD), methaqualone, mecloqualone, methadone, methylphenidate, PCP, PHP, BMK, psilocin, TCP In manufacturing of explosives, dyes. Gasoline additive. Industrial solvent. Used in the photographic industry. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || SULPHURIC ACID Oil of vitriol, hydrogen sulphate. 7664-93-9 28070010 231-639-5 H2SO4 Heroin, cocaine, amphetamine, methamphetamine. Reagent used in the production of chlordiazepoxide, diazepam, LSD, MDA, mescaline, methylphenidate, phenmetrazine, BMK. Used in fertilizers, chemicals, dyes, petroleum refining, etching, photographic industry, analytical chemistry, in making iron and steel, and in industrial explosives. NAME: Other Names: CAS Number: Harmonized Code: EC number (EINECS inventory) Molecular formula: Major Illicit Uses: Legitimate uses: || HYDROCHLORIC ACID Muriatic acid, hydrogen chloride. 7647-01-0 28061000 231-595-7 HCl Heroin, cocaine, amphetamine, methamphetamine, lysergide, methaqualone, mecloqualone. Reagent used in the production of Barbiturate, DOB, 4-bromo-2,5-dimethoxyphenylethylamine, chlordiazepoxide, diazepam, diethyltryptamine, dimethyltryptamine, hydromorphone, JB318,JB329, JB336. MDA, methadone, methylamine,methylphenidate, PCE, PCP, PHP, psilocin, STP TCP, TMA, phenimetrazine. Used in manufacturing of chlorides and hydrochlorides. Used in the photographic industry, in metal products cleaning, etc. Annex 4: Statistics of seizures and stopped shipments for all scheduled substances in category 2 || Scheduled substances in category 2 || 2008 || 2009 || 2010 Acetic anhydride (Liters) || 240,963 || 30,510 || 21,123 Phenylacetic acid (Kg) || 153 || 277 || 1 Potassium permanganate (Kg) || 2,029 || 1 || 3 Anthralinic Acid || 0 || 0 || 0 Piperidine || 0 || 1 || 0 [1] Seizures and
stopped shipments of AA in the EU dropped from 241 tons (in 2008) to 33 tons
(in 2009) and 21 tons (in 2010).
[2] 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, available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0709:FIN:en:PDF .
[3] Stakeholders have been consulted by RPA during the years 2006 and
2007 via questionnaires on the functioning of (and possible problems with) the
current EU legislation. These data were subsequently analysed by RPA, which
provided its Final Report to the Commission at the beginning of 2009. [4] For further
details, see under Section 4.2.1 "Strength and weaknesses of the
legislation" of the above-mentioned Report COM(2009)209 final.
[5] Council conclusions
on the functioning and implementation of the EU drug precursor legislation –
3016th Competitiveness Council meeting Brussels, 25 May 2010.
[6] Cefic (the European Chemicals Industry Council)/Acetyls Sector Group
and FECC (the European Association of Chemical Distributors).
statistical summary of SME consultation contained in Annex 1. It should also be
noted that from the group of consulted end-users, at least 42 companies of the
106 respondents have been identified as SMEs (this number of SMEs could even be
much higher as many respondents did not provide the required turnover data to
conduct the SME test).
[8] Including at
least 42 SMEs.
[9] See also
statistical summary of consultations contained in Annex 1. [10] EIM: Administrative
costs and administrative burdens imposed by amendments of the EU drug precursor
legislation. EIM had provided the Commission with a "Final Report" in
October 2011. A corrected "Final Report" dated March 2012 eliminated
a number of errors discovered subsequently. A copy of the March 2012 Final
Report is accompanying this report as separate document. It has not been
published due to the sensitivity of the information concerned.
[11] See http://ec.europa.eu/justice/newsroom/anti-drugs/opinion/111027_en.htm
for details on this consultation.
[12] A reagent is a
chemical substance that reacts with, or takes part in a reaction with, another substance
(usually a precursor in the strict sense) during the processing or
manufacturing of a narcotic drug or psychotropic substance. It does not become
part of, or contributes to only a small portion of, the molecular structure of
[13] A solvent is a
liquid chemical substance that is used to dissolve or disperse one or more
substances. It does not itself react with other substances, nor is it
incorporated into the molecular structure of the end products. A solvent may
also be used to purify the end product.
[14] For further
information see: Commentary on the United Nations Convention against illicit
traffic in narcotic drugs and psychotropic substances 1998, on Article 12, page
251 – available at:
http://www.unodc.org/documents/treaties/organized_crime/Drug%20Convention/Commentary_on_the_united_nations_convention_1988_E.pdf
[15] The 1988 UN
Convention is available at: http://www.incb.org/pdf/e/conv/1988_convention_en.pdf
[16] INCB Annual
Report 2009 – Precursors, point 110, available at:
http://www.incb.org/pdf/precursors-report/2009/English/Precursors_Report_09_english.pdf
[17] INCB Annual
Report 2010 – Precursors, points 74-76 and 89, available at:
http://www.incb.org/pdf/precursors-report/2010/en/PrecursorsReport2010_Rev_E_V10579291.pdf
[18] Annex 2 contains a list of the 23 scheduled substances.
[19] The list of
non-scheduled substances is, due to its sensitivity, not published but is
provided by the competent authorities directly to trusted operators.
[20] i.e. to
introduce the Acetyl Group (-(C=O)-CH2-CH3) into chemical
[21] The size of
the illicit acetic anhydride market is primarily driven by the demand for
heroin,cf. UNODC, the Global Afghan opium Trade, under 2, page 92 – available
at http://www.unodc.org/documents/data-and-analysis/Studies/Global_Afghan_Opium_Trade_2011-web.pdf
[22] The size of
heroin, cf. UNODC, the Global Afghan opium Trade, under 2, page 92 – available
[23] Consultation
before the 2010 Commission Report: feedback from the Cefic Drug Precursor Issue
[24] EMCDDA Annual
Report 2011, Chapter 6, page 72 with reference to UNODC, the World Drug Report
[25] UNODC, The
Global Afghan Opium Trade, under 2.2, The Balkan Route, page 114.
[26] UNODC, the
Global Afghan opium Trade, under 2.2, Acetic Anhydride trafficking to
Afghanistan, pages 103 et seq. [27] Source: UNODC World Drug Report 2010
[28] UNODC, the
Global Afghan opium Trade, under section 2.1 The current state of the acetic
anhydride market, page 99.
[29] UNODC, the
Global Afghan opium Trade, under section 2.1, pages 98, 99.
[30] 1 kg of AA
equals 0.926 litres of AA (international conversion rate used by the INCB).
[31] EU Annual
Reports on Drug Precursor Seizures and Stopped Shipments, available at http://ec.europa.eu/enterprise/sectors/chemicals/documents/specific-chemicals/precursors/index_en.htm
[32] UNODC, the
Global Afghan opium Trade, under section 2.1, page 94.
[33] UNODC the
Global Afghan opium Trade, under section 2.1, page 96.
[34] For instance: Belgium,
Hungary and Italy require their operators to notify each AA transaction to the
authorities prior to the delivery of orders. Hungary has increased reporting
obligations for legal transactions with the substances AA and potassium
permanganate to every 2 months (instead of yearly as foreseen under EU law).
Belgium, Denmark and Spain require end-users to register with the authorities.
[35] Additional
obligations apply to AA for export to third countries, which is, however, not
relevant for the present analysis (Art. 11(1) of Regulation (EC) No 111/2005,
Commission Regulation (EC) No 1277/2005).
[36] See Annex 4 (Statistics
of seizures and stopped shipments for all scheduled substances in category 2)
[37] See Annex 1
(stakeholder consultation) sections a) and b) under question 3.
[38] UNODC, The
Global afghan opium trade, under 2.2, The cost of interdiction, page 116.
[39] INCB Annual
Reports on Precursors 2000-2010, available at:
http://www.incb.org/incb/en/precursors_reports.html.
[40] For a
description of the "Balkan Route" see above under Section 0.
[41] UNODC: The
Global afghan opium trade, a threat assessment 2011, under 2.2, The Balkan
Route, p. 116.
[42] It is very
difficult to estimate drug-related public expenditure in Europe. Even though
public expenditure on all aspects of the drug phenomenon has been under
scrutiny during the last decade, comprehensive estimates are still a challenge;
the amount and quality of information available varies greatly between
countries. In the last decade, at least 12 Member States have attempted to
arrive at comprehensive estimates of drug-related expenditure. These countries
reported public expenditure on the drug problem ranging from 0.04% to 0.48% of
GDP. For further information see: EMCDDA Annual Report 2011, Chapter 1, page 21
et seq. and table 2 at page 22 with GDP-related estimates for 12 Member States.
[43] EIM
calculation, based on the ‘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, as detailed in Annex III to the EIM
[44] Eurostat
PRODCOM database (data from 2010), available at:
http://epp.eurostat.ec.europa.eu/portal/page/portal/prodcom/data/tables_excel
[45] Acetic
Anhydride Supply Chain Analysis conducted by the United States.
[46] Out of 54
respondents in the category “operators of category 2 substances”, at least 27
fell under the SME definition (many other respondents did not provide the
required information), which amounts to at least 50%.
[47] 2,473
companies are estimated to be end-users of AA in the EU (EIM Report, page 10).
[48] See Annex 1,
Summary of stakeholder consultation and SME consultation.
[49] Out of 106
respondents in the category “end-users of category 2 substances”, at least 42
could be identified as SMEs (many other respondents did not provide the
requested turnover and employee data), in addition the SME-specific consultation
for which 60 responses were received, comprised exclusively end-users.
[50] AA is licitly
used as an acetylating agent in chemical, photographic and pharmaceutical
industry. It is used for producing plastic, textile, dyes, photochemical
agents, perfumes, explosives and aspirin.
[51] 4,056
enterprises are registered in the EU to deal with scheduled substances in
category 2 (EIM Report, page 10 and Annex III to EIM Report with reference
to RPA.
[52] 8,548
companies are estimated to be end-users of scheduled substances in the EU, (EIM
Report, page 10) with reference to the stakeholder consultation.
[53] INCB Annual Reports on Precursors 2000-2010, available at http://www.incb.org/incb/en/precursors_reports.html.
[54] Workshop on
countering heroin precursor diversion, Brussels, 9 June 2011. This workshop was
organised as a special meeting of the Drug Precursor Working Group and within
the framework of the European Pact to Combat Heroin and Cocaine Trafficking
(where Germany and Italy had taken the lead on activities relating to heroin).
[55] The alert messaging
system (AM) connects all competent authorities (regulatory, customs, police)
and enables them to rapidly disseminate information about diversion (attempts).
This ensures a coordinated approach by authorities across the EU and prevents
traffickers from "shopping around" for substances in the EU.
[56] The Risk Information
Forum (RIF) is a tool under the EU Customs Risk Management System which links
Member States' customs authorities in all major ports/airports/frontiers. It
allows for exchange of risk-related information directly among operational
officials and risk analysis centres.
[57] See footnote 34
[58] EU Drugs
Strategy 2005-2012, endorsed by the European Council of November 2004 (15074/04
CORDROGUE 77 SAN 187 ENFOPOL 187 RELEX 564).
[59] EU Drugs Action Plan for
2009-2012 (2008/C
326/09).
[60] The EU Drug
Strategy additionally complements these two key dimensions with three
cross-cutting themes: coordination; international cooperation and information;
[61] For further
details see http://ec.europa.eu/justice/newsroom/anti-drugs/opinion/111027_en.htm.
[62] See also under
Section 0 above.
[63] Article 168
[64] Article 67 TFEU
[65] Art. 4 of
[66] Art. 8(2) of
Regulation (EC) No 273/2004 in combination with Article 17, 19 or Regulation
(EC) No 1277/2005.
[67] Special
licences and special registrations are foreseen in Article 3(2) and (6) of
Regulation (EC) No 273/2004. Special licences or registrations may be granted by the competent
authorities to pharmacies, dispensaries of veterinary medicine, certain types
of public authorities or armed forces. Such special licences shall only be
valid for the use of precursors within the scope of the official duties of the
operators concerned.
[68] A registration
requirement of end-users can be achieved with different means, for instance:
adaptation of the definition of operators, adaptation of the definition of
placing on the market, or introducing a separate provision for end-user
[69] Article 3,
paragraph 6, of Regulation (EC) No 273/2004.
[70] This threshold
is currently foreseen in Article 6 of Regulation (EC) No 273/2004.
[71] Only three
Member States expressed their views, two were favouring an exemption for
holders of special licences and one was against such an exemption. This limited
information was not considered a sufficient basis to change the status quo.
[72] See also Section
[73] For instance the
United States have recently conducted a large scale supply chain analysis of AA
production and trade, in order to identify most vulnerable points for potential
diversion, where enforcement actions should be concentrated on.
[74] A copy of the
EIM Report is accompanying this report as separate document.
[75] For further
information see EIM Report, page 9.
[76] As a basis for
the calculations, the non-rounded hourly tariff of € 25.63 has been used.
[77] Tariff used in
the Action Programme for reducing administrative burdens in 2008-2009.
[78] Block A: €19
per hour, Block B: €21 per hour, Block C: €39 per hour.
[79] 4,056 enterprises
are registered in the EU to deal with scheduled substances in category 2 (EIM
Report, page 10) with reference to RPA.
[80] See Member
State survey, questions 7 and 8.
[81] See section 0.
[82] EIM Report,
section 3.4, p. 16.
[83] For instance,
Germany reported in the written consultation that requests from operators to
the authorities to verify new customers were an important element within the
industry-authority partnership to prevent diversion.
[84] Contribution of
Hungary during the written consultation.
[85] Fore example, the
UK currently charges £435 (approximately € 520) for issuing a new
registration Article 2 of UK Statutory Instrument 2010 No. 2564 - Dangerous
Drugs - The Controlled Drugs (Drug Precursors) (Intra-Community Trade and
Community External Trade) Regulations 2010, in force since 15 November
2010, available at: http://www.legislation.gov.uk/uksi/2010/2564/pdfs/uksi_20102564_en.pdf.
Also the Czech Republic and Estonia have informed the Commission during the
written consultation that they charge fees for granting licences and
[86] This is the case
for Germany, who had in its national legislation, prior to entry into force or
Regulation (EC) No 273/2004, a requirement for all end-users of category 2
substances to be registered, as well as for the Eastern European Member States
(EU 12) which had scheduled AA as a category 1 substance prior to accession.
[87] National
legislation in Belgium, Denmark and Spain contains an obligation for end-users
to register with the authorities. Italy has a very detailed database system, in
which companies are required to notify every transaction before delivery, so
that the authorities claim to have effectively an overview of all end-users.
Austria and France apply a voluntary registration of end-users.
[88] See EIM Report
page 20 "origin of some figures" and Annex 1 to that Study
"Detailed calculations".
[89] 49 new
operators/year can be considered as a maximum, as the number of AA producers
and traders (whose businesses requires a certain infrastructure) should be more
stable than the number of end-users.
[90] Fore example, the
UK currently charges £3,655 (approximately € 4,370) for issuing a new
licence, Article 2 of UK Statutory Instrument 2010 No. 2564 - Dangerous Drugs -
The Controlled Drugs (Drug Precursors) (Intra-Community Trade and Community
External Trade) Regulations 2010, in force since 15 November 2010,
available at: http://www.legislation.gov.uk/uksi/2010/2564/pdfs/uksi_20102564_en.pdf.
[91] This amounts to
an average time of 57 minutes per import authorisation.
[92] The same reasoning
applies to sub-options 3a, 4a, and 5a which are also limited to AA.
[93] Total costs in
this table are based on the sum of the exact individual components. Therefore
they do not fully correspond with the totals of the (rounded) components in
[94] If the change of
category for AA is also carried out in Regulation (EC) No 111/2005 on external
trade, the yearly costs under option 6 would rise by an additional 0.6 million
to 0.9 million.
[95] An exact
relation with the European turnover of AA is not possible, as there are no
published market prices for AA. However, based on market research, the
production of AA in the Europe amounts to approximately 330,000 tons/year and
the EU import value per ton amounted to 780 Euros on average over the last
three years (2007-2009), which corresponds to a market value of the European
production of € 257,4 mio/year. See: 2010 CEH Marketing Research Report on
Acetic Anhydride © by the Chemical Economics Handbook – SRI Consulting, page 30
(European production) and page 32 (price).
[96] See Section 0.
[97] For AA the
yearly maximum quantity amounts to 100 litres.
[98] Notably the
obligation to register with the authorities, the obligation to comply with the
rules on customer declarations and on documentation of transactions.
[99] As foreseen in
Article 13 of Regulation (EC) No 273/2004 and Art. 29 of Regulation (EC) No
1277/2005. [100] Member
States are obliged to inform the Commission of national measures they adopted
according to Art. 16 of Regulation (EC) No 273/2004.