Explanatory Memorandum to COM(2012)548 - Amendment of Regulation (EC) No 273/2004 on drug precursors - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2012)548 - Amendment of Regulation (EC) No 273/2004 on drug precursors. |
|---|---|
| source | COM(2012)548  |
| date | 27-09-2012 |
Many chemicals are used in a wide variety of important industrial processes (e.g. in the synthesis of plastics, pharmaceuticals, cosmetics, perfumes, detergents and aromas) and they are traded for these licit uses on regional and global markets. Some of these chemicals can, however, 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 precursors.
Drug precursors are rarely produced by the criminals that intend to use them in the illicit manufacture of drugs, as their production often requires important industrial 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. However, in order to prevent their diversion to illicit drug production, a specific regulatory framework has been set up on international level through Article 12 of the United Nations Convention against the Illicit Traffic in Narcotic Drugs and Psychotropic Substances (hereafter referred as UN 1988 Convention). The European Union is a Party to the Convention and has implemented its obligations through Regulation (EC) No 273/2004 governing the monitoring of the intra-EU trade in drug precursors and Regulation (EC) No 111/2005 governing the external trade. The Union regulatory framework provides for the monitoring and control of the legitimate trade in drug precursors. Operators, i.e. manufacturers, distributors, brokers, importers, exporters and wholesalers of chemicals engaged in the legitimate trade of drug precursors are required to take measures against theft, check their customers, detect suspicious transactions and notify the authorities thereof. This industry-authority partnership is key to the well functioning 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 of the world and exploit weaknesses of control to their benefit. This proposal aims to address 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, 75% of the global seizures of AA happened in the EU. Heroin use has been contributing 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.
Even though the quantities of AA seized in the EU have decreased very substantially since 2008, the INCB continues to mention in its annual reports that the European legislative control measures are not sufficiently strict to prevent the diversion of the main heroin precursor from the intra-EU trade.
On 7 January 2010, the European Commission adopted a Report on the implementation and functioning of the existing EU legislation on drug precursors which concluded that the legislation is overall functioning well but also identified some weaknesses and made recommendations how to address these.
This proposal addresses, by amending Regulation (EC) No 273/2004, the recommendation of the Commission Report to improve the prevention of the diversion from the EU-internal trade of AA, the main drug precursor for heroin, by extending the registration requirement, which so far applies only to operators placing AA on the market, to also include users of the substance and by enhancing the harmonised registration provisions to achieve a more robust level playing field preserving the internal market and avoiding adoption of divergent national measures.
This proposal is fully consistent with the objectives of the EU Drugs Strategy 2005-2012 and the EU Drugs Action Plan (2009-2012), which set out the objective to reduce the diversion and trafficking in/via the Union of drug precursors used for the production of illicit drugs.
As the drug problem is a complex phenomenon, it requires a multidisciplinary approach of combining demand and supply reduction. Preventing the diversion and trafficking of drug precursors aims at reducing the supply of illicit drugs – the ultimate objective being a high level of protection, well-being and social cohesion for 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[7]. 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 Article 12 of the 1988 UN Convention 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’ actions on prevention of drug-use[8].
In addition, the 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[9].
Contents
- RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS
- LEGAL ELEMENTS OF THE PROPOSAL
- BUDGETARY IMPLICATION
- General Context
- Grounds for and objectives of the proposal
- Consistency with other policy and objectives of the Union
- Consultations of interested parties, collection and use of expertise
- Impact assessment
- Legal basis
- Subsidiarity principle
- Proportionality principle
- Choice of the instrument
- Main provisions of the proposal
- 5. ADDITIONAL INFORMATION
The Commission Services consulted in 2009 and early 2010 all stakeholders on the implementation of Regulation (EC) No 273/2004 and presented its findings in a Report to the European Parliament and the Council, which was adopted on 7 January 2010[10]. In May 2010, the Council adopted conclusions on the Commission’s Report, recognising the importance of continuing active co-operation among authorities and industry and of improving the implementation of the European legislation. 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[11].
The Commission subsequently developed six potential policy options (see the next section for details) and discussed them with the Member States and industry representatives in a special meeting of the Drug Precursor Working Group in June 2010.
Member States and industry stakeholders were further 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 was carried out via the Enterprise Europe network from 1 October until 24 November 2010 to ensure that the concerns of a specific target group – end-users of drug precursors most of which are SMEs – were considered.
Finally, the Commission mandated a study to an external consultant to evaluate in detail the administrative costs on companies and authorities that would result from each of the policy options.
The main problem driver being the insufficient control by competent authorities over all economic players involved in the legitimate trade with drug precursors, all policy options examined seek to improve control via enhanced reporting, notification or registration obligations imposed on the economic players. The impacts of the following six policy options have been analysed:
– Option 1 (baseline option): no action: the current EU legislation will remain unchanged;
– Option 2: strengthened reporting obligations;
– Option 3: strengthened rules and obligations on operators related to customer declarations from end-users;
– Option 4: require operators to systematically notify new end-users to the authorities to allow verification;
– Option 5: require registration for end-users and reinforce requirements regarding registration;
– Option 6: move AA from category 2 to category 1 scheduled substances.
For options 2 to 5, two sub-options were analysed, i.e. to either limit them specifically to AA or to apply them to all scheduled substances in category 2.
The overall conclusion of the impact assessment[12] was that both, option 4 (for only AA) and option 5 (for only AA) would be good choices to address the identified objectives. Both would have effects on SMEs as end-users dealing with AA are primarily SMEs, but 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 by imposing fees), an argument which is particular relevant for SMEs. All in all the strong political support which option 5 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, and the somewhat lower burden on SMEs tip the balance in the end in favour of option 5.
The legal basis of the proposal is Article 114 of the Treaty on the Functioning of the European Union (TFEU). Article 114 has the objective to establish an internal market while ensuring a high level of protection of human health and the environment.
The subsidiarity principle as set out in Article 5 of the Treaty on the European Union applies insofar as the proposal does not fall under the exclusive competence of the Union.
The general objective of Regulation (EC) No 273/2004 is to prevent the diversion of drug precursors from legitimate trade in accordance with the Union's obligations under Article 12 of the 1988 UN Convention. It contributes to the world-wide combat against the illicit production and trafficking of narcotic drugs and psychotropic substances, while ensuring a proper functioning of the internal market for drug precursors by subjecting operators to the same, harmonised rules within the EU whilst avoiding unnecessary obstacles to legitimate trade and administrative burden for enterprises and competent authorities.
The objective of this proposal, namely to strengthen control measures on AA in order to prevent it diversion from the EU internal market while avoiding market distortions, cannot be sufficiently achieved by the Member States alone and action by the Union will be more efficiently achieved for the following reasons:
– Some Member States feel legally prevented from adopting national control measures going beyond the EU legislation on the basis of Article 10 of Regulation (EC) No 273/2004, which empowers Member States to adopt national measures which are necessary to enable its authorities to perform their control and monitoring duties. They argue that the EU legislation is subjecting 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 legislation
– On the contrary, other Member States are contemplating or have already based substantive national controls on Article 10, leading in first instance to different approaches of control in different Member States which might be detrimental to the functioning of the Union Market and, secondly, 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 Union market. A combination of different national measures will not be as effective as a harmonised approach at EU-level. This is also confirmed by the fact that both, Member States and concerned industry sectors 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.
The proposal does not go beyond what is necessary in order to achieve the intended objectives, in accordance with the principle of proportionality, as set out in Article 5 of the Treaty on European Union. By preventing the diversion of drug precursor from the legal trade to illicit drug production, this proposal is expected to contribute to the fight against illicit trafficking in narcotic drugs and psychotropic substances, and consequently to protect citizens from the health damage related to drug addiction. Furthermore by ensuring that operators and users engaged in the legal trade of those drug precursors are subject to harmonised rules, it should ensure a proper functioning of the Union market by avoiding unnecessary barriers to such legitimate trade and by reducing administrative burdens for operators and competent authorities.
The proposal only tackles the weaknesses identified in the evaluation on the functioning and on the implementation of the Regulations on Drug Precursors, namely by requiring registration not only for operators placing AA on the market but also for users possessing it for their own uses or processes (i.e. end-users). The proposal does not extend the envisaged provisions for AA to other scheduled substances in category 2.
The chosen legal instrument is a Regulation as it aims to harmonise the rules applicable to economic operators (end-users) dealing with AA for their own uses or processes. It amends the already existing Regulation (EC) No 273/2004.
The proposal introduces the requirement that end-users of AA must obtain a registration as already exists for operators placing the substance on the market, and strengthens the rules for registration.
Additionally it proposes to establish and maintain a European Database on Drug Precursors in order to modernize the collection of the information provided by Member States on drug precursor seizures and stopped shipments, in accordance with current Article 13 of Regulation (EC) No 273/2004, and to maintain a list of EU licensed or registered operators and users legally trading or using drug precursors, as well as to enable operators to provide competent authorities in summary form with information about their transactions involving scheduled substances in accordance with current Article 8 of Regulation (EC) No 273/2004.
Finally, the draft Regulation adapts the provisions of Regulation (EC) No 273/2004 regarding ex-Comitology to the new rules of the Lisbon Treaty.
The proposal has no impact on the European Union budget because no additional resources are required to implement the action proposed. The necessary resources to implement the European database are already included in the allocations granted during the budget procedure and within the Internal Market line. Therefore it does not have a budgetary impact over and above the appropriations already foreseen for the years to come in the official programming of the Commission.
– The proposal is subject to a notification to the WTO in the framework of the TBT Agreement.
– The proposed act is relevant for the European Economic Area (EEA).
– The proposed act contains transitional period for the coming into force of the new registration obligations for end-users of AA.
– The proposed act includes a review clause to assess whether the amended Regulation will have been effective to prevent the diversion of AA.