9 Extending controls on the trade
in drug precursors
| (34286)
14514/12
COM(12) 548
| Draft Regulation amending Regulation (EC) No 273/2004 on drug precursors
|
| Legal base | Article 114 TFEU; co-decision; QMV
|
| Document originated | 27 September 2012
|
| Deposited in Parliament | 4 October 2012
|
| Department | Home Office
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| Basis of consideration | EM of 15 October 2012
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| Previous Committee Report | None
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| Discussion in Council | No date set
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| Committee's assessment | Legally and politically important
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| Committee's decision | Do not clear; further information request
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BACKGROUND
9.1 The United Nations Convention against the Illicit Traffic
in Narcotic Drugs and Psychotropic Substances, agreed in 1988,
establishes a framework for international cooperation to tackle
illicit traffic in narcotic drugs and psychotropic substances.
It requires the Parties to the Convention (which include the
EU and all Member States) to take the necessary legislative and
administrative measures to fulfil the obligations set out in the
Convention. An Annex to the Convention contains a list of chemical
substances which are commonly used in a variety of industrial
processes to manufacture pharmaceuticals and household goods,
but which may be also used for illicit drug production. These
substances are often referred to as "drug precursors."
Article 12 of the Convention requires Contracting Parties to
implement a series of measures to monitor international trade
in drug precursors, report suspicious orders and transactions,
and ensure appropriate labelling and documentation.
9.2 Regulation (EC)No 273/2004 ("the 2004 Regulation")
establishes harmonised rules on the monitoring and control of
drug precursors within the European Union in order to prevent
their diversion into illicit drug production. The Regulation
imposes a number of obligations on "operators" —
individuals or companies who supply certain scheduled substances
listed in Annex 1 of the Regulation, or who store, manufacture,
produce, process, trade in, distribute or broker such substances.
They include a requirement to:
- obtain a licence (for category 1 substances)
or to register with the competent national authorities (for category
2 substances) before supplying or otherwise placing on the market
substances listed in Annex 1 to the Regulation;
- obtain a declaration from each customer describing
how each scheduled substance will be used;
- keep detailed records and documentation of all
transactions involving scheduled substances for at least three
years;
- ensure that scheduled substances are appropriately
labelled; and
- notify competent authorities of any suspicious
orders or transactions.
9.3 Twelve substances are listed in Annex 1 as
"Category 1" substances, and five as "Category
2" substances, including acetic anhydride, the main drug
precursor for heroin. The Commission reports that, in 2008, 75%
of global seizures of acetic anhydride occurred in the EU, suggesting
that substantial quantities were being diverted from legitimate
internal trade to the illicit production of heroine. Although
the quantities seized have diminished since then, the United Nations'
International Narcotics Control Board considers that EU control
measures need to be tightened.
THE
DRAFT REGULATION
9.4 The draft Regulation proposes a number of
changes to the 2004 Regulation to strengthen the control and monitoring
of the trade in drug precursors. They include:
- requiring users[44]
to obtain a licence before possessing or placing on the market
Category 1 substances;
- creating a new sub-category within Category 2
substances specifically for acetic anhydride (sub-category 2A)
and establishing stricter controls;
- requiring users to register with the competent
national authorities before possessing acetic anhydride;
- specifying that the supply of acetic anhydride
is restricted to registered operators or users;
- setting out the factors to be considered by competent
authorities in determining whether or not to register an operator
or user (for example, the competence, integrity, suitability and
reliability of the applicant) and the grounds on which registration
may be suspended or revoked;
- clarifying that Member States may adopt measures
to control and monitor suspicious transactions involving non-scheduled
substances (drug precursors not listed in Annex 1 of the 2004
Regulation); and
- establishing a European database on drug precursors
which would include information on all licensed or registered
operators and users and on transactions involving scheduled substances,
as well as information provided by Member States on drug precursor
seizures and on methods of diversion and illicit manufacture.
9.5 In an attempt to minimise the cost burden
for SMEs — the main end-users of drug precursors —
the Commission proposes that operators or users qualifying as
a "micro enterprise" should be exempt from any requirement
to pay a licence or registration fee.[45]
It also proposes that various measures concerning the grant of
a licence or registration, customer declarations, documentation
and labelling of mixtures containing substances listed in Annex
1 of the Regulation, information on transactions, and changes
to the Annexes may be adopted by the Commission by means of delegated
acts.
9.6 The draft Regulation, like the 2004 Regulation
which it will amend, cites an internal market legal base since
its objective, according to the Commission, is to establish an
internal market in chemical substances which have multiple licit
applications whilst at the same time avoiding the adoption of
divergent national measures to prevent the substances being diverted
into illicit drug production. It highlights the risk that differing
national control measures may cause those involved in illicit
trade to seek to exploit the weakest link and fragment the internal
market. The Commission says that no additional resources will
be needed to implement the draft Regulation, as the internal market
budget line includes provision for a European database on drug
precursors.
THE
GOVERNMENT'S
VIEW
9.7 The Minister of State for Crime Prevention
(Jeremy Browne) describes the draft Regulation as,
"a proportionate response to an identified weakness
in the current controls of [acetic anhydride]".
and believes that a harmonised approach at EU level
is justified as,
"isolated actions in individual Member States
risk shifting the problem from one Member State to the next".[46]
He says that the diversion of acetic anhydride into
illicit drug production frequently occurs when the substance is
traded across national borders and that an EU-wide monitoring
system of registered end-users should facilitate more effective
enforcement.
9.8 The Minister describes the risk-based system
of registration in place in the UK for companies using precursor
chemicals as part of their business activities, with the degree
of regulation reflecting the harm posed by a particular chemical
substance and the likelihood that it may be diverted into illicit
trade. He notes that all businesses are required to pay a fee
for the issue of a licence or registration and says that the Commission's
proposal to exempt micro-enterprises from payment of a fee would,
"compromise the principle upon which the UK
charging regime is based, namely full cost recovery and no cross
subsidy of licensees."[47]
9.9 He indicates that the Government would seek
to extend this approach to the new controls introduced for end-users
of acetic anhydride. As yet, the numbers in the UK who are likely
to be affected by the new registration requirement are unknown,
but the Government intends to consult relevant trade bodies.
9.10 The Government welcomes the proposed establishment
of a European database on drug precursors which should, over time,
reduce the volume of requests for information concerning UK registered
companies which the Home Office Drugs Licensing and Compliance
Unit currently handles. The database should make it easier for
the UK to access information on companies registered in other
Member States when investigating illicit trade in drug precursors.
9.11 Finally, the Minister notes that the Commission
has proposed an internal market legal base, adding:
"While the proposal itself does not cite a Title
V legal base, we are considering whether its content makes it
a measure pursuant to Title V of Part Three of TFEU [the Treaty
on the Functioning of the European Union], therefore triggering
the JHA Opt-in Protocol."[48]
CONCLUSION
9.12 We agree with the Government that the changes
proposed by the Commission appear to be a sensible and proportionate
response to worrying evidence that acetic anhydride, the main
drug precursor for heroin, has been diverted from legitimate trade
to illicit drug production. Whilst we are content with the substance
of the draft Regulation, we note that the impact of the new registration
requirement for legitimate end-users of acetic anhydride in the
UK is as yet unknown and ask the Minister to report back to us
once he has consulted the relevant trade bodies. We also ask
him to tell us whether he considers that the powers conferred
on the Commission to adopt delegated acts are appropriate.
9.13 We note the Minister's view that the draft
Regulation may constitute "a measure pursuant to Title V
of Part Three of TFEU" and thus be subject to the UK's Title
V opt-in. We ask him to identify those provisions of the draft
Regulation which the Government believes impose obligations derived
from Title V and to indicate which legal base or bases should
be cited. Meanwhile, the draft Regulation remains under scrutiny.
44 Users are broadly defined as natural or legal persons
who possess a scheduled substance and are engaged in the processing,
formulation, consumption, storage, keeping, treatment, filling
into containers, transfer from one container to another, mixing,
transformation or any other utilisation of scheduled substances. Back
45
The meaning of the term "micro enterprise" is set out
in Article 2(3) of the Annex to the Commission Recommendation
of 6 May 2003 concerning the definition of micro, small and medium-sized
companies. Back
46
See paras 17 and 18 of the Minister's Explanatory Memorandum. Back
47
See para 30 of the Minister's Explanatory Memorandum. Back
48
See para 10 of the Minister's Explanatory Memorandum. Back
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