COMBINED EVALUATION ROADMAP/INCEPTION IMPACT ASSESSMENT
Title of the initiative	Revision of the Regulation on marketing and use of explosives precursors
Lead DG — responsible unit	DG HOME D.2	Date of roadmap	24.05.2017
Likely type of initiative	Legislative proposal
Indicative planning	Q4-2018
Additional information
This combined evaluation roadmap/Inception Impact Assessment aims to inform stakeholders about the Commission's work in order to allow them to provide feedback on the intended initiative and to participate effectively in future consultation activities. Stakeholders are, in particular, invited to provide views on the Commission's understanding of the current situation, problem and possible solutions and to make available any relevant information that they may have, including on possible impacts of the different options. The roadmap/Inception Impact Assessment is provided for information purposes only and its content may change. This roadmap/Inception Impact Assessment does not prejudge the final decision of the Commission on whether this initiative will be pursued or on its final content.

A. Context, evaluation, problem definition and subsidiarity check

Context

Explosives precursors are chemical substances which can be misused to manufacture homemade explosives. Recognising the threat these substances pose to public security, in the 2008 action plan on enhancing the security of explosives 1 the Commission made it a priority to examine the possibility of regulating substances of concern. Regulation (EU) No 98/2013 on the marketing and use of explosives precursors 2 (‘the Regulation’) introduced restrictions and controls on a limited number of chemicals that are listed in its two annexes. The Standing Committee on Precursors, 3 a Commission expert group that brings together Member States and stakeholders from the chemicals industry and retail, has been facilitating efforts at EU level since 2008.

The 2015 European Agenda on Security, 4 which prioritises fighting terrorism, reflects the importance of taking action at EU level to reduce access to explosives precursors. After the attacks in Paris on 13 November 2015 and Brussels on 22 March 2016, the Commission announced that, in addition to ensuring that the Regulation is fully applied, it would revise it as soon as possible in order to address any weaknesses and security gaps. 5 In November 2016, the Commission added to Annex II three threat substances for which suspicious transactions, significant disappearances and thefts should be reported to the designated national contact points. 6

In February 2017, the Commission adopted a report on the application of the Regulation 7 . The report outlines the main challenges faced by Member States and the supply chain and examines the feasibility and desirability of strengthening the system in the future. It concludes that the entry into force of the Regulation has helped reduce access to dangerous explosive precursors which can be misused to manufacture homemade explosives. It adds, however, that additional changes to the Regulation are necessary to increase the capacity of all those involved in implementing and enforcing the restrictions and controls. With this in mind, the Commission has committed to carefully assessing the impact of possible new and strengthened measures.

Evaluation and problems the initiative aims to tackle

This initiative will start by evaluating the relevance, effectiveness, efficiency, coherence and added value of the Regulation, in order to examine issues which have already been identified and to identify any additional problems which should be tackled. The evaluation's findings will feed into an impact assessment of the policy options which could address the problems identified.

Despite the restrictions and controls introduced under the Regulation, regulated explosives precursor substances and mixtures continue to be accessed by individuals and groups that aim to carry out terrorist attacks in Europe. This is evident from recent attacks involving homemade explosives which have left at least 195 dead and over 750 injured, 8 and from many additional incidents where homemade explosives and related materials have been found and seized by the police. 9 Terrorist attacks have devastating, though difficult to quantify, social and economic impacts, due to the death and injury of victims, distressing psychological effects on the wider population, damaged infrastructure, disruptions to business operations and services, and the mobilisation of public resources for contingency planning and response.

The use of regulated explosives precursors for terrorist purposes in Europe raises the question of whether the Regulation is effective in limiting availability to the general public of explosives precursor substances and ensuring the appropriate reporting of suspicious transactions through the supply chain.

Prior to the full evaluation, several issues have already been identified as possibly hindering the effective implementation and application of the restrictions and controls. For example,

Lack of capacity: some economic operators have reported difficulties in fulfilling their obligations to restrict, label, and report, either because they feel that the provisions in the Regulation are unclear or because they feel they lack capacity. At the same time, some Member States have expressed a lack of capacity in monitoring transactions and incidents with a cross-border element;

Insufficient harmonisation: some economic operators have reported it challenging to adapt to the different regimes and specificities of each Member State, while some Member States have expressed a need for a common approach on the granting and refusal of licenses and on professional users;

Exemption of professional users: the Regulation introduced restrictions on access by members of the general public, but there is also a risk of illicit diversion by professional users. 10 In order to close a potential security gap, some Member States have recommended that the scope of the Regulation cover also professional users; and

Weak controls on some threat substances: some Member States have alerted that, as recipes for home-made explosives evolve over time (in part as a result of regulating substances that have been misused), some threat substances may not be restricted or controlled proportionally to the threat they pose.

Subsidiarity check (and legal basis)

The legal basis for a proposal in this area is Article 114 of the Treaty on the Functioning of the European Union. On this basis, the Regulation has already established measures at EU level which harmonise the placing on the market and the use of explosives precursors. A regulation is the most appropriate legal instrument to ensure the greatest degree of uniformity for economic operators.

Action at EU level is justified and offers added value because in the internal market Member States cannot individually ensure the effectiveness and efficiency of the restrictions and controls on explosives precursors in their territory. Acting at EU level also strengthens the Member States’ capacity to investigate and enforce the restrictions and controls on the many transactions and incidents that have cross-border elements.

B. Objectives and policy options

The overall objective of revising the Regulation is to strengthen protection in Europe against the illicit use of explosives precursors, by improving the effectiveness and efficiency of the EU restrictions and controls which limit availability to dangerous substances and ensure the appropriate reporting of suspicious transactions through the supply chain.

A set of specific objectives for the review will be adjusted at the end of the evaluation exercise, on the basis of the problems and issues which will have been identified. They may include, for example,

Improving the capacity of economic operators and Member State competent and law enforcement authorities to restrict and control the sale, possession, introduction and use of explosives precursors;

Increasing the degree of uniformity in the application of the Regulation across Member States;

Strengthening controls over professional users;

Restricting and controlling all threat substances proportionally to the threat they pose.

The evaluation exercise will also examine whether there is potential for simplification and cost savings, and the extent to which the results of research carried out into the properties of explosives precursor substances and home-made explosive mixtures 11 can be taken into account in a revision of the Regulation.

The evaluation exercise will allow the Commission to define a set of policy options to examine during the impact assessment. A preliminary set of policy options is as follows:

Policy option 1: Baseline scenario

Continued facilitation and coordination through the Standing Committee on Precursors and other ad hoc initiatives (e.g. regional and thematic workshops, financing projects, issuing voluntary guidance and other support documents, and using delegated powers when appropriate), but no new policy or legislative initiative. This policy option would likely bring incremental benefits towards all the above-mentioned objectives, as Member States and economic operators gain experience and exchange views on application challenges and good practices.

Policy option 2: Increase effectiveness and efficiency of the current Regulation

A combination of policy measures would address issues that are identified during the evaluation as hindering the full implementation and application of the existing restrictions and controls, but would not add new rules or obligations. This policy option would entail, for example, clarifying and/or simplifying rules on restricting, labelling, and reporting; improving the transmission of information along the supply chain and across Member States; proposing common approaches to implementing and applying existing rules (including, for example, the establishment of common criteria for determine who should be considered a professional user and what should constitute proof of professional use, as well as common criteria for the granting and refusal of licences); and/or updating the annexes to add threat substances.

Policy option 3: Allow acquisition, possession and use only by professional users

This policy option entails significant changes to the framework introduced by the Regulation. Instead of limiting availability to the general public, a revised Regulation would grant access to the restricted substances only to professional users. This policy option would introduce a fully harmonised approach to the marketing and use of restricted substances, as licensing and registration regimes for the members of the general public would be revoked, and set a common definition of professional user across Europe. Because of increased harmonisation, this policy option would allow for a simplification of the rules on restricting, labelling and reporting. In addition, this policy option would also entail updating the annexes to add threat substances and improving the exchange of information across borders.

Policy option 3a – Acquisition by professional users would be granted upon presentation by the purchaser of proof of identify and professional use to the economic operator.

Policy option 3b – Acquisition by professional users would be granted upon presentation by the purchaser of proof of identify and professional use to the economic operator, and the registration by the economic operator of the transaction.

As mentioned above, the above policy options are subject to change on the basis of the evaluation exercise which will precede the impact assessment.

C. Preliminary assessment of expected impacts

Likely economic impacts

Policy option 1 would have no significant economic impact.

Policy option 2 is expected to have an overall positive and direct economic impact for economic operators, as it seeks to increase effectiveness and efficiency, and would therefore lower burdens on economic operators and Member States competent authorities. Changes to the annexes could have a negative economic impact on the economic operators involved in the supply chain of the substances concerned. In these cases, the impact assessment will examine, for every substance concerned, whether the economic impacts on the supply chain are proportionate to the objectives sought.

Policy option 3 is expected to decrease the costs of implementation and compliance both for economic operators and public authorities. However, this option would carry an economic loss to those economic operators who sell restricted substances to members of the general public, who would no longer be able to purchase these substances. Policy option 3b would also require economic operators to spend time complying with the registration requirement and maintaining a register available for inspections. A cost-benefit analysis during the impact assessment exercise will determine whether the economic loss is offset by lower costs of compliance and proportionate to the benefits the measures would bring.

All three policy options are expected to achieve gains in security by enhancing protection against terrorist attacks involving homemade explosives. This will reduce the mid- and long-term economic costs involved in the death and injury of victims, disruption of business and services, rebuilding infrastructure, and mobilising first responders and other public services.

The evaluation and impact assessment will examine, in particular, whether and how small and medium enterprises are affected.

Likely social impacts

The social impacts of taking action, through any of the policy options considered, will be positive because all the policy options aim at enhancing protection in Europe against terrorist attacks using homemade explosives. Such attacks have devastating impacts in the death and injury they cause to the victims and in the distressing psychological effects they have for the wider population.

Policy option 3, however, may cause an inconvenience to members of the general public who carry out legitimate non-professional activities with restricted explosives precursors for which no alternative substance or concentration level exist. The impact assessment exercise will assess which are these activities and substances and whether the inconvenience imposed would be disproportionate in relation to the benefits the measures would bring to society.

Likely environmental impacts

Improving the security of chemical substances has the indirect positive impact of preventing accidental or intentional chemical incidents which inevitably release harmful chemicals into the environment.

Likely impacts on fundamental rights

The initiative seeks, first and foremost, to protect the right to life, the integrity of the person, and the rights to liberty and security. As regards the protection of personal data, Member States are already obliged under the current Regulation to ensure that personal data are processed in line with EU requirements. Existing tools and structures could be used to increase voluntary or mandatory cross-border information sharing by Member State authorities. This would therefore be in accordance with existing national and EU law.

Likely impacts on simplification and/or administrative burden

Both policy options 2 and 3 are expected, after a transitional period during which national systems have to adapt to the changes introduced at EU level, to bring simplification to the existing framework and to decrease the administrative burden on public authorities. The impact assessment will nevertheless examine what could potentially be new burdens imposed on public authorities and whether they would be proportionate to the benefits of the new measures.

D. Data collection and better regulation instruments

Impact assessment

An impact assessment will be prepared to support the preparation of this initiative and to inform the Commission’s proposal. The impact assessment report will be accompanied by the evaluation of the existing Regulation.

Data collection

Information and data have been collected while preparing the various documents produced by the Commission, in particular the 2017 Report on the application of the Regulation [COM(2017) 103 final] and the 2015 Report on the transfer of ammonium nitrate [COM(2015) 122 final]. The Commission will also make use of information gathered in the Standing Committee on Precursors and in other Commission groups discussing explosives, pyrotechnics, fertilisers, and REACH.

Additional information and data are needed to better understand how the current Regulation works and whether it is effective and efficient. This will involve assessing:

compliance with the Regulation;

the regulatory and compliance costs of applying the Regulation;

the benefits of applying the Regulation;

the barriers affecting effectiveness and efficiency;

the scope for simplification; and

the scope for further harmonisation.

These data will be used to assess the impacts of new possible measures. The Commission, supported by an independent entity, will carry out data and evidence collection and stakeholder consultations. This will include analysing the size and type of markets involving explosives precursor substances.

Consultation strategy

The Commission will consult as widely as possible in order to gather key information and ensure that the general public interest of the Union is well reflected in the future design of EU rules on explosives precursors.

Targeted consultations will be carried out with Member State authorities (particularly those with a role in the implementation of the Regulation), the chemicals industry, the retail sector, professional and non-professional users of explosives precursor substances, and any other relevant stakeholders.

The Standing Committee on Precursors will also be consulted through the targeted consultations and during its regular meetings.

In addition, the Commission will launch a 12-week online public consultation, which will be announced at http://ec.europa.eu/info/law/contribute-law-making_en

Will an implementation plan be established?

An implementation plan is not necessary. The instrument under review is a Regulation and will not have to be transposed by Member States.