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Document 52012SC0267
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 111/2005 laying down rules for the monitoring of trade between the Community and third countries in drug precursors
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 111/2005 laying down rules for the monitoring of trade between the Community and third countries in drug precursors
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 111/2005 laying down rules for the monitoring of trade between the Community and third countries in drug precursors
/* SWD/2012/0267 final */
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 111/2005 laying down rules for the monitoring of trade between the Community and third countries in drug precursors /* SWD/2012/0267 final */
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Regulation of the European
Parliament and of the Council amending Council Regulation (EC)
No 111/2005 laying down rules for the monitoring of trade between the Community
and third countries in drug precursors 1. Problem Definition 1.1. What is the problem? Ephedrine and pseudoephedrine are chemical
substances used for the manufacture of cold or allergy medicines. These two
substances are also the main precursors for the manufacture of methamphetamine.
In order to prevent their diversion from legal trade to illicit drug production
a specific regulatory framework has been set up (both on international level[1] and in the EU[2]) in order to identify
suspicious transactions. However, this is not the case for medicinal products
containing ephedrine or pseudoephedrine. As the ephedrine and pseudoephedrine
contained in medicinal products can be easily extracted (by using cheap
home-made equipment and through a simple chemical process), these products are
specifically targeted by drug traffickers as a source of precursors for the
illicit manufacture of methamphetamine. The fact that medicinal products for
human use containing ephedrine or pseudoephedrine are excluded from the
provisions of Regulation (EC) 111/2005, which applies to trade between the EU
and third countries, has led to a situation where these products could not be
stopped or seized by Member States' competent authorities when products were
exported from or transiting through the Union customs territory, even though it
was very likely that they would be misused for the illicit manufacture of
methamphetamine in their country of destination. The EU is expected to close
the loophole in the current legislation as regards the powers conferred to
customs and police authorities who can stop and seize ephedrine and
pseudoephedrine but cannot stop and seize medicinal products containing
ephedrine or pseudoephedrine. The underlying drivers of the problem can
be summarised as follows: - the control measures over ephedrine and
pseudoephedrine (the substances) have been strenghtened worlwide. Some
countries of the world have gone to the extent to prohibit the imports of these
substances. - therefore, the need for traffickers to
look for alternative sources of ephedrine and pseudoephedrine to manufacture
methampethamines; - as a result, traffickers are targeting
medicinal products containing these substances which are not subject to strict
control measures; and - the strenghtening of control measures
over these medicinal products containing ephedrine and pseudoephedrine in other
regions of the world. As a reaction, traffickers target those regions where
there are less control measures over these products, when exported or in
transit, such as the EU. From 2007 until 2010, seizures of
methamphetamine precursors contained in medicinal products containing ephedrine
or pseudoephedrine by EU Member States' competent authorities at the borders
have fluctuated considerably. While in 2007 hardly any medicinal products were
recorded out of the overall quantities seized (0.3 mt[3] out of 8 mt), in 2008 and 2009
the amount of medicinal products out of the total quantities seized increased
sharply (respectively 1.8 mt out of 3.5 mt and 0.6 mt out of 1.4 mt). Even
though this amount decreased considerably in 2010 (0.1 mt out of 2.9 mt), many
Member States and the International Narcotics Control Board (INCB) are
concerned that the mechanisms of Regulation (EC) No 111/2005 for the control of
medicinal products containing ephedrine or pseudoephedrine are not sufficient. 1.2. Who is affected - Third countries, where methamphetamine
are produced, whose control measures over medicinal products containing drug
precursors are not effective if not reciprocated by exporting and transiting
countries; - Manufacturers and distributors located
either inside or outside of the Union, as suppliers or traders of these
medicinal products containing ephedrine and pseudoephedrine; and - Customs authorities, police and health
authorities, as the enforcement authorities designated within each Member State to implement the drug precursors legislation. 2. Analysis of subsidiarity Regulation (EC) No 111/2005 is based on
Article 207 TFEU (formerly Article 133 TEC). It lays down rules for the
monitoring of trade between the Community and third countries in drug
precursors. Currently EU Member States customs
authorities seize medicinal products containing ephedrine or pseudoephedrine on
the basis of national anti-drugs laws or of the customs code, resulting in
different control actions at the EU external borders. Moreover, they try to
curtail the diversion of these medicinal products through different types of
national measures, thus leading to differing legal requirements for EU economic
operators. 3. Objectives General policy objectives ·
To contribute to the world-wide combat against
the illicit manufacture of drugs. Specific policy objectives ·
To fight the illicit manufacture of methamphetamine,
by controlling the supply of ephedrine/pseudoephedrine contained in medicinal
products that are exported, imported or transiting between the Union and third
countries through preventing their diversion, while not hampering legitimate
trade in these products; ·
To maintain the free flow of medicinal products
containing ephedrine or pseudoephedrine for legitimate purposes between the Union and third countries; ·
To avoid disproportionate administrative burdens
on national competent authorities (customs, police, health) and on the industry
involved in the trade of medicines containing ephedrine/pseudoephedrine. Operational objective To achieve and maintain a downward trend of
diversion attempts of medicinal products containing ephedrine or
pseudoephedrine, intended for illegal purposes. 4. Policy Options Option 1: taking
no new legislative
action (baseline option) Regulation (EC) No 111/2005 will not be
modified. Under this Regulation medicinal products containing ephedrine or
pseudoephedrine are not controlled. Therefore, Member States’ authorities
cannot stop or seize these products when they enter or leave the Union customs
territory based on EU legislation, even though it is likely that they would be
misused for the illicit manufacture of methamphetamine. Option 2: Recommending voluntary measures to Member States The Commission would make a Recommendation
listing a number of measures for the control of medicinal products containing
ephedrine and pseudo-ephedrine from which each Member State can "pick and
choose" as they deem it appropriate. Option 3: Increasing the powers of competent authorities Medicinal products containing ephedrine or
pseudo-ephedrine would be covered by the provisions of Article 26 of the
current Regulation (Powers of competent authorities). This would enable EU
competent authorities to stop transactions involving these medicinal products
when there are reasonable grounds for suspecting that these products might be
misused in the illicit drugs manufacture, whether they are exported, imported
or in transit. Option 4: Increasing the powers of competent authorities and introducing the
use of pre-export notifications EU Member States'
competent authorities would have a legal basis not only to stop and seize
medicinal products containing ephedrine and pseudo-ephedrine (as in option 3)
but also to send pre-export notifications for these products to the country of
destination via PEN online (Pre-Export Notification). Option 5: Subjecting medicinal products containing ephedrine and
pseudoephedrine to the same control requirements as ephedrine and
pseudoephedrine Medicinal products
containing ephedrine or pseudo-ephedrine would be included in the list of
scheduled substances of category 1. They would therefore be subject to the same
control requirements to which scheduled substances of category 1, such as
ephedrine and pseudoephedrine, are currently submitted: i.e. pre-export
notification, export authorisation, license, etc. Option 6: Banning trade of medicinal
products containing ephedrine and pseudoephedrine In this option, import, export and transit of medicinal products
containing ephedrine or pseudoephedrine to, from and through the Union customs
territory would no longer be possible. Before considering a trade ban, other control measures, such as
those foreseen in the legislation, should be explored. These measures have been
analysed under option 5. Therefore, option 6 has been discarded without further analysing its
impacts. 5. Assessment of Impacts This initiative
respects the fundamental rights, freedoms and principles contained in the
Charter of Fundamental Rights of the Union. In particular Article 35 of the Charter
guarantees to everyone the right of access to
preventive health care and the right to benefit from medical treatment.
Empowering competent authorities to act over medicines, as foreseen
under options 3, 4 and 5, will not reduce the access to medicines for the
public. No environmental impact can be
associated with this problem. It is difficult to determine whether there
would be any specific impact on SMEs or micro-enterprises, as it was not
possible to target in the consultation those marketing specifically medicinal
products containing ephedrine or pseudoephedrine. However, SMEs were consulted
as part of the pharmaceutical associations. The absence of their replies
confirms that they are not much involved in the trade of medicinal products
containing ephedrine or pseudoephedrine or are working for the multinational
companies that are active in this segment. Therefore, it could be assumed that
SMEs would not be affected by this proposal. International impacts: Diversion of drug
precursors is a global problem which requires a global response. If stronger control measures over medicinal products containing
ephedrine or pseudoephedrine were taken at EU level, this would match efforts
made by other countries in the world, thus contributing to the international
objective of strengthening controls over these products. For policy options 3, 4 and 5, the administrative
burden for the competent authorities has been quantified using the EU
'Standard Cost model' and on the basis of the data gathered from the
stakeholders' consultation. The additional administrative burden for the
industry could be only partially assessed as no data were provided by the
pharmaceutical trade associations and companies that submitted a reply to the
online consultation, given that they were all in favour of no legislative
action. Option 1: taking
no
new legislative action (baseline option) Effectiveness The identified weakness of the current legislation
with regard to the diversion of medicinal products containing ephedrine and
pseudo-ephedrine would remain, allowing traffickers to continue targeting
medicinal products to source ephedrine and pseudoephedrine for the illicit
manufacture of methamphetamine. Therefore, this option will not contribute
to fighting the illicit manufacture of methamphetamine by reducing the
supply of ephedrine and pseudoephedrine contained in medicinal products. The free trade flow of these
products for legitimate purposes between the Union and third countries will
be maintained. Furthermore, the EU will continue to be
criticised at international level for remaining "inactive"
despite continued calls by the INCB for stepping up the control of its external
trade legislation. Efficiency This option does not impose any additional
administrative burden on European level on either businesses or national
competent authorities. As the “business as usual costs” will remain unchanged,
the administrative costs will also remain unchanged. Option 2: Recommending voluntary measures to Member States Effectiveness This option will not provide for an EU
response to the identified problem. It will however guide those Member States
which do not have any control measures in place, to establish some on the basis
of the good practice in other Member States which have already taken some and
have proven to be effective in reducing the supply of ephedrine and
pseudoephedrine for the illicit manufacture of drugs. The trade flow of these products between
the Union and third countries will not be affected. This option will not comply with the UN
Resolutions inviting all Contracting Parties to the 1988 UN Convention to
strengthen controls over this type of products. Efficiency Whatever measure they may decide to
implement, one can assume that it will imply some administrative burden on the
national level. The additional administrative burden of any of these national
measures is not assessed in the present initiative as it is unclear, which
measures Member States might take. Option 3: Increasing the powers of competent authorities Effectiveness This option will increase the chances to
prevent the diversion of these products, thus reducing the supply of ephedrine
and pseudoephedrine for the illicit manufacture of methamphetamine. As this
option will establish within the drug precursor legislation a legal basis for
Member States' competent authorities to stop or seize a consignment of
medicinal products containing ephedrine and pseudoephedrine, the Member States'
competent authorities will no longer have to rely on different national laws
where they exist to stop or seize these products. The trade flow of medicines containing
ephedrine or pseudoephedrine will not be hampered. It will reduce the criticism expressed
by the INCB concerning the EU lack of action in
imposing control measures over these products. Efficiency Controls will thus be performed both at
export/import and in transit in all Member States, on the basis of risk
analysis. Since this will be part of the normal work of customs, where risk
criteria vary according to trends, the additional administrative burden is
expected to be minimal. As regards traders, customs controls being part of the
normal risk they take in trading goods internationally, the impact is also
considered as minimal. Option 4: Increasing the powers of competent authorities and
introducing the use of pre-export notifications Effectiveness This option builds on the previous one,
thus maintaining all the benefits already outlined. In addition, the use of the
PEN-online system will minimise the risk of diversion, as this system ensures a
systematic and consistent monitoring of trade in drug precursors globally.
Thanks to this tool, this option will enhance the chances to prevent the
diversion of medicinal products containing ephedrine or pseudoephedrine for
the illicit manufacture of methamphetamine. The use of pre-export notifications (PEN
online) for medicinal products by Member States’ competent authorities will
be praised by the INCB who has repeatedly encouraged the Union to do so
over the last few years through their annual reports. Since its creation, PEN-online has never
been recorded as slowing down or hindering trade transactions as confirmed
by the fact that a growing number of countries in the world use it. Efficiency The additional administrative burden for
competent authorities in relation to the controls they will perform, under the
amended Article 26, will remain minimal. The average additional administrative
burden for competent authorities for sending one pre-export notification for a
category 1 substance amounts at €15. The additional administrative burden will
mainly depend on the volume of the licit trade for these products in each Member State. In this respect, it can be assumed that this additional administrative burden
is relatively low and that it can be borne by Member State's competent
authorities given that several Member States have already been sending them
voluntarily over the last three years during the international operational
initiatives under Project Prism. Option 5:
Subjecting medicinal products containing ephedrine and pseudoephedrine to the
same control requirements as ephedrine and pseudoephedrine Effectiveness This option will strengthen considerably
controls over medicinal products containing ephedrine or pseudoephedrine, which
would be submitted to the same control regime imposed by the drug precursor
legislation to the raw substances they contain. This option will increase the chances to
prevent diversion, thus reducing the supply of ephedrine and pseudoephedrine for the illicit manufacture of methamphetamine. The requirements that would be applicable
to these medicinal products would be disproportionate to the objective pursued
by the present initiative. The trade flow of these products between
the Union and third countries might be hampered by
the increased requirements with which operators will be obliged to comply in
order to export or import these products. Furthermore, this option would imply the
amendment of the same article in the Regulation governing intra-EU trade in
drug precursors. This option will comply with the CND
Resolution inviting amongst others the Union "to apply similar control
measures for pharmaceutical preparations containing ephedrine and
pseudoephedrine as those for bulk (raw) precursor chemicals"[4]. Efficiency There are four main administrative
requirements: license, import authorisation, export authorisation and
pre-export notifications. The additional administrative burden stemming from
the requirement of PEN-online has been calculated under option 4. As regards licensing, the current
average administrative burden per competent authority for cat 1 substances is
€861 per year. Therefore, the current administrative burden per competent
authority to issue a licence for these products would be the same as for any
other substance of category 1, therefore € 49. As regards the import authorisations,
the current average administrative burden per competent authority for cat 1
substances is €1236 per year. The current administrative burden to grant an
import authorisation is € 28. As regards the export authorisations,
the average administrative burden per competent authority for cat 1 substances
is €995 per year. The current administrative burden to grant an export
authorisation is € 29. The administrative burden per company to
obtain a licence is € 77 (DG ENTR impact assessment)[5]. 6. Comparison of Options The following table indicates the
effectiveness and cost efficiency of each option, thus contributing to the
analysis of the most preferred one. Table 1: Comparing the options Options || || Effectiveness || || Cost Efficiency || || Overall Assessment || Reducing supply of EPH/PSE contained in medicines by preventing their diversion || Maintaining the free flow of EPH/PSE medicines between the EU and third countries || Compliance with UN Resolutions || Additional administrative burden Per authority || Per industry 1 || - || + || - || € 0 || € 0 || - 2 || -/+ || + || - || € 0/+ || € 0/+ || - 3 || + || + || + || € 0/+ || € 0/+ || ++ 4 || ++ || + || + || € 1500* || NA || +++ 5 || +++ || +/- || + || Exports = €9300 Imports = €7700 || Licence = €77 || ++ Even though the baseline scenario does not
imply any additional administrative burden, retaining this option should be
excluded if the Commission is to respond adequately to the Council's request to
address the weaknesses identified in the control system of the drug precursor
legislation and to concerns expressed by the international community. Non-legislative measures, unless adopted
across all Member States, would only partially address the identified problem.
Moreover, it will not enable competent authorities to stop or seize, be it at
export or in transit, medicinal products containing ephedrine or
pseudoephedrine due to the lack of a clear legal basis on these specific goods.
The measures contemplated under this option would only to a certain extent
prevent the diversion of the medicinal products containing ephedrine and pseudoephedrine. Options 3, 4 and 5 would all provide a
clear legal basis for competent authorities to stop and/or seize medicinal
products containing ephedrine or pseudoephedrine at export from or in transit
through the Union customs territory, when there are reasonable grounds for
suspecting that these products are intended for the illicit drugs manufacture.
They would all reduce the criticism expressed by the INCB concerning the EU
lack of action in imposing control measures over these products and would all increase
the chances to prevent the diversion of these products, thus reducing the
supply of ephedrine and pseudoephedrine for the illicit manufacture of methamphetamine,
though to different degrees. When comparing these three options
providing for legislative amendments, option 3 would generate only minor
administrative burden; the same can be expected for option 4, while option 5
would impose the highest administrative burden for both competent authorities
and economic operators. Even though option 5 could be considered the most
effective insofar as it applies the strictest controls, it would impose too
many control requirements that would seem disproportionate to the objective
pursued by the present initiative. The added value provided by option 4 if
compared to option 3 is that, under this option, the synergy of the two
combined measures increases the effectiveness of each individual measure, with
a limited additional burden given that the pre-export notification system is up
and running and that the number of pre-export notifications that could be
seemingly sent per year by Member States' competent authorities is relatively
small. Moreover, as pre-export notifications are already compulsory for
scheduled substances of category 1, it would seem logical to make them
compulsory also for the products containing them, such as medicinal products
containing ephedrine or pseudoephedrine. Option 4 would thus seem the most preferred
one: it would provide for an efficient control, would impose only one extra
control requirement and it would generate hardly any additional administrative
burden. 7. Monitoring and Evaluation The Commission envisages: ·
Collection, analysis, and reporting of Member
States' annual statistics of seizures and stopped shipments. ·
Support the implementation of the amended
Regulation through the Drug Precursors Working Group and through updating the
existing guidelines, the e-learning tool, FAQ document. ·
Implementation of a database currently being
developed to facilitate the collection and analysis of statistics. ·
Creation of a specific tariff code in the
Combined Nomenclature for medicinal products containing ephedrine or
pseudoephedrine. ·
Organisation of awareness-raising activities
involving competent authorities and economic operators. ·
Exchange of information, including about trends,
with the governments of third countries. The Commission could undertake an
evaluation of its new provisions five years after their adoption, examining the
results achieved against the objectives set and assessing any implications of
future options. It could then submit a report on the evaluation. [1] United Nations Convention against the Illicit Traffic
in Narcotic Drugs and Psychotropic Substances, available at: http://www.incb.org/pdf/e/conv/1988_convention_en.pdf [2] 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 [3] Mt= metric ton = 1000 kg. [4] Resolution E/CN.7/2011/L.5/Rev.1 on
"Strengthening international cooperation and regulatory and institutional
frameworks for the control of precursor chemicals used in the illicit
manufacture of synthetic drugs". http://www.unodc.org/documents/commissions/CND-Res-2011to2019/CND54_8e1.pdf [5] Administrative costs and administrative burdens
imposed by amendments of EU drug precursor legislation, Final Report, EIM,
October 2011, page 24.