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EU Strategies in combating diversion

and trafficking of drug precursors

Paris Pact Roundtable on Western Europe

Paris/France

8-9 November 2010

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� Challenges

� Regulatory responses

� EU Mutual Assistance & EU Risk management chemicals

� Need for international cooperation

� Need for support of international initiatives

Overview

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Challenges

� The European Monitoring Centre for Drugs and Drug Addiction notes:

� Heroin still accounts for the greatest share of morbidity and mortality related to drug use in the European Union

� A decline in heroin use and associated problems observed in 1990s and the early years of the present century, though more recent data suggest that the trend might have changed direction

� Cutting off heroin precursor supply remains a highly effective weapon to counter illicit heroin manufacture

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� A major concern: Sharpe contrast between high volumes of acetic anhydride legally traded and the minute volumes of acetic anhydride estimated being misused in the illicit heroin manufacture

� World wide legal production of acetic anhydride increasing - at the scale of several million tons per annum

� INCB Precursor Report 2009: approx 135 000 MT of acetic anhydride legally traded as reflected through the PEN system

� UNODC estimates: approx 600 MT of acetic anhydride required for illicit heroin manufacture in Afghanistan

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� Increased diversification of international legal trade - 29 exporting countries/81 importing countries of AA involving all the regions of the world

� Complex supply chain for acetic anhydride and diverse end-use exposure

� EU used to be a major producer and exporter of AA …. Today, the EU is a major trader with volumes slightly decreasing

� EU Customs dealing with approx. 203 million customs declarations - 8 million for transit

� Recent detection of explosive device trafficking via AIR cargo – some drug precursors are also explosive precursors ….

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� Project Cohesion/DICE – EU targeted for AA exports to ME – EU CNAs stopped several shipments (no import permits, no legitimate requirements)

� EU operators targeted – but decreasing ….

� Rapidly changing MO – the target is moving…

�Traffickers seek new targets – new regions for obtaining AA

�Smuggling methods evolving – new routings –methods of concealment etc.

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Need for a holistic approach – to hit the moving target

� Strong regulatory procedures on key drug precursors

� Strong links with the private sector to maximise

the instrument of notification of suspicious transactions and toapply voluntary cooperation on substitute substances, pre-precursors, derivates …

� Increased Customs awareness at the borders to detect suspicious consignments diverted from domestic distribution channels and subsequently correctly declared for further transit

� Backtracking investigations to identify the point of diversion & intelligence gaps

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� Interagency cooperation - Health/Police/Customs

� Bilateral drug precursor agreements between countries or regions to further strengthen cooperation on specific topics

� International cooperation – in particular need to support and to utilise international standard operating procedures established through Project PRISM – Project COHESION – OP TARCET

Need for a holistic approach (2)

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EU Regulatory responses

� Complete revamp of EU drug precursor regulations in 2005, in particular

� Strengthened import controls

� Further strengthened EU export controls

� Introduction of transhipment controls

� PENs for Table II Substances where third countries make requests to the UN

� EU wide licensing regime for operators

� EU drug precursor regulations adopted at EU level and directly applicable in EU Member States (identical rules throughout the EU)

� “Drug precursors” versus other types of precursors i.e. “Explosive precursors”

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EU Regulatory responses (2)

� In-depth evaluation of the EU drug precursor legislation conducted in close cooperation with EU Member States

� Appropriate follow-up currently being assessed

� EU Drug Precursor Committee � Gathers precursor experts of all 27 EU

Member States and Europol as observer� Examines all relevant precursor related

issues

� Votes (e.g. the measures to implement the CND decision to transfer phenylacetic acid to Table I of the 1988 UN Convention

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Cooperation with the private sector

� Cornerstone of Article 12 of the 1988 UN Convention

� Notification of suspect transactions – a legal obligation for the operators

� Cooperation procedures� EU Guidelines for the Industry� eLearning for the Industry

� EU Voluntary monitoring list� Non-scheduled substances frequently found to be diverted� Industry notifies suspect transactions (up to 52 % of all notifications)

� Flexibility to quickly react to new patterns� More than 50 % of EU seizures involve non-scheduled substances

� Cf. German presentation – will illustrate the maximised use of cooperation with Industry

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� Informs operators about legal obligations

� Guidance on identification of suspect transactions

� Guidance on operatorsinternal arrangements (responsible officer, security of premises + storage etc.)

� Implements INCB Code of practice

� Prepared with EU Precursor experts and Industry representatives and endorsed by the EU Drug Precursor Committee

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� Implemented through EU Guidelines

� Taken on board of the eLearning

INCB Code of practice

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� Based on EU Guidelines

� Contains the INCB Code of practice

� Includes UN approach

� Prepared with EU precursor experts from the public and private sector

� Available in several EU / UN languages

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� European Antifraud Office (OLAF)

� AFIS – Antifraud system

� Links EU competent authorities

� Appointed CNA’s (regulatory and law enforcement –Police/Health/Customs)

� “Alert Message system”

� Exchanging information on suspicious orders (preventing the shopping around)

� Exchanging information about suspicious transactions, stopped shipments or seizures in the EU or at the external frontier + between the EU and third countries (where we have bilateral agreements)

Operational responses

European Anti-Fraud Office (OLAF)

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�EU Risk management: Traffickers are targeting different entry and exit points of the EU

EU wide approach for border controls

�EU wide risk analysis criteria for targeting and

selecting high risk consignments

�Risk Information exchange system (RIF):links all major EU ports/airports/land frontier points

�E-Learning on drug precursors for Customs and

Border control

�Customs 2013 Drug Precursor Project Group - EU operational customs experts

Operational responses (2)

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� 2 weeks EU wide action will all EU MS Customs Administrations

� 8 risk profiles

� New modus operandi

�New substances

�New routings

�New methods of concealments

�New intelligence links

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� Pre-precursors for phenylacetic acid

� Pre-precursors for BMK (P2P)

� New trafficking patterns for BMK (P2P)

� Intelligence links between drugs/precursor seizures in Eastern Europe and Mexico

� New trafficking patterns for PMK (3,4 MdP2P)

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Slovak Customs

PMK glycidate

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Acetyl Benzeneacetonitrile

� Belgian Customs Zeebrugge/Antwerp

� BMK pre-precursor

� New MO: routing -transport vector – origin

� RF precursor legislation with strong measures on BMK …

Belgium Customs

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Mandelic acid

� Encountering “mandelic acid”

�2-Hydroxy-2-phenylacetic acid

�Phenylacetic acid – a related compound

�Potential intermediate substance

�Potential for circumventing legal controls

� Yields high amounts of phenylacetic acid

� Several UN CND Resolutions on this phenomenon

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• Diversion of drug precursors is a problem with an international dimension

requires strong international co-operation

International Cooperation (1)

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� EU has concluded bilateral precursor agreementswith world's major players (USA - 1997, People’s Republic of China - 2009)

� Bilateral drug precursor agreements: “A strategic Instrument” allowing for tailor made cooperation on specific issues of mutual interest

� Negotiations with the Russian Federation commenced in 2009

International Cooperation (2)

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� The EU strongly support Projects COHESION & PRISM managed under the umbrella of the INCB

� PILA� DICE II� Provide a flexibility to address rapidly changing patterns of drug precursor diversion and trafficking

� Identify + address joint/cross regional or global challenges

� Importance and central role of the International Narcotics Control Board (INCB) as global focal point

� Strong EU MS participation

� Strong EU support to UNODC OP TARCET � Importance of capacity building� Border control training for TARCET II (DE, FR, PL,

LIT, IT)

International Cooperation (3)

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To conclude:

� Adequate regulatory and operational responses

� Interagency cooperation

� Cooperation with the private sector

� International cooperation

� Strong need for continued international support of Project Cohesion and TARCET III

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Thank you very much for your attention

Suzanne Stauffer Leif Knudsen

European Commission European Anti-Fraud Office-OLAF

Phone: +32.2.295.69.78 Phone: +32.2.295.79.35

Fax: +32.2.296.54.04 Fax: +32.2.296.69.99

E-mail: Suzanne.Stauffer@ec.europa.eu E-mail: Leif.Knudsen@ec.europa.eu