Select Committee on European Union Forty-Ninth Report


Letter from the Chairman to Bob Ainsworth

  Sub-Committee F (Social Affairs, Education and Home Affairs) considered this proposal at a meeting on 11 December. The Committee believes that the change in the legal nature of the measure (from a Directive to a Regulation) is a welcome step towards consistency and efficiency in the control of drug precursors in the EU. There, are, however, two points on which we would be grateful for clarification:

    —  The replacement of a Directive by a Regulation has been welcomed for bringing "internal" precursor controls in line with the "external controls" of Regulation 3677/90. But the direct application of standards by a Regulation in this context seems hard to reconcile with the inability of Member States to implement in a timely manner the standards set out in the Directive and its modifications. In view of these delays, are you satisfied that a simple change in the legal nature of the instrument would suffice to ensure efficiency?

    —  The Committee believes that a system of mandatory disclosure would be a much more effective way of controlling precursors than a merely voluntary system. We note, however, that you have expressed concern about the relevant provisions, on the grounds that they would risk "antagonising industry". It is not clear why this would be the case or why the industry's concerns should take precedence over the need to fight the scourge of drugs.

    —  You also say that, as Article 8(1) (on mandatory disclosure) currently stands, it will require no changes to UK law—yet the current UK system is one of voluntary reporting. What is the exact position on this matter?

  We would welcome your comments on these points and also any information on the current state of play regarding the Commission's review of EU precursor legislation. In the meantime the Committee has decided to retain the proposal under scrutiny.

11 December 2002

Letter from Bob Ainsworth to the Chairman

  I am responding to your letter of 11 December on the Commission proposal for a regulation of the European Parliament and of the Council on drug precursors (Doc 12064/02 Cordrogue 75). I apologise for not replying sooner.

  Your first point was that it is hard to reconcile direct application of standards by a Regulation with the inability of some Member States to implement in a timely manner the standards set out in the Directive and its modifications.

  In my explanatory memorandum, I said that a number of member States of the European Union had been slow to introduce legislation to implement the Directive on precursors. I did this only to illustrate the relative advantages of a Regulation over a Directive in this area. All Member States have now implemented the Directive, and we are not aware of any systemic difficulties in administering it within the current EU. However, I also said that the issue was of particular relevance in regard to the enlargement of the Union: it will mean that new member States will not have to introduce domestic legislation to implement the necessary controls. As you imply, this will not in itself guarantee that the controls will be imposed effectively, but it will be an important step in the right direction.

  Your next two points related to the issue of compulsory or voluntary disclosure. It is convenient if I take them the opposite way round from the order of your letter.

  Your third point was that there was an inconsistency in my memorandum. I said that article 8(1) (which requires mandatory disclosure) would not imply any change in UK law; but UK law requires only voluntary disclosure. My officials are discussing this with Commission officials. The latter have said that it was not their intention to cause any change to the way the controls operate, and that, if the feeling among Member States is that the wording of the current draft alters the status quo, it will be changed to ensure that it does not. So there will be no need to change UK law as a result of this Regulation.

  Your second point was that the Committee believes that a system of mandatory disclosure would be much more effective than a voluntary one. I must disagree with the Committee here. A balance needs to be struck between law enforcement concerns and industry interests. Many of the substances that are used as precursors in the manufacture of illicit chemicals have very wide licit use and are used and traded legally in very large quantities. For example, hydrochloric and sulphuric acids are used in many basic industrial processes, acetone is used in the paint industry, acetic anhydride in petroleum refining. Amounts diverted for illicit use are, by comparison, tiny. A system of mandatory disclosure would therefore be a significant burden on industry, and would be very costly to implement effectively. Our law enforcement authorities (and those of our European partners and others) find that the voluntary system works well. It does not mean that the production of illicit drugs can be choked off entirely by this means: the scale of the licit trade is too vast to allow that to happen. But it does give enough power to let the authorities track the movement of diverted chemicals as an investigative tool and to interdict where appropriate. And it encourages industry to co-operate and police itself: levels of co-operation are high, with industry often volunteering information. The adversarial situation that a compulsory system large enough to be effective would create would be likely to hinder rather than help.

  Finally, you asked for any information on the progress of the Commission's review of EU precursor legislation. The issues involved are complex. It is unlikely that proposals for amendments to existing legislation will be made for some months yet. There is no immediate urgency for this work to be completed. The original EU legislation was adopted more than a decade ago and has been amended on numerous occasions, so the EU Action Plan on Drugs 2000-04, endorsed by the European Council at Feira in June 2000, asked the Commission to organise an appropriate assessment of it. The current review is the Commission's response to that. However, the view of the UK agencies involved is that, while the review is worthwhile, the current controls do work adequately. The Commission's advisory committee of national officials will meet next in late April/early May and I will update you on progress then.

24 February 2003

Letter from the Chairman to Bob Ainsworth

  Thank you for your letter of 24 February. It was most helpful to Sub-Committee F (Social Affairs, Education and Home Affairs) in examining the proposal at a meeting on 2 April.

  The Committee notes your concerns about the negative impact of a mandatory system of suspicious transaction disclosure by industry. It is not clear to us, however, why such a system would lead to an "adversarial situation" between law enforcement authorities and industry. A private sector duty to report suspicious transactions is well established in areas such as money laundering control, with the UK having pioneered the development of standards in the field.

  We look forward to being updated on the progress of discussions of this proposal after the advisory committee has met. In the meantime, we will retain the proposal under scrutiny.

3 April 2003

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