Scope:

Regulation 98/2013 regulating the marketing and use of explosives precursors

Evaluation findings:

The evaluation showed that the Regulation has reduced the availability of chemical substances that can be misused to manufacture homemade explosivesand that reporting of suspicious transactions has improved.

While the overall objectives of the regulation remain relevant, the regulation does not cover or clearly define all relevant threat substances and concerned stakeholders. The level of access to restricted substances is not fully adequate to the current context and does not address new and evolving threats. 

The lack of definitions or insufficient clarity in the regulation creates legal uncertainties for competent national authorities and economic operators. It also poses practical issues for reporting suspicious transactions, detection of potential threats and prevention of illicit access to explosives precursors.

The evaluation identified limitations of the application and enforcement of the regulation. Public authorities have not always effectively applied and enforced surveillance and reporting obligations and the level of awareness of the Regulation's requirements along the supply chain is uneven. Fragmentation of control regimes across the EU has created challenges for compliance of economic operators and poses a security concern.

The evaluation found that the regulation was generally consistent with and complementary to other key relevant EU legislation. However, there are some differences as regards certain definitions affecting the coherence of the framework.

Overall, the EU benefit of the Regulation appeared to be limited by the fragmentation of the system of restrictions and control regimes across the EU (i.e. ban, licensing, and registration) and by the diverging level of awareness along the supply chain. Economic operators face unnecessary obstacles to the free movement of these substances in the internal market.

Estimated savings and benefits

According to the evaluation findings, the regulation introduced costs proportionate to its general and specific objectives. The most burdensome activities are the ones related to training and awareness raising of staff members and reporting suspicious transactions, thefts or significant losses. Most of the costs for national authorities increased only moderately following the entry into force of the Regulation. The evaluation identified potential for simplification and cost savings in possible further harmonisation of the system of restrictions and controls, clarification of some labelling obligations, and a faster and more flexible procedure for enabling changes to the list of restricted substances. 

Which objective(s) does the Commission pursue?

The main objectives of the Commission proposal are to ensure a high level of security through measures to prevent and combat crime and to ensure the functioning of the internal market, by preventing distortion of competition and overcoming trade barriers.

In light of the identified problems, the specific objectives are to:

• Further restrict access to certain explosives precursors and strengthen controls;
• Align restrictions and controls with the evolving threat regarding explosives precursors;
• Increase enforcement by the competent authorities of the Regulation;
• Improve the transmission of information and compliance along the supply chain;
• Facilitate intra-EU trade and prevent distortion of competition; 
• Improve the clarity of the Regulation and ensure uniformity in its application.

The Commission proposal increases the harmonisation of the framework for making available restricted explosives precursors to the public by setting common conditions for licensing and by discontinuing the registration regime. The proposal clarifies that it applies to both offline and online sales. The distinction between a professional user, to which restricted explosives precursors can be made available and a member of the public, to which they cannot, is facilitated by the definition of both concepts. Regarding labelling, the proposal clarifies that every step in the supply chain will bear the burden of informing the subsequent one that the product supplied is subject to the restrictions.

Estimated savings and benefits

The Commission proposal will clarify and improve the efficiency of the control measures currently applied. The impact assessment estimated this to lead to a decrease of around 10% (EUR 25- 75 million per year) of the current costs of companies to comply with the regulation. The main benefits follow from these savings in compliance costs, as well as a reduction of crime, including terrorist attacks, potentially up to EUR 500 million.

The proposal will limit the divergences in the restrictions on explosive precursors across the EU. This will simplify the legal framework and will make it clearer and easier to comply with. Such measures are especially useful for companies operating across the EU, which currently have to adapt to different regimes.

The regulatory framework will also be simplified by transferring from Regulation (EC) 1907/2006 the relevant security-oriented restrictions on the making available of Ammonium Nitrate. This will make the legal framework more coherent and hence, more likely to be complied with and enforced.

Outcome of Legislative Procedure

The new Regulation EU 2019/1148 makes significant improvements to the current legislative framework, thereby limiting the availabilty of substances and mixtures that could be misused by terrorists and criminals to manufacture home-made explosives. It maintains the key principles of the Regulation as initially proposed and adds new provisions, including the banning of two additional explosives precursors (ammonium nitrate and sulphuric acid), the discontinuation of the current registration systems, more careful licensing and screening, quicker and better information sharing, as well as verification upon sales and registering transactions.     Overall, the simplification benefits proposed by the Commission were preserved.

However, the agreement deviates from the Commission proposal in particular as it will not be possible to restrict additional substances through delegated acts. The existing delegation of power to amend the annexes is preserved, regarding the chemicals’ concentration values and the list of chemicals subject to reporting of suspicious transactions.

Guidance and monitoring

On 24 June 2020, the Commission published its guidelines for the implementation of the new explosives precursors regulation(2020/C 210/01).The guidelines are meant to assist national authorities and the chemical industry, including online marketplaces, to implement the new rules.

Additionally, on 16 June 2020, the Commission also published a monitoring programme on its website, in the form of a public staff working document SWD (2020) 114. This monitoring programme will help the Commission monitor the outputs, results and impact of the new explosives precursors regulation.