REVIEW OF KEY POLICY MEASURES OF THE EUROPEAN COMMUNITY TO PREVENT ILLEGAL TRADE AND iPIC EVALUATION JANUSZ KOZAKIEWICZ OLCPU, ICRI (POLAND) Presentation for the China-ECA Dialog Urumqi (P. R. China), June 2009

KEY POLICY MEASURES IN THE EC AIMING AT PREVENTION OF ILLEGAL TRADE IN ODS (information based on new recast Regulation (EC) 2037/2000) Placing on the market and use bans and restrictions (including ban on non-refillable containers) Appropriately designed and managed import-export licensing system Registration, logbooks keeping and reporting requirements Labeling provisions Awareness raising tools Cross-checking of imports and exports data Entering into iPIC agreements with countries importing from the EC and exporting to the EC

Placing on the market and use bans and restrictions (including ban on non-refillable containers) X

PLACING ON THE MARKET AND USE BANS AND RESTRICTIONS (I) Ban on non-refillable containers except for lab/analyt uses (special advantage) Easier monitoring and control of ODS use Bans and restrictions with respect to placing on the market and use of ODS and products/equipment containing/relying on ODS Diminished demand for ODS

PLACING ON THE MARKET AND USE BANS AND RESTRICTIONS (II) Starting from 1 January 2010 placing on the market and use of ODS will be prohibited in the EC except for: –laboratory and analytical uses (subject to quantitative limits) –feedstock and process agent uses (process agent uses  may be subject to quantitative limits for each installation, regarding make-up or consumption and emissions) –destruction or reclamation  placing on the market of ODS for recycling is banned –reclaimed HCFCs for servicing refrigeration, air-conditioning and heat pump equipment (until 31 Dec 2014)  recycled HCFCs cannot be placed on the market and may be used only by the entity who made recovery or for whom recovery was made (!!!) –HCFCs for re-packaging and subsequent re-export (until 31 Dec 2019) –MB for emergency uses, until 18 March 2010 for QPS, and (until 31 Dec 2014) for re-packaging and subsequent re-export –recycled or reclaimed halons for critical uses listed in the Annex to the Regulation (but may be placed on the market for those uses only by authorized companies)

PLACING ON THE MARKET AND USE BANS AND RESTRICTIONS (II) Starting from 1 January 2010 placing on the market and use of products and equipment containing/relying on ODS will be prohibited in the EC except for: –laboratory and analytical uses –critical uses of halons listed in the Annex to the Regulation (but may be placed on the market for those uses only by authorized companies) IMPORTANT NOTES: - exports of all ODS except for HCFCs  allowed only if ODS are exported for uses permitted in the EC - exports of products and equipment containing/relying on ODS (except for HCFCs)  allowed only if for lab/analyt purposes or for critical uses of halons - exports of products and equipment containing/relying on HCFCs allowed only after special approval by Commission is issued and notification is sent to importing country before exportation

Appropriately designed and managed import-export licensing system

APPROPRIATELY DESIGNED AND MANAGED IMPORT-EXPORT LICENSING SYSTEM (I) All ODS and ODS-containing mixtures (both virgin and used) are covered – also those which are not known to be usually traded Both import AND export licenses are required for all ODS Importers submit: –(1) Declarations of quantities/uses  annual quotas approved –(2) Applications for licenses  licenses issued (since 1 Jan 2010 all licenses will be issued per shipment) Placing on the market quotas needed for all ODS permitted for imports for exempted uses (except for ODS declared to be imported for destruction) Licensing of import/export of products and equipment containing or relying on ODS

APPROPRIATELY DESIGNED AND MANAGED IMPORT-EXPORT LICENSING SYSTEM (II) Application for import/export license must contain detailed data on: –EC importer AND exporter in the third country (or EC exporter AND importer in the third country) –imported/exported ODS or imported/exported product/equipment containing/relying on ODS –place and expected date of importation/exportation –customs office where the clearance will be made –in case of imports for destruction – the name and address of destruction facility Cases when application for license can be rejected: - obligations set out in the Regulation are not complied with - importer/exporter in the third country is not authorized to import/export - (in case of exports only) the competent authority in the third country informs that such imports are not wanted

Registration, logbooks keeping and reporting requirements

REGISTRATION, LOGBOOKS KEEPING AND REPORTING REQUIREMENTS (I) Registration of the following entities in the interactive ODS website: is mandatory: –importers and exporters  list of eligible importers/exporters is published each year in Official Journal of the EC –importers who import HCFCs or Methyl Bromide for re-packaging and subsequent re-export –Customs where imports/exports is taking place –users of ODS for laboratory and analytical purposes –users of ODS as process agents –users of ODS as feedstock (so far only planned) –ODS destruction facilities (so far only planned)

REGISTRATION, LOGBOOKS KEEPING AND REPORTING REQUIREMENTS (II) Logbooks keeping will be mandatory starting from 1 January 2010 for operators of refrigeration, air conditioning and heat pump equipment and fire protection systems, containing 3 kg or more of ODS Such logbooks shall contain : – quantities and type of ODS contained in equipment, added or recovered during servicing and recovered during decommissioning –data on company/technician which serviced the equipment Logbooks keeping will also be mandatory for companies which will use reclaimed or recycled HCFCs for servicing refrigeration, air conditioning and heat pump equipment Such logbooks shall contain : –the same information as logbooks kept by equipment operators + names of suppliers of reclaimed HCFCs and sources of recycled HCFCs that were applied in particular equipment  cross-checking of information is possible, so using virgin HCFCs falsely named as reclaimed or recycled HCFCs will be much more difficult

REGISTRATION, LOGBOOKS KEEPING AND REPORTING REQUIREMENTS (III) Annual reporting is mandatory for : –producers of ODS –importers/exporters of ODS –users of ODS as process agents –ODS destruction facilities Information to be provided by importers/exporters contains, inter alia: – quantities and type of ODS released for free circulation in the EC or brought to the EC  specifying the countries of origin/destination and purposes for which ODS were imported/exported if ODS was imported for destruction the name and address of destruction facility must be reported –all ODS selling/buying transactions made on EC territory –all ODS stocks

Labeling provisions

LABELING PROVISIONS Labels on ODS containers must, inter alia: – reflect their intended use, e.g. as process agent, as feedstock etc. – contain information that ODS from this particular container may be applied ONLY for that particular use Labels on reclaimed HCFCs containers must, in addition: – contain information on name and address of reclamation facility

Awareness-raising tools

AWARENESS-RAISING TOOLS Licensing manual : – designed as two volumes document: volume I  available for customs and EC Member States competent authorities only volume II  available for importers/exporters, ODS users and the general public (can be viewed on ODS website –contains comprehensive information on the ODS licensing system mandatory in the EC Special information notices for importers and exporters issued annually : – contains comprehensive information on rules of submitting import/export declarations –available for importers/exporters, ODS users and the general public (can be viewed on ODS website The part ODS website available for general public contains also : –basic information on ozone layer depletion, Montreal Protocol and ODS –basic information on ODS regulatory framework in the EC –links to ODS legislation mandatory in the EC and documents related to ODS issued by the EC Problem: Customs training system at the EC level does not work  so far customs training left for Member States

Cross-checking of import and export data

CROSS-CHECKING OF IMPORT AND EXPORT DATA Customs submit stamped used import licenses to the European Commission  cross-checking with data from the EC importers is possible Ozone Secretariat provides to the European Commission data on ODS imports/exports to/from the EC submitted annually by exporting/importing Montreal Protocol Parties  cross-checking with data from EC importers/exporters and from customs is possible Results of that cross-checking for 2006 and 2007 revealed inconsistencies that are presently under investigation

iPIC system used by the EC

STRUCTURE OF iPIC SYSTEM USED BY THE EC In 2007 the EC started to collaborate with other countries on exchanging information on ODS imports/exports on the basis of informal Prior Informed Consent system (iPIC) – presently involving c.a 40 participating countries including all participants of Urumqi meeting  also in 2007 the EC started to implement Decision XVII/12 requesting exporting countries not to send CFCs to developing countries until confirmation has been received (may be seen as kind of iPIC) Imports to the EC  iPIC applies to all import license applications except for MB and HCFCs Exports from the EC  iPIC applies to all exports except for MB and HCFCs and other ODS if exported for feedstock and process agent uses –in case of exports of MB and HCFCs  iPIC applies only if there is a request from importing country Verification is made through checking eligibility of trade partner in the origin/destination country and eligibility of the ODS and its declared use –iPIC information sheet is checked and (if necessary) is sent out to the partner country competent authority with copy to UNEP Network co- ordination office –if no response from partner country after 5 working days  reminder is sent out –if no response after 10 working days  license is issued

STATISTICS OF iPIC APPLIED IN 2008 Number of cases of EC trade with iPIC partner countries (including MB and HCFCs) : 2007   318 Number of cases in 2008 where the corresponding national licensing sheet was checked (no checks were made for trade in MB and HCFCs) : 88 Number of cases where the request to partner country’s competent authority to accept the license was sent: 2007   26

STATISTICS OF REQUESTS TO PARTNER COUNTRY’s COMPETENT AUTHORITY Requests% % Accepted No response Rejected Total

RESULTS OF EVALUATION OF iPIC APPLIED IN 2008 and 2007 Percentage of cases „accepted by partner country’s competent authority ”  increased Percentage of cases „no response from partner country’s competent authority”  decreased, but still was very significant (31% of all requests) Percentage of cases „rejected by partner country’s competent authority”  decreased, but still was very significant (19% of all requests) BUT:  all those checks were initiated solely by the EC !!!  none of importing countries participating in iPIC informed the EC of issuance of an import license !!!

CONCLUSIONS FROM EVALUATION OF iPIC APPLIED IN 2008 AND 2007 General conclusion:  iPIC was proved to be a very useful tool for preventing illegal trade in ODS But:  More proactive behavior of partner countries participating in iPIC with the EC is definitely needed  partner country’s competent authorities need to communicate the EC on import/export licenses issued  partner country’s competent authorities need to respond to EC requests for acceptance/rejection of import/export licenses

WHAT IS ALSO NEEDED TO PREVENT ILLEGAL TRADE IN ODS EFFECTIVELY ? Establish appropriately threatening penalties for ODS smuggling!!!

WHAT IS ALSO NEEDED TO PREVENT ILLEGAL TRADE IN ODS EFFECTIVELY ? Don’t let your customs officers sleep on their posts !!!

Thank you for your attention !