Whereas the existing control regimes, such as for dual use substances for chemical weapons, can be understood against the background of the Cold War or state terror, the focus of a new EU regulation is religious or politically motivated terrorism. The new regulation places the responsibility on the chemicals industry, chemical trading and the complete delivery chain - right down to the supply of the end-user.

Regulation (EU) No. 98/2013 on the marketing and use of explosives precursors was published at the beginning of February. It applies to 15 substances or mixtures listed in two annexes, which contain the substances in defined concentration limits. Together with the Fecc (European Association of Chemical Distributors), Verband Chemiehandel e.V. has campaigned for practicable concentration values. Unfortunately, this has not been achieved in all cases. The most prominent example here is nitric acid: Mixtures containing it already fall under the regulation at concentrations of merely 3%.

New Licensing System
The regulation affects, first of all, the supply to the private end user, i.e., its focus is a business that to date was not primarily covered by the control regimes, such as the retail sector. Also-called licensing regime is envisaged. This means that the products concerned, as a basic principle, may not be supplied to members of the general public or in other words private consumers, or imported, owned or used by these persons, unless they have obtained a corresponding license from the authorities. No decisions have yet been made as to whether, and to what extent, these licenses are valid across national borders.Also, the prerequisites for obtaining such a license have not yet been defined. Furthermore, discussions continue as to what extent the supplying party may actually rely on this license. The registration regime, which has proved its value over time in Germany, is only foreseen for limited exceptional cases. The regulation contains a nonwaiver clause for registration systems that existed before March 1.

Questionable Labeling Obligation
Furthermore, the regulation requires that the products in question must be labeled with a reference to their distribution restrictions if they are made available to members of the general public. All economic operators must ensure that this labeling is carried out if they intend to make restricted explosives precursors, or products containing those, available to a member of the general public. The addressee of this regulation is clearly stated as being primarily the retailer or any other economic operator that supplies the general public. This is problematic for the simple reason that, as a rule, retailers will not know the exact composition. Also, the labeling obligation is at least questionable for the following reason: In particular with mixtures, such as cleaning agents, first the notification on the label may attract attention to the fact that the product could possibly be suitable for illicit purposes. Early on in the regulatory process, attention was drawn to both the above problem situations. Unfortunately, it was not until now, in the course of the work on the implementation of the regulation, that these problems have been perceived as such. Now in the discussions, proposals are being made to pass this labeling obligation further up the supply chain. Furthermore, the type of labeling is completely undecided as well. Here, without a definitive guideline in the regulation, there will be diverging oncepts of member states, so there are fears that there will be different systems in the internal market.

Open Extension Of Application
A further point that could lead to different regulations throughout the market is that the member states are granted the possibility of extending or amending the annexes by adding further substances or changing the limits of concentrations for mixtures. This would allow the consideration of special country-specific factors, however, for the companies affected, this involves a certain legal uncertainty - in particular if they are active internationally. The main effect of such an open scope of application, though, would be contrary to the declared target of the regulation of improving the free movement of goods in the internal market.

Unforeseeable Consequences
The possibility cannot be excluded that those (retail) traders that are affected ill discontinue articles or have their composition changed in view of the fact that the regulation causes more bureaucratic burden, legal uncertainty and probably even differing regulations in different member states. In the end, therefore, the whole supply chain is affected and also challenged to find possible alternatives.

B2B Trading Affected
The regulation also affects business-to-business trading. There are both indirect effects from the regulation and also direct effects because, as a basic rule, every suspicious transaction regarding the substances and mixtures listed in the annexes must be reported - independently of whether this was a sale to a member of the public or to another business. Originally, even a more further-reaching obligation had been proposed that involved reporting all suspicious transactions independently of whether the substance was listed or not. This would have meant that the companies, although without corresponding evidence, would have to continue to monitor their product portfolios with a good detective's nose for possibilities of misuse and subsequent criminal activities. It proved possible to stop this proposal after it was recognized that this was taking things too far and would also be simply asking too much of the affected companies. Here, only trustful cooperation with the authorities can lead to a result that satisfies justified security needs and at the same time takes appropriate account of commercial interests.

Summary And Prospects
Above and beyond the existing control regimes for economic operators, the new regulation involves the whole supply chain right down to sales to the private end-user. Therefore, the actors in the supply chain must be prepared to deal with a completely new concern and if necessary create the required structures. The aim of a regulation as a legal instrument is to create the greatest possible degree of uniformity and to improve the free movement of goods within the internal market. This regulation will certainly not meet these goals. Finally, we must monitor to what extent and in which way the member states make use of the numerous derogation possibilities. The regulation comes into force on Sept. 2, 2014.