N.F. Gielen and Others (C-369/13)

Contents

Judgment Of The Court (Fifth Chamber)12 February 2015^note(Reference for a preliminary ruling — Drug precursors — Monitoring of trade between the Member States — Regulation (EC) No 273/2004 — Monitoring of trade between the European Union and third countries — Regulation (EC) No 111/2005 — Concept of scheduled substance — Substance alpha-phenylacetoacetonitrile (APAAN) — Scheduled substance 1-phenyl-2-propanone (BMK))In Case C‑369/13,REQUEST for a preliminary ruling under Article 267 TFEU from the Rechtbank Oost-Brabant ’s-Hertogenbosch (Netherlands), made by decision of 21 June 2013, received at the Court on 1 July 2013, in the criminal proceedings againstTHE COURT (Fifth Chamber),composed of T. von Danwitz, President of the Chamber, C. Vajda, A. Rosas, E. Juhász and D. Šváby (Rapporteur), Judges,Advocate General: M. Szpunar,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:— the Netherlands Government, by K. Bulterman and B. Koopman, acting as Agents,— the Spanish Government, by L. Banciella Rodríguez-Miñón, acting as Agent,— the European Commission, by J.-F. Brakeland and K. Talabér-Ritz, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of Article 2(a), (b), (d) and (f) of Regulation (EC) No 273/2004 of the European Parliament and of the Council of 11 February 2004 on drug precursors (OJ 2004 L 47, p. 1) and of Article 2(a) and (f) of Council Regulation (EC) No 111/2005 of 22 December 2004 laying down rules for the monitoring of trade between the Community and third countries in drug precursors (OJ 2005 L 22, p. 1).

2The request has been made in criminal proceedings brought against Messrs Gielen, Geerings, F.A.C. Pruijmboom and A.A. Pruijmboom on charges of importing and/or exporting a substance called ‘alpha-phenylacetoacetonitrile’ (‘APAAN’) within the European customs territory without being in possession of the licence required for that purpose and, in the alternative, of having, again without a licence, had that substance in their possession and placed it on the market.

Legal context

EU law

3In order to prevent the diversion of substances frequently used for the illicit manufacture of narcotic drugs and psychotropic substances, the EU legislature adopted monitoring and control measures consisting of an internal part in the form of Regulation No 273/2004 and an external part in the form of Regulation No 111/2005.

Regulation No 273/2004

4Recitals 13 and 17 in the preamble to Regulation No 273/2004 state:(13) A significant number of other substances, many of them traded legally in large quantities, have been identified as precursors to the illicit manufacture of synthetic drugs and psychotropic substances. To subject these substances to the same strict controls as those listed in Annex I would present an unnecessary obstacle to trade involving licences to operate and documentation of transactions. Therefore, a more flexible mechanism at Community level should be established whereby the competent authorities in the Member States are notified of such transactions.…(17) Since the objectives of this Regulation, namely the harmonised monitoring of the trade in drug precursors and the avoidance of its diversion to the illicit manufacture of synthetic drugs and psychotropic substances, cannot be sufficiently achieved by the Member States and can therefore, by reason of the international and changeable nature of such trade, be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives.’

5Article 2(a), (b), (d) and (f) of that regulation provides:‘For the purposes of this Regulation the following definitions shall apply:(a) “scheduled substance” means any substance listed in Annex I, including mixtures and natural products containing such substances. This excludes medicinal products as defined by Directive 2001/83/EC of the European Parliament and of the Council of 6 November 2001 on the Community code relating to medicinal products for human use [OJ 2001 L 311, p. 67], pharmaceutical preparations, mixtures, natural products and other preparations containing scheduled substances that are compounded in such a way that they cannot be easily used or extracted by readily applicable or economically viable means;(b) “non-scheduled substance” means any substance which, although not listed in Annex I, is identified as having been used for the illicit manufacture of narcotic drugs or psychotropic substances;…(d) “operator” means any natural or legal person engaged in the placing on the market of scheduled substances;…(f) “special licence” means a licence that is granted to a particular type of operator;…’

6Under Article 3(2) of Regulation No 273/2004 ‘[o]perators shall be required to obtain a licence from the competent authorities before they may possess or place on the market scheduled substances of category 1 of Annex I’.

7Article 9 of that regulation provides:1. In order to facilitate cooperation between the competent authorities, the operators, and the chemical industry, in particular as regards non-scheduled substances, the Commission shall, in accordance with the procedure referred to in Article 15(2), draw up and update guidelines to assist the chemical industry.2.The guidelines shall provide in particular:(a) information on how to recognise and notify suspect transactions;(b) a regularly updated list of non-scheduled substances to enable the industry to monitor on a voluntary basis the trade in such substances;(c) other information which may be deemed useful.…’

8Annex I to Regulation No 273/2004 lists the ‘scheduled substances’, within the meaning of Article 2(a) of Regulation No 273/2004, one of which is, in category 1, ‘1-phenyl-2-propanone’ (‘BMK’). By contrast, APAAN is not included in that list.

Regulation No 111/2005

9The concept of ‘scheduled substance’ defined in Article 2(a) of Regulation No 111/2005 is, in essence, identical to that in Article 2(a) of Regulation No 273/2004. The Annex to Regulation No 111/2005 to which Article 2(a) thereof refers is also in essence identical to Annex I to Regulation No 273/2004.

10Article 2(f) of Regulation No 111/2005 defines the concept of ‘operator’ as ‘any natural or legal person engaged in import, export of scheduled substances or intermediary activities relating thereto, including persons pursuing the activity of making customs declarations for clients on a self-employed basis, either as their principal occupation or as a secondary activity related to another occupation’.

11Article 6(1) of Regulation No 111/2005 provides:‘Operators established in the Community, other than customs agents and transporters when acting solely in that capacity, engaged in import, export or intermediary activities involving scheduled substances listed in Category 1 of the Annex, shall hold a licence. The licence shall be issued by the competent authority of the Member State in which the operator is established....’

12Article 10 of Regulation No 111/2005 provides:1. In order to facilitate cooperation between the competent authorities of the Member States, operators established in the Community and the chemical industry, in particular as regards non-scheduled substances, the Commission shall, in consultation with the Member States, draw up and update guidelines.2.These guidelines shall provide, in particular:(a) information on how to identify and notify suspect transactions;(b) a regularly updated list of non-scheduled substances to enable the industry to monitor on a voluntary basis the trade in such substances.…’

13Regulation (EU) No 1258/2013 of the European Parliament and of the Council of 20 November 2013 (OJ 2013 L 330, p. 21) and Regulation (EU) No 1259/2013 of the European Parliament and of the Council of 20 November 2013 (OJ 2013 L 330, p. 30) amended Regulation No 273/2004 and Regulation No 111/2005 respectively. Besides the amendments made to the definition of the concept of ’scheduled substance’, within the meaning of those two regulations, they also included APAAN in the list of ‘scheduled substances’ included in Annex I to Regulation No 273/2004 and in the Annex to Regulation No 111/2005. However, as Regulations No 1258/2013 and No 1259/2013 did not enter into force until 30 December 2013, they are not applicable to the main proceedings.

Netherlands law

14Regulations No 273/2004 and No 111/2005 were implemented by the Law on the prevention of the abuse of chemical substances (Wet voorkoming misbruik chemicaliën, ‘the WVMC’).

15Article 2(a) of the WVMC provides:‘It shall be prohibited to act contrary to the provisions laid down by or pursuant to:a. Articles 3(2) and (3) and 8 of Regulation No 273/2004 and Articles 6(1), 8(1), 9, 12(1) and 20 of Regulation No 111/2005…’

16The intentional infringement of that provision constitutes an economic offence and is punishable by a maximum of six years’ imprisonment.

The dispute in the main proceedings and the questions referred for a preliminary ruling

17On the basis of Article 2 of the WVMC, Messrs Gielen, Geerings, F.A.C. Pruijmboom and A.A. Pruijmboom were prosecuted on charges of importing and/or exporting APAAN, a substance which the Netherlands authorities regard as falling within the classification of a ‘scheduled substance’ in category 1 of the Annex to Regulation No 111/2005, within the European customs territory. In the alternative and on the same legal basis, they are also accused of having, without a licence, had that substance, which is regarded as falling within category 1 of Annex I to Regulation No 273/2004, in their possession and of having placed it on the market.

18On 2 January 2013, the Openbaar Ministerie (Public Prosecution Department) summoned the accused, whose pre-trial detention has currently been suspended, to appear before the national court.

19In the course of those proceedings, the Rechtbank Oost-Brabant ’s-Hertogenbosch (East Brabant District Court, ’s-Hertogenbosch) noted that APAAN was not expressly included on the list of ‘scheduled substances’ covered by category 1 of Annex I to Regulation No 273/2004 and by category 1 in the Annex to Regulation No 111/2005. Consequently, in accordance with, inter alia, the principle of legality, operations relating to that substance ought not to be capable of giving rise to proceedings based on Article 2(a) of the WVMC.

20However, and notwithstanding a judicial practice to the contrary, that court does not exclude the possibility that that substance may nevertheless be classified as a ‘scheduled substance’ within the meaning of Article 2(a) of Regulation No 273/2004 and Article 2(a) of Regulation No 111/2005, in the light of the fact, first, that APAAN may easily be converted into BMK — a scheduled substance which falls within category 1 of the relevant Annexes to those regulations — and, secondly, that significant financial rewards may be gained from that conversion.

21Assuming that APAAN is to be classified as a ‘scheduled substance,’ within the meaning of Article 2(a) of those regulations, the national court also seeks clarification as to the scope of the concept of ‘operator’ defined in Article 2(d) of Regulation No 273/2004 and Article 2(f) of Regulation No 111/2005.

22In those circumstances the Rechtbank Oost-Brabant ’s-Hertogenbosch decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1)(a) Can the chemical substance [APAAN] be equated with [BMK]? In particular, the Rechtbank seeks clarification as to whether the Dutch term “bevatten”, the English term “containing” and the French term “contenant” should be interpreted as meaning that the substance BMK must, as such, already be present in the substance APAAN.(b) If Question 1(a) is answered in the negative:Must APAAN be regarded, or must it not be regarded, as [one of the] “stoffen … die zodanig zijn vermengd dat genoemde stoffen niet gemakkelijk met eenvoudige of economisch rendabele middelen kunnen worden gebruikt of geëxtraheerd”, “[a substance] that [is] compounded in such a way that [it] cannot be easily used or extracted by readily applicable or economically viable means” and “[une autre préparation] contenant des substances classifiées qui sont composées de manière telle que ces substances ne peuvent pas être facilement utilisées ni extraites par des moyens aisés à mettre en oeuvre ou économiquement viables”? It appears from Annex 3 that, in the view of the police, a relatively straightforward, perhaps even simple, conversion process is involved.(c) In answering Question 1(b), more particularly with regard to the use of “economisch rendabele middelen/economically viable means/[moyens] économiquement [viables]”, is it significant that in the conversion of APAAN to BMK — albeit by illegal means — very substantial amounts of money (can) apparently be made when the further processing of APAAN to BMK and/or amphetamine is successful and/or in the case of the (illegal) trade in the BMK obtained from APAAN?(2) The term “operator” is defined in Article 2(d) of Regulation No 273/2004 and in Article 2(f) of Regulation No 111/2005. In answering the following question, the Rechtbank requests that the Court of Justice proceed on the basis that what is under discussion here is a scheduled substance within the meaning of Article 2(a) or an equivalent substance within the terms of “Annex I: Scheduled substances within the meaning of Article 2(a)” of the Regulations.Should that term “operator” also be understood to refer to a natural person who, whether or not with (an)other legal person(s) and/or natural person(s), (intentionally) has a scheduled substance in his possession without a licence, without there being any further suspicious circumstances?’

23In its request for a preliminary ruling, the national court made a request for the application of the expedited procedure provided for in Article 105 of the Rules of Procedure of the Court.

24However, as there is no urgency, that request was refused by an order of the President of the Court in Gielen and Others (C-369/13, EU:C:2013:708).

Consideration of the questions referred

The first question

25By its first question the national court asks, in essence, whether Article 2(a) of Regulation No 273/2004 and Article 2(a) of Regulation No 111/2005 are to be interpreted as meaning that the classification of ‘scheduled substance’, within the meaning of those provisions, does not apply to a substance, such as APAAN, which is not referred to in Annex I to Regulation No 273/2004 or the Annex to Regulation No 111/2005, but which may, by readily applicable or economically viable means, within the meaning of those regulations, be converted into a substance referred to in those annexes.

26It should be noted at the outset that the concept of ‘scheduled substance’ is defined in Article 2(a) of Regulation No 273/2004 and Article 2(a) of Regulation No 111/2005 as any substance listed in the relevant Annexes to those regulations, including mixtures and natural products containing such substances, but excluding medicinal products as defined by Directive 2001/83, pharmaceutical preparations, mixtures, natural products and other preparations containing scheduled substances that are compounded in such a way that such substances cannot be easily used or extracted by readily applicable or economically viable means.

27It is apparent from the wording of those provisions that the list of substances in the relevant Annexes to Regulations No 273/2004 and No 111/2005 is exhaustive and, consequently, that only the substances which are expressly included on the list set out in those annexes may be classified as ‘scheduled substances’ for the purposes of those regulations, to the exclusion of any substance which is equivalent to a scheduled substance.

28That strict interpretation is borne out, first, by the fact that Regulations No 273/2004 and No 111/2005 do not contain any indication which tends to establish that the EU legislature intended to provide for such a concept of equivalent substance and, secondly, by recital 13 in the preamble to Regulation No 273/2004 in which the EU legislature states that to subject all the substances which are precursors to synthetic drugs or psychotropic substances to the same strict controls as those listed in Annex I to Regulation No 273/2004 would present an unnecessary obstacle to trade.

29It is also apparent from the ordinary meaning of the term ‘containing’ used in the definition of ‘scheduled substance’ that, where pharmaceutical preparations, mixtures, natural products and other preparations are at issue, the classification of such products as a ‘scheduled substance’ requires a substance listed in the relevant Annexes to those regulations to be, as such, contained in those products, namely to be one of their constituents.

30In the present case, it is common ground, first, that APAAN is not included on the list of scheduled substances, within the meaning of Article 2(a) of Regulation No 273/2004 and Article 2(a) of Regulation No 111/2005, set out in the relevant Annexes to those regulations, in the version of those regulations applicable to the main proceedings and, secondly, that BMK is, as such, not a constituent of APAAN.

31With regard to the latter point, it is apparent from the order for reference, which has been confirmed on that point by all the interested parties which have submitted observations in the present proceedings, that BMK is manufactured from APAAN by a process not of extraction, but of hydrolysis of the APAAN, which presupposes that the APAAN is converted.

32As is apparent from paragraph 29 of this judgment, a product which does not, as such, contain a substance listed in Annex I to Regulation No 273/2004 and the Annex to Regulation No 111/2005, but from which such a substance is, by means of a process of conversion, obtained, cannot be classified as a ‘scheduled substance’ within the meaning of Article 2(a) of Regulation No 273/2004 and Article 2(a) of Regulation No 111/2005.

33Consequently, in the absence of an express mention of APAAN in the relevant Annexes to Regulations No 273/2004 and No 111/2005, that substance may not be classified as a ‘scheduled substance’, within the meaning of Article 2(a) of those regulations, or as a substance which is equivalent to such a substance.

34In that regard and given that BMK is not, as such, a constituent of APAAN, the fact, pointed out by the national court, that the process for converting APAAN into BMK is straightforward and economically viable is irrelevant.

35That finding cannot be called into question by the objective of Regulations No 273/2004 and No 111/2005, as set out in recital 13 in the preamble to the former regulation, or by the changeable nature of the trade in drugs, which is referred to in recital 17 in the preamble to that same regulation, as the Kingdom of the Netherlands submits.

36Although it is true that the objective of those regulations is to combat the diversion of substances commonly used in the illicit manufacture of narcotic drugs and psychotropic substances by establishing a system to monitor trade in those substances together with effective, proportionate and dissuasive penalties, the fact remains that the penalising objective of those regulations cannot have any effect on the definition of the concept of ‘scheduled substance’ or on any classification of the substance concerned as a scheduled substance on the basis of that definition (see, by analogy, judgment in D. and G., C‑358/13 and C‑181/14, EU:C:2014:2060, paragraph 49).

37That must a fortiori be the case because the EU legislature, in Article 9 of Regulation No 273/2004 and Article 10 of Regulation No 111/2005, provided for a mechanism for cooperation between the Member States, the operators, and the chemical industry in order to control the movement of ‘non-scheduled substances’, which are defined in Article 2(b) of those regulations as any substances which, although not listed in the relevant Annexes to those regulations, are identified as having been used for the illicit manufacture of narcotic drugs or psychotropic substances.

38On the basis of the foregoing considerations, the answer to the first question is that Article 2(a) of Regulation No 273/2004 and Article 2(a) of Regulation No 111/2005 must be interpreted as meaning that the classification of ‘scheduled substance’, within the meaning of those provisions, does not apply to a substance, such as APAAN, which is not referred to in Annex I to Regulation No 273/2004 or the Annex to Regulation No 111/2005, even if it may, by readily applicable or economically viable means, within the meaning of those regulations, easily be converted into a substance referred to in those annexes.

The second question

39In the light of the answer to the first question, there is no need to reply to the second question.

Costs

40Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (Fifth Chamber) hereby rules: Article 2(a) of Regulation (EC) No 273/2004 of the European Parliament and of the Council of 11 February 2004 on drug precursors and Article 2(a) of Council Regulation (EC) No 111/2005 of 22 December 2004 laying down rules for the monitoring of trade between the Community and third countries in drug precursors must be interpreted as meaning that the classification of ‘scheduled substance’, within the meaning of those provisions, does not apply to a substance, such as alpha-phenylacetoacetonitrile, which is not referred to in Annex I to Regulation No 273/2004 or the Annex to Regulation No 111/2005, even if it may, by readily applicable or economically viable means, within the meaning of those regulations, easily be converted into a substance referred to in those annexes.