Atmospheric Environment 34 (2000) 3037}3039

New Directions: Uncovering the illegal trade in CFC'sand halonsq

At "rst glance the faxed solicitation received by theFrench chemicals distributor seemed genuine. A Germanbroker operating on behalf of a "re-"ghting companyhad a large quantity of chloro#uorocarbons and halonsfor sale. The chemicals were described as ex-militarystock and certi"cates from the local chamber of com-merce were available attesting to this fact.

The price was good, so the French "rm placed a trialorder for 20 tonnes of halon 1301. Yet when the "rstdelivery arrived, the cylinders were labelled in Chineseand were not con"gured for the European market. En-quiries revealed that the material had originated inChina, and had been illegally imported into Europefalsely labelled as R-227 } a legal hydro#uorocarbon.

The French buyer noti"ed the authorities, and a fewmonths later the Rotterdam police intercepted a furthershipment heading from China to Germany. The largestcase of ozone-depleting substances (ODS) smuggling tooccur in Europe had been uncovered, but not before anextensive web of middle-men and brokers had been ableto bring in over 800 tonnes of Chinese chloro#uoro-carbons (CFCs) and halons. The illegal material was soldon to customers in the UK, France, Belgium, Italy,Greece, Hungary and the US.

The Environmental Investigation Agency (EIA) hasbeen probing the global ODS black market for the lastthree years and has built up a comprehensive picture ofthe major smuggling routes, methods used to avoid de-tection and the "rms involved. Estimates put the illegaltrade at over 20,000 tonnes a year, with 15% of the CFCsused in the United Kingdom thought to have come viathe black market. Although replacement chemicals arebeing actively promoted, there remains a large amount ofold equipment across the EU and US that is cheaper totop-up with CFCs than to retro"t.

The problem of illegal trade "rst emerged in the mid-1990s, as the production ban on CFCs and halons came

qContributions to New Directions are welcome, as is corre-spondence on this or previous columns. Please see http://www.uea.ac.uk/&e044/newd.html for further details or contact Dr.W.T. Sturges at new.directions@uea.ac.uk.

into e!ect in industrialised countries. At this time eco-nomic turmoil meant that Russia was unable to meet itsMontreal Protocol commitments and provided hugequantities of cut-price CFCs. Suddenly a network of#y-by-night brokers sprang up. Several set up o$ces inEstonia to organise the transhipment of Russian CFCs tothe lucrative markets of the West. The US, with its highexcise tax on CFC imports and predilection for air-conditioned automobiles, became the smugglers'fa-voured destination. At one point CFCs were second onlyto cocaine in terms of the value of contraband passingthrough the port of Miami. Illegal shipments were alsoentering Europe, where a stable price for CFCs and slowtake-up of alternatives both pointed to a thriving blackmarket.

To uncover evidence of the extent and nature of thesmuggling operations, EIA launched a sting operation.Using a dummy company EIA contacted CFC and halonsuppliers around Europe, the US, Russia, India andChina and asked about price, availability and exportexperience. Careful scrutiny of the responses led to theidenti"cation of suppliers and importers #outing the law.Undercover investigators posing as chemical dealers thenmet with some of these "rms in China, Spain and Franceto "nd out how the fraud works.

The results of this long-term investigation have beenstartling. China has now taken over from Russia as theleading supplier of black market ODS, with a cluster oftrading companies based in the province of Zhejiang, eastof Shanghai, at the forefront. Some of these companiesadvertise cheap CFCs and halons on their Internethomepages, and also make postings to trade bulletinboards.

The methods used to evade customs control exploitloopholes in the Montreal Protocol rules. Chinesetraders o!ered to supply EIA investigators by fraudu-lently declaring the CFCs to be HCFCs, which arenot so strictly controlled. Another method is to claimthe chemicals are recycled, when in fact they are virgin.This fraud has been widely used to undermine theUS import petition process. EIA has tracked sub-stantial shipments of Chinese halon 1301 entering theUS falsely declared as recycled. Some of these shipmentseven ended up in the US Department of Defence's halonbank.

1352-2310/00/$ - see front matter ( 2000 Elsevier Science Ltd. All rights reserved.PII: S 1 3 5 2 - 2 3 1 0 ( 0 0 ) 0 0 0 9 3 - 5

The economic motive for ODS smuggling is clear.Production of chemicals that are still widely-sought isbanned in industrialised countries, while production incertain developing countries has soared. For instance,one kilo of CFC-12 costs around C12 in the UK but canbe bought in China for C1. Similarly a kilo of halon 1301in the US costs upward of $25, but is on sale for just $8 inChina.

Given that the phased approach adopted under theMontreal Protocol creates fertile ground for a blackmarket to grow, the issue of enforcement becomes cru-cial. The US approach has been to set up a proactiveinter-agency task force to tackle the ODS smugglers,bringing together the Environment Protection Agency,customs service, Federal Bureau of Investigation, andDepartment of Justice. As a result there has been a seriesof high-pro"le prosecutions, with one smuggler sen-tenced to almost "ve years in prison.

In Europe attempts to detect illegal shipments andprosecute smugglers have been hampered by a lack ofcross-border co-operation. It was only last year thatSpain "nally introduced legal sanctions against ODSsmugglers. Yet a series of initiatives are emerging whichshould greatly curtail the illegal trade in ODS. The Euro-pean Union is in the "nal stages of adopting a sales anduse ban for both CFCs and halons, the US is in theprocess of tightening up its ODS import regulations, andthe G8 forum of the world's leading economies is

strengthening international e!orts to combat environ-mental crime, including ODS smuggling.

As a result of its exhaustive investigations EIA believesthere is a pressing need for an enforcement committee tobe established under the aegis of the Montreal Protocol.Such a committee would compile annual reports into theillegal trade and disseminate best practice to counter it.Progress on this issue was made at the meeting of theparties held in Beijing last December.

The Montreal Protocol is a landmark agreement, rep-resenting the most successful e!ort by governments tocounter a human-induced environmental problem. Yetits achievements are being undermined by the illegaltrade. Steps taken now to tackle the smugglers will notonly strengthen Montreal, but will create an importantprecedent for the enforcement of future multinationalenvironmental agreements such as the Kyoto Protocolon greenhouse gases.

Julian Newman1

Environmental Investigation Agency, 69-85 Old Street,London EC1V 9HX, UK

E-mail address: eiauk@gn.apc.org

1 Julian Newman is an investigator at the EnvironmentalInvestigation Agency, an international non-governmental or-ganisation based in London and Washington DC.

New Directions: Will illegal trade in CFCs and halons threatenozone layer recovery?

Halon-1301 (CBrF3) and CFC-12 (CCl

2F2) are major

ozone depleting substances (ODSs) that are still increas-ing in concentration in the background atmosphere (seeFraser et al., 1999, Journal of Geophysical Research 104,15985}15999 and Montzka et al., 1999, Nature 398,690}694). This is in spite of a ban, under the MontrealProtocol, on their production in the developed worldsince the mid-1990s. Emissions of H-1301 and CFC-12continue from their large banks ("xed "re-"ghting sys-tems, old refrigeration and air conditioning units) in thedeveloped world and from legal use in an expandingmarket in the developing world. The phasing out ofproduction of CFCs and halons in the developing worldis not due until 2010. The inclusion of expected develop-ing world consumption of CFCs and halons over the nextdecade into global emission models suggests that theonset of measurable ozone recovery may not occur untilapproximately 2020, according to the World Meteoro-logical Organisation's Scientixc Assessment of OzoneDepletion: 1998 (Madronich et al., 1999, WMO ReportNo. 44, Geneva, (Chapter 11).

Julian Newman, in this issue, reports that there isan illegal trade, between developing and developedcountries, of over 20,000 tonnes per year of CFC-12 andH-1301. If emitted to the atmosphere, these additionalCFCs and halons will further delay ozone recovery. Thistrade is reported to occur via incorrect labelling of newCFCs and halons, produced in the developing world, aseither HFCs or as recycled product. These are in re-sponse to demand for CFCs and halons to service exist-ing equipment, largely in the developed world. In theabsence of an illegal trade, this demand could be satis"edlegally, albeit expensively, from recycled CFCs andhalons.

So how signi"cant is a possible trade of this magni-tude? The 1997 world production of CFCs and halons(largely CFC-12 and H-1211) in developed (10%) anddeveloping (90%) countries was approximately 200,000ODP (ozone depletion potential) weighted tonnes peryear according to the United Nations EnvironmentProgramme (http://www.unep.org/ozone). The amountof CFCs and halons stored in refrigeration and air

3038 New Directions / Atmospheric Environment 34 (2000) 3037}3039