The successive phase-outs of CFCs and HCFCs and the phase-down of HFCs has inevitably resulted in illegal trade activity regionally and globally. The exact scale of the illegal trade can only ever be estimated based on activity and intelligence from the market and illegal trade interceptions. The main opportunity for illegal trade occurs when regulations to restrict supply are implemented nationally or regionally and the substance is freely available in other parts of the world. For example, the European Union’s phase-out of CFCs prompted illegal trade in ODS and the main focus of the illegal trade was CFC-12. During the first phase of illegal trade of ODS in the mid-1990s, it was estimated that up to 38,000 tons of CFCs were being traded illegally every year, equivalent to 20% of legal commerce. In 2006 it was estimated by UNEP that up to 14,000 tonnes of CFCs, were being smuggled into developing countries every year and now there is now a growing illegal trade in HCFCs.
Smuggling Methods for ODSs and HFCs
False Labelling: Smuggled in cylinders or packaging labelled as legal products.
Mis-declaration: Disguised by putting the names of other similar, legal chemicals on shipping documents and invoices. This method is often combined with “double-layering”; filling a shipping container with cylinders of illegal substances except for a layer of the legitimate chemical stated on the Bill of Lading next to the container door.
Concealment: Simply hidden in ships, cars, or trucks and moved across border. This method usually involves small quantities but is lucrative and the overall volume can be significant.
Tran-shipment fraud: Consignments ostensibly destined for legitimate end markets are diverted onto black markets. This type of fraud often involves complex shipping routes, passing through transit ports and free-trade zones where customs procedures may be more relaxed.
Adapted from the chapter Illicit trade in ozone-depleting substances (ODS) from East Asia to the world of a United Nations Office on Drugs and Crime report (2013).
Source: UNODOC United Nations Office on Drugs and Crime
Example of Illegal Trade using Bulk Container
Although illegal shipments widely use disposable cylinders, illegal trade using bulk container tanks (ISOtanks) does occur. Customs authorities in Pakistan confiscated 18,000 kilogrammes of the smuggled refrigerant HCFC-22 at Karachi Port in mid-October 2018. The import of HFC-32 was claimed, but customs noticed that the bulk container tank was not classified for HFC-32. The tank had large stickers declaring its contents as HFC-32 and flammable, which HCFC-22 is not. Agents scanned the container and found the temperature and pressure readings on the tank also did not correspond to HFC-32 refrigerant. Authorities then tested a sample, which confirmed the presence of HCFC-22. This is an example of false labelling. The customs officer had received UNEP training in ODS illegal trade.
Source: UN Environment – United Nations Environment Programme
The Montreal Protocol put in place a licensing system for ODS to further regulate trade. Significant efforts were also undertaken to train customs officials and environment officials in combating ODS smuggling. UNEP OzonAction provides materials that are intended to support customs and enforcement officers in their work to implement national licensing systems for ODS, and future commitments on HFCs under the Montreal Protocol due to the adoption of the Kigali Amendment, to detect and prevent illegal trade in these chemicals, and to facilitate legal trade. The phase-down of HFCs in the EU is reducing supply and inevitably leading to some illegal trade facilitated by the legitimate availability of HFCs outside the EU.
However irrespective of the level of illegal trade, the Montreal Protocol has proven to be a success and highly regarded for its effective implementation. Similarly, the F-Gas Regulation is already successful in driving innovation, change to lower GWP substances and improving containment.
United Nations Office on Drugs and Crime, Transnational Organized Crime in East Asia and the Pacific, Chapter 10 Illicit trade in ozone-depleting substances (ODS) from East Asia to the world, https://www.unodc.org/res/cld/bibliography/transnational-organized-crime-in-east-asia-and-the-pacific-a-threat-assessment_html/TOCTA_EAP_web.pdf