Legal Compliance for Import/Export Of Acetic Anhydride

1. Introduction:

1.1 Acetic Anhydride is one out of 14 precursor chemicals which are found to be commonly used by terrorist group/ criminals syndicates to manufacture IEDs. Therefore, its import and export is monitored under Programme Global Shield so as to prevent it falling into hands of terrorist or criminal organizations. It is used in manufacture or production of Photographic film & other coated materials, production of aspirin, wood preservative, production of modified starches, but it is also used for manufacturing Improvised Explosive Device (IEDs) as well as manufacturing heroin, a prohibited narcotics and Psychotropic Substances. It is subjected to intensive checks and maintenance of the records/documentation/permission.

1.2 It is an organic chemical having chemical formula as C4H6O3. The HS code or CTH for Acetic Anhydride is 29152400 and the CAS No. is 108-24-7. [To know more about HS Code/CAS No/UN No., please refer to e-book on HS Code/CAS Code/UN Code].

 1.3 It is the responsibility of all regulatory and enforcement organizations located at border trade points as well as inside the country to ensure that this chemical is used for licit purposes only and should not be allowed to fall into hands of criminal elements. Customs authorities, being placed at Border points, have important responsibility to ensure that all imports/exports of Acetic Anhydride are in compliance with statutory provisions. By carrying out our responsibilities with sincerity, we can not only keep our country safe, but also help other countries being safe.

Table I: Details about Acetic Anhydride at a glance

2. Summary of Legal provisions applicable to Import/ Export of Acetic Anhydride

Table II

3. Important Aspects of Legal Controls on Import/Export of Acetic Andride.

A. Controls under NDPS Act, 1985 and NDPS Order, 2013

2.1 Under the UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, 1988, 23 chemicals have been identified as precursor chemicals which are used for illicit drug manufacturing. These chemicals are subjected to control under the NDPS (Regulation of Controlled Substances) Order, 2013 issued under Section 9A of the NDPS Act, 1985. Acetic Anhydride is one of these 23 precursor Chemicals.

2.2 Under the NDPS (Regulation of Controlled Substances) Order, 2013 issuedunder Section 9A of the NDPS Act,1985, manufacturers, distributors, sellers, importers, exporters and consumers of specified controlled substances are required to maintain records and file quarterly returns with the Narcotics Control Bureau. Precursors covered under this order are (i) Acetic anhydride (ii)N-acetyl anthranilic acid, (iii) Ephedrine (iv) Pseudoephedrine and (v) Anthranilic acid.

2.3 The Narcotic Drugs and Psychotropic Substances (Regulation of Controlled Substances Order, 2013) which came into effect from 26.03.2013. This order stipulates various procedures with regards to specified substances declared to be controlled. These are:

• Every person who manufactures or distributes or sells or imports or exports or consume any controlled substance shall maintain a daily account of activities in Form C or D and this record of his activity shall be preserved for a period of five years.
• Person dealing with controlled substance shall report to Director General, Narcotics Control Bureau, immediately regarding any loss or disappearance of any controlled substance under his control.
• Any consignment of controlled substance shall be moved from one place to another only when it is accompanied by a consignment note in the prescribed format (Form-G) and the consignor shall make necessary entries on the triplicate copy of the consignment with reference to the receipt of controlled substance. A quarterly return or such movements shall be sent by registered post in Form –E or F to the concerned Dy. Director, NCB.
• Any consignment of an imported controlled substance shall be accompanied by a bill of entry from the port of entry to the warehouse or establishment of importer. This consignment note/ bill of entry shall be preserved for a period of five years by the consignor or consignee by importer or purchaser.
• No transporter shall carry a consignment of controlled substance without a consignment note or bill of entry. He should produce the same when required by any official empowered in this regard.
• Every container/vessel containing a controlled substance in a consignment for export / import shall be labeled prominently, giving the details of name and quantity of controlled substance with the name and address of exporter and importer and consignee.
• The documents relating to import / export of any controlled substance shall be preserved for a minimum period of five years.
• School, colleges, universities, government or autonomous institutions, registered scientific societies and hospitals using any controlled substance for educational, scientific and analytical purposes are exempted from taking registration, maintaining records and sending returns as prescribed under the order. They shall however comply with other provision of this Order.

2.4 Section 25A of the NDPS Act, 1985 provides punishment for any contravention of the Order made under section 9A. An offender is liable for rigorous imprisonment, which may be extended to 10 years, and fine, which may extend to one lakh rupees. The court may impose a fine exceeding one lakh rupees after recording the reasons therefore.

B. Controls imposed under the Foreign Trade Policy and ITC (HS):

2.5 Import of Acetic Anhydride require import license from DGFT and Export is subject to a “No Objection Certificate” from the Narcotics Commissioner of India

C. Section 11-I of the Customs Act, 1962:

2.6 It has been notified as specified goods under Section 11-I of the Customs Act, 1962. On account of having declared as specified goods, it is subjected to special measures for the purpose of checking their illegal export and facilitating the detection of the said goods, which are likely to be illegally exported, as laid down in the Specified Goods (Prevention of illegal Export) Rules, 1969 [notified vide notification No. 6/1969- Customs, dated 3-1-1969J.

2.7 These measures are required to be taken in the areas specified in the Indo­Pakistan border in the States of Gujarat, Rajasthan, Punjab and Jammu and Kashmir, in terms of notification No. 80-Customs, dated 27.03.1980 and in the Indo-Burma border in terms of Notification No. 318-B/86/Customs, dated 14.05.1986 and No. 24/88- Customs (NT), dated 15.4.1988.

2.8 The goods specified under this section are subject to intensive checks in the specified areas by the Customs officers. Acetic anhydride has been notified as a specified substance under this section within an area of 100 km. along the Indo – Myanmar border and 50 km. along the Indo-Pak border by the Government of India.

2.9 Broadly, the special measures under this section require all persons who own, possess or transport acetic anhydride to maintain records and notify the details of quantities held and transported with, to the Customs officers.

Note: Text of the notification mentioned above can be seen in the Reference material section of this E-book. Further for more details about notified and specified goods under the Customs Act, 1962, refer to e-book on notified and specified goods under the Customs Act, 1962.

4. Important Websites

(i) Website of Narcotics Control Bureau i.e. www.narcoticsindia.nic.in for relating to laws relating to Narcotics and Psychotropic substances in India and other related matters.

(ii) Website of Directorate General of Foreign Trade in the Ministry of Commerce & Industry, India i.e.www.dgft.gov.in, inter alia, for latest policy provisions relating to import/export of Urea and other relevant information.

(iii) Website of WCO i.e. www.wcoomd.org to know more about World Customs Organization, its activities and about Programme Global Shield.

(iv) Website of Central Board of Excise & Customs, Department of Revenue, Ministry of Finance, India i.e. www.cbec.gov.in to know more about Indian Customs, legal text of indirect tax statutes, rule, notifications, instructions etc.

(v) Website of National Academy of Customs, Excise and Narcotics, Regional Training Institute, Kanpur, India i.e. www.nacenkanpur.gov.in for free learning resources in the form of e-books on Customs, Central Excise and Service Tax.

5. Reference Material

4.1 The Narcotics Drugs and Psychotropic Substances (Regulation of Controlled Substances) Order, 2013, dated 26.03.2013 (effective from 26.03.2013)

GS.R.191 (E). -In exercise of die powers conferred by section 9A of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985), the Central Government hereby makes the following Order, namely:-

1. Short title and commencement.-(l) This Order may be called the Narcotic Drugs and Psychotropic Substances (Regulation of Controlled Substances) Order, 2013.

(2) It shall come into force on the date of its publication in the Official Gazette.

2. Definitions.- (1) In this Order, unless the context otherwise requires, –

(a) “Act” means the Narcotic Drugs and Psychotropic Substances Act” l985 (61 of 1985);

(b) “Appendix” means the Appendix appended to this Order;

(c) “Form” means a form annexed to this Order;

(d) “Schedule” means the Schedules annexed to this Order.

(2) Words and expressions used herein and not defined, but defined in the Act shall have the same meaning as defined in the Act.

3. Power to include Controlled Substance in Schedules.- The Central Government may, by notification in the Official Gazette, include any controlled substance in one or more Schedules.

4. Prohibition of manufacture, trade and commerce, possession and consumption of controlled substance in ‘Schedule-A’.- (1) No person shall manufacture, distribute, sell, purchase, possess, store, or consume any controlled substance included in Schedule-A without a unique registration number in Form-A issued by the Zonal Director of Narcotics Control Bureau:

Provided that the requirement of registration under this clause shall be complied within a period of 180 days of the coming into force of this Order:

Provided further that the Government or autonomous institutions, Schools or Colleges or Universities recognized by the Government registered Scientific Societies and Hospitals using any controlled substance in Schedule-A for educational, scientific and analytical purposes are exempted from the registration.

(2) Every application for registration under sub-clause (1) shall be made in Form-B to the Zonal Director of Narcotics Control Bureau having jurisdiction over the area.

(3) The Zonal Director of Narcotics Control Bureau shall issue a unique registration number in Form-Aor deny the registration within thirty working days from the date of receipt of an application in Form-B.

(4) In case the registration number is not issued within the stipulated time period or denied, the Zonal Director of Narcotics Control Bureau or any other officer authorised by him in this regard shall inform the applicant the reasons thereof.

(5) Every person who has been registered under sub-clause (1) shall maintain daily accounts in Form-C or Form-D, as the case may be, and the records of the daily accounts shall be preserved for a minimum period of five years from the date of last entry.

(6) Every person who has been registered under sub-clause (1) shall file quarterly return in Form-E or Form-F, as the case may be, to the Zonal Director of the Narcotics Control Bureau concerned having jurisdiction over the area.

(7) The return of every quarter shall be filed before the last day of the month following that quarter.

(8) Every person who has been registered under sub-clause (1) shall immediately report regarding, any loss or disappearance of the controlled substance in Schedule-A to the concerned Zonal Director of Narcotics Control Bureau within whose area of jurisdiction such loss or disappearance occurred and a copy of the report shall also be endorsed to the Director General, Narcotics Control Bureau, New Delhi.

Explanation l.– For the purpose of this clause, the area of jurisdiction of a Zonal Director of Narcotics Control Bureau shall be the area as specified in the Appendix.

Explanation 2.– For the purpose of this clause, the expression “quarters” shall be January to March, April to June, July to September and October to December of every year.

5. Surrender of registration.- A holder of a registration number issued under sub-clause (1) of clause 4 may, if he so desires, surrender his registration by giving notice in writing to the issuing authority and obtaining acknowledgement therefore.

6. Disposal of stocks on surrender of registration.- The stocks of controlled substance in Schedule-A as may be in the possession of a holder of a registration number issued under sub-clause (1) of clause 4, on the surrender of his registration, shall be disposed of in such manner as may be specified by the issuing authority in this behalf.

7. Transport of controlled substance in schedule-A.-

(1) No consignment of controlled substance in Schedule-A shall be moved from one place to another place within India, except when it is accompanied by a consignment Note in Form-G.

(2) The consignment Note shall be prepared in triplicate and the original and duplicate copies of the consignment Note shall be sent along with the consignment to the consignee, who shall return the duplicate copy to the consignor for retention after endorsing on the original and duplicate copies the particulars of quantity received by him.

(3) In case of non-receipt of duplicate copy by the consignor, duly endorsed by the consignee acknowledging the receipt of the consignment of controlled substance, the consignor shall report loss or disappearance of the consignment in the manner provided in sub-clause (8) of clause 4 within forty-five days from the date of dispatch of the consignment.

(4) In the case of any consignment of controlled substance in Schedule-A is imported into India such consignment from the port of entry to any warehouse or factory or business establishment or premises of the importer or consumer, as the case may be, shall be accompanied by a Bill of Entry.

(5) The consignment Note or the Bill of Entry, as the case may be, shall be preserved for a minimum period of five years by the consignor and the consignee or importer, as the case may be.

(6) No transporter shall carry any consignment of controlled substance in Schedule-A without a consignment Note or Bill of Entry.

(7) The transporter shall produce the consignment Note or Bill of Entry, as the case may be, when required by an officer empowered under section 42 of the Act.

(8) (a) Whenever controlled substance in Schedule-A are transported by motorized tankers or otherwise by packages, all the inlets and outlets of such tankers or packages, as the case may be, shall be sealed with tamper-proof seals each of which shall have identifiable description and such seal shall be affixed at the premises of the consignor and removed at the premises of the consignee.

(b) The description of tamper-proof seal affixed on such tankers or packages shall be entered on the consignment Note or Bill of Entry of each consignment.

(c) No person shall use or possess any tamper-proof seal which has identifiable description on it identical to another tamper-proof seal.

(9) Whenever a consignment of controlled substance in Schedule-A is transported from the area which comes within the jurisdiction of a Zonal Director of the Narcotics Control Bureau to an area which comes within the jurisdiction of another Zonal Director of the Narcotics Control Bureau, the consignor shall send a quarterly report to the latter Zonal Director in Form-H.

Explanation 1.- For the purpose of this clause, the expression “Bill of Entry” shall have the same meaning as defined in the Customs Act, 1962 (52 of 1962).

Explanation 2.– For the purpose of this clause, the jurisdiction of a Zonal Director of Narcotics Control Bureau shall be the area as specified in the Appendix,

8. Selling of controlled substance in Schedule-A,- No person shall sell a controlled substance in Schedule-A to a buyer who does not possess a valid registration number issued under sub-clause (1) of clause 4:

Provided that a controlled substance may be sold to a buyer specified in second proviso to sub-clause (1) of clause 4 without a registration number.

9 Destruction of controlled substance in schedule-A.- (l) Any person intending to destroy a controlled substance in Schedule-A shall apply in Form-I to the concerned Zonal Director of the Narcotics Control Bureau having jurisdiction over the area.

(2) The Zonal Director of the Narcotics control Bureau shall, within a period of thirty days of the receipt of an application in Form-I, appoint a committee-comprising a Gazetted officer of the Narcotics control Bureau, Superintendent or central excise of the concerned range and an authorised representative of the applicant for supervising the destruction of controlled substance in Schedule-A and any such destruction shall be carried out within a period of thirty days from the appointment of the Committee.

Explanation.– For the purpose of this clause, the jurisdiction of a Zonal Director of Narcotics Control Bureau shall be the area as specified in the Appendix.

10. Export of controlled substance in schedule-B. – (l) No person shall export any controlled substance in Schedule-B except in accordance with the conditions of the No  Objection Certificate issued by the Narcotics Commissioner.

(2) Anyone who intends to export a controlled substance in schedule-B shall apply to the Narcotics Commissioner in Form J for a No Objection Certificate.

(3) The Narcotics commissioner shall issue or deny the No objection certificate within a period of twenty one working  days from the date of receipt of application the No objection certificate is not issued within the stipulated time period or denied, the Narcotics commissioner or any other officer authorised by him in this regard shall inform the applicant
the reasons thereof.

(4) The No Objection Certificate for export issued by Narcotics Commissioner shall be valid for a single consignment only.

(5) Every exporter shall submit the details and documents relating to the export, such as invoice, cargo manifests, customs, transport and shipping documents relating to the export of the controlled substance in Schedule-B which shall contain the details such as name of the controlled substance, quantity, name and address of the consignee, exporter and the importer, to the Narcotics Commissioner within a period of seven days of export.

11. Import of controlled substance in Schedule-C.-(1) No person shall import any controlled substance in Schedule-C except in accordance with the conditions of the No objection Certificate issued by the Narcotics Commissioner.

(2) Anyone who intends to import a controlled substance included in schedule-C shall apply to the Narcotics Commissioner in Form-K for a No Objection Certificate.

(3) The Narcotics commissioner shall issue or deny the No objection certificate within twenty one working days from the date of receipt of application and in case the No objection certificate is not issued within the stipulated time period or denied, the Narcotics commissioner or any other officer authorised by him in this regards shall inform the applicant the reasons thereof

(4) The No Objection Certificate for import issued by the Narcotics Commissioner shall be valid for a single consignment only.

(5) Every importer shall submit the details and documents relating to the import, such as invoice, cargo manifests, customs, transport and shipping documents relating to the import of the controlled substance in Schedule-C which shall contain the details such as name of the controlled substance, quantity and the name and address of the consignee, exporter and the importer, to the Narcotics Commissioner within a period of seven days of import.

12. Labeling of consignment for export or import.- (1) every container or vessel containing a controlled substance in a consignment for export or in a consignment which is ‘ imported shall be labeled prominently giving details of the name and quantity of the controlled substance, name and address of the exporter and importer and the consignee if any.

(2) The documents relating to the import or export of the controlled substance such as invoice, cargo manifests, customs, transport and shipping documents shall contain the details such as name of the controlled substance, quantity and the name and address of the consignee, exporter and the importer and the documents shall be preserved for a minimum
period of five years.

13. Repeal and savings.-(1) The Narcotic Drugs and Psychotropic Substances (Regulation of Controlled Substances) Order, 1993 is hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken or purported to have been done or taken under the order repealed by sub-clause (1) shall, in so far as it is not inconsistent with the provisions of this order, be deemed to have been done or taken under the corresponding provisions of this order.

SCHEDULE

[See clause 2 (d)]

SCHEDULE-A (Schedule-A substances are those controlled substance whose manufacture, distribution, sale, purchase, possession, storage and consumption is subject to controls as specified in this Order.)

SCHEDULE-B (Schedule-B substances are those controlled substance whose export from India is subject to controls as specified in this Order.)

SCHEDULE -C (Schedule-C substances are those controlled substance whose import into India is subject to controls as specified in this Order.)

Note: For Appendix specifying the area of jurisdiction of Zonal Director of Narcotics Control Bureau and for Form and Formats specified for various purposes, download complete document from website of Narcotics Control Bureau i.e. www.narcoticsindia.nic.in.

4.2 Notification No. 60/91- Customs (NT), dated 29.08.1991, issued under Customs Act, 1962

The notification No. 60/91-Customs (NT), dated 29.08.1991 reads as under:-

Whereas the Central Government, having regard to the magnitude of the illegal export of the goods specified in the Schedule hereto annexed, across the Indo‑ Burma border and Indo-Pakistan border is satisfied that it is expedient in the public interest to take special measures for the purpose of checking the illegal export of the said goods and facilitating the detection of the said goods which are likely to be illegally exported:

Now, therefore, in exercise of the powers conferred by section 11-I of the Customs Act, 1962 ( 52 of 1962), and in supercession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 90/88-Customs (NT), dated the 15th December, 1988, the Central Government hereby Specifies the goods in the said Schedule as the goods with respect of which special measures for the purpose of checking their illegal export and facilitating the detection of the said goods, which are likely to be illegally exported, shall be taken in the areas specified in the Indo-Pakistan border in the States of Gujarat, Rajasthan, Punjab and Jammu and Kashmir, in terms of notification No. 80-Customs, dated 27.03.1980 and in the Indo-Burma border in terms of Notification No. 318-B/86/Customs, dated 14.05.1986 and No. 24/88- Customs (NT), dated 15.4.1988.

The Schedule

Acetic Anhydride

**

Abbreviations

CAS No: Chemical Abstract Service Number

[Note: CAS numbers are used to provide a unique, unmistakable identifier for chemical substances and provide an unambiguous way to identify a chemical substance. A CAS No. is separated by hyphens into three parts-the first consisting from two to seven digits, the second consisting of two digits, and the third consisting of a single digit serving as a check digit.]

CBEC: Central Board of Excise and Customs

CCR: Compulsory Compliance Requirement

CTH: Customs Tariff Heading

DGFT: Director General of Foreign Trade

FT (D &R) Act: Foreign Trade (Development & Regulation) Act, 1992

HS Code: Harmonized System of Commodity Description and Coding System

[Note: It is an internationally standardized system of names and numbers for classifying traded products. It has been developed and is maintained by WCO. It is based on HS Convention.]

IED: Improvised Explosive Device

ITC (HS): Indian Trade Classification based on Harmonized System at 8 digits.

[Note: ITC (HS) is issued under Foreign Trade (Development & Regulation) Act, 1992 by the Ministry of Commerce & Industry. It contains details such as commodities description, their HS code and import/export policy whether prohibited or restricted or free; and policy condition relating to the item if that item is restricted for import or export.]

MSIHC Rules: Manufacture, storage, Import of Hazardous Chemicals Rules, 1989

[Note: These rules have been issued under Section 6, 8, and 25 of the Environment (Protection) Act, 1986 (29 of 1986) by the Department of Environment, Forest and Wildlife under the Ministry of Environment, Forests and Climate Change]

MSDS: Material Safety Data Sheet (MSDS)

[It is a document mandatorily required to be provided by the manufacturer and contains information on physical and chemical properties of material, potential hazards of the material, and how to work safely with hazardous substances. It also contains information on the use, storage, handling, and emergency procedures related to hazards of the material. All MSDSs at least have eight (8) sections, but most of them have additional sections also. To know more about MSDS, refer to e-book on MSDS.]

NCB: Narcotics Control Bureau

NDPS Act: Narcotics Drugs and Psychotropic Substance Act, 1985

PGS: Programme Global Shield

[Note: It is an international programme aimed at preventing smuggling and diversion of Precursor Chemicals for manufacture of IEDs]

RFID: Radio Frequency Identification

UN Code: United Nation Number

[Note: UN numbers or UN IDs are four digit numbers. It has been developed by the United Nations Committee of Experts on transportation of dangerous goods. It identifies hazardous substances and articles (such as explosives, flammable liquids, toxic substances etc. To know more about HS Code/CAS No./UN Code, refer to e-book on HS Code/CAS Code/UN Code.]

WCO: World Custom Organisation

Note:

1. In this E-book, attempts have been made to explain about Compulsory Compliance Requirement for Import / Export of Acetic Anhydride (also known as Ethanoic Anhydride). It is expected that it will help departmental officers in their day-to-day work.

2. Though all efforts have been made to make this document error free, but it is possible that some errors might have crept into the document. If you notice any errors, the same may be brought to the notice of the NACEN, RTI, Kanpur on the Email address: rtinacenkanpur@yahoo.co.in. This may not be a perfect E-book. If you have any suggestion to improve this book, you are requested to forward the same to us.

3. This e-book is one of the several e-books dealing with different aspects of WCO Programme Global Shield (PGS). The Programme Global Shield (PGS) is a long term law enforcement initiative of WCO alongwith its partner organizations, namely, United Nations Office on Drug and Crime (UNODC), International Police Organization (INTERPOL) and member countries. This Programme is aimed at combating the illicit diversion and trafficking of high risk precursor chemicals, which are commonly used by criminal elements/terrorist organizations to make Improvised Explosive Devices (IEDs).

4. It is acknowledged here that in preparing this e-book, the WCO training material as well as material from other sources including that available freely on internet have been used. Wherever possible, the source of material has been indicated in this e-book. It might be possible that for some material, we may not have specifically mentioned such source. This e-book is meant for education and training of Customs officers in India and is for non­commercial use. While it is not our intention to infringe any copyrights, if anybody has any issue with regard to any of the material used in this e-book, the same may kindly be brought to our notice on the email addresses mentioned above.

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Sd/-

(C. P. Goyal)
Additional Director General
NACEN, RTI, Kanpur
goyalcp@hotmail.com