CONTROL OF INTERNATIONAL TRADE

Sections

HISTORICAL SURVEY
PROVISIONS OF THE 1925 CONVENTION AND RELEVANT COMMENTS BY THE CONFERENCE
INTERPRETATION OF THE PROVISIONS OF THE 1925 CONVENTION BY THE ADVISORY COMMITTEE
THE CONFERENCE OF 1931 FOR LIMITING THE MANU-FACTURE AND REGULATING THE DISTRIBUTION OF NARCOTIC DRUGS
THE CASE FOR A NEW CONSIDERATION OF THE IDEA OF A CLEARING HOUSE SYSTEM
SIMPLIFICATION OF CONTROL RESULTING FROM THE ESTABLISHMENT OF AN INTERNATIONAL CLEARING HOUSE

Details

Pages: 42 to 51
Creation Date: 1950/01/01

CONTROL OF INTERNATIONAL TRADE

Part I

HISTORICAL SURVEY

The control of the international trade in narcotic sub-stances has three aspects:

  1. Domestic control;

  2. Respect for control measures of foreign countries; and

  3. Control by international organs.

The 1912 Convention provided for domestic control of international transactions 1 and established the principle of respect for control measures of foreign countries.2

The Advisory Committee of the League of Nations on the Traffic in Opium and Other Dangerous Drugs,3 at its first session in 1921, decided to adopt control techniques which had been enforced by Great Britain in the blockade of the Central Powers in the war of 1914-1918. The Advisory Committee took as legal basis the relevant provisions of the 1912 Convention and developed a procedure which subsequently became known as the "import certificate and export authorization system" This has remained until now the backbone of control of the international trade in narcotic drugs.

1 Articles 5 and 12.

2 Articles 3 and 13.

3 Subsequently referred to as the Advisory Committee.

The Secretary-General of the League of Nations, by a circular letter,4 sent a note to Governments explaining the system, which was as follows:

To import narcotic drugs the importer had, in the first place, to obtain a certificate from his Government stating that the import of that particular consignment of the drug was approved and was required for legitimate purposes (in the case of raw opium) or for medical or scientific purposes (in the case of the drugs defined in chapter III of the 1912 Convention, e.g., medicinal opium, morphine, cocaine, diacetylmorphine). The importer then forwarded the certificate with his order to the exporting firm. The Government of the country in which the exporting firm was situated did not issue its export licence for the consignment in question until the import certificate had been received from the exporter from whom the drugs had been ordered. The exportation of drugs unaccompanied by a government licence was forbidden.

4 No. 15 of 1922.

It was also laid down that a separate export licence was required for each consignment of drugs exported.

To facilitate the application of the new system by the different parties to the Convention, the Advisory Committee drew up, in April 1922, a specimen import certificate for issuance by the Ministry applying the legislation on narcotics enacted in accordance with the 1912 Convention. It was not until the conclusion of the 1925 Convention that a precise legal undertaking was imposed on the Governments while at the same time certain improvements were made in the system as originally conceived.

The question of the control of the international trade in narcotic drugs was one of the principal problems dealt with by the Second Opium Conference, which convened in Geneva in November 1924 and adopted the Convention in 1925.

PROVISIONS OF THE 1925 CONVENTION AND RELEVANT COMMENTS BY THE CONFERENCE

The articles of the 1925 Convention as finally adopted by the Conference upon the recommendation of its Sub-Committee E are reproduced below with footnotes giving relevant excerpts from comments contained in the report of this Sub-Committee.

"Article 12

"Each Contracting Party shall require a separate import authorization 5 to be obtained for each importation of any of the substances to which the present Convention applies. Such authorization shall state the quantity to be imported, the name and address of the importer and the name and address of the exporter.

5 Two principles are essential to the effective control of the international traffic. The first of these is that a separate import authorization or export authorization from the Government shall be required in the case of each importation and exportation; this secures that every international transaction in the substances covered by the Convention comes under the consideration of the Government before it is carried out. The second is that an export authorization shall only be issued by the Government of the exporting country on the production of a certificate from the Government of the importing country that the import into the latter country of the consignment proposed for export has been approved. The production of such a certificate is a guarantee to the Government of the exporting country that its exports are destined for persons duly authorized by their Government to receive the drugs and for purposes which are legitimate.

"The import authorization shall specify the period within which the importation must be effected and may allow the importation in more than one consignment.

"Article 13

"1. Each Contracting Party shall require a separate export authorization to be obtained for each exportation of any of the substances to which the present Convention applies. Such authorization shall state the quantity to be exported, the name and address of the exporter and the name and address of the importer.

"2. The Contracting Party, before issuing such export authorization, shall require an import certificate, issued by the Government of the importing country and certifying that the importation is approved, to be produced by the person or establishment applying for the export authorization.

"Each Contracting Party agrees to adopt, so far as possible, the form of import certificate annexed to the present Convention.

"3. The export authorization shall specify the period within which the exportation must be effected, and shall state the number and date of the import certificate and the authority by whom it has been issued.

"4. A copy of the export authorization shall accompany the consignment,6 and the Government issuing the export authorization shall send a copy to the Government of the importing country.7

"5. The Government of the importing country, when the importation has been effected, or when the period fixed for the importation has expired, shall return the export authorization, with an endorsement to that effect, to the Government of the exporting country. The endorsement shall specify the amount actually imported.

6 While an import authorization may allow a supply of the substances to be imported in more than one consignment, a similar latitude is not allowed in the case of exportation. The reason for this will be apparent on an examination of the proposals as a whole. In the case of an importation, it will not be possible for the importer to know beforehand whether the person in the other country from whom he is obtaining the supply will be able to send it in a single consignment or not, and as the import authorization has to be issued before he can order the goods, provision must be made to allow the importation to be effected in more than one consignment. The case is different in regard to exports. The general scheme requires that a copy of the export authorization must accompany the goods, and it would lead to great confusion if the export authorization allowed the despatch of the goods in more than one consignment, and there was a difference between the amount specified in the export authorization and the quantity of goods in the consignment. It is proposed, therefore, that where the goods have to be sent in separate consignments a separate export authorization should be obtained in respect of each consignment. This should lead to no difficulty in practice . . . It is understood that the usual procedure would be, in the case of consignments sent by sea, that the copy should be handed to the captain or other responsible officer of the ship, and, in the case of goods sent overland by train, to the responsible railway official in charge of the goods, and so on.

7 The Sub-Committee considered that the copy should be sent direct from the competent authorities in the one country to the competent authorities in the other and not through the diplomatic channels.

"6. If a less quantity than that specified in the export authorization is actually exported, the quantity actually exported shall be noted by the competent authorities on the export authorization and on any official copy thereof.

"7. In the case of an application to export a consignment to any country for the purpose of being placed in a bonded warehouse, in that country, a special certificate from the Government of that country, certifying that it has approved the introduction of the consignment for the said purpose, may be accepted by the Government of the exporting country in place of the import certificate provided for above. In such a case, the export authorization shall specify that the consignment is exported for the purpose of being placed in a bonded warehouse.

"Article 14

"For the purpose of ensuring the full application and enforcement of the provisions of the present Convention in free ports and free zones, 8the Contracting Parties undertake to apply in free ports and free zones situated within their territories the same laws and regulations, and to exercise therein the same supervision and control, in respect of the substances covered by the said Convention, as in other parts of their territories.

"This article does not, however, prevent any Contracting Party from applying, in respect of the said substances, more drastic provisions in its free ports and free zones than in other parts of its territories.

8 Free ports not being subject to the ordinary control of the Customs authorities of the territory in which they are situated, the illicit traffickers have been able in the past to evade control by making use of the free ports. Attention has been called by the Opium Advisory Committee to this means of evasion, and the question has been reported upon by the Transit Committee of the League (see annex 7 to minutes of the fourth session of the Advisory Committee, document C.155.M.75.1923. XI). In consequence of the attention so called, a number of Governments have already adopted and are enforcing measures of control, over imports and exports, of the drugs in their free ports.

On the consideration of this provision the Italian representative pointed out that the Italian Government was disposed to prohibit entirely the introduction into the free ports in Italy of the substances covered by the Convention.

On 31 January 1925, the Chairman of Sub-Committee E wrote a letter to the Director of the Communications and Transit Section of the Secretariat of the League of Nations asking for observations on articles drafted by the Sub-Committee. In his reply on 5 February 1925, the Director drew attention to the opinion given on 29 August 1923 by the Advisory and Technical Committee for Communications and Transit in response to a request of the Advisory Committee on Opium in regard to the question of the control of the opium traffic in free ports (document C.667.M.267.1923, VIII, II, p. 22). It contained, in particular, the two following cases:

"Legally, the regime of a free port allows the sovereign State of the port, by its ordinary policing and supervisory powers, to enact any measure for the control of the opium traffic inthe free port which it considers necessary for the application of the International Opium Convention.

"In practice, any such measures which could be taken would, no doubt, be fully adequate to control the traffic of opium which has been declared. On the other hand, in view of the small bulk of these goods there is no doubt that the measures to prevent contraband in opium in free ports, as well as in any other ports, will often prove ineffective in cases in which opium is not declared.

"The most practical means of surmounting these difficulties would therefore appear to be to perfect the control in the free port itself by the following general measures:

"Opium should not be despatched from the country of origin to a free port except in the following cases:

"( a) If the consignment is sent with a through bill of lading made out to a final destination via the free port, the country of origin must not, in such a case, despatch the opium unless the country of destination shown in the through bill of lading has given the guarantees regarded as necessary with a view to the application of the Opium Convention;

"( b) If, according to the bill of lading, the free port is the final destination of the consignment, the sovereign State of the port has given the same guarantees. In such a case, the free port is considered, in respect of these guarantees alone, as being on exactly the same footing as any other part of the territory of that State."

Further the Director stated that the above-mentioned points ( a) and ( b) appeared to be covered by the draft drawn up by the Sub-Committee E.

"Article 15

"1. No consignment of any of the substances covered by the present Convention which is exported from one country to another country shall be permitted to pass through a third country, whether or not it is removed from the ship or conveyance in which it is being conveyed unless the copy 9 of the export authorization (or the diversion certificate, if such a certificate has been issued in pursuance of the following paragraph) which accompanies the consignment is produced to the competent authorities of that country.

"2. The competent authorities of any country through which a consignment of any of the substances covered by the present Convention is permitted to pass shall take all due measures to prevent the diversion of the consignment to a destination other than that named in the copy of the export authorization (or the diversion certificate) which accompanies it, unless the Government of that country has authorized that diversion by means of a special diversion certificate. A diversion certificate shall only be issued after the receipt of an import certificate, in accordance with Article 13, from the Government of the country to which it is proposed to divert the consignment, and shall contain the same particulars as are required by Article 13 to be stated in an export authorization, together with the name of the country from which the consignment was originally exported. Ail the provisions of Article 13 which are applicable to an export authorization shall be applicable equally to the diversion certificate.

"Further, the Government of the country authorizing the diversion of the consignment shall detain the copy of the original export authorization (or diversion certificate) which accompanied the consignment on arrival in its territory, and shall return it to the Government which issued it, at the same time notifying the name of the country to which the diversion has been authorized.

9 A proposal was submitted to the Sub-Committee that if any person fails to produce any document as required by paragraph 1 of chapter VI, or diverts, or attempts to divert, without an authorization as required by paragraph 2, any consignment to a destination other than that named in the export authorization or diversion certificate, he shall be guilty of an offence, and the consignment shall be liable to confiscation, whoever may be the owner of it. The Sub-Committee agreed with this proposal, but it considers that any provisions as to penalties or confiscation should appear in an article in the Convention applying generally to the provisions of the Convention.

"3. In cases where the transport is being effected by air, the preceding provisions of this article shall not be applicable if the aircraft passes over the territory of the third country without landing. If the aircraft lands in the territory of the said country, the said provisions shall be applied so far as the circumstances permit.

"4. Paragraphs 1 and 3 of this article are without prejudice to the provisions of any international agreement which limits the control which may be exercised by any of the Contracting Parties over the substances to which the present Convention applies when in direct transit.

"5. The provisions of this article shall not apply to transport of the substances by post.

"Article 16

"A consignment of any of the substances covered by the present Convention which is landed in the territory of any Contracting Party and placed in a bonded warehouse shall not be withdrawn from the bonded warehouse unless an import certificate, issued by the Government of the country of destination and certifying that the importation is approved, is produced to the authorities having jurisdiction over the bonded warehouse. A special authorization shall be issued by the said authorities in respect of each consignment so withdrawn and shall take the place of the export authorization forthe purpose of Articles 13, 14 and 15 above.

"Article 17

"No consignment of the substances covered by the present Convention while passing in transit through the territories of any Contracting Party or whilst being stored there in a bonded warehouse may be subjected to any process which would alter the nature of the substances in question or, without the permission of the competent authorities, the packing.

"Article 18

"If any Contracting Party finds it impossible to apply any provision of this chapter to trade with another country by reason of the fact that such country is not a party to the present Convention, such Contracting Party will only be bound to apply the provisions of this chapter so far as the circumstances permit."

The Conference recommended also that each Government should consider the possibility of forbidding the conveyance in any ship sailing under its flag of any consignment of the substances covered by the Convention:

  1. Unless an export authorization has been issued in respect of such consignment in accordance with the provisions of the Convention and the consignment is accompanied by an official copy of such authorization, or of any diversion certificate which may be issued;

  2. To any destination other than the destination mentioned in the export authorization or diversion certificate.10

The "import certificate and export authorization system'' of the 1925 Convention applies to all drugs to which the Convention applies or which may be brought under it by virtue of its article 10. "Indian hemp and the resin prepared from it" are expressly included. The resin and the "ordinary preparations of which the resin forms the base" are in addition subject to the provisions of article 11 of the 1925 Convention in virtue of which the parties undertook:

  1. To prohibit the export of the resin obtained from Indian hemp and the ordinary preparations of which the resin forms the base (such as hashish, esrar, chiras, djamba) to countries which have prohibited their use, and, in cases where export is permitted, to require the production of a special import certificate issued by the Government of the importing country stating that the importation is approved for the purposes specified in the certificate and that the resin or preparations will not be re-exported;

  2. Before issuing an export authorization under article 13 of the present Convention, in respect of Indian hemp, to require the production of a special import certificate issued by the Government of the importing country and stating that the importation is approved and is required exclusively for medical or scientific purposes.

INTERPRETATION OF THE PROVISIONS OF THE 1925 CONVENTION BY THE ADVISORY COMMITTEE

The Advisory Committee, at its eleventh session in 1928, drew up the Model Administrative Code11to the International Opium Convention of 1925 with a view to providing Governments with practical guidance in the application of the Convention. Chapter III of the Code refers to the control of exports and imports and reads as follows:

"III. Imports and exports

"Authorization and permit

"10. Any firm or person, authorized to trade in narcotics who desires to import or export consignments must apply to the competent authority, who, if the request is deemed to be in order, will issue the necessary permit for imports or exports, and, in case of imports, an import certificate intended to be submitted to the authority of the exporting country. A duplicate of the permit may take the place of the import certificate.

10 Recommendation II of the Final Act: the above text follows the suggestion of the Advisory Committee which has also provided for a recommendation in this case. The reasons for this recommendation, as given by the Sub-Committee were the following: a ship of country A may be engaged in smuggling opium from country B to country C without touching at any port in country A and without, therefore, coming under the control of the authorities of country A. A large amount of the illicit traffic in opium was carried on in this way. The Sub-Committee recognized that some Governments might find difficulty in applying such a provision, and would require to examine it carefully before they could adopt it. It is for this reason that it has not proposed that it should be inserted as a definite provision in the Convention itself.

The Sub-Committee also recognized that the provision would not be applicable if country B is not a party to the Convention and does not issue export authorizations.

11 C.774.M.365.1932.XI.

"Registration of permits

"11. The permits issued must be entered by the authority in registers kept for the purpose, and must be numbered consecutively. They will only be valid for a limited period (say, two months for exportation and three months for importation). They shall not be transferable.

"Particulars to be entered in permits

"12. The permit shall indicate the name and profession or status of the importer and exporter, the quantities of drugs to be imported or exported, their exact name, the period within which they must be imported or exported, the number, marks and numbering of packages (for export), the Customs Office through which the goods are to enter or leave the country, the route to be followed, and any other particulars which the authority may deem necessary. A duplicate of the permit shall be furnished to the Customs House through which the goods are to be imported or exported.

"Exportation to countries which have, and to those which have not, adopted the certificate system

"13. If a consignment is to be sent to a country which only allows narcotics to be imported subject to possession of an authorization issued by the importing country, the exporter must produce evidence that the authorization has been granted.

"In the case of countries which have not adopted the certificate system, it is recommended that the authorities of the exporting country should ascertain as far as possible, before granting the export permit, that the consignee is a reputable person and that the goods are not intended for illicit purposes.

"Import permit

"For purposes of importation, the import certificate or, in its place, a copy of the permit will be sent by the importer to his supplier abroad, who will show it to the authorities of his own country in order to obtain the permission to export the goods. Once the export authorization has been given, the authority of the exporting country shall hand over to the person concerned an export permit which shall accompany the goods, and shall send a copy of the permit to the authority of the importing country in conformity with the provision of article 13 of the Geneva Convention. When the goods enter the country, the Customs will certify on the import permit that the goods have been duly imported, and will return the permit to the importer for discharge. The importer will record on the permit that he has received the goods, and will send the permit to the supervisory authority. The Customs will return to that authority the duplicate import permit sent by it to them, and will state that the goods have been cleared.

"Verification on importation

"14. On the arrival of the consignment, the Customs must inspect it to see that it corresponds to the particulars given in the import permit and that the address shown is actually the address of the consignee.

"Export permit

"15. Every consignment of narcotics to a foreign country must be accompanied by an export permit. The Customs will record the export of the consignment on the permit, which must accompany the consignment to its destination. The duplicate export permit sent to the Customs Office will be returned by the latter, with certification of export, to the supervisory authority, who will thus be satisfied that the goods have left the country.

"Postal consignments

"16. If consignments are sent by post, the postal authorities must place the papers accompanying the consignment, including the export permit or import certificate, at the disposal of the Customs Office of export.

"Prohibition of re-exportation

"17. If the authority does not wish to allow imported goods to be re-exported, a special note to that effect must be made on the import permit.

"Unused permits

"18. Unused import or export permits must be returned to the supervisory authority both by the party concerned and by the Customs Offices to which duplicate permits have been sent.

"Statistics of imports and exports must be based on the quantities actually imported or exported, omitting those the permits for which are either not used or are cancelled.

"Transit

"19. The conveyance of narcotics in transit will only be authorized if the consignment is accompanied by an export permit issued by the exporting country. If the exporting country has not adopted the certificate system an import permit issued by the importing country must be produced.

"Narcotics may only be imported, exported or sent in transit through the Customs Offices appointed for that purpose.

"Prohibition of placing in bond or in free ports

"20. In general, narcotics may not be placed in a private warehouse. Narcotics stored in a free port or in a government warehouse shall be subject to the supervision exercised in the country itself, and may not be exported without an export permit.

"Prohibition of export by letter and of the despatch of consignments addressed to a post-office box or a bank

"21. In accordance with the Postal Convention, the import or export of narcotics by ordinary or registered letter post is prohibited.

"The posting of consignments of narcotics to a post-office box or to a bank to the account of a third party should also be prohibited.

"Seizure of consignments unaccompanied by permits

"22. Consignments of narcotics unaccompanied by an import or export permit will be seized by the Customs Office and placed at the disposal of the supervisory authority."

The 1925 Conference had:

  1. Rejected the method of direct limitation of the production of raw opium and coca leaf;

  2. Limited itself to the control of trade of narcotic substances,12 with the hope that this would prove to be an indirect method of limiting the production of raw materials and the manufacture of narcotic drugs.

THE CONFERENCE OF 1931 FOR LIMITING THE MANU-FACTURE AND REGULATING THE DISTRIBUTION OF NARCOTIC DRUGS

Already at the second International Opium Conference of 1924/1925 and before, the opinion had been widely held that the control of trade had to be supplemented by direct methods of limiting production and manufacture if the aim was to be achieved of limiting the use of narcotic drugs to medical and scientific needs. By 1930 a sufficient number of States were ready to limit the manufacture of narcotic drugs to these needs by direct methods. The Convention of 1931 provided for such limitation.

The 1931 Conference which adopted the Convention considered a draft convention elaborated by the Advisory Committee at its fourteenth session (1931). Chapter III of the regulations annexed to this draft convention, if adopted would have created a clearing house for all international transactions in narcotic drugs. The following quotations from these regulations illustrate the point:

"Chapter III

"1. A Central Narcotics Office shall be established at . . . organized as follows. . .

"2. The expenses of the Central Narcotics Office shall be defrayed by . . .

"Chapter IV

"The following procedure shall apply in regard to the export including re-exports of any narcotic drugs:

12 Internal Control Measures of the 1925 Convention apply to manufactured drugs only, including medicinal opium and certain preparations, chapter III, article 4, except the provisions of articles 2 and 3 in regard to raw opium and coca leaves. The Agreement of 1925 provides for the control of prepared opium.

"1. The manufacturer or trader who is in receipt of an order for the export of any narcotic drug shall notify the Central Narcotics Office of the receipt of such order.

"2. The Central Narcotics Office will ascertain by inspecting its records whether the execution of the order would cause the importation into the country concerned during the current year of an excess of the drug ordered over the aggregate of the amounts shown in the estimates for that country for that year, as constituting the home total for that drug, after deduction of any amount which, according to those estimates, will be manufactured in that country in that year.

"3. The Central Narcotics Office will thereupon, as soon as possible and, if necessary, by telegram, issue a certificate to the manufacturer or trader to whom the order has been given stating according to the information contained in its records either:

"(i) That the order may be executed, or

"(ii) That a proportion of the order may be executed stating what proportion, or

"(iii) That the order may not be executed.

"In cases (ii) and (iii) the certificate shall give reasons for the statements made therein.

"In all cases a copy of the certificate issued shall be sent to the Government of the country from which the export is to be made.

"In the case of an import, for the purpose of re-export, the issue of a certificate shall be subject to the provisions of article 14 of the Convention.

"4. Except as provided in paragraph 8 of this chapter, no narcotic drug shall be exported or re-exported by any trader or manufacturer except upon receipt of and in accordance with, the terms of a certificate supplied under paragraph 3 of this chapter.

"5. Applications from any manufacturer or trader for a certificate shall be dealt with by the Central Narcotics Office in strict order of priority ofreceipt.

"6. The Central Narcotics Office shall be informed immediately the export takes place both by the exporter and the Government of the country from which it is made and the Central Narcotics Office shall also be informed immediately the order reaches its destination both by the consignee and the Government of the country of import.

"7. In the event of any order in respect of which a certificate has been issued under the provisions of this chapter not being executed, either in whole or in part, or in the event of the return to the exporter of the whole or part of the narcotic drugs the subject of an executed order, the certificate issued in respect of such order shall be returned to the Central Narcotics Office as soon as possible for cancellation or amendment as the case may be. An amended certificate will, where applicable, be issued by the Central Narcotics Office.

"8. The foregoing provisions of this chapter shall not apply in the following cases:

"(i) Where exporting country and the importing country are so distant from the place where the Central Narcotics Office is established that the application of these provisions would involve excessive delay in the fulfilment of the orders;

"(ii) Where the supplies are made by the exporting country to one of its colonies, protectorates, overseas territories or territories under suzerainty or mandate;

"Provided that:

"(i) The quantities so exported during the year do not exceed . . .

"(ii) The exports are reported immediately to the Central Narcotics Office.13

"Chapter V

"1. Records shall be kept by the Central Office in a form to be approved by . . .

"(i) Of the conversion and consumption totals for each country for each year in respect of each narcotic drug showing how these are made up;

"(ii) Of the world total and export total for each year, and the actual amounts to be manufactured for export in each exporting country in each year;

"(iii) Of all orders for the export or re-export of narcotic drugs in respect of which it has issued certificates, such orders to be classified according to whether the certificates permitted the execution of the order in whole or in part or refused permission to execute the order.

"2. The records of the Central Office shall be open to inspection at any time by any officer duly appointed for that purpose either by the . . . of the League of Nations or by the Government of any High Contracting Party.

"3. The Central Office will furnish to the Secretary-General of the League such returns, statements or information as the Council may require."

Although the 1931 Conference did not accept the plan of a central clearing house as suggested in the above regulations, it considered that the idea had practical merits and could, in certain circumstances, provide a basis for the control of the international trade and for combating the illicit traffic. This explains why the Conference, in a limited way, established such central clearing house for all exports which were believed to involve particularly great risks, i.e., for exports of the more dangerous drugs of group I of the 1931 Convention to territories which are neither parties to the 1925 Convention nor to the 1931 Convention. The relevant provision [article 14 (1) of the 1931 Convention] reads as follows:

13A suggestion was made for consideration of the Conference that it might be desirable to simplify the procedure still further by allowing a similar exception for the export of medicinal preparations containing only a small proportion of the drugs subject to the condition that the export shall be immediately notified to the Central Narcotics Office.

"Article 14

"1. Any Government which has issued an authorization for the export of any of the drugs which are or may be included in group I to any country or territory to which neither this Convention nor the Geneva Convention applies shall immediately notify the Permanent Central Board of the issue of the authorization; provided that, if the request for export amounts to 5 kilogrammes or more, the authorization shall not be issued until the Government has ascertained from the Permanent Central Board that the export will not cause the estimates for the importing country or territory to be exceeded. If the Permanent Central Board sends a notification that such an excess would be caused, the Government will not authorize the export of any amount which would have that effect."

The 1931 Conference also adopted a special regime for export of diacetylmorphine the complete prohibition of which was proposed by the Austrian Government.

Concerning diacetylmorphine (heroin) the Committee of Experts 14 came to the conclusion that all the beneficial actions of heroin can be obtained from other drugs and that heroin can therefore be entirely dispensed with.15 The Conference as a whole did not share this opinion,16 and accepted as a compromise solution the special regime which is laid down in article 10 of the Convention which reads as follows:

"Article 10

"1. The High Contracting Parties shall prohibit the export from their territories of diacetylmorphine, its salts, and preparations containing diacetylmorphine, or its salts.

"2. Nevertheless, on the receipt of a request from the Government of any country in which diacetylmorphine is not manufactured, any High Contracting Party may authorize the export to that country of such quantities of diacetylmorphine, its salts, and preparations containing diacetylmorphine or its salts, as are necessary for the medical and scientific needs of that country, provided that the request is accompanied by an import certificate and is consigned to the government department indicated in the certificate.

14 The Committee of Experts, appointed by the Council of the League, for the Limitation Conference of 1931, was composed of Professor W. E. Dixon, Professor Erich von Knaffl-Lenz, Professor M. Tiffeneau and Dr. P. Wolff. In accordance with the decision of the Technical Committee of the Conference, Dr. Small, of the United States delegation, also attended the meetings of the experts.

15 Records of the 1931 Conference: C.509.M.214.1931.XI. vol. II, p. 131.

16See, however, recommendation VI of the Final Act of the Limitation Conference.

"3. Any quantities so imported shall be distributed by and on the responsibility of the Government of the importing country."17

In regard to all other international transactions the Conference did not go beyond the decisions of the Second Opium Conference of 1924/1925 which limited itself to domestic control by the "import certificate and export authorization system" and restricted supervision by an international organ to post factum control [by criticism and sanctions (embargo recommendations)].

The 1939 Draft proposed to retain the "import certificate and export authorization" system of the 1925 Convention for international transactions in raw opium.18 No exceptions, however, were permitted for exports to countries which would not become parties to the planned Convention.19 The relevant provisions of the 1939 Draft are as follows:

"CHAPTER X

"Control of International Trade in Raw Opium

"Article 27

"The High Contracting Parties shall apply to raw opium the provision of chapter V of the Geneva Convention, provided, however, that the derogation from the application of Articles 12 to 17 of the said Convention admitted by its eighteenth Article shall not apply.

17The Model Administrative Code to the 1931 Convention contains the following comments in respect of this article: "Ad article 10

"If a Government received an import certificate in respect of diacetylmorphine from a Government which is not a party to this Convention, and that country does not appear from the notifications received under article 20 from the Secretary-General or from the reports of the Opium Advisory Committee or the Permanent Central Board to be a diacetylmorphine manufacturing country, and if any doubt exists as to whether it is a diacetylmorphine manufacturing country, or not, it is recommended that the Government receiving the certificates should make such inquiries as may appear to it to be necessary in order to satisfy itself on the point.

"Under the terms of paragraph 2 of this article, export authorizations are to be issued only against import certificates authorizing import by a government department. However, such import certificate is required to be accompanied by a formal request from the Government of the importing country, asking that the export should be permitted. The drug when exported, is required to be consigned to the government department of the importing country indicated in the import certificate.

"Under the terms of paragraph 3 of this article, the drug imported by the government department concerned may be distributed by that department, on its responsibility, either directly to doctors or pharmacists, or through authorized wholesalers."

18 In view of article 12 of the 1925 Convention, it can hardly be doubted that the system applies to raw opium. A strong case can also be made that it applies to prepared opium if articles 12, 23 and 22 of the 1925 Convention are interpreted in combination.

19See, however, article 18 of the 1925 Convention.

"Article 28

"The High Contracting Parties undertake that any quantity of raw opium shipped on consignment to any country or territory shall pending sale be kept in a Customs bonded warehouse under State control.

"Article 29

"1. The High Contracting Parties in whose territory or territories raw opium is produced for purposes of export under the provisions of this Convention shall not permit the export in any year of a quantity of raw opium larger than the quantity allotted to it for export by the Controlling Authority in that year in accordance with sub-paragraph (iii) of paragraph 1 of Article 19.

"2. If a consuming country requires the delivery to it of raw opium in the early part of a year in respect of which estimates were furnished, the producing country may export such opium before the end of the preceding year.

"Such opium shall, for the purpose of paragraph 1 of this article, be considered as having been exported in the year in respect of which the estimates were furnished.

"3. If a producing country consigns raw opium to another country pending its sale, such opium shall not, for the purpose of paragraph 1 of this article, be regarded as having been exported until and so far as the opium has been sold.

"Any part of such opium remaining unsold on 31 December of any year shall be considered as forming part of the regulating stock of the producing country.

"Article 30

"The import of raw opium into any country or territory shall not in any year exceed the sum of:

"(i) The total of the estimates as defined in sub-paragraph (iii) of paragraph 1 of Article 5; and

"(ii) Any quantities which have been exported in that year-provided that, if a producing country imports raw opium, such imports shall not, in any year, exceed the aforementioned sum, less any quantities produced in that country in that year in accordance with the provisions of this Convention."

The idea of an international clearing house was revived in the discussions of the Commission on Narcotic Drugs, at its first session. Some members considered that all imports of narcotic drugs into Japan and perhaps into Korea should be subject to prior sanction of an inspectorate appointed by the United Nations.20

20 Report of the Commission on its first session, p. 23.

Part II

THE CASE FOR A NEW CONSIDERATION OF THE IDEA OF A CLEARING HOUSE SYSTEM

Since the first introduction of the "import certificate and export authorization system" by the Advisory Committee, Governments have established an administrative machinery for the control of narcotic drugs and have collected a great amount of information relating to this control such as: particulars of persons engaged in the production, manufacture and trade; location of businesses carrying on these activities; purchases and disposals of the substances controlled; drugs manufactured, stocks held, etc.; many authorities have records of each individual wholesale transaction and sometimes even of retail transactions.21 In some cases approval of authorities is required for wholesale transactions and for some particularly risky retail transactions. For their recording the use of official forms is often prescribed and duplicates are filed by the supervisory offices. The idea of a central clearing house is in some cases accepted on the national level of control.

In view of these developments the Commission may desire to consider whether the objections to an international clearing house, the practical value of which for the control of international trade was recognized in 1931,22 are still valid.

These objections may be summed up as follows:

(A) International trade transactions would be burdened with cumbersome bureaucratic procedures;

(B) The additional costs of international control caused by the introduction of the clearing house system would not be justified by the advantages derived therefrom;

(C) Supplies to countries importing drugs under control might be seriously delayed.

(A) In view of the fact that at the present time all international transactions in narcotic drugs require the completion of forms and applications, it may be seriously questioned whether the introduction of the clearing house system would result in additional burdens on the individual importer and exporter, excepting perhaps the requirement of submitting one or two additional copies of forms they have to furnish already under the present system of import certificates and export authorizations.

On the other hand, administrations would be relieved of the obligation to furnish to the international control organs quarterly statistics of imports and exports of narcotic substances.23

21 For recent legislation on this problem see: Annual Summary of Laws and Regulations relating to the Control of Narcotic Drugs-1947, E/NL.1947/Summary, p. 15, et sequitur.

22 See article 14 (1) of the 1931 Convention.

23 Article 22 (2) of the 1925 Convention.

(B) It is estimated by the joint secretariat of the Permanent Central Board and the Supervisory Body that the annual number of international transactions in narcotic drugs does not exceed 5,000 to 6,00024 This secretariat states that:

"If synthetic drugs were widely manufactured and entered widely into the international trade, these figures might, of course, rise speedily. With the present volume of transactions, it would seem however that the recording of these transactions by the ICB (International Control Body) does not present an unmanageable or too expensive administrative problem. It is one which can probably most easily be solved through mechanical recording by accounting machines."

(C) The strength of the objection that international transactions would be considerably delayed by introduction of the clearing house system should be examined in the light of technical developments, particularly in the field of international communications, since 1931. In case of urgent need the Government concerned could send the application to the clearing house by radio photographic process. The reply could be sent by cable. If the cable is addressed to the competent official, there is hardly any room for deceptions and forgeries of illicit traffickers. In nearly all cases dispatch of the applications by air mail would be sufficient.

SIMPLIFICATION OF CONTROL RESULTING FROM THE ESTABLISHMENT OF AN INTERNATIONAL CLEARING HOUSE

It should be pointed out that, in addition to relieving national administrations of the obligation of sending quarterly statistics of imports and exports, the functioning of an international clearing house authorized to approve import certificates before export is authorized would prevent excesses of imports over estimates and "embargoes" under article 14 (2) of the 1931 Convention would become unnecessary whether for parties to the new convention or for non-parties complying with the provisions of the new convention concerning the international clearing house.25

If the Commission on Narcotic Drugs approves in principle the establishment under the new convention of an international clearing house system the details of the organization and functioning of this system could be worked out at a later stage (see also document E/CN.7/W.44, pp. 65 and 66). On the assumption that a future control organ will be authorized to compare all export applications with the estimates of the importing country and to authorize imports, the joint secretariat of the Permanent Central Board and the Supervisory Body has outlined the working of an international clearing house as follows:26

24Document E/OB/W.78, p. 21.

25See also document E/OB/W.78, p. 21.

"Each import authorization is sent to the International Control Organ which compares the amount asked for with the estimates. If the amounts to be imported remain within the estimates27 the Control Organ would forward the import authorization, duly endorsed, to the exporting country.

"Whenever the Control Organ notes that an import authorization would exceed the estimates,27 it would hold it in abeyance and inform the importing country which would be given the opportunity of cancelling the import authorization or modifying its amount in accordance with its estimates27 or submitting supplementary estimates.

"It may be desirable that the Control Organ notifying the Governments concerned of the extent to which their estimates have been or have not been exhausted by imports and exports (the amount available for imports would be increased by exports of the country in question). This notification could be made several times each year or after each transaction.

26 Ibid., p. 30.

27 The memorandum of the joint secretariat prefers the use of the term "supply limit" rather than "total of estimates"; see document E/OB/W.78, pp. 11 and 20.

"The exporting country would have to issue two more carbon copies of the export authorization than at the present time and mail one of them upon issue to the importing country (in addition to the copy which the exporting country has to send to the Government of the importing country in accordance with existing provisions28); the second additional carbon copy would be sent to the International Control Organ and replace the present export statistics. The importing country would, immediately on receipt of the goods, send one of the export authorizations which it receives from the exporting country, to the International Control Organ. This would replace the present quarterly import statistics. This copy would be duly endorsed by the importing country. The date of receipt and the amount actually received would be included in the endorsement."

The exporting countries may, in very urgent cases, be authorized to issue the export authorization on the basis of authorization granted by the International Control Organ by cable, before it receives the import authorization, duly endorsed by the Control Organ.

28 Article 13 (4) of the 1925 Convention.