Smuggling made real easy

Krzysztof Story (VSquare/ Environmental Reporting) 2020-06-03

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Over the past fifty days, Polish authorities have seized 70 tonnes of illegal pesticides, while European ones have seized over 1346 tonnes. How did this happen?

The mechanism is simple. First, you need to buy an active ingredient of a pesticide outside Europe, most likely China, where a litre costs 10-15 euros. When it surfaces on the European black market, it would be worth up to six times more. You would still have to pay for transport and packaging, but you will still earn up to 50 euros per litre or kilo. Profit from one container might amount to two million euros.

Where does it go? It is sprayed on our fields and then ends up on our tables. Almost every vegetable, fruit or grain we buy contains residues of various substances. Pesticides have become an integral part of industrial food production. If we take a typical field of wheat, the process begins in the autumn with seed dressing. Later, a herbicide (weeding agent) is applied. If there is no snow cover and vegetation continues (which has become the norm in Poland in recent years), you must still use fungicide and insecticide to kill fungi and aphids. Spring starts with a second fungicide treatment. Then the procedure to produce dwarf wheat begins – special preparations cause it to grow up to around 85 centimetres only, rather than over a metre, which makes it resistant to heavy rainfall and wind. Later, another fungicide and insecticide (to kill aphids) are applied. In total, between seven or eight different treatments and substances are applied.

The sector of plant protection products is worth billions of euros. And here too there we see elements of the shadow economy. Unlike alcohol and drug trafficking, this money is virtually risk-free. Even if you get caught, you are unlikely to end up in court. If you do, you will only go down with an affordable fine.

“The risk of arrest and conviction is small and profits may be huge,” confirms Rien Van Diesen, an expert at the EU police Europol, who specialises in illegal pesticides.

This report has been prepared by a team of international journalists. The results of their investigations have been confirmed by a Europol expert.

In Germany, only eleven cases related to pesticides trading have been investigated by prosecutors since 2011. Some are still underway. There have been no convictions.

27 tonnes of illegal pesticides have been detected in Slovenia over the past 17 years. None of the cases went to court.

Italian authorities have intercepted 1,053 tonnes of pesticides since 2017 and imposed 167 fines. Since 2015, their efforts resulted in only three lawsuits. In one, the court ruled that defendant needs to serve a year in prison, in the remaining fines were imposed in the amount of 1,000 and 600 euros.

In the Netherlands, over the past 10 years, the prosecutor’s office has registered over 200 suspects involved in illegal pesticide trading. Only four prison sentences have been handed down. Two of them have been successfully repealed.

Small-time runners at the border

On 23 May 2019 at a border crossing in Medyka, Poland, a border guard searched a bus headed for Szczecin. The vehicle’s storage compartments held a total of 92 kilogrammes of chemicals in small containers. The driver, 35, admitted to smuggling.

On 11 January 2018 at a border crossing in Korczowa, Poland, an ingeniously-designed pipe system in a Volkswagen stopped to be searched connected the windshield washer fluid tank to the fuel pump. If the fuel to propel te car was there, what was in the petrol tank? Sixty litres of illegal pesticides.

On 5 October 2016 during another check in Korczowa, Poland, an empty refrigerated truck is searched by border guards. An X-ray scan reveals a suspicious substance in one of the fuel tanks. There is some suspicious liquid in the compressor that should cool the fridge. A total of 660 litres of pesticides have been retrieved by the fire department.

In January 2018, inspectors from the country’s Main Inspectorate of Plant Health and Seed Inspection (PIORiN) found 500 kilogrammes of pesticides under a haystack in a barn in the region of Podlasie, Poland. The labels were in the Cyrillic alphabet.

In December 2019, PIORiN inspectors found 12 tonnes of chemicals at a farm near Poznań. On 31 January 2020, the authorities decided to neutralise the chemicals.

There are hundreds of similar cases. A majority of smugglers are detected at the state border. In 2019 alone, the National Tax Administration stopped 162 shipments of illegal pesticides. The year before there were 326 of them.

Each month Polish and Ukrainian customs officers seize thousands of litres or kilogrammes of pesticides. These are usually smuggled in small amounts – in tanks, bags, spare wheels. They are difficult to trace, especially if we are talking about the busiest border in the entire European Union – more than 22 million people pass eight road and six rail border crossings annually. Experts say that up to 90 per cent of illegal pesticides cross the border without being detected. “A vast majority of these cases are small-time smugglers. Small amounts carried by individual persons. I would estimate the detection rate at 10 per cent,” says Włodzimierz Olejnik, an attorney who specialises in industrial property law. 

“What we find is just the tip of the iceberg,” confirms Professor Jacek Nawrocki, Ph. D. from the Department of Plant Protection at the University of Agriculture in Kraków.

One field in ten

These small amounts of smuggled goods point to a larger phenomenon. The European plant protection market is estimated at 11 billion euros (annually). What percentage of that is the black market? Depending on whom we ask, between 10 and 25 per cent. According to recent estimates confirmed by the European Union and the OECD, the black market amounts to 13.8 per cent of the total. If these estimates are correct, chemicals that have never passed any lab are sprayed on one field in ten or even one field in seven. Their total amount is estimated at over 48,000 tonnes.

Forty-eight thousand tonnes of what exactly? What are those illegal pesticides? There is no clear answer. Pesticides can be compared to medicines – each pesticide is based on a certain active ingredient (generic ingredient), which is given a brand name, patented and trademarked for legal protection. The “illegal” nature of a given pesticide may originate in any of these stages. It may involve a legal active ingredient that has been produced and smuggled outside the official channels. Expired products or labels in foreign languages can also be found on the market. Some products only pretend to be popular, brand-name substances.

“What do such fakes contain?” we ask.

“Hopefully simple, cheap ingredients, that are non-toxic or expired”, says Dr Jacek Nawrocki. “Someone may have thrown away a stockpile of supplies, and sometimes the packaging contains something completely different. Instead of the now-withdrawn Linuron, dyed milk of lime was added because it had a similar consistency.”

Chemicals that have been banned within the EU and which are illegally imported from other countries can also be dangerous. In 2019, PIORiN inspectors seized dichlorvos, banned 12 years before due to potential carcinogenic effects.

“The biggest problem with illegal pesticides is that there is no guarantee what might happen when you handle them. We do not know their composition, what may happen when you are exposed to them, any potential consequences.”

“Those substances have not been tested. There are no available results of studies or analysis. Even if they are safe to humans, they might be harmful to bees, to the environment. There is always some victim in this crime,” admits Europol’s Rien Van Diesen.

“It is difficult to establish any immediate consequences. It is hard to attribute a specific disease or death to illegal pesticides. We haven’t been able to find a single country that has convicted someone of threatening human life and health or polluting the environment. But that doesn’t mean that illegal pesticides are safe.

„The most obvious threat is the level of the active ingredient, which may be too high,” says Rafał Mładanowicz, president of the National Federation of Cereal Producers. “But the quality of a given substance may also be affected by the other ingredients – activators, fillers.”

Mładanowicz remembers that the federation ordered 57 substances with the same active ingredient – tebuconazole. Only nine had the efficiency of over 70 per cent. Twenty failed to work at all.

“In most cases, a cheaper fake simply would not work. It will not kill insects, weeds or fungi,” Mładanowicz says. “And the farmer will have to re-apply it. Use more of that substance or other agent. All this increases the level of toxic substances that accumulate in plants and the soil”.

There is a third scenario too. “The composition will be completely different than the one provided by the ‘seller.’ For instance, a fungicide would be effective against another type of fungus. And the one that the farmer wanted to get rid of will get more nutrients and space for growth. Some levels of a particular ingredient may also harmful to animals, let alone humans”.

There are cases where the threat from counterfeit and illegal pesticides is simply obvious. On 9 April 9 2009, a passenger plane from China landed at Budapest Airport. It carried over three tonnes of pesticide with a flashpoint of 24 degrees Celsius. There was a real risk of explosion.

There are some genuine threats in Poland too. A sample of a substance seized during a border control check in 2016 contained 69 per cent bromadiolone, which is a rodenticide. Although products that contain bromadiolone are registered in four EU countries (Poland excluded), the EU only allows its concentration to be below 0.005 per cent or 14,000 times lower. In high concentrations, bromadiolone can be fatal if there is skin contact or if it is inhaled. It may also damage a fetus and is extremely toxic in the aquatic environment.

The Silver Axe

The largest pan-European initiative that aims to fight the shadow economy in pesticides is called the Silver Axe. It is a several-week long effort that involves inspections at the borders and ports across the entire EU. It is coordinated by Europol and national authorities (in Poland – PIORiN, KAS and the police). It has been taking place regularly since 2015 and is gradually expanded. So far, 1222 tonnes of illegal pesticides have been seized during the operation. Poland joined the Silver Axe for the second edition – during the three initial years, Polish authorities seized over 125 tonnes of illegal pesticides. Operation Silver Axe 2020 ended a few days ago. Over fifty days, Polish authorities seized 70 tonnes of illegal pesticides, European ones – 1346 tonnes.

Later in our report, we talk about additional tonnes, kilograms and litres of illegal pesticides. Border guards seize a vast number of small transports. Some are attempts at making a fast buck, an additional source of income for seasonal agricultural workers. But these small shipments add up to 10 or even 25 per cent of a market that is worth billions of euros. And all of this is not bought on by chance of circumstance. Someone is responsible for the organisation, plans, supply chains, someone finds recipients.

Both Europol and the Polish authorities confirm that the trade in pesticides is conducted by highly organised criminal groups, and small-time smugglers stopped at the border are only a small fragment of a much larger picture.

“We have observed groups that operate from the territory of Ukraine. They have their factories, but they also import ingredients from China or Russia. They transport goods by car and can get as far as Greece,” says Europol’s Rien Van Diesen.

The second type of import goes via European seaports: Antwerp, Rotterdam, Hamburg, but also Gdańsk and Gdynia. Over the past five years, PIORiN inspectors have seized over 56 tonnes of illegal chemical substances in those two Polish ports.

The main players on the market are organised groups from the United Kingdom and Germany. They operate in five or six countries, conduct both legal and illegal businesses. “They use legitimate transport companies and warehouses for transport,” says Van Diesen. “On the one hand, we have small businesses and private individuals who are trying to transport one or two shipments, looking for a quick buck. On the other hand, organised crime groups. They are typically run by a total of 50 to 100 people.

Different strategies are utilised. Active ingredients from China are sometimes described as a fabric dye, and pesticides are prepared on-site. At other times, finished products are imported. Counterfeit packaging is produced elsewhere and the pesticide at a different location. Often, substances banned in the EU are imported legally, and cross the EU on transit to Morocco, for instance. Only when the container reaches Morocco, it is empty and illegal pesticides are sprayed onto our fields and end up on our tables. Sometimes pesticides are exported from the EU, documents are doctored and the chemical is imported back.

Groups that control the black market are quickly adapting to reality. According to our source in Ukraine, the sealing of the Polish border resulted in the main transit routes being redirected to the Baltic States, Romania and Moldova. This volatility makes illegal trade in pesticides difficult to define, let alone track.

China’s double-faced approach 

The first shipment of illegal pesticides that was detected in Europe, arrived from China and reached Spain in 2000. Since then, China has been present in all opinions as a leader in the production of illegal pesticides and the most common country of origin for the so-called generics (active ingredients used to create the finished product). And even that status quo is currently being challenged as India is taking on an increasingly more prominent role.

Also, since January 2020, the state-controlled ChemChina has been the sole owner of Syngenta, the world’s largest producer of legal pesticides. Chinese capital also holds a majority of Adama’s stock – Adama is an Israeli company that produces plant protection products. China now seems to be the largest player on the market for both legal and illegal pesticides. In the last four years alone, at least four illegal shipments from China containing an excess of 10 tonnes have been discovered in the ports of Gdańsk and Gdynia.

China’s Institute for the Control of Agrochemicals (ICAMA) should supervise pesticides on the domestic market. Each Chinese plant protection product should have a special single-page document, the so-called ICAM-1-Pager. In many cases, the 1-Pager is fictitious and its verification requires that the shipment be kept in port for several days.

The current situation might be improved by a better exchange of information and direct access of European authorities to ICAMA. Cooperation with countries outside the EU in such matters falls within the powers of the European Anti-Fraud Office (OLAF), which has its liaison officer in Beijing. Our sources at OLAF confirm that the Chinese authorities are collaborating on subsequent investigations, but are still working to improve information exchange.

Over the past few weeks, we have sent several questions to the Chinese authorities about their dual role in the pesticide market and the future cooperation with European authorities. However, as of today, we have not received any response.

A fine amounting to PLN 165

The EU is not the only entity taking further action to combat the problem. Pesticide producers themselves are also taking steps to defend their rights.

“Companies whose products are counterfeited invest in new security measures,” says Dr Jacek Nawrocki. “Embossed packaging, holograms; the packaging, colour and label design also change every few years. Pesticides are protected as if they were banknotes. All those steps are taken to make it difficult to make a good fake.”

Despite this, the system is not foolproof. How and what exactly reaches farmers and then – as a result – our tables? We will never know the truth. What we do know, however, is that legally authorised plant protection products must undergo rigorous testing and it takes up to ten years for a product to be placed on the market. And even then there might be errors, which was the case with chlorpyrifos – a chemical that has long been known to be harmful damages the nervous system of the fetus and was only banned as late as January 2020.

“There are no rules on the black market. What can you find there?”

“There are substances originally produced in Ukraine, with labels in Cyrillic alphabet, which are illegally smuggled into Poland,” says Rafał Mładanowicz. “This is the best option for a farmer. Sometimes the substance may be diluted. There are some mind-boggling cases. Instead of pesticide, someone was selling Persil washing powder. A company that produced fake Chwastox (originally made in Poland), was instead selling… tea essence.

“Authorities estimate the shadow economy in pesticides to be 10 to 25 per cent.”

“I’m nor aware of the basis for such calculations. In my opinion, this is a much smaller margin. Perhaps that market share reflects the situation four or five years ago. Today, many farmers in Poland have been taught a memorable lesson when they suffered financial consequences.”

One such case involves farmers from Kraków, who used fake pesticides in 2010 and, as a result, lost tens of thousands of zlotys when their crops were destroyed.

“This procedure affects farmers the most,” says Mładanowicz. “Because they can lose all their crops.”

“But some take risks. Do you see any benefits?”

“I don’t believe you can benefit much from it. Let’s look at a medium intensive wheat crop. We need to treat the seeds, apply fungicide (two times), spray the field with a growth regulator, a herbicide and an insecticide. That amounts to 450 zlotys per hectare.”

“How much cheaper are fakes?”

“From what I have heard, you can save up to 30-40 per cent. And not everything is counterfeit. Is it worth risk the whole crop to save a hundred złoty per hectare? You must be desperate. That is why now when something is 10 per cent cheaper, then farmers are already suspicious.”

This is confirmed by Jacek Nawrocki from the University of Agriculture in Kraków. “Even if the counterfeit is half cheaper, it does not pay at all. It’s like going to a fortune teller. Someone who takes plant production seriously will never consider such option”.

New shipments at the borders confirm that the demand does not slow down. Some farmers buy illegal pesticides unaware they are counterfeit. They buy them online.

“About 50 per cent of trade moved online,” comments Mładanowicz. “Pesticides may be purchased on OLX, Allegro, anywhere.”

“How can we distinguish a counterfeit from an original product?”

“It’s the price. This is the only criterion. Photos, descriptions can be easily fabricated. And the price should always be the same. There is no discount for plant protection products, no Black Friday.”

If a farmer uses an illegal pesticide (the same if he misuses a legal chemical) there is a chance that the produced food will exceed the so-called Maximum Residue Limits or MRLs.

“In theory, if the control system worked well, such batches should be recycled or converted into ethanol,” Mladanowicz points out.

In practice, they are sold. Farmers also have their methods – they sometimes mix counterfeit pesticides with good ones or sell goods at markets, where the risk of an inspection is lower. The Chief Sanitary Inspectorate (GIS) is unable to analyse all samples.

“To be honest – if during the harvest I bring 25 tonnes of grain to the purchasing centre, there is no chance that someone would refuse to buy it because of a high level of pesticides,” says Rafał Mładanowicz, a farmer and at the same time head of the National Federation of Cereal Producers.

Online, substances that have recently been banned and which farmers have grown accustomed to are particularly popular. We need a minute to perform a single search on an auction site and buy chlorpyrifos, a chemical banned a few months ago.

Trade in plant protection products is controlled by PIORiN. Inspectors carry out approximately 7,000 inspections a year at points of sale and 23,000 at farms. About 8 per cent of inspections report irregularities, and in 2018-2019 alone they questioned the quality of over 50 tonnes of plant protection products. They imposed 3,745 fines. At first glance, those inspections seem effective. Well.. until we check that the average fine imposed by sanitary inspectors amounted to PLN 165. That corresponds to the amount you need to pay for a speeding ticket if you exceed the limit by 25 km/h.

Zero risk

Every year we have hundreds of cases of smuggling and selling illegal pesticides in Poland. Yet, until 14 March 2020, only a fine of up to 5,000 złotys might have been imposed on someone who sells, stores and uses counterfeit plant protection products. Therefore, only a limited number of cases were prosecuted in court, usually because other regulations were also violated. In most cases, they charged individuals with fabricating brand packaging (Article 305 [1] of the Industrial Property Law). Attorney Włodzimierz Olejnik represented producers in several such cases. “This crime is punishable by up to two years of imprisonment. It is prosecuted at the request of the victim, that is the producer. Popular products are most often counterfeited. Labels are copied, often in an unprofessional way.”

Importing pesticides without customs duties may be the basis for criminal and fiscal proceedings. Until recently, the law had mainly protected industrial designs (interests of producers) and profits from customs duties. In theory, the use of illegal, potentially toxic chemicals for food production could be included under Article 165 or 182 of the Penal Code. The first deals with compromising people’s health and threatening their life, the second – about polluting the environment. The only problem is that no such lawsuits have been filed with Polish courts. In 2018, a lawsuit that resulted from the online sale of counterfeit pesticides was dropped. The decision was substantiated as follows: “there is no information from both the person who notified the authorities nor from the auction website (…) that anyone has purchased those substances. In this situation, there is no reason to assume that people’s health and well-being were being put at risk.”

But even sentences passed in cases that involve counterfeit products designs are usually quite mild. In Poland, we have been able to identify court documents for several such cases. In 2012, police officers raided an illegal pesticide warehouse in the Hrubieszów poviat (Lubelskie Voivodeship). They seized over 250 kg of substances with fabricated labels and holograms. A kilo was worth up to a thousand zlotys, and the 54-year-old property owner had previously been convicted of a similar crime. He was sentenced to eight months imprisonment.

We believe this is the only case that involved someone going to jail in Poland for selling illegal pesticides. What about a shop near Kraków that sold counterfeit pesticides for years? The owner got one year conditionally suspended for three years. Or an illegal pesticide wholesaler in Lubaczów, who sold smuggled plant protection products with a total value of hundreds of thousands of zlotys? They received suspended sentences, and the trial lasted nearly ten years.

Earlier, I discussed a case that involved smuggling 660 litres of toxic pesticide across the border. A fine of PLN 3,400 was imposed on the driver and the goods were seized. The customs value of what firemen pumped out of his tank amounted to nearly PLN 250,000.

Fertilizer from the ironworks

It seems that countries are becoming more vigilant about carrying border checks, also looking for illegal pesticides. But organised groups are always a step ahead – they have begun to use, for instance, ports in the Baltic States (including Klaipeda). They also stopped importing ready-for-sale, packaged counterfeit products that resemble brand labels of other companies, because the law on the industrial property is very effective. Instead, generics are imported – active ingredients themselves, which are rarely protected by patent.

“It is impossible to assess the real scale,” says Dr Nawrocki. “Nobody will admit to illegal, double spraying that was incorrectly applied. The fact is that we find residue traces of such chemicals in food, including illegal ones or ones that should not be used with that particular crop.”

“Has anything changed?”

“The inspections are becoming more commonplace, the producers’ awareness also increased. In the 1990s it was easier to sell illegal products, official data is incomplete. The trade was managed by organised groups. For instance, entities based near Kraków would sell “efficient” fertilizers, which were supposed to contain a lot of phosphorus. It was a door-to-door peddling. Later on, it turned out that it was waste from the ironworks in Kraków, and farmers were putting it onto their fields. And harmful substances do not disappear from the environment immediately, pesticides have half-lives, like isotopes. We still find the residue of toxic substances in the soil.

Today, the picture is quite different. Poland has recently introduced further changes. On 13 February 2020, amendments to the act on plant protection products were adopted. “The main change requested by PIORiN during the work on the project was to introduce more stringent penalties for illegal pesticide trade,” says Tadeusz Łączyński, Deputy Chief Inspector. From 14 March 2020, individuals who sell or use of counterfeit pesticides might face up to three years in prison. Now, PIORIN inspectors do not have to announce their inspections in advance, but such change was introduced only in September 2018.

“There is no doubt that it has increased the efficiency of their actions,” admits Łączyński.

Daily dinner pesticide servings

Each year, the European Food Safety Authority publishes results of a study of food quality across the EU. According to a recent report, 4.5 per cent of the food on our tables exceeds the permitted levels of pesticide residue. Some of it comes from illegal sources. No one can guarantee its safety. Particularly that every day we are exposed not to one but a whole range of chemicals in our food.

What can we do? Some solutions include more severe penalties, more accurate sales statistics, and better collaboration between the state’s authorities. But a very important commitment made by both consumers and environmental organizations is to generally reduce the number of pesticides used. The European Parliament is discussing making direct payments dependent on such a reduction. The goal of the new strategy adopted by the European Commission “Farm to Fork” is to reduce pesticide use by half by 2030. Agricultural organisations say this is unreal because the increase in costs will cause European farmers to lose the competition with imported food.

Meanwhile, the black market for pesticides still exists, is generating huge profits, and the people who control it are rarely held accountable for their actions. 

“In a vast majority of cases, it is the person caught with the illegal substance who is punished,” explains Włodzimierz Olejnik. “That person says that they had purchased the pesticide from an unknown source and the investigation hits a dead end.”

During our investigation, we conducted 83 interviews throughout Europe. All of them have confirmed that it is often impossible to track down the entire route that a pesticide takes from its production facilities to our tables. 

“A man caught on the border with a kilo of cocaine spends a year in prison, and a smuggler carrying six containers of pesticide gets a fine of 40,000. I do not understand this. Honestly, I don’t have a good answer,” admits Dutch environmental prosecutor Rob de Rijck.

Unfortunately, this argument can also be used in Poland. It enough to consider a lorry driver who tried to smuggle 660 litres of alcohol of unknown origin and was caught at a Polish border crossing or a Volkswagen driver who wanted to smuggle 70 kilos of drugs instead of a spare wheel – their punishment would be swift and severe. For pesticides, it ends with a fine. In the case of alcohol, cigarettes and drugs, the police can investigate and break down organised crime groups. Why is it impossible in the case of pesticides? Why am I able to buy a banned and hazardous substance online in less than a minute? We are slowly beginning to understand that the black market for pesticides is a real threat. And that untested, potentially toxic substances are ending up on our tables. And that the people who profit from such trade are often not even held accountable.

Illegal trade in pesticides is a collective efforted from a team of investigative journalists: Eva Achinger, Lorenzo Bagnoli, Antonio Baquero, George Brock, Kristof Clerix, Anuška Delić, Staffan Dahllöf, Rasit Elibol, Caroline Henshaw, Nils Mulvad and Krzysztof Story. Their work was supported by Journalismfund.eu and Reporters in the field / Robert Bosch Stiftung. https://www.ir-d.dk/illegal-trade