Inspection of SPS standards by ricochet. The CJEU on extra-EU enforcement of process standards in BRF v EC.

The CJEU (General Court) held in Case T-429/18 BRF SA et al v European Commission  this week.  I need to think a bit more about the implications of the judgment, particularly as I am keen to submit a research grant somewhere to investigate how, practically speaking, the EU may enforce EU process standards on production taking place abroad.

The GC refers to this challenge at 79 in fine where  it says ‘neither the Commission nor the Member States have enforcement powers in respect of establishments outside the European Union or countries not directly subject to obligations imposed by EU law.’ In the case at issue, Regulation 854/2004 provides that the possibility for third country establishments to export products of animal origin (for BRF: poultry) to the EU market requires, first, the country in question and, second, the establishment concerned be included on the lists provided for in those provisions.

The Court held that the Commission is within its rights to establish the reliability threshold of the guarantees provided by the competent authorities of a third country at a particularly high level and may thus go so far as to require, by reference to essential parameters, practically irreproachable performance on the part of the competent authorities of third countries (at 80). As far as its duty to state reasons is concerned, at 84:

The Commission stated, in recitals 4 and 5 of the contested implementing regulation, that the Brazilian authorities had been requested to take the necessary corrective actions to remedy the serious and repeated cases of non-compliance with EU requirements due to the presence of salmonella in poultry meat and poultry meat preparations. It is apparent from the information provided by those authorities and from the results of the official controls carried out at the borders of the European Union, however, that the necessary actions had not been taken, so the placing on the market of the products from the establishments concerned constituted a risk for public health. Those reasons relate to the 10 establishments belonging to the applicants and set out in the second table of the annex to that implementing regulation.

At 88: detailed reasons per establishment, for removal from the list, are not required.

More can be said about the judgment however at this stage I jus want to point out the somewhat messy implications of lack of extraterritorial enforcement powers. It puts foreign establishments at the mercy of their own food and feed inspection authorities. For  while EU law requires that some level of tailor-made information be available at individual establishment level, ultimately lack of diligent inspection by the local authorities will ricochet unto individual corporations’ export opportunities.

Geert.

 

 

 

SPS meets Geopolitics: the Lithuanian WTO complaint against Russia’s restrictions on dairy

Lithuania is suspecting that a combination of its currently holding the rotating presidency of the European Union, and Russian jittery over an impending trade and association agreements with the Ukraine, Moldova and Georgia (Armenia has pulled out under Russian pressure), explains the actions taken by Russia against Lithuanian Diary imports.

Russia notified the measure to the WTO on 11 October. Not much detail is given in the notification as to the health hazard identified, other than ‘due to detection of incompliance to microbiology, sanitary chemical and organoleptic requirements.’ – a fault which it had recently found in Russian dairy products, too and which of course Lithuania are denying.

How and where the Lithuanian complaint is currently developing is a little bit fuzzy: the EC has reportedly spoken at the WTO against the Russian action, on behalf of Lithuania (and of course to the dislike of Russia) , however I understand informal talks are underway, too.

Geert.

International standards, Codex and a new SPS dispute in the making: EU US (Ractopamine)

Alberto Alemanno reports on some crucial developments in the development of international SPS standards. Prof Alemanno links to recent EU Agriculture Council conclusions which are a treasure trove of issues linked to the WTO’s room for domestic regulatory autonomy.

In brief, the FAO/WHO’s Codex Alimentarius Committee adopted limits for the use of ractopamine (a veterinary drug used to pimp pigs) which are more lenient than the EU’s (albeit stricter than those of the US). While the WTO Agreement on Sanitary and Phytosanitary Standards – SPS, encourages WTO Members to apply standards which conform with international standards, it also allows for recourse to the precautionary principle in the case of scientific uncertainty (Article 5.7).

The EU Ministers have decided to continue employing its own, stricter standard, and have instructed the European Commission to ensure that exporters to the EU that employ a weaker standard, set in place a parallel system for export to the EU (one which guarantees that the EU’s stricter standard is being abided by in export to the EU).

The EU’s resolve on this issue is firm. The likelihood of a challenge under the WTO Dispute Settlement very high. As Alberto points out, even in Beef Hormones, Article 5.7 was not employed. Before a WTO Panel would come to that, it would also have to assess the qualities of the relevant Codex decision as an international standard, given the slim majority with which it was adopted (which brings back memories of EC Sardines).

Risk management never fails to pop up on time for first term exam questions.

Geert.