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Challenges and solutions on import-export EU-USA in new legislation • OTA,JohannaMirenda,AlexisCarey
• AOEL,JohannaStumpner
• AllianceforOrganicIntegrity,BovanElzakker• OPTA,KarstKooistra,TradinOrganic,moderator
USA, NOP. New Rule: Strengthening Organic Enforcement
• ProposedRulepublishedAugust5,2020• Aimstobuildconsistentcertificationpracticestodeteranddetectorganicfraud,improvethetraceabilityoforganicproductsthroughoutthesupplychain,andprotectorganicintegrity.
New Rule: Strengthening Organic Enforcement • Expandsthetypesofbusinessesthatarerequiredtobecertified(importers,exporters,traders,brokers)
• RequireselectronicimportcertificatesforallshipmentsoforganicproductsenteringtheU.S.
• Requireseveryoperationtohavemonitoringpracticesandprocedurestopreventanddetectorganicfraud
• Requiresrisk-basedsupplychainauditsandmass-balanceexercises.
New Rule: Strengthening Organic Enforcement • EstablishesnewrequirementsfordatareportingtotheUSDA-NOPINTEGRITYDatabase
• Formalizesstandardsforgrowergroupcertificationpractices• Raisesthebarforinspectorandcertifierqualifications• Andmore…
Next Steps • PubliccommentsaccepteduntilOctober5,2020.• 1,500CommentsSubmitted• USDA-NOPReviewingCommentsandDevelopingFinalRule• FinalRuletobepublished(2021?)• PhasedImplementation(1+years)
U.S. – EU + UK Trade Data
• U.S.tradewiththeEU/UK(fromavailabledata)
• 2020exportstoEU+UK:$12.4millionUSD(up5%)
• 2020importsfromEU+UK:$295millionUSD(down11%)
U.S. – EU Organic Equivalence Arrangement
• NewarrangementmustbesignedbyJan1,2026topreserveorganicequivalence
• Scopeofcurrentarrangement,inclusionsandexclusions• Noantibioticsadministeredtoanimals,no3rdpartyallowances,labeluse,etc.
• Processofnegotiatinganequivalencearrangement• Side-by-sidestandardsreview,combinedeffortofUSDA/USTR
• AnticipateddifferencesinU.S.–EUstandards• Growergroups,importcertificatesanddatatransparency,residuemanagement
U.S. – UK: New Organic Equivalence Arrangement
• Scopeofthearrangement• Crops,WildCrops,Livestock,ProcessedProducts
• Excludesagriculturalproductsderivedfromanimalstreatedwithantibiotics/aquaticanimals
• Importandexportprocedures• NewformrequiredforGreatBritain(England/Scotland/Wales)• NorthernIrelandmaintainsuseofTRACES
• Challenges:• ExportingtoEUviaUK• Increasedtimeandcosts,newpaperwork
New organic regulation in the EU
JohannaStumpnerAöLe.V.
Biofach,19.02.2021
New org. regulation in the EU
• Regulation(EU)2018/848publishedàpostponedto01.01.2022• Secondarylegislationunderdiscussion(4furtheractsalreadypublished-actsonpermittedsubstancesforuseinorganicproduction,controlandtradestillindiscussion)
• Highlightsofthenewrules:1. Definitionoforganicbreedingtechniquesandorganicheterogenousplanmaterial2. DatabasesfororganicseedsharmonisedandobligatorythroughouttheEU3. Detailedrulesonhandlingofsuspicionofnon-conformitiesforoperatorsand
controlbodies/authorities4. Precautionarymeasuresandsystematiccriticalcontrolpointsestablishedfor
EVERYoperatorinthechain
19.02.2021 10
New org. regulation in the EU
5. MoreharmonisationofcontrolswithintheEU(catalogueofmeasures,rulesonmass-balance-checks,on-the-spotchecks,etc.)
6. Stricterrulesonflavouringoforganicproducts7. Newrulesforcleaninganddisinfectionfororganicprocessingand
storage8. Rulesonprocessingtechniques(banofionexchange)9. Scopeoftheregulationhasbeenbroadenedtoalistproducts
whicharenotfromagriculture,butclosetoit
19.02.2021 11
Challenge: Where do we come from?
• SpecialreportoftheEuropeanCourtofAuditorsfrom2019:therearestill
weaknessesinthecontrolsystem
concerningimportedorganicproducts
• In2018,114countriessentorganicproductstotheEU.[…]Around87%of
theimportedorganicproductsare
certifiedbyequivalentcontrolbodies.
19.02.2021 12
Challenge: Where do we come from?
19.02.2021 13
Solution: System change in the EU
19.02.2021 14
Conformity
Equivalency
Marketgrowstoofast,importgrowstoofasteither…
Whats new in the EU? • Regulation(2018/848),Article45
• ProductsareconformwiththerulesoftheEUregulation(conformity)
• Productsareimportedviaabilateraltradeagreement(equivalency)
• (foratransitionalperiod):Productsareimportedviaequivalentthird
countriesliketodayuntiltradeagreementsareconcluded(equivalency)
19.02.2021 15
Whats new in the EU?
• Article45(2),Reg.2018/848• COMcanissuespecialapprovalsforproductsandsubstances
• otherclimaticconditions,productsthatwedonothavehereintheEUatall,etc.
• Approvalfortwoyears• Currentproposalunderdiscussion:automaticrenewalfortwoyearsifnochangesaremade
19.02.2021 16
Trade agreements
• Currentequivalentthirdcountriesarevalidtil2026• Untilthenbilateraltradeagreementswillhavetobereached
• Therearealreadyfirstmeetingswithdifferentcountries,e.g.USA• EUfocusesprimarilyonthosecountries,whichtheEUexportsmostlyto
19.02.2021 17
Recognition of Control Bodies
- TherewillbedetailedrulesontherecognitionandsupervisionofCBsinthirdcountriesaddedtoregulation2018/848- LookingatespeciallytopicslikequalificationofCBauditors- InternalprocessesoftheCBsliketimelyreactiontonon-conformitiesandcasesofsusicion,aswellascatalogueofmeasures
- Givingquotaforadditionalinspections- ButalsoqualificationofsupervisorsattheCommissionandaccreditationbodies
19.02.2021 18
Whats new in the EU concerning import?
• NewdefinitionandrulesforGroupcertification(seenextpresentationbyBovanElzakker)
• MoredetailsoftheoperatorscertificateinthirdcountriesandrevisionoftheCOIinTRACES
• Introductionofso-called"BorderControlPoints"(BCP)=organicgoodsshouldonlybeimportedintotheEUviacertaincustomsofficesattheexternalbordersoftheEUàwouldreducethenumberofcustomsofficesbyalot
• Stillunderdiscussion,becausethereisalotofdisagreementonthepracticabiltyofthisruleandespeciallycustomsauthoritiesarecomplaining
19.02.2021 19
Whats new in the EU?
19.02.2021 20
TRAVELPLANIndiscussion
BREXIT • TradeagreementbetweenEUandUKcovers
organicproducts
• UKcontrolbodiesarerecognisedasequivalent
already,willswitchtorecognitionoftheUKas
equivalentthirdcountry
• Agreementdoesnotcoverproducts,whichareonly
tradedthrough,orre-packaged/re-labelled
• Definitionof„processing“fromthehygiene
regulation852/2004
“TheorganicproductslistedinthisAppendixshall
beunprocessedagriculturaloraquaculture
productsproducedintheUnitedKingdom/EUor
processedagriculturalproductsforuseasfoodor
feedthathavebeenprocessedintheUnited
Kingdom/EUwithingredientsthathavebeen
grownintheUnitedKingdom/EUorthathave
beenimportedintotheUnitedKingdom/EUin
accordancewithUnitedKingdom/EUlawsand
regulations.”
19.02.2021 21
BREXIT
• ForimportsfromtheUKtotheEUaCOIviaTRACESisneeded• ForexportsfromtheEUtotheUKaCOIinpaperbasedformisneededfromJuly1stonwardsàwillswitchtoelectronicsystemwithtime
• Tradeagreementisvaliduntilendof2023,willthenbere-evaluated
*COI=CertificateofInspection
19.02.2021 22
BREXIT – challenge for EU-US trade Year Exportcountry Importcountry Category Volume(t)
2018 UnitedStates UnitedKingdom Rice 133.6572018 UnitedStates UnitedKingdom Rice 14.2462018 UnitedStates UnitedKingdom Fruit,freshordried,excl.citrus&tropicalfruit 2.6492018 UnitedStates UnitedKingdom Wine,vermouth,ciderandvinegar 1.7322018 UnitedStates UnitedKingdom Vegetables,fresh,chilledanddried 1.6092018 UnitedStates UnitedKingdom Soupsandsauces 1.5772019 UnitedStates UnitedKingdom Soupsandsauces 1.5422018 UnitedStates Netherlands Fruitjuices 1.5412018 UnitedStates Netherlands Vegetables,fresh,chilledanddried 1.4342019 UnitedStates Netherlands Vegetables,fresh,chilledanddried 1.2282019 UnitedStates UnitedKingdom Vegetables,fresh,chilledanddried 1.1452018 UnitedStates Netherlands Fruitjuices 9752019 UnitedStates Netherlands Fruitjuices 9732018 UnitedStates Netherlands Vegetableoilsotherthanpalm&oliveoils 6822019 UnitedStates Netherlands Sugar,otherthanbeet&cane 6682019 UnitedStates Germany Preparationsofvegetables,fruitornuts 617
19.02.2021 23
Challenges and solutions EU-US trade • EUandUSbothwanttotackleorganicfraud–botharechangingtheirregulatoryframeworks
• Gettingmoreintodetail,requiringmoredocumentationandtraceability,switchingtoelectronicsystems(e.g.importcertificates)
• EUandUSdohavedifferentapproachesonafewtopicsFromEUperspective:USisanimportantpartnerintradeAsineverygoodrelationship:SOLUTIONISCOMMUNICATION!Talktoeachother,notabouteachother!Especiallyinthenowopeneddiscussionaboutanewtradeagreement!
Grower Group certification (EU: Group of Operators)
BovanElzakker(AgroEco,AFI,AOI)
Challenges for smallholder farmer’ groups
• OrganisedinanICS,sometimesmanagedbyacooperative,sometimesbyacompanysourcingfromthem.
• Quiteavariety,smallandlarge,singlecroporarange,oneormoreforexportandrestlocalmarkets,older-wellorganized,younger,smaller–vulnerable
• Smallholderfarmersproducingcoffee&cocoa,banana&pineapple,nuts,herbs&spices,wildcollection,oilseeds,driedfruits,lowandhighvaluecrops
• ResponsibleformajorityofimportsintoEUandintoUS,rawmaterialsoringredients• Coleacpwebinar17February15:00-16:00hrs:FutureEUandUKorganicregulations:potentialimpactsontradewithAfrica.
• IFOAMOE/EOCCwebinar18February16:00-17:30hrs:EUregulatorychanges,effectsonInternationalTrade
• FIBLwebinar19February12:00:ICScurrentandfuturechallenges• Disruptionoftrade,$$$,integrityaspects
NewEUorganicregulation(EU2018/848)withdelegatedacts• Notyetpublished(14JanImplementingRegulationfinal)
• layingdowndetailedrulesfortheimplementationofRegulation(EU)2018/848oftheEuropeanParliamentandoftheCounciloncontrolsandothermeasuresensuringtraceabilityandcomplianceinorganicproductionandthelabellingoforganicproducts
• GroupcertificationalsoallowedinEU,leadingtochangesinrequirementsforgrowergroupsinglobalsouth
• LotofimpactonexistingandnewGGsintheglobalsouth,notsureofanyuptakeinEurope.
• ConsequencesparticularlyforcompanymanagedgrowergroupsandsmallerGGswithlimitedturnover
NewUSDASOErule• Formalisesrequirementsforgrowergroups(usedtofollowEUandIFOAMguidance)• Notsostrict,descriptive.NotforUSfarmers
Equivalence• Someoverlap,differenceinterminology• Bothsideschangeandareinatradeagreementthatisbasedonequivalency.• Requirementschanging,interpretationandimplementationtobeseen• Responsibilitythatagroupcanbeeasilycertifiedtobothregulations,andmore.
Background:• NeverenforceddecertificationofentiregroupduetofailureofICS.• Whilethereareregularlyproblemswithintegrity• Abilitytosanction,de-certifyanidentifiedgroup,product.• Reflectedingroup’sorganisation,ICS,traceability,externalcertification
1.Eachgrouptoformlegalpersonality• Legalbasistocertify,sanctionetc.• Independencefromprocessor/exporter• Registration,board,bankaccount,office
• Whileintheprologue(6)intheIRitsaysGoOshouldbeabletogeneratesufficientresourcestoestablishanefficientICSrelyingonqualifiedstaff
• WhiledevelopingfarmerorganisationsthatcanimplementanICSneedslongleadtimes• Absenceofcapacity,competenceinthecommunities• Infrastructure(power,telephoneandinternetconnection)lacking
2.Limittosizeofgroup• Max2.000(was500inearlierdraft)
• Guaranteegoodmanagement,communication,implementmeasures
• Onlysmallholders-largerfarmers,processingunit:individualcertification• Requiresre-organisation,alsoofwellfunctioninggroups
3.Eachgroup‘own’ICS• EUwantsfarmerstooperate,own,areresponsiblefortheirICS• Donotwantthe(external)processor-tradertomanageit• CanbesameformatascompanyICSbutlimitedtothegroup.• Own(trained)ICSinspectors• OwnICSmanagerwhocancommunicatewithCB• Takemeasuresintheeventofsuspicions• USexpectslargergroupstoformsubgroups
4.Differentcontrolrates• EU:ofthegroup10%unannouncedand10%additional• EU:ofthefarmersminimum10,5%re-inspected• EU:2%sampling,annually,accreditedlaboratory• US:1.4√farmers• US:trainingrequirementsinspectorsandcertifiers• Riskassessment?
Questions, consequences • DoesnotfitthewidediversityintheGoO-GG• Complyby01Jan2022.Timetoadapttothe2.000numberby01Jan2025
• Operators,evenCBshardlyknowaboutthis• Regulationsforlegalpersonalityverydifferent,differentgovernmentattitudes
• Lackofcapacitytoestablishthelegalentity,embedtheICSinit• Lackofhumanresources,ofbasicinfrastructure,whopays
• Interpretation:companymustdelegateorcontinuewithcentralmanagement• Whoorganisestheinspection,communicateswiththeCB• Whoholdsthecertificate,isresponsible,intervenesincaseofirregularities
• Externalinspectionmoreexpensiveduetosampling(lackoflocallabs)• Whilegoodexternalinspection,riskbasedismoreeffectiveandcheaper
• Significantincreaseoforganicpremiumrequired• Lessmoneyandattentiongoingtofarmingpractices,inputs,weakeningorganicintegrity
• Commercialoperatorssayitisdestroyingtheirvaluechain• Cannotcontrol,guaranteeorganicqualitywhendelegatingtofarmers
• Exportersdonotexpectthemarkettopayforstructurallyhighercosts• Disruptioninsupplies2022
While• Rootcauseofpresenceofprohibitedsubstancesisnotaddressed• Useofriskassessmentatvariouslayersignored• Group(internal)responsibilitynotreallyaddressed• Fieldcertificationvswholefarmconversion,singleproductfocus
• Therequirementsareasignificantbarriertostartnewgroups
Solutions
• Formulateandcommunicateconcernsasasector• EU&NOPandlocalCBstodevelopcommoninterpretationfordifferentsituationsandtestthesewithauthorities
• FIBLisdoingsomeresearch(needsassessment,solutions)–situationneedsmoreresearch
• GIZisfundingtobuildcapacitytosupportexistinggroupstore-organise-needsmoredonors
• EUandUStoharmonizetoavoidproblemswithequivalence
Summary; Challenges and Solutions
USANOP;newRule(1500publiccomments);• electronicimportcertificates,raisingthebar.• traceabilityoforganicproducts,protectorganicintegrityEU• harmonisationofcontrolsandinterpretation• rulesonprocessingtechniquesGroupcertification• EUNOPcommoninterpretation,harmonisation
