Summary
Changes in the administration of the Certificate of Organic Inspection (COI) in the EU’s TRACES computerised trade facilitation system, aimed at strengthening traceability along organic supply chains have given rise to problems which could see some imports of organic products from ACP countries diverted back onto the general market, at substantial commercial cost to the ACP exporters concerned. The potential problem however has been swiftly identified and existing dialogue structures have been used to raise with the EC the specific concerns of ACP organic exporters. The EC has swiftly proposed modifications to the TRACES reporting scheme, with ACP exporters now being invited to clarify whether this solution addresses the administrative problem which had arisen. This issue in the organic sector highlights the vital importance of ensuring the smooth functioning of trade administration arrangements to ACP suppliers of short shelf life products. It raises serious concerns over the absence of any formal institutionalised mechanisms for ACP trade dialogue with the UK, should problems in trade administration documentation arise within the process of the UK’s departure from the EU customs union and single market.
On the 14th January 2020 the EC issued an implementing regulation which clarified the requirements for the issuing of the Certificate of Organic Inspection (COI) required for imported products to be placed for sale on the EU market as ‘Organic’ products.
The framework regulation requires imported organic products to be accompanied by ‘a certificate of inspection issued by the competent authorities, control authorities or control bodies of a recognised third country or by a recognised control authority or control body’. The new implementing regulation sets out all the authorised bodies recognised for the issuing of a Certificate of Organic Inspection and the procedures to be followed for new authorised bodies to be added to the list (1).
However, in addition it ‘clarifies’ how ‘the certificate of inspection is to be issued by the relevant control authority or control body at the moment the consignment leaves the third country of export or origin’ (1). This new requirement entering into force on 3rd February 2020.
However, according to a notification from COLEACP a survey of operators seeking to comply with the new regulatory requirement suggests ‘it takes a few days for the Control bodies to receive complete transport documents’, this ‘hinders the possibility’ to include accurate transportation related documentation in the relevant information boxes of the certificate of organic origin inspection ‘before the consignment leaves the third country of origin or export as required by Article 13(4) of Regulation (EC) No 1235/2008’. (2).
Since the submission of incomplete COIs would result in the loss of organic status for sale on the EU market this is a matter of considerable commercial concern. As the EC itself acknowledges price premiums on officially certified organic products can be ‘up to 150% higher than the price of comparable conventionally produced goods’ (3).
Against this background COLEACP raised the issue of the commercial impact of the new regulation with Freshfel and others to ‘request some amendments to the rule that would minimise negative consequences’.
On the 24th January 2020 COLEACP reported the European Commission had notified organic certification bodies and third country authorities that while ‘Implementing Regulation (EU) 2020/25 will still enter into force on 3rd February’ and COIs will still need to be ‘issued and signed before the consignment leaves the third country’, the TRACES electronic reporting system was being modified to allow the information boxes related to transportation information to be ‘included in the COI within 10 days from the issuance of the COI’, but before arrival and clearance in the EU member state in which it is first landed (2).
COLEACP described the EC’s swift response to the concerns raised as a ‘a very positive step’ and is now checking with commercial operators the feasibility of being able to comply with these new modified EU requirements (2).
This needs to be seen against the background of a situation where fully 44 ACP countries are involved in exporting organic products to the EU market, accounting for fully 13.6 % of the total volume of extra-EU organic imports.
Some 33 of these ACP countries are in Africa, 5 in the Pacific and 6 in the Caribbean, with by far the largest ACP organic exporter being the Dominican Republic which accounts for almost 62% of the total volume of ACP organic exports to the EU. The main organic exports from the Dominican Republic are
‘Tropical fruit, fresh or dried, nuts and spices’ (almost 90% and mainly bananas) with ‘Cocoa beans’ accounting for almost 10% of Dominican organic exports to the EU. In total there are 7 ACP countries involved in organic cocoa bean exports to the EU.
In the coming year the issue of the administration of organic certification requirements will need to be addressed in the context of the UK’s scheduled withdrawal from the EU customs union and single market, in a context where the UK may well no longer have access to the EU’s TRACES system which allows the post departure completion of the COI.
| Comment and Analysis
The identification of the practical problems faced in meeting EU traceability requirements for organic certification which have arisen at the beginning of 2020, highlight the importance of getting to grips with the practical consequences of the UK’s departure from the EU customs union and single market in terms of ensuing continuity in trade documentation essential to ACP exports to the UK market. The existence and apparent effectiveness of the formal structures of dialogue around these trade policy implementation issues in the EU context, highlight the need for the rapid establishment of similar UK specific structure of dialogue to identify and get to grips with difficult transitional issues which are likely to be faced in the establishment and operationalisation of UK only trade administration instruments and systems. This also raises the more general issue of the transitional arrangements to be set in place with regard to certification and authorisation requirements arising from the UK’s departure from the EU customs union and single market. In its September 2019 ‘BREXIT Preparedness Checklist for Companies Doing Business in the EU’, the European Commission highlighted how ‘in order to ensure product safety and the protection of public health and the environment, the placing on the EU market of certain products requires a certificate by a body established in the EU or an authorisation by an authority of an EU Member State’. It went on to point out if the UK leaves the EU without a transitional arrangement in place then all ‘certificates or authorisations issued by UK authorities or by bodies based in the UK are no longer valid in the EU’. This would appear to imply that unless and explicit commitment is forthcoming from the UK government to continue to recognise EU issued authorisations and certificates then goods without a valid UK recognised certificate or authorisation will not be allowed to be placed on the UK market. It may not only be organic products which could get caught up these kinds of transitional problems, with, in the absence of formal structures for dialogue with the UK government on these kinds of trade administration issues, other horticultural products potentially also getting caught up in these kind of issues during the period immediately following the UK’s departure from the EU customs union and single market. It would appear necessary to: a) prepare and forward to UK border control authorities, clear instructions on how to b) establish transitional arrangements for dealing with these anomalies so as to c) establish clear mechanisms for dialogue where trade administration problems are |
Sources:
(1) EC, ‘The Commission Implementing Regulation (EU) 2020/25 amending and correcting Regulation (EC) No 1235/2008, published in the Official Journal of 14 January 2020, will enter into force on 3 February 2020’, 13 January 2020
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32020R0025&from=EN
(2) COLEACP, ‘Positive amendments regarding Commission Implementing Regulation (EU) 2020/25’, 24th January 2020
https://eservices.coleacp.org/en/actu/positive-amendments-regarding-commission-implementing-regulation-eu-202025
(3) Organics sector on the rise as both domestic production and imports see large increases,12 March 2019
https://ec.europa.eu/info/news/organics-sector-rise-both-domestic-production-and-imports-see-large-increases-2019-mar-07_en
(4) EC, ‘Organic imports in the EU: A first analysis-Year 2018’
https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/farming/documents/market-brief-organic-imports-mar2019_en.pdf
(5) EC ‘BREXIT Preparedness Checklist for Companies Doing Business in the EU’, September 2019
https://ec.europa.eu/info/sites/info/files/brexit-preparedness-communications-checklist_v3_en.pdf