Importing organic products from third countries, DM 24.2.21 and EU rules

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DM 24.2.21, in the Official Gazette 19.3.21, aspires to regulate the import of organic products from third countries. (1)

An a priori enhanced control regime is introduced, which is incompatible with Regulation (EU) 2017/625 as well as unnecessarily burdensome for the Italian food supply chain and consumers.

Moreover, public authorities have an obligation to disapply the decree, since it was never notified to Brussels as it should have been.

DM 24.2.21, import of organic products

The ministerial decree repeats some concepts already contained in European or national legislation:

– only enterprises registered in the appropriate category of the national list of organic operators maintained by MiPAAF can import organic products,

– importers and inspection bodies must use the TRACES(Trade Control and Expert System) computer system to register and monitor incoming goods,

– prior telematic communication to the ministry at least 7 days before the arrival of each consignment at the customs point of entry is required.

However, the ministry adds operator rating criteria and presumptions of risk, resulting in additional burdens of analysis and controls, which are neither reflected nor compatible with EU rules.

Reinforced control measures

A presumption of high risk, which is followed by ‘reinforced control’ measures, applies to all importers who have experienced one or more of the following in the past five years:

– Irregularities and infractions,
– More than five imports in the previous year,
– A single import of goods in quantities exceeding 1 tonne
– Import during the year of organic and conventional products.

Operator ratings and frequency of inspections

Operators who are not in one of the situations mentioned in the previous paragraph are considered ‘low risk’ and therefore subject to at least one annual inspection.

Just one of the above contingencies results in the operator being placed in the ‘medium risk’ class, resulting in at least two inspections per year.

More than one of the above-mentioned eventualities, i.e., the allegation of irregularities and infractions, trigger the high risk class, with three or more inspections per year.

Rating observations

The annual inspection program that bodies are required to submit to the ministry already stipulates that the planning of the frequency of inspections and the intensity of inspection visits to enterprises should be worked out on the basis of the risk analysis, also taking into account the results of previously performed inspections. With more frequent inspections, including unannounced inspections of previous noncompliances

The rating criteria established in the reg. EU 2017/625 – whose scope also includes controls on organic products-are themselves structured on a complex matrix. Which must be based not on presumptions but on a concrete risk analysis that includes specific risks related to supply chains and products, logistics, countries of origin, etc. (3,4).

Italy, the numbers of organic

Organic production in Italy involves more than 80 thousand enterprises. 59,000 farmers, plus 12,000 farmers who process their own produce and 10,000 processing enterprises. The inherent richness of small farms is complemented by larger farms, cooperatives and consortia, craft and industrial enterprises. With sales of € 4.5 billion in the domestic market and € 2.6 billion in exports.

Imports of organic commodities in Italy, conducted by about 500 operators, amount to 26,000 tons of bananas, 24,000 tons of soybean cake (for feed), 13,000 tons of cane sugar, 7,000 tons of soybean bean, 6,500 tons of cocoa, 5,200 tons of coffee, 3,500 tons of sunflower seeds, 1,600 tons of spices, 1,500 tons of dates, dried figs and pineapple, 750 tons of raisins, etc. Most of the products of South American and African origin, to a lesser extent those from Asia, come from fair trade projects. (5)

Italy, possible application implications

Italy does not produce bananas or coffee or cocoa, and domestic soybean production alone is not enough to make up the feed that supplements pasture and animal fodder on organic farms (4million chickens, 400 thousand cattle, 50 thousand pigs, etc.).

Import is a widespread need that MiPAAF completely overlooks, however, in assuming ‘high risk’ outside the criteria set out in reg. EU 2017/625.

An operator who imports 1 ton of cane sugar, equal to 2/3 the load capacity of a Ducato van (1.5 t), slightly more than the capacity of a Piaggio Apecar (0.7 t), is assumed to be at high risk.

Italian paradox

The presumption of risk theorized in DM 24.2.21 has paradoxical consequences. An operator who performs six small 1-ton imports, for example, is considered more ‘at risk’ than one who imports 100 tons of the same products at one time.

An Italian operator importing 1 ton of rice oil (which no one in Italy produces), worth about €2,000, would have to perform a multiresidual analysis costing more than €200, or 10 percent of the cost of the cargo, plus the cost of additional inspection visits.

Harm to Italian operators and consumers, unconstitutionality

This legislation incorporates reverse discrimination to the detriment of operators as well as Italian consumers. Unconstitutional discrimination (6,7) it is capable of causing:

1) Relocation of import activities. Higher costs to import derricks from third countries through Italy give unfair advantage to importers in other member states (e.g., to Rotterdam in the Netherlands, Hamburg in Germany),

2) Increased costs of raw materials, so thus increased prices of organic products in the market. To the detriment of production and distribution companies, which are thus also penalized in international markets, as well as Italian consumers.

Burst analysis

The analyses required by the italic ministerial decree should intervene on every batch, in cases of organic products:

– coming from Argentina, Brazil, Ecuador, Egypt, India, Peru, Serbia, Tunisia and Turkey,

– fruit juices and purees, oilseeds (sunflower, soybean), grains (wheat, quinoa), and coffee. A thrashing of Italian organic roasters and industries,

– Country of export other than country of origin. Eg. cocoa sold by a Swiss trader, tea sold by a trader from Britain.

Diplomatic incidents ahead

The European Commission – As a result of appropriate analysis, audit on the spot and negotiations-signed on behalf of the now 27 member states agreements on mutual recognition of equivalence of effectiveness of production systems, control measures and guarantees of conformity of organic products with a number of third countries. These include Argentina, India and Tunisia.

The controls of authorities such as the Tunisian Ministère de l’Agriculture, des Ressources Hydrauliques et de la Peche, SENASA(Servicio Nacional de Sanidad y Calidad Agroalimentaria) in Argentina, APEDA(Agricultural and Processed Food Export Development Authority) in India-are recognized as equivalent to that of EU member states. Denying this, assuming the high risk of the operators certified by them, will cause diplomatic incidents with the respective countries.

Duplicate controls

Conversely, the European executive is keeping its guard up on products arriving from China, the Russian Federation, Kazakhstan, Moldova, Ukraine and Turkey, which are subject to a reinforced European control plan. That is to say, for each incoming consignment–over a much wider variety of products than provided for in Ministerial Decree 24.2.21–one must check traceability and conduct a customs analysis.

However, Italian ministerial officials stipulated that goods arriving from Turkey be subjected to additional and separate procedures and control measures than those established in the EU. Regardless of the strengthened European control plan, to which not even due mention is made for the express purpose of preventing the duplication of controls and related burdens for Italian importers and their customers alone, who are once again discriminated against compared to those in other member states.

Kafka at customs

The authors of Ministerial Decree 24.2.21 also overlooked the charges and costs for customs access for inspection bodies. In fact, the inspector deputized to conduct bio checks must come escorted by specialized personnel from the Customs Agency, after agreeing on an appointment based on availability. If the inspection visit and the taking of samples for analysis are not immediate, the container has to stop at customs, incurring additional costs for the importer.
Who should pay daily port charges for occupying the storage area beyond the second day until the accredited laboratory has delivered the analysis report.

The time and cost of customs clearance are therefore neither determined nor determinable, in a condition of uncertainty that is intolerable for a business operator. When instead one could allow immediate customs clearance of consignments with compliant documentation, with a view to sampling for analysis at the importer to be appointed custodian, with a requirement to keep tanks and containers stationary and sealed while waiting for the green light.

DM 24.2.21, duty of disapplication by any authority

EU Directive 2015/1535 strictly requires prior notification to the European Commission of any draft national technical regulations that may affect the production and placing on the market of goods and certain services. Following notification, the member state must refrain from implementing the notified rule, for a minimum period of three months(standstill period), until Brussels’ green light.

The bizarre decree under consideration was never notified to Brussels, as can be seen by consulting the TRIS(Technical Regulations Information System database) registry, years 2020-2021. Therefore, DM 24.2.21 is devoid of substantive effect, although it is only apparently in effect. And any public authority has a duty to disapply it ex officio, according to unanimous case law of the EU Court of Justice confirmed by the Court of Rome (8,9,10).

Responsibility

We are unfortunately, once again, faced with an outlaw measure. An act of unnecessary hindrance to public inspection authorities-which, as it turns out, have a duty to disapply it-and burdensome costs for supply chain operators. Who, in each case, organize to ensure the enforcement of regulations that are illegitimate but hitherto believed to be in force.

Agriculture, Food and Forestry Minister Stefano Patuanelli must now turn the mismanagement of his department around. Identify who introduced rules in the draft decree to Brussels that were manifestly incompatible with EU rules and who endorsed them, including by failing to notify Brussels.

Governance and good governance

The transversal power that systematically afflicts Italian-based businesses and the reputation of the country system-orchestrating discriminatory measures against them, as well as contrary to European law (11)-has historically been that of the Coldiretti magic circle. (12) Although in this case the measure suffers from the generic and cross-cutting tension to counter the import of foodstuffs, when they do not compete with and indeed characterize domestic productions (coffee, cocoa, raisins).

The Italian agribusiness system now needs good governance that must guarantee the complete independence of the public administration from partisan private interests, which still hinder the activities and competitiveness of companies in international markets. (13) And it is evident how globalization cannot be regulated one-way, demanding preferential duties and favorable terms on theexport of our high value-added products, except to impose unjustified burdens on theimport of agricultural raw materials and semi-finished products from the same countries.

Agroecology and ecological transition

The case under consideration is all the more odious because it hinders the development of the organic farming system that European strategies Farm to Fork e Biodiversity 2030 instead aspire to promote as a model to be followed, for the sustainable development of supply chains with the highest respect for ecosystems and animal welfare (14,15).

FAO(Food and Agriculture Organization, UN) in turn recommended that member states in 2019 incentivize small-scale enterprises engaged in agroecology. (16) After the UN General Assembly, on 11/17/18, adopted the United Nations Declaration on the Rights of Peasants and Other People Working in Rural Areas. (17) Therefore, it cannot be accepted that these rights, which are essential to ecological transition, should be trampled on by Coldirettian autarkic regurgitations.

#CleanSpades, legality and progress.

Dario Dongo and Bianca Crivello

Cover design by artist @PatChappatte

Notes

(1) Ministerial Decree 24.2.21 no. 91718. Provisions for the implementation of Reg. 1235/2008 laying down detailed rules for the implementation of Reg. 834/2007 of the Council regarding the import regime of organic products from third countries and repealing Decree No. 8283 of February 6, 2018. In Official Gazette 19.3.21, no. 68

(2) The text of DM 24.2.21 differs in several points from the version presented by MiPAAF at the Organic Agriculture Technical Table 4.12.20. Governance is confirmed as not being at home, at the department in Via XX Settembre

(3) Dario Dongo. Official public audits, operator ratings, and transparency. Does it portend a breakthrough? FARE(Food and Agriculture Requirements). 4/28/17, https://www.foodagriculturerequirements.com/archivio-notizie/controlli-pubblici-ufficiali-rating-degli-operatori-e-trasparenza-si-preannuncia-una-svolta

(4) Reg. EU 2019/1793, on the temporary increase of official controls and emergency measures governing the entry into the Union of certain goods from certain third countries, and implementing Regulations (EU) 2017/625 and (EC) No. 178/2002 (…) and repeals Regulations (EC) No. 669/2009, (EU) no. 884/2014, (EU) 2015/175, (EU) 2017/186 and (EU) 2018/1660

(5) Dario Dongo. Fair trade, ABC. The Christmas we would like every single day. GIFT (Great Italian Food Trade). 22.12.18,
https://www.greatitalianfoodtrade.it/progresso/fair-trade-abc-il-natale-che-vorremmo-ogni-santo-giorno

(6) The European Court of Justice is unanimous in declaring these kinds of measures as equivalent to quantitative restrictions on the free movement of goods, therefore incompatible with the TFEU (Treaty for the Functioning of the European Union). V. ECJ, Case 83/78(Pigs Marketing Board), judgment 29.11.78

(7) The Italian Constitutional Court has in turn ruled that reverse discrimination is unconstitutional because it conflicts with the ‘principle of equality and freedom of economic initiative, which are protected by Articles 3 and 41 of the Constitution (…) The disparity in treatment between domestic and EU companies, while irrelevant to EU law, is therefore not irrelevant to Italian constitutional law‘ (Constitutional Court, Judgment No. 443/1997).

(8) ECJ, ‘Fratelli Costanzo’ judgment (Case C-103/88, paras. 31-33)

(9) Dario Dongo. Food Regulations and Enforcement in Italy. Reference Module in Food Science, Elsevier, 2019. ISBN 9780081005965. https://doi.org/10.1016/B978-0-08-100596-5.21172-4, http://www.sciencedirect.com/science/article/pii/B9780081005965211724

(10) So too did the Court of Rome in the case of Leg. 145/17 (decree establishment location in food labeling). V. Trib. Rome, XVIII Civil Section, proceedings no. r.g. 41840/2018 (Andrea Olivero vs Dario Dongo), order 3.1.19. V. https://www.greatitalianfoodtrade.it/etichette/sede-stabilimento-decreto-inapplicabile-per-il-tribunale-di-roma

(11) The first exemplary case was DL 155/04, signed by then Agriculture Minister Gianni Alemanno, which in Article 1-bis had prescribed mandatory indication of the origin of all ingredients contained in every food product made and packaged in Italy. The writer (Dongo) reported this rule to the European Commission, which enjoined the Italian government to refrain from applying this rule

(12) The latest official sign of Coldiretti’s infiltration of Italian agricultural policies is the conflict of interest of its acolyte Gabriele Papa Pagliardini, director general of AGEA. V. https://www.greatitalianfoodtrade.it/progresso/agea-coldiretti-la-commissione-europea-boccia-il-conflitto-d-interessi

(13) The utmost attention must also be paid to the interference of the Coldiretti magic circle with the procedures for awarding public Rural Development funding. As mentioned in the procedure, which is still ongoing, concerning biodiversity in cattle breeding. See paragraphs Public Notice, Public Notice and Private Interests, Justice, in the previous article https://www.greatitalianfoodtrade.it/mercati/aia-fedana-e-il-vitello-d-oro-allevatori-in-rivolta-l-esempio-di-anarb

(14) Dario Dongo, Marina De Nobili. Farm to Fork special, the strategy presented in Brussels on 5/20/20. GIFT (Great Italian Food Trade). 5/24/20, https://www.greatitalianfoodtrade.it/progresso/speciale-farm-to-fork-la-strategia-presentata-a-bruxelles-il-20-5-20

(15) Dario Dongo, Giulia Torre. Special – EU 2030 Biodiversity Strategy, the plan announced in Brussels. GIFT(Great Italian Food Trade). 5/31/20, https://www.greatitalianfoodtrade.it/progresso/speciale-strategia-ue-2030-per-la-biodiversità-il-piano-annunciato-a-bruxelles

(16) Dario Dongo, Camilla Fincardi. Agroecology, SDGs, salvation. FAO’s decalogue. GIFT (Great Italian Food Trade). 12.4.20, https://www.greatitalianfoodtrade.it/progresso/agroecologia-sdgs-salvezza-il-decalogo-della-fao

(17) Dario Dongo. Peasants’ rights, UN Declaration. GIFT (Great Italian Food Trade). 11/23/18, https://www.greatitalianfoodtrade.it/progresso/diritti-dei-contadini-dichiarazione-onu

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Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.