Start of sanctions

The Decree entered into force on Nov 3, 2015, but includes ‘transitional and conclusive provisions’ allowing non-conforming goods to be offered until available quantities are depleted. Any contracts between suppliers and schools concerning non-conforming food, concluded before Nov 3, 2015, have one year to be brought into conformity with the measure.
Enforcement of the Decree has begun; some food suppliers have recently been subject to sanctions for offering products with palm, coconut and rapeseed oils, and cocoa.

Bulgaria has notified the EC of the Decree, but there is no evidence that it has informed the TBT Committee or the SPS Committee, as required under WTO rules on transparency. Nor does it appear as though any WTO members have raised any relevant ‘specific trade concerns’ in the context of such committee meetings.

comment-new-trade-moves-oil-bottle

The next meetings of the SPS Committee and TBT Committee are scheduled from Oct 27-28, 2016 and Nov 10-11, 2016, respectively. Stakeholders must act quickly so that relevant ‘specific trade concerns’ are included in the meeting agendas and that statements can be prepared. Affected businesses in the EU may consider legal options as well.

Ambivalence in Czech Republic

The Czech Ministry of Agriculture has had to field complaints and attempts to encourage it to prohibit the sale of products containing palm oil. At a press conference on Feb 5, 2016, Agriculture Minister Marian Jurečka said the Ministry would not prohibit the sale of products containing palm oil, noting that there is no evidence regarding negative health effects.

He indirectly referenced Regulation (EU) No. 1169/2011 of the European Parliament and of the Council of Oct 25, 2011 on the provision of food information to consumers. He recognised that, as of December 2014, all products containing palm oil must be labelled as such in their lists of ingredients.

However, on March 15, 2015, a seminar on palm oil – themed ‘Defend palm oil?’ – had been held in the Chamber of Deputies within the Parliament. It was organised by Olga Havlová, Member of the Chamber of Deputies and Vice-President of its Committee on Agriculture.

At a press conference afterwards, Havlová stated that she intended to table a bill to prohibit the sale of products with palm oil in schools and hospitals. She cited alleged (though unsubstantiated) health risks associated with palm oil consumption.

There may be an ulterior motive, as the Czech Republic has a major dairy industry. Reports suggest that margarine containing palm oil has increasingly replaced butter in many food products.

On May 13, 2016, the Czech Republic notified the EC, using TRIS, of its ‘Draft implementing decree of 2016 on requirements for foods for which advertising is permitted and which can be offered for sale and sold in schools and school facilities’. It allows ‘foods that do not contain caffeine or trans-fatty acids from partially hydrogenated fats, and are not energy drinks or stimulating beverages’.

The English translation of the Draft implementing decree does not expressly single out palm oil by name. However, if it were to be adopted by the Parliament, it would likely raise the same potential inconsistencies with regional and multilateral legal obligations as the Bulgarian decree, due to the potential de facto discrimination against palm oil and derived products.

At the EU level, such discrimination would almost certainly violate rules on the free movement of goods. At the multilateral level, the Czech Republic would likely be in violation of its WTO obligations, in particular with respect to the GATT, the TBT Agreement and the SPS Agreement.

Generally speaking, WTO members may not discriminate against foreign products, and technical regulations must be supported by scientific evidence and risk assessments. There is no evidence that Havlová or any government official has commissioned or conducted such studies.

In countering the moves by both countries, the palm oil industry must make it clear to government representatives at the national and EU levels that such measures will not be tolerated. In this, the rules of the EU and the WTO are on the industry’s side.

FratiniVergano
European Lawyers


 

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