In the EU, efforts to limit the importation, distribution and sale of palm oil and products using palm oil have been intensifying. It appears as though domestic competitors of palm oil are attempting to convince EU member-states and government officials to implement discriminatory measures, as highlighted by action taken in Bulgaria and the Czech Republic.
On Nov 3, 2015, Bulgaria’s Ministry of Agriculture and Food issued a Decree Amending and Supplementing Decree No. 9 of Sept 16, 2011 (the Decree) on specific requirements for safety and quality of foodstuffs offered in kindergartens and schools, as well as for foodstuffs offered during events organised for children and schoolchildren.
Article 21(2) of the Decree prohibits foods containing fats, except for butter derived from cow’s milk; sunflower oil and olive oil; hydrogenated fats of plant origin; and fats of plant origin, the labelling of which does not mention the type of their processing.
There is no doubt that the move will affect food products containing palm, coconut and rapeseed oils, as well as cocoa. In this respect, the relevant legal aspects must also be considered.
Bulgaria acceded to the World Trade Organisation (WTO) on Dec 1, 1996, and to the EU on Jan 1, 2007. As such, it is subject to legal obligations at the multilateral and regional levels, including various regulations prohibiting unjustified discrimination.
Violation of EU rules
The EU maintains a Technical Regulations Information System (TRIS). Under the notification procedures, member-states must submit draft technical measures so that they may be examined by the European Commission (EC) as well as other member-states.
According to the TRIS database, the EC received notification of a draft of the Decree from Bulgaria on Feb 11, 2015. It included a brief statement of grounds for the measure, in particular that ‘[s]ince there is a direct link between the safety and quality of foodstuffs consumed by children and their health and welfare, the safety and quality requirements of the main groups of foodstuffs need to be perfected’.
In addition, the notification states that ‘the draft has no significant impact on international trade’ with respect to technical barriers to trade, and that ‘the draft is neither a sanitary nor phytosanitary measure’.
Substantively, the Decree arguably violates rules established in the Treaty of the Functioning of the EU on the free movement of goods, due to the lack of scientific justification for its public health objective; and thus acts as an arbitrary discrimination or disguised restriction on trade.
Inconsistency with WTO law
Bulgaria’s measure also appears to be inconsistent with WTO law, including the General Agreement on Tariffs and Trade 1994 (GATT), the Agreement on Technical Barriers to Trade (TBT Agreement) and the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement).
It appears that the Decree provides less favourable treatment to imported oils and fats in a discriminatory manner, which consequently protects the domestic dairy, sunflower oil and olive oil industries.
There is also no evidence that Bulgaria has gathered scientific evidence or conducted a risk assessment – as is required – regarding the exclusion of palm, coconut and rapeseed oils, and cocoa.
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