Romania Suspends Unclear Food Waste Law

Today I receive and publish an interesting contribution about the recent “food waste” law recently entered into force in Romania, coming from Oana Constantinescu and Toma Barbărasă (respectively partner and attorney at law at Schoenherr si Asociatii SCA).

After France and Italy to my knowledge that is the most concrete attempt in EU to mitigate the problem by law: the path seems nonetheless paved of difficulties. Compared to the Italian legislation (already covered on this blog) a point of merit is the provision of sanctions; but the negligible amounts of the fines could foster the lack of application of the law.

It will be extremely useful to follow the developments of these bills and try to measure the impact of them in the mid-term, since doubts on their real effectiveness seems to remain.

A new law meant to fight food waste in Romania came into force in late May but is now inapplicable, as its provisions are unclear and application norms have yet to be published.

On 21 May 2017, Law 217/2016 on Food Waste Reduction entered into force (the “Law“). The Law aims to reduce food waste by imposing measures on all operators in the food industry.

The issues

In its current form, the Law has already raised concerns about its scope as well as the practical measures that operators need to take in order to comply with it.

For instance, it is not clear which entities must comply with the Law, as the Law stipulates that it applies to operators in the agri-food sector without defining who these are. This may raise more difficulties, since the Law only refers to enterprises (in terms of applicable sanctions), but does not define them.

In addition, the Law does not provide a definition for products that are close to expiry. This is important, since a clear distinction needs to be made between highly perishable products that can only stay a few days before becoming unsafe and products with a longer validity.

Another cause for concern is the lack of clear procedures, as food operators are given no guidelines or instructions on how to implement the measures in practice. Of course, each operator must assess its activity on a case-by-case basis and proceed depending on the products and its specific activity.

All of these issues are meant to be resolved through the application norms, which were supposed to be drafted by 21 May 2017, but have now been pushed back pending analysis.

In the beginning of June, the Ministry of Agriculture issued a statement saying that the legal mechanisms included in the normative act cannot be applied and that the enforcement of the law is postponed until further notice.

Outline of the measures imposed

Under the Law food operators must take the following effective measures:

  1. Accountability measures for the reduction of food waste in the entire agri-food chain, from the manufacturing stage to the marketing stage, and to the final consumer;
  2. Low-priced sale measures for products close to expiry;
  3. Transfer measures by donation or sponsorship for products close to expiry; such transfers shall be made to entities specifically registered in this respect;
  4. Measures for the direction of by-products not intended for human consumption under Regulation (EC) 1774/2002, under certain conditions, for the disposal of animal by-products;
  5. Measures for the direction of agri-food products unfit for human or animal consumption by transformation into compost;
  6. Measures for the direction of agri-food products unfit for human or animal consumption for their transformation into biogas;
  7. Measures for the direction of by-products left after going through the above stages to an authorised neutralising unit.

The Law gives food operators the opportunity to offer nearly expired products to associations, foundations and social enterprises. It also sets maximum amounts in this respect, namely 3 % + VAT of the purchase price (for food marketers) or of the production price (for food manufacturers or processors). In their turn, associations and foundations may market the offered products at maximum 25 % + VAT of the purchase price (in case they receive the products from food marketers) and at maximum 25 % + VAT of the production price (in case they receive the products from food manufacturers or processors).

Sanctions

Operators who fail to observe the above measures will face fines ranging from RON 1,000 to RON 10,000 (approx. EUR 220 to EUR 2,200). The fines depend on the size of the entity, i.e. big enterprises will face higher fines.

Conclusions

Although the Law officially came into force on 21 May 2017, its provisions are not clear enough to be applicable in practice. Moreover, the Ministry of Agriculture and Rural Development had the legal obligation to enact application norms for the Law before 21 May 2017. Although the norms were initially published on the Ministry’s website for public debate, they are now no longer available.

A serious issue that the Law may trigger is so-called parallel trade caused by the obligations imposed on operators. On the one hand, operators must donate or sell products close to expiry at a low price. On the other hand, associations and foundations that purchase these products at a low price may then market them at maximum 25 % + VAT of the purchase/production price. Since the Law sets a maximum value for the latter, there is a risk that the price may raise competition issues by becoming fixed, thus affecting operators on a free market.

Obviously the Law will have a major impact on all players in the agri-food sector. A deeper analysis of the impacts will be required before the issues (or at least some of them) can be resolved.

Oana Constantinescu and Toma Barbărasă (respectively partner and attorney at law at Schoenherr si Asociatii SCA)

 

Spicing up EU-Indonesia food trade relations – The EU adopts emergency measures for Indonesian nutmeg

Today we have a most welcome return on our blog: Francesco Montanari, food lawyer in Lisbon and senior associate at Arcadia International, examining the EU emergency measures imposed on Indonesian nutmeg import.

Early this January, the European Union (EU) has decided to step up the conditions for importing Indonesian nutmeg into its market. Nutmeg is a high-value dried spice that derives from trees of the genus Myristica, plants that typically grow in a few Asian countries. Nutmeg has been widely used in European cuisine since the Middle Age for various purposes. According to some sources, its value increased exponentially during the 16h century, when belief had it that it could help preventing the plague. Currently, nutmeg sourced from Indonesia accounts for nearly 80% of all EU imports of that product, with Netherlands, Germany and Italy being the three top importers.

Indonesian nutmeg has been already under EU surveillance for some time mainly because of aflatoxins contamination. Indeed, it has been subject to reinforced checks at EU borders in the context of Regulation (EC) No 669/2009 since July 2012. A relatively high number of notifications (20) reported by EU Member States’ control authorities through the Rapid Alert System for Feed and Food (RASFF) over the period 2009-2012, in addition to some shortcomings emerging from an audit performed by the Food and Veterinary Office of the European Commission had justified an increase in border surveillance back then.

Over three years later, non-compliance levels reported in relation to Indonesian nutmeg do not seem to have substantially improved. A quick search in the RASFF database, in fact, shows that the number of RASFF notifications concerning this product have not decreased over the last three years, accounting for 23 border rejections.

It is against this background that the European Commission has recently decided to stiffen the import requirements applying to nutmeg with Indonesian origin.

The Commission has done so by adopting Regulation (EU) No 2016/24 whose provisions amend and supplement, among others, Annex I to Regulation (EU) No 884/2014, an EU emergency measure setting special import conditions for a number of imports presenting a high risk of aflatoxin contamination.

Applicable as of 2 February 2016, the new import requirements applicable to nutmeg from Indonesia imply that, in addition to the obligation of pre-notify the arrival of their consignments, the concerned business operators will have to provide the control authorities at EU borders also with:

  • a valid health certificate verified, signed and stamped by an authorised representative of the Indonesian Ministry of Agriculture for food, attesting that the consignment in question has been subject to sampling and analysis in conformity with EU legislation; and
  • an analytical report detailing the results of the tests performed in the country of origin in compliance with the maximum levels set by Regulation (EC) No 1181/2006.

At their arrival in the EU, consignments will still be subject to 100% documentary checks by national control authorities and to a lower frequency (20%) in case of identity and physical checks. Business operators sourcing nutmeg from Indonesia should be aware that, under the import regime set by Regulation (EU) No 884/2014, identity and physical checks may be not always performed at EU borders, but, based on the choice made by each Member State, be carried out at designated premises located either at an external borders or in-land.

Whilst the introduction of stricter import requirements for Indonesian nutmeg may be justified in the light of the overall unsatisfactory compliance level observed over time, the impact that the newly introduced measures will have on the bilateral trade relations between the EU and the Asian country remains to be seen.

In fact, over the last few years, the EU has been particularly active in voicing its concerns over the compatibility of certain sanitary and phytosanitary requirements set by Indonesia with the applicable international trade rules (e.g. BSE, avian flu and import requirements for plants and plant products), although with limited success. This considered, the import conditions that the EU recently adopted for Indonesian nutmeg risk being an additional political irritant in the context of the already tense trade talks between Brussels and Jakarta.