Food Fraud: An in depth discussion of new EU Regulation on official checks on food

Cesare Varallo, an Italian lawyer and expert on food fraud regulation gives us an exclusive insight into EU regulation and food fraud…

As many readers possibly already know,  Regulation (EC) No 882/2004 on official controls performed to ensure the verification of compliance with feed and food law, animal health and animal welfare rules, is under review for the next couple of years.

The new text will further include plant health, plant reproductive material and plant protection product controls and will also modify the structural design of the financing system for official controls in the EU.

One of the most divisive matters, nonetheless, remains in relation to which specific requirements to prevent food fraud should be detailed within the new text.

From a recent draft, 26th September 2016, we can try to anticipate some of the main changes. Political agreement on the text has been reached and it should be voted upon by the end of the year and adopted in early 2017.

If the definition of food fraud is not given, it is important to outline that in the scope of the Regulation and official controls, we now include the possible violation of the rules perpetrated through fraudulent or deceptive practices. This risk should be further taken into account by national, competent authorities when they organise and prioritise the official controls on their territory, as well as controls on imported foods. Fraudulent or deceptive practices committed with respect to the marketing standards referred to in Articles 73 to 91 of Regulation (EU) No 1308/2013 (CMO – Common Market Organisation for agricultural products) are included as well.

Moreover, the draft’s attempt to fill one of the main gaps in the capabilities of official controls suggests that the European Union reference centres for the authenticity and integrity of the agri-food chain should be created to support the activities of the Commission and of the Member States in order to prevent, detect and combat frauds. Validated analysis methods and protocols should be developed and applied, and collections or databases of authenticated reference materials should be created and used to detect fraudulent violations.

The administrative assistance and cooperation system (AAC), an IT tool used also by the Food Fraud Network to exchange information about violations of EU agri-food chain legislation which have a cross-border dimension, has been revived and recently-implemented measures have been detailed in EU Commission implementing decision 2015/1918. This will allow competent authorities to quickly exchange information about frauds cases – if no serious risk for public health is involved – with more discretion then through the RASFF platform.

Finally, regarding sanctions, the recent draft states that:

“Member States shall ensure that financial penalties […] for violations of the provisions of this Regulation and of the rules referred to in Article 1(2), perpetrated through fraudulent or deceptive practices, reflect, in accordance with national law, at least , […] either the economic advantage for the operator […] or, as appropriate, a percentage of the operator’s turnover.”

Whereas, in the introduction of Regulation n. (77) it states that: “financial penalties applicable to violations of the rules perpetrated through fraudulent or deceptive practices to be sufficiently deterrent, they should be set at a level which seeks to exceed any undue advantage for the perpetrator resulting from those practices.”

If the EU Commission cannot impose sanctions in each Member State, the principle should lead to more uniformity in enforcement. In many countries today what we call a “food fraud” is prosecuted under criminal law as any other kind of fraud (e.g. financial). The problem is that often weak penalties are provided and physical detention is not a real option.

Therefore, it would be better for Member States to focus their policies on the amounts of applicable fines and on other kinds of ancillary sanctions (i.e. naming and shaming of companies/people involved, closing of premises, revoking of licenses…) – be them provided by criminal or administrative law. The main focus should therefore be on removing any financial incentives for fraudsters.

Biography

Cesare Varallo is a food lawyer in Italy who is also Vice President Business and Regulatory Affairs at Inscatech and founder of foodlawlatest.com. He is
a leading expert and global adviser on food safety issues, food fraud prevention, crisis management and food labelling, with particular focus on EU, USA and Italian markets. He is a well-recognised speaker and author who is regularly involved in international conferences and scientific activities, as well as in policy effectiveness evaluation for international bodies (i.e. DG Santé for the EU Commission, UN agencies).