A court in the European Union has dismissed a case brought by two Brazilian meat companies about a 2018 decision to ban imports of their products into the EU because of public health reasons.

The Brazilian companies BRF SA and SHB Comércio e Indústria de Alimentos SA are part of the group BRF Capital. They were seeking considerations to annul an EU implementing regulation. BRF Group is active in more than 150 countries with 58 production plants and 13,000 integrated farms.

Almost 40 percent, or more than 150,000 tons, of imports of poultry meat from Brazil into the EU market for 2017 were exported by that group through BRF and SHB. Twelve sites belonging to the two companies appeared, until 2018, on lists of plants whose products of animal origin may be imported into the EU. Ten establishments belonged to BRF and two to SHB. Turnover of around €289 million ($327 million) in 2017 was generated from sales within the EU by the delisted factories, according to court documents.

BRF and SHB were also ordered to pay the costs of the Commission including those from the interim proceedings.

Court decision
The European Commission adopted regulation in May 2018 that said checks had found Salmonella in their poultry meat and poultry meat preparations. According to this regulation, cases of fraud had also been detected in March 2018 in Brazil, during laboratory certification of meat products exported to the EU.

The General Court of the European Union ruled that the Commission sufficiently reasoned the implementing regulation.

The court found that the fraud concerning lab certification for poultry meat and meat products exported to the EU, calls into question the reliability of guarantees which Brazilian authorities are supposed to provide under regulation to protect public health.

“The court adds that, in view of the objective of safeguarding public health, the Commission is entitled to respond to concrete suspicions of fraud relating to the certification of products when those suspicions cast serious doubt on the systemic capacity of the authorities of the third country to provide the guarantees provided for in Regulation No 854/2004 without awaiting the final outcome of the investigations.”

The BRF Group operates two sites in Thailand and one in Argentina that are authorized to export poultry meat, such preparations and products to the European Union.

In a statement, BRF said it regretted the decision which confirms the European Commission’s discretionary powers to disable plants, located in other countries, which export animal protein.

“BRF will evaluate the situation, always seeking the necessary requirements for the re-listing of its plants. The company reiterates that it complies with the rules and regulations, applicable to Brazil and to all the countries to which it exports, regarding the production and commercialization of its products, it has strict processes of food safety and quality controls,” according to a company statement. “BRF will continue to constantly improve its processes to ensure the highest standards of safety, integrity, and quality.”

Incident background
From March 2017 to mid-April 2018, only 41 cases related to the 12 delisted establishments of the applicants were subject to an RASFF report. During that period, they were the origin of 6,766 containers exported to the EU under a reinforced checks regime involving inspections of consignments arriving at customs.

Two audits by the Commission in Brazil revealed deficiencies resulting from the dysfunction of the authorities despite the second one showing improvements.

EU restrictions on poultry meat from Brazil due to Salmonella has been raised four times since 2017 at meetings of the World Trade Organization.

In March 2017, the EU Commission became aware that Brazilian federal police were investigating, under Operation “Carne Fraca” fraud affecting meat. As part of this, civil servants of the Brazilian Ministry of Agriculture were suspected of corruption in dealings with 21 establishments, including one belonging to the BRF Group.

Findings from Operation “Trapaça,” part of Operation Carne Fraca, were published in March 2018. This fraud investigations centered on plants belonging to the BRF Group and involved meat intended for export to countries requiring Salmonella tests, such as EU member states. Investigations focused on lab tests for Salmonella that had been falsified to circumvent controls by authorities.

An appeal may be brought before the Court of Justice against the decision within two months and 10 days of notification of the decision.

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