New requirements for organic production: turnover, marking, sanctions
The use of the marks “ecological”, “biological”, “organic” and others has become an effective marketing and business solution for the promotion of products. Attractiveness of such labels for the public encouraged entrepreneurs to use it. This phenomenon has become so widespread that required a new legislative regulation.
On July 10, the Verkhovna Rada of Ukraine adopted the Law “On Basic Principles and Requirements for Organic Production, Turnover and Marking of Organic Products”. The main purpose is to indicate new control rules for the process of making organic food products. Now only their observance will allow the use of attractive designations: “ecological”, “biological”, “organic”, etc. Moreover, the establishment of clear rules is also necessary to comply with the provisions of the Association Agreement between Ukraine and the EU, and hence to expand the possibilities for exporting domestic food products to European markets.
After the act enters into force, within one year there will be a period to comply with the provisions of the current legislation. After that, the law will be fully implemented.
By the time this happens, the law “On the production and circulation of organic agricultural products and raw materials” will continue to regulate the legal relationship. Thus, with due observance of all the requirements of the legislative procedure, the new rules will begin to apply in August-September 2019.
Under the new law, the branches of organic production include:
- organic crop production (including seed growing and sowing seedlings);
- organic livestock breeding (including poultry farming, beekeeping);
- organic mushroom growing (including organic yeast cultivation);
- organic aquaculture, production of organic seaweed;
- production of organic food products (including organic winemaking);
- production of organic feed;
- harvesting of organic plant species.
At the same time, new rules will not apply to the production and turnover of products intended for own consumption, perfumery and cosmetic products and medicines, hunting and fishing products withdrawn from the natural environment.
Thus, Article 14 of the law defines new general requirements for the production of products, which in the future may be sold as organic. In particular, such activities will require separate maintaining records at the enterprise, separation from the production and storage of another type of products (goods).
Technologies must meet the requirements of the new legislation in this area and do not cause any harm to human, animal or plant health, prevent or minimize pollution of the environment. Also, preferably renewable resources should be used, including waste products and by-products of plant and animal origin, provided that they meet the requirements for organic production.
The use of food supplements, micronutrients and additives for technological purposes is possible only in the maximum permissible amounts, which will be determined by the new legislation.
Water, as an organic products ingredient, must also comply with the requirements set by the legislation for drinking water. At the same time, it is prohibited to mix organic and inorganic ingredients in a product that will be sold as organic.
In addition, in the production process it will be prohibited to use:
- genetically modified organisms and products (excluding authorized veterinary medicinal products);
- synthetic substances;
- methods of electric or other stimulation for compulsion, which causes pain to animals, use of tranquilizers;
- ionizing radiation;
- hydroponic methods;
- artificially derived polyploid animals and plants;
- substances and technological methods of production, the results of which may mislead the consumer regarding the nature (origin) of the product;
- growth stimulators, hormones or similar substances, except those included in the List of Substances (Ingredients, Components) allowed to be used in the process of organic production and which are allowed for use in the maximum permissible amounts, in cases specified by this law.
The list will obviously be developed and approved during the next year of adaptation period. Articles 15-26 specify the requirements for each individual type of production of organic products, and Article 24 provides for an exhaustive list of exceptions.
In the context of the above it becomes clear that the production process will require a new control procedure, which will be confirmed by a certificate of organic production and / or turnover of organic products. Such certification will be carried out by the relevant authorities on the terms of the contract payment, and the certificate itself will be valid within 15 months from the date of its issue.
At the certification period, enterprises that have expressed a desire to obtain such a document will be able to label their products as “products of the transitional period to organic production”, subject to the approval of the certification authority. Moreover, certification will provide for the mandatory annual inspection of production for compliance with the requirements of legislation in this area.
If the production has already received a foreign certificate of conformity, it can be recognized in Ukraine in accordance with the procedure established by the new law. In particular, this is possible with a separate application from the enterprise with a request to the state authorities of Ukraine on the inclusion of the foreign certification body in the State List of foreign certification bodies.
Only after obtaining the relevant certificate and free consent of the certification body, the entity will be able to mark its products with the state logo “organic” and use it for marketing purposes. Please note that such requirements also apply to the use of such trademarks.
Failure to comply with these requirements also establishes a new administrative liability.
At the same time, we remind that labeling of products as ecological without a proper certificate, among other things, is a violation of the law “On Protection from Unfair Competition”. This will be the basis for the investigation of the Antimonopoly Committee of Ukraine and recovery from the offending producer of a fine of up to 5% of the annual income. And this does not take into account the risks of filing lawsuits against the producer, as well as other market participants who believe they have suffered damage.
In general, the new law raises standards for the production of organic products, which can be considered both as a positive phenomenon and as such, which increases the burden on the national producer. However, in any case, the compliance of Ukrainian production of organic products with new standards will allow supplying its products to European markets, and not just raw materials.
Only the time and judicial practice can show the quality of the new law…or, at best, absence of case law on the application of it.
Here you can find the table “Amounts of fines for non-compliance with the requirements of the law of the products manufacturer”.