Counterfeit Pesticides Consequence of Unregulated Trade in Active

Counterfeit Pesticides Consequence of
Unregulated Trade in Active Ingredients
Grenada. June, 2012
Javier Fernandez
Regulatory & Legal Affairs
CropLife Latin America
Who are we?
CropLife Latin America is a nonprofit trade
organization that represents the Plant Science
Industry.
The Plant Science Industry
The Plant Sciences Industry researches, develops,
manufactures and markets pesticides,
biotechnology products, and seeds, contributing to the
improvement of agricultural productivity and profitability
A Global Network
CropLife Latin America is one of the 16 associations which
make up the CropLife International Global Network.
CropLife Canada
European Crop Protection Association
EuropaBio
CropLife America
Bio Production Agriculture
Japan Crop Protection Association
CBI Japan
CropLife Asia
CropLife Latin America
AgroBio Mexico
Israel Crop Protection Association
ArgenBio
CIB Brazil
AgroBio Brazil
CropLife Africa / Middle East
Africa Bio
Association Network in Latin America
8 companies & 21 associations in 18 countries.
MEXICO:
AMIFAC
GUATEMALA: AGREQUIMA
EL SALVADOR: APA
HONDURAS:
CropLife Honduras
NICARAGUA: ANIFODA
COSTA RICA: Cámara de Insumos Agropecuarios
Fund. Limpiemos Nuestros Campos
REP. DOMINICANA: AFIPA
PANAMÁ:
ANDIA
COLOMBIA:
Cámara Procultivos – ANDI
Corporación CampoLimpio
VENEZUELA:
AFAQUIMA
ECUADOR:
CropLife Ecuador
PERÚ:
CropLife Perú
BRASIL:
ANDEF e IInpEV
BOLIVIA:
APIA
PARAGUAY:
CAFYF
URUGUAY:
CAMAGRO
CHILE:
AFIPA
ARGENTINA: CASAFE
Mission
• Represent the plant science
industry by promoting proper
legal and regulatory
frameworks, while effectively
communicating industry’s
contributions to innovation
and productivity, and
supporting sustainable
agriculture in Latin America.
Counterfeiting and Illegal Trade
...Global, cross industry & increasing
Impact
 US$250 billion in counterfeit and pirated goods traded internationally
(OECD, 2008)
 US$775 billion every year, incl. lost tax revenue, spending in law
enforcement & healthcare (ICC BASCAP, 2008)
 Expected to increase to US$1.7 trillion by 2015 (ICC BASCAP, 2011)
 2.5 million legitimate jobs jeopardized every year
Counterfeiting and Illegal Trade
...Global, cross industry & increasing
Broad range of targets for counterfeiters:
 Auto & parts
 Software & video games
 Cosmetics & luxury goods
 Electronics, video & music
 Apparel
 Food & beverage
 Sporting goods
 Pharmaceuticals
 Tobacco
Counterfeiting and Illegal Products
……in Crop Protection Products
 A steep rise in global manufacturing, distribution and
use of counterfeit and illegal crop protection products
5% to 10% of European market (ECPA, 2012)
500 tons seized in 2010; 2500 tons seized in 2012
US$4 bn global market (CropLife International, 2012)
Up to 10-30% of the market in ‘hotspot’ countries
Importation, distribution and delivery vary considerably depending
on country
ICAMA REPORT
I. Progress and Achievements in the Reform of Registration of Agricultural Chemicals
(II) The Strength of Market Supervisory Management has
Intensified
2. Activities to crack down on regional manufacturing and sales of
counterfeits
A total of 35,000 law enforcing inspectors have been mobilized
nationwide, 8541 cases have been investigated and handled, 3840
cases have been transferred to judicial agencies for investigation, and
the total amount involved is over 80,110,000 yuan.
2012-6-21
10
ICAMA REPORT
I. Progress and Achievements in the Reform of Registration of Agricultural Chemicals
(III) Increase in Export of Agricultural Chemicals by a Large
Margin
From January – August, 2008, export of agricultural chemicals
shows the three characteristics below:
I. Too fast of an increase in the export of active
ingredients.
The export of active ingredients is 377,700 tons, and the
export amount is 3.88 billion US dollars, an increase of 69.3%
above the corresponding period of 2007.
11
2012-6-21
Counterfeiting and Illegal Products
……in Crop Protection Products
Evolution: Isolated incidents transform into
organized and concerted criminal group
activities
A health, safety & socio-economic issue
 Farmer safety and livelihoods:
Acute exposure, crop damage,
disposal of contaminated crops
 Environment: Water
contamination, endangered
species, biodiversity
 Food chain security: consumer
health from unknown, untested
residues
Sugar beet treated with counterfeit
product in 2005: 75 ha of beet
destroyed only in one farm!!!
Farmer confidence impacted…
Legitimate Herbicide
Tomato, Italy, 2004 Counterfeit
pesticide used
Counterfeit product with the wrong
sulfonylurea killed Maize crops in several
countries in Europe in 2004
Corn, Italy, 2004
Corn near Asti, Italy,
Industry reputation severely threatened…
Illegitimate materials sold as
branded products in very
sophisticated counterfeit
containers and packaging.
Italy – Seal and Cap
Impact stems out beyond the fields:
Who will pay for storage & destruction of 560 tons
of counterfeit pesticides seized in Ukraine?
Ukraine - Counterfeit pesticides
Ukraine - Counterfeit pesticides
Ukraine - Counterfeit pesticides
Two goals for a counterfeit free environment
Transparency in documents (shipping, regulatory)
Customs and Regulators
Enlarging responsibility for counterfeits
Counterfeiters and those that help them
International shipping documents for Active
Ingredient (AI): Customs at import
Issue: Zero links between export & import documents
Solution: Transparency in shipping documents (export/import)
Import customs need to know if the AIs/pesticides are:
• Legal
• Registered
• What is stated on the import documents (!)
• Sourced at legal factories
Registered
No environmental or labor issues
Who helps importing customs - exporting customs / national
regulators?
Registration documents
Regulators of importing country
Issue: Named factories of AI don’t always exist
Solution: Transparency in regulatory documents
Do the regulators know the AI manufacturer?
•
Registered?
•
How do regulators know that the factory exists?
Are penalties applied for falsehood in registrations?
Cancellations?
Responsibility
Exporters of active ingredients to counterfeiters
Exporters: ‘We didn’t know!’
‘Not our problem’
And exporters continue to ship AI to counterfeiters.
Issue:
‘Knew or Should Have Known’?
Exporter Solution:
Know Your Customer – do not ship to counterfeiters
Legal trend of third party liability for counterfeits:
e-Bay cases
Tourists in airports
Bankers
Cigarettes
Landlords
Exporters of components for counterfeits?
Who will pay for storage and destruction costs of counterfeit pesticides and AIs?
Educate exporters – Shanghai Export Fair
18 March 2009
‘Know Your Customer’
Initiate KYC program in China amongst exporters
Do not ship AI to exporters in other countries
AI exporters might be responsible for:
 Storage/destruction costs
 Reputation damage to China
 Potential arrest and prosecution
Similar efforts to customers in various geographies
Customs and police actions, Paraguay
What triggered success in 2008?
1. Investigate CFers inside Paraguay - raids
2. International law enforcement workshops - awareness
Customs, Interpol
3. Investigate imports to Paraguay from China - seizures
Customs
Paraguay - Police Raid, April 9, 2008
Ciudad del Este, FIRST POLICE RAID re pesticides
Paraguay - Police Raid, April 9, 2008
Ciudad del Este
Paraguay - Police Raid, April 9, 2008
Ciudad del Este
Paraguay - Police Raid, April 9, 2008
Ciudad del Este
Paraguay – customs action
Seizure: 16,000 Liters Glyphosate 41%, Port of Villeta
19 Nov 08 [Op Nemby]
 Container contents fraudulently declared as Imidazole in Paraguayan
Customs
 Seizure conducted by the Unidad Tecnica Especializada (UTE), prosecutor
 Prosecutor – Yolanda Morel
Facts:
• Hefei Longcan Chemistry Co. – China
–
–
–
–
Registered exporter in ICAMA, NOT manufacturer
Commercial invoice indicating Hefei as the product source is NOT authentic
Hefei website advertises the sale of Glyphosate
Hefei participated in the Shanghai Export fair
Issue: Who falsified the shipment documentation?
• Shipping documentation from China and Buenos Aires declared contents as
agricultural chemicals
• Importer not registered with SENAVE to import agricultural chemicals, but
registered as a company AFTER the Glyphosate departed China
Paraguay – customs, false shipping documents
Invoice – Hefei Longcan
China Export Doc (BL)
Paraguay - seizure
Paraguay
Paraguay
Paraguay – positive media coverage for customs
Paraguay – customs action
Azoxistrobina (AZ) Disguised as Precursor Chemical
25 Nov 08 [Op AZ]
 SENAVE President acted upon information received pertaining to a
suspect shipment of a precursor chemical.
 Declared as (E)-2-(2-(6-Chloropyrimidin-4-Yloxy)Phenyl)-3Methoxyacrylate, suspected to contain AZ.
 Shipping documents declare value as US$1.35m.
 Retention of product carried out by EP Prosecutor, Alvarez.
 According to SENAVE lab test, chemical was NOT AZ, but precursor
chemical which requires no ICAMA or SENAVE authorization.
Facts:
• Shipper, Xiamen Eastex Ltd. (China), listed in the internet as a clothing
and shoe manufacturer, sent product to Paraguay by air via Miami
• Commercial Invoice issued by Vectra Hill Ltd. (British Virgin Islands,
mailing address - Uruguay) Vectra doesn’t exist in Uruguay.
• Paraguayan importer is an importer and manufacturer of agrochemicals
with affiliates in Brazil and Argentina.
Paraguay – false shipping documents
Commercial Invoice
Chinese Shipper
Paraguay – positive media coverage for customs
Paraguay
Paraguay
Agrochemical Spill, Port of Villeta
4 Dec 08
 Report of agrochemical spill in the Port of Villeta prompted
the local Prosecutor, Mirta Rivas, to inspect the situation
 Importer failed to present documents showing the legal
importation of the agrochemicals
 Prosecutor ordered the retention of the cargo
 Importer eventually presented the documents
Importance:
 Prosecutor’s proactive response likely the result of
heightened awareness of illicit agrochemical importations
caused by previous seizures.
Paraguay
Paraguay – customs action
Multi-Container Seizure
16 Dec 08
[Op Villeta]
 Three containers seized following departure from the Port of Villeta, product
imported by company without SENAVE authorization.
 Containing: 23,520 kilos of Methomyl 90%, 3,500 kilos of Flutriafol 80%, and
1,000 kilos of Imazethapyr 70%
 Seizure conducted by the Unidad Tecnica Especializada (UTE), prosecutor
 Prosecutor – Mirta Rivas
Facts:
 NO Chinese exporter or shipper declared on shipping documentation
 Declared Exporter/Shipper: Diofal Trading, Free Zone, Uruguay
 Three Chinese manufacturers listed on packaging:
 TaiAn Tianyi Chemical Co. Ltd, China Continental (Methomyl)
 NO ICAMA registration
 Shangyu Nutrichem Co. Ltd., China Continental (Flutriafol)
 NO registrations in ICAMA for Flutriafol
 Pilot Plant of Shenyang Research Institute of Chemical Industry, China
Continental (Imazethapyr)
 NO ICAMA registration
Paraguay – false shipping documents
Commercial Invoice
Chinese Shipping Doc
Paraguay – false shipping documents
Commercial Invoice
Chinese Shipping Doc
Paraguay - seizure
Paraguay
Paraguay – positive media for customs
International shipping trade
How to eliminate counterfeit pesticides
EXPORTERS
 Know Your Customer
IMPORTERS
 Shipping documents correct
REGULATORS
 Fraud in registration documents?
CUSTOMS
 Verify shipping documents
 Work with pesticide regulators
Thank you!