Chinese garlic, which is subject to quotas to enter Europe, is an object of desire for importers, to the point that they are a priority objective of the European Anti-Fraud Office (OLAF). Despite this, they arrive to the EU with the same methods used with drugs and other smuggled objects. There have even been arrests of "Chinese garlic cartel kingpins" and the losses caused by the illegal import of garlic have been estimated at about 60 million Euro.
Against this background, which European garlic producers are familiar with, as they have worked to show EU tax authorities that both them and the EU are financially hit by these practices, the EU's proposal to "simplify" the bureaucracy for the import of garlic in Europe has sparked protests from growers and the European garlic sector in general, and specifically from the National Bureau of Garlic of Spain and the National Association of Producers and Exporters of Garlic, which bring together all Spanish production and trade and 60% of the European garlic sector.
According to Miguel del Pino, garlic producer from Montalbán, president of the garlic sector at Asaja Córdoba and member of the National Bureau of Garlic, the main issue of concern for Spanish garlic producers is that the European Commission is considering the possibility of undertaking what they call a "simplification" of EU policies on the import of agricultural products, which in this case would directly affect the standards to introduce garlic into Europe. According to Del Pino, "a simplification of these controls would encourage irregular practices, harm the Community budget and cause the entry of greater volumes of the product, leading to imbalances in the EU garlic market, which is a very sensitive sector to any increases in supply."
Spanish garlic producers, which have denounced the case in coordination with the rest of the European sector, especially together with France and Italy, say that "we could see an increase in fraud, as found in repeated occasions by the OLAF, which has shown that importers in several EU countries were bringing in fresh or refrigerated garlic under other tariff items and thereby bypassing the 9.6% ad valorem customs duty, in addition to the specific right of 1,200 per tonne, which entails a substantial amount of tax evasion and a significant damage to European industry professionals."
The garlic tariff issue is a complicated one: it started in the early 90's, when the entry of Chinese garlic into the EU was free, which nearly destroyed the European garlic sector, as according to Del Pino, Chinese garlic prices were "so incredibly cheap that there was no way to explain them, unless the Chinese government was doing social dumping, which we couldn't prove." The fact is that, in 1993, the European Commission, after a request from European garlic producers, established some barriers to the free entry of Chinese garlic.
The regulations that were introduced in 1993 and which are still in force establish a quota for Chinese garlic (for which the importer pays only 9.6% in taxes) of 53 million kilos; another 19 million kilos are allocated for Argentinian garlic, although this is not as cheap as the Chinese and the quota is occasionally not even exhausted, and another quota of about 6 million kilos is established for other producing countries. Furthermore, there are countries with preferential agreements, such as Morocco, which can export duty-free to the EU, although with small quotas.
To import garlic under these quotas, especially when it comes to the Chinese, which is the most interesting because of its price, it is mandatory to issue an application for authorization to the EC, indicating the desired amount. Despite this, due to the great demand, permission is generally granted to bring a smaller volume, as this is also distributed among the applicants on the basis of whether they are traditional or new importers (for which certain requirements must be met), and outside that quota, it is necessary to apply in advance for a license, the so-called B, license, to import garlic, paying a fee of 1,200 Euro per tonne.
According to Miguel del Pino, the method which requires the payment of the 1,200 Euro fee is not used frequently to import garlic, "because it doesn't pay off." And now the Chinese quota is exhausted and what the EU wants to do (according to Spanish garlic producers, under pressure from Dutch and British importers) is to remove the license with the expensive import tariff. Thus, the matter would be solved directly by customs without any bureaucracy. This is what Spanish garlic producers believe will "facilitate fraud and lead to the garlic market becoming flooded with produce for which no tariffs were paid, and this would do much damage to the European sector."
Del Pino pointed out that "in the current situation there is already a lot of fraud, and proof of this, in his words, is that Europe consumes more garlic than the EU's combined productions (Spain, France and Italy) together with the total import quota for all countries. There is still a garlic oversupply in the market and never any shortages, so where do they come from?"
Source: diariodecadiz.es
