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Information on the obligations of parallel traders of plant protection products

The federal government/Länder working group for plant protection product inspections ('AG PMK') has compiled a guideline which describes the obligations of parallel traders and operators who import agricultural products directly for their own use.
Due to their potential risks for human and animal health and the environment, plant protection products are strictly controlled chemicals which are fundamentally prohibited and subject to authorisation. They may only be placed on the market and used if their use is either authorised in Germany or is approved for parallel trade (up to 13 June 2011: parallel import permit).
The fact that increasing numbers of plant protection products are found which are not eligible for parallel trade makes traders of plant protection products feel increasingly insecure. For this reason, the working group for plant protection product inspections ('AG PMK'), in which all the Länder are members, and the Federal Office of Consumer Protection and Food Safety (BVL) have compiled a guideline.

Regulatory framework for parallel trade


In Germany the BVL evaluates applications for approvals for parallel trade. If all the requirements are met, the BVL issues the applicant with a certificate, which has a unique approval number (GP-number = parallel trade approval; this replaces the former PI-number as from 14 June 2011). This certificate enables the applicant to distribute a plant protection product with a defined authorisation number and a defined trade name from a specific Member State of the European Union in Germany. It is not allowed to distribute other plant protection products such as products from other Member States or from other manufacturers using this approval number.
Parallel trade with plant protection products is only allowed for products which have their own authorisation in the Member State which is specified in the approval for parallel trade and if their composition is identical to a plant protection product which is authorised in Germany (reference product). Parallel traders must ensure that the authorisation of the traded goods is valid at the time of trade in the Member State. At the time of placing a product on the market in Germany, the reference product in Germany must still be authorised.
If parallel traders consciously trade with plant protection products which are not eligible for parallel trade, they are misusing their approval. This leads to a revocation of approval and a 2-year ban for the parallel trader, or a five-year ban following a repeated revocation.
Unlike holders of plant protection product authorisations, traders have no knowledge, or only restricted knowledge of the composition of the traded products. They have no knowledge of the manufacturing process concerning the active substances in the plant protection products, the formulation procedure for the plant protection products or the chemical compounds used. Furthermore, they have no information on the manufacturing location of the active substance or on the formulator. And lastly, they have no information on the manufacturer's and authorisation holder's distribution networks. Consequently, they can only identify their goods for definite by using the documentation.

Analysis


Plant protection products are mostly highly complex formulations which consist of many chemical components of varying natures. Many non-active ingredients, e.g. polymers or derived natural products, cannot be defined exactly in a laboratory without an unreasonable amount of effort. It is therefore often not possible to determine the identity or origin of plant protection products through laboratory analyses.
However, parallel traders can usually have the active substance/s and their content as well as relevant impurities analysed if the respective maximum admissible levels are stipulated by Regulation (EU) No 540/2011. If inadmissible deviations are detected, the product is not eligible for parallel trade. If no deviations are detected, this does not constitute evidence of the origin or identity of the goods. Such evidence can only be provided by corresponding documentation on origin.

Documentation


Since parallel traders have no information on the composition of the traded products and are not able to determine their origin by laboratory analysis, they can only provide evidence of their origin through the respective documentation.
It goes without saying that a respectable and reliable trading company keeps accurate records. Companies which hold an approval for parallel trade must be aware that they are responsible for the safety of the traded products in the same way as a normal authorisation holder is for his plant protection products. Meticulous documentation is in the parallel trader's own interest in order to guarantee the absolute traceability of the products.
Parallel traders can provide evidence of the identity and origin of plant protection products with receipts, invoices, delivery advices or waybills. These documents must carry the trade name of the plant protection product in the country of origin. A general description such as the active substance name and content is not sufficient. In addition, the authorisation number in the country of origin should be stated. Goods in their original packaging from the country of origin which carry the trade name and authorisation number directly on the container provide the highest amount of security.

Origin

A product which is placed on the market by a parallel trader may only be the product authorised in the Member State which is specified in the certificate of authorisation. If the product was acquired from a middleman from another country, special care is required. The parallel trader must ensure that the origin is correct. If the original packaging is missing, it is essential that evidence of the correct origin is provided through the documentation described above.

Batch numbers and date of manufacture

Individual products can be identified by batch numbers and the date of manufacture. Only if the original batch number of the manufacturer in the country of origin is stated can the goods be assigned directly to a certain production batch in the event of a problem.
To enable the best possible traceability the parallel trader is obliged, when labelling the product, either to state the original batch number and date of manufacture on the container of the traded product, or to include his own batch number system in his bookkeeping which guarantees that the original batch number and date of manufacture can be traced, should this be required in specific and justified cases.

Business relations

Parallel traders often acquire their goods from middlemen and not directly from the authorisation holder in the country of origin. If the goods are not available in the original packaging, the documentation described above must be available and complete. If the supplier before is not prepared to disclose this information, this justifies the suspicion that the product is not eligible for parallel trade. For one's own safety, such goods should not be purchased.
Furthermore, previous experience with this middleman should be taken into consideration. If there have been problems in the past with the middleman's products, business relations with the corresponding middleman should be scrutinised, especially if the placing of these products on the market led to administrative offence procedures and administrative fines or revocations of approval.
Companies trading in the wholesale and retail markets should request confirmation by way of a signed contract to the effect that only goods which are eligible for parallel trade and whose origin is correct may be distributed.

Recommendations for cost prices

An additional clue to the legal origin or identity of plant protection products can be their price: All parties concerned with the trade of plant protection products also want to make a profit. Besides profit margins, additional costs are incurred with every commercial transaction due to transport, and repackaging and relabelling as well as storage of the products if applicable. Even taking into consideration price differences between different Member States, as a rule this means that prices do not fall below certain minimum prices. Even if selling prices in the Member State may be undersold by generous reductions, in most cases it is not possible to buy products below the minimum selling prices stated by the authorisation holder due to profit margins and costs.
Since the whole business is founded alone on price differences between plant protection product markets in the EU, parallel traders must have excellent knowledge of plant protection product prices. If the price for a product is unusually low and the reason for this is not evident, this raises the suspicion that the plant protection product is illegal, in particular if it is not distributed in the original packaging and the documentation is not complete.

Summary

Companies who trade with plant protection products carry a particular responsibility because potential risks for human and animal health and the environment are involved when trading with these products. Since plant protection product traders have no information on the composition of the products, unlike manufacturers or authorisation holders, they can only be sure of their origin and identity and thus the safety of the products on the basis of the following parameters:

  • delivery advice, waybills, invoices and sales receipts which state the trade name and the authorisation number of the product in the Member State of origin
  • original packaging from the Member State of origin
  • origin of the product from the Member State of origin
  • batch number and date of manufacture
  • purchases from reliable middlemen/traders whose goods have not given rise to administrative measures in the past
  • comprehensible prices which take into consideration selling prices in the Member State of origin, profit margins for middlemen and all further costs such as transport, repackaging and relabelling.

Edition: 2012

Date of publication: 19.03.2012

Year of issue
2012
date of issue
19-03-2012

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