Reports have emerged in Ecuador that the European Union has approached the Embassy of Ecuador in Belgium to inform that the European Anti-Fraud Office (OLAF ) has received -from various commercial sources- specific allegations that Ecuador imported tuna from third countries and then may have been re-exported to the European Union after processing, making use of certificates of origin Form A, improperly benefiting from the Generalized System of Preferences-GSP. This information has been, in turn, complemented by an analysis conducted directly by EAFO.

Tuna exported from Ecuador to the European Union under the GSP provisions of Council regulation No. 980/2005, dated 27 June 2005 must meet the requirements of origin established in the Commission’s regulation No. 1602, dated 24 June 2000, which determines in the case of fisheries, that the only products eligible for tariff preferences in Europe are those that come from materials fully obtained in the beneficiary countries, in the territorial waters of the beneficiary country or that have been caught by their vessels out of these territorial waters.

There is however a flexibility possible  which allows canners in Ecuador to make use of the accumulation of origin with other countries of the Andean Community of Nations - CAN - the Central American Integration Group and/or the European Union.

Given the importance that processed tuna trade has between Ecuador and the European Union, and in order to ensure equal treatment within the same or similar circumstances prevailing between trading partners, the European Union demands that the Ecuadorian authorities initiate an urgent investigation regarding the status of tuna exports from Ecuador with certificates of origin Form A, under the GSP scheme.  The EU wants Ecuador’s cooperation to authorize the EU to jointly participate in such research, and allow the EU to send a delegation to travel to the country in April 2010.

The purpose of the joint research would be to verify the status of exports from Ecuador and determine the real origin of the products in question by checking the data in hands of the respective authorities and records of the processing companies involved.  It looks like the research period would go from 2007 to the present time.

It is a known fact that the competitiveness and future of Ecuador’s canned tuna and pre-cooked loins exports to the European market depend largely on the 0% duty status  that it receives under the GSP.  In case the suspicions and allegations made prove to be true, the future business of Ecuador and its tuna processing companies may be at risk. Also in case Ecuador’s authorities would not cooperate or show that their system of control is insufficient, it could have devastating effects on the country’s tuna exporting industry.

It must be said that the EU has also recently organized missions to verify the correct GSP status on canned tuna and pre-cooked loins exports to Colombia, Guatemala and El Salvador.  Only in the case of Colombia irregularities emerged – but these turned out to be rather technical and complicated, and are heavily disputed by the companies affected.

In case the European Union would find proof of irregularities, the real victims will be the European tuna importers. Although they are often not made aware of exactly where their suppliers source their tuna, but at the same time they are fully liable to pay the penalties in the European Union. These penalties amount usually to 24% over the invoice value of each imported container of tuna.  Considering that a container of canned tuna could average USD 60.000 and that some companies import more than a 100 containers yearly – a negative outcome of an EU mission could potentially result in millions of dollars in damages for EU tuna importing companies.