Parallel trade in the EU: What the member states say

Could agreement on EU rules on the parallel trade of agrochemicals help to cut the ever-increasing workload faced by EU member states in the registration of agrochemicals? Proposals to introduce EU-wide rules on parallel trade are being discussed as part of the planned revision of the EU agrochemical registration Directive (91/414). Disagreement on the treatment of parallel trade products persists and the proposal will undergo further changes before relieving the industry and member states of some of the workload, says Mathias Uteβ of the German federal office for consumer protection and food safety, the BVL. He spoke of the progress and difficulties regarding parallel trade at the Registration of Agrochemicals in Europe conference on May 13th-14th in Brussels, Belgium.

The majority of member states support the inclusion of parallel trade in the revised Directive, while deeming "criteria of identity" as essential. They also agree that imports from third countries, or placing generics on the market, fall outside of parallel trade rules.

These discussions were channelled by EU Ministers to define "identicality". They deemed the term to signify: the common origin of the product; that active ingredients, safeners and synergists are identical in specification and content; that the type of formulation is identical; and that packaging size, material or form should be the same.

Consequently, data requirements to obtain a parallel trade permit include information on: the member state of origin; the name and registration number of the product in the member state of origin; original instructions for use; the name and registration number of the reference product; a draft label; and a sample if necessary.

However, member states have failed so far to reach consensus on numerous issues related to parallel trade. Firstly, they disagree on the concept of "common origin". "Some stressed that the procedure can only be a simplified if the products have the same origin," Mr Uteβ said. In an earlier court case, the European Court of Justice (ECJ) concluded that "common origin" is a "prerequisite" for parallel imports as it allows for a simpler checking of identity. Mr Uteβ criticised the Court's view, saying that the justification was questionable "from a scientific point of view" and "between the lines, you can read that imports have to be handled more strictly by member states."

Secondly, the EU member states disagreed on data protection, as some believe that successful parallel trade hinges on free access to data on the reference product, which is an identical authorised product. Others dismiss this perceived need as reference products are authorised under data protection rules in their member state of origin. Under the current legislation, member states are free from having to check data protection status while granting parallel trade permits.

Thirdly, a minority of states disagree that imports for own use should be handled in the same way as imports that are placed on the market. The ECJ concluded that imports for own use have to be checked in the same way as imports for the market. The Court based the decision on the necessity to assess whether an imported product falls under parallel import rules and on the basis that "effective controls are impossible if farmers are dispensed from the obligation to have their products examined."

Fourthly, some states argue against repackaging and labelling of parallel imports, as it makes abuse of the rules "easier", while others point out that size and quality of packaging may require that national authorities repackage products in line with safety guidelines.

If authorities grant a parallel trade permit, the imported product is placed on the market and used in accordance with the reference product’s authorisation, Mr Uteβ explained. "Many provisions regarding authorised plant protection products are to be applied correspondingly to parallel trade permits," Mr Uteβ added. Such terms include: rules regarding the amendment or withdrawal of a grace period; the duty to inform the competent authority of unexpected effects; rules on confidentiality and advertising; as well as controls, penalties, fees and charges.

The permit is valid for as long as the reference product is authorised. It will expire if the latter is withdrawn from the market or if the import is withdrawn for safety or efficacy reasons or if the permit is misused. The European Commission is to set out additional requirements to facilitate the monitoring and control of parallel imports.

Negotiations are continuing on the EU parallel trade rules. Further changes are likely as officials seek to resolve some of the discrepancies that could allow for the abuse of parallel trade rules. EU Ministers have yet to adopt a common position on the proposed revision of Directive 91/414. The draft proposal will then undergo a second reading in the European Parliament.