2726 gulfbusiness.com\/may 2017

Notes from a leader Notes from a leader

Rima Mrad, partner at law firm BSA Ahmad Bin Hezeem & Associates LLP, explores the importance of consistent standards for global Halal certification

Halal certification and the need to set unified international standards

including Halal slaughter certificates, certificates of establishments, slaughter-houses and facilities classified as Halal, certificates of preliminary components and additives to Halal Products and any other components in which meat and secretions thereof are included, rennet, and animal gelatine, fat, oils and deriva-tives thereof ”.

It is important to note that the UAE’s regulation stipulates that the Halal Certificate must have a serial number, be similar to the certificate form approved by the UAE pursuant to the Gulf Standard related to “Animal Slaughtering Requirements According to Islamic Law” and attested by the UAE Embassy or Consulate in the exporting country. All other GCC nations have adopted similar requirements.

Challenges faced by Halal products’ suppliers and exportersAs mentioned, each GCC country has its own regulations concerning the import of meat and poultry products and – spe-cifically – regarding the procurement of a Halal Certificate.

The submission of a proper Halal Certificate can be questionable in some instances due to the existence of many Halal certifying bodies; each adopting a different set of standards.

The lack of uniform Halal standards and regulations is considered as a chal-lenge that Halal product manufacturers and exporters need to deal with, and is a factor hindering the growth of the Halal market. In this sense, as previ-ously noted by the former chairman of the World Halal Forum (WHF), Khairy Jamaluddin, “the lack of consensus on Halal standards is a relevant reason why the Halal industry cannot grow faster”.

The absence of global Halal stand-ards results in uncertainty for companies intending to export Halal products and has a significant financial and social impact. From one side, companies are obliged to incur higher costs as they are trying to comply with the different standards applicable in the markets and from another side, such cost is usually passed on to the ultimate consumer and causing the increase of the product’s sell-ing price.

WTO dispute between Brazil and Indonesia The concerns outlined above are by no means limited to the GCC. Due to the existence of these different Halal stand-ards, misinterpretations and disputes regarding the proper allocation of these rules have arisen within the scope of international trade, thereby harming the free flow of goods and the underlying principles and rules of the World Trade Organisation (WTO).

A very recent case that demonstrates the consequences of the lack of uniformity regarding the Halal standards for world-wide usage, concerns the WTO Dispute Settlement DS484, involving the com-plaint made by Brazil against Indonesia, in which United States, European Union, Japan, Korea, Republic of China, Chile, New Zealand, Norway, Vietnam, Paraguay, Chinese Taipei, India, Australia, Argentina, Russian Federation, Canada, Thailand, Oman, and Qatar figure as third parties.

In this case, Brazil first requested con-sultations with Indonesia and, because of the failure to settle the dispute, in October 2015, requested the establish-ment of a panel concerning certain meas-ures imposed by Indonesia on the impor-tation of chicken products.

One of the arguments raised by Brazil concerns the imposition by Indonesia of restrictions on the import of the poultry products from Brazil on the alleged basis that it does not comply

with the Indonesian Halal slaughtering and labelling requirements. As per the Brazilian complaint, the measures taken by Indonesia were “more trade-restrictive than what should be required”.

Brazil further asserted that Indonesia’s position concerning the Halal slaughtering process might have been used as an excuse to arbitrarily impose measures aiming to protect its internal market. Also, as per Brazil’s complaint, those measures were effec-tuated through the establishment of stricter Indonesian Halal requirements for imported chicken, than those applied to the domestic production. The WTO panel expects to issue its final report on this matter in May this year.

Possible alternatives In order to avoid damage to the interna-tional meat and poultry market, as well as ameliorate conflicts arising from the imposition of different Halal standards, among its other objectives, the Emirate of Dubai seeks to centralise Halal trade by taking measures to unify Halal mar-ket procedures.

In September 2016, a delegation of

Dubai officials, including those from Dubai Exports, Dubai Islamic Economy Development Centre, and the UAE Consulate in São Paulo, Brazil, met with Brazilian business executives and government officials, and discussed the importance of addressing this issue. Various speakers at this meeting voiced their support for a movement to develop standard norms and certifications to be followed by all countries where Halal products are consumed.

It is yet to be established whether this movement will gain traction. However, it is known by now that each importing country will need to accept an agreed upon global standards for it to be effec-tive. A global Halal standard recog-nised by all importing countries would undoubtedly mitigate the Halal import-export challenges created by lack of uni-fied standards. The role of Dubai as a sovereign government supporting this ini-tiative is a positive and constructive step and will have a tremendous impact on the progress and development of this field.

ConclusionThe Halal market has perceived the urgent need for a globalised Halal stand-ard recognised by all importing countries to ensure the adoption by Halal certifiers of proper guidelines in its certification process. This measure would not only be positive to the international trade and the commercial relationship between countries, but also to the population who would have more safety regarding com-pliance with Islamic Shariah and would not suffer from the consequences of the imposition of discriminatory and market-impeding Halal standards.

We will need continuing efforts by all stakeholders and the overall Halal industry to convince concerned national governments that this change is positive move before we can see the Halal stand-ardised certification becoming a reality.

The importation of meat and poultry products into the Gulf Cooperation Council nations and other Islamic coun-tries is a considerable business.

One of the issues that has caused uncertainty in this important international market segment is the necessity to obtain proper Halal certification for this kind of imported products.

But how should that be handled, what are the problems in the process, and what are the options for streamlining such with a unified approach.

Import of meat and poultry to the GCC There is no question that GCC nations have a large impact in the international meat and poultry market, due to the large amount of these products that they collec-tively import.

Over 15 per cent of the world's meat and poultry exports in 2015 were des-tined to GCC countries, with Brazil being the largest supplier, dominating with an impressive 80 per cent market share.

Saudi Arabia is the leading importer of Brazilian poultry. Not surprisingly, given Brazil’s outsized market share, it is also the leading supplier of poultry products to the UAE with 68 per cent of market share.

Year 2010-2014 2015 Jan-Jun (Avg) 2016

Brazil 77% 80% 80%

EU 12% 10% 9%

US 9% 6% 8%

Rest of World 2% 4% 3%

GCC region broiler meat market shares

Soure: IHS MArkIt – GLoBAL trAde AtLAS

Importing Country Weight (MT) Value (USD million)Brazil 256,597 506USA 77,286 79France 12,861 26Thailand 2,971 9Turkey 3,210 8*InternAtIonAL trAde Center dAtA, AS of 2014

Additionally, according to the data published by the Brazilian Commercial Intelligence Branch in 2016, meat and poultry products are collectively the great-est export from Brazil to the UAE.

Requirements for the export of meat and poultry to Halal importing coun-tries: the Halal Certificate Companies looking to export Halal meat and poultry products must comply with several rules, such as obtaining specific cer-tificates required by each country. Among them is the Halal Certificate, confirming that the slaughtering process was executed in compliance with the principles of the Islamic Shariah.

Nonetheless, despite the similarities concerning some of these countries’ regula-tions relating to the import of meat and poultry products – notably regarding the need for the Halal Certificate – there is a lack of uniformity in the process as each country has its own distinct regulations.

In line with this, the GCC Ministerial Committee for Food Safety, acknowledg-ing the importance of establishing joint regulations, decided at its first meeting in September 2014 to adopt the GCC Guide for Control on Imported Foods (the ‘GCC Guide’), which was thereupon issued in 2015.

Despite the existence of the GCC Guide, the GCC nations, including Saudi Arabia, the UAE and Qatar, do have their own separate, additional and distinct Halal compliance requirements.

For example, the UAE has its own regulations regarding UAE Halal Products Control, which defines Halal Certificate in Article 1 of the Cabinet Resolution No (10) of 2014 as, “a docu-ment certifying that the products, ser-vices, and production systems thereof are in conformity with the rulings of Shariah,