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By John Helmer, Moscow

Shipments of Norwegian salmon and trout to Russia, the biggest global consumer of Norwegian fish, have been illegally restricted by the Russian government veterinary and phyto-sanitary inspectorate, Rosselkhozdnadzor (RSKN), according to a report by the government’s competition watchdog, the Federal Antimonopoly Service (FAS).

The FAS told Fairplay that regulations issued by RSKN limit imports of the fish to Russia to companies on lists accepted by the Norwegian government, and submitted for complementary approval by RSKN. This cumbersome administrative procedure is unlawful, according to the FAS, because it restricts free trade in the Russian market.

The FAS issued its ruling after an investigation prompted by the Russian Fish Union, an association of 22 small fish importers, processors, and distributors. In October they had called for action by FAS to put an end to what they called the subterfuge of food safety regulation. The real purpose, they told FAS, was to monopolize the salmon and trout market by much larger companies, including Russian Sea, which is owned by Gennady Timchenko.

The FAS ruling in their favour, against RSKN, is the first time FAS has intervened in veterinary or phyto-sanitary control of imports in Russia’s food trade with the finding that such measures are anti-competitive in intention and effect.

The FAS told Fairplay that it ruled against the purported fish control on November 21, and announced it publicly on December 7. A spokesman for RSKN told Fairplay today that it will appeal against the FAS decision. But it refuses to clarify why its regulations impose the import control for salmon and trout, but leave imports of other fish and fish products unaffected.

Jan Eirik Johnsen, director of the Norwegian Seafood Export Council in Russia, told Fairplay Oslo believes that fewer administrative restrictions would mean less trade barriers. He noted that Russia leads Norway’s customers for fish, followed by China and Japan. Last month, he added, there was an increase in both tonnage and value for Norwegian fish exports to Russia compared to November of 2010. Salmon tonnage was up, he noted, as the average price for salmon fell globally. Trout volume was down due to production problems in Norway. The cumulative value of exports of Norwegian seafood to Russia since the beginning of the year is €599 million (4.63 billion Norwegian krone). The comparable tonnage and value numbers were marginally higher a year ago.

Alexei Aronov, spokesman for the Fish Union, said imports of fish are being controlled from Vietnam, as well as from Norway. Union members, he said, believe that RSKN is not to blame, but that commercial attempts to monopolize the market are the problem. He claims there is no veterinary or food product safety issue, and that the limitation on who may import fish to the Russian market occurs after the products are approved at their origin for compliance with Russian phyto-sanitary standards. “The Fish Union hopes that in future this market will be more transparent and will be controlled by a [neutral] electronic documentation system.”

In its application for the FAS investigation, the union had declared: “Currently, the Russian fish market has developed the following situation. A number of businesses try to monopolize the supply of fish products from Norway and Vietnam… Particularly worrisome is the fact that the initiative to restrict competition is supported by the veterinary service in Norway and the Vietnam Association of Seafood. These organizations are putting pressure on exporters of fish products, encouraging them to contract only with… the four largest companies in the country for import, seafood processing and delivery, which dominate the [Russian] market situation…We hope that the FAS will reveal the true initiators of the coordinated action.”

The RSKN regulations also discriminate against the smaller, poorer capitalized fish importers by making the application process for import certification last up to eight weeks. “During this time, as a rule,” the Union statement says, “market conditions change, and enterprise costs grow… The Fish Union intends to develop its cooperation with Rosselkhoznadzor aimed at introducing modern systems control, the introduction of electronic document management, which increases the reliability and speed of transmission of information. It should make the control system more objective and independent.”

Russian Sea, North Company, Atlant-Pacific, and Tekhnolat are the four Russian importers identified by the Fish Union as the beneficiaries of the present system. The Union is also critical of the Norwegian exporters and the Norwegian government food safety agency for going along with the scheme of market limitation. On November 22, four of the Union members – Santa Bremor, Defa, Agama, Vichunay – announced at an industry meeting in Oslo that they will contest the one exporter-one importer scheme currently in place. The Union claims the Norwegians have responded that their acquiescence in the scheme has been forced on them by the big Russian importers.

Russia Sea was asked to respond to the public criticism, the union allegations, and the FAS ruling. The company spokesman, Mila Rotynskih, has not responded.

Note: Norwegian market fixing for their salmon exports has recently run into a severe embarrassment in China, the largest market for the fish after Russia. There, according to a report in the current issue of Private Eye in London, the government in Beijing has barred imports of Norwegian salmon this year on veterinary control grounds. This reportedly followed the decision by the Nobel Prize Committee in Oslo to make its award last December to Liu Xiaobo, a Chinese dissident who is currently in prison. The Norwegian fisheries minister, Lisbeth Berg-Hansen, was snubbed during her visit to Beijing last December, days after the Oslo prize ceremony. This past October the Norwegians responded by filing a complaint against Chinese manipulation of the import control system to the World Trade Organization. “Norway believes the measures put in place by China are in conflict with international trade rules, and we have raised the issue in the WTO,” a government spokesman has announced. “We are now in a dialogue with Chinese authorities to resolve the issue, and we will continue to monitor the situation.” Meantime, Beijing has agreed to commence imports of Scottish salmon.

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