The document discusses organic fraud and traceability issues. It notes that Turkey and the United Arab Emirates are hubs for organic fraud, with large Turkish companies and traders shipping grain and oilseeds to Europe with questionable organic certification. The EU has implemented a new database called TRACES to better monitor organic imports and ensure traceability, addressing issues found in past audits. There is also concern about goods redirected from Europe to the United States, bypassing stronger EU traceability rules. The document promotes implementing a similar traceability system for Canada to strengthen organic import controls and reduce fraud.

1. Part I - Organic Integrity and
Innovations in Traceability
Harro Wehrmann, Wehrmann Farms
Ryan Koory, Senior Analyst with Mercaris
Ken Nott, Grain Discovery
Moderator: Simon Jacques, Ecocert Canada

2. TRACES : What is it ?
TRADECONTROL AND EXPERT SYSTEM
OF THE EUROPEAN COMMISSION

3. TRACES Introduction
► Regulation for Organic Imports from Third Countries ( non EU member
States)
► Can only be marketed as such if an official COI accompanies the
shipment
► The movement of these Imports is being monitored by a new Web based
Database
► This database is shared between all EU member states

4. Turkey and the United Arab Emirates are hubs of
organic fraud
The five countries concerned are renowned as hot
spots for organic fraud for organic grain and oilseed
for years. That is why some of them are subject to
stricter control regulations intended to ensure the
products’ traceability back to the farms. This does
not always work out, as a report by the EU auditors
showed a few weeks ago. The reports talks about a
large Turkish company “with 10 production units and
15 processing units in Turkey, Ethiopia, Kirghizstan,
Kazakhstan and Ukraine.”
The auditors requested the most recent inspection
report for this company and all its plants from the
control body. They received an eight-page report in
which “basic information was missing from this 8-
page report, such as the dates of the visits to the
different units, the nature of the actual checks
carried out in each of the different units.”
One of the biggest customers of CUC is the well-
known Turkish agricultural trader Tiryaki. It is not clear
whether the responsible control body in that case
was CUC, and whether this was the reason for the
licence withdrawal. However, if it wasn’t, it is likely
that another control body will soon lose its approval.

5. The mentioning of the UAE in this context is
particularly striking. It is not so much organic camel
milk that is certified there – in fact about 3.9% of all
organic food imports of in the EU are transacted
through the UAE. According to EU statistics, this
amounted to about 127,000 tons of organic food in
2018, consisting mainly of wheat, oilseeds and other
cereals. It is likely that the larger share of the food
produce is not shipped via the UAE ports (this would
be quite a detour).
Instead, this process is mainly about cash flows and
trading companies registered in the UAE. In reality,
most of the goods are shipped via Turkey. From
there, 264,000 tons of organic products arrived in the
EU in 2018. We are not talking figs, apricots and
hazelnuts here, but wheat, other cereals and
oilseeds. These account for over half of Turkey’s
imports to the EU.
In addition to the EU, large quantities of organic food
stocks with questionable organic status are shipped
from Turkey and the UAE to the USA. This was
uncovered in 2018 by the Cornucopia Institute. In its
report, it named Tiryaki as the most important trader,
mentioning that the company had changed control
bodies in order to pre-empt investigations and had

6. Expectations of the EU Commision
1. Improved monitoring of Imports
2. Database for Traceability in case of Chemical Residues in Organic
Products
3. Improvements of Efficiency for member state Customs Offices
4. 24/7 availability
5. Central web based workflow Documents for private and public use
6. Common HS codes
7. Risk management and Information Exchange between EU members

7. Participants
► Exporting Country :
► CB’s have to be registered in TRACES
► With all their Trade and Farm Clients.
► Each member has an ID number
► Producers
► Exporters
► Exporters/Traders
► Importing Country :
► Importer
► First Consignee
► CB of the First Consignee
► Customs Office in Country of Import

8. User Guide
► Traces is available 24/7 from the following website:
► Webgate.ec.Europa.eu/tracesnt/login
► Any User can connect with username and password, however Use is
restricted to registered users

9. Process description
► The COI template can be completed by the Exporter of the organic
product
► The template can also be completed by the Importer of the organic
product
► The COI is validated by the CB of the Exporter and registered on Traces
► Electronic COI is available on the TRACES website for the Endorsing
authorities ( Customs office)
► The original ,validated certificate is sent to the Importer and a copy to
the Exporter

10. Process … continued
► The Importer or clearing agent will mention the TRACES COI number in the
customs declaration
► Customs agent will validate the electronic COI on the Traces website and
sign the Paper copy of the COI
► The Importer has to keep the original COI for future audits

11. Import control by member states in
the EU
1. Traces
2. Pesticide residue screening : no product is being accepted if it shows
residue levels above the threshold issued by the BNN
All Imports are being tested due to pressure from Consumer
Organizations
3. in some member states only organic products from Producer
organizations will be accepted by the Trade ( Bioland,Bio Austria)

12. Application in Canada
► Imports of agricultural products into Canada are controlled by CFIA
► CFIA also polices Canadian CBs
► Import requirements are listed in the CFIA AIRS system
► AIRS ( Automated Import Reference System)
► Requirements might include Import permits and Phytosanitary certificates.
► All permits and certificates MUST be issued before Container leaves the
PoO( Port of Origin)
► It would be easy to apply the same rules to the Issuance of a CoI

13. Continued…
► Customs clearance of Imports are performed by CBS and CFIA
► Only when cleared by CFIA will the Shipment be cleared by CBS
► Under the new Safe Food for Canadians act ,Importers of Food need a
License

14. Conclusion
► Canada already has a template for stricter Import controls
► A system similar to the Seed Importation or the Ag product Importation
system can easily be implemented
► CFIA already has the mandate to police the CORG program
► Why are stricter Import controls necessary ?
► See below…

15. US Organic Trade Association cautions against
redirected fraud goods
Meanwhile, the taz reports that US Organic Trade
Association warned its members of redirected fraud
good deliveries to the US following the licence
withdrawal for the CUC. From an email to its
members available to the taz, the Organic Trade
Association was quoted saying that there are
rumours about large quantities of sunflower seeds,
linseeds and maize that has been redirected from
the EU to the USA. There, the goods don’t need a
certification following the EU-Eco-Regulation, but one
following the US NOP standard – issued by CUC.

16. ORGANIC GRAINS
PILOT 2019

17. WHAT IS BLOCKCHAIN ?
A blockchain is a web-based record-keeping system
used to share data through a computing network that
is either public or private.
When information is added to this system, it is
encrypted and becomes a new “block” of data added
to the “chain” of records.
Each partner involved in a blockchain has a copy of
this database.

18. Clay Tablets
3000 BC
Ledgers in history
Papyrus
1000 BC
Tally Sticks
5th Century
Distributed Ledger
Now !
Spreadsheet
s
1980’s
Double Entry
14th Century

19. Business Networks
Each Participant
Equal Citizen on
Blockchain
No Network DistributedCentralized
Most S&H software

20. ?
Blockchain Ecosystem
Bank Seed
Insurance
Logistics
Fertiliser
Buyers
Sensors
Precision
Regulators
Quality
Equipment

21. Supply Chain
ElevatorLogisticsMarket Farm Fields SeedProcessorConsumer • • • • • •• Logistics •

22. ElevatorLogisticsMarket Farm Fields SeedProcessorConsumer• • • • • •• Logistics •
Supply Chain

23. Organic Soybean Pilot – March/April

24. Tracing ORGANIC (IP)soybeans from certified seed to final consumer
Benefits
Micro payments via blockchain – “tip your farmer”
Agronomic / supply chain data is inputted and shared on one ledger (blockchain)
Customer scans QR code on final packet & “digital passport” is revealed
Next generation of food grade grain provenance technology
Reduce burdensome paper trial and inefficiencies
Centralized Market Place bringing more liquidity and transparent markets
Decommoditise – potential to extract a premium
Differentiate your product from your competitors

25. ELEVATOR
• Buyer: Beechwood Agri Service
• Arrival: 23rd Oct, 2018
• Departure: 28th Mar, 2019
CERTIFIED SEED
• Breeder: University of
Guelph
• Variety: OAC Kent Soybeans
• Technical: Click on link
CONSUMER TOFU FACTORY
• Buyer: Ying Ying Tofu
• Arrival: 28th Mar, 2019
• Production: 4th Mar, 2019
• Batch: Sweet & Spicy
• Product: Gourmet Tofu
FARMER
• Grower: Minten Farms
• Plant: 4th June, 2018
• Harvest: 17th Oct, 2018
• Fertiliser/Chem: Click on Link
WHOLESALER
• Seller: Fresh Spoke
• Arrival: 8th April, 2019
• Product: Gourmet Tofu
Digital Passport

26. App – Screen Selection
Breeder Farmer Elevator Tofu Factory
Distributer

27. Breeder Farmer Elevator Tofu Factory
Distributer
App – Screen Selection

28. Breeder Farmer Elevator Tofu Factory
Distributer
App – Screen Selection

29. WHEN IS THIS GOING TO HAPPEN ?
• WALMART DEMANDS ALL SUPPLIERS OF PRODUCE
TO BE ON THE BLOCKCHAIN BY SEPTEMBER 2019 !
• BERRIES , FRUIT AND ORGANICS BY 2020

31. Skate to where the puck is going
to be, not where it has been
Wayne “The Great One” Gretzky
““

32. Part I - Organic Integrity and
Innovations in Traceability
Ryan Koory, Senior Analyst with Mercaris
Imports and Gaps in Organic Tracking in North America