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Cablegate: Russian Vet Service Goes Renegade

VZCZCXYZ0001
PP RUEHWEB

DE RUEHMO #3181/01 3031436
ZNR UUUUU ZZH
P 291436Z OCT 08
FM AMEMBASSY MOSCOW
TO RUEHRC/USDA FAS WASHDC PRIORITY 5397
RUEHC/SECSTATE WASHDC PRIORITY 0554
INFO RUEHVI/AMEMBASSY VIENNA 4674
RUEHBS/USEU BRUSSELS
RUEHGV/USMISSION GENEVA 5226

UNCLAS MOSCOW 003181

SENSITIVE
SIPDIS

USDA FAS FOR OCRA/KUYPERS; ONA/SALLYARDS, MURPHY
- OSTA/HAMILTON, BEAN
PASS FSIS/JONES, DUTROW
STATE FOR EUR/RUS
STATE PASS USTR FOR PORTER, KLEIN
BRUSSELS PASS APHIS/FERNANDEZ
VIENNA PASS APHIS/TANAKA
GENEVA FOR USTR

E.O. 12958: N/A
TAGS: EAGR ETRD ECON WTO RS
SUBJECT: RUSSIAN VET SERVICE GOES RENEGADE

REF: A) MOSCOW 1826, B) HANSEN/DUTROW EMAIL, C)
MOSCOW 2949, D) MOSCOW 2788, E) MOSCOW 2204

SENSITIVE BUT UNCLASSIFIED

1. (SBU) SUMMARY: The Russian Federal Veterinary
and Phytosanitary Surveillance Service (VPSS)
informed via official letter that it will no
longer accept certifications from the USDA Food
Safety and Inspection Service (FSIS) that U.S.
importers meet Russia's sanitary norms and are
authorized to export meat, poultry and pork to
Russia. The VPSS refusal to accept FSIS
certifications violates the side letter agreement
on meat and poultry plant inspections which was
signed as part of the U.S.-Russia bilateral WTO
market access agreement in November 2006. VPSS
has also asked FSIS to provide a list of U.S.
poultry facilities that do not use chlorinated
anti-microbial washes during chilling, in light
of the implementation of resolution 33, which
bans such practice as of January 1, 2009 (REF A).
The VPSS letter notes that the GOR is available
after November 20 to consult with the U.S. side
regarding the side letter agreement on
meat/poultry inspections and other relevant
issues. We view the renewed threat to impose a
ban on chlorine-treated chicken as a Russian
attempt to gain negotiating leverage in advance
of the next round of consultations on the
meat/poultry quotas under the 2005 U.S.-Russia
Meat Agreement. If Russia did impose such a
ban, it would likely result in major shortages
of chicken in Russia and lead to an inflationary
spike in food prices in 2009. END SUMMARY.

---------------------------------------
VPSS Letter Rejects FSIS Certifications
---------------------------------------

2. (SBU) The original scanned copy and courtesy
translation of the VPSS letter were sent to FSIS
on October 28 (REF B). An informal embassy
translation of the VPSS letter follows.

3. (SBU) BEGIN TEXT:
Moscow, October 24, 2008
No. FS-AC-2/10864

Assistant Deputy Administrator
USDA Food Safety and Inspection Service (FSIS)
Dr. William James

The Federal Service for Veterinary and
Phytosanitary Surveillance (FSIS) renders its
respect to the USDA Food Safety and Inspection
Service (FSIS). In response to your letters
dated September 25, 2008 and September 26, 2008
concerning amendments to the list of U.S. plants
certified for shipping pork, beef and poultry
meat to the Russian Federation, I inform you of
the following:

During signing of the exchange letter (Side
Letter agreement) regarding inspection and
certification of U.S. plants on November 19, 2006
in Hanoi, the American and Russian sides accepted
to abide by relevant obligations. Under those
obligations FSIS was granted the ability to add
new U.S. plants to the list of eligible exporters
by certifying that they meet the requirements of
the Russian Federation.

VPSS agreed to add most of the above-mentioned
poultry, pork, and beef plants to the list of
U.S. facilities that are eligible to export
products to the Russian Federation (under FSIS
guarantees).

However, as was demonstrated during recent joint
inspection of the U.S. plants, it became obvious
that the plants did not comply with the Russian
veterinary and sanitary requirements.

Thus, 70 enterprises out of 152 livestock plants
inspected in 2007-2008 were removed from the
approved list of the U.S. plants eligible to
export products to Russia roughly - 46.5% of the
total.

In addition it was detected in the course of the
joint inspection of U.S. poultry plants in 2008
that certain inspected plants were not complying
with the Russian-American criteria for processing
enterprises supplying poultry meat to the Russian
Federation.

Thus, the majority of the plants visited did not
meet the requirements for anti-mortem examination
of birds:

- Anti-mortem examination of chickens was
conducted in a random manner instead of
inspecting each arriving batch;

- Plant employees only keep a record of dead
chickens which are later reported to the
representatives of the US government veterinary
service. The dead chickens are not opened up or
sent for lab testing;

- Chemical-toxicological characteristics
pertaining to arsenic content in poultry are
higher at certain plants in the United States
than is stipulated in Russian standards;

- Carcass chilling requirements were not met;

- Temperature in cut-up and packing areas do not
correspond to the standards defined by the
Russian-American criteria;

- Sequence and isolation of production areas are
not met;

- At plants where veterinary and sanitary
evaluation is conducted in accordance with HIMB
system, USDA veterinarians do not examine
internal organs. This does not comply with point
4.7 of the veterinary certificate for export of
poultry into the Russian Federation;

- There were instances when storage temperatures
and sanitary conditions of refrigeration chambers
were violated.

A large number of U.S. plants do not take
measures to address deficiencies and comments
made in the course of previous audits.

In addition, over the period of 2008, inspectors
of the U.S. government veterinary service made
repeated violations when filling out veterinary
documentation that accompanied livestock products
(poultry, pork) shipped from the United States to
Russia.

As a result, numerous discrepancies were detected
during routine border veterinary control
regarding the information declared on veterinary
certificates, i.e. mismatch of a container
numbers, plant numbers, name of products,
manufacturing dates, and weight of products. It
was also noted that a certificate indicated only
one manufacturing enterprise while in fact the
container was filled with products from several
enterprises. This indicates a serious lack of
control of the U.S. veterinary service over
livestock products shipped to the Russian
Federation.

Therefore, these facts indicate that the U.S.
side does not meet the terms of the side letter
agreement on inspections signed in Hanoi on
November 19, 2006. FSIS has a nonchalant
attitude in certifying enterprises and making
them eligible to export meat and raw meat
products to the Russian Federation. FSIS also
sends false assurances to VPSS regarding
enterprises that do not fully meet the Russian-
American criteria.

In this connection, VPSS cannot accept assurances
of the U.S. side regarding meat and poultry
exporting enterprises. U.S. meat and poultry
plants will only be added to the list of eligible
exporters to Russia after joint inspections of
those facilities takes place which include
Russian veterinary experts.

In this connection, it is necessary for FSIS to
review at its own discretion the data available
and remove enterprises that do not meet the
Russian-American criteria from the lists of the
U.S. meat processing enterprises manufacturing
beef, pork and poultry eligible to export their
products to the Russia. In addition , please
send this information to VPSS.

Simultaneously, we inform you that the list of
the U.S. poultry plants must be updated in light
of resolution 33 signed by the Chief State
Sanitary Inspector of the Russian Federation
dated June 6, 2008 titled, "On Poultry Production
and Circulation" (attached). In accordance with
this resolution, as of January 1, 2009,
application of solutions for chicken carcass
treatment containing chlorine levels exceeding
the requirements set by SanPin 2.1.4.1074-01 will
be prohibited. Resolution 33 is titled, "Potable
Water Hygienic Requirements to Quality of Water
in Centralized Potable Water Supply System.
Quality Control" (registered by the Russian
Ministry of Justice on October 31, 2001, No.
3011).

Finally, as was already mentioned in VPSS letter
FS-HB-2/9932 dated October 1, 2008, VPSS is ready
to hold consultations to address all of the
issues above in Moscow anytime after November 20,
2008.

Dr. James, accept my assurances in the deepest
respect.

Deputy Head
A.I. Saurin
END TEXT.

------------------------------------------
Threatened Ban on Chlorine-Treated Chicken
------------------------------------------

4. (SBU) The VPSS letter means that no additional
facilities will be allowed to import meat, pork
and poultry to Russia unless they have undergone
a joint physical inspection by FSIS and VPSS that
establishes to VPSS' satisfaction that the
facility meets Russia's sanitary and safety
norms. With inspections and audits currently
only occurring once a year, some new facilities
could wait several months before they would be
authorized to ship to Russia. We do not believe
that the latest letter will have any impact on
facilities that are currently authorized to ship
product to Russia, though we are currently
attempting to confirm this understating with VPSS
officials.

5. (SBU) We view the VPSS request for a list of
U.S. poultry facilities that do not use
chlorinated anti-microbial washes as an attempt
to hold a "Sword of Damocles" over U.S. importers
and trade negotiators in the run-up to the next
round of consultations on the meat/poultry quotas
under the 2005 Meat Agreement. Since the vast
majority of U.S. poultry producers use
chlorinated antimicrobial washes to kill
foodborne pathogens before the product reaches
consumers' plates, a ban on chlorine-treated
chicken would effectively prevent the export of
U.S. poultry products to Russia. Russian poultry
producers are also expressing concern with the
new resolution. Domestic industry contacts
informed Post that roughly half of all domestic
poultry producers use chlorinated antimicrobial
washes in their facilities, although most will
not publically admit it. Many put labels on
their product stating that it is "chlorine free"
when, in fact, it is not.

6. (SBU) In late July 2008, representatives of
the U.S. poultry industry signed (under duress) a
memorandum of understanding with their Russian
counterparts in Moscow which requires the U.S.
poultry industry to forego 17 percent of its
share of Russia's 2009 tariff-rate quota (REF E).
In exchange, the U.S. industry received
assurances that the proposed ban on using
chlorine in poultry production would be
rescinded. The fact that the latest VPSS letter
requests an updated list of U.S. poultry
facilities that do not use chlorine in poultry
production insinuates that the ban will indeed be
implemented as planned, and those facilities that
use chlorine will be shut out of the Russian
market.

-------
COMMENT
-------

7. (SBU) We are skeptical that Russia would
actually implement a ban on chlorine-treated
chicken, because it would inevitably lead to an
inflationary spike in food prices in Russia.
Domestic producers only meet around 55% of the
current consumer demand for chicken in Russia.
The major poultry exporters to Russia (the United
States and Brazil) chill slaughtered chicken with
a chlorine-water solution that would run afoul of
the ban. In addition, the EU is not currently
producing enough chicken to meet internal EU
demand, and EU poultry prices are in any event
too high to be competitive in the Russian market.

8. (SBU) This is the first time that VPSS has
explicitly stated that it will not abide by the
side letter agreement on plant inspections signed
as part of the U.S.-Russia WTO market access
agreement in November 2006. The letter confirms
that protectionist elements within the Ministry
of Agriculture are intent on protecting the
domestic agriculture sector and delaying or
derailing Russia's WTO accession. As we continue
to engage with Russian officials on the
accession, we will emphasize that other senior
officials and ministries, including the Ministry
of Economic Development, need to manage the
accession process more coherently and rein in
these protectionist elements within the GOR.
During the next WTO multilateral working party
meeting in Geneva, we also recommend that USTR
and USDA representatives discuss with Russian
trade negotiators our concerns with the recent
protectionist letters from VPSS. Likewise, any
meat/poultry quota reached during consultations
should be contingent on Russia's agreement not to
implement trade-restrictive sanitary and phyto-
sanitary measures, including 'esolution 33.

BEYRLE

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