Agriculture

Food Safety

The Law of Ukraine “On Safety and Quality of Food” dated 23 December 1997 (the Law of Ukraine “On Safety and Quality of Food”). According to the Law of Ukraine “On Safety and Quality of Food” producers of food are prohibited from producing and/or selling products that are dangerous, unsuitable for consumption or incorrectly labeled. While producing food products, producers shall use only permitted, safe and high-quality ingredients in the amounts prescribed by legislation. Producers and sellers of food shall ensure that sufficient and reliable information on nutrition value, ingredients, proper conditions for storage and preparation of such products, as well as the health hazard with regard to such products, are available to consumers.

Producers and sellers are allowed to sell only those food products of animal origin for which relevant veterinary documents have been issued so as to confirm their safety.

According to Ukrainian legislation, consumers on the territory of Ukraine in the course of purchase, ordering or use of goods with the purpose of satisfying their needs are granted with a right to necessary, accessible, reliable and timely information about goods, their quantity, quality, range of products, and their producer, as well as with a right to appeal to courts and other authorities for protection of their infringed rights or legal interests.

Veterinary and Sanitary Control and Supervision

The State Committee on Veterinary Medicine (the “SCVM”) and its local bodies are authorised to exercise state control and supervision over the production of all unprocessed food products of animal origin. The SCVM officials monitor the compliance by the producers with applicable sanitary standards in relation to both fodder and meat production  and their storage and transportation.

In particular, such officials authorise the commissioning into operation of the newly-built or renovated production facilities, approve food products for further circulation and issue veterinary certificates confirming the quality and safety of unprocessed meat products. The SCVM officials also inspect meat production facilities and products of animal origin as to the compliance with applicable sanitary standards and regulations. The SCVM is authorised to determine the frequency of such inspections that are usually held on monthly basis.

In addition, facilities for production of processed meat products and facilities for production, processing and storage of grains and sunflower seeds are monitored by the State Sanitary-epidemiologic Service (the “SSES”) and by the State Inspection on the Control of Quality of Agricultural Products and on the Monitoring the Market for Agricultural Products. Grain storage facilities are also subject to certification by local grain inspections.

Biosecurity

All Ukrainian producers of food products of animal origin must comply with the principal legislation related to biosecurity measures. The respective issue is regulated by the Law of Ukraine ‘‘On Veterinary Medicine’’ dated 25 June 1996, the Law of Ukraine ‘‘On Ensuring the Sanitary and Epidemiological Welfare of the Population’’ dated 24 February 1994, The Law of Ukraine “On Safety and Quality of Food” dated 23 December 1997 and the Law of Ukraine ‘‘On the Withdrawal from Circulation, Processing, Utilization, Destruction and Further Usage of Low-Quality and Dangerous Products’’ dated 14 January 2000.

Companies’ activity dealing with poultry production is regulated in details by the regulations adopted by the SCVM.

According to Ukrainian legislation, in the event of a bird flu outbreak, all infected birds are subject to culling. Moreover, depending on the epizootic situation, clinical course and other factors, the relevant state authorities are authorised to take a decision to cull all bird livestock within a particular unit. In such case, the owners of such livestock are to receive compensation.

Producer’s Certificate of Quality

Any producer of food products must issue a producer’s certificate in respect of each shipment of its products. The certificate proves that the relevant products have been produced in conformity with all applicable standards and regulations. Producers are only allowed to issue a producer’s certificate if they are able to confirm the accuracy of the certificate based on documentary evidence, which includes, among other things, confirmations of introduction of quality control systems at their facilities, relevant conclusions of veterinary and sanitary examinations, veterinary certificates and operational permits.

Health and Safety

The production and processing of food products, including meat products, involves the performance of certain hazardous activities, including sanitizing and disinfecting production, storage and transportation facilities, working with dangerous substances, gas-hazardous work and work with objects under high pressure, which give rise to a general risk of accidents.

Ukrainian producers are subject to various Ukrainian laws governing workplace safety. Their operations are monitored by the State Committee of Ukraine for Industrial Safety, Labour Protection and Mining Supervision (the ‘‘Labour Protection Committee’’). The Labour Protection Committee has the power to inspect, at any time, the condition of producers’ equipment and to monitor dangerous manufacturing processes. The Labour Protection Committee is authorized to impose fines for violations of applicable labour regulations.