What Tariffs May Mean for Food Fraud: Strategies for Prevention and Detection
Increased tariffs on agricultural commodities, whether pending or in place, create fertile ground for Food Fraud within complex global supply chains. This heightened risk threatens the safety and quality of both raw materials and finished food products. This blog examines the potential impact of tariffs on Food Fraud and offers strategies to safeguard supply chains.
The Role of Tariffs in the Propagation of Food Fraud:
- Price Disparities as a Catalyst for Fraudulent Activities: Tariffs artificially elevate market prices at the point of destination, creating a financial incentive for illicit practices. This encourages adulteration and mislabeling, where lower-cost substitutes or falsified origins are used to maximize profit.
- Vulnerabilities Inherent in Extended Supply Chains: The protracted nature of global supply chains, a hallmark of globalization, introduces numerous junctures at which fraudulent activities can transpire. The proliferation of handling and distribution stages compromises oversight and traceability.
- The Obscuring Effect of Globalization's Complexity: The intricate network of global brokers and distributors obscures accountability, hindering the tracing of fraud to its source. This lack of transparency allows fraudulent practices to thrive, reducing the likelihood of detection.
Strategies for Mitigating Food Fraud Risks
Organizations may implement the following strategies to proactively address these challenges:
- Proactive Monitoring of Regulatory Changes: Maintain a vigilant awareness of proposed tariff alterations through consistent monitoring of official updates. This facilitates anticipatory adjustments to import strategies.
- Rigorous Scrutiny of Import Documentation: Engage in collaborative efforts with clients to meticulously verify the accurate classification of imported goods in accordance with the Harmonized Tariff Schedule of the United States (HTS). This ensures regulatory compliance and identifies potential anomalies. (https://hts.usitc.gov/)
- Vigilance Against Illicit Transshipment: Maintain heightened awareness for indicators of illegal transshipment, a common tactic used to evade tariffs. Accurate classification, valuation, and verification of country of origin are key for identifying such activities and implementing appropriate mitigation strategies.
- Comprehensive Due Diligence in Importer Vetting: Rigorous vetting of importers is essential. The prevalence of temporary company establishment for duty evasion, particularly concerning goods subject to antidumping (AD) and countervailing (CV) duties, necessitates stringent verification protocols.
Identification of Red Flags
It is essential to stay vigilant for warning signs that a supplier or importer may not be legitimate. To safeguard your business and ensure you're working with a reputable company, consider the following key factors:
- Conduct thorough reviews of bond requests from newly established importers who later assign entry processing to third-party filers, ensuring heightened scrutiny.
- Closely monitor importers exhibiting frequent changes in surety providers due to claims-related issues.
- Exercise caution when evaluating bond requests originating from freight forwarders with inadequate importer vetting procedures.
Scientific Methodologies for Shipment Verification
There are several reliable methods to confirm an ingredient's authenticity and ensure it is free from adulterants. Common techniques include:
- Isotopic Analysis: Employ isotopic analysis to ascertain the provenance of food products, validate authenticity, and detect adulterants. This scientific methodology provides conclusive evidence of product integrity.
- Advanced Authenticity and Traceability Protocols: Implement sophisticated food authenticity and traceability methodologies to identify and prevent fraudulent practices.
Conclusion
As tariffs continue to shape the global agricultural trade landscape, the risk of Food Fraud may become increasingly pressing. The intricate web of supply chains, market price fluctuations, and limited transparency may create opportunities for deceptive practices that compromise the integrity of raw materials and finished food products. However, businesses can combat these challenges by employing proactive monitoring, rigorous importer vetting, and advanced analytical techniques.
Reach out today to learn more about how we can support your food and ingredient authenticity testing needs!
Eurofins US Food laboratories are at the forefront of global food authenticity and adulteration testing. We offer comprehensive services, often accompanied by expert interpretation, for a wide range of products, including juices, spices, wine, agave, olive oil, and honey. Leveraging advanced techniques, such as SNIF-NMR—the technology that launched Eurofins' legacy in wine authenticity—our network, including specialized centers in Des Moines, IA (Eurofins Food Chemistry Testing Des Moines) and Nantes, France (Eurofins Analytics France), provides thorough authenticity verification. Contact us to ensure the integrity of your food and ingredients.
Meet the Author
Ramin Jahromi is the Authenticity Department Leader for Eurofins in Des Moines, IA, bringing over 35 years of experience in food testing, including more than 25 years specializing in fruit juice and agricultural product authenticity. His expertise is further underscored by his leadership roles, having served as Chair of the Technical Committee for Juice and Juice Products, member of the IFU Methods Committee, and member of the American Spice Trade Methods Subcommittee. Ramin has also contributed significantly to the field through numerous poster presentations and publications, which can be found on the Eurofins website.
