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Questions and answers about exporting to dairy quota markets

27 February 2008

What are dairy quota markets?

These are the markets in the Dairy Industry Restructuring Act 2001 schedule of designated markets.

Market	Product	Expiry date	New system at expiry
Dominican Republic	milk powder	30 June 2007 (extended to 31 December 2007)	Allocate licences to eligible participants
Canada	butter	31 July 2007 (extended to 31 December 2007)	Export restrictions no longer apply
European Communities	butter and cheeses	31 December 2007 (25% of rights)	Allocate licences to eligible participants
European Communities	butter and cheeses	31 December 2008 (another 25% of rights)	Allocate licences to eligible participants
USA	cheddar cheese and low-fat cheese	31 December 2008	Remove some export restrictions; and allocate some licences to eligible participants
USA	NSPF cheese and American-type cheeses	31 December 2009	Remove some export restrictions; and allocate some licences to eligible participants
European Communities	butter and cheeses	31 December 2009, (another 25% of rights)	Licences allocated to eligible participants
Japan	prepared edible fat	31 March 2010	Licences allocated to eligible participants
Japan	cheese	31 March 2010	Export restrictions no longer apply
European Communities	butter and cheeses	31 December 2010 (another 25% of rights)	Licences allocated to eligible participants

What is the Dairy Industry Restructuring Act and its Amendment?

The Dairy Industry Restructuring Act (DIRA) 2001 provided the New Zealand Dairy Board (and then Fonterra) with exclusive rights to export dairy product to certain quantity-regulated markets up to July 2007, and from then until existing agreements expired.

An amendment to the DIRA in December 2007 provides for the future allocation of rights to designated dairy export markets. Under the amended Act, MAF is responsible for allocating export licences and maintaining the register of eligible export licence holders, while NZFSA will be responsible for compliance, certification and enforcement.

What has changed?

Previously one exporter held the licences for New Zealand quota markets. The DIRA amendment allows export licences to be allocated to multiple licence holders.

Am I eligible to export to dairy quota markets?

Exporters of dairy products to designated quota markets must hold a valid export licence, which is allocated by MAF.

[For more on eligibility see the MAF website ‘Q&A about dairy export rights’.]

How is my export licence registered?

A ‘Quota Management Register’ (QMR) has been set up to register all allocated export licence holders, including any subsequent transfers. The register is held and maintained by MAF. It holds information relating to all quota programmes, periods, product types, specifications, markets, quota licence holders and their subsequent allocations.

[See contact details for MAF below.]

Can I transfer my export licence?

Government has passed the Dairy Industry Restructuring (Transfer of Export Licences) Regulations 2007, which allows export licence holders to transfer export licences to another person eligible to hold an export licence. Licence holders may not transfer export licences except in accordance with the rules in these regulations.

[The Dairy Industry Restructuring (Transfer of Export Licences) Regulations 2007]

[For more on transferring licences see the MAF website ‘Q&A about dairy export rights’.]

What is dairy quota export approval?

Dairy quota export approval means a certificate or authorisation issued by the Director-General to an exporter of dairy quota products to designated markets.

How do I apply for an authorisation to export to a quota market?

Export licence holders must apply for authorisation to export to all quota markets where there are multiple licence holders. The application is raised on the Quota Management System (QMS) located in NZFSA’s Auckland Dairy Certification office. [See contact details for NZFSA below.]

When an application for quota exports has been approved, a quota certificate will be issued if one is required for product to enter the market.

For EU quota butter and cheese, this certificate will be an IMA certificate. Other importing countries do not require a quota certificate on import. A certificate of origin and health is required for dairy products to enter the Dominican Republic. This will be issued when the quota export application is approved.

What is the Quota Management System?

The ‘Quota Management System’ (QMS) is the system exporters use to apply for authorisation to export to quota markets. This system processes requests for quota certificates and prints quota certificates when required for the market. Approvals are given by NZFSA’s Auckland Dairy Certification office. [See contact details for NZFSA below.]

The QMS records quota use by a licence holder and generates quota reconciliation reports that track quota use by multiple export licence holders into designated quota markets.

An electronic QMS will be available in March 2008 for all quota markets.

What else is required of a quota exporter?

In addition to the exporter holding a valid export licence, dairy quota product must be manufactured at premises that have a registered Quota Compliance Programme (QCP). Before exporting, a dairy quota licence holder must apply to NZFSA for authorisation to export.

All dairy product exported from New Zealand must be manufactured at premises that have a registered Risk Management Programme, and meet New Zealand legislative requirements.

Other documentation may be required by importing country authorities, such as:

• a health/sanitary certificate

• a country of origin certificate

• a valid import licence

• a valid customs export entry

• an IMA certificate (for the EU market only, see below).

What is a Quota Compliance Programme?

A Quota Compliance Programme (QCP) is a document that outlines procedures relating to the manufacture, storage, testing and export of dairy product to a quota market.

The QCP is registered with NZFSA.

Butter and cheese exported to the EU quota must meet the requirements of specification D204.1 ‘Quota Compliance Programmes’ and the December 2007 specification amendment. The specification will be revised to include QCP provisions for product manufactured for export to other quota markets.

What is an IMA certificate?

An IMA (Inward Monitoring Arrangement) Certificate is required for entry of quota butter and cheese into the EU. Commission Regulation 2535/2001 and its amendments lays down rules for import arrangements for New Zealand quota butter and cheese, including requirements for IMA certificates.

The IMA certificate is an official assurance issued under the Animal Products Act.

What will happen to IMA certificates?

The current IMA certification E-cert system will be replaced by the QMR and the QMS. Until these systems are fully operational IMA certificates can be issued manually for the EU quota market for exporters other than Fonterra. Fonterra will be able to use the old IMA certification system to obtain certificates until the release of the new Quota Management System in March 2008.

What happens to the Dairy Industry (IMA Certification) Regulations 2000?

It is proposed that these are revoked on the enactment date of the Animal Products (Regulated Control Scheme – Dairy Quota Products) Regulations 2008 in the first half of 2008.

[See NZFSA consultation on proposals for a Dairy Quota Regulated Control Scheme.]

What other changes have occurred recently?

Commission Regulation 2535/2001 has been amended recently to provide for the import of New Zealand quota butter with a fat content of 80–85%, whereas previously the fat content was 80–82%.

What happens if quota product is rejected or does not enter the quota market?

Exporters must notify NZFSA within 24 hours when any export product is rejected at a border. If quota product originally exported as part of a quota for which an export license has been issued does not enter a quota market for another reason, NZFSA must be informed so it can reconcile quota usage.

What role does Customs play?

MAF advises New Zealand Customs Service of exporters who are eligible to export to a particular market. Alerts on the Customs’ computer system check that only approved exporters are exporting product to a quota market. It will raise an alert flag and stop the shipment from being exported if the exporter is not eligible to export to that market.

Where can I find more information?

About the Dairy Quota Management System

Questions and answers about dairy export rights and allocation of export licences (this link takes you to the MAF website

How do I contact NZFSA’s Auckland Certification Unit?

For information about QCPs, the QMS, IMA certificates and authorisations to export.

For general enquiries, contact Kate Slinn, NZFSA Senior Advisor – Client Services

Postal address: NZFSA, PO Box 3540, Auckland

Physical address: Level 1, 96 New North Road, Eden Terrace, Auckland

Phone: 09 909 6200

Fax: 09 909 6217

Email: dairyquota@nzfsa.govt.nz

For general enquiries on the Dairy Quota Management Programme, contact Ann Hayman, NZFSA Senior Programme Manager, NZFSA, Wellington

Phone: 04 894 2674

How do I contact MAF?

For information on the QMR, dairy quota licences and transfers, and statutory declarations of milksolids.

For general enquiries, contact Hamish Forsyth, MAF Dairy Quota Allocation and Transfers

Postal address: MAF Policy, PO Box 2526, Wellington

Phone: 04 894 0580

Email: Dairyquota@maf.govt.nz