The indictments of New Jersey Sen. Bob Menendez and Wael Hana are raising concern over an arrangement that gives control over millions of dollars in U.S. beef and poultry trade to a single entity at the heart of the scandal.

New Jesey-based IS EG Halal, a company run by Hana, was allegedly used by Egypt to funnel bribes to Menendez and his wife Nadine.

According to USDA and industry officials, the company had little or no experience with halal certification at the time of a 2019 action by the Egyptian government to give it exclusive authority in the U.S. and around the world to ensure imported beef and poultry met Islamic production standards.

“Given the volume of shipments to Egypt, having only one recognized halal certifier available to U.S. exporters is a significant concern, especially under the current circumstances,” said Joe Schuele, a spokesman for the U.S. Meat Export Federation.

The U.S. exported about $90 million worth of beef variety meats to Egypt in 2022, up from $69 million in 2021, according to USDA data that also show shipments of about $33 million in the first 7 months of this year. Most of that is beef livers — a product valued in Egypt. The local premium there offers U.S. packers a far better price than they can get from American pet food makers or renderers.

When it comes to exporting products like liver, halal certification “is a very important part of our business in the beef industry … because we obviously produce way more beef livers than are consumed in the United States,” said Mark Gustafson, former director of international sales for Colorado Premium and vice president of international sales for JBS Swift and Co. “Egypt has always been our largest liver market.”

As Hana awaits trial on charges of bribery, fraud and extortion along with the Menendezes, U.S. packers are considering the fate of IS EG Halal and the certification their products need for export, says Gustafson.

“The question becomes if that certifier is no longer valid, what are our options as far as getting our certification?” he said. 

And it's not just beef. U.S. chicken exports to Egypt also need halal certification and are therefore reliant on IS EG.

IS EG is still certifying now, but if that stops, Egypt “is going to have to open the door to additional certifiers in the U.S. to handle halal certification for U.S. meat and poultry,” USA Poultry and Egg Export Council President and CEO Greg Tyler told Agri-Pulse. “Indonesia has six different certifiers across the U.S.”

U.S. poultry exports to Egypt are smaller than the beef trade, but there is optimism spurred by recent growth after the country lifted a restriction on imports to whole broilers and opened its market to chicken parts, Tyler said. 

The U.S. shipped about $2.3 million worth of broiler meat to Egypt last year, up from just $40,000 in 2021, according to USAPEEC data. The U.S. has exported $1.3 million worth of broiler meat to Egypt in just the first seven months of this year.

“It’s something we were excited about and we’re hoping to get more product into there, but this (IS EG) factor is something that’s raising concern in the industry,” Tyler said.

Brazil has even more on the line. The country’s poultry industry shipped $88 million worth of product to Egypt last year and all of it was certified by IS EG, according to USAPEEC data.

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Egypt so far has not required halal certification for dairy, but that’s expected to change soon. Egypt’s General Organization for Veterinary Service has that requirement on hold and its latest action was to extend the period that dairy doesn’t need certification until Dec. 31, according to an Aug. 22 report released by USDA’s Foreign Agricultural Service.

Greg TylerGreg Tyler, USAPEECThe U.S. exported $74 million worth of dairy products to Egypt last year.

There’s talk among U.S. meat industry officials that Egypt is considering approving new halal certifiers in the U.S. — the country has a lot to choose from — and that’s something USDA is encouraging, a government official tells Agri-Pulse.

It’s also something halal certification companies are hoping for. There were four companies approved to do just that by Egypt before the country decided in 2019 to give the certification monopoly to IS EG. One of them, the Maryland-based Halal Certification Department, wants to get that business back, says owner and president Habib Ghanim.

“In 2019 (Egypt) reviewed all the certifiers that were doing the work and within a month decided to eliminate everybody except (IS EG), which didn’t even know anything about halal,” Ghanim told Agri-Pulse. “All of us lost our accounts. They took all of our accounts and gave them to Wael Hana. We hope that they will cancel IS EG and start fresh and fair.”

USDA, fearing one halal certifier just wasn’t enough and that a monopoly on the service would increase meat prices, has argued against the monopoly given to IS EG Halal.

Ghanim says his certifying company charged just a fifth of what IS EG began charging when the company took control and FAS comments appear to generally support that claim.

The FAS office in Cairo released an analysis in July 2019 — just three months after Egypt’s Agriculture Ministry named IS EG as the only halal certifier for U.S. meat — and stressed that “the new certifier increased fees for certification services drastically, over tenfold in some cases.”

The FAS report went on to say that under IS EG, “a shipment of 15 metric tons would be charged $333 per ton, or around 15 cents per pound for halal certification. Previously, the cost for certification was $10-20 per metric ton, or less than one cent per pound.”

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