Ethiopian Federal Laws

A PROCLAMATION TO PROVIDE FOR COFFEE QUALITY CONTROL AND MARKETING

WHEREAS, in order to efficiently supply quality and competitive coffee to the global market it has become necessary to establish an improved system for coffee quality control and marketing;

WHEREAS, it has been found necessary to make the coffee marketing system fast and cost effective, in order to enable coffee producers to earn better income from coffee transactions;

WHEREAS, it has become necessary to harmonize coffee marketing with the organizational work of the Ethiopia Commodity Exchange and the reorganization of the executive organs of the Government;

NOW, THEREFORE, in accordance with Article 55 (1) of the Constitution of the Federal Democratic Republic of Ethiopia it is hereby proclaimed as follows:

PART ONE
GENERAL

1. Short Title

This Proclamation may be cited as the “Coffee Quality Control and Marketing Proclamation No. 602/2008”.

2. Definitions

1. “coffee” means the fruit of a coffee tree or parts of such fruits in whatever form;
2. “red cherry coffee” means the red fruit of a coffee tree picked after it is naturally ripened;
3. “coffee with pulp” means a red cherry coffee picked and dried but not pulped;
4. “washed coffee with parchment” means red cherry coffee which has been pulped, fermented, washed and dried with its husk;
5. “washed coffee” means red cherry coffee which has been pulped, fermented, washed to remove its sticky mucilage;
6. “sun dried” means a red cherry coffee which has been dried, hulled, cleaned and sorted;
7. “semi-washed coffee” means dried and pulped red cherry coffee with its sticky mucilage;
8. “supply coffee” means coffee processed in any form by industries located in the production area for delivery to auction centers or the Ethiopia Commodity Exchange;
9. “export coffee” means coffee bought by exporters from auction centers or the Ethiopia Commodity Exchange or produced on their own farm, prepared and processed, in accordance with the country’s quality standard, for export;
10. “coffee by product” means light, broken, underdeveloped or including any coffee with defects:
11. “domestic consumption coffee” means coffee which is coffee by product, or coffee the taste of which has deteriorated due to mishandling or length in storage and with not more than 15% purity, which is not harmful to health but is not fit for export;
12. “traditionally processed coffee” means coffee processed using outdated methods of wood or stone grinder;
13. “coffee supplier” means a person who, upon meeting the required criteria, collects coffee with pulp or red cherry coffee from producers or from his own farm for delivery to auction centers or the Ethiopia Commodity Exchange;
14. “coffee exporter” means a person who, upon being licensed to trade coffee by the appropriate government organ and fulfilling the requirements set by the Ministry, and upon purchasing coffee from auction centers or the Ethiopia Commodity Exchange or collecting from his own farm, prepares, processes and exports coffee in compliance with the export quality and standards;
15. “executive body” means the Ministry, the Ethiopia Commodity Exchange or a regional executive organ authorized by law to implement the regulation and directive to be issued in accordance with this Proclamation for the proper execution of coffee marketing and quality;
16. “coffee transaction” means the lawful buying and selling of coffee between a coffee supplier and a coffee exporter, a coffee exporter and a foreign coffee importer, or coffee exporter and a domestic consumption wholesaler or a coffee supplier and a domestic consumption coffee wholesaler or a domestic consumption coffee wholesaler and retailers;
17. “coffee quality control” means inspection and control of the picking, processing, storage and transportation of coffee, in accordance with acceptable norms, to ensure delivery of coffee to consumers in its natural state;
18. “coffee processing” includes collecting and pulping red cherry coffee after picking, pulping and cleaning coffee with pulp, and processing export coffee in accordance with the country’s quality and grade requirements and the buyers’ needs as per the authorized technical procedures;
19. “coffee producers” means any coffee producer, including small-scale coffee farmers, coffee farmers’ co-operatives, private investors, and state coffee producing enterprises;
20. “coffee quality liquoring and inspection center” means an institution under the Ministry, that inspects, liquors and issues certificates for coffee locally supplied from production areas, export coffee, and coffee by product delivered to consumer areas;
21. “coffee transaction centers” includes local markets designated by the regional organ having legal power for trading of red cherry coffee and coffee with pulp; the auction centers and the Ethiopia Commodity Exchange;
22. “coffee trade” means acts including collecting coffee from producers, processing and supplying to auction centers or the Ethiopia Commodity Exchange, exporting, roasting, grinding, distributing, retailing with license from the appropriate government organ;
23. “domestic consumption coffee wholesaler” means a person who, upon being licensed to trade coffee by the appropriate government organ and fulfilling the requirements set by the Ministry, and upon purchases domestic consumption coffee from auction centers or the Ethiopia Commodity Exchange, for sale in the designated market;
24. “coffee roaster” means a person who, upon being licensed by the appropriate government organ purchases coffee from auction centers, the Ethiopia Commodity Exchange, or a domestic consumption coffee wholesaler, roasts or roast and grinds coffee for export or sale in the domestic market;
25. “competence certificate” means a document that certifies the ability of a person to collect, process, store, transport coffee, and to engage in all other activities related to coffee trade;
26. “manipulation” means any act that results or is likely to result in confusion or deception of market participants or the Government as to the price, quantity, quality, or type of coffee;
27. “Ministry” means the Ministry of Agriculture and Rural Development;
28. “person” means a natural or juridical person;
29. “region” means any regional state referred to in Article 47 of the Constitution of the Federal Democratic Republic of Ethiopia and includes the Addis Ababa and Dire Dawa city administrations;
30. any expression in the masculine gender includes the feminine

3. Scope of Application

This Proclamation shall apply to any person directly or indirectly involved in transactions of Ethiopian coffee quality control and marketing.

PART TWO
COFFEE QUALITY CONTROL AND TRANSACTION PROCESS

4. Coffee Quality Control Process

1. Coffee shall be pre-inspected by the legally designated regional quality control organ in the locality of production and sent as closed with seal to a coffee quality liquoring and inspection center.
2. Supply coffee so sent to the coffee quality liquoring and inspection center shall upon verification that it has been properly sealed and delivered, be graded through an appropriate examination based on a representative sample.
3. In case of export coffee, before it is exported, it shall be certified by a coffee quality liquoring and inspection center and issued a certificate that it is prepared in accordance with the characteristics of the agro ecology of its production area and meets the required grade; then shall be sealed and sent to the port for consignment.
4. In the case of domestic consumption coffee, it shall only be sealed and sent to consumer regions upon verification and issuance of a certificate by a coffee quality liquoring and inspection center that it meets the grade requirements set by the law.

5. Coffee Transaction Process

1. coffee transaction between a coffee producer and coffee supplier; or where it is supply coffee intended for export, between a coffee supplier and a coffee exporter; where it is supply coffee and below an exportable grade, between coffee supplier and a domestic wholesaler; or where it is not exportable, coffee by product, between a coffee exporter and a domestic wholesaler; shall take place in lawful coffee transaction centers;
2. supply coffee transaction in auction centers or the Ethiopia Commodity Exchange shall be carried out on the basis of the grade and representative sample certificate issued by coffee quality liquoring and inspection center in an open auction system;
3. coffee sold in an auction centers and in the Ethiopia Commodity Exchange shall be sent to the processing warehouse for export preparation with the details of grade, quantity, place of origin and any other relevant information required by law;
4. coffee not sold upon presentation in the auction centers or in the Ethiopia Commodity Exchange may be stored in enterprises that provide only warehousing services until a better price is offered for it;
5. coffee for domestic consumption shall be traded in auction centers and in the Ethiopia Commodity Exchange.

PART THREE
OBLIGATIONS OF TRANSACTING ACTORS

6. Obligations of Person Involved in Coffee Transaction

1. conduct coffee transaction only in transaction centers;
2. comply with all directives and regulations enacted by the appropriate body for the proper execution of coffee transaction;
3. acquire a certificate from the coffee quality liquoring and inspection center before submitting supply coffee to auction centers or the Ethiopia Commodity Exchange or consigning coffee to domestic or export market;
4. ensure, before loading coffee for transportation, that a vehicle and its driver conform to the provisions of this Proclamation and regulations and directives issued pursuant to the Proclamation;
5. own the proper coffee processing and storage facility as well as equipments and personnel, or submit a contract of hire of the same, in accordance with the competence certification process issued by the Ministry or regional agriculture bureaus;
6. submit a representative sample from the coffee prepared for transaction when so requested for quality inspection purposes;
7. have the appropriate executive body seal and issue a letter of release when transporting coffee from the production area to coffee quality liquoring and inspection center or from coffee quality liquoring and inspection center to market centers and to the ports or to local consumption markets;
8. maintain a register of the daily coffee exchange quantity, grade, price and list of purchase and disclose such register to the relevant government organ on demand and cooperate when physical presence for site visit or inventorying is required;
9. abstain from all acts that may result the defamation of the good name of the country’s coffee.

7. Obligation of Coffee Suppliers

1. within 24 hours, deliver red cherry coffee to a processing plant, for processing into washed parchment coffee, semi-washed coffee, or sun dried coffee using the technical process required by the Ministry;
2. within six month of processing, deliver processed supply coffee to auction centers or the Ethiopia Commodity Exchange for sale;
3. ensure that the coffee submitted to coffee quality liquoring and inspection centers conforms to quality standards and has a moisture content of not more than 12%;
4. purchase, process and transport coffee only in the area designated to him and submit the same without mixing the coffee with coffee of other agro ecologies;
5. where it is export coffee graded by the coffee quality liquoring and inspection centers to be traded on the Ethiopia Commodity Exchange, store it in warehouses designated by the Commodity Exchange or where it is coffee to be traded in auction centers and in case he is willing to wait for better price, store it in licensed commercial warehouses not involved in the coffee trading business.

8. Obligations of Coffee Exporters

1. process export coffee in accordance with the country’s quality standard, for export;
2. not exceeding 24 hours after the conclusion of a contract for sale of coffee, have the contract and the correct sale price registered at the National Bank of Ethiopia, and notify the same to the Ministry and other concerned authorities within 15 days;
3. export coffee collected from his own farm or purchased from auction centers or the Ethiopia commodity Exchange before the next harvest;
4. except in cases of mixing processes registered under special permission of the Ministry, export coffee, without mixing different types and maintaining the name of place of origin;
5. sell coffee by product leftover from export coffee in the auction centers or the Ethiopia Commodity Exchange;
6. without prejudice to the extension of a contract permitted by the National Bank of Ethiopia upon showing of sufficient reasons, perform the contract he concludes with the buyers on the due date;
7. not resubmit for sale to auction centers or to the Ethiopian Commodity Exchange once he purchased the export coffee from the auction center or from the Ethiopian Commodity Exchange and graded by the coffee quality liquoring and inspection center;

9. Obligations of Domestic Consumption Coffee Wholesalers

1. only purchase domestic consumption coffee from auction centers or the Ethiopia Commodity Exchange;
2. not purchase, sell or transport export coffee;
3. not sell domestic consumption coffee in coffee producing areas unless it is permitted by the concerned body; and
4. transport and sell domestic consumption coffee purchased from auction centers or the Ethiopia Commodity Exchange to markets designated for the wholesaler, after having the same sealed by the appropriate executive body and obtaining a letter of release.

10. Obligations of Coffee Roasters

1. purchase the coffee for such purpose only from auction centers, the Ethiopia Commodity Exchange or wholesalers; and
2. ensure the description written on the packaging of the roasted and ground coffee conforms with the quality of the coffee.

11. Obligations Coffee Producers

1. without prejudice to Article 6(1) of this Proclamation, have the right to directly export coffee from his own farm, only after submitting the same to the coffee quality liquoring and inspection center for grading before and after processing for export; and
2. sell coffee by product in auction centers or the Ethiopia Commodity Exchange only upon examination and approval of the coffee quality liquoring and inspection center.

12. Obligations of Service Providers

1. A body engaged in coffee processing shall properly clean and process the coffee received by it as per the terms of the contact it entered and deliver the same to the owner with evidence of appropriate cleaning for the quality and grade of the coffee.
2. A body engaged in coffee cleaning and pulping shall prevent the husk or any odor emanating from liquid waste produced by the cleaning and pulping process from causing any negative impact on the environment and community.
3. The owner of a vehicle that sustained malfunctions or against which a crime is committed while transporting coffee, shall promptly report the same to a lawful organ in the locality.
4. An owner or agent of a vehicle transporting coffee, shall before loading the coffee verify that the coffee has been prepared for transportation in conformity with this Proclamation.
5. A person engaged in providing coffee transportation service, shall transport the coffee he received from its place of consignment to its destination without breaking the seal and tearing the canvas and by preserving its quality.
6. A body engaged in coffee warehousing shall store coffee received for storage in accordance with the contract entered into.

PART FOUR
MISCELLANEOUS PROVISIONS

13. Power of the Ministry

1. determine, in consultation with regions, places and conditions of coffee transaction and quality control;
2. inspect and grant certificate of quality and issue a letter of release to all coffee destined for domestic consumption or for export;
3. cause any coffee to be exported that does not meet the required quality standard to be reprocessed for compliance with the required quality and grade;
4. notwithstanding the provisions of sub-article (2) of this Article, authorize the export of coffee for purposes of sampling or trade fair;
5. for the purpose of ensuring compliance with this Proclamation or regulations and directives issued for the implementation of this Proclamation with court order or, in cases of urgent circumstances, without a court order inspect any dwelling, vehicle, warehouse, public enterprise or any other place where coffee is likely to be found; and subject to the right of the owner of the coffee to appeal to the court, where the illegality of the coffee is ascertained beyond doubt, confiscate and sale such coffee;
6. provide service at quality inspection and auction centers, and charge service fees;
7. suspend services to a person whose acts of distorting the transaction process are proved sufficiently and notify the same to the appropriate body ;
8. issue certificate of competency to persons engaged in coffee export business;
9. determine the amount of commission paid to whistle blowers who report illegal coffee transactions.

14. Prohibitions

1. processing coffee using technical procedures other than those issued by the Ministry or the appropriate regional body.
2. buying or selling, by any person in the coffee trading business, coffee outside the Ethiopia Commodity Exchange or a transaction center established by the Ministry or the appropriate regional body.
3. storing, by any person in the coffee trading business, coffee for more than one production season.
4. transporting, by any person in the coffee transporting business, coffee in a manner that is below the standard of cleanliness.
5. selling, by any person in the coffee trading business, export standard unfrosted or roasted ground coffee in a domestic market.
6. engaging, by any person in the coffee trading business or person directly or indirectly connected to the coffee trading business and for illegal gain, in any deliberate manipulative practice in relation to the quality and marketing of coffee.

15. Penalties

1. Any coffee processor who fails to comply with the appropriate technical procedures and thereby causes damage to the quality of the coffee or the local community shall have his processing plant closed and be prohibited from transporting his coffee to transaction centers, and unless punishable by greater penalty as per any other relevant law, be penalized by a fine of Birr 20,000 and an imprisonment of not less than one year but not exceeding three years.
2. Any person engaged in coffee transaction outside transaction centers established by the Ministry or by an appropriate regional body or the Ethiopia Commodity Exchange shall, in addition to confiscation of his coffee, unless punishable with a greater penalty as per any other relevant law, be penalized by a fine of Birr 20,000 and an imprisonment of not less than one year but not exceeding three years.
3. Any person who, without notifying the appropriate body, stores and tenders for sell coffee outside the authorized time and place, shall, in addition to confiscation of the coffee, unless punishable with a greater penalty as per any other relevant law, be penalized by a fine of Birr 30,000 and in imprisonment of not less than one year but not exceeding three years.
4. Any person who unlawfully or in an inappropriate manner transports coffee shall, in addition to confiscation of the coffee, unless punishable with a greater penalty as per any other relevant law, be penalized by a fine of Birr 50,000 and an imprisonment of not less than three years but not exceeding five years.
5. Any person who sells unfrosted coffee or processed roasted coffee that is of export standard in the domestic market shall, in addition to confiscation of the coffee, unless punishable with a greater penalty as per any other relevant law, be penalized by a fine of Birr 50,00 and an imprisonment of not less than three years but not exceeding five years.
6. Any person who owns a vehicle apprehended transporting illegal coffee, shall, in addition to confiscation of the coffee, unless punishable with a greater penalty as per any other relevant law, be penalized by a fine of Birr 50,000 and an imprisonment of not less than three years but not exceeding five years;
7. Any person who commits any manipulative act in relation to coffee quality and marketing, shall, unless punishable with a greater penalty as per any other relevant law, be penalized by a fine of Birr 50,000 and an imprisonment of not less that three years but not exceeding five years;
8. Any person who illegally diverts and transports coffee legally authorized for transportation to the appropriate inspection centers or to the auction centers or to the Ethiopia Commodity Exchange shall, unless punishable with a greater penalty as per any other relevant law, be penalized by a fine of Birr 100,000 and an imprisonment of not less that five years but not exceeding ten years.

16. Jurisdiction

The Federal First Instance Court shall have jurisdiction on criminal matters provided under Article 15 of this Proclamation.

17. Repealed and Inapplicable Laws

1. The Coffee Trade Proclamation No. 263/1984 is hereby repealed.
2. No law, regulation, directive or customary practices shall, in so far as they are inconsistent with the provisions of this Proclamation, have effect on matters provided under this Proclamation.

18. Transitory Provisions

1. All pending civil or criminal matters brought in accordance with the laws repealed or made inapplicable by this Proclamation or civil or criminal faults committed against the relevant repealed or inapplicable law before the coming into force of this Proclamation, shall be concluded in accordance with the relevant repealed or inapplicable law.
2. Any certificate of competency issued before the coming into force of this Proclamation shall be deemed to have been issued as per this Proclamation, until replaced by a new certificate of competency issued by the competent authority in accordance with the provisions of this Proclamation.
3. In order to make, the coffee transactions provisions included under this Proclamation, to conform with the manners of organizational work of the Ethiopian Commodity Exchange, it shall be determined by the regulation to be issued by the Council of Ministers.

19. Power to Issue Regulations and Directives

1. The Council of Ministers may issue regulations necessary for the implementation of this Proclamation.
2. The Ministry may issue directives necessary for the implementation of this Proclamation and regulations issued pursuant to sub-article (1) of this Article.
3. The Regional States may issue laws necessary for the implementation of this Proclamation
4. The Ethiopia Commodity Exchange Authority may issue directives necessary for the implementation of this Proclamation and regulations issued pursuant to sub-article (1) of this Article with respect to coffee trading on the Ethiopia commodity Exchange

20. Effective Date

This Proclamation shall enter into force up on the date of publication in the Federal Negarit Gazeta.

Done at Addis Ababa, this 25th day of August, 2008
GIRMA WOLDEGIORGIS
PRESIDENT OF THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA