JBS subsidiary loses appeal against Carne Fraca fine

JBS has lost an appeal against a fine for one of its subsidiaries as part of Operation Carne Fraca in Brazil.

The Controladoria-Geral da União (CGU) rejected the reconsideration request from Seara Alimentos, the company sanctioned under Operation Carne Fraca (Weak Flesh). Seara Alimentos is a subsidiary of JBS S.A., the Brazilian-based parent company of JBS USA.

In October 2023, Seara Alimentos was fined Brazilian Real $14.8 million (U.S. $2.9 million). However, the company appealed the decision. The CGU heard the claim and considered the evidence but dismissed it based on input from the Directorate of Liability of Legal Entities (DIREP).

JBS previously said that those responsible for the Carne Fraca investigation did not raise any suspicions about the quality or security of Seara’s or JBS’ products and brands.

Offences came to light during Operation Carne Fraca, a Federal Police investigation that uncovered a meat fraud scheme involving some of the largest companies in the country.

Historical violations
In March 2017, Brazilian police announced the results of Operation Carne Fraca, which began in 2015 and highlighted cases of fraud and corruption in about 20 beef and poultry processing plants in the country. Major changes were made by the Brazilian Ministry of Agriculture, Livestock, and Food (MAPA) as a result of the incident.

Fines for Seara Alimentos totaled almost Brazilian Real $14.8 million (U.S. $2.9 million) and the decision was officially published earlier this month.

The CGU found that Seara Alimentos, in 2015 and 2016, paid “undue benefits” to public MAPA agents in the state of Paraná.

Financial payments targeted inspection activities and impacted the issuing of national and international health certificates during sanitary inspections for food products shipped to Chile and China.

In another case in February this year, a regional court in Santa Maria, in the state of Rio Grande do Sul, denied the request of a local unnamed slaughterhouse to annul a fine imposed by the Ministry of Agriculture and Livestock based on findings as part of Operation Carne Fraca.

The judge ruled the penalty was correct, and the company was told to pay Brazilian Real $450,000 (U.S. $90,800). In June 2021, the meat firm filed a case against the decision covering issues found in 2017.

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