Subsidiary JBS loses appeal against Carne Fraca fine

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

The Controladoria-Geral da União (CGU) has rejected the request for reconsideration of Seara Alimentos, the company subject to sanctions under Operation Carne Fraca (Weak Flesh). Seara Alimentos is a subsidiary of JBS SA, the Brazil-based parent company of JBS USA.

In October 2023, Seara Alimentos was fined US$14.8 million ($2.9 million) in Brazilian reals. However, the company appealed the decision. The CGU heard the claim and considered the evidence, but rejected it based on input from the Legal Entity Liability Directorate (DIREP).

JBS previously said those responsible for the Carne Fraca investigation had not expressed any suspicion about the quality or safety of Seara or JBS products and brands.

Violations came to light during Operation Carne Fraca, a federal police investigation that uncovered a meat fraud scheme involving some of the country’s largest companies.

Historical violations
In March 2017, Brazilian police announced the results of Operation Carne Fraca, which began in 2015 and uncovered cases of fraud and corruption in about two dozen beef and poultry processing plants in the country. As a result of the incident, major changes have been made by the Brazilian Ministry of Agriculture, Livestock and Food (MAPA).

The fines for Seara Alimentos totaled almost $14.8 million in Brazilian real ($2.9 million) and the decision was officially published earlier this month.

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

Financial payments targeted inspection activities and influenced the issuance 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, Rio Grande do Sul state, rejected the request of a local unnamed slaughterhouse to annul a fine imposed by the Ministry of Agriculture and Livestock breeding based on findings in the context of Operation Carne Fraca.

The judge ruled that the fine was correct and the company was told to pay the Brazilian real $450,000 (US$90,800). In June 2021, the meat company filed a case against the decision over issues found in 2017.

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