January 1, 2019
Last May, the Egyptian minister of agriculture issued a decision to certify the Islamic Egyptian Company (IS EG) as the only company that has the right to issue halal certifications in the US, instead of eight centres that have been certified by the ministry. While Egyptian importers were still recovering from the effects of this decision, they were surprised with a similar decision after five months to give the same company exclusive rights to issue halal certifications in South America, which is virtually the main source of imported meats in Egypt.
The two decisions raised many questions, especially considering that IS EG is a recently established firm with no experience in issuing halal certifications. As well as this, the company has doubled halal certification fees for each container, as much as 25 times more in some cases. Mada Masr, an Egyptian news website, has tracked the company and revealed that it is affiliated to another company owned by an official Egyptian sovereign body.
IS EG: The story of a company which appeared from nowhere
IS EG has been and remained unknown to many transactors in the market, whether for foreign and Egyptian importers or even foreign governments. A report issued by the agricultural attaché of the American embassy revealed that it is a fresh company that was established in November 2017 and has no previous experience in issuing halal certifications or with transactions with meat providers or certification companies in the USA. The company’s activity started in May 2019 with the decision of the minister of agriculture to restrict issuing halal certifications in the USA to this company.
The company has been registered in New Jersey since 2017, however, there have been no previous importing operations or halal certifications issued. The founder of the company is called Wael Hanna and an American lawyer called Antranig Aslanian, who was a representative of the Egyptian government in a previous case. IS EG seems as if it appeared from nowhere. The website of the company was registered on 22 April, a few days before the decision. And the new website has almost no information about the company. A few weeks after the decision, the legal representative was changed, and the new lawyer became Howard Dorian, a notorious lawyer who has been stopped from practicing several times previously. In the same month, the new lawyer represented another Egyptian importing company called Medi Trade to establish a branch in New Jersey in the same place as the IS EG’s headquarters. Wael Hanna is also the head of Medi Trade. There is little accessible information about Medi Trade. Despite its huge business in the Egyptian market, it doesn’t have a website. Several official statements indicated that Medi Trade is owned by the state and affiliated to a sovereign body. At the end of 2015 the company was among five bodies working under political instructions to lower prices. IS EG has restricted receiving halal certifications for importers to Medi Trade, instead of delivering the certification with the other documents of the shipment as before. It takes a lot of time according to one of the importers who is dealing with the company.
Monopoly eliminating the free market Egypt is importing two main types of red meat, the majority of it is frozen (the rest is cold cuts). Brazil comes on the top of the list of countries exporting red meat to Egypt with 171,000 tons in 2018. The share from the USA was 62,200 tons in the same year – it all needed certification to say that it’s halal and it’s permissible to consume it under Islamic Sharia law. Certification costs a lot of money. IS EG has doubled the fees in USA from $200 to more than $5,000 for a container (container= 27 tons), and doubled it in South America from $250 to $1,500.
IS EG will earn millions of dollars through monopolising this certification, more than $11 million per year in North America alone, and about $10 million in South America, considering the stability of prices and the number of shipments this year compared with last year. The rise of halal certification fees by IS EG led to an increase in meat prices in the Egyptian market.
According to the American agriculture ministry, the decision led to a rise in the price of American meat exported to Egypt at EGP 13 per kilo. Moreover, the Egyptian government has annulled contracts with a huge number of companies that have the right to issue halal certifications in USA and South America, without any justification.