The FEI banned it... so if you are competing under their rules, you can not use it. It is not liscenced as an animal fly repellent, so it can not be liscenced and sold as such.
However, it was not banned because it is dangerous. It is because it is natural, so no one has a patent on it like a synthetic substance would have. Hence, no one is going to put up the money for testing to se how it works because no company owns it.
Nothing to stop you using it if you are not competing under FEI rules!
Companies have however managed to get around the ban, as it was only banned for its use as a fly repellent, so many companies have brought out sprays under names such as 'horse spray' or 'coat spray' and have therefore legally managed to add the citronelly oil