{"id":4345,"date":"2021-01-05T08:45:24","date_gmt":"2021-01-05T08:45:24","guid":{"rendered":"https:\/\/diaztradelaw.com\/?p=4345"},"modified":"2022-07-07T14:56:26","modified_gmt":"2022-07-07T18:56:26","slug":"usda-national-organic-program-enforcement-compliance-overview","status":"publish","type":"post","link":"https:\/\/diaztradelaw.com\/usda-national-organic-program-enforcement-compliance-overview\/","title":{"rendered":"USDA National Organic Program &#8211; Enforcement &#038; Compliance Overview"},"content":{"rendered":"<p><em>Co-Authored by <\/em><a href=\"https:\/\/diaztradelaw.com\/meet-the-team\/\"><em>Sharath Patil<\/em><\/a><\/p>\n<p><strong><em>What\u2019s the National Organic Program?<\/em><\/strong><\/p>\n<p>Established by Congress and <a href=\"https:\/\/www.federalregister.gov\/documents\/2000\/12\/21\/00-32257\/national-organic-program\">announced <\/a>in 2000, the U.S. Department of Agriculture\u2019s (\u201cUSDA\u201d) <a href=\"https:\/\/www.ams.usda.gov\/about-ams\/programs-offices\/national-organic-program\">National Organic Program<\/a> (\u201cNOP\u201d) is a federal regulatory program which develops and enforces uniform national standards for organically-produced agricultural products sold in the United States. NOP operates as a public-private partnership which accredits third-party organizations to certify that farms and businesses meet the national organic standards. By enforcing its standards, NOP ensures a level playing field for producers while protecting consumer confidence in the integrity of the <a href=\"https:\/\/www.ams.usda.gov\/rules-regulations\/organic\/organic-seal\">USDA organic seal<\/a>.<\/p>\n<p><!--more--><\/p>\n<p><strong><em>How does NOP Enforcement Work?<\/em><\/strong><\/p>\n<p>The NOP\u2019s Compliance &amp; Enforcement Division (\u201cC&amp;E\u201d) is involved in enforcement organic standards. C&amp;E enforces rules by working with independent certifying agencies. Independent certifying agencies accredited by the USDA conduct periodic inspections or audits. If a certifying agency finds a violation, it can issue one of the <a href=\"https:\/\/www.ams.usda.gov\/sites\/default\/files\/media\/4002.pdf\">following notices<\/a>:<\/p>\n<ul>\n<li>Conditions for a new\/continued certification (for minor issues)<\/li>\n<li>Notice of noncompliance<\/li>\n<li>Denial or proposed suspension of certification (for major non-compliances)<\/li>\n<li>Denial or proposed revocation of certification (for major non-compliances)<\/li>\n<\/ul>\n<p>When a certifier proposes to suspend or revoke an operation\u2019s organic certification, it must provide the operation with the right to request mediation. The goal of the mediation process is to engage in alternative dispute resolution to lead to a settlement agreement between the operator and the certifier. The certifier may accept or reject the mediation request.<\/p>\n<p><strong><em>NOP Penalties<\/em><\/strong><\/p>\n<p>Organic producers and distributors who violate national organic standards are subject to potentially severe civil and criminal penalties by the NOP. These penalties include civil fines, civil sanctions in the form of organic status suspensions or revocations, and even referral to law enforcement agencies for criminal proceedings.<\/p>\n<p>For example, an organic producer or distributor\u2019s mislabeling actions can result in penalties as high as $18,370 per violation. The term \u2018violation\u2019 here has been interpreted broadly and could sometimes mean per order or entry. <em>In Re Xochitl<\/em>, below, is an example of penalties compounding quickly because violations were interpreted by the number of orders\/entries.<\/p>\n<p>The following are <a href=\"https:\/\/www.ams.usda.gov\/services\/enforcement\/organic-enforcement-activity\">NOP enforcement statistics<\/a> in recent years:<\/p>\n<table>\n<tbody>\n<tr>\n<td width=\"108\"><strong>Year<\/strong><\/td>\n<td width=\"204\"><strong>Total Civil Penalties Levied<\/strong><\/td>\n<td width=\"156\"><strong>No. of Suspensions<\/strong><\/td>\n<td width=\"156\"><strong>No. of Revocations<\/strong><\/td>\n<\/tr>\n<tr>\n<td width=\"108\">2017<\/td>\n<td width=\"204\">$187,500<\/td>\n<td width=\"156\">294<\/td>\n<td width=\"156\">17<\/td>\n<\/tr>\n<tr>\n<td width=\"108\">2018<\/td>\n<td width=\"204\">$30,750<\/td>\n<td width=\"156\">548<\/td>\n<td width=\"156\">16<\/td>\n<\/tr>\n<tr>\n<td width=\"108\">2019<\/td>\n<td width=\"204\">$804,300<\/td>\n<td width=\"156\">595<\/td>\n<td width=\"156\">14<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Below are some case summaries explaining to NOP has penalized organic businesses for repeat noncompliance:<\/p>\n<p><a href=\"https:\/\/www.ams.usda.gov\/sites\/default\/files\/media\/ALJXochitl07202017.pdf\"><em>In Re Xochitl, Inc.<\/em><\/a><\/p>\n<p>In a July 2017 USDA administrative law proceeding, <em>In Re Xochitl, Inc.<\/em>, the respondent Xochitl, Inc. (\u201cXochitl\u201d), a Texas corporation, was found by an independent accredited agency to be using nonorganic cottonseed oil in the production of corn chips sold as organic during an unannounced inspection. The independent agency issued Xochitl a Combined Notice of Noncompliance and Proposed Revocation, and Xochitl soon after admitted to the use of nonorganic cottonseed oil. Two months later, Xochitl filed a timely appeal of the Combined Notice of Noncompliance and Proposed Revocation with the USDA\u2019s Agricultural Marketing Service (\u201cAMS\u201d) Administrator. A few months later, Xochitl signed a settlement agreement under which Xochitl agreed to withdraw its appeals, waive further proceedings, pay a civil penalty of $31,135, and have its organic certification suspended.<\/p>\n<p><strong>However, only three months after signing the settlement agreement, Xochitl was again investigated by AMS for selling products as organic without certification, which resulted in further violations. As a result of Xochitl\u2019s further violations during suspension, the AMS Administrator upheld the independent agency\u2019s revocation for five years and imposed a civil penalty of $1,826,000. The civil penalty amount was calculated by multiplying the $11,000 penalty (at the time) by 166 for each unique order of product sold by Xochitl as organic without certification during the suspension period. Ultimately, Xochitl only had to pay $475,000 and was even allowed to seek reinstatement in the organic program.<\/strong><\/p>\n<p><a href=\"https:\/\/oalj.oha.usda.gov\/sites\/default\/files\/CD%20-%2004-01-16%20-%20Yorgo%20Foods,%20Inc%2016-0001_Redacted.pdf\"><em>In Re Yorgo Foods, Inc.<\/em><\/a><\/p>\n<p>Respondent, Yorgo Foods, Inc., produced agricultural products certified as organic. During an inspection by an accredited certifying agency, the agency found several (unpublished) noncompliances. This resulted in respondent being suspended (time period unspecified). Respondent asked to be reinstated, but NOP denied reinstatement. Respondent appealed NOP\u2019s denial, but AMS Administrator denied appeal. Then, in a settlement agreement, respondent\u2019s suspension was reduced to six months. However, a month later, the certifying agency found that respondent was selling organic products during suspension period. Because respondent had broken the settlement agreement, respondent and NOP signed a second settlement agreement in which respondent waived its right to an appeal and had to pay a civil penalty of $33,000.<\/p>\n<p><strong>However, even after signing the second settlement agreement, respondent was found to sell organic products while suspended in willful violation of the USDA. As a result, the AMS Administrator assessed a civil penalty of $880,000 with $540,000 held in abeyance, and respondent\u2019s organic certification was suspended for three years. The remaining $340,000 was allowed to be paid in quarterly installments over a period of five years.<\/strong><\/p>\n<p><strong><em>Settlement<\/em><\/strong><\/p>\n<p>Fortunately, NOP provides settlement opportunities to businesses who may have violated national organic standards but are willing to proactively cooperate to ensure past harms are mitigated and future violations are avoided. Typically, these settlements are executed as alternatives to administrative proceedings that may result in suspension or revocation of certification or accreditation, as well as civil penalties for the knowing sale of products in violation of the USDA organic regulations. Settlement always requires operations to comply with USDA organic regulations and, sometimes, includes specific compliance requirements and\/or reduced civil penalties. NOP publishes details on some <a href=\"https:\/\/www.ams.usda.gov\/services\/enforcement\/organic\/settlements\">settlement proceedings<\/a> on its website.<\/p>\n<p><strong><em>NOP Resources<\/em><\/strong><\/p>\n<p>The NOP offers helpful resources for the benefit of organic producers, distributors, and consumers. These resources help ensure that organic producers and distributors are proactive about their NOP compliance. These resources include:<\/p>\n<ul>\n<li><strong>Organic Integrity Database<\/strong>\n<ul>\n<li>NOP\u2019s <a href=\"https:\/\/organic.ams.usda.gov\/integrity\/\">Organic Integrity Database<\/a> lets interested parties and the public alike research the organic status of organic farms and businesses. These listings are provided to NOP from accredited certifying agents.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li><strong>Organic Integrity Learning Center<\/strong>\n<ul>\n<li>Through its <a href=\"https:\/\/www.ams.usda.gov\/services\/organic-certification\/training\">Organic Integrity Learning Center<\/a>, NOP provides a wide range of free training and outreach materials for organic farms, businesses, and organic certification agencies. The Learning Center supports the professional development and continuing education of professionals working to protect organic integrity including certifiers, inspectors, reviewers and compliance specialists in organic businesses. Courses include<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li><strong>National Organic Program Handbook<\/strong>\n<ul>\n<li>NOP\u2019s <a href=\"https:\/\/www.ams.usda.gov\/rules-regulations\/organic\/handbook\">handbook<\/a> provides those who own, manage, or certify organic operations with guidance and instructions that can assist them in complying with the USDA organic regulations. Although the handbook is non-binding guidance, it provides critical insight into NOP\u2019s procedures and expectations of industry.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong><em>Contact Us<\/em><\/strong><\/p>\n<p>Diaz Trade Law has assisted clients with understanding national organic standards, developing corrective action plans, and navigating settlement discussions with NOP. If you\u2019re an organic producer or distributor and seek to build a proactive organic compliance program or successfully mitigate organic standards violations, reach out to us at 305-456-3830 or <a href=\"mailto:info@diaztradelaw.com\">info@diaztradelaw.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Co-Authored by Sharath Patil What\u2019s the National Organic Program? Established by Congress and announced in 2000, the U.S. Department of Agriculture\u2019s (\u201cUSDA\u201d) National Organic Program (\u201cNOP\u201d) is a federal regulatory program which develops and enforces uniform national standards for organically-produced agricultural products sold in the United States. NOP operates as a public-private partnership which accredits third-party organizations to certify that farms and businesses meet the national organic standards. By enforcing its standards, NOP ensures a level playing field for producers while protecting consumer confidence in the integrity of the USDA organic seal.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9,62,100,10,32,59,72,61,34,798],"tags":[177,164,125,123,126,544],"class_list":["post-4345","post","type-post","status-publish","format-standard","hentry","category-best-practices","category-customs-expert","category-enforcement","category-export","category-import","category-international-business","category-international-law","category-international-trade","category-international-travel","category-usda","tag-best-practices","tag-compliance","tag-export","tag-import","tag-international-trade","tag-usda"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>USDA National Organic Program - Enforcement &amp; 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