Importers, Brokers Concerned Over Proposed Import Certificate Requirements for Organic Products

The Produce Marketing Association, the Western Growers Association and the United Fresh Produce Association said they appreciated AMS’s “intention to strengthen oversight and enforcement of the production, handling, and sale of organic agricultural products,” in comments dated Oct. 5. “We believe the rule will yield greater integrity and reliability in the organic supply chain and will continue to build consumer and industry confidence in the USDA organic label,” said the trade groups, which represent members at “every level” of the organic supply chain.

But a requirement that organic products be accompanied by a National Organic Program (NOP) import certificates on a shipment-by-shipment basis is unrealistic in light of the 30 days the agency has to review and issue them, the trade groups said. “We believe the 30-day timeframe for issuance of an import certificate is unworkable as proposed and would have limited impact on fraud control,” they said.

“Produce is picked, packed, and shipped to the border all in the same day,” the PMA, WGA and UFPA said. “The invoices for each load are generated as the load is leaving a packing facility in Mexico for instance. Waiting for an inspection certificate would only delay a supply chain that relies on the efficient movement of fruits and vegetables from the fields to consumers across North America. Shelf life is very short for perishables, and any delay is a detriment,” the trade group said.

The trade groups’ joint comments recommended “a certificate turnaround period for perishable products of no longer than the end of the next calendar day,” and a five-day turnaround for semi-perishable products. Alternatively, AMS could approve certificates so that goods can cross the border, then actually issue them within 10 days.

The American Association of Exporters and Importers called on AMS to do away with the shipment-specific import certificates altogether, arguing they are redundant in light of the data already collected in ACE. “USDA would be able to obtain all of the information that would be required on a certificate through CBP’s ACE portal,” AAEI said in its comments, also dated Oct. 5. Any data not already collected in ACE, such as National Organic Program operation ID numbers, could be added to the data collected in ACE, AAEI said. That data could be cross-referenced with AMS’s existing INTEGRITY database.

“AAEI believes that the combination of ACE and INTEGRITY is an existing data [system] to strengthen enforcement and to collect data on organic imports which is much more powerful and provides real-time information on the compliance of each load than a certificate,” the trade group said. “A load-specific certificate would be redundant, would add cost to organic companies throughout the supply chain, and would not provide adequate benefits in enforcement over and above the information collected in ACE and INTEGRITY.”

Another common refrain in comments on the proposed enforcement strategy is the need to more precisely define the “Organic Importer of Record.” The AMS proposed it as the “operation responsible for accepting imported organic products within the United States.” The Fresh Produce Association of America, among other groups, said in its comments that the proposed definition is too ambiguous and could include service providers with little knowledge of the underlying product.

The International Warehouse Logistics Association, which represents some of those service providers that could potentially be subject to new requirements under AMS’s proposed importer definition, highlighted that as problematic, in its comments to AMS.

“A 3rd party warehouse does not generally have a relationship with the foreign supply chain and, as such, is not in a position to provide meaningful verifications,” the IWLA said. “Nor is the 3rd party warehouse in any way involved in the import processing documentation. We are not the customs Importer of Record. We do not hold title to the product. We simply receive the shipment into our warehouse because our customer – typically a U.S. manufacturer or distributor – directs the trucking company to deliver it to us for storage and further distribution,” it said.

The FPAA suggested that AMS look to the example of the Food and Drug Administration’s definition of importer of record in FDA’s Foreign Supplier Verification Program regulations. In developing its importer definition, FDA looked to capture the person with a direct financial interest in the imported food, as the person likely to have the most knowledge and control over a product’s supply chain. “This approach might be illustrative for AMS-NOP in clarifying any ambiguity with the current definition in the proposed organic enforcement rule,” the FPAA said.

The National Customs Brokers & Forwarders Association of America shared the same concerns over provisions on import certificates and the importer of record definition, in comments dated Oct. 3. But it also raised issues more specific to customs brokers, including the potential that the proposed enforcement strategy could result in more onerous filing requirements in ACE.

“Since customs brokers will in most circumstances be the filers, we urge AMS to streamline this process as much as possible and avoid requiring the submission of the same information in duplicate formats -- such as entry of the data elements AND uploading the NOP Import Certificate into the Digital Imaging System (DIS),” the NCBFAA said. ”We also caution against requiring redundant entry of data elements that are already submitted as part of the customs entry. In fact, the most efficient process would be to only require entry of the NOP Import Certificate number in ACE, which could be automatically matched up to a database containing the NOP Import Certificates generated by the foreign certifying agents.”

The NCBFAA similarly urged AMS to delay implementation of the new enforcement strategy until 10-digit tariff subheadings can be implemented throughout the tariff schedule for organic products. “Most of the organic products that are subject to the proposed rule do not contain an HTS suffix to differentiate organic from non-organic product. This means AMS will be ‘flagging’ thousands of HTS subheadings that could contain organic products, but mostly consist of products that are not organic, in turn requiring importers/filers to file thousands of disclaims for non-organic products that fall under a flagged HTS code,” it said. Not only is this inefficient, but it leads to confusion and inaccuracies in the filing process.

The NCBFAA suggested AMS create a trusted trader program for organic importers to streamline some of the proposed reporting requirements in the enforcement strategy, including by way of an exemption from shipment-by-shipment certificate requirements or a blanket certificate option. “A well-designed Trusted Trader Program, with meaningful benefits for participants, would provide a valuable incentive for U.S. importers to develop the internal controls necessary to strengthen the integrity of their organics supply chain,” the NCBFAA said.