The impact of the updates to the USDA Organic Rule for imported products
Images: left, Scott Tupper for YAve, right, Barbara Dufrêne
The new requirements to the United States Department of Agriculture’s (USDA) organic rule are the most significant updates since it was first enacted more than 20 years ago, all players in the coffee and tea supply chains, need to be aware of the changes before the compliance deadline next year.
The USDA first passed organic regulations in December 2000. The ‘Strengthening Organic Enforcement’ (SEO) Rule took effect in October 2002, and those regulations were in place until 2020 when a new rule was proposed. The USDA published a final rule 18 January 2023, which took effect 20 March 2023. The compliance deadline for the Final Rule is 19 March 2024.
The National Coffee Association (NCA) held a webinar on 31 May – ‘Strengthening Organic Enforcement” (SEO) Rule & its Impact on the Coffee Sector’ – to help green coffee importers understand the new regulations and who is affected, but tea importers should also heed the advice.
Mabell Rivas, technical manager, Quality Assurance International (QAI), one of the presenters, said there is now a significant increase in oversight and authority to address incidences of fraud and fewer parties are exempt from certification. In the coffee industry, she said the impact is primarily on entities that interact as intermediaries, which are currently exempt but will now have to be certified per SOE, these include: brokers, traders, exporters, importers, and some warehouse operations such as green coffee gathering centers.
The webinar highlighted some of the notable updates to the SEO Rule. Among them: import certificates for all imported products entering the US will be required (by March 2024); additional info is to be displayed on nonretail containers; and companies will need to develop and implement Supply Chain Fraud Prevention Plans, which will be assessed.
Except for the exempt operations described in the Code of Federal Regulations Title 7 205.101, each operation or portion of an operation that produces or handles agricultural products intended to be sold, labelled, or represented as ‘100 percent organic’, ‘organic’ or ‘made with organic (specified ingredients or food group(s))’ must be certified.
Within the coffee supply chain, Rivas said that at origin, farmer, wet process, intermediary, dry process, and the green coffee trader/exporter must be certified. In the importing country, the broker/trader agent/importer and processor, must be certified, but she said some activities at the warehouse such as distribution and finished product distribution are exempt. Exemptions to the SOE Rule (under 7 CFR Part 205.101), in terms of ‘Operation Type’ include:
- Operations whose gross organic sales total USD $5,000 or less annually;
- A retail establishment that does not process organically produced agricultural products;
- Retail establishments that process, at the point of sale, [previously] certified organic products;
- Handling operations that only handle agricultural products containing less than 70 percent organic ingredients;
- An operation that only receives, stores, and/or prepares for shipment but does not handle products and the products are packaged in tamper-evident packages or containers.
Under the new SOE Rule (§ 205.273), import certificates will now be required for any organic product coming into the US. Roxanne Beavers, senior technical reviewer, Quality Assurance International (QAI), who also presented during the webinar, explained that Import Certificates must be created using the National Organic Program (NOP) Organic Integrity Database; will be generated using the Organic Certificate listings. She said that it is possible to create one Import Certificate to cover multiple imports for a period of time (e.g., season, quarter) with a maximum amount of product identified. Before product ships, Beaver said the importer must upload the Import Certificate to the Automated Commercial Environment (ACE) of Customs and Border Protection.
What is an import certificate? Beavers explained that the NOP Import Certificate must list:
- Exporter and their Organic Certifying Agency
- Product Name
- HTS Code
- Manufacturer of product and Certifying Agency (if not exporter)
- Amount of product and shipping ID
- May have start and end date
Furthermore, Beavers said that an Integrity Database online system is currently being developed, noting that NOP began testing the system in Q2 2023. She noted that in the US, transaction certificates are used in the coffee industry, thus, this is not a huge change so players should be able to handle it better than other agricultural commodities.
Another change to the SEO Rule is that organic operators need to create a fraud prevention plan, which is designed to improve supply chain traceability. Beavers said the Fraud Prevention Plan must be developed, reviewed, and approved by 19 March 2024. Those, those importing organic coffee or tea need to:
1. Conduct a vulnerability assessment (all fraud), including:
a. Know your products and risks (history, economic and geographical factors)
b. Know your suppliers (manufacturer, broker, history)
c. Know your supply chain (length, complexity, supply and demand)
d. Know your existing verification measures and identify the gaps
2. Design and implement internal mitigation measures including a robust supplier approval program that involves internal audits and second-party supplier audits.
3. Ensure practices are effective through monitoring practices and verification tools such as internal audits and control testing.
4. Document the vulnerability assessment, mitigation measures and monitoring practices in an Organic Fraud Prevention Plan.
5. Integrate mitigation measures into the Organic System Plan (OSP).
Just a reminder, the compliance deadline for the SOE Final Rule is 19 March 2024.
T&CTJ will provide any updates as they become available.
- Vanessa L Facenda, editor, Tea & Coffee Trade Journal.
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