Strengthening Organic Enforcement (SOE)

This new rule reduces the types of uncertified entities in the organic supply chain that operate without USDA oversight, including importers, brokers, distributors and traders of organic products, to safeguard organic integrity and improve traceability throughout the entire supply chain. 

The definition of “handle” has been updated per §205.2, and NOP has signaled that most all activity within the supply chain will now require certification oversight:

Handle. To sell, process, or package agricultural products, including but not limited to trading, facilitating sale or trade on behalf of a seller or oneself, importing to the United States, exporting for sale in the United States, combining, aggregating, culling, conditioning, treating, packing, containerizing, repackaging, labeling, storing, receiving, or loading.

Based on this new definition, as well as the types of certified organic products being handled, the NOP has updated §205.101. The full regulatory text can be found at this link: https://www.ecfr.gov/current/title-7/section-205.101

Some handlers with more complex supply chains will need to identify uncertified handlers used and determine if the activity of the uncertified handler now requires certification. MCS has contacted all certified producers, alerting them about SOE and asking that the certified operation makes any uncertified handler aware of the new provisions, and to review the Self-Assessment Flowchart and complete the Exempt Handler Affidavit, submitting it to MCS as soon as possible. 

There are still a few limited low-risk exemptions from certification described in §205.101(a)-(h). Exempt operations must still follow the applicable production and handling requirements, including appropriate labeling as well as keeping required records for three years. Exempt products used as ingredients must not be represented as organic in products processed and marketed by other operations. 

There is no change to the exemption at §205.101(a), which covers operations that gross $5,000 or less, as well as the exemption for retailers that do not process and sell directly to customers. Operations that only handle products containing less than 70% organic ingredients or that only identify organic ingredients in the information panel continue to be in the exempt category. 

An operation that only receives, stores and/or prepares for shipment but does not otherwise handle remains exempt; however, the scope of this is very limited. Exempt handlers in this regard must adhere to the following requirements for packaged products: Products must be enclosed in a sealed, tamper-evident package or container prior to receipt and remain in the same enclosure the entire time under the control of the operation. Tamper-evident packaging or container means, per the rule, that the contents are sealed in a manner where an attempt to break the seal, access the contents or reclose the package would be obvious. This exemption is intended primarily for storage and warehouse facilities moving organic products within the supply chain.

An operation that only buys, receives, stores and/or prepares for shipment but does not otherwise handle organic agricultural products already labeled for retail sale may be exempt. Products must be enclosed in a sealed, tamper-evident package or container labeled for retail sale prior to receipt and remain in the same retail package or container while under control of the operation.This allowance may cover, for example, some distributors, brand name owners, and sales brokers that purchase and/or receive products in their finished retail packaging. Private labeling operations that process organic products must be certified. In addition, an operation that only arranges for the shipping, storing, transport or movement of organic agricultural products but does not otherwise handle organic products continues to be exempt. There are specific nuances that need to be considered with the new rule, and operations that aren’t sure should contact MCS. NOP has signaled that transportation only remains an activity exempt from certification, though loading or unloading of unpackaged products into or from a storage facility must be certified, as this is not a form of transportation within the exempt category.

Certified operations are responsible for verifying that products handled by uncertified entities in their supply chain remain in compliance with the organic regulations, including verifying organic products transported by an uncertified transporter. Organic system plans will need to be updated with a full description of how the certified operation verifies any uncertified operations in the supply chain. Records back to the last certified operation are required and must demonstrate prevention of commingling and contamination during transportation.

Requires all certified operations to develop and implement improved record-keeping and organic fraud prevention processes and procedures as applicable, depending on risk. New definitions for “organic fraud” and “supply chain traceability audit” were added to the regulations. Certifying agents will conduct risk-based supply chain traceability audits between certifiers to fully verify organic integrity. The OSP must also include measures implemented to prevent fraud. MCS will be providing guidance for operations requiring fraud prevention plans and supply chain verifications.

The use of NOP Import Certificates for all organic products entering the United States is now required. Exporters will request import certificates to be issued by their certifier from the Organic Integrity Database (OID) for all imports to the United States. Import certificates may be issued for individual shipments or for multiple shipments of a product over a specific timeframe and with a designated quantity. Additionally, all import documents must identify products as organic, as well as the non-retail container carrying the organic product. Non-retail containers are those used for shipping or storage of a product that is not used in the retail display or sale of the product. In addition, a lot number, shipping identification, or other unique information that links the container to audit trail documentation must be present on the container.

Certifying agents will now be required to issue publicly available, standardized certificates generated from the USDA’s Organic Integrity Database (OID). While the certificate must be issued from the OID, the product list (MCS refers to this as the Product Verification list) or addendum listing specific products certified under a NOP scope can be issued from the certifier and not the OID.

Certifying agents must also keep accurate and current certified operation data in OID, which will further support verification of operations’ certified status. Changes in certification status (i.e., newly certified, surrendered, suspended or revoked) must be made by the certifier within 72 hours of the change.

While certifiers have been required through NOP guidance to conduct unannounced inspections for at least 5% of clients per year, the SOE rule codifies this requirement in regulation. Mass-balance audits during annual on-site inspections are now codified in the regulations (MCS has been doing this for several years). In addition, inspections must verify traceability back to the previous certified operation in the supply chain during annual on-site inspections. Traceability audits must show that organic products and ingredients are traceable by the operation from the time of purchase or acquisition through production to sale or transport. Mass balance and traceability audits will continue to be conducted at all annual on-site inspections.

SOE adds definitions and options for producer group certification, which has previously taken place outside of the United States. Producer groups must meet certain criteria to qualify for certification and must use an internal control system to monitor compliance. Please review the specific criteria and contact MCS if you think you may qualify.

The new regulations change specific qualification and training requirements for certifying agent personnel (inspectors and certification specialists/reviewers) and require that personnel meet minimum education and experience qualifications and include prescriptive continuing education requirements.