USDA Publishes Final Organics Rule

The U.S. Department of Agriculture (USDA) Agricultural Marketing Service (AMS) published its long-anticipated final rule on agricultural organic products with a mandatory Organics Certificate for imports of organic products beginning in one year. USDA said the rule is intended “to protect integrity in the organic supply chain by strengthening organic control systems, improving farm to market traceability and providing robust enforcement of the USDA organic regulations.” The rule takes effect March 20 and will be implemented one year later - March 19, 2024.

The new rule requires any operation that “produces or handles” organic agricultural products to be certified organic. Importantly, customs brokers are specifically exempted from organic certification under section 205.101(g). The exemption applies to customs brokers conducting custom business. If a customs broker conducts any additional activities within the definition of “handle” (selling, importing, trading), he must be certified with respect to those activities.

Similarly, freight forwarders and other logistics providers are exempt under 205.101(h), if they only arrange for the shipping, storing, transport or movement of agricultural organic products.

Under the rule, importers must be certified. The importer is responsible for:

• Verifying that the import certificate is received from the foreign exporter.
• Verifying that the import certificate data accurately reflects the shipment (with respect to quantity and type of product).
• Verifying that the product has not been treated with a prohibited substance as a result of fumigation or ionizing radiation treatment at any point in the product’s movement across borders.
• Maintaining an organic control system that documents the verification (reviewed by certifying agent).
• Ensuring the word “organic” is written on all commercial documents.

USDA made significant changes in the proposed rule in how the Organic Import Certificates will work. The Organic Import Certificate will flow through the existing Organic Integrity Database which will serve as the single source of the certificate. The foreign exporter generates a request for a certificate from a certifying agent. The foreign exporter can be the final physical handler of the organic product in the foreign country or the entity that facilitates, sells, or arranges for sale to the U.S.

The certifying agent verifies the authenticity of the organic export and then uploads the information into the Organic Integrity Database. Each Import Certificate must be assigned with a certified organic operation listed in the database, identified by a 10-digit code. The database then generates a unique Organic Certificate number.

The certified organic exporter then provides the certificate to the importer, or its designated customs broker, who then enters the certificate number in ACE along with the origin; destination; certifying agent issuing the NOP Import Certificate; harmonized tariff code, when applicable; total weight; and the organic standard the product was certified to.

AMS has been working with the trade to create 10-digit Harmonized Tariff System (HTS) breakouts for organic products. Without a breakout for organics in the various HTS numbers, disclaimers are needed for non-organic products in that tariff subheading.

Questions?

For any questions regarding the extension of these exclusions, please contact the Maersk Customs Services Trade Compliance team in North America at compliance.mcsi.nam@maersk.com.