National Organic Standards Board

 Compliance, Accreditation and Certification Subcommittee

Oversight Improvements to Deter Fraud Discussion Document

February 21, 2019

I. INTRODUCTION

Organic products have been one of the fastest growing sectors in agriculture for decades. In 2017 

organic sales in the U.S. were nearly $50 billion. The most recent figures for 2017 show growth of 6.4% 

for organic food products versus 1.1% growth for nonorganic food products. The strong demand for 

organic products, coupled with limited supply in some supply chains, has led to documented 

occurrences of both domestic and import fraud in the use of the organic label. The organic 

community, trade, regulatory agencies and Congress have all taken note of these activities and have 

moved forward with stronger enforcement, and the development of new tools to build a stronger 

system for protecting organic integrity.

II. BACKGROUND

On August 10, 2017, the USDA issued a memo to the NOSB about the oversight of imported organic 

products. In this memo, the USDA outlined a number of actions taken by the NOP to deter fraudulent 

shipments. Additionally, the memo expressed the AMS’s priority to explore additional measure that 

would strengthen the global organic control system. AMS specifically requested the NOSB “provide 

recommendations on improving the oversight and control procedures that are used by AMS, certifiers, 

and operations to verify organic claims for imported organic products.” 

To support this work AMS convened a panel at the Fall 2017 NOSB meeting. This panel was comprised 

of representatives from several Federal agencies including the Agricultural Marketing Service (AMS), , 

Animal Plant Health Inspection Service (APHIS), and Customs and Border Protection (CBP) to discuss the 

federal perspective and tools used in relation to imports of agricultural products. The NOP also 

provided suggestions on areas of work. At the spring 2018 NOSB meeting, the Board convened a panel 

representing various entities involved in certification and the organic supply chain, to delve deeper into 

possible solutions for deterring fraud and protecting organic integrity.

III. DISCUSSION

To continue the work of the NOSB in providing guidance to the NOP, this discussion document

summarizes the input we have received from the public, representing certifiers as well as all links in the 

 supply chain from the farm through processing, distribution, and retail. We welcome additional public 

comment about priorities, and where best to focus funds and enforcement activities that will result in the 

most positive outcome, and will build a better system for full compliance. The following areas received 

public support, but could be further refined through public input in order to develop a stronger organic 

certification system that is both reactive when fraud is suspected and proactive to deter as well as 

identify fraud. The items below are not listed in terms of priority.

1. Explore working with Congress to provide the NOP with “stop sale” authority.

2. Organic certification agencies should develop a stronger system of collaboration and transparency 

when investigating fraud.

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3. Close the loophole which allows uncertified handlers to both buy/sell organic products, as well as to 

physically take possession.

a. Handlers who take possession of organic products in unsealed containers, where they could 

sort, consolidate, relabel or otherwise compromise the contents or container label, must be 

certified. This would include warehouses, transfer areas, repack operations, retail consolidation 

locations among others.

b. Handlers who do not take physical possession, but instead buy/sell or broker product, must be 

certified. This would include exporters, traders, importers, brokers and others. 

c. Handlers who manage private labels that have an organic claim, which they then sell into the 

marketplace, must be certified.

4. In addition to the education of inspectors and internal certification personnel, information on the 

requirements of organic certification should be developed specifically targeted to handlers to 

improve their sourcing, processing, and sales of organic products. A goal of this education would be 

to harmonize, where possible, the procedures used in the trade that track organic compliance. 

Better understanding of NOP organic crop production is also needed. For example, washing off 

prohibited pesticide residue does not result in a NOP compliant product.

5. Certification agencies should improve upon the Handler Organic System Plan, by increasing the 

focus on the system that verifies the ingredients, processing, transfer and storage are compliant 

with organic regulations. Is the system robust enough to address risk to the supply chain for that 

specific type of business? Are there multiple sources of ingredients? Are they domestic or imported 

sources? 

6. Does every organically sold product, have clear correlation between the information on the

certificate, the shipping documentation, and the physical product with the source, certifier, and 

company name, beyond just the lot number?

a. At times, in order to maintain a proprietary source a supplier may not wish to have their 

sources disclosed to their buyer. How can this be addressed?

7. When known, all certifiers provide acreage and possible yields of organically grown commodities for 

tracking in the Organic Integrity Database. Are there confidentiality issues that need to be 

addressed? How do we track this information for foreign organic commodities certified under 

equivalency or recognition agreements?

8. Implement the use of transaction or import certificates for all imported product and track in a 

database the source, volume, and type of commodity imported.

9. The organic industry could setup an alert system, where buyers who reject a product due to concern 

of the validity of organic certification, could present this information so other buyers could do their 

own review before purchase and/or processing or resale.

10. If the supply chain has been identified in the trade as having risk of fraud, does the supplier or 

certifier perform pesticide residue testing? Is there clear documentation that all transportation and 

warehousing has been verified as protecting organic integrity by preventing commingling with 

nonorganic product or contamination by prohibited substances? Maintain a database of positive 

pesticide residue tests (similar to the EU).

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11. In determining areas of risk, does the supplier or certifier take into account:

a. The distance between the production of the item and the ultimate consumer.

b. The social pressures found along the supply chain, that might discourage oversight of highstatus individuals or companies. 

c. The market demand coupled with short supply of the commodity. 

d. The economic pressures found along the supply chain that might encourage the sale of 

nonorganic products as organic.

e. Are samples retained along the supply chain; and if so, is pesticide residue testing being done? 

Are the pesticide residue results transparent?

f. The number of intermediaries and or borders crossed between raw supplier and final buyer.

g. The number of legal entities in the marketplace owned by one supplier that moves product 

internally as well as externally, making it difficult to track which entity has possession as the 

product moves through the supply chain.

h. There is a very large volume of organic product being bought and sold.

i. The handler manages both organic and nonorganic.

j. Approach risk assessment and oversight by providing higher scrutiny to the 20% of operations 

that would affect 80% of the commodities traded.

12. The National Organic Program could improve its oversight through the following activities: 

a. Dedicate staff to oversee the tracking of organic grain being imported from overseas though 

tools such as “Vesseltracker”. 

b. Improve the regulations by requiring all handlers, both those that take physical possession and 

those that do not, to become certified organic and provide oversight of organic inspection.

c. Work with certifiers and the trade for the development of an “approved supplier” list for 

businesses that import organic into the United States. The European Union has a system like 

this in place.

1. Each entity could be assigned a unique number or code, that would then be used 

 by their sub-entities, private labels or other identification in the marketplace, to 

 more easily track which companies are part of a larger parent company, even 

 though they have a different name.

d. Dedicate funds to aid in spot checking commodities for pesticide residues, in high risk 

operations. Certifiers could handle the risk assessment, sample collection and testing, and get 

reimbursed by the NOP for the cost of the testing. This could be tried as a pilot project first, 

with a limitation on the samples taken.

e. Review blockchain technology and geotagging as two systems that could enhance and provide 

redundancy to the current certificate and documentation system which have shown 

vulnerability to counterfeit or scams by sophisticated operations.

f. Strengthen requirements for certifier attendance at NOP trainings, and verify during 

accreditation audits that appropriate staff have been advised of the information obtained at 

those trainings.

IV REQUEST FOR PUBLIC COMMENT

1. Are there additional activities missing from the list above that would result in better oversight 

and enforcement of the organic regulations?

2. Are there specific items above that are impractical or difficult to implement and why?

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3. Please provide your thoughts on how these items should be prioritized. E.g. by importance? By 

ease of implementation?

V Subcommittee vote

Motion to accept this discussion document on oversight improvements to deter fraud

Motion by: Harriet Behar

Seconded by: Lisa de Lima

Yes: 5 No: 0 Abstain: 0 Recuse: 0 Absent: 1 

Approved by Sue Baird, Subcommittee Chair to transmit to NOSB, February 21, 2019

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