UNITED STATES DEPARTMENT OF AGRICULTURE 

AGRICULTURAL MARKETING SERVICE 

BEFORE THE ADMINISTRATOR 

) 

In re: ) 

 )

Vegetales Organicos ) Administrator’s Decision

 Schiagom S.A. de CV ) 

 ) APL-050-22 

Penjamo, Guanajuato, Mexico ) 

) 

This Decision responds to an Appeal (APL-050-22) of a Notice of Proposed Suspension 

under the National Organic Program (NOP) issued to Vegetales Organicos Schiagom S.A. de CV 

(Vegetales) of Penjamo, Guanajuato, Mexico by Oregon Tilth Certified Organic (OTCO), a 

USDA accredited certifying agent. The operation has been deemed not in compliance with the 

Organic Foods Production Act of 1990 (Act)1

 and the U.S. Department of Agriculture (USDA) 

organic regulations.2 

BACKGROUND 

The Act authorizes the Secretary to accredit agents to certify crop, livestock, wild crop, 

and/or handling operations to the USDA organic regulations (7 C.F.R. Part 205). Certifying 

agents also initiate compliance actions to enforce program requirements, as described in section 

205.662, Noncompliance procedure for certified operations. Persons subject to the Act who 

believe they are adversely affected by a noncompliance decision of a certifying agent may appeal 

1

 7 U.S.C. 6501-6522 

2

 7 C.F.R. Part 205 

Page 1 of 6 
 

such decision to the USDA Agricultural Marketing Service (AMS) pursuant to § 205.680 

Adverse Action Appeals Process – General, and § 205.681, Appeals of the USDA organic 

regulations. 

FINDINGS OF FACT 

1. On September 16, 2008, Vegetales was certified organic for crops by OTCO. 

2. On July 15, 2021, OTCO issued a Notice of Noncompliance to Vegetales. 

3. On September 22, 2021, OTCO issued a Notice of Proposed Suspension to Vegetales. 

4. On March 5, 2022, OTCO and Vegetales entered into a Settlement Agreement, after OTCO 

accepted Vegetales’ mediation request. 

5. On April 7, 2022, OTCO issued a Notice of Unsuccessful Mediation after Vegetales failed to 

comply with the prior settlement terms. The notice revived the prior Notice of Proposed 

Suspension. 

6. On May 2, 2022, Vegetales filed an Appeal. 

7. On May 16, 2022, USDA/AMS entered into a Settlement Agreement with Vegetales. 

8. On December 15, 2022, OTCO reported to NOP that Vegetales had breached the May 16, 

2022 NOP Settlement Agreement. 

9. On December 29, 2022, NOP issued a Notice of Noncompliance and Request for Corrective 

Action to Vegetales. 

10. As of February 8. 2023, Vegetales had not completed the required corrective action, leading 

to this Decision. 

Page 2 of 6 
 

DISCUSSION 

The USDA organic regulations at 7 C.F.R. §205.400, General requirements for 

certification, state that, “A person seeking to receive or maintain organic certification under the 

regulations in this part must: (a) Comply with the Act and applicable organic production and 

handling regulations in this part; ... (e) Submit the applicable fees charged by the certifying 

agent...” Additionally, the organic regulations at §205.406, Continuation of certification, state 

that, “(a) To continue certification, a certified operation must annually pay the certification 

fees...” 

Certifier OTCO issued a Notice of Noncompliance on July 15, 2021, followed by a 

Notice of Proposed Suspension on September 22, 2021, stating that Vegetales had failed to pay 

its certification-related fees by the deadline. OTCO accepted Vegetales’ mediation request, and 

on March 5, 2022, OTCO and Vegetales entered into a Settlement Agreement whereby 

Vegetales agreed to pay to OTCO, within ten days of the effective date of their Settlement 

Agreement, the two overdue Invoices (numbers 1785 and 1807) from OTCO for certificationrelated fees. However, after Vegetales failed to make the agreed upon payment within 10 days, 

OTCO issued a Notice of Unsuccessful Mediation on April 7, 2022, reviving the September 22, 

2021 Notice of Proposed Suspension. 

Vegetales filed an Appeal with NOP on May 2, 2022. OTCO confirmed that Vegetales 

had subsequently paid the overdue invoices that were the subject of the prior Vegetales-OTCO 

Settlement Agreement. Therefore, NOP offered Vegetales a Settlement Agreement, which was 

accepted and executed on May 16, 2022. Pursuant to the NOP agreement, Vegetales agreed to 

pay all (future) certification-related fees to its certifier by the deadline set by the certifier. 

Page 3 of 6 
However, on December 15, 2022, OTCO reported a breach of the NOP Settlement 

Agreement to NOP. Specifically, Vegetales had failed to pay Invoice 2013 (MX 71,200.80) and 

Invoice 2128 (MX 40,874.31) by the deadlines set by OTCO, which were June 4, 2022 and 

October 15, 2022, respectively. Therefore, on December 29, 2022, NOP issued a Notice of 

Noncompliance and Request for Corrective Action giving Vegetales twenty days, until January 

18, 2023, to pay the delinquent certification-related fees. 

OTCO stated to NOP on February 1, 2023, that Vegetales had not made any payment 

since September 1, 2022, despite the two invoices being reissued. However, it is noted that 

while Invoice 2128 was reissued with the original amount being unpaid, Invoice 2013 was 

reissued as Invoice 1975, and shows that a partial payment had been paid. Nevertheless, the 

invoices were to have been paid in full by the set deadline, which Vegetales failed to do. NOP 

sent an email to Vegetales on February 1, 2023, providing a last chance for Vegetales to make 

full payment of the invoices by February 6, 2023. OTCO subsequently confirmed that as of 

February 8, 2023, Vegetales hasn’t made the required payments. 

Vegetales agreed, per Term 4B of the May 16, 2022 NOP Settlement Agreement to pay 

all certification-related fees to its certifier by the deadline set by the certifier unless an extension 

was granted. No extension was requested or granted in this case. Further, the Settlement 

Agreement in Term 4D states that, “Vegetales agrees that the failure to abide by the terms of 

paragraphs immediately above shall result in USDA, AMS possibly pursuing an administrative 

hearing process against Vegetales.” Clause 3D of the Settlement Agreement states that, 

“Vegetales withdraws its appeal and waives further appeal rights in this matter. Failure to 

comply with the Settlement Agreement shall automatically void paragraph 2 above.” Paragraph 

2 states, “USDA, AMS agrees not to issue a formal Administrator’s Decision charging Vegetales 

Page 4 of 6 
 

 

with alleged violations of the OFPA and the USDA organic regulations for any actions disclosed 

by the investigation which gave rise to this agreement.” A closure letter sent to Vegetales on 

May 16, 2022 with the executed NOP agreement also stated that, “... failure to abide by the 

terms of the agreement shall automatically void the settlement agreement and USDA, AMS may 

pursue an administrative hearing process.” 

CONCLUSION 

Evidence substantiates that Vegetales has violated the organic regulations at 7 C.F.R. 

§205.400, and 7 C.F.R. §205.406, by failing to pay the applicable certification-related fees. 

Payment of fees is important, because it allow certifiers to continue providing the organic 

certification services that protect the market and ensures fairness within the organic market. 

Vegetales failure to pay occurred despite the September 22, 2021 Notice of Proposed 

Suspension; the March 5, 2022 Settlement Agreement with OTCO; the May 16, 2022 Settlement 

Agreement with NOP which Vegetales has breached; the re-issued invoices; the Notice of 

Noncompliance and Request for Corrective Action issued by NOP; and the reminder email by 

NOP. Therefore, the initial September 22, 2021 Notice of Proposed Suspension is revived. 

Vegetales can’t remain certified at this time. 

DECISION 

Vegetales’ May 2, 2022 Appeal of the September 22, 2021 Notice of Proposed 

Suspension is denied, and Vegetales’ certification is suspended. Pursuant to the organic 

regulations at 7 CFR §205.662(f), Vegetales may apply for reinstatement at any time after it has 

made full payment of all delinquent certification-related fees to OTCO. The request for 

Page 5 of 6 
y _________________________________ 

reinstatement must be accompanied by evidence demonstrating that said full payment has been 

made, and that Vegetales is also in compliance with all other organic regulations. While under 

suspension, Vegetales may not sell, label, or represent any products as organic. 

Additionally, attached to this formal Administrator’s Decision denying Vegetales’ 

Appeal is a Request for Hearing form. Vegetales has thirty (30) days to request an 

administrative hearing before an Administrative Law Judge. 

Done at Washington, D.C., on this _____ 13th

day of ________________, 2023. February

Digitally signed by BRUCE

BRUCE SUMMERS SUMMERS 

Date: 2023.02.13 21:04:16 -05'00' 

Bruce Summers 

Administrator 

Agricultural Marketing Service 

Page 6 of 6