UNITED STATES DEPARTMENT OF AGRICULTURE 

AGRICULTURAL MARKETING SERVICE 

BEFORE THE ADMINISTRATOR 

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Administrator’s Decision 

APL-065-22 

In re:

 

Asociacion de Productores 

Palto Café Amazonas 

Utcubamba, Peru 

This Decision responds to an Appeal (APL-065-22) of a Notice of Proposed Suspension 

under the National Organic Program (NOP) issued to Asociacion de Productores Palto Café 

Amazonas (Palto) of Utcubamba, Peru, by Organic Crop Improvement Association (OCIA), 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 

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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 November 3, 2021, Palto was certified organic for crops by OCIA. 

2. On February 11, 2022, OCIA issued a Notice of Noncompliance to Palto. 

3. On March 16, 2022, OCIA issued a Notice of Proposed Suspension. 

4. On July 18, 2022, OCIA issued a Notice of Denial of Mediation to Palto’s mediation request 

of March 29, 2022. 

5. On July 29, 2022, Palto filed an Appeal. 

6. On November 7, 2022, USDA/AMS entered into a Settlement Agreement with Palto. 

7. On December 13, 2022, OCIA reported to NOP that Palto had breached the November 7, 

2022 Settlement Agreement. 

8. On December 14, 2022, NOP issued a Notice of Noncompliance and Request for Corrective 

Action to Palto. 

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; (b) Establish, implement, and update annually an organic 

production or handling system plan that is submitted to an accredited certifying agent as 

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provided for in §205.200; ... (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...” and 

submit an “updated organic production or handling system plan which includes: (i) A summary 

statement, supported by documentation, detailing any deviations from, changes to, modifications 

to, or other amendments made to the previous year’s organic system plan during the previous 

year ...” 

Certifier OCIA issued a Notice of Noncompliance on February 11, 2022, stating that 

Palto had failed to submit its 2022 annual certification renewal documentation, updated Organic 

System Plan (OSP), and certification-related fees by the deadline. OCIA subsequently issued a 

Notice of Proposed Suspension on March 16, 2022, due to Palto’s continued failure to submit 

required documentation and fees. On July 18, 2022, OCIA denied Palto’s mediation request, 

noting that Palto had previously been suspended for failing to comply with regulations regarding 

certification renewal and the payment of fees, and was later reinstated. 

Palto filed an Appeal on July 29, 2022, stating it needed to hire new internal inspectors 

and train them, but commits to submitting required materials on time in the future NOP 

confirmed with OCIA that Palto had subsequently submitted its 2022 certification renewal 

application, though still has an outstanding balance on 2022 inspection fees. OCIA also reinvoiced Palto for the fees on September 6, 2022. Although Palto violated the organic 

regulations at 7 C.F.R. §205.400 and 7 C.F.R. §205.406 by not submitting its renewal application 

and all fees by the deadline, NOP offered Palto a Settlement Agreement as the application was 

subsequently submitted. Pursuant to the agreement, executed on November 7, 2022, Palto 

agreed to pay the outstanding certification-related fees of $689.60 for the 2022 inspection, within 

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30 days of execution of the Settlement Agreement. Additionally, Palto agreed to submit its 2023 

renewal application, updated OSP, and certification fees by the renewal anniversary date, and 

respond to all other requests for information or documentation by the deadline set by the certifier 

unless an extension was granted by the certifier. 

However, on December 13, 2022, OCIA reported to NOP that Palto hadn’t paid the 

certification/inspection fees within 30 days of the settlement execution, which was December 6, 

2022. Therefore, on December 14, 2022, NOP issued a Notice of Noncompliance and Request 

for Corrective Action to Palto, stating that OCIA had reported a breach of the NOP Settlement 

Agreement, and giving Palto 20 days from receipt of the notice to comply with the terms of the 

Settlement Agreement and take the corrective action of making the agreed-upon payment to 

OCIA. Palto was told that failure to do so could result in suspension of Palto’s certification. 

NOP contacted OCIA on January 13, 2023 and was informed that Palto had still not paid 

the delinquent certification fees. Therefore, NOP sent a reminder email to Palto that day, 

instructing it to immediately pay the owed $689.60. As of February 2, 2023, Palto has not made 

the agreed-upon payment. 

Palto agreed, per Term 4B of the November 7, 2022 Settlement Agreement, to pay the 

delinquent $689.60 for the 2022 inspection within 30 days of execution of the agreement. 

Further, the Settlement Agreement in Term 4E states that, “Palto 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 Palto.” Clause 3D of the Settlement Agreement states 

that, “Palto 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 Palto with 

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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 Palto on November 

7, 2022 with the executed 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 Palto 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. This 

is despite the February 11, 2022 Notice of Noncompliance, the March 16, 2022 Notice of 

Proposed Suspension, the re-issued Invoice of September 6, 2022, and the November 7, 2022 

Settlement Agreement with NOP which Palto has breached, and therefore, the initial March 16, 

2022 Notice of Proposed Suspension is revived. Palto can’t remain certified at this time. 

DECISION 

Palto’s July 29, 2022 Appeal of the March 16, 2022 Notice of Proposed Suspension is 

denied, and Palto’s certification is suspended. Pursuant to the organic regulations at 7 CFR 

§205.662(f), Palto may apply for reinstatement at any time after it has made full payment of all 

delinquent certification-related fees to OCIA. The request for reinstatement must be 

accompanied by evidence demonstrating that said full payment has been made, and that Palto is 

also in compliance with all other organic regulations. While under suspension, Palto may not 

sell, label, or represent any products as organic. 

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y 

_________________________________ 

Additionally, attached to this formal Administrator’s Decision denying Palto’s Appeal is 

a Request for Hearing form. Palto has thirty (30) days to request an administrative hearing 

before an Administrative Law Judge. 

Done at Washington, D.C., on this _____ 9th

day of ________________, 2023. Februaary

Digitally signed by BRUCE

BRUCE SUMMERS SUMMERS 

Date: 2023.02.09 07:40:11 -05'00' 

Bruce Summers 

Administrator 

Agricultural Marketing Service 

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