Inre: 

( ( 

UNITED STATES DEPARTMENT OF AGRICULTURE 

AGRICULTURAL MARKETING SERVICE 

BEFORE THE ADMINISTRATOR 

Hakan Organics DMCC 

Dubai, United Arab Emirates 

) 

) 

) 

Administrator's Decision 

APL-033-17 

This Decision is in response to an appeal (APL-033-17) of a Combined Notice of 

Noncompliance and Proposed Revocation issued by the U.S. Department of Agriculture 

(USDA), Agricultural Marketing Service (AMS), National Organic Program (NOP) to Hakan 

Organics DMCC, located in Dubai, United Arab Emirates. The operation was deemed not in 

compliance with the Organic Foods Production Act of 1990 (OFPA) 1 and the 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 

§205.662. The Act authorizes the NOP to enforce the USDA organic regulations. Persons 

subject to the Act who believe they are adversely affected by a noncompliance decision, such as 

a Combined Notice of Noncompliance and Proposed Revocation, may appeal such decision to 

the AMS Administrator pursuant to §205.680 of the USDA organic regulations. 

1 7 u.s.c. 6501-6522 

2 7 C.F .R. Part 205 

1 
( ( 

FINDINGS OF FACT 

1. Hakan Organics DMCC is a certified organic operation located in Dubai, United Arab 

Emirates. 

2. On April 28, 2017, the NOP issued Hakan Organics DMCC a Combined Notice of 

Noncompliance and Proposed Revocation. 

3. On May 30, 2017, Hakan Organics DMCC appealed the Notice; the appeal was accepted 

and was acknowledged on May 30, 2017. 

DISCUSSION 

The NOP issued Hakan Organics DMCC (hereafter, Hakan Organics) a combined Notice 

of Noncompliance and Proposed Revocation. The Proposed Revocation was issued because 

Hakan Organic, through its agents, represented fumigated, non-organic soybeans as organic for 

sale in the United States. These soybean shipments were managed by Hakan Organics, and two 

related entities: Beyaz Agro (Gazientep, Turkey) and Agropex (Broadway, Virginia). 

The investigation that led to the Proposed Revocation relates to a shipment of 16,250 

metric tons of soybeans, which arrived in the United States aboard the vessel M/V "Four 

Diamond" on November 12, 2016. The soybeans had been previously exported from Ukraine to 

Turkey and were then re-exported from Turkey to the United States. Before leaving Ukraine, the 

soybeans were fumigated with aluminum phosphide, a prohibited substance under the USDA 

organic regulations. The NOP investigation revealed that Hakan Organics and its agent, Goksal 

Beyaz, who serves as the General Coordinator for Hakan Organics and who acted on its behalf, 

violated the OFPA by knowingly representing and selling the fumigated soybeans as organic. 

2 
( ( 

The Proposed Revocation cited three specific violations. The first was a violation of the 

USDA organic regulations at §205.272 (Commingling and contact with prohibited substance 

prevention practice standard). Between March and October, 2016, Hakan Organics imported 

soybeans in bulk into Turkey from four expo1iers in Ukraine, as demonstrated in four Ukrainian 

phytosanitary certificates. These certificates show that the four shipments of soybeans were 

fumigated with aluminum phosphide, a prohibited substance under the USDA organic 

regulations. Hakan Agro (Hakan Organics' parent company) was identified on the phytosanitary 

certificates as the consignee in Turkey, and therefore is a responsible, notified party. In 

preparation for re-export, the soybeans in bulk from the four shipments were consolidated under 

one phytosanitary certificate issued by Turkish authorities. The four loads of bulk soybeans were 

then consolidated and re-exported in a single shipment aboard the M/V "Four Diamond." 

The second violation cited the OFPA §6519(c)(2) (Recordkeeping, investigations, and 

enforcement). In applying for an organic transaction certificate, Hakan Organics acted through 

its agents Goksal Beyaz and Beyaz Agro to present fraudulent information to a USDA-accredited 

organic certifying agent. On November 12, 2016, Beyaz Agro presented incomplete and false 

information to its organic certifying agent to obtain an organic transaction certificate for the load 

of fumigated soybeans to be shipped on MN "Four Diamond." Goksal Beyaz and Hakan 

Organics Import/Export Specialist ~ere copied on the request. The request was 

made to obtain documentation of the organic status of the products. 

The third violation in the Notice cited the USDA organic regulations at §205.100(c)(2) 

(What has to be certified) and §205.105(a) (Allowed and prohibited substances, methods, and 

ingredients in organic production and handling). Beyaz Agro sold the non-organic, fumigated 

soybeans through Hakan Organics affiliate Agropex, to Global Natural. The fumigated soybeans 

3 
( ( 

from the MN "Four Diamond'' were sold through Agropex as organic. Subsequently, Global 

Natural LLC, on behalf of Hakan Organics, Goksal Beyaz, Beyaz Agro, and Agropex, arranged 

for the sale of the non-organic soybeans to certified organic handlers in the United States. 

In its appeal, Hakan Organics DMCC argues that the violations cited by the NOP were 

perpetrated by Beyaz Agro, a certified organic handler that is distinct from Hakan Organics. The 

appeal states that Hakan Organics has no relationship with or control over Beyaz Agro, and 

Beyaz Agro is not authorized to act as an agent for Hakan Organics. The appeal notes that many 

allegations in the Proposed Revocation refer to specific actions taken by Beyaz Agro, not 

directly by Hakan Organics. 

Hakan Organics acknowledges that in February 2014, it entered into an agreement with 

Goksal Beyaz, a Turkish citizen, to open a Hakan Organics satellite operation in Turkey. Hakan 

Organics' appeal notes that the "agreement with Mr. Beyaz entrusted him to execute certain 

transactions on behalf ofHakan Organics in Turkey." The Hakan Organics appeal states, 

"Unfortunately, as evidenced by the allegations in the Notice and findings made during Hakan 

Organics' internal investigation into those al.legations, that trust was grossly mispla~d. On April 

28, 2017, immediately upon learning of the misconduct alleged in the Notice, Hakan Organics 

terminated its relationship with Mr.-Beyaz." 

Hakan Organics also stated that it cannot confirm what information was communicated to 

identified in the Proposed Revocation as a Hakan Organics' "Import/Export 

Specialist." The appeal states that-snot an employee of Hakan Organics. While Mr. 

Beyaz was authorized to establish e-mail accounts under the hakanfoods domain name for use by 

the Turkish operation, the appeal states tha~was not an employee or agent of Hakan 

4 
( ( 

Organics. No one shared with Hakan Organics any notice or documentation about any shipments 

that would indicate Beyaz Agro was falsely representing them to be organic. 

Hakan Organics responds to the specific violations in the Proposed Revocation as 

follows. First, Hakan Organics denies causing organic products to come into contact with 

prohibited substances or selling treated soybeans as organic. Beyaz Agro, not Hakan Organics, 

was the entity that obtained ce1tificates and re-exported the soybeans. 

Second, Hakan Organics denies that Beyaz Agro was an agent authorized to act on its 

behalf, and states that any action Mr. Beyaz took on behalf of Beyaz Agro was not authorized by 

Hakan Organics. Hakan Organics denies that Beyaz Agro was its agent, and thus Beyaz Agro's 

alleged misconduct should not be imputed to Hakan Organics. 

Third, Hakan Organics notes that while it partnered with Mr. Beyaz to open satellite 

operations in Turkey and granted Mr. Beyaz authority to take certain actions on its behalf, it had 

no such agreement with Beyaz Agro. The appeal notes that when Hakan Organics confronted 

Mr. Beyaz about the allegations, Mr. Beyaz admitted his responsibility for the actions ofBeyaz 

Agro, which were outside the authority granted by Hakan Organics. 

Hakan Organics closes its appeal by stating it has reviewed its internal controls and 

external partners to ensure that Hakan Organics and all individuals it works with comply with all 

applicable laws. The appeal closes with, "Hakan Organics is not Beyaz Agro, and despite the 

unfortunate and now terminated relationship with Mr. Beyaz, that USDA cannot and should not 

revoke Hakan Organics' organic ce1tification on account ofBeyaz Agro's misconduct." 

In response to the appeal, AMS notes four key points that demonstrate Hakan Organics' 

involvement in the transaction that represented the soybeans treated with prohibited substances 

as organic. 

5 
( ( 

First, in its appeal, Hakan Organics acknowledges that it partnered with Mr. Beyaz to 

open satellite operations in Turkey and granted Mr. Beyaz authority to take certain actions on its 

behalf. The appeal also noted that Mr. Beyaz was authorized to establish e-mail accounts under 

the hakanfoods domain name for use by the Turkish operation. The delegation of these 

permissions is evidence that Hakan Organics understood that people with hakanfoods email 

addresses would be representing Hakan Organics beyond Mr. Beyaz. 

Second, the phytosanitary certificates involved in this case identified Ukraine as the 

country of origin for the soybeans, and Hakan Agro DMCC (parent company of Hakan 

Organics) was identified on the phytosanitary certificates as the consignee in Turkey; it therefore 

is a responsible, notified party. Other documents obtained through the investigation also include 

hakanfoods.com email addresses. 

Third, as additional evidence of the connection between these businesses, in early 2017, 

Hakan Organics and Beyaz Agro shared an exhibition booth at the Biofach World Organic Trade 

Fair in Nuremberg, Germany. Booth staff provided two business cards for Goksal Beyaz; one 

card was labeled Goksal Beyaz, Chairman, Beyaz Agro; the other was labeled Goksal Beyaz, 

General Coordinator, Hakan Organics. 

Finally, during NOP's investigation, staff interviewed a representative of Global Natural, 

a party receiving products from these transactions. This representative provided a contract titled 

"Trade Agency Agreement" between Hakan Organics and Global Natural, which stated that the 

parties agreed to enter into business on a sales agency basis. The agreement was signed by 

Goksal Beyaz as the General Coordinator for Hakan Organics DMCC. The Global Natural 

representative stated that Global Natural's contract is with Hakan Organics; that all sales were 

reported to Beyaz Agro in Gaziantep, Turkey; and that Goksal Beyaz, Hakan's General 

6 
( . ( 

' 

Coordinator, signed his contract with Hakan. The representative stated that Hakan Agro DMCC 

and Beyaz Agro are the same organization; Goksal Beyaz works for Hakan, and Beyaz Agro is a 

functional part of the Hakan organization. As further evidence of this connection, Global Natural 

provided a banking record from February, 2017, documenting the wire transfer of$ 

directly from Hakan Agro DMCC to Global Natural LLC. 

CONCLUSION 

The evidence indicates that the NOP's April 28, 2017, Notice of Noncompliance and 

Proposed Revocation to Hakan Organics DMCC was appropriate due to the nature of the 

violations. 

DECISION 

The appeal is denied. Hakan Organics DMCC's organic certification is to be revoked. 

Attached to this formal Admimstrator's Decision is a Request for Hearing form. Hakan has thirty 

(30) days to request an administrative hearing before an Administrative Law Judge. IfHakan 

does not request a hearing in that pedod, this Decision will be implemented and the NOP will 

revoke Hakan Organics DMCC's organic certification. In accordance with §205.662(f)(2) of the 

USDA organic regulations, "A certified operation or a person responsibly connected with an 

operation whose certification has been revoked will be ineligible to receive certification for a 

period of 5 years following the date of such revocation. •t 

7 
Done at Washington, D.C., on this 51-h 

dayof --SJy ,2017. 

~£2e·~~ 

Bruce Summers 

Acting Administrator 

8