UNITED STATES DEPARTMENT OF AGRICULTURE 

AGRICULTURAL MARKETING SERVICE 

BEFORE THE ADMINISTRATOR

 

In re:

 

Productos Organicos 

 el Capricho S.P.R. de R.L. de C.V

Baja California Sur, Mexico 

 

)

)

)

)

. ) 

 ) 

) 

) 

Administrator’s Decision 

APL-031-21 

This Decision responds to an Appeal (APL-031-21) of a Notice of Proposed Suspension 

under the National Organic Program (NOP) issued to Productos Organicos el Capricho S.P.R. de 

R.L. de C.V. (Capricho) of Baja California Sur, 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 February 6, 2018, Capricho was certified organic in crops by OTCO. 

2. On December 9, 2020, OTCO issued a Notice of Noncompliance to Capricho. 

3. On January 29, 2021, OTCO issued a Notice of Proposed Suspension. 

4. On April 7, 2021, OTCO issued a Notice of Denial of Mediation to Capricho’s mediation 

request of March 24, 2021. 

5. On May 3, 2021, Capricho filed an Appeal. 

6. On June 4, 2021, USDA/AMS entered into a Settlement Agreement with Capricho. 

7. On March 25, 2022, OTCO reported to NOP that Capricho had breached the June 4, 2021 

Settlement Agreement. 

8. On March 30, 2022, NOP issued a Notice of Noncompliance and Request for Corrective 

Action to Capricho. 

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 

Page 2 of 6 
that, “(a) To continue certification, a certified operation must annually pay the certification 

fees...” 

Certifier OTCO issued a Notice of Noncompliance on December 9, 2020, stating that 

Capricho had failed to pay outstanding certification-related fees. OTCO had issued Invoice 

20142148 to Capricho on October 31, 2020, for $785.04 representing inspection fees; and 

Invoice 20141300 on August 25, 2020, for $957.00 representing 2020 certification fees. After 

Capricho again failed to submit the outstanding fees, OTCO issued a Notice of Proposed 

Suspension on January 29, 2021. Capricho requested mediation on March 24, 2021, which 

OTCO denied on April 7, 2021. Capricho subsequently filed an Appeal on May 3, 2021, stating 

that it had paid all the fees owed to OTCO in full. OTCO confirmed to NOP on May 6, 2021 

that Capricho had paid all outstanding fees on April 23, 2021. 

Although Capricho violated the organic regulations at 7 C.F.R. §205.400(e) and 7 C.F.R. 

§205.406, by failing to pay certification-related fees over several months despite invoices and 

reminders issued by OTCO, the noncompliance had been subsequently resolved and no other 

noncompliances were noted by OTCO. Therefore, NOP offered Capricho a Settlement 

Agreement which was executed on June 4, 2021. Pursuant to the agreement, Capricho agreed to 

pay all certification-related fees, including the yearly certification fee and inspection-related fees, 

for 2021 and 2022, by the deadline set by OTCO unless Capricho notified OTCO before the 

deadline and OTCO agreed to an extended deadline for submission of the fees. Capricho also 

agreed to respond to all requests for documentation and information by the deadline set by 

OTCO unless OTCO agreed to an extension. 

However, on March 25, 2022, OTCO reported to NOP that Capricho had not paid its 

certification fees, had surpassed OTCO’s 90-day allowance for payment of fees, and wasn’t 

Page 3 of 6 
 

responding to OTCO’s communications. OTCO had sent past due reminders to Capricho on 

January 13, 2022, February 1, 2022, and March 14, 2022. Capricho is delinquent on paying its 

2022 annual renewal certification fees of $1,421.00, which were due December 23, 2021; and the 

inspection fees for the November 12, 2021 inspection, in the amount of $1,447.24, which were 

due January 8, 2022. The total amount Capricho owes OTCO is $2,868.24. 

On March 30, 2022, NOP issued a Notice of Noncompliance and Request for Corrective 

Action to Capricho, giving Capricho 20 days from the receipt of the notice to comply with the 

terms of the Settlement Agreement and take the corrective action of paying the overdue 

certification fees owed to OTCO. At the end of the allowed 20 days, NOP contacted OTCO and 

learned that Capricho has still not paid the certification fees. 

Capricho agreed, per Term 4A of the June 4, 2021 Settlement Agreement to pay all 

certification-related fees, including the yearly certification fee and inspection-related fees for 

2021 and 2022 by the deadline unless OTCO agreed to an extension. Further, the Settlement 

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

paragraphs (A-B) immediately above shall result in USDA, AMS possibly pursuing an 

administrative hearing process against Capricho.” Clause 3D of the Settlement Agreement states 

that, “Capricho 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 Capricho 

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 Capricho on 

June 4, 2021 with the executed agreement also stated that, “... failure to abide by the terms of the 

Page 4 of 6 
 

 

agreement shall automatically void the settlement agreement and USDA, AMS may pursue an 

administrative hearing process.” 

CONCLUSION 

Capricho 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 fees time after time despite Invoices from 

OTCO, reminders, Notices of Noncompliance, and a June 4, 2021 Settlement Agreement with 

NOP which Capricho has breached, thereby reviving the initial January 29, 2021 Notice of 

Proposed Suspension. Capricho can’t remain certified at this time. 

DECISION 

Capricho’s May 3, 2021 Appeal of the January 29, 2021 Notice of Proposed Suspension 

is denied, and Capricho’s certification as to crops is suspended. Pursuant to the organic 

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

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

must be accompanied by evidence demonstrating that said full payment has been made, and that 

Capricho is also in compliance with all other organic regulations. While under suspension, 

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

Page 5 of 6 
 

 y 

_________________________________ 

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

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

hearing before an Administrative Law Judge. 

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

 day of ________________, 2022. 

Digitally signed by BRUCE 

SUMMERS 

Date: 2022.05.09 21:17:18 -04'00' BRUCE SUMMERS 

Bruce Summers 

Administrator 

Agricultural Marketing Service 

Page 6 of 6