USDA PACA restrictions update

As part of its efforts to enforce the Perishable Agricultural Commodities Act (PACA) and ensure fair…

As part of its efforts to enforce the Perishable Agricultural Commodities Act (PACA) and ensure fair trading practices within the U.S. produce industry, the Department of Agriculture (USDA) continues sanctions on a produce business for failing to meet its contractual obligations to the sellers of produce it purchased and failing to pay reparation awards issued under the PACA. These sanctions include suspension of the business’s PACA license and barring the principal operator of the business from engaging in PACA-licensed business or other activities without approval from USDA. By issuing these penalties, USDA continues to enforce the prompt and full payment for produce while protecting the rights of sellers and buyers in the marketplace.

SCC International Inc., operating out of Rio Rico, Ariz., continues to be restricted from operating in the produce industry for failing to pay a $3,742 award in favor of an Arizona seller. As of the issuance date of the reparation order, Sergio Chamberlain was listed as the officer, director and major stockholder of the business.

Prior to the issuance of this most recent reparation order, numerous reparation orders were issued against SCC International, Inc., for failure to pay a total of $248,852 to numerous sellers. SCC International, Inc., has not made payments to the previous sellers within the time designated in the reparation orders. As a result, the sanction period levied against the firm and its principal has been extended to reflect the violations.

Another company, CTA Inc., has satisfied a reparation order issued under the Perishable Agricultural Commodities Act (PACA).

The Ferndale, Wash., company has met its obligations and is now free to operate in the produce industry. Jonathan Tan, David Green, Gurprett Cheema and Jagit Aujia were listed as the officers, directors and major stockholders of the business and may now be employed by or affiliated with any PACA licensee.

PACA provides an administrative forum to handle disputes involving produce transactions. This may result in a reparation order being issued that requires damages to be paid by those not meeting their contractual obligations in buying and selling fresh and frozen fruits and vegetables. USDA is required to suspend the license of a business that fails to pay PACA reparations awarded against it as well as impose restrictions against those principals determined to be responsibly connected to the business when the order is issued. Those individuals, including sole proprietors, partners, members, managers, officers, directors or major stockholders may not be employed by or affiliated with any PACA licensee without USDA approval.

Once a reparation order is fully satisfied and it is confirmed that there are not any outstanding unpaid awards, USDA lifts the employment restrictions of the previously named, responsibly connected individuals.

The PACA Division, which is in the Fair Trade Practices Program in the Agricultural Marketing Service, regulates fair trading practices of produce businesses that are operating subject to PACA, including buyers, sellers, commission merchants, dealers and brokers within the fruit and vegetable industry.

In the past three years, USDA resolved approximately 3,500 PACA claims involving more than $58 million. PACA staff also assisted more than 7,800 callers with issues valued at approximately $148 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.