USDA Lifts PACA Reparation Sanctions on California Produce Business
WASHINGTON, DC - The U.S. Department of Agriculture (USDA) announced that Amon Foods Inc. satisfied a reparation order issued under the Perishable Agricultural Commodities Act (PACA).
According to a press release, the Hayward, California, company can continue operating in the produce industry upon applying for and being issued a PACA license. Hussein Tawfik was listed as the officer, director, and major stockholder 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 impose sanctions on 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. USDA also requires any unlicensed company that fully satisfies all unpaid reparation awards to obtain a license if it continues to operate in the industry.
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 3,350 PACA claims involving more than $63 million. PACA staff also assisted more than 8,000 callers with issues valued at approximately $156 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.