Drafted by: Vanessa Montoya and Kim Hatfield
How are inspections conducted for handlers who do not take physical possession?
This is a very common question from brokers, traders, private label brand owners, importers, and exporters. The USDA NOP requires that all initial inspections be in-person, even if you do not physically handle any organic product. You may be wondering, “What is the purpose of an onsite, in-person inspection if I am not touching the product?”
For operations that do not physically handle, store, process, or repackage organic products, the inspection is primarily a system review, taking a closer look at your recordkeeping and traceability.
Your inspector will explore the following topics:
- Confirming the activities described in your Organic System Plan are accurate and the location of your records is operational
- A complete supplier list with valid certificates issued in the last year
- A comprehensive supplier verification system to ensure future suppliers are valid
- A sufficient traceback or recall system that allows you to trace sold goods back to their incoming shipment
- An auditable in/out mass balance demonstrating you sourced as much product as you sold
- Sufficient import and export documents (if applicable)
How traceability works
The inspector follows a “paper trail” to verify that an organic product can be tracked from the certified supplier to the final customer, even though the nonphysical Handler never possesses the product.
The inspector may select a sale and review:
- Sales invoices issued by the nonphysical Handler to the customer.
- Purchase record showing where that product was sourced.
- Supplier’s organic certificate showing the product was sourced from a certified operation.
- Import records (if applicable), such as import certificates, bills of lading, customs documents, or NOP Import Certificates.
- Shipping documents showing the product moved directly from supplier or warehouse to the customer.
- Quantity reconciliation (mass balance) to verify that the sales of organic products do not exceed the amount purchased by the nonphysical Handler.
The easier it is to verify these concepts, the faster and more affordable your inspection will be. A well-organized recordkeeping system is the best way to show that organic integrity is maintained throughout your operation, even when products are never physically handled. After your initial inspection, CCOF will determine if your next inspection can be conducted virtually; we will let you know if we are able to do a virtual inspection.
