LPO' Enforcement in 2021

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LPO' Enforcement in 2021 Voluntary Report – Voluntary - Public Distribution Date: April 30, 2021 Report Number: MX2021-0023 Report Name: Mexico Organic Law 'LPO' Enforcement in 2021 Country: Mexico Post: Mexico City Report Category: Special Certification - Organic/Kosher/Halal Prepared By: USDA Approved By: Daniel Alvarado Report Highlights: On December 26, 2020, Mexico published a measure that requires most organic raw materials and bulk products to be certified to Mexico’s Organic Law (LPO) standards by June 26, 2021. The Measure includes an annex that lists the products which will require proof of LPO certification at the border. While USDA has requested an extension of the June 26, 2021 deadline, Mexico has not approved an extension and U.S. stakeholders should prepare for compliance on June 26, 2021. Mexico’s organics regulator, the National Service for Animal and Plant Health, Food Safety and Quality (SENASICA), is fully responsible for certifying and enforcing the LPO requirements. This report contains a summary of SENASICA’s public statements on this Measure and contact information for parties seeking additional information. THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Executive Summary: On December 26, 2020, Mexico published a measure (the Measure) stating products which will be marketed as organic in Mexico will need to show compliance at the border with Mexico’s organic law (LPO). The Measure includes an annex listing the scope of products (by HS code) that must be certified. A summary of this list is included in the pages of this report. The deadline for enforcement of this Measure is June 26, 2021. Because Mexico does not currently recognize USDA organic certification, U.S. organic products exported to Mexico must be certified to the LPO. In order to be certified to the LPO, U.S. operators must be certified by a SENASICA-accredited certifying body. There are currently 12 certifying bodies accredited by SENASICA that are also accredited by the NOP. Product already certified to the USDA’s organic standards may be “recertified” to the LPO by a SENASICA-accredited certifying body. SENASICA has listed two methods to contact its staff with questions about implementation of the Measure: 1) email to [email protected], or 2) telephone to (+52) 55 5905 1000, ext. 51509, 51523, or 51532. For presentations and other resources from SENASICA’s April 12, 2021 webinar, please see SENASICA’s website. Disclaimer: SENASICA is solely responsible for the implementation of the Measure and the LPO. USDA is providing this GAIN report only as a summary of public information provided by SENASICA. All questions regarding the LPO should be directed to SENASICA using the contacts listed above. Page 2 of 41 Background: Mexico published its original national organic law and corresponding standards in 2006 under the Ley de Productos Orgánicos (LPO). See GAIN Report No. MX6501. In 2015, Mexico published allowance of a grace period (from May 2015–October 2016; see GAIN report no. MX2015-2073) for which organic exports to Mexico should come into compliance with the LPO and its regulatory updates in 2010 and guidelines on labeling and production in 2013. On June 8, 2020, the Government of Mexico (GOM) published the Modifications to the Guidelines for the Organic Operations in its federal gazette, finalizing a multi-year process of revising the LPO’s organic standards. Official GOM information about the guidelines can be found here. Although the LPO requires organic products imported to Mexico to be certified to the LPO standards, or an equivalent standard, Mexico agreed to not enforce these requirements while it was conducting equivalence discussions. As a result, U.S. organic exports to Mexico are certified to the NOP standard and have been shipped to Mexico where they could be legally marketed as organic and bear the USDA organic seal. The December 2020 Measure: On December 17, 2020, Mexico hosted a webinar with industry stakeholders and informed that SENASICA would begin enforcing the LPO requirements on December 28, 2020. Prior to this, in November 2020, Mexico published a draft measure on the Regulatory Improvement Commission’s (CONAMER) site titled, “Acuerdo que Establece las Mercancías Cuya Importación y Exportación está Sujeta a Regulación por Parte de la Secretaría de Agricultura y Desarrollo Rural” (“Agreement Establishing Goods whose Import and Export are Subject to Regulation by the Ministry of Agriculture and Rural Development”). See GAIN Report No. MX2020-0078. In Article 7 of the Measure, Mexico stated: In accordance with the provisions of articles 33 and 35 of the Organic Products Law, and 45 of its Regulations, the importer must present to the DGIF staff, at the point of entry into the country, the current Organic Certificate that protects the organic quality of each of the goods to be imported, as well as the Control Document, issued by an organic certification body approved by SENASICA or by an organic certification body under the control system of a country with which Mexico is equivalent in terms of organic products. This draft measure also included an annex and listed the products in tables b) – f) that would need to prove compliance under the LPO at the border (the Annex). This initial draft version gave a compliance deadline of December 28, 2020 (the date the measure would become final). Mexico revised the draft Measure and published the final version on December 26, 2020 in the Diario Oficial, to include a transitory Article Four, extending the compliance deadline to 180 Page 3 of 41 days from the date the Measure entered into force (June 26, 2021). The measure entered into force on December 28, 2020, per the Diario Oficial. Mexico notified this draft measure to the World Trade Organization (WTO) Sanitary and Phytosanitary (SPS) Committee on December 21, 2020 as SPS/N/MEX/230/Add.3. On January 4, 2021, the United States submitted an Enquiry Point request to Mexico to notify the Measure to the Technical Barriers to Trade (TBT) Committee; the re-notification is pending.1 Compliance Deadline: Initially, Mexico planned for the Measure to be fully enforced on December 28, 2020. Mexico delayed the compliance deadline for 180 days until June 26, 2021. Due to the number of changes that organic industry stakeholders in both Mexico and the United States must make in order to fully comply with the LPO standards, USDA has asked for an extension until at least December 31, 2021. Until there is a written, public notice stating otherwise, U.S. stakeholders should prepare for compliance to the LPO standards on June 26, 2021. See GAIN No. MX2020-0079. Scope: Raw Material / Ingredients Annex b) – f) of the Measure lists the tariff codes for all products subject to compliance with Mexico’s phytosanitary, zoo sanitary, and aquaculture health requirements. According to SENASICA, for the products in Annex b) – f) to be listed as “organic” at the point of entry, they must be accompanied by an organic certificate demonstrating certification to the LPO and a transaction certificate issued by a certifying agent approved by SENASICA. However, SENASICA states in its written responses to the April 12 seminar (Question 25) that only organic products that will be marketed in Mexico as organic need to be certified to the LPO. If raw materials are exported to Mexico as USDA organic, then processed in Mexico—but not marketed in Mexico—and re-imported to the United States or another country to be sold as USDA organic, those products do not need to be certified to the LPO. For the most part, the products listed in the Annex b) – f) by 8-digit HS code are raw ingredients or bulk materials. In Annex b) – f), there are several listings for “others.” SENASICA has stated that the intent in these cases is to include all other products that are similar to the ones specifically named but which do not have their own tariff code due to a small trading volume. A summary list is included in the pages of this report; however, the summary list is for convenience only and affected parties should refer to the full list. The full list is included as a courtesy, unofficial, professional translation here, as an attachment to this report. 1 Organic standards do not address risks to plant, animal or human health, nor do they support health claims of any kind. WTO Members maintain separate and distinct regulations for determining whether a food is safe to consume, and for addressing plant and animal health. Organic programs, therefore, fall under the scope of the TBT Agreement. Page 4 of 41 Processed Products / Retail SENASICA has also informed stakeholders in presentations and via written responses (find courtesy, unofficial English translation attached to this GAIN report) that an existing memorandum of understanding (MOU) between SENASICA and the Federal Consumer Protection Office (PROFECO) will expand the scope of LPO enforcement to all organic products marketed in Mexico, to include processed products at the retail level. Mexican Outreach and Resources: SENASICA first informed industry about the upcoming changes during a webinar on December 17, 2020. SENASICA also gave a webinar to U.S. industry and stakeholders on April 12, 2021. Mexico requested questions regarding the LPO be sent to [email protected], or by contacting SENASICA staff at +52 55 5905 1000, ext. 51509, 51523, and 51532. Certification and Accreditation: SENASICA stated that the following types of operations must be certified to the LPO: 1. Plant production 2. Plant production (wild collection) 3. Animal production (domestic) 4. Animal production of natural ecosystems or non-domestic 5. Animal production (insects) 6. Production of fungi 7.
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