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USDA Lifts PACA Reparation Sanctions on California Produce Business

The U.S. Department of Agriculture (USDA) announced that Espirit Trading Inc. satisfied a reparation order in the amount of $26,990 issued under the Perishable Agricultural Commodities Act (PACA) involving unpaid produce transactions.

The Vernon, Calif., company can continue operating in the produce industry upon applying for and being issued a PACA license. Lin Calin was listed as the officer, director and/or 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 USDA’s issuance of a reparation order 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 or impose sanctions on an unlicensed 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.

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