WASHINGTON, April 23, 2014 – The U.S. Department of Agriculture (USDA) announced that Sun Belt Commodities Inc. satisfied a reparation order issued under the Perishable Agricultural Commodities Act (PACA).
The Houston, Texas, company has met its obligations and is now free to operate in the produce industry. Daniel Chen and James C. Lai were listed as the officers, directors, and/or 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. USDA will only reinstate the license of a business to an active status if all reparation awards are satisfied and if the license is not terminated.
The Agricultural Marketing Service (AMS), PACA Division, regulates fair trading practices of produce businesses operating subject to PACA, which includes buyers, sellers, commission merchants, dealers, and brokers within the fruit and vegetable industry. All oversight of actions related to PACA are conducted by AMS, an agency within USDA.
In the past three years, USDA resolved approximately 4,600 claims filed under PACA involving more than $87 million. This is just one more way USDA continues to support the fruit and vegetable industry.
For more information, contact John Koller, Chief, Dispute Resolution Branch at (202) 720-2890, by fax at (202) 690-2815, or by email at disputeresolutionsection@ams.usda.gov regarding this matter.
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