20 in 2020 ………… DRC Comes of Age

Yes, it has been 20 years since the DRC opened its doors for business. Throughout the coming year we will be celebrating this milestone by remembering the people who made it happen, the vision, the triumphs, and the people who keep it going. We will also examine those places where the vision continues to chase the goal.

It is a unique story starring a dedicated group of industry and government people who took an idea, seized an opportunity, and launched what has become the DRC today. There were many meetings and consultations across North America in the late 1990’s resulting in far too many stories to recount, but we will do our best to review where the DRC came from.

We will also be reporting on where the DRC is going as we move into our third decade as the dispute resolution body in Canada and beyond as our membership expands around the world.

It has been my privilege to be at the helm of the DRC since 2011, but the foundation and story of this unique and thriving organization is built on the shoulders of others who dedicated time and energy to a vision and strategy that has endured to, as our tag line says ……………… keeping trade on track.

Fred

DRC Trading Standards – Section 19 Part III

We are almost at the end of our review of all sections of DRC’s Trading Standards. In this issue, we address the last three terms in section 19 which includes “Reject without reasonable cause”, “Suitable shipping condition” and “Truly and correctly account”. We will end the series with a summary of section 20 – Trade Terms and section 21 – Interpretation.

Reject without reasonable cause

The word rejection in our industry is sometimes used loosely. We sometimes hear of receivers referring to rejecting the product but while still in possession of the load. When this occurs they have unknowingly committed an act of acceptance (see our November Solutions Blog which included the concept of acts of acceptance). In order to make a rejection in a proper and timely manner, a receiver must make sure that: a) there is legal justification to refuse produce within reasonable time, b) not refuse produce that complies with the contract and c) has not committed an act of acceptance. As a receiver, if you have received produce in deteriorated condition or that has failed to meet contract terms, but you have committed an act of acceptance, you can offer the product back to the shipper or seller. However, if the shipper or seller does not accept the load back, your only recourse left is to claim damages or secure an agreement in writing to change the terms of the contract.

Suitable Shipping Condition

This term only applies to FOB transactions where the seller assures that, under normal transit conditions, the product will meet the agreed quality and condition requirements when the product is shipped. This implies that some degree of deterioration will normally occur even under the best transit conditions due to the perishable nature of the commodities in our industry. This term is also known as Good Delivery or Good Arrival where percentage of tolerances of defects are increased in comparison with the tolerances established by the grade standard where applicable.

Truly and correctly account

Consignment and Joint Account Transactions require that an itemized account of sale is submitted per transaction. An itemized account of sales must include the date of receipt and date of final sale, the quantities sold at each price, or other disposition of the produce, and the proper, usual or specifically agreed upon selling charges, expenses properly incurred and any other expense agreed upon. While these are the only terms that require an itemized accounting, when a receiver decides to claim damages and uses an account of sales to prove their damages, they must be prepared to meet the requirements of an itemized account of sales. Additionally, sales and expenses must be supported by their respective sales tickets, receipts, or invoices if required. In addition, regrading or repacking require its own accounting method which allows a deduction from the invoice price based on the labour and shrink (the amount of discarded product) costs, the portion of the freight of the lost product, the cost of the inspection (if applicable) and other costs as a result of having the product repacked or regraded.

CFIA has issued the following notice regarding the full coming into force of the SFCR for fresh fruits of vegetables on January 2, 2020

On January 15, 2020, most businesses in the fresh fruits or vegetables (FFV) sector will become subject to new requirements under the Safe Food for Canadians Regulations (SFCR). These include: preventive controls, preventive control plans and traceability.

In addition, importers who require an SFC licence and who do not have a valid licence as of that date may experience delays or rejection of their shipment at the border and may be subject to other SFCR enforcement actions.

New requirements for lot code labelling of consumer-prepackaged fresh fruits or vegetables will also come into force at that time. However, businesses will have until January 15, 2021 to use up existing packaging.

Prepare now

FFV businesses should begin now to learn about and prepare for the new requirements. New and updated guidance documents are available on the CFIA website:

Businesses should also review the following for information on lot-code labelling:

Inspection frequency

The number of times that CFIA inspects a food business depends on several factors, with risk to food safety being one of them. Using their My CFIA account, SFC-licensed businesses can provide operational and risk information that may help lower their establishment’s risk result and lower the frequency or scope of inspections.

Licence holders that do not complete this information could be inspected at the same rate as an establishment that has been assigned the highest risk result for that commodity.

Watch the FFV recorded presentation

Businesses can watch a recorded presentation to learn more about the new SFCR requirements. The presentation discusses the implications and benefits of the SFCR for the FFV sector, and is tailored to the interests of growers, harvesters, importers and exporters.

For more information about the SFCR, visit inspection.gc.ca/SafeFood.

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