Additional Information for Groeb Farms, Inc.

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
UNITED STATES OF AMERICA
)
)
)
No. 13 CR 137
v.
)
)
Honorable Virginia Kendall
GROEB FARMS, INC.
)
)
)
Defendant GROEB FARMS, INC., a Michigan corporation with its principal
place of business in Onsted, Michigan, by
and through its undersigned attorney,
pursuant to authority granted by its Board of Directors, and the United States
Attorney's Office for the Northern District of Illinois, enters into this Deferred
Prosecution Agreement. The terms and cond
itions of this Agreement are as follows:
The Criminal Information
1.
GROEB FARMS waives indictment an
d agrees to the filing of a one-
count Information in the United States District Court for the Northern District of
Illinois, charging that on or about January 25, 2010, in the Northern District of
Illinois, Eastern Division and elsewhere,
GROEB FARMS, as part of a fraudulent
practice, received and bought merchandise
, namely, twenty-two container loads of
Chinese-origin honey with a contract va
lue of $882,178, knowing the same to have
been imported and brought into the United
States contrary to law, namely, as part
of a fraudulent practice in violation of
Title 18, United States Code, Section 542, in
that the honey was falsely and fraudulent
ly imported and brought into the United
States described as Chinese honey syrup,
some of which was transported through
the Northern District of Illinois and late
r delivered into the
Northern District of
Illinois as finished product, in violation of Title 18, United States Code, Sections
545 and 2. A copy of the Information is attached as Appendix A.
Acceptance of Responsibility
2.
GROEB FARMS accepts and acknowledges responsibility for its
conduct and that of its current and former
executives and employees as set forth in
the Factual Statement attached hereto and incorporated by reference herein as
Exhibit A, as well as the additional co
nduct set forth in the Factual Statement,
1
which constitutes relevant conduct under United States Sentencing Guidelines
§1B1.3. GROEB FARMS agrees that it sha
ll not contest or otherwise challenge the
admissibility into evidence of the Factual
Statement, the facts contained within the
Factual Statement, or any other document
, testimony, or other evidence the USAO
NDIL might use in any related criminal
prosecution against GROEB FARMS in the
event of a material breach of this Agreement.
Cooperation
3.
GROEB FARMS agrees to cooperate fully with the USAO NDIL and
with any other agency with which the USAO NDIL requests GROEB FARMS to
cooperate, regarding any matter about
which GROEB FARMS has knowledge.
GROEB FARMS' agreement to cooperate sh
all extend until the completion of law
enforcement investigations of any criminal activity relating to the illegal
importation and entry of honey into the Un
ited States, including any investigations
or prosecutions of others, but in no even
t shall that cooperation be less than the
duration of this Agreement, that is, twenty-four months.
4.
GROEB FARMS agrees that its cooper
ation, as agreed to in Paragraph
3 of this Agreement, shall include, but
is not limited to, th
e following, although
GROEB FARMS' cooperation shall not incl
ude production of materials covered by
the attorney-client privilege or the work product doctrine:
(a)
Completely and truthfully disclosing all information as may be
requested by the USAO NDIL with respect to the activities of GROEB FARMS and
its present and former board of directors, agents, officers, executives, and
employees, as well as any brokers, count
er parties, other third parties, and
customers concerning all matters inquired into by the USAO NDIL;
(b)
Assembling, organizing, and timely providing on request from the
USAO NDIL all documents, records, or ot
her tangible evidence in GROEB FARMS'
possession, custody, or control;
(c)
Using its best efforts to make available its present and former board
of directors, agents, officers, executives, and employees to provide information
and/or testimony as requested by the USAO NDIL, including sworn testimony
before a federal grand jury or in federal
trials, as well as interviews with federal
law enforcement authorities. Cooperat
ion under this Agreement will include
identification of witnesses who, to GR
OEB FARMS' knowledge and belief, may have
material information regarding the matters under investigation;
2
(d)
Providing testimony and other information deemed necessary by the
USAO NDIL or a court to identify or est
ablish the original location, authenticity,
or other evidentiary foundation necessary to
admit into evidence documents in any
criminal or other proceeding as requested by the USAO NDIL; and
(e)
Disposing on a voluntary bas
is and according to
law any illegally
transshipped, illegally misdeclared, or
illegally entered Chinese-origin honey,
whether in raw, blended, or finished form, of which GROEB FARMS has knowledge
and which resides in GROEB FARMS' possession, custody, or control.
Fine
5.
GROEB FARMS agrees to pay $2,000,000 to the United States as a
monetary penalty within thirty days of th
e filing of this Agreement in Court.
If
GROEB FARMS fails to fulfill its obligations
to pay the penalty and is deemed in
default under the terms of this Agreem
ent, GROEB FARMS agrees and stipulates
to the entry of a judgment against it for the unpaid amount and shall fully
cooperate in that process. The parties ha
ve agreed to the penalty based on GROEB
FARMS' financial ability to pay, as conf
irmed by financial statements and other
representations made by GROEB FARMS and its representatives to the United
States, under penalty of perjury and pr
osecution for false statements.
GROEB
FARMS understands that any misrepresent
ations concerning its financial status
would constitute a material breach of this Agreement.
6.
If GROEB FARMS materially breaches this Agreement as determined
by the USAO NDIL within its exclusive discretion, any monies paid by GROEB
FARMS to the United States shall not
be returned to GROEB FARMS and any
outstanding sums still owed
to the United States sha
ll remain due to the United
States. The USAO NDIL agrees, however,
to recommend to
the Court that the
amount paid pursuant to this Agreement should be offset against whatever fine the
Court shall impose as part of its judgment
in the event of a subsequent prosecution
against GROEB FARMS.
Deferral of Prosecution
7.
In consideration of GROEB FARMS'
cooperation, as well its remedial
actions to date, and its willingness to (i)
accept and acknowledge responsibility for
the conduct of its current and former exec
utives, employees, and agents as detailed
in the Factual Statement; (ii) have already implemented and continue further
implementation of new, enhanced remedial
actions as specified in Exhibit B; (iii)
demonstrate its future good conduct and full compliance with U.S. importation
3
laws, the Food, Drug, and Cosmetic Act ("FDCA"), and other federal laws; (iv)
educate customers and other industry participants regarding illegally transshipped,
illegally misdeclared, and unsafe or unwho
lesome products, including honey; (v)
continue its cooperation with the USAO NDIL, law enforcement, and other
government agencies as specified in Paragr
aphs 3 and 4; (vi) volunteer to dispose
according to law any honey specified in
Paragraph 4(e); and (vii) pay the monetary
penalty set forth in Paragraph 5, the USAO NDIL shall recommend to the Court,
pursuant to Title 18, United States Code, Section 3161(h)(2), that prosecution of
GROEB FARMS on the Information filed pursuant to Paragraph 1 be deferred for
a period of twenty-four months from the date of the Court's Order. Specifically,
upon execution of this Agreement, and pursuant to Title 18, United States Code,
Section 3161(h)(2), the USAO NDIL sha
ll move, unopposed by GROEB FARMS, to
present this Agreement to the Court and
move for a continuance of all further
criminal proceedings, including trial, for a
period of twenty-four months, for speedy
trial exclusion of all time covered by such a continuance, and for approval by the
Court of this deferred prosecution.
8.
The USAO NDIL agrees th
at if GROEB FARMS has not committed a
material breach of this Agreement for tw
enty-four months from the date of the
Court's Order deferring prosecution, th
e USAO NDIL shall seek dismissal with
prejudice of the Information filed agai
nst GROEB FARMS pursuant to Paragraph
1, and this Agreement shall expire and be of no further force or effect.
Government Commitment
9.
Except in the event of a material br
each of this Agreement, during the
term of this Agreement and upon expira
tion of this Agreement as set forth in
Paragraph 8, the USAO NDIL shall not further pursue investigations relating to
the matters set forth in the Factual Statem
ent that have been, or could have been,
conducted by the USAO NDIL prior to th
e date of this Agreement as to GROEB
FARMS.
Court Not Bound
10.
GROEB FARMS and the USAO NDIL understand that the Agreement
to defer prosecution of GROEB FARMS must be approved by the Court, in
accordance with Title 18, United States Code, Section 3161(h)(2). Should the Court
decline to approve this Agreement for any reason, both the USAO NDIL and
GROEB FARMS are released from any ob
ligation imposed upon them by this
Agreement and this Agreement shall be null and void.
4
Waiver of Rights
11.
GROEB FARMS agrees to waive and hereby expressly waives all rights
to a speedy trial pursuant to the Si
xth Amendment of the United States
Constitution, Title 18, United States Co
de, Section 3161, Federal Rule of Criminal
Procedure 48(b), and any applic
able Local Rules of the United States District Court
for the Northern District if Illinois for the period that this Agreement is in effect.
12.
In case of a material breach of this Agreement, any prosecution of
GROEB FARMS relating to the informatio
n and facts contained in the Factual
Statement or any crime arising therefrom th
at is not time-barred by the applicable
statute of limitations as of the date of
this Agreement, may be commenced against
GROEB FARMS notwithstanding the expi
ration of any applicable statute of
limitations during the deferred prosecution period and up to the determination of
any material breach and for one year ther
eafter. Thus, by signing this Agreement,
GROEB FARMS agrees that the statute of limitations with respect to any related
prosecution that is not time-barred on th
e date of the signing of this Agreement
shall be tolled for the period of this
Agreement plus one year. GROEB FARMS'
waiver of the statute of limitations
is knowing and voluntary and in express
reliance on the advice of counsel. Up
on the successful completion of this
Agreement, all applicable statutes of limitations shall be in effect.
Breach of this Agreement
13.
Should the USAO NDIL determine that GROEB FARMS has
committed a material breach of any prov
ision of this Agreement, the USAO NDIL
shall provide written notice to GROEB F
ARMS of the alleged breach, and provide
GROEB FARMS with a thirty day (30) period
, or longer at the reasonable discretion
of the USAO NDIL, in which to make a presentation to the USAO NDIL, to
demonstrate that no material breach has o
ccurred, or, to the extent applicable, has
been cured. The parties expressly understand and agree that should GROEB
FARMS fail to request an opportunity to present facts in mitigation within a
two-week period of the potential breach, it shall be conclusively presumed that
GROEB FARMS is in material breach of this Agreement. The parties further
understand and agree that the USAO NDIL's exercise of discretion under this
Paragraph is not subject to review in
any court or tribunal outside of the
Department of Justice. In the event of
a material breach of this Agreement that
results in a prosecution of GROEB FARMS, such prosecution may be premised upon
any information of which law enforcement
is aware as well as any information
provided by or on behalf of GROEB FARMS to the USAO NDIL or any other
government agency. As set forth in Paragraph 2 of this Agreement, GROEB
5
FARMS shall not contest or otherwise cha
llenge the admissibility into evidence of
the Factual Statement, the facts contained within the Factual Statement, or any
other document, testimony, or other evid
ence the USAO NDIL might use in any
criminal prosecution against GROEB FARMS
in the event of a material breach of
this Agreement.
Requirement to Obey the Law
14.
Should the USAO NDIL determine du
ring the term of this Agreement
that GROEB FARMS has committed any fe
deral crime commenced subsequent to
the date of this Agreement, GROEB FARMS shall, in the sole discretion of the
USAO NDIL, thereafter be subject to pr
osecution for any federal crimes of which
the USAO NDIL has knowledge, including but not limited to the conduct described
in the Factual Statement.
Public Statements
15.
GROEB FARMS expressly agrees that
it shall not, through its present
or future attorneys, board of directors,
agents, officers, executives, or employees,
make any public statement contradicting
any statement of fact contained in the
Factual Statement. Any such contradictory public statement by GROEB FARMS,
its attorneys, board of directors, agents, officers, executives, or employees shall
constitute a material breach of this Agr
eement as governed by Paragraph 13 of this
Agreement, and GROEB FARMS shall thereafter be subject to prosecution
pursuant to the terms of this Agreement.
16.
The decision of whether any statem
ent subject to Paragraph 15 of this
Agreement contradicts a fact contained in the Factual Statement and should be
imputed to GROEB FARMS for purposes of determining whether GROEB FARMS
has breached this Agreement shall be in
the sole and reasonable discretion of the
USAO NDIL. Upon the government's noti
fication to GROEB FARMS of a public
statement by any such person that in whole or in part contradicts a statement of
fact contained in the Factual Statemen
t, GROEB FARMS may avoid a breach of
this Agreement by publicly repudiating
such statement within two business days
after notification by the government. Th
is Paragraph is not intended to apply to
any statement made by any individual in
the course of any criminal, regulatory, or
civil case initiated by a governmental or
private party against such individual.
In
addition, consistent with GROEB FARMS' obligation not to contradict any
statement of fact set forth in the Factual Statement, GROEB FARMS may take
good faith positions in litigation involving
any person or entity not a party to this
Agreement. Nothing stated in this Agreement is intended to operate or shall
operate as a waiver of GR
OEB FARMS' rights under Federal Rule of Evidence 408.
6
Additional Terms
17.
GROEB FARMS agrees that, if
GROEB FARMS' business operations
are sold to a party or parties affiliated or unaffiliated with GROEB FARMS as of
the date of this Agreement, whether by sale
of stock, merger, consolidation, sale of
a significant portion of its assets, or other form of business combination, or
otherwise undergoes a direct or indirect change of control during the term of this
Agreement, GROEB FARMS shall include in any such contract or instrument a
provision binding the purchaser/successor to
all the obligations described in this
Agreement.
18.
It is further understood that this Agreement is binding on GROEB
FARMS and the USAO NDIL, but specifica
lly does not bind any other federal
agencies, or any state or local authoritie
s, although the USAO NDIL will bring the
cooperation of GROEB FARMS and its comp
liance with its other obligations under
this Agreement to the attention of federal, state, or local prosecuting offices or
regulatory agencies, if requested by GROEB FARMS or its attorneys. It is
understood that this Agreement also excludes
any natural persons. It is the intent
of the parties to this Agreement that the
Agreement does not confer or provide any
benefits, privileges or rights to any indi
viduals or other entities other than the
parties hereto, and that nothing in th
e Agreement shall be admissible in any
proceeding other than a proceeding brought by the USAO NDIL. Moreover,
GROEB FARMS may raise defenses and/or assert affirmative claims in any civil
proceedings brought by private parties as
long as doing so does not otherwise
violate any term of this Agreement.
19.
It is further understood that this
Agreement does not relate to or cover
any criminal conduct by GROEB FARMS othe
r than the conduct described in the
Factual Statement.
20.
GROEB FARMS and the USAO NDIL agree that, upon acceptance by
the Court, this Agreement and an Order deferring prosecution shall be publicly filed
in the United States Distri
ct Court for the Northern Di
strict of Illinois, Eastern
Division.
21.
This Agreement sets forth all the terms of the Deferred Prosecution
Agreement between GROEB FARMS and the USAO NDIL. No modifications or
additions to this Agreement shall be valid
unless they are in writing and signed by
the USAO NDIL, GROEB FARMS' attorneys, and a duly authorized GROEB
FARMS' representative.
7
________________________
__________________________________
________________________
__________________________________
__________________________________
22.
GROEB
FARMS
and
its attorneys acknowledge that no threats,
promises,
or
representations
have
been
made,
nor
agreements
reached,
other
than
those
set
forth
in
this
Agreement
to
ca
use GROEB FARMS to enter into this
Agreement.
AGREED
:
FOR GROEB FARMS, INC.
DATE
ROLF B. RICHTER
Chief Executive Officer
Duly Authorized Representative
GROEB FARMS, INC.
FOR THE UNITED STATES ATTORNEY'S OFFICE FOR THE
NORTHERN DISTRICT OF ILLINOIS
DATE
GARY S. SHAPIRO
United States Attorney
Northern District of Illinois
ANDREW S. BOUTROS
Assistant United States Attorney
8
________________________
__________________________________
CERTIFICATE OF CORPORATE RESOLUTIONS
The undersigned Secretary of GROEB FARMS, INC., a Michigan corporation,
hereby certifies that the following resolu
tions were duly enacted by the Board of
Directors of GROEB FARMS on February 8, 2013, and that such resolutions remain
in full force and effect:
WHEREAS, GROEB FARMS has been engage
d in discussions with the United
States Attorney's Office for th
e Northern District of Illinois to resolve criminal liability
relating to its honey-related businesses; and
WHEREAS, in order to resolve such discu
ssions, it is proposed that GROEB
FARMS enter into a deferred prosecution agr
eement with the United States Attorney's
Office for the Northern District of Illinois; and
WHEREAS outside counsel for GROEB FARMS has advised the Board of
Directors of GROEB FARMS' rights, possi
ble defenses, and the consequences of
entering into such agreement with the United States Attorney's Office for the Northern
District of Illinois;
Therefore, this Board hereby RESOLVES that:
1.
GROEB FARMS agrees and consents
to the entry of the Deferred
Prosecution Agreement with the United States Attorney's Office for the Northern
District of Illinois;
2.
Outside counsel and GROEB FARMS' President and Chief Executive
Officer are hereby authorized, empowered
and directed, on behalf of GROEB FARMS,
to execute the Deferred Prosecution Agreemen
t substantially in such form as reviewed
by this Board of Directors at this meeting with such changes as outside counsel may
approve; and
3.
Outside counsel and GROEB FARMS'
President and Chief Executive
Officer are authorized, empowered and direct
ed to take any and all actions as may be
necessary or appropriate, and to approve
the forms, terms, or provisions of any
agreement or other documents as may be ne
cessary or appropriate to carry out and
effectuate the purpose and intent of the foregoing resolutions.
DATE GEORGE
CAWMAN
Chairman of the Board of Directors
GROEB FARMS, INC.
9
________________________
________________
___________________
OFFICER'S CERTIFICATE
I, ROLF B. RICHTER, the duly authorized representative of GROEB
FARMS, INC., hereby expressly acknowledge the following: (1) I have the authority
to sign this Deferred Prosecution Agreement;
(2) I have read this entire Agreement;
(3)
I have had an opportunity to disc
uss this Agreement fully and freely with
GROEB FARMS' attorneys; (4) GROEB FARMS fully and completely understands
each and every one of its terms and th
e Agreement's consequences; (5) GROEB
FARMS is fully satisfied with the advice an
d representation provided to it by its
attorneys; and (6) GROEB FARMS has signed this Agreement voluntarily.
DATE
ROLF B. RICHTER
Chief Executive Officer
GROEB FARMS, INC.
10
________________________
__________________________
_________
COUNSEL'S CERTIFICATE
The undersigned are outside counsel for GROEB FARMS, INC. In connection
with such representation, I acknowledge
that I: (1) discussed this Deferred
Prosecution Agreement with my client, GROEB FARMS; (2) fully explained each
one of its terms to GROEB FARMS; (3) fully
answered each and every question put
to me by GROEB FARMS regarding this Agreement; and (4) believe GROEB
FARMS completely understands all of this
Agreement's terms and its consequences.
FOLEY & LARDNER LLP
DATE
Lisa
Noller
Counsel for GROEB FARMS, INC.
11
Exhibit A
FACTUAL STATEMENT
GROEB FARMS, INC. admits and agrees to the following facts and that
those facts establish its guilt beyond a reasonable doubt and constitute relevant
conduct pursuant to Guideline §1B1.3:
On or about January 25, 2010, in the
Northern District of Illinois, Easter
n Division and elsewhere, GROEB FARMS,
together with Executive A and Executive
B, as part of a fr
audulent practice,
received and bought merchandise, namely, twenty-two container loads of
Chinese-origin honey with a contract va
lue of $882,178, knowing the same to have
been imported and brought into the United
States contrary to law, namely, as part
of a fraudulent practice in violation of
Title 18, United States Code, Section 542, in
that the honey was falsely and fraudulent
ly imported and brought into the United
States described as Chinese honey syrup,
some of which was transported through
the Northern District of Illinois and late
r delivered into the
Northern District of
Illinois as finished product, in violation of Title 18, United States Code, Sections
545 and 2. More specifically,
1.
GROEB FARMS, INC., was the larg
est industrial honey supplier and
packer in the United States, with its principal place of business in Onsted,
Michigan and other processing and packin
g facilities, namely, Belleview, Florida;
Colton, California; San Bernardino, California since December 2012; and from
January through September 2011, Baytown,
Texas. GROEB FARMS processed and
sold honey to retail, foodservice, and in
dustrial customers. In about March 2007,
outside investors purchased a majority in
terest in GROEB FARMS and constituted
a new Board of Directors with oversight functions.
2.
Executive A was a senior GROEB FARMS executive, who reported
directly to GROEB FARMS' Board of Directors and exercised control, authority,
responsibility, and supervision over GRO
EB FARMS, including its operations and
executive management team. Executive A
served as management's primary point
of contact to the Board of Directors and communicated directly to the Board,
GROEB FARMS' customers, and the public regarding GROEB FARMS' polices,
positions, and practices on food safe
ty and illegally transshipped and illegally
misdeclared honey.
3.
Executive B was a senior GROEB FARMS executive who reported
directly to Executive A an
d exercised control, authority, responsibility, and
supervision over purchasing honey on behalf of GROEB FARMS.
1
4.
At times material to this Agreement, Executive A and Executive B
were acting within the scope of their em
ployment, with intent to benefit GROEB
FARMS, and in the course of the discharge of their duties.
5.
Beginning no later than February 2008 and continuing until about
April 2012, GROEB FARMS, as pa
rt of a fraudulent practice, received, bought, sold,
and facilitated the transportation, concea
lment, and sale of merchandise, namely,
at least approximately 1,578 container load
s of Chinese-origin honey knowing the
same to have been imported and brought
into the United States contrary to law,
namely, as part of a fraudulent practice in
violation of Title 18, United States Code,
Section 542, all in violation of Title 18, United States Code, Section 545.
6.
As part of the fraudulent practice, GROEB FARMS, acting through
Executive A and Executive B, purchased Chinese-origin honey for processing at its
facilities and sold that honey to its domestic customers as mislabeled non-Chinese
honey, and at other times as Chinese hone
y, all while knowing that the honey had
been falsely and fraudulently imported
and entered into the United States in
avoidance of U.S.-imposed antidumping duti
es and at times, honey assessment fees,
including in the following means:
a.
falsely and fraudulently declarin
g Chinese-origin honey as having
originated from countries other than China, including Indonesia,
Malaysia, Mongolia, Thailand, and Vietnam; and
b.
falsely and fraudulently describing
Chinese-origin honey as a product
other than honey, including sugars and syrups.
7.
Beginning in or about 2008 and continuing through in or about 2012,
GROEB FARMS instituted first-party onsi
te supply chain audits and inspections
of manufacturers and suppliers. As part of
the fraudulent practice, Executive A and
Executive B:
a.
continued to deliberately purchase honey from U.S.-based brokers
receiving honey from Asian suppliers,
including Suppliers 1, 2, 3, and
4, even after the audits raised subs
tantial concerns that these overseas
suppliers were providing GROEB
FARMS with illegally transshipped
and misdeclared Chinese-origin honey;
b.
continued to deliberately purchase honey from another U.S.-based
broker receiving honey from anothe
r Asian supplier, Supplier 5, even
2
Exhibit B
CORPORATE COMPLIANCE PROGRAM
Goods shipped from a country of origin to a country of intermediate
destination, mislabeled as to country of
origin, and that ultimately pass through a
customhouse at the port of final destination and enter into the United States as a
misdeclared product, are considered
illegally "transshipped."
Specifically,
Chinese-origin honey imported into the Un
ited States through third countries and
mislabeled and declared as originat
ing from a third country is illegally
"transshipped." Chinese-origin honey impo
rted and entered into the United States
as originating from a country other than China, even if not transshipped, is
considered an illegally misdeclared produc
t. Similarly, Chinese-origin honey
imported and entered into the United States as a product other than honey,
including, for example, molasses, fructose
, rice syrup, glucose syrup, honey syrup,
and apple juice concentrate is also consider
ed an illegally misdeclared product.
The
United States assesses antidumping duties on Chinese-origin honey and honey
assessment fees on all honey. Illegally
transshipped, mislabeled, and misdeclared
Chinese-origin honey can avoid these duti
es and fees, in violation of U.S. law.
Furthermore, illegally transshipped, mislabeled, and misdeclared honey can create
a two-tier pricing structure for honey:
higher prices for buyers and sellers
unwilling to transact in transshipped, mislabeled, and misdeclared honey and
cheaper prices for those willing to do so or who are otherwise indifferent.
The Food, Drug, and Cosmetic Act ("FDCA") and Food Safety Modernization
Act ("FSMA") are designed to ensure that
foods are safe, wholesome, sanitary, and
properly labeled.
The purpose of this Corporate Complianc
e Program is to ensure that GROEB
FARMS, INC. maintains supply chain integrity and conducts reasonable, good-faith
country-of-origin inquiries reasonably desi
gned to ensure that GROEB FARMS is
able to track and trace its domestic and imported products, as well as avoid
transacting in illegally transshipped, illegally misdeclared, and unsafe or
unwholesome products, including honey.
To prevent and address deficiencies in its policies and procedures regarding
full compliance with U.S. importation and customs laws, the FDCA and FSMA, and
other federal laws relating to honey and other products (collectively, the
"traceability and food laws"), GROEB FARMS
agrees to continue to conduct, in a
manner consistent with all of its obligat
ions under this Agreement, appropriate
reviews of its internal controls, existing policies, and procedures.
1
Where necessary and appropriate, GR
OEB FARMS agrees to adopt new or
to modify existing policies and procedures to ensure that it maintains a rigorous
compliance code, standards, and procedures
designed to detect and deter violations
of the traceability and food
laws. At a minimum, this
should include, but not be
limited to, the following elements to the ex
tent they are not already part of GROEB
FARMS' existing policies and procedures:
1.
A clearly articulated corporate policy, adopted by formal resolution of
GROEB FARMS' Board of Directors, agains
t violations of the traceability and food
laws. Among other things, the corporate policy shall make clear that it is a federal
crime for anyone to fraudulently or kn
owingly import or bring into the United
States, any merchandise contrary to law
(including U.S. importation and customs
laws, the FDCA and FSMA), or receive,
conceal, buy, sell, or in any manner
facilitate the transportation, concealment, or sale of such merchandise after
importation, knowing the same to have b
een imported or brought into the United
States contrary to law.
2.
Promulgation of compliance stan
dards and procedures designed to
reduce the prospect of vi
olations of the traceabilit
y and food laws and GROEB
FARMS' compliance code and appropriate
measures to encourage and support the
observance of ethics and compliance stan
dards and procedures against traceability
violations at all levels of
the company. These standards and procedures shall apply
to all directors, officers, executiv
es, and employees, and where necessary,
appropriate, and practical, outside parties
acting on behalf of or for the benefit of
GROEB FARMS, including, but not lim
ited to, agents, brokers, traders,
representatives, manufacturers, producer
s, processors, distributors, teaming
partners, joint venture partners, and others
(collectively, "agents, brokers, and
others").
3.
Development of these compliance st
andards and procedures, including
ethics and compliance programs on the basis of a risk assessment addressing the
individual circumstances of each honey pu
rchasing transaction, including, but not
limited to: (a) market conditions at the
time of the transaction, as well as (b)
reasonable country-of-origin and supply chain
inquiries, including a review of the
honey's:
(i)
paperwork, markings, and labe
ls, or lack, incompleteness, or
tampering thereof;
(ii)
verified container numbers;
(iii)
drum conditions and color;
(iv)
price;
(v)
volume;
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(vi)
sales condition, including spot buy versus long-term contract;
(vii)
claimed country of origin, incl
uding the honey production outputs
of the claimed country, whether the claimed origin has been used as a
transshipping route, and whether the country
is a historic net consumer or exporter
of its honey;
(viii)
seller, agent, or broker an
d each's track record and business
practices, including use of affiliates or
third parties to import into the United
States, a higher risk practice than directly serving as the importer of record;
(ix)
claimed manufacturer, factory, producer, or processor and the good-
faith due diligence and supply chain audits
conducted thereof, if any, including the
willingness and extent of access granted for the audits; thoroughness, scope, and
frequency of the audits; and the training,
expertise, and credibility of the auditor;
and
(x)
claimed importer of record and any information or background
relating to the same.
4.
Periodic review of its complianc
e standards and procedures, including
ethics and compliance programs, taking into
account relevant developments in the
field and evolving industry standards, an
d update and adapt as necessary to ensure
the continued effectiveness of the company's ethics and compliance programs in
detecting and reducing violations of the traceability and food laws and GROEB
FARMS' compliance code.
5.
Mechanisms designed to ensu
re that GROEB FARMS' policies,
standards, and procedures regarding the tr
aceability and food laws are effectively
communicated to all directors, officers, executives, and employees, and where
necessary, appropriate, and practical, agents, brokers, and others. These
mechanisms shall include: (a) periodic trai
ning for all directors, officers, executives,
and employees, and where necessary, approp
riate, and practical, agents, brokers,
and others; and (b) annual certifications by
all such directors, officers, executives,
and employees, and where necessary, approp
riate, and practical, agents, brokers,
and others, certifying compliance with the training requirements.
6.
An effective system for receiving, reporting, handling, and addressing
suspected criminal conduct and/or violatio
ns of the compliance policies, standards,
and procedures regarding the traceability
and food laws for directors, officers,
executives, and employees, and where necessary, appropriate, and practical, agents,
brokers, and others, as to known complaints
that arise internally and externally of
the company.
7.
Appropriate disciplinary procedures
to address, among other things,
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