Author: DRC

Since the DRC opened for business nearly twenty years ago, members have been primarily North American-based, however, over time, membership has expanded to include 17 countries. Today DRC enjoys an increasing global presence and steps to further expand and grow membership.

A 2018 presence at Fruit Attraction in Spain and upcoming participation in the Canadian Pavilion at Fruit Logistica (Berlin) combined with new and refreshed outreach tools targeting non-Canadian prospective membership are being rolled out. Keeping Trade on Track and a comprehensive Exporting to Canada Q&A are now available. Keeping in mind that the best transactions are those to which both parties are DRC members we encourage you to share the information with non-DRC buyers.

Canadians subject to the Safe Food for Canadians Regulations (SFCR) are required by regulation to hold a DRC membership unless the person is expressly excepted by the regulation. Certain non-resident importers (NRIs) are also required to secure a DRC membership.

In addition to fulfilling a regulatory requirement for those subject to the SFCR, DRC membership is an important risk mitigation tool and provides specialized business-to-business commercial dispute resolution: protection and compliance.

DRC will be participating in this year’s Fruit Logistica Trade Show to be held in Berlin, Germany. On February 6-8, 2019 the DRC team will be on hand at their booth in the Canada Pavilion to meet with members and potential members. If you have a trade partner who is not currently a member, please encourage them to stop by the booth to discuss the benefits of membership.

Visit us to learn more about DRC’s full range of member benefits and services. As a private commercial dispute resolution body, we provide the produce trade with harmonized trading standards, education, mediation and arbitration procedures and services necessary to avoid and resolve commercial disputes in a timely and cost-effective manner.

Exporting to Canada? The new Safe Food for Canadians Regulations include key trade and commerce requirement for buyers and sellers of fresh fruits and vegetables. A DRC Membership is a CFIA regulatory requirement for Canadians to buy, sell, import or export fresh fruits or vegetables, unless exempt. Make sure you are selling only to DRC members in Canada and feel free to share our information with your industry peers.

To learn about the DRC’s full suite of services and tools visit us at the Canada Pavilion on Hall 23, A-19.

Sometimes when DRC Trading Assistance Staff is reviewing a dispute file, we find contradictory information on the transaction documents which are not part of the disputed matter between the parties.

Since a high percentage of the produce industry’s transactions do not have a written contract, the contract between the parties is established by the documents supporting the transactions. This includes, but is not limited to documents such as a purchase order, invoice, bill of lading, passing, broker’s confirmation of sale and any written communication.

When there is conflicting information on any of these documents, more fuel could be added to the dispute because we are now dealing with an additional element that was not part of the original matter under dispute. Therefore, these are some of the items we recommend verifying prior to issuing documents such as a purchase order, an invoice, bill of lading or a broker’s confirmation of sale:

• Make sure you have the buyer or seller’s correct legal entity name or trade name. You can contact DRC, PACA, or the Blue Book (if you are a member) to see if the name matches what you have.
• Invoices normally have a “sold to”, “shipped to” field. The grower-shipper needs to be advised by the buyer/receiver where the load is being shipped to, including any stops before reaching final destination as good delivery determinations are based on the named destination.
• US#1, CAN #1, CAT 1, etc. are not the same. All grade standards are different. These terms need to be discussed, understood and agreed upon.
• Consignment and Price After Sale (P.A.S.) or Open Price, are not the same. These terms need to be discussed, understood and agreed upon. Solutions Blog Article
• A broker’s confirmation of sale must be sent to both parties, and both parties must verify the information on this document is accurate.
• Suggested transit temperature noted on the bill of lading should match the load instructions provided to the carrier by the shipper or the receiver. If conflicting information regarding temperatures is found, the carrier needs to contact the freight contractor or the shipper/receiver to confirm the right temperature setting on the reefer unit.

When noticing conflicting information on the documents related to a transaction, it is your responsibility to promptly let the parties involved in the transaction know that you have found an error or omission and request that document be amended accordingly.

DRC specializes in business-to-business commercial dispute resolution for produce and understands the breadth and variability of relationships and transactions in the produce industry.

Canada’s Safe Food for Canadians Regulations (SFCR) includes a regulatory requirement for Canadians who buy, sell, import or export produce to have a DRC membership unless specifically excepted from the requirement.

Beyond DRC’s specialized knowledge and the regulatory requirement for Canadians subject to the SFCR, here are some top of mind reasons for being a DRC member:

• DRC is a credible and recognized due diligence resource to turn to when researching prospective new accounts.
• The Trading Assistance team is able to assist in identifying potential new clients or suppliers.
• The Help Desk offers the knowledge and expertise to prevent and help resolve many matters prior to filing a formal complaint.
• DRC is truly a referee between parties when a purchase and sale do not go as planned. When a file is open, DRC’s Trading Assistance team does not represent either party.
• Filing a Notice of Dispute (NoD), which initiates the informal consultation process, bears no cost. The service is included in membership fees and a member may initiate as many NoDs as required.
• Filing a NoD does not raise a red flag or impact the standing of either party. The informal consultation process is private, confidential and results in a settlement in 80% of the circumstances.
• The goal of the Trading Assistance team is to help parties reach an amicable and timely resolution by pointing out the respective pros and cons of each party.
• DRC Trading Assistance Staff provides guidance to members for disputes that fall outside DRC’s jurisdiction.
• DRC provides seminars and webinars, including in-house seminars, to educate and help avoid future disputes between members.

A DRC membership is more than good business, it assures protection and compliance.

A friendly reminder that a few of you have DRC membership fees that are past due. In accordance with the By-laws of the Corporation, failure to pay your annual membership fees may result in termination of your membership. In order to stay in good standing, if you have yet to pay your yearly membership fees, please contact us asap at: DRC Help Desk | 613-234-0982 | [email protected]

The start of a new year is a good time to take stock of assets. A DRC membership is an asset of great value to you and your trading partners.

As a DRC member you are encouraged to proudly display the DRC logo on your website, signature block and promotional materials.

For more information, please contact the Help Desk and we’ll send you the information you’ll need to let them know!

A DRC membership is far more than good business and, in a few weeks, it becomes a regulatory requirement for anyone subject to the Safe Food for Canadians Regulations (SFCR).

Here are some important reminders:

When it comes to the SFCR, there are two important distinctions:

1. requirements related to food safety and traceability; and,
2. requirements related to trade and commerce.

Although much of the detail in the regulations concerns food safety and traceability, there is a very important trade and commerce requirement for buyers and sellers of fresh fruits and vegetables: Canadian buyers and sellers of fresh fruits and vegetables must be members of the Fruit and Vegetable Dispute Resolution Corporation (DRC), unless excepted. In other words, if you are subject to the requirement a DRC membership is your authority to trade produce.

While a DRC membership fulfills the SFCR regulatory requirement that provides authority to buy, sell or negotiate the sale or purchase of fruits and vegetables inter-provincially, intra-provincially and internationally, there is much more to it than that.

A DRC membership has always been a wise business decision, especially when it comes to risk management. Your DRC membership gives you an avenue to seek advice, interpret business and claims documents, mediate with your trading partner, and when necessary get a binding decision on a dispute that simply can’t be resolved informally. As a risk management tool it is important your trading partners be DRC members as well. Their membership ensures a common set of rules are in place when disputes occur. It also allows us to have done a background check and monitor any other issues which may be occurring. If they are avoiding the DRC membership, should you be asking yourself why?

Regardless of where you are buying or selling your produce, your best protection as a buyer or seller is a DRC membership, especially when both parties are members.

Canadian retailers are reminded to carefully consider and evaluate the regulatory requirement to hold a DRC membership. Under the SFCR, which comes into effect on January 15, 2019, it is prohibited for a person to

(a) sell any fresh fruits or vegetables that are to be exported or sent or conveyed from one province to another;

(b) purchase or negotiate the purchase on another person’s behalf of any fresh fruits or vegetables that are to be imported or sent or conveyed from one province to another;

(c) receive any fresh fruits or vegetables that have been imported or sent or conveyed from one province to another; or

(d) send or convey from one province to another or import or export any fresh fruits or vegetables.

There are exceptions to these prohibitions, some of which are noted below:

• any person who is a member in good standing of the Fruit and Vegetable Dispute Resolution Corporation
• a person who only sells fresh fruits or vegetables directly to consumers if that person paid less than $100,000 for the fresh fruits and vegetables that they sold to consumers within the previous 12 months

A number of retailer operations that have not been subject to the current requirement to hold either a CFIA Produce Licence or a DRC membership as authority to buy and sell fruit and vegetables will now be required to be a member of the DRC.

The requirement will be of particular interest to independent retail operations as well as a number of franchise operators.

To learn more, check out the DRC’s self-assessment for Retail

You may already be a Non-Resident Importer (NRI) shipping to Canada, thinking about becoming an NRI if you are shipping to Canada, or perhaps your customer wants you to be the importer of record for shipments going to them in Canada. No matter the circumstance, it is important to know that on January 15, 2019 the new Safe Food for Canadians Regulations (SFCR) come into effect and will impact the way NRIs currently export to Canada.

What does this mean from a DRC and SFCR perspective?

CFIA defines a non-resident importer as a person importing food into Canada whose fixed place of business is in a country other than Canada. Effective January 15, 2019 in order to be an NRI for fresh fruits and vegetables, CFIA will apply four main conditions when considering NRI status:

1. Food Safety: To be eligible to obtain a licence as an NRI under the SFCR, the NRI’s fixed place of business must be in a country that the CFIA has recognized as having a food safety system that provides at least the same level of protection as that of Canada’s. Currently, this includes commodities covered by USDA and CFIA Food Safety Systems Recognition (FSSR) Arrangement. As more food safety systems are evaluated, more countries may be added in the future.
2. Port of Entry (United States): Product must enter Canada directly through the US. In other words, the product must land and clear US customs before it can move into Canada. You cannot be a US NRI and ship the product from another country straight into Canada.
3. DRC Membership:  A DRC Membership is required for NRIs shipping fresh produce into Canada as the SFCR requires that anybody importing or moving fresh fruits and vegetables across provincial and/or international borders must be a DRC member in good standing. It is important to keep in mind that a SFCR licence and a DRC membership do not have the same intent. A SFCR licence intends to identify businesses and authorize those businesses to carry out licensable activities such as NRI. A DRC membership requires fair and ethical trading practices by minimizing trade irritants and facilitating effective trade dispute resolution.
4. CFIA Licence: Obtain a licence as an NRI from CFIA. To do so, set up a myCFIA account and complete the application for a license. We strongly recommend doing so prior to the January 15, 2019 implementation date in order to avoid any delays.

As always, if you still need help or want to explore other scenarios, please give us a call (+1 613-234-0982) or drop us a line at [email protected].

To view this information as a pdf file follow this link:  https://fvdrc.com/wp-content/uploads/2018/12/DRC-SFCR-and-NRI-2019-January-1.pdf

DRC is a membership based organization whose core work is “business-to-business private commercial dispute resolution” between members and, if applicable, between a member and a non-member.  DRC’s jurisdiction to help parties resolve a dispute is automatic if both parties were members at the time of transaction.  If one or both were not a member when the dispute arose, it may be more difficult to DRC to assist you.  Simply put, as a DRC member, always make sure you deal only with other DRC members, so your access to fast, affordable dispute resolution services is not compromised.

DRC can resolve domestic (intra or interprovincial) disputes provided the companies are within Canada,           the United States or Mexico. In addition, DRC will resolve international disputes provided the dispute arises in relation to a transaction that has entered into commerce in Canada, the United States or Mexico.

DRC attempts to help its members regardless of whether the dispute is with another DRC member or a non-member. However, in disputes between a member and a non-member, an arbitration clause or a voluntary arbitration agreement is needed to be able to use DRC’s Dispute Resolution Rules as an effective and efficient alternative to the courts. That said, DRC’s recourse is limited when you deal with a non-member, therefore we strongly recommend you encourage your trading partners to join in order to avoid being left without recourse through DRC.

Disputes must be brought to DRC within nine (9) months from the date on which the dispute arose. Unresolved disputes that fall outside of nine months will be deemed to have been abandoned.

When a company has decided to join DRC, through their membership application process, it is important that the applicant lets DRC membership staff know if they have an ongoing or previous dispute. We want to make sure you join for the right reasons and not under the impression that our rules are retroactive. However, if you are involved in a straight no-pay with one of our members, you can report that matter to our Trading Assistance Office, and that issue will be investigated.