Environmental Laws and Regulations

 

All agricultural companies are subject to a broad range of evolving environmental laws and regulations. These laws and regulations include:

Clean Air Act
Clean Water Act (CWA)
Resources Conservation and Recovery Act (RCRA)
Federal Insecticide, Fungicide and Rodenticide Act (FIFRA)
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)  

These environmental laws and regulations are intended to address concerns related to air quality, storm water discharge and management and disposal of agricultural chemicals relating to seed treatment for domestic and overseas varieties. Our company maintains quality standards to be in compliance with these laws and related regulations.

Environmental concerns are inherent in most major agricultural operations, including those conducted by our company, and there can be no assurance that the cost of compliance with current and future environmental laws and regulations will not have a material impact on our operations. Moreover, it is possible that future developments, such as increasingly strict environmental laws and enforcement policies, including further restrictions on the use of agricultural chemicals, could result in increased compliance costs.

Our company is also subject to the Federal Seed Act (the “FSA”), which regulates the interstate shipment of agricultural and vegetable seed. The FSA requires that seed shipped in interstate commerce be labelled with information that allows seed buyers to make informed choices and mandates that seed labelling information and advertisements pertaining to seed must be truthful. The FSA also helps promote uniformity among state laws and fair competition within the seed industry.

Internationally, we are subject to various government laws and regulations (including the U.S. Foreign Corrupt Practices Act and similar non-U.S. laws and regulations) and local government regulations. To help ensure compliance with these laws and regulations, we have adopted specific risk management and compliance practices and policies, including a specific policy addressing the U.S. Foreign Corrupt Practices Act.

We are also subject to numerous other laws and regulations applicable to businesses operating in China, including, without limitation, health and safety regulations. Specifically, vegetable seeds are allowed to be imported from the U.S. into China with no Chinese taxes under an application process. For each import transaction, we submit the import/export application form that contains seed quantity and its Latin term to China Agriculture Department. If the seeds are not on a prohibited list, then approval can and usually is granted.

The procedure involves the following steps:

  1. Submit the import/export application form that contains seed quantity and its Latin term to China Agriculture Department. If the seeds are not on a prohibited list, then approval can and usually is granted.  This process takes approximately two weeks.
  2. After formal approval from the China Agriculture Department is received, we submit our request to a sub-department within China Agriculture Department to obtain the phytosanitary request, on which they will list all the diseases China prohibits that might come with this variety of seed that we are importing.   This process takes approximately two weeks.
  3. Once the list of diseases is obtained from the China Agriculture Department , we then send it to the seed supplier that is originating our seeds (located in U.S)., and our supplier will provide the phytosanitary certificate with the seed to indicate that the seed being shipped does not contain any of the diseases listed in the phytosanitary request that was previously obtained from China. This process takes approximately two weeks.
  4. An original phytosanitary certificate is included with the seeds for the the importer who is responsible for shipment.  It is a customary practice that an electronic copy of the phytosanitary certificate is sent in advance to the importer before the shipment is contracted.

The average time to complete the entire permit process is approximately five weeks. No seed products are imported without completion of the required permits and approval from the China Agriculture Department.