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FOOD & DRUG LAW
Miscellaneous FDA Issues
Customs Update: FDA and food imports
(Published in the Journal of Commerce Online August 1, 2007)
 to view printable article.
It is impossible to read a newspaper, view a news Web site or listen to a TV news report without hearing something negative about trade between the United States and China. In light of the sudden
interest in everything Chinese, The Journal of Commerce held a webinar on July 24, “FDA's New Approach to Risk Management -- How It Will Effect Traders' Operations and Bottom Line." While by
no means limited to a discussion about China-related FDA issues, China is certainly the impetus for much of the recent Congressional activity surrounding the Food and Drug Administration and how the
agency oversees food imports.
The FDA developed an Import Strategic Plan in the 1990s, but like those of other federal agencies, it
is understaffed and underfunded, leaving the agency mired in its traditional approach of interdicting shipments at the border upon their arrival.
We are now hearing Congress agree with FDA’s own upper management that the current regime is not working. The question is what will replace it? FDA is talking about centralizing management, but
no performance goals have been articulated. FDA is expected to advocate centralizing entry processing at a regional level, but will its information technology system, internally or externally, be
able to keep up? Right now, FDA is sampling less than 1 percent of all food imports. Is that enough? Can FDA really sample more? If so, does that make the food supply chain any safer?
As part of implementing its Import Strategic Plan, FDA is urging the closure of seven of its 13 labs. Following the Customs model, FDA is attempting to push technology out to the field to allow
preliminary results almost instantaneously with a variety of handheld and similar devices. At the same time, the labs which FDA proposes to keep open will be its most modern and, therefore,
arguably the most efficient and productive.
While centralizing lab functions has some logical appeal, the attempt by FDA to consolidate entry
review to selected regional locations has raised eyebrows among many traders who recall Customs' advocacy of a similar approach regarding Commodity Teams staffing. It seems clear that FDA’s
management sees centralization as a way to insure more uniform decisions, and it may be right, but what happens to the importing community, especially the smaller importers? The single biggest
complaint about dealing with FDA is you can’t get anyone on the telephone. You can’t find out the status of your shipment. It takes FDA forever to do anything! How will that change if entry review is
centralized? Will there be more and heartier telephone lines? Will more FDA staff be available to the trade on a timely basis to answer questions? Will FDA be better able to communicate its intentions
and also in a more timely fashion? Will FDA beef up its ability to communicate with the trade electronically and by fax?
On the positive side, FDA has begun to talk about risk in the context of the life cycle of the imported product -- from farm to fork, from manufacturer to consumer. By looking at the bigger picture, it may
yet be possible for FDA to catch up with Customs in terms of figuring out how to separate the bad guys from the good guys.
The FDA is testing a program called PREDICT (Predictive Risk-Based Evaluation and Demonstrative Import Tracking) in Los Angeles. It is FDA’s attempt to measure risk based on information from a
wide variety of sources, including FDA’s own historical data, but such additional sources as other government agencies, open source intelligence, supply chain data, and evolutionary algorithms to
identify shipments which present the greatest risk. For those who deal with the Customs-Trade Partnership Against Terrorism (C-TPAT), does this sound familiar?
In order for PREDICT or an ISP to really work, the first question is whether FDA’s IT system can handle it? At the same time, what about FDA relying on third-party inspections and labs to reduce its
workload? Like every other government agency, FDA has been unwilling to blindly accept data from third parties. However, like Customs in the context of C-TPAT, it is inevitable that third-party data is
useful. While you would never want the government to rely on third-party data without some means to periodically validate it, at the same time, there are reliable third parties who are able to conduct
proper testing, for example, to recognized scientific standards. Inspections can similarly be conducted by third parties and be reported based on specific, objective criteria. As the funds available
to government agencies continue to shrink, other means of securing the supply chain should be considered and approved. Why not also include membership in C-TPAT has an indicator of lesser risk?
When traders look at risk management, the first question is, what does that mean? Each agency defines it differently, which is not surprising given that each agency has its own area of jurisdiction.
Customs has the most robust approach to risk management, which includes C-TPAT, the Container Security Initiative, advance manifest data and the soon to be announced "10+2" program for advance
collection of import data. If we look at the State department, there is little risk management being employed. Each transaction is considered on its own merits. The Commerce department's Bureau of
Industry and Security works more or less the same way, although we are now hearing about interest in a "trusted trader" program. The Department of Agriculture has just announced a new program for
the importation of selected fruits and vegetables which is clearly grounded in a limited form of risk management.
Perhaps the second-most active risk management program after Customs' is administered by the
Transportation Security Administration. It is working on a "trusted traveler" program, recently announced new packaging requirements, and is working to reconcile its known shipper rule with
C-TPAT. So, while FDA has a long way to go in developing its risk management approach, at least it is now finally considering its options.
For those of us who qualify as “grey hairs” when it comes to experience with international trade, the current position of the FDA harks back to the Eighties, when Customs' standing with members of
Congress (and, frankly, the trade community) was really low. The agency was able to reinvigorate itself by working closely with the trade and Congress. FDA could learn from that experience, but
since its focus has traditionally been inwardly directed, and because members of Congress often act without fully understanding either the best options or the impact of the options selected, now is the
time for all of us to work through our respective trade associations and companies to not only comment on what FDA proposes, but to go one step further. We should be considering what would
help FDA do its job better. For example, should there be a ruling program for product coding? Are there other decisions FDA issues which are so routine that a ruling program makes sense? How
would independent laboratories be able to test product which would satisfy the FDA? How would validation of that testing take place? What form of third-party inspection of domestic and foreign
facilities might work? How would that data be validated? There are a few of the current topics of conversation about making positive changes at the FDA. What do you think would help?
Customs Update: Changes at FDA
(Published in The JOURNAL of COMMERCE ONLINE March 26, 2007)
to view article.
LOS ANGELES -- At a recent trade association program, Michael Mullen, the assistant commissioner of international affairs and trade relations for Customs and Border Protection,
recommended that other federal agencies undertake three specific steps to enhance trade facilitation while at the same time giving due regard to ever-shrinking budgets and staffing and equipment levels.
The steps:
1. Move to a post-entry environment;
2. Move to a paperless environment; and
3. Fully participate in ITDS.
For those not familiar with it, ITDS, the International Trade Data System, is an under-construction
computer portal and part of the Automated Commercial Environment through which data would be transmitted to the U.S. government and, by its own programming, the system would automatically
share that data with all the participating agencies which have jurisdiction over a particular import transaction.
The goal is to have all the federal agencies which touch on imports [and exports] participate. Some have been slower than others, although the Food & Drug Administration does have a representative
on the ITDS board and has for some time.
What Mullen recommended was a really trusted trader program. Later at the same event, we learned
how FDA is putting its own spin on trade facilitation. The speaker was David Horowitz, deputy associate commissioner for compliance policy. During his comments, Horowitz discussed the
reorganization FDA is planning. While nothing official has yet been published, Congress is being briefed, so we can expect something along these lines to occur.
There will be one associate commissioner for regulatory affairs and another for compliance. Regulatory Affairs will oversee operations and budget, while Compliance will oversee Policy and Risk
Management and the Office of Enforcement, both civil and criminal. An Office of Imports, established under Regulatory Affairs, will oversee Import Operations and the Prior Notice Center. It will centrally
manage entry review by setting policy. There is a hint of centralizing the actual review of entries, but that does not appear to be in FDA’s immediate plans.
There are some who would suggest that centralization is needed for the usual reasons -- lack of uniformity; FDA staff needing training in specific areas; due to lack of staffing, FDA’s responses take
too long, and so on. Others would oppose centralization over such concerns as the time difference between where they are located and FDA headquarters in Maryland. Some would also oppose
centralization due to the money it would cost if a meeting was needed with the relevant decision makers should a serous problem present itself. Either way, we have to hope that by centralizing
policy, clearer guidance will be given to the FDA’s staff so shipments will move faster and regulations and requirements will be better understood inside and outside the agency.
Even while the reorganization itself is months or more off, FDA’s Import strategy in the near term will be focused on foreign operations, entry admissibility/border operations, domestic operations,
information technology and applied sciences and technology.
With these efforts, FDA is beginning a serious move towards risk assessment. The outcome should
be to free up the agency’s assets to spend only limited time on compliant goods (generally in the post-entry audit environment), while focusing on high risk and non-compliant goods. Importers,
therefore, can expect heightened expectations to provide even more reliable information. FDA has even said that it wants to release compliant goods and have more coordination and collaboration with
importers, as well as other regulators (e.g., state agencies) and stakeholders.
In implementing risk management, FDA plans to focus on fraud and economic adulteration (using
inferior, cheaper ingredients to cheat consumers and undercut competition), while auditing low risk areas. Another key focus for the agency will be data management. In this regard, currently the field
has at least one database per commodity type, e.g. drugs, medical devices, seafood, food, etc. The total number of databases may be as high as 17 and each is freestanding! The plan is to consolidate
them into one database incorporating, as well, a powerful search engine.
Another interesting idea is virtual inspections. Right now, FDA dispatches personnel to foreign
countries in order to conduct inspections for the purpose of ensuring given products meet sanitary, safety or other standards. In the face of ever diminishing budgets, FDA is looking at maximizing its IT
capability through virtual inspections. The plan is to review documentation and information at FDA headquarters instead of dispatching staff out of the country, and if necessary, FDA will ask the host
country to conduct the inspection and advise its results.
As with all such plans, the proof is in the implementation. Nonetheless, FDA is to be applauded for
its efforts to modernize, but keep its professional and technical standards in tact and meeting its current high standards.
FDA-EU COOPERATION EXPANDS
06/07
The FDA has signed an agreement with the European Commission and the European Medicines Agency (EMEA) to expand cooperation from the current vaccines, oncology and pharmacogenomics
to pediatrics and medicinal products for rare diseases (orphan drugs). Scientific dialog will also be widened to include extensions of therapeutic indications and risk management plans.
FOOD OVERSIGHT CHANGING?
05/07
The proposed Human and Pet Food Safety Act of 2007 seeks to tackle one of the most perplexing problems - how to fix the FDA. While there are other efforts to consolidate FDA, Agriculture and
APHIS into one super agency akin to DHS, with the substantial number of food-borne illness outbreaks, such as E.coli in leafy greens, especially bagged salads, and the pet food recall thought
to be caused by Chinese-made melamine-laced food additives, the U.S. Congress is again stepping into the fray. Currently there are 12 federal agencies with jurisdiction over food safety, many with
overlapping jurisdiction and conflicting priorities.
The bill is H.R.2108 in the House and S.1274 in the Senate. What is intriguing about it is the funding
mechanism. There is general agreement that FDA has been seriously under funded and so badly hobbled in carrying out its responsibilities. How will Congress overcome the shortcoming of not
appropriating sufficient funds? It will allow the new agency to collect fines and use those fines for enforcement purposes!
MORE FOOD MONITORING?
04/07
In the last year or so, the U.S. has been subjected to a series of food related outbreaks. These events have involved spinach, lettuce, tomatoes, peanut butter, and the latest, of course, pet food.
One estimate pegs the spinach E-coli outbreak resulting in losses in excess of $100 million! Con Agra’s peanut butter salmonella contamination problem is estimated to have cost the company up
to $60 million. Can new regulations be far behind? Will they be federal or state enacted?
FOOD DEFENSE WORKSHOP
03/07
FDA is planning a workshop for food manufacturing, retail and food service facilities on March 23 - 24, 2007 in Fayetteville, AR. For more details contact Steven C. Seideman at 479-575-4221 or seideman@uark.edu .
Wondering about the latest news in dealing with the FDA and Customs regarding seafood importations?
01/07
for a copy of a recent presentation by Ben England for more details.
FDA ASKS MARSHALS TO SEIZE DIETARY SUPPLEMENTS
01/07
Ratcheting up its enforcement efforts, at the behest of FDA, on September 5, 2006, U.S. marshals seized quantities of dietary supplements worth approximately $55,000 which were alleged to be in
violation of the new drug and misbranding provisions of the Federal Food, Drug and Cosmetic Act as these supplements were supposedly promoted with claims typically associated with drugs.
Promotion was accomplished through product labeling, promotional literature, audio cassette tapes, and Internet websites.
While this publicized instance involves dietary supplements, there is no question the Government has become far more aggressive in enforcing its FDA related rules and regulations. This is evident with a
wide variety of agricultural products. Of note is a recent attempt by Customs to impose penalties on Universal Fruits and Vegetables Corp. and several individuals. The Government proceeded under the
False Claims Act grounded upon allegations the defendants had imported fresh garlic misrepresenting its country of origin to evade antidumping duties imposed on Chinese origin fresh garlic.
The trial court held in favor of the Government. However, on appeal, defendants prevailed. The Government then asked that the appellate decision be amended to include remand (transfer) to the
Court of International Trade. The CIT then held it does not have jurisdiction. The False Claims Act allows the Government to recover damages. However, the damages claimed in this case were
underpaid duties which means they are not damages as envisioned by the False Claims Act. Therefore, the CIT held it did not have jurisdiction to decide the issues presented.
Additionally, the number of instances where importers of products subject to FDA jurisdiction are being referred for criminal prosecution is increasing. Be careful!
USDA PLACES RESTRICTIONS ON FISH PRODUCTS
01/07
APHIS established regulations effective September 29, 2006 restricting the importation of live fish, fertilized eggs and gametes of fish from certain species susceptible to spring viremia of carp (SVC),
consisting of common carp (including koi), grass carp, silver carp, bighead carp, Crucian carp, goldfish, tench and sheatfish. Comments will be accepted until October 30, 2006. For more information, see
http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/E6-1447 8.htm
APHIS PROPOSES TO AMEND FRUIT/VEGETABLE REGS.
07/06
In the April 27, 2006 Federal Register, the Animal and Plant Health Inspection Service (APHIS) published proposed changes to its regulations governing the import of fruits and vegetables. While
many of the changes are of an organizational nature, there are some which are substantive. They deal with establishing criteria which would allow APHIS to approve certain new fruits and vegetables
for importation and to more quickly and efficiently acknowledge pest-free areas in foreign countries. These changes would also eliminate the practice of listing specific imported commodities subject to
phytosanitary measures. Comments are due no later than July 26, 2006. Public hearings will be held on May 23, 2006 in Seattle, WA, May 24, 2006 in Los Angeles, on May 26, 2006 in Miami and on
June 20, 2006 in Washington D.C. In a nutshell, any existing requirements remain in effect but they will be easier to locate and the information is being reorganized to be more user friendly. For more
details, see the proposed regulations at http://frwebgate3.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=08014310694+1+0+0&WAISa
ction=retrieve
These changes come on the heels of those proposed in December 2005 which also updated APHIS’
rules and regulations. Much of their thrust was to clarify details about certain fruits and vegetables which are eligible for importation under permit.
In January 2006, APHIS amended its regulations by revising the approved doses for irradiation treatment of imported fruits and vegetables. In this Federal Register notice, APHIS established a new
minimum generic dose of irradiation for most plant pests of the class Insecta, a new minimum generic dose for the fruit fly family, reduced the minimum dose of irradiation for some specific fruit fly
species, added pests to the list for which irradiation is an approved treatment at less than the generic dose, and provided for the use of irradiation as a treatment for cut flowers and foliage.
FOOD SAFETY AND DEFENSE WORKSHOP
07/06
FDA has scheduled for June 6-7, 2006 in Fayetteville, Arkansas a public workshop to be held at the
Continuing Education Center, 2 East Center Street. The workshop is intended to provide information about current Good Manufacturing Practice regulations for foods, Hazard Analysis Critical Control
Point (HACCP), food defense awareness and related subjects, especially for small businesses and startups.
For more details, contact Steven C. Siederman of the Institute of Food Science and Engineering,
University of Arkansas, 479-575-4221 or seiderman@uark.edu, or David Arvelo, FDA, 214-253-4952, david.arveloa@fda.hhs.gov
MORE ABOUT FRUITS AND VEGETABLES
07/06
Preceding all of these efforts, in November 2005, FDA published materials about the safe handling of
raw produce and fresh-squeezed fruit and vegetable juices. This publication includes buying tips, storage tips, preparation tips and fresh juice safety. For more details, see http://www.cfsan.fda.gov/~dms/prodsafe.html
FDA ALLERGEN UPDATE
07/06
FDA has also posted to its website two new guidance documents in the form of frequently asked questions which deal with the new food allergen labeling requirements. One is entitled “Guidance for
Industry: Questions and Answers Regarding Food Allergens, including the Food Allergen Labeling and Consumer Protection Act of 2004 (Edition 3).” It can be found at http://www.cfsan.fda.gov/~dms/alrguid3.html. The second document is entitled “Guidance for
Industry: Questions and Answers About the Petition Process.” Its link can be found at: http://www.cfsan.fda.gov/~dms/petqagui.html
Food allergens are ingredients that are one of the following five (5) foods or from one of the following three (3) food groups, or are ingredients that contain proteins derived from one of the following:
- milk
- egg
- fish
- Crustacean shellfish
- tree nuts
- wheat
- peanuts
- soybeans
If the product contains a tree nut, the specific type of nut must be declared. For fish and shellfish, the
species must be stated. The definition of Crustacean shellfish excludes molluscan shellfish, e.g. oysters, clams, mussels and scallops.
There are, of course, other foods which cause allergies to individuals consuming them. However, Congress has chosen to require only the ones listed above to be subject to these labeling rules. The
labels must appear on all packaged food sold in the U.S. whether produced domestically or imported. If the food is packaged by retailers or food service establishments, they, too, are subject to these
regulations (but not if wrapped or boxed in response to a customer’s order). However, if the good is a meat, poultry or egg product, those are regulated by the USDA.
If the product’s ingredients listing mentions for example whey, egg yolks and natural peanut flavor, that listing must be immediately followed or have adjacent to that label, a label stating the product
“Contains milk, egg and peanuts” and the contains portion of the label must start with the word contains capitalized.
Failure to comply with these requirements is subject to civil sanctions, criminal penalties or both under the Food Drug and Cosmetic Act. FDA may also request seizure/recall.
Whether FDA will set trace levels remains to be seen. The agency admits this issue is likely to come before it through the petition process.
USDA/APHIS BAN
04/06
USDA Veterinary Services and APHIS have placed a temporary ban on the importation of poultry and commercial shipments of live birds, hatching eggs, and unprocessed avian products from India, which
is currently affected by a strain highly pathogenic avian influence. The ban includes shipments currently en route.
The pathogen is HPAI H5N1 and there are already bans in place for Cambodia, China (including Hong Kong), Indonesia, Japan, Laos, Kazakhstan, Malaysia, Nigeria, Romania, Russia, South Korea,
Thailand, Turkey, Ukraine and Vietnam. Pakistan reported an outbreak of NPAI but of an H7 strain. Unofficial sources report poultry die-offs in Saudi Arabia and Myanmar, too.
Commercial shipments of processed avian products from the affected countries must be accompanied by a Veterinary Service permit and government certification confirming the products
were treated according to APHIS’ requirements. Such products may not be entered as passenger baggage. U.S. origin pet and performing birds will be allowed to return from these countries for thirty
(30) days upon entering U.S. quarantine zones. For more details about returning pets see
http://www.aphis.usda.gov/NCIE/returning-pet-bird-import.html.
MANGO IMPORTS ALLOWED
04/06
The U.S. and India have reached agreement on a framework outlining the requirements for bilateral trade of commodities treated by irradiation. This should lead to the importation of mangoes into the U.S.
FDA MEETS WITH PUBLIC RE FOOD LABELING
02/06
The FDA in the Southwest region is collaborating with the University of Arkansas in presenting a public workshop entitled "UA/FDA Food Labeling Workshop." The workshop is intended to provide
information about FDA food labeling regulations and other related subjects to the regulated industry, particularly small businesses and startups. It will be held on April 5, 2006 (all day) and April 6, 2006,
from 8 a.m. to 3 p.m. at the Continuing Education Center, 2 East Center St., Fayetteville, AR. For more details contact Steven C. Seiderman at the Institute of Food Science & Engineering, University
of Arkansas, 2650 North Young Ave., Fayetteville, AR 72704, 479-575-4221, FAX: 479-575-2165, or
e-mail: seideman@uark.edu.
The January 4, 2006 Federal Register announcement encourages registration by March 21, 2006.
There is a advance fee of $150 to cover facilities, materials, speakers, and breaks. Seats are limited; course space will be filled in order of receipt of registration. Those accepted into the course will
receive confirmation. Registration will close after the course is filled. If on-site registration is possible, the cost will be $200. The registration form is published as part of the Federal Register announcement.
“This public workshop is being held in response to the large volume of food labeling inquiries from small food manufacturers and startups originating from the area covered by the FDA Dallas District
Office ... The goal of this public workshop is to present information that will enable manufacturers and regulated industry to better comply with labeling requirements, especially in light of growing concerns
about obesity, trans fat, and food allergens. Information presented will be based on agency position as articulated through regulation, compliance policy guides, and information previously made available
to the public. Topics to be discussed at the workshop include:
(1) Mandatory label elements,
(2) nutrition labeling requirements,
(3) health and nutrition claims,
(4) Food Allergen Labeling and Consumer Protection Act of 2004, and
(5) special labeling issues such as exemptions.
FDA WARNS ABOUT FRUIT PRODUCTS WITH HEALTH CLAIMS
12/05
The FDA recently announced that it issued Warning Letters to 29 companies that manufacture, market or distribute products made from cherries or other fruits. The recipients were told to stop
making unproven claims on their web sites and product labels that their fruit products treated or prevented disease. The companies cited market dried fruit, fruit juice and juice concentrate claiming
to treat or prevent diseases such as cancer, heart disease and arthritis. Failure to cease and desist could lead to such actions as criminal sanctions, injunctions and product recalls.
LOS ANGELES SINGLED OUT
11/05
The FY 2006 FDA Appropriations bill contains a provision calling on the L.A. District to clean up its act, especially with reference to imports of ethnic food. Congress expressed concern about
communication with importers, the amount of time shipments are held and proper declaration of product.
FDA L.A. supposedly implemented new procedures in 2004. Congress told FDA L.A., it is time to
review the performance of those procedures and solicit input from the importing community.
DISPOSING OF CONTAMINATED FOOD
10/05
On the heels of Hurricane Katrina, the Food and Drug Administration (FDA) published a notice advising growers, food manufacturers, food warehouse managers and transporters how to dispose of
contaminated or spoiled food. These suggestions apply just as well to the results of Hurricane Rita and any other circumstance where food goes bad. There are, of course, circumstances where food
can be reconditioned, but in the end, the decision of how to get rid of the food or recondition it turns in large measure on what is it contaminated with? is it hazardous, radiological, non-hazardous,
municipal or other waste? what special handling is required? how much of it is there? how can it be transported and to where? are there any special permits required? For more details, check the FDA
website at www.cfsan.fds.gov/~dms/fsdias3.html. You can also call FDA’s Office of Compliance, Center for Food Safety and Applied Nutrition at 301-436-2359, or FDA’s Nashville District Office at
615-781-5388 or the Atlanta Regional Office at 404-253-1171.
FDA MEETS WITH THE PUBLIC
10/05
In the August 16, 2005 Federal Register, FDA announced “Vision 2006 – A Conversation With the American Public.” These meetings will take place in three cities – Boston, Miami and Phoenix. They
are designed to allow consumers to interact with agency leadership on issues of mutual concern. FDA intends to also update the public about its current programs as it shapes its agenda. The topics
include “new opportunities to advance the safe use of medical products, increase the public health benefits of direct-to-consumer advertising, guarantee the safety and reliability of dietary supplements,
and improve the science of drug development by lowering the cost of new medical products and speeding access to better medical technologies...” FDA officials also hope to discuss the agency’s
“continuing efforts to increase public understanding of, and involvement in, the agency’s scientific and regulatory processes.”
Questions to be posed include:
What information does the public expect to receive from FDA regarding the benefits and risks of new food and medical products?
Where does the public currently get information about these products, and how beneficial is this information in helping to inform the decision being made?
What additional information, if any, does the public believe should be provided to enable individuals to discuss with their physicians or other health care providers the benefits and risks of products for a
health condition the individual has or thinks he or she might have?
What additional steps can FDA take to improve its communication with consumers and build confidence in its activities and its mission?
09/05
FDA PROVIDES TRAINING ON GOOD MANUFACTURING PRACTICES
09/05
In conjunction with Peking University and the International Society for Pharmaceutical Engineering, the FDA will provide educational workshops in China on the topic of good manufacturing practices in
the pharmaceutical industry. While these sessions are intended for the drug industry, the approaches, structures and principals discussed are equally applicable to any FDA product subject
to good manufacturing practice requirements. For more details, http://frwebgate4.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=67693618873+6+0+0&WAISa
ction=retrieve
SEAFOOD THAT GOT HIGH!
08/05
On August 1st, Florida's Agriculture and Consumer Services Commissioner announced the arrest of two men for allegedly trying to smuggle nearly 200 pounds of marijuana from Florida to New York in a
refrigerated truckload of seafood.
BASMATI RICE SEIZED
08/05
FDA recently announced that U.S. marshals seized over $80,000 worth of basmati rice. FDA held the
Pakistani rice to be adulterated by insect contamination - weevils, beetles and insect larvae were found during a laboratory analysis.
As is typical, the goods were held at the importer's premises under embargo but when the importer refused to destroy or recondition, FDA took the action of asking the U.S. Marshal to intervene.
KING CRAB SHIPMENT FORFEITED
07/05
The U.S. Court of Appeals for the Ninth Circuit issued a decision in June 2005 holding that King crab taken in violation of Russian fishing regulations is forfeited under the Lacey Act. The facts of the case
involve two Russian vessels which were suspected of catching the crab in waters protected by Russian law while having their monitoring equipment turned off. When the crab was off-loaded in
Blaine, WA, Customs seized it under the Lacey Act, 16 U.S.C. § 3372(a)(2)(A), relying on evidence provided by Russian authorities. The importer argued he held a security interest in the load through a
financing agreement with the Russian fishing vessels and there was nothing inherently illegal about possessing crab. Besides, said the importer, I know nothing about where the crab was caught.
The trial court held the innocent importer defense was not available because the crab itself was contraband because of where it was caught, even though the load might not otherwise be illegal to
possess. The Lacey Act makes it illegal to import, export, transport, sell, receive, acquire or purchase any fish or wildlife or plant taken, possessed, transported, or sold in violation of any law,
treaty, or regulation of the U.S., any Indian tribal law, if the law or regulation of any State is violated or in violation of any foreign law. See 16 U.S.C. §3372(a). The Act provides for both civil and criminal
penalties. On appeal, the Ninth Circuit affirmed the decision of the lower court.
While decided by a federal appellate court which has jurisdiction only over the U.S. western states,
this case puts all traders of fish, wildlife and plants on notice to be sure they know and can properly document where their product originates. In this case, what cost the importer his goods was the fact
he did not know (or at least claimed not to know) the vessels went into protected waters.
For more details, see USA v. Deep Sea Fisheries, et al, No. 03-36006, D.C. No. CV-02-02167-JCC (June 9, 2005).
FDA PUBLICATIONS STILL VALID
07/05
With the enactment of the Bioterrorism Act, the FDA began seriously looking at the integrity of the food supply chain. The agency has long demanded good manufacturing practices under HACCP and
other programs, but the integrity of the supply chain was an altogether different analysis and, therefore, called on the agency to reach out to industry in a way it had not done previously.
To that end, in late 2003, FDA published guidance documents about Food Security Preventive Measures for Importers and Filers, and a separate one for Food Producers, Processors, and
Transporters. For any importer of food and food products who is also a member of the Customs-Trade Partnership Against Terrorism, the contents of these pamphlets reads like a roadmap to qualifying for C-TPAT.
In them, FDA recommends being ready for the possibility of “tampering or other malicious, criminal, or terrorist actions.” The list of recommendations includes to assign responsibility for security to a
knowledgeable individual; conduct an initial assessment of your company’s food security procedures and operations; put in place a crisis management strategy; plan for emergency situations; become
familiar with local emergency response systems; know your staff and who has which responsibilities; establish a system to identify and recognize staff members (including the use of color coded badges
to highlight access limitations); periodically assess levels of access and the individuals given that access; change combinations, rekey locks, and collect retired key cards; restrict personal items in
non-public areas; allow only personal use medicines on site; prevent staff from bringing personal items into food preparation and storage areas; regularly inspect the contents of staff lockers, bags,
packages and vehicles when on company property; incorporate food security awareness into training programs (including information on how to prevent, detect and respond to tampering and other
misdeeds); provide periodic reminders of the importance of security; encourage [and reward] staff support of security efforts; watch out for unusual or suspicious behavior by staff [and visitors]; and be
alert for atypical staff health conditions.
Regarding visitors, FDA recommends inspect incoming and outgoing vehicles, packages and
briefcases; restrict entry to facilities; issue visitor badges; insure each visitor has a valid reason for being in the area of the facility to which he or she is given access; verify the identity of unknown
visitors; restrict access to food handling and storage areas; and restrict access to locker rooms.
As to facilities, the FDA recommends protecting perimeter access with fencing and other deterrents;
secure doors, windows, roof openings/hatches, vent openings and trailer bodies; use metal or metal-clad exterior doors when the facility is not in operation; secure bulk unloading equipment when
not in use and inspect that equipment prior to use; minimize the number of entrances to restricted areas; account for all keys; monitor premises security; minimize the places which can be used to
temporarily hide intentional contaminants; provide adequate interior and exterior lighting, including emergency lighting; manage and control the vehicles which are parked on site, including company
trucks; and keep parking areas separated from entrances to food storage and processing areas, utilities and equipment.
The FDA goes on to recommend that in day-to-day operations, food companies should use only known and appropriately licensed or permitted sources for all products [and services]; encourage
suppliers, distributors and transporters to practice appropriate food security measures; authenticate labeling, packaging configuration, tamper-evident packaging and product coding/expiration dating
systems; request locked/sealed vehicles, containers and railcars, get the seal numbers in advance of arrival and verify them; put in place procedures to deal with breaches of the chain of custody; require
transporters to be able to verify the location of a load at any time; establish delivery schedules and investigate delayed or missed shipments; supervise off-loading of incoming shipments, including
off-hours deliveries; account for overages and shortages; investigate altered shipping documents; inspect incoming shipments for signs of tampering, contamination or damage, plus counterfeiting;
check for authenticity, package/product integrity, and batch/lot and container codes; verify conformance with FDA product safety, quality, effectiveness and labeling requirements; perform
random testing of incoming product; inspect all shipping containers and vehicles; reject suspect food and alert appropriate law enforcement and/or food public health authorities as appropriate.
FDA goes on to make similar recommendations regarding the storage of food which builds on the principle of segregating compliant food from contaminated or compromised product. The FDA also
recommends detailed requirements for the handling of outbound product as are listed above, plus securing water and utilities and the ventilation system. Not to be overlooked, FDA also provides
recommendations regarding keeping the computer system in tact, such as restrict access; use passwords and firewalls; eliminate access when staff leaves; establish traceability of all transactions;
keep virus protection up-to-date; and validate and periodically challenge the system’s security and procedures.
In these pamphlets, one also finds recommendations about identifying to whom problems and
anomalies are to be reported; having proper supervision in place; establishing procedures for the recall of product and the investigation of suspicious activity. FDA also recommends pre- and
post-hiring screening of staff; proper staff food security training and refresher sessions. Finally, the agency also includes the obvious recommendations when it comes to laboratories – restricting
access to the lab and its materials; restricting access to sensitive materials; responsibility for integrity controls; and a complete inventory of all lab materials and their proper control.
While these pamphlets were written in 2003, their recommendations remain valid even today. Companies need to be vigilant and implement these or similar procedures. Eventually FDA will figure
out how to meet the mandate of Section 302 of the BTA and will implement a program which expedites the release of food importations from compliance companies. Having these sorts of
controls in place will be necessary to obtain the benefits of that quick release program.
FDA UPDATE
06/05
Did you know that over 170,000 prior notices are filed each week with FDA? The agency expects to receive about 9 million submissions in fiscal year 2005! Approximately 78% are filed through ABI
and about 22% through FDA’s PNSI system. FDA has released additional information and statistics regarding its efforts under the Bioterrorism Act. It has also published guidance documents regarding
related subjects. Therefore, traders are encouraged to keep informed by visiting the FDA website at http://www.fda.gov/oc/bioterrorism/bioact.html.
FDA FOCUSES ITS EFFORTS -
11/04
Over a six week period, FDA carefully looked at international and domestic shipments and domestic manufacturers of spring and mineral water; fruit and vegetable juices, including concentrates; liquid
and powdered infant formula; fresh leaf and stem vegetables, including cut; and fluid milk.
FDA hopes to determine risk levels and identify areas where industry needs to be most mindful about
possible intentional contamination.
FDA SECURITY PROGRAM
10/04
FDA will be conducting vulnerability assessments starting on October 11, 2004 and lasting for about six (6) weeks. The purpose of these efforts is to evaluate preparedness, identify high risk products,
target inspections, sample foods for contaminants, identify unregistered firms, heighten the involvement of the Food Emergency Response Networks laboratories, heighten food security
awareness within industries considered to be vulnerable and identify gaps within the system.
FDA will work with the individual states to heighten collaboration and coordination. The focus will be
on the following products:
1) Spring and mineral water - first three weeks;
2) Fruit and vegetable juice, including concentrate - first three weeks;
3) Liquid and powdered infant formula - second three weeks;
4) Fresh leaf and stern vegetables, including cut - second three weeks;
5) Fluid milk - all six weeks.
In the end, FDA expects to draw 2,730 samples and analyze them. FDA states it will work this effort
in concert with its Prior Notice Center. Watch to see if prior notice releases will be delayed.
NOAA UPS ENFORCEMENT ON SEA BASS
10/04
NOAA has announced it will increase enforcement against Chilean sea bass which is not properly documented. The agency recently seized a large shipment of Chilean sea bass as the certification of
the catch contained unauthorized signatures.
Only the port official of the exporting country may authorize re-export of Chilean sea bass. No one
else may sign the certification. Here is another context where due diligence is required and sometimes overlooked.
Customs Update: FDA and Export Records
(Published in the Journal of Commerce Online on August 12, 2004)
to view document in printable format
In the June 1, 2004 Federal Register, the Food and Drug Administration issued its latest thoughts about the records it expects companies to possess when exporting food and cosmetics. Written
comments are due to the agency no later than Aug. 16.
The FDA Export Reform and Enhancement Act establishes record-keeping and notification provisions
for companies which export certain FDA regulated products. If exporting a drug or device, notification must be given to the agency identifying that drug or device when exports first start. Originally these
rules were to become effective in March 2002, but have been delayed due to objections filed by industry.
The focus of these objections are two-fold. First, there is the question of giving FDA access to these
records. Does FDA have authority to seek export records when it is food or cosmetics which are exported? Second, what type of records must be maintained by a company to confirm its exports do
not conflict with the foreign country's laws?
The food and cosmetic industries assert that FDA has the burden to show an exporter violated the
foreign law, not the other way around. Further, it was argued the form of the records need not be affidavits from high-ranking company officials. Instead, certification should be required only if FDA has
established a label warning for a product or if there is a specific limit on the presence of an ingredient or substance because of safety concerns. Otherwise, a company should be free to maintain any
records which satisfy its internal corporate compliance requirements.
In this Federal Register notice, FDA has asked the public to comment regarding its ability to inspect
export records held by food and cosmetic exporters. Additionally, FDA wants to know what records should an exporter be required to maintain. The notice asks specific questions under each topic, such as:
1) Is it enough if the company has records but FDA has no access to them?
2) What about FDA's ability to confirm that import for export product is actually being exported?
3) Should there be specific records required?
4) Who needs to sign any certifications which might be required?
5) Should certification be limited to only those circumstances where FDA has a policy position in place?
6) What regulatory standard should apply?
7) What records are sufficient to provide an exporter with a reasonable belief there is compliance?
8) What records will allow enforcement in the U.S., and can they be fashioned to be simple and easy to identify?
How will these policy questions affect your company? What will be required to show due diligence?
What, if any, implication does this have on a company's Sarbanes-Oxley compliance/internal controls if it is publicly traded? What are the implications if the company is privately held?
Let us know.
FDA EXTENDS COMMENT PERIOD
05/04
July 13th is the latest deadline to file comments regarding how the FDA prior notice procedures are working. FDA also wants comments evaluating its efforts at cooperating with Customs. Clearly the
trade is in favor of harmonized time limits and both agencies seem to be moving in that direction. It seems more encouragement is needed.
For more information about what FDA’s prior notice rules mean to your company see Questions and Answers Regarding the Interim Final Rule on Prior Notice of Imported Food (Edition 2) which can be
obtained on FDA's website at
http://www.cfsan.fda.gov/~pn/pnqagui2.html
New Industry Guidance re Labeling
01/03
One of the areas where importers run into major problems with the FDA rules and regulations is when
products are imported which make health claims, for example, ginseng tea. The medicinal benefits of consuming ginseng tea are simply not recognized in the U.S. due to the lack of scientific testing to
support those claims.
In an effort to make things somewhat clearer for importers in terms of what claims are allowed, the
FDA has issued a guidance document about qualified health claims for food and dietary supplements. In order to avoid FDA problems, importers are encouraged to download and review FDA’s document
which can be obtained at:
www.cfsan.fda.gov/dms/guidance.html or www.fda.gov/ohrms/dockets/default.htm.
FDA WORKSHOPS -
08/02
The Food and Drug Administration has announced workshops for the public which deal with food safety and recalls. They will be held in Oakland, Los Angeles, and Seattle. For more information, see
the July 2nd Federal Register.
FDA Temporarily Expands Services
06/02
Along the Southwest land border, the Food & Drug Administration has begun a study spanning the period October 20, 2001 to April 20, 2002. The purpose of the study is to evaluate whether weekend
service should be provided on an on-going basis.
FDA RAMPS UP INSPECTIONS
11/01
As a result of the September terrorist attacks, the U.S. Food and Drug Administration has announced
it will increase the depth and frequency of importer record audits and shipment inspections. FDA also plans to dramatically increase the number of inspectors and investigators from 165 to 365 and shift to
24 hour operations at many major ports. Whether importers or their suppliers will be required to create and maintain records of their security programs remains an open question.
NEW BOND AMOUNT FOR FDA GOODS
04/01
In T.D. 0126, Customs announced revised guidelines for bonds required at time of entry where FDA
goods are imported. It confirms the three times the value standard currently in use but also allows Customs to insist on a bond equal to the domestic value of the goods being imported.
SHRIMP IMPORTER CONVICTED
01/00
An Atlanta federal appeals court recently upheld the conviction of a company and two executives who
were accused of altering paperwork to avoid cargo detention by Customs and FDA. The sentence was five (5) years probation and a $1 million fine against the company. The sentence of the
executives will be altered. Sigma International Inc. was accused of altering its import paperwork to avoid automatic detention of imported Indian shrimp. An FDA inspector randomly sampled a shipment
and discovered a different packer’s name. Later the FDA learned Sigma was reselling some Chinese shrimp which had been rejected as rotten. The company was also accused of washing this shrimp in
a chlorine mixture as a means to eliminate foul odors.
FDA GETS TOUGH
10/99
Is it an isolated instance or the waive of FDA enforcement in the future? That is the question posed
by a few recent warning letters issued by FDA to importers of goods subject to its regulations. In those warning letters, importers were advised that importing their goods stating FDA compliance
when the goods were non-compliant was a misrepresentation which was seen as an attempt to circumvent the FDA rules and regulations - so far the standard warning. In addition, however, these
warning letters referred to potential violations of the Customs rules and regulations, including both the fraud statute (19 U.S.C. § 1592) and the corresponding criminal statute (18 U.S.C. § 542)!
STAKES RAISED FOR FDA VIOLATIONS
08/99
Dissatisfied with the deterrent effect of three (3) times the value fines in stopping the importation of
products and foodstuff violating the FDA rules and regulations, Customs is now proposing to increase the penalty for importing such foodstuff and products to their domestic value if not treated or disposed
of as required by law! Domestic value is defined as "the price at which such or similar property is freely offered for sale at the time and place of appraisement, in the same quantity or quantities as
seized, and in the ordinary course of trade." While everyone agrees the importation of these products and foodstuffs is a problem, a better solution would likely be to change the current FDA law so that
release of these goods to the importer pending final FDA action is not allowed.
FDA STEPS UP ENFORCEMENT
05/99
FDA is expected to issue guidance to field offices in the near future to identify “high-risk” imported products which could be susceptible to contamination, including produce, baked goods,
heat-and-serve products and infant formula. Low-acid canned and acidified foods such as vegetables, canned tuna, sardines, pet food, salsa, pickles and sauces. Seafood will continue to be a
focus of attention, including mahi-mahi, pompano, tuna, salmon, swordfish, grouper, snapper and uncooked molluscan shellfish. Mexican parsley, cilantro and green onions as well as Guatemalan
raspberries will also be carefully looked at.
In the border context, FDA and Customs have explored ways to collaborate more effectively. Field
inspectors are reported to have a goal of collecting 1,000 samples between March 1 and September 30, 1999 of broccoli, parsley, cilantro, strawberries, head lettuce, green onions and scallions, celery,
and cantaloupe. Screening is reported to focus on total bacteria count, coliforms, E. coli, Salmonella and Shigella. To meet these ambitious goals, FDA is shifting more personnel to the border region.
SAN DIEGO CUSTOMS OUT OF SYNC
11/97
For some time now, San Diego Customs has been seizing goods subject to FDA approval if they
move in-bond and are not FDA approved. Customs Headquarters issued a public bulletin a few months back which referred to only unapproved drugs as prohibited goods. What about unapproved
food or medical devices? Why only San Diego? The matter is currently under further review at Customs Headquarters which has preliminarily indicated that goods may move in-bond even if they
are not FDA approved because an FDA Compliance Policy (which Customs is supposedly enforcing) states unapproved goods are subject to entry (even in-bond) determination on a case-by-case basis,
rather than San Diego Customs' blanket prohibition.
UNAPPROVED DRUGS
06/97
What started as a U.S. attempt to assist Mexico to eliminate bogus pharmaceutical companies
operating at its border has turned into a nightmare for the U.S. companies involved. For many years, the U.S. has served as a transit point for goods intended for Mexico but originating elsewhere. Those
goods are frequently off-loaded at U.S. ports and shipped in-bond to Mexico. However, in order to help Mexico eliminate bogus drug dispensers, Customs took a closer look at the entire process and
concluded that unapproved drugs may not transit the U.S. They are not approved by the Food & Drug Admin. and so are considered prohibited merchandise. As such, they are subject to immediate
seizure. Interestingly, the seizure remedy is being enforced only at the Port of Otay Mesa and is in contradiction to an informal FDA policy which finds that so long as the goods are actually intended for
export, FDA seemingly waives application of its regulations.
Equally interesting, on May 29, 1997 Customs issued a reminder to the trade that unapproved drugs
are subject to seizure. However, that notice does not mention unapproved medical or other devices (such as t.v. sets) which are also subject to FDA approval.
FEDERAL LAW IS NOT ALWAYS SUPREME
In the recent case of Medtronic. Inc. vs. Lohr (1996), 64 USLW 4625, 56 CCH S CT BULL B2857, a Florida manufacturer was sued by a recipient of one of its pacemakers. The patient alleged
design,manufacturing and labeling defects. The manufacturer argued that the federal Medical Device Amendments of 1976, 21 USC §360e, preempted state action. The U.S. Supreme Court ruled that
state law did indeed govern in certain instances, in part because FDA determinations regarding the pacemakers dealt with their substantial equivalency with other products on the market and not with
their safety, i.e., the FDA process is not designed to address public safety but rather to maintain the status quo regarding existing medical devices.
In a matter related only because it also involved FDA activity, the U.S. Court of Appeals for the Western (Ninth) District recently upheld a seizure by the FDA of allegedly adulterated drugs. The
veterinary drug manufacturer was inspected on several occasions by FDA. Citations were issued which culminated with an arrest warrant for various drugs with an approximate total worth of $100,000.
A condemnation action to dispose of the seized drugs followed with the manufacturer arguing that the drug seizure was unconstitutional as an unreasonable search and seizure. The court disagreed
finding that "persons engaging in pervasively regulated industries have a diminished expectation of privacy." The court went on to point out the types of industries it had in mind - selling or dispensing
liquor or firearms or disposition of misbranded or adulterated goods.
Should traders be concerned about the potential for application of this principle in the import/export context?
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