Customs Update: Changes at FDA
(Published in The JOURNAL of COMMERCE ONLINE March 26, 2007)

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.