However, prior notice submitters are reminded that the HTS Code is required by CBP independent of prior notice. See 19 CFR 143 Subpart D - Electronic Entry Filing, which sets forth the requirements for electronic filing, and specifically 19 CFR 143.32(f), which references the Customs and Trade Automated Interface Requirements (CATAIR) as the defining document for what data has to be submitted. Therefore, filers should keep in mind that ABI/ACS will not accept a submission that lacks the HTS code.  (Source)

FDA and CBP should typically consider not taking any regulatory action if there is a prior notice violation because the prior notice was submitted more than 5 calendar days before the anticipated date of arrival, provided that: (1) the prior notice was submitted less than 10 calendar days before the anticipated date of arrival; and (2) the prior notice was submitted through the Prior Notice System Interface (PNSI). In addition, under the same conditions, FDA should typically provide the Prior Notice Confirmation Number when prior notice has been confirmed for review even if prior notice was submitted more than 5 calendar days before the anticipated date of arrival. Because of the way the Automated Broker Interface of the Automated Commercial System (ABI/ACS) is programmed, when prior notice is submitted through ABI/ACS, the Prior Notice Confirmation Number cannot be provided more than 5 calendar days before the anticipated date of arrival. (source)

INTRODUCTION

There are various regulations that govern food imports into the United States. This paper will explore several of the more current ones, with concentration on one of the most recent and important legislation regulating the import of food. This is the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 or better known as the Bioterrorism Act.

Food imports into the United States (excluding meat, poultry and eggs which are regulated by the United States Department of Agriculture – USDA) are under the jurisdiction of the Food and Drug Administration (FDA).

A. THE BIOTERRORISM ACT

The Bioterrorism Act was enacted to protect the U.S food supply and its human and animal population. In the aftermath of September 11, 2001 and the subsequent anthrax incidents, there were grave concerns about the possibility of unconventional terrorist attacks through biological and chemical means to the food supply chain. The Act lays down laws involving stringent documentary requirements and regulations; encompassing inspections, sampling, testing etc which will affect the import of food and food related goods into the United States.

The Bioterrorism Act was passed by United States Congress and signed into law on June 12, 2002 by President Bush.  FDA) administers the act.

With the Act made into law, the FDA stepped-up its inspections on imported food. For example in 2003, FDA’s increased he examination of imported food by more than five fold - reaching 62,000 inspections by July 2003. This was a new six-month record, as compared to merely 12,000 inspections done in all of 2001.

Foreign food exporters and U.S food importers can fully expect increased vigilance from both FDA and CBP (Bureau of Customs and Border Protection) what more with increased FDA budgets; 655 new recruitment of FDA field personnel, who work exclusively on food security and food safety; and new research to develop new prevention and mitigation technologies and to improve the ability to assess foods for contamination with chemical, biological and radiological agents.

The Bioterrorism Act encompasses various sections:

Section 302 - Protection Against Adulteration of Food.

Section 303 - Administrative Detention

Section 304 - Debarment for Repeated Or Serious Food Import Violations

Section 305 - Registration of Food Facilities

Section 306 - Maintenance and Inspection of Records for Foods

Section 307 - Prior Notice of Imported Food Shipments

Each section is a comprehensive and extensive legislation in itself, but the focus of this paper is on Section 303, 305, 306, and 307

Bioterrorism Act Time Lines

1) SECTION 305 - REGISTRATION OF FOOD FACILITIES

Current Status:

Enforced as law as on Dec 12, 2003. Interim Final Rule will be made final on June 2005.

Definition:

Section 305 of the Bioterrorism Act requires owners, operators, or agents in charge of domestic and foreign facilities that manufacture, process, pack, or hold food for human or animal consumption in the United States, to register their facilities with FDA by December 12, 2003, unless the facility is exempted.

For the list of who is exempted from registration, and more information on registration, please log on to www.cfsan.fda.gov/~dms/ffregui4.html for a more detailed explanation. Companies who have not registered can do so by going online at : www.cfsan.fda.gov/~furls/ovffreg.html#register

The purpose of registration is to provide FDA with sufficient and reliable information about food and feed facilities. When used with Administrative Detention (section 303), Record Keeping (section 306) and Prior Notice (section 307), registration will help provide FDA with information on the origin and distribution of food and feed products and thereby, aid in the detection and quick response to actual or potential threats to the U.S food supply.

FDA estimates the total number of food facilities that must register (both domestic US and foreign facilities) to be approximately 420,000, half of which are domestic facilities in the U.S. As of September 17, 2004, FDA had received 221,450 registrations of which 118,963 are foreign and 102,487 are domestic. Japan had the largest number of foreign facility registration at 15,446, followed by China (9,680), Canada (9,363), France (8,764), Italy (7,558) and Mexico (7,300).

Among the Asian countries (excluding Japan) Vietnam led with 3,111 registrations, followed by Korea (2,601), India (2,513), Thailand (1,709), Taiwan (1,604), Hong Kong (1,026), Indonesia (995), Philippines (909), Malaysia (626) and Singapore (364).

With the logical assumption that the foreign facilities that register are the ones who are already selling food products, or planning to sell food products to the U.S, then it is a clear indication that Malaysia is currently, NOT a major shareholder in the marketplace. Even lesser developed nations with smaller population than Malaysia had higher registrations – for example, Peru had 1,091 registrations, Costa Rica - 925 registrations and Guatemala - 676 registrations.

Since section 305 is already law and compliance is mandatory, failure to register is a prohibited act. At this point in time however, FDA has issued a revised Compliance Policy Guide (CPG) on November 8, 2004 replacing the earlier CPG that was issued on December 2003. The revised CPG is a document to provide guidance on FDA’s strategy of enforcing and achieving compliance with the requirements of the interim final rule for Registration of Food Facilities (section 305) It represents FDA’s current thinking on registration of domestic and foreign facilities. The CPG however does not create or confer any rights for or on any person and does not bind FDA or the public. An alternate approach may be used if such approach satisfies the requirements of the applicable statutes and regulations.

The regulations states that if any article of food arrive at a U.S port of entry without a valid registration number, the article will be subject to hold until the registration violation is cleared. After November 8, in the revised CPG, FDA states that for foreign facilities, the agency intends to enforce the registration through Prior Notice (section 307) by requiring the registration number of the foreign manufacturer and shipper as part of Prior Notice.

2.) SECTION 307 - PRIOR NOTICE OF IMPORTED FOOD SHIPMENTS

Current Status:

Enforced as of Dec 12, 2003. Still in Interim Final Rule, but will be made final in June 2005

Definition:

Section 307 of the Bioterrorism Act requires that prior notice be given to FDA before food is imported or offered for import into the United States.

The  Bioterrorism Act requires that this information also be provided to FDA in advance of an imported food's arrival to the United States. FDA will use this information in advance of the arrival to review, evaluate, and assess the information, and determine whether to inspect the imported food.

FDA and CBP have collaborated on the implementation of the prior notice interim final rule. Most of the prior notice information required by the interim final rule is data usually provided by importers or brokers to the Bureau of Customs and Border Protection (CBP) when foods arrive in the United States.

Nearly all of the current imported food shipments can comply by using CBP's Automated Broker Interface of the Automated Commercial System (ABI/ACS). Prior notice can be submitted either through ABI/ACS or through FDA's Prior Notice System Interface (PSNI) as of December 12, 2003.

What food is subject to the requirement for submitting prior notice?

Prior notice applies to food for humans and other animals that is imported or offered for import into the United States. For purposes of the interim final rule, "food" is defined by reference to section 201(f) of the Federal Food, Drug, and Cosmetic Act. Section 201(f) defines "food" as articles used for food or drink for man or other animals, chewing gum, and articles used for components of any such articles.

For purposes of the interim final rule and complying with prior notice of imported food shipments, "food" does not include food contact substances or pesticides.

Prior notice is required for food for use, storage, or distribution in the United States, and includes gifts, trade samples and quality assurance/quality control samples, food for transshipment through the United States to another country, food for future export, and food for use in a U.S. Foreign Trade Zone.

What foods are excluded from the prior notice requirement?

Foods that are excluded from the prior notice requirement are:

(1) food carried by or otherwise accompanying an individual arriving in the United States for that individual's personal use (i.e., for consumption by themselves, family, or friends, and not for sale or other distribution)

(2) food that is exported without leaving the port of arrival until export;

(3) meat food products, poultry products and egg products that are subject to the exclusive jurisdiction of the U.S. Department of Agriculture (USDA) under the Federal Meat Inspection Act, the Poultry Products Inspection Act, or the Egg Products Inspection Act; and

(4) food that was made by an individual in his/her personal residence and sent by that individual as a personal gift (i.e., for non-business reasons) to an individual in the United States.

When must prior notice be submitted?

Prior notice must be received and confirmed electronically by FDA no more than 5 days before arrival and, as specified by the mode of transportation below, no fewer than:

1.                  2 hours before arrival by road

2.                  4 hours before arrival by air or by land by rail

3.                  8 hours before arrival by water

4.                  The time consistent with the timeframe established for the mode of transportation for an article of food carried by or otherwise accompanying an individual if it is subject to prior notice (The food must also be accompanied by the FDA confirmation.)

In addition, prior notice must be received and confirmed electronically by FDA before food is mailed by international mail. (The parcel must be accompanied by confirmation of FDA receipt of prior notice.)

How must the prior notice be submitted?

Prior notice must be submitted electronically. FDA estimates more than 80 percent of prior notice of imported food shipments submissions can be transmitted through ABI/ACS.

Who must submit prior notice?

Any individual with knowledge of the required information may submit the prior notice, including, but not limited to, brokers, importers, and U.S. agents.

Will FDA provide confirmation of receipt of prior notice?

Yes. FDA will issue a confirmation of prior notice to the transmitter upon successful receipt of the prior notice information.

What information must be included in the prior notice?

The prior notice must be submitted electronically and contain the following information:

·        Identification of the submitter, including name, telephone and fax numbers, email address, and firm name and address

·        Identification of the transmitter (if different from the submitter), including name, telephone and fax numbers, email address, and firm name and address

·        Entry type and CBP identifier

·        The identification of the article of food, including complete FDA product code, the common or usual name or market name, the estimated quantity described from the smallest package size to the largest container, and the lot or code numbers or other identifier (if applicable)

·        The identification of the manufacturer

·        The identification of the grower, if known

·        The FDA Country of Production

·        The identification of the shipper, except for food imported by international mail

·        The country from which the article of food is shipped or, if the food is imported by international mail, the anticipated date of mailing and country from which the food is mailed

·        The anticipated arrival information (location, date, and time) or, if the food is imported by international mail, the U.S. recipient (name and address)

·        The identification of the importer, owner, and ultimate consignee, except for food imported by international mail or transshipped through the United States

·        The identification of the carrier and mode of transportation, except for food imported by international mail

·        Planned shipment information, except for food imported by international    mail

What are the consequences of failing to submit adequate prior notice information of an imported food shipment?

Food that is imported or offered for import with inadequate prior notice is subject to refusal and holding at the port or in secure storage. FDA will provide its staff with enforcement guidance containing the Agency's policies on injunctions, prosecution, and debarment related to failure to provide timely and accurate prior notice, as well as the Agency's policies regarding refusals

For more details and information on Prior Notice, please log on to http://www.cfsan.fda.gov.

NOVEMBER 2004 - FDA’s MOST RECENT REVISED COMPLIANCE POLICY ON PRIOR NOTICE

The Food and Drug Administration (FDA) and the Bureau of Customs and Border Protection (CBP) have revised Compliance Policy Guide (CPG) § 110.310; “Prior Notice of Imported Food Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002. The first CPG was issued in December 2003 and subsequently June 2004. This November 2004 CPG is the most recently issued

The purpose of this document is to provide guidance on FDA's and CBP's strategy for enforcing and otherwise achieving compliance with the requirements of the interim final rule for submitting prior notice for food imported or offered for import into the United States (68 Fed. Reg. 58974 (Oct.10, 2003) (codified at 21 CFR 1.276 - 1.285)).

FDA's guidance documents, including this Compliance Policy Guide (CPG), do not establish legally enforceable responsibilities. Instead, guidance documents describe the agency's current thinking on a topic and should be viewed only as recommendations, unless specific regulatory or statutory requirements are cited. The use of the word should in agency guidance documents means that something is suggested or recommended, but not required.

The November 2004 revised CPG makes the following important changes in enforcement policy:

Policy

This policy provides guidance to FDA and CBP staff when they encounter the prior notice situations described within this section. The policy contains several references to Tables 1 and 2, which are set out below.

·                    FDA registration number of manufacturer’s facility

FDA and CBP are further relaxing the requirements regarding when the prior notice must include the FDA registration number of the facility that manufactured the food. The revised CPG permits a submitter to enter a “reason code” that explains why the submitter need not, or is unable to, provide the manufacturing facility’s registration number.  (Please refer to Appendix 1 below for the Reason Code.)

Generally, a prior notice must include the name, registration number, city, and country of the facility that manufactured the food being imported or offered for import. If the manufacturing facility is exempt from registration, the prior notice should instead provide the name, street address, city, and country of the manufacturing facility as well as a reason code indicating why the facility is not required to register (e.g., “H. Grower – satisfies farm exemption”).

In this revised CPG, FDA is announcing that the prior notice may omit the manufacturing facility’s registration number in certain situations, even though the manufacturing facility is not exempt from FDA registration.

o       If the article of food is for transshipment, storage and export, or further manipulation and export, the prior notice must include the name, street address (or registration number), city, and country of the manufacturing facility.

o       If the article of food is sent by an individual as a personal gift, the prior notice must include either: (a) the name, registration number (or street address), city, and country of the manufacturing facility; or (b) the name and address of the firm that appears on the food label. The prior notice also must include the appropriate reason code (i.e., “Individual gift – label name/address in lieu of registration number”).

o       If the submitter is unable to determine the manufacturing facility’s registration number after a good faith effort, the prior notice must include the name, street address, city, and country of the manufacturing facility. The prior notice also must include the appropriate reason code (i.e., “Unable to determine the registration number of the manufacturer”).

o       If the submitter is unable to determine either the name and full address or the registration number of the manufacturing facility, the prior notice must provide the name, street address, city, and country of the headquarters of the manufacturer. The prior notice also must include the appropriate reason code (i.e., “L. Unable to determine identity of manufacturer – providing identity of manufacturer’s headquarters”).

o       If the submitter is unable to determine the name, full address, and registration number of the manufacturing facility as well as the name and full address of the manufacturer’s headquarters, the prior notice must include the name, street address, city, and country of the invoicing firm. The prior notice also must include the appropriate reason code (i.e., “M. Unable to determine identity of manufacturer or headquarters – providing invoicing firm’s identity”)

FDA will reject any prior notice that does not include either a valid registration number for the manufacturing facility or an appropriate reason code. Reason codes are listed in Appendix 1 of the revised CPG. (Please see Appendix 1 below for the Reason Code). Where the manufacturing facility’s registration number is not known, submitters should no longer use 10000000000 to complete this field, since this will no longer be accepted.

These changes in enforcement policy will make it easier for someone who does not deal directly with a food’s manufacturer to import food products made by that manufacturer.

On the other hand, FDA and CBP note that submitting a prior notice that does not include the registration number of a manufacturing facility that is required to be registered (or providing identifying information for the manufacturer’s headquarters or for the invoicing firm) may result in the food being delayed at the port of arrival, because it may take more time for FDA and CBP to verify the identity of the manufacturing facility and its registration status and to determine whether the food is subject to hold. In addition, failing to provide required information may be considered as a factor in determining whether and where to examine the article of food.

·                    Early submission of prior notice

If prior notice is submitted more than 5 calendar days before the anticipated date of arrival of an imported article of food, FDA and CBP typically should not take any regulatory action, provided that:

(1) the prior notice was submitted less than 10 calendar days before the anticipated date of arrival; and

(2) the prior notice was submitted through FDA’s Prior Notice System Interface (PNSI). The prior notice must be submitted through PNSI, and not using CBP’s Automated Broker Interface of the Automated Commercial System (ABI/ACS), because the ABI/ACS cannot provide a Prior Notice Confirmation Number more than 5 calendar days before the anticipated date of arrival.

Note that if any of the prior notice information, except the anticipated arrival information, the estimated quantity, or the planned shipment information, changes after FDA has confirmed the prior notice submission for review, the prior notice must be re-submitted. The re-submission must be confirmed by FDA for review no less than 2,4, or 8 hours before arriving at the port of arrival, with the minimum time depending on the mode of transportation. If the prior notice is re-submitted, the previous prior notice should be cancelled.

·                    Express Courier and the omission of anticipated arrival information

If a prior notice does not include anticipated arrival information and/or planned shipment information, FDA and CBP typically should not take any enforcement action, provided that:

(1) the article of food is imported or offered for import via express courier;

(2) the person submitting the prior notice is the express courier;

(3) the prior notice is submitted via PNSI; and

(4) the prior notice includes the shipment’s tracking number in lieu of the required anticipated arrival information and/or planned shipment information.

·                    Gift packs purchased or otherwise acquired by an individual and imported or offered for import for non-business purposes

For gift packs purchased or otherwise acquired by individuals and imported or offered for import for non-business reasons, a single prior notice may be submitted for the gift pack and the prior notice may include identifying information for the facility that packed the gift pack instead of the manufacturing facility. The prior notice also must include the appropriate reason code (i.e., “O. Gift pack for non-business purposes -- providing single prior notice and identity of packer”).

A gift pack is a food that is described with FDA Product Code 37Y-01 (human food) or 72E-99 (animal food). Food is considered to be for non-business purposes when it is not for sale, resale, barter, business use, or commercial use. The policy described in this section applies irrespective of where the individual who purchased or otherwise acquired the gift pack lives and irrespective of the type of carrier. The policy also applies irrespective of whether it involves a commercial or non-commercial shipper,

For the purpose of this CPG, gift packs are considered to be food that is described with FDA Product Code 37Y--01 (human food) or FDA Product Code 72E--99 (animal food).

Examples of gift packs that may be covered are:

o        A gift basket containing fresh fruit and/or vegetables.

o        A gift box containing crackers and cheeses and canned condensed soups.

o        A gift basket of crackers, cheeses and fresh fruit.

o        A wicker basket with champagne, port, scotch whisky, smoked salmon, cheese, tea, coffee, chutney, pistachio nuts, biscuits, marmalade, honey, butter biscuits, crackers, cake, mustard, olive oil, and olives.

o        Tote bag with infant clothing, bib, booties, and coffee and candy for the parents; or a toy dispenser with hard candy and powdered candy.

o        A gift bag with multiple pet food items such as rawhide chews and dog biscuits, with or without non-food items.

·                    Food carried by or otherwise accompanying an individual that is not for personal use

In general, the action FDA and CBP staff typically should consider taking is education/communication for minor or inadvertent prior notice violations and refusal for all other prior notice violations.

Manufacturer. Table 1 lists the prior notice requirements for providing information about the identity of the manufacturer for an article of food that is no longer in its natural state. If there is a prior notice violation due to the fact that this information is not provided, FDA and CBP should typically consider not taking any regulatory action under the circumstances described in the first column of Table 2 if the information in the second column of that table is provided.

·                    Food imported or offered for import for non-commercial purposes with a non-commercial shipper, irrespective of the type of carrier

FDA and CBP should typically consider not taking any regulatory action when an article of food is imported or offered for import for non-commercial purposes with a non-commercial shipper. Generally, staff should consider a non-commercial purpose to be when the food is purchased or otherwise acquired by an individual for non-business purposes and the shipper is an individual (e.g., the individual delivers the food to a post office or common carrier for delivery to self, family member, or friend for non-business purposes, i.e., not for sale, resale, barter, business use, or commercial use.)

Examples of foods imported or offered for import that may be covered by this non-commercial category are:

o        food in household goods, including military, civilian, governmental agency, and diplomatic transfers;

o        food purchased by a traveler and mailed or shipped to the traveler's U.S. address by the traveler, not the commercial establishment; and

o        gifts purchased at a commercial establishment and shipped by the purchaser, not the commercial establishment.

Note that the shipper and the carrier are different entities, and the carrier is likely to be a commercial entity even when the shipper is an individual. Thus, the food for non-commercial purposes may arrive by international mail or any other mode of transportation, but must be shipped by one individual to another individual (self, family member, or friend) to be considered for non-commercial purposes.

For example, when an individual ships his or her own household goods, even when the goods are delivered to a mover or carrier for international movement, the individual is the shipper, e.g., the owner or exporter of the article of food who consigns and ships the article from a foreign country or the person who sends an article of food by international mail to the United States (see § 1.276(b)(12) of the prior notice interim final rule).

In another example, when an individual purchases food at Store A and sends that food to an individual by mail, the individual is the shipper and the carrier is the mail service. If the individual uses an express courier, the result is the same: the individual is the shipper and the express courier is the carrier.

However, if Store A ships the food, Store A is the shipper. Since Store A is not an individual, this last example is not covered by the policy described above because the food was not imported or offered for import with a non-commercial shipper. (While a "person" sometimes can be an individual, partnership, corporation, or association, see 21 U.S.C. 321(e), by "individual" we mean a sole human being, not a partnership, corporation, or association.)

·                    Food arriving by international mail that is NOT food imported or offered for import for non-commercial purposes with a non-commercial shipper

In general, the action FDA and CBP staff typically should consider taking is education/communication for minor or inadvertent prior notice violations and refusal for all other prior notice violations.

Manufacturer. Table 1 lists the prior notice requirements for providing information about the identity of the manufacturer for an article of food that is no longer in its natural state. If there is a prior notice violation because this information is not provided, FDA and CBP should typically consider not taking any regulatory action under the circumstances described in the first column of Table 2 if the information in the second column of that table is provided.

·                    Food imported or offered for import for quality assurance, research or analysis purposes only, not for human or animal consumption or resale

If the article of food is imported or offered for import for quality assurance, research or analysis purposes only, not for human or animal consumption and not for resale, then FDA and CBP should follow the enforcement policies described in Table 1 & 2. Please note that with respect to item 1 of Table 2, there is a specific reason code for samples of food that are imported or offered for import for quality assurance, research or analysis purposes (see Appendix 1 Reason Code I. Samples – quality assurance, research or analysis purposes only ). This reason code should be used when it is applicable.

For the purpose of this CPG, samples of food are considered to be imported or offered for import for quality assurance, research or analysis purposes when they are imported in small quantities (i.e., quantities consistent with the quality assurance, research, or analysis purposes) and the entire sample is used up by the analysis or is destroyed after analysis or a reasonable retention period after analysis. The analysis may include sensory analysis or evaluations such as those organoleptic analyses for testing the quality of tea or for testing for histamines.

Evidence that an article of food is imported for quality assurance, research, or analysis purposes only might include, among other evidence, that the food and shipment documents are marked accordingly. The policy in this section does not apply to samples intended for test marketing, such as tasting at trade shows or product promotional tasting events.

Information about when samples are "food" for the purposes of prior notice is provided in the 2nd Edition of Guidance for Industry, Prior Notice of Imported Food, Questions and Answers, May 2004.at : www.cfsan.gov/~pn/pnqagui2.html

This guidance states that, in general, prior notice is required for samples of food, including animal feed, for research and development and test marketing (Q&A, Section C., Question 1.3).

However, if the samples are items that are in such early stages of research and development that they cannot yet be considered food for the purposes of prior notice, then they would not be subject to prior notice requirements (Q&A, Section C., Question 1.3).

In addition, if the sample is in a form that is not an article of food, such as a slurry of lettuce for pesticide analysis or a sterile sample container filled with juice for heavy metal analysis, then prior notice would not apply (Q&A, Section C., Question 17.2).

APPENDIX 1:           REASON CODES FOR REGISTRATION NUMBER OF

                                    MANUFACTURER NOT PROVIDED

1.      A. Facility is out of business

2.      B. Facility is private residence (21 CFR 1.227(b)(2))

3.      C. Facility is a restaurant (21 CFR 1.226(d); 1.227(b)(10))

4.      D. Facility is retail food establishment (21 CFR 1.226(c); 1.227(b) (11))

5.      E. Facility is non-processing fishing vessel (21 CFR 1.226(f))

6.      F. Facility is non-bottled drinking water collection and distribution establishment (21 CFR 1.227(b)(2))

7.      G. Individual gift - label name/address in lieu of registration number (21 CFR 1.281(a)(6), (b)(5), and (c)(6))

8.      H. Grower - satisfies farm exemption (21 CFR 1.226(b); 1.227(b)(3))

9.      I. Samples - quality assurance, research or analysis purposes only

10.J. U.S. manufacturing facility that is not required to register

11.K. Unable to determine the registration number of the manufacturer.

12.L. Unable to determine identity of manufacturer - providing identity of manufacturer's headquarters

13.M. Unable to determine identity of manufacturer or headquarters - providing invoicing firm's identity

14.O. Gift pack for non-business purposes - providing single prior notice and identity of packer

For the full information on the revised Compliance Policy Guide, log on to: http:// www.cfsan.fda/~pn/cpgpn4.html

3.) SECTION 303 - ADMINISTRATIVE DETENTION

Food and Drug Administration (FDA) has issued a final rule on Administrative Detention of Food for human or animal consumption under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002

Current Status:

The final rule was published at the Office of the Federal Register on May 27, 2004 The rule became effective on July 6, 2004.

Definition:

Section 303 authorizes and establishes procedures for the FDA to detain an article of food if an FDA officer or qualified employee has credible evidence or information indicating that the article presents a threat of serious adverse health consequences or death to humans or animals.

I. Summary of the Final Rule

The purpose of administrative detention is to prevent adulterated food from entering commerce before FDA brings a seizure or injunction action (i.e., a court action to seize the food or enjoin its distribution). Thus, administrative detention is, by its nature, a temporary, stopgap measure.

The provision giving FDA the authority to administratively detain food, is self-executing. Thus, FDA has had administrative detention authority since enactment of the Bioterrorism Act on June 12, 2002. This final rule, rather than imposing requirements on industry, imposes restrictions on how FDA may exercise its new administrative detention power. In that sense, it differs from FDA’s other rulemakings under the Bioterrorism Act. It primarily sets forth obligations and procedures for FDA to follow.

FDA’s administrative detention authority is expected to have little impact on the food industry. Before the Bioterrorism Act, even though FDA itself did not have administrative detention authority, it usually could rely on state agencies to detain adulterated food on its behalf. Most states have long had the power to administratively detain or “embargo” food under state law.

The following summarizes the key provisions of the final rule:

• An FDA officer or qualified employee may order the detention of any article of food that is found during an inspection, examination, or investigation if FDA has credible evidence or information that the food presents a threat of serious adverse health consequences or death to humans or animals.

• “Food” is defined to mean all food under FDA regulation, including food contact substances. It does not include food regulated exclusively by the U.S. Department of Agriculture (USDA) under the Federal Meat Inspection Act (21 U.S.C. 601 et seq.), the Poultry Products Inspection Act (21 U.S.C. 451 et seq.), or the Egg Products Inspection Act (21 U.S.C. 1031 et seq.).

• The FDA District Director of the district in which the article of food is located or an FDA official senior to such director must approve the detention order.

• The detention period is for a reasonable period not to exceed 20 calendar days, unless a greater period of time, not to exceed 30 calendar days, is necessary to enable FDA to institute a seizure or injunction action.

• The detention order may require that the detained article of food be labeled or marked as detained with official FDA tags or labels. The FDA tag or label would include, among other information, a statement that the article of food must not be consumed, moved, altered, or tampered with in any manner for the period shown, without the written permission of an authorized FDA representative.

• The detention order must state the location and any applicable conditions under which the food is to be held.

• If FDA determines that removal of the detained article of food to a secure facility is necessary, the food must be moved to a secure facility. In addition, FDA may approve a request for modification of a detention order to allow movement of the detained article of food for purposes of destruction, movement to a secure facility, preservation, or any other appropriate purpose. The article of food remains under detention before, during, and after such movement.

• A violation of a detention order, including removal or alteration of a tag or label or transfer of the detained article of food in violation of the detention order, is a prohibited act under the Federal Food, Drug, and Cosmetic Act (FD&C Act).

• Any person who would be entitled to claim the detained article of food if such article were seized may appeal the detention order and request an informal hearing. If FDA grants a hearing, an FDA Regional Food and Drug Director (RFDD) or another official senior to an FDA District Director will serve as the presiding officer at the hearing.

• The timeframes for appeals and hearings differ depending upon whether the detained article of food is perishable or nonperishable.

• Perishable food:

• An appeal must be filed within 2 calendar days of receipt of the detention order.

• If a hearing is requested in the appeal, and FDA grants the request, the hearing will be held within 2 calendar days after the date the appeal is filed.

• FDA’s decision on the appeal will be issued 5 calendar days after the appeal is filed.

• Nonperishable food:

• A notice of intent to file an appeal and to request a hearing must be filed within 4 calendar days of receipt of the detention order.

• An appeal must be filed within 10 calendar days of receipt of the detention order.

• If a hearing is requested in the notice of intent and the appeal, and FDA grants the request, the hearing will be held within 2 calendar days after the appeal is filed.

• FDA’s decision on the appeal will be issued 5 calendar days after the appeal is filed.

• Confirmation of a detention order by the FDA presiding officer is considered final agency action, subject to judicial review.

• If the detained article of food is a perishable food, FDA must submit a seizure recommendation to the Department of Justice within 4 calendar days after the detention order is issued, unless there are extenuating circumstances.

• FDA is not financially responsible for the costs of storing or transporting detained articles of food, nor for any damages or other costs associated with an administrative detention.

The administrative detention procedures for food described in the final rule were modeled after FDA’s medical device administrative detention regulation, 21 C.F.R. § 800.55.

II. Changes from the Proposed Rule

The final rule differs only slightly from the proposed rule published by FDA in May 2003. The following changes have been made:

• The final rule requires that the detention order include the name and title of the FDA official who approved the order. The proposed rule did not require the detention order to include this information.

• The final rule provides that the appeal hearing, if requested and granted by FDA, will be held within 2 calendar days after the date the appeal is filed for both perishable and nonperishable foods. The proposed rule would have given FDA 3 calendar days to hold the hearing with respect to nonperishable foods.

• The final rule requires the presiding officer at the hearing to issue a written report of the hearing, including a proposed decision with a statement of reasons. It also provides that the hearing participant may review this report and suggest changes to it within 4 hours of issuance of the report, after which the presiding officer will issue a final agency decision. The proposed rule did not contain these provisions.

• The final rule uses the term ”request for modification of a detention order” to refer to a request to permit movement of a detained article of food. The proposed rule used the term request for “limited conditional release.” Because Customs defines the term “limited conditional release” differently, FDA decided to use a different term in order to avoid confusion.

III. General Provisions Of The Final Rule

1. What Definitions Apply to This Subpart? (21 C.F.R. § 1.377)

“Food”has the meaning given that term in § 201(f) of the FD&C Act. That definition is: “(1) articles used for food or drink for man or other animals,

(2) chewing gum, and

(3) articles used for components of any such article.” 21 U.S.C. § 321(f).

Examples of food subject to administrative detention include, but are not limited to: fruits; vegetables; fish; dairy products; raw agricultural commodities for use as food or components of food; animal feed, including pet food; food and feed ingredients and additives, including substances that migrate into food from food packaging and other articles that contact food; dietary supplements and dietary ingredients; infant formula; beverages, including alcoholic beverages and bottled water; live food animals (such as hogs and elk); bakery goods; snack foods; candy; and canned foods.

Note that the definition of food in this final rule is broader than that in FDA’s interim final rules on food facility registration and prior notice of food imports. While FDA’s registration and prior notice rules do not apply to food contact substances, such as food packaging and ceramicware, the administrative detention final rule does. “Substances that migrate into food from food packaging” include immediate food packaging or components of immediate food packaging that are intended for food use. Outer food packaging would not be a substance that migrates into food, and would, therefore, not be subject to administrative detention.

“Perishable food”means food that is not heat-treated; not frozen; and not otherwise preserved in a manner so as to prevent the quality of the food from being adversely affected if held longer than 7 days under normal shipping and storage conditions. This perishable food definition has been modeled after the current Regulatory Procedure Manual (RPM) definition of “perishable commodity.” Examples of perishable foods include, but are not limited to, fluid milk (but not ultrapasteurized milk), fresh fish and shellfish, and fresh fruits and vegetables.

2. What Criteria Does FDA Use to Order a Detention? (§ 1.378)

An officer or qualified employee of FDA may order the detention of an article of food that is found during an inspection, examination, or investigation under the FD&C Act if the officer or qualified employee has credible evidence or information indicating that the article of food presents a threat of serious adverse health consequences or death to humans or animals.

“Credible evidence or information” is not defined in the final rule, and FDA declines to define it in a way that might limit the agency’s interpretive discretion. However, FDA has indicated that it will consider a number of factors including reliability, reasonableness, and the totality of facts and circumstances. FDA intends to apply the credible evidence standard consistent with relevant case law.

“Serious adverse health consequences” also is not defined in the final rule. FDA intends to define this term in a separate rulemaking. However, this is similar to the standard FDA currently uses to classify recalls as Class I. It is not limited to situations involving bioterrorism or intentional contamination.

3. How Long May FDA Detain an Article of Food? (§ 1.379)

FDA may detain an article of food for a reasonable period that may not exceed 20 calendar days after the detention order is issued. However, FDA may detain the article of food for an additional 10 calendar days (i.e., for a total of 30 calendar days after the detention order is issued) if additional time is needed to institute a seizure or injunction action.

Such a 10-day extension requires approval of an “authorized FDA representative” and requires that FDA issue a new detention order and, if applicable, place new tags or labels on the detained article of food to indicate the change in detention dates. Alternatively, FDA may order detention for the full 30 calendar days in the original detention order if FDA knows at the outset that 30 calendar days will be needed to institute a seizure or injunction action.

4. Where and Under What Conditions Must the Detained Article of Food be

Held? (§ 1.380)

A detained article of food must be held in the location and under the conditions specified in the detention order. FDA will determine the conditions for holding the detained food on a case-by-case basis based on the totality of information available to FDA about the article of food.

For example, if the shipping documents require a specific refrigeration temperature for the food, FDA likely will order that the food be stored at that temperature. If necessary, FDA may consult with the owner of the food, if readily known, about appropriate storage conditions.

If FDA determines that removal of the food to a secure facility is appropriate, the food must be removed to a secure facility. FDA intends to make such removal determinations on a case-by-case basis considering several factors, including the adequacy of security and the ability to prevent the movement of the food.

If removal to a secure facility is appropriate, FDA will identify a specific location to which the food should be moved in the detention order. The costs of secure storage are a private contractual matter between the owner of the secure facility and the recipient of the detention order.

It is also possible that FDA may order the food to be stored in government storage.

If a detained article of food is on board a conveyance, FDA will consult with the Bureau of Customs and Border Protection (Customs) concerning movement of the detained article of food to limit the impact on the flow of trade. FDA believes it will detain food on board a conveyance only under rare circumstances.

In that event, a transporter may request modification of the detention order to allow removal of the detained food from the conveyance to a storage facility. If the detained article of food is part of a shipment that also contains other foods that are not subject to the detention order and that can be readily segregated, the other articles of food may be moved.

The movement of an article of food in violation of a detention order is a prohibited act under the FD&C Act.

5. May a Detained Article of Food be Delivered to Another Entity or Transferred to Another Location? (§ 1.381)

A detained article of food may not be delivered to any other entity, even upon execution of a bond. It may not be delivered to its importers, owners, or consignees. Until an “authorized FDA representative” releases the detained food by issuing a detention termination notice, the detention period expires, or FDA issues a modification to the detention order allowing movement, a detained article of food simply may not be moved.

As discussed above, FDA may require removal of a detained article of food to a secure storage facility. The recipient of the detention order also may request a modification of a detention order to permit movement to another location. Such a request must be submitted in writing to the authorized FDA representative that approved the detention order. The request must state:

• The reasons for movement;

• The exact address of and location in the new facility (or the new location within the same facility) where the detained article of food will be transferred;

• An explanation of how the new address and location will be secure, if FDA has directed that the article of food be detained in a secure facility; and,

• An explanation of how the article of food will be held under any applicable conditions described in the detention order.

If the modification of the detention order is for the purpose of destroying the detained article of food, the submitter must also provide a verified statement identifying its ownership or proprietary interest in the detained article of food.

The authorized FDA representative may approve, in writing, a request to modify a detention order to permit movement of the detained article of food for any of the following purposes:

• To destroy the article of food;

• To move the detained article of food to a secure facility;

• To maintain or preserve the integrity or quality of the article of food; or

• For any other purpose that the authorized FDA representative believes is appropriate.

FDA will decide on a case-by-case basis who will be responsible for transporting the detained article of food. FDA may transport the food to the secure facility itself; FDA may direct the recipient of the detention order to transport the food; or FDA may designate a third party to transport the food (e.g., if FDA believes that control of the food might be lost if the recipient of the detention order were to transport the food).

If FDA directs the recipient of the detention order to transport the food, that person must obtain a modification of the detention order before moving the detained article of food. FDA must supervise the transport of the detained food unless FDA has declined in writing to supervise the transfer.

If FDA declines in writing to supervise the transfer, the recipient of the detention order must immediately notify, in writing, the authorized FDA representative who approved the modification of the detention order when the detained food has reached its new location and must provide the specific location of the detained food within the new location.

In addition, the recipient of the detention order must ensure that any required tags or labels accompany the detained food during and after transport.

A detained article of food remains under detention before, during, and after movement to another facility. The transfer of an article of food in violation of a detention order is a prohibited act.

6. What Labeling or Marking Requirements Apply to a Detained Article of Food? (§ 1.382)

A detention order may require that the detained article of food be tagged or labeled. The tag or label applied to a detained food must include the following information:

• A statement that the article of food is detained by FDA in accordance with section 304(h) of the FD&C Act;

• A statement that the article of food must not be consumed, moved, altered, or tampered with in any manner for the period shown, without the written permission of an authorized FDA representative;

• A statement that the violation of a detention order or the removal or alteration of the tag or label is a prohibited act, punishable by fine or imprisonment or both; and

• The detention order number, the date and hour of the detention order, the detention period, and the name of the officer or qualified employee of FDA who issued the detention order.

The mark or label may be attached to the food container, a packing container, accompanying documents, or some other location.

Once the detained article is released, or the detention period expires, FDA will remove, or authorize the removal of, any labels or tags. FDA does not expect that such tags or labels will impair the future marketability of the article of food.

7. What Expedited Procedures Apply When FDA Initiates a Seizure

Action Against a Detained Perishable Food? (§ 1.383)

FDA will expedite seizure actions when perishable food is administratively detained. For perishable foods under a detention order, FDA will send a seizure recommendation to the Department of Justice (DOJ) within 4 calendar days after the detention order is issued.

If the fourth calendar day is not a working day when the government is open for business, FDA will advise the DOJ of its plans on the last working day before the fourth calendar day and send the seizure recommendation as soon as practicable on the first working day that follows.

FDA will follow this 4-day timetable unless there are “extenuating circumstances.” Extenuating circumstances include, but are not limited to, instances when the results of confirmatory testing or other evidentiary development require more than 4 calendar days to complete.

8. When Does a Detention Order Terminate? (§ 1.384)

FDA may terminate a detention order at any time. When FDA terminates a detention order or the detention period expires, an authorized FDA representative will issue a detention termination notice releasing the article of food to any person who received the detention order or that person’s representative.

If the detention period expires but FDA fails to issue a detention termination notice, the detention is deemed to be terminated. A detention order automatically terminates when FDA initiates a seizure or injunction action against the detained food.

9. Can FDA detain imported foods and foods in intrastate commerce?

Yes. In a controversial part of the final rule, FDA states that its authority to administratively detain food extends to food that has not entered interstate commerce. FDA believes Congress intended to grant the agency authority to detain even food moving only within a State.

According to FDA, this does not violate the Commerce Clause of the U.S. Constitution, because food that presents a threat of serious adverse health consequences or death, even if it moves exclusively in intrastate commerce, may have a collective impact on interstate commerce.

FDA also can detain imported food and food offered for import. However, because FDA and Customs already possess other, more effective enforcement tools for control of imported foods, FDA does not anticipate it will use its administrative detention authority frequently with respect to imported foods. If FDA does detain food on a ship or other conveyance at the border, FDA will consult with Customs to minimize any disruption to the movement of that ship or conveyance in trade.

FDA notes that its administrative detention authority is separate and distinct from its authority to refuse admission of imported foods under § 801(a) of the FD&C Act. Under §801(a), FDA may refuse admission of any food offered for import if such food appears to be adulterated or misbranded. Even though such refusal of admission is preceded by an action referred to as “detention and hearing,” it should not be confused with administrative detention under this final rule.

Section 303 of the Bioterrorism Act also includes a provision authorizing the agency to temporarily hold imported food at ports of entry. The temporary hold provision authorizes FDA to request that Customs institute a temporary hold for up to 24 hours on an article of food offered for import at the port of entry if FDA has credible evidence or information indicating that the article of food presents a threat of serious adverse health consequences or death to humans or animals, and FDA is unable immediately to inspect, examine, or investigate such article.

FDA has received comments on the temporary hold provision and plans to consider these comments in developing its approach on how best to implement it. This final rule, however, does not address the temporary hold provision.

IV. How Does FDA Order a Detention?

1. Who May Order/Approve a Detention? (§§ 1.378, 1.391)

An officer or qualified employee of FDA may order a detention. This includes, but is not limited to, FDA field investigators, State and local officers and employees duly commissioned or deputized by FDA, and FDA employees who have security clearance to receive national security information. It does not include employees of other Federal agencies.

The detention order must be approved by an “authorized FDA representative.” An “authorized FDA representative” is the FDA District Director in whose district the detained article of food is located or an FDA official senior to such director. If prior written approval of a detention order is not feasible, prior verbal approval must be obtained and confirmed in writing as soon as possible.

2. Who Receives a Copy of the Detention Order? (§ 1.392)

FDA must issue a detention order to the owner, operator, or agent in charge of the place where the article of food is located. If the owner of the article of food is different from the owner, operator, or agent in charge of the place where the food is located, FDA must provide a copy of the detention order to the owner of the article of food, if the owner’s identity can be determined readily. Some steps FDA will take to determine the identity of the owner of the detained article of food include examining any readily available bills of lading or invoices, and asking the owner, operator, or agent in charge of the place where the detained article of food is located.

If the detention order pertains to an article of food on a vehicle or other carrier, FDA also must provide a copy of the detention order to the shipper of record and the owner and operator of the vehicle or other carrier, if their identities can be determined readily.

FDA does not plan to routinely publicize issuance of detention orders. However, in a public health emergency, FDA may issue a press release or Talk Paper with information about a detained article of food. In addition, administrative detention may be a precursor to other enforcement actions, including seizures which are public filings in Federal court. Information about an administrative detention also may be released under the Freedom of Information Act.

3. What Information Must FDA Include in the Detention Order? (§ 1.393)

The detention order must be in writing signed by the officer or qualified employee of FDA who has the credible evidence or information on which detention is based. The detention order must include the following information:

• The detention order number;

• The date and hour of the detention order;

• Identification of the detained article of food;

• The period of the detention;

• A statement that the article of food is detained for the period shown;

• A brief, general statement of the reasons for the detention;

• The address and location where the article of food is to be detained and the appropriate storage conditions;

• Any applicable conditions of transportation of the detained article of food;

• A statement that the article of food is not to be consumed, moved, altered, or tampered with in any manner during the detention period, unless the detention order is first modified;

• The text of § 304(h) of the FD&C Act and 21 C.F.R. §§ 1.401 and 1.402 (regarding who may appeal the detention order and requirements for submitting an appeal);

• A statement that any informal hearing on an appeal of a detention order must be conducted as a regulatory hearing under 21 C.F.R. Part 16, with certain exceptions;

• The mailing address, telephone number, e-mail address, and fax number of the FDA district office and the name of the FDA District Director in whose district the detained article of food is located;

• A statement indicating the manner in which approval of the detention order was obtained, i.e., orally or in writing; and

• The name and title of the authorized FDA representative who approved the detention order.

V. What Is the Appeal Process for a Detention Order?

1. Who is Entitled to Appeal? (§ 1.401)

Any person who would be entitled to be a claimant for the article of food if it were seized by FDA under § 304(a) of the FD&C Act may appeal a detention order. The procedures for establishing who may be a claimant in a seizure action are governed by Supplemental Rule C to the Federal Rules of Civil Procedure.

2. What Are the Requirements for Submitting an Appeal? (§ 1.402)

A party appealing a detention order must submit an appeal in writing to the FDA District Director in whose district the detained article of food is located. The request for appeal must include a verified statement identifying the claimant’s ownership or proprietary interest in the detained article of food and must be submitted in person, by mail, e-mail, or fax.

The following timeframes apply:

• If the detained article of food is perishable:

v     The claimant must file an appeal within 2 calendar days of receipt of the

detention order. If the claimant desires an informal hearing, a written request for a hearing must be included in its appeal.

v     If FDA grants a hearing, FDA must conduct the hearing within 2 calendar days after the appeal is filed.

• If the detained article of food is nonperishable:

v     The claimant must file an appeal within 10 calendar days of receipt of the detention order.

v     If the claimant desires an informal hearing, a notice of intent to request a hearing must be filed within 4 calendar days of receipt of the detention order.

v     If FDA grants a hearing, FDA must conduct the hearing within 2 calendar days after the appeal is filed.

• Under the Bioterrorism Act, FDA must issue its decision within 5 calendar days after the appeal is filed.

• The appeal process terminates if FDA institutes either a seizure action or an injunction action.

3. What Requirements Apply to an Informal Hearing? (§ 1.403)

If FDA grants a request for an informal hearing on an appeal of a detention order,  it must conduct the hearing in accordance with existing regulations in 21 C.F.R. Part 16, with certain exceptions.

The hearing is public unless the FDA Commissioner determines that all or part of the hearing should be closed to prevent an invasion of privacy, prevent disclosure of trade secrets or confidential commercial or financial information, or prevent disclosure of classified information. The presiding officer may require that the hearing be completed within one calendar day.

The presiding officer must issue a written report of the hearing that includes all written material presented at the hearing, a finding on the credibility of witnesses wherever credibility is a material issue, and a proposed decision with a statement of reasons. The hearing participant may review and comment on the report within 4 hours after it is issued. The presiding officer will then issue a final agency decision. No party may seek a reconsideration or stay of the presiding officer’s final agency decision.

4. Who Serves as the Presiding Officer at an Informal Hearing? (§ 1.404)

The presiding officer for the appeal and the hearing must be an FDA Regional Food and Drug Director (RFDD), or another FDA official senior to a District Director. The presiding officer may not have participated in the investigation or action that is the subject of the hearing and may not be a subordinate of a person (other than the FDA Commissioner) who participated in such investigation or action.

5. When Does FDA Have to Issue a Decision on an Appeal? (§ 1.405)

FDA must issue a decision confirming or revoking the detention order within 5 calendar days after the appeal is filed. If FDA fails to provide an opportunity to request a hearing, or fails to confirm or terminate the detention order within the 5-day period, the detention order is deemed terminated.

The presiding officer must issue a written report including a proposed decision confirming or revoking the detention order by noon of the fifth calendar day after the appeal was filed. The claimant has 4 hours to comment on the report. The presiding officer then must issue a final agency decision within the 5-day period.

If the presiding officer confirms the detention order, the article of food continues to be detained until FDA terminates the detention order or the detention period expires, whichever occurs first. FDA’s confirmation of a detention order is deemed a final agency action, subject to appeal in Federal court. If the presiding officer terminates the detention order, FDA must issue a detention termination notice. FDA expects that it would normally be able to issue the detention termination notice with one calendar day of the decision to terminate the detention.

6. How Will FDA Handle Classified Information in an Informal Hearing? (§ 1.406)

FDA expects that there may be instances where the credible evidence or information supporting a detention order consists of Classified National Security Information (“classified information”). FDA will not release classified information to individuals without proper security clearance.6 However, FDA will provide as much information as possible without compromising the classified nature of the information. The presiding officer will provide notice of the general nature of the information and an opportunity to offer opposing evidence or information, if this is possible consistent with safeguarding both the information and its source. Any confirmation of a detention order based in whole or in part on classified information will indicate this fact.

The fact sheet of the rule can be viewed by logging on at: www.cfsan.fda.gov/~dms/fsbta21.html

The full text of the rule called “Administrative Detention of Food for Human or Animal Consumption Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002” is 250 pages long and can be viewed by logging on at: www.fda.gov/bbs/topics/news/2004/NEW01073.html

This website opens at a press release, i.e., FDA News. Scroll all the way down to Federal Register, and click on Part 1, Part 2 and Part 3. Part 1 is 100 pages , Part 2 is 100 pages and Part 3 is 50 pages.

4.) SECTION 306 - MAINTENANCE AND INSPECTION OF RECORDS FOR FOODS

Current Status:

Section 306 – The establishment and maintenance of records under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 was proposed on May 9, 2003. The rule has not been published as a final rule despite FDA’s earlier intention to publish a final rule no later than December 12, 2003. 

Definition:

Section 306 proposes the establishment and maintenance of records by certain domestic persons who manufacture, process, pack, transport, distribute, receive, hold, or import food intended for human and animal consumptionin the United states.

In addition, these requirements apply to certain foreign facilities that manufacture, process, pack, or hold food for human or animal consumption in the United States.

Background

• Section 306 on the Maintenance and Inspection of Records for Foods is a recordkeeping proposal designed to help FDA track foods implicated in future emergencies, such as terrorism-related contamination. These regulations would establish requirements regarding the establishment and maintenance, for not longer than two years, of records by persons (excluding farms and restaurants) who manufacture, process, pack, transport, distribute, receive, hold, or import food.

• Under the proposed rule, manufacturers, processors, packers, distributors, receivers, holders and importers of food would be required to keep records identifying the immediate source from which they received the food, as well as, the immediate subsequent recipient, to whom they sent it.

• This requirement would apply to almost all foreign and domestic food sources and almost all recipients of food destined for consumption in the United States.

• The proposed rule would require records to be established at the time the covered activity occurs. FDA is proposing that required records for perishable foods not intended for processing into non-perishable foods, and required records for animal food including pet food, be retained for one year from the date they were created. Records for all other foods would have to be retained for two years after the date they were created.

• To minimize the economic burden on food companies affected by the proposal, FDA's proposals would allow companies to keep the required information in any form that they prefer. Records may be kept in any format, paper or electronic, provided they contain all the required information. The proposed rule also states that existing records can be used to satisfy the requirements of the regulations if these records contain all the required information.

• For persons other than transporters the proposed rule would require the records to contain the following information for each article of food:

a) The firm's name, and the responsible individual representative of the firm (that was the immediate previous source, or the immediate subsequent  recipient of the food)

b) The address, telephone and fax numbers, and e-mail address of that person, if available

c) The type of food, including brand name and specific variety

d) The date received or released

e) Lot number or other identifier number, if available

f) The quantity and type of packaging

g) The name, address, telephone number and, if available, fax number and e-mail address of the transporter who transported the food

• With respect to the immediate previous source, the specific source of each ingredient that was used to make every lot of finished food product would have to be identified if this information is reasonably available. What is reasonably available may vary from case to case.

• If an article of food is reasonably believed to be adulterated and presenting a threat of serious adverse health consequence or death to humans or animals firms would be required to provide these and other records to FDA within four hours during certain business hours, or eight hours at other times.

• Transporters (e.g., trucking companies, private delivery carriers, railroads and airlines) would also be required to keep similar documentation-including information about all the means of transportation used.

• Farms, restaurants, (including all operations that prepare food for, or serve food directly to consumers), fishing vessels not engaged in processing, and firms regulated exclusively by the U.S. Department of Agriculture, would be exempted from the new recordkeeping requirements. With some exceptions, foreign facilities would be excluded if their food products undergo further manufacturing/processing, including packaging, by another facility outside the United States.

• Retail food operations would be exempted from maintaining records on immediate subsequent recipients of foods sold directly to consumers.

• This proposed regulation provides that a final rule would become effective six months from the date of publication of the final rule in the Federal Register . The proposed rule would require all businesses, except small and very small businesses, to comply with the final rule 6 months from its publication rule in the Federal Register.

Small businesses (fewer than 500 but more than 10 full-time equivalent employees) would have to comply within 12 months from publication of the final rule, and very small businesses (10 or fewer full-time equivalent employees) would have to comply within 18 months from publication of the final rule. 

Who must establish and maintain records under the proposal?

Domestic persons that manufacture, process, pack, transport, distribute, receive, hold or import food intended for human or animal consumption in the U. S. and foreign facilities that manufacture, process, pack or hold food intended for human or animal consumption in the U.S.

Who is excluded from these regulations?

• Farms; restaurants; non-profit operations that prepare food for, or serve food directly to, consumers;
• Fishing vessels not engaged in processing;
• Persons regulated exclusively by the U.S. Department of Agriculture under various statutes.
• A foreign facility is excluded if food from it undergoes further manufacturing/processing (including packaging) by another facility outside the U.S. The facility is not exempted from recordkeeping if the processing or packaging activities of the subsequent facility are limited to the affixing of a label to a package or other de minimis activity. The facility that conducts the de minimis activity also must establish and maintain records.
• Retail food operations also are exempted from maintaining records on immediate subsequent recipients when foods are sold directly to consumers.

However, retail facilities with fewer than 10 employees that are located in the same general location as a farm, and sell unprocessed food grown on that farm or another farm located in the same general physical location are excluded from the requirement to establish and maintain records on both immediate previous sources and immediate subsequent recipients. This exemption also applies to processed foods such as baked goods, jams, jellies, and maple syrup so long as all the ingredients were grown or raised on that farm. In addition, persons who manufacture, process, pack, transport, distribute, receive, hold or import pet food who are not subject to the recordkeeping provisions of the animal proteins prohibited in ruminant feed regulation (21 CFR 589.2000) are, with respect to pet food records, excluded from the requirement to establish and maintain records on both immediate previous sources and subsequent recipients.

What records must be established and maintained?

For manufacturers, processors, packers, distributors, receivers, holders and importers of food (that is, persons other than transporters), the records would have to:

a)     Identify the immediate non-transporter previous sources, whether foreign or domestic, of all foods received, including the name of the firm and the responsible individual; address; telephone number; fax number and e-mail address, if available; type of food, including brand name and specific variety (e.g., Brand X Cheddar Cheese, not just cheese; romaine lettuce, not just lettuce); date received; lot number or other identifier if available; quantity and type of packaging (e.g., 12 oz. bottles); and the name, address, telephone number--and, if available, fax number and e-mail address--of the transporter who brought it. The records must include information that is reasonably available to identify the specific source of each ingredient that was used to make every lot of finished product.

b)     Identify the immediate non-transporter subsequent recipients of all foods released, including the name of the firm and the responsible individual; address; telephone number; fax number and e-mail address, if available; type of food, including brand name and specific variety; date released; lot number or other identifier if available; quantity and type of packaging; and the name, address, telephone number--and, if available, fax number and e-mail address of the transporter who transported the food from you. For transporters, the records for each food transported would have to include:

1.         The name of the firm and the responsible individual who had the food before you and their address, telephone number, and, if available fax number and e-mail address, and the date you received it.

2.         The name of the firm and the responsible individual who had the food immediately after you and their address; telephone number, and, if available, fax number and e-mail address, and the date you delivered it.

3.         The type of food, including brand name and specific variety; lot number or other identifier if available, quantity, and type of packaging.

4.         Identification of each and every mode of transportation used (e.g., company truck, private carrier, rail, air, etc.) and the individual responsible from when the food was first received until it was delivered.

How must the records be maintained?

FDA is specifying the information a covered entity must keep but not specifying the form in which the records must be maintained. The records may be kept in any format, paper or electronic, provided they contain all the required information.

Can existing records be used to satisfy the requirements of these regulations?

The proposed regulations do not require duplication of existing records, if these records contain all the required information.

How long must the records be retained?

The proposed rule would require records to be created when food is received, released or transported. Records for perishable foods not intended for processing into non-perishable foods, as well as records for animal food including pet food, would have to be retained for one year from the date they were created. Records for all other foods would have to be retained for two years after the date they were created.

Where must the records be retained?

At the establishment where the activities covered in the records occurred (onsite) or at a reasonably accessible location.

What are the record availability requirements?

When FDA has a reasonable belief that an article of food is adulterated and presents a threat of serious adverse health consequences or death to humans or animals, any records or other information to which FDA has access must be available for inspection and photocopying or other means of reproduction within 4 hours if the request is made between 8:00 am and 6:00 pm, Monday through Friday, or within 8 hours if the request is made at any other time.

What records are excluded from these proposed regulations?

Recipes, financial data, pricing data, personnel data, research data and sales data are excluded from these requirements. FDA is proposing to define recipe as the quantitative formula used in the manufacturing of the food product, but not the identity of the individual ingredients of the food. If finalized as proposed, FDA would have access to the records containing the ingredients used in a food product, but would not have access to the quantities of the ingredients used to make a product.

What will happen if the required records are not established and maintained?

The Bioterrorism Act makes failure to establish and maintain the required records or failure to make them available to FDA a prohibited act. The Federal government can bring a civil action in Federal court to enjoin persons who commit a prohibited act; or the Federal government can bring a criminal action in Federal court to prosecute persons who commit a prohibited act.

When would the recordkeeping requirements take effect?

Currently, you do not have to comply with the proposed rule. However, there are certain statutory provisions regarding access to records and other information by FDA that are already in effect.

This proposed regulation provides that a final rule would become effective six months from the date of publication of the final rule in the Federal Register .

The proposed rule would require all businesses, except small and very small businesses, to comply with the final rule 6 months from its publication rule in the Federal Register. Small businesses (fewer than 500 but more than 10 full-time equivalent employees) would have to comply within 12 months from publication of the final rule, and very small businesses (10 or fewer full-time equivalent employees) would have to comply within 18 months from publication of the final rule.

The regulation can be viewed at: http://www.fda.gov/oc/bioterrorism/bioact.html

B) MANDATORY LISTING OF TRANS FATS IN FOOD LABELS

Current Status:

On July 9, 2003, FDA issued a final regulation requiring food manufacturers to list trans fatty acids, or trans fat on the nutritional labels of foods, and some dietary supplements. Food manufacturers exporting food to the US should take note of this new ruling and have until January 1, 2006 to comply.

Background:

FDA issued a proposed rule in the Federal Register on November 17, 1999 to amend the regulations to require that trans fat be listed on nutrition labels.

On December 5, 2000, FDA reopened the comment period for the rule to obtain comments about "reduced claims." FDA reopened another comment period on November 15, 2002, to receive comments about use of footnote with the statement "Intake of trans fat should be as low as possible." In total, FDA received over 2,700 comments that addressed the scientific, economic, policy and legal basis for the rule.

In finalizing this rule, FDA relied on scientific reports, expert panels, and studies from the Institute of Medicine/National Academies of Science, 2001 Report of the National Cholesterol Education Program, and the 2000 Dietary Guidelines for Americans.

The Food, Drug and Cosmetic Act (FD&C Act) provides the FDA with statutory authority to require food and nutrition labeling. Specifically, two sections of the FD&C Act provide the legal authority, as follows:

Sec. 403(a) of FD&C Act - requires foods to be adequately labeled and that material facts be disclosed to consumers.

Sec. 403(q)(2)(A) of FD&C Act - gives the Secretary authority to require additional nutrients to be included in nutrition labeling if such information will "assist consumers to maintain healthy dietary practices."

The new requirement through the Department's Food and Drug Administration (FDA), will mean that manufacturers of most conventional foods and some dietary supplements will have to list in the Nutrition Facts panel the trans fat content of the product, in addition to the information about its overall fat content and saturated fat content. ( Please see examples attached.)

Information on Trans Fat

Trans fatty acids or trans fats is often but not always found in the same foods as saturated fat, such as vegetable shortening, some margarines, crackers and biscuits, candies, baked goods, cookies, snack foods, fried foods, salad dressings and many processed foods.

Trans fat occurs in foods when manufacturers use hydrogenation, a process in which hydrogen is added to vegetable oil in order to turn the oil into a more solid fat.

The new requirement is an effort by the Department of Health & Human Services as well as the FDA to give American consumers a more complete picture of fat content in foods - allowing them to choose foods low in trans fat, saturated fat and cholesterol, all of which are associated with an increased risk of heart disease. Reducing the intake of trans fat and saturated fats is recommended by the Federal Dietary Guidelines for Americans.

Under the new FDA regulations, by Jan. 1, 2006, consumers will be able to find trans fat listed on food nutrition labels directly under the line for saturated fat. The new information is the first significant change on the Nutrition Facts panel since it was established in 1993.

The new labeling reflects scientific evidence showing that consumption of trans fat, saturated fat and dietary cholesterol raises low-density lipoprotein (LDL) cholesterol ("bad" cholesterol) levels that increase the risk of coronary heart disease. Nearly 13 million Americans suffer from coronary heart disease, and more than 500,000 die each year from causes related to coronary heart disease.

By providing more useful information to consumers seeking a healthy diet, the new labels are expected to reduce the costs of illness and disease for Americans. The FDA estimates that the changes in regulations will save between $900 million and $1.8 billion each year in medical costs, lost productivity and pain and suffering.

FDA hopes to improve the nutrition label to provide clearer, up-to-date guidance on a healthy overall diet. FDA is also working to increase the focus on health in food product development and promotion, as well as encouraging research that would foster greater science-based competition among food producers to improve health.

Although some food products already list trans fat on the food label, food manufacturers have until Jan.1, 2006, to add it to the nutrition label. This phase-in period minimizes the need for multiple labeling changes and allows small businesses to use up current label inventories. The FDA will allow manufacturers to implement the change more quickly, and in fact expects many manufacturers to start listing trans fat content soon.

In addition, dietary supplement manufacturers will now need to list trans fat, as well as saturated fat and cholesterol, on the Supplement Facts panel when their products contain more than trace amounts (0.5 gram) of trans fat. Examples of dietary supplements that may contain trans fat are energy and nutrition bars.

The new requirements are included in final FDA regulations which was published in the Friday, July 11, Federal Register 21 CFR Part 101.

Examples of Revised Nutrition Facts Panel Listing Trans Fat

Examples of the revised Nutrition Facts panel listing trans fat are displayed below. The specific requirements for nutrition labeling of food are found in 21 CFR 101.9, which will be updated for trans fat in the next revision.

Examples of Graphic Enhancements Used by the FDA

For more information, log on to: http://www.fda.gov/oc/initiatives/transfat/

Why is FDA addressing trans fat?

The trans fat nutrition labeling rule responds, in part, to a citizen petition from the Center for Science in the Public Interest (CSPI), and is based on recently published human studies and health expert advice on trans fat.

Recently the Institute of Medicine, National Academies of Science (IOM/NAS) published a report that found that trans fatty acids increase low density lipoprotein (LDL or "bad") cholesterol, thereby increasing the risk of coronary heart disease. The IOM/NAS report recommended that "trans fat consumption be as low as possible while consuming a nutritionally adequate diet." Similar recommendations are made for saturated fat and cholesterol.

This regulation will provide information on food labels about the amount of trans fat in foods so that consumers can select foods with lower levels of trans fat and thereby lower their intake of trans fat as part of a heart-healthy diet. FDA estimates that 3 years after the effective date, trans fat labeling would prevent from 600 to 1,200 cases of CHD and 250-500 deaths each year. It takes about 3 years for lower LDL-cholesterol to result in lower CHD risk.

Does this rule mean that FDA is banning trans fat from food?

No, FDA is not banning food manufacturers from using trans fat in packaged foods. FDA is requiring food manufacturers, processors, and distributors to label the amount of trans fat in a serving of food on the Nutrition Facts panel. As a result, Americans will have information they need to reduce their intake of trans fat, saturated fat, and cholesterol.

What are the public health benefits and costs of the trans fat final rule?

FDA estimates that 3 years after the effective date, January 2006, trans fat labeling would annually prevent from 600 to 1,200 heart attacks and save 250-500 lives. Based on this estimate, this rule will realize a cost savings of $900 million to $1.8 billion per year in medical costs, lost productivity, and pain and suffering.

FDA estimates that industry will incur a one-time cost of approximately $140 to $250 million. These costs include: determining the amount of trans fat in the food products, relabeling the Nutrition Facts panel to add trans fat, and reformulating products voluntarily to decrease the amount of trans fat.

If you need more information log on to the Federal Register Final Rule: Trans Fatty Acids in Nutrition Labeling, Nutrient Content Claims, and Health Claims (July 11, 2003) at www.cfsan.fda.gov/~lrd/fr03711a.html or for Food Labeling, see http://www.cfsan.fda.gov/label.html

C) FOOD LAW AND LIABILITY

When a person is injured by a defective product that is unreasonably dangerous or unsafe, the injured person may have a claim or cause of action against the company that designed, manufactured, sold, distributed, leased, or furnished the product. In other words, the company may be liable to the person for his injuries and, as a result, may be required to pay for his damages. That, in short, is product liability; and, not surprisingly, the law that governs this kind of liability is referred to as Product Liability Law.

A Brief Background on History of Product Liability Law

In 1842 in a case Winterbottom v. Wright in England, it was held that no person

(in this case a manufacturer) can be sued over a defective product, (even due to the negligence of the manufacturer) by any other party/persons if those persons did not enter into a contract with the manufacturer.

For example, a distributor who purchased from the manufacturer had the right to sue for damages due to negligence if the product was defective. But the ordinary man on the street that purchased the product and suffered injury as a consequence of the defective nature of the product, had no right to sue the manufacturer as he had not entered into a contract with the manufacturer. Or the words of the law, the man on the street was not “in privity” with the manufacturer.

Subsequently, in 1916, in a case between MacPherson v. Buick Motor Co, Justice Cardozo ruled that a manufacturer of a thing when negligently made is a thing of danger. And if the thing of danger is used by persons other than the purchaser, then irrespective of contract, the manufacturer of this thing of danger is under duty to make it carefully and is held liable. In other words, a person injured by a defective product could sue the manufacturer for negligence even if he had purchased the product from someone else.

In 1963, the law of the time decided in a case Greenman v. Yuba Products that:

“To establish the manufacturer’s liability, it was sufficient that plaintiff proved he was injured while using the product in a way it was intended to be used as a result of a defect in the design and manufacture of which the plaintiff was not aware that made the product unsafe for its intended use.”

In most states in the United States, a person injured by a product may recover damages based on:

a) Negligence

b) Breach of Warranty

c) Strict Liability

Negligence

Negligence is the failure to exercise ordinary care to avoid injuring someone to whom you owe the duty of care. Ordinary care is the care that a reasonable person would take based on the circumstances known to him at the point in time.

Breach of Warranty

A warranty is a promise, claim, or representation made about the quality, type, number, or performance of a product. The law assumes generally that a seller always provides some kind of warranty concerning the product he sells and that he should be required to meet the obligation created by the warranty.

Strict Liability

Strict product liability is liability without fault for an injury caused by a product that is defective and not reasonably safe i.e. liability without privity and without negligence. Thus, in establishing strict liability, the injured party need only prove that a) the product was defective, and b) the product defect was the cause of the injury.

Conclusion

The subject of product liability law is extensive and this write-up can at most merely state (briefly) some simple facts of a complex subject. Suffice to note that Product Liability cases are filled with numerous instances involving food. Liability in food law cases can include all members of a supply chain, or it may focus on specific groups e.g. manufacturers, importers or retailers. It is the responsibility of each member of the chain to conduct “due diligence”.

Due diligence in a food law application constitutes the determination of the supply chain member that the food product has met certain conditions.

For example, that the previous member of the supply chain has a Food Safety program or HACCP (Hazard Analysis Critical Control Point) program in place.

Experts advise that when there is a problem, companies should apologize, admit mistakes and become advocates of food safety. It is up to the food safety staff and quality assurance personnel to protect their companies from  liability issues and at the same time protect the children, elderly, the sick, as welllas general consumers from products that sometimes become defective.

Product Liability Insurance

It may interest you to know that with the exception of the US government, Wal-Mart is the world’s most sued entity. As such, US corporations and retailers who sell products to retail and industrial consumers need to do more than make sure that their liability insurance is comprehensive, because retailers can be held responsible for selling “faulty” products or from slip-and–fall occurrences within the store premises.

In most states in the US, the retailer that puts a product into the stream of commerce, can be responsible for defects in the product and as well as for failing to warn of a known danger or defective condition in the product. To continue selling an item, the retailer then has to seeks indemnification from the vendor or manufacturer of the product.

Thus, for the store, the best defense a store has is under its contract with its vendor, where the retailer will ask the vendor to indemnify and defend them in case there is a problem with the product. Oftentimes, the retailer will demand to be named as an additional insured on the policy issued to the vendor. This allows the retailer the right to go directly against the insurance company even if the product manufacturer or vendor does not honor the policy.

A retailer generally can be responsible for selling a dangerous product. They can be liable for selling a product whose warnings do not match the UL (Underwriters Laboratories) or OSHA requirements. They can also pass that along to the manufacturer who stuck them with the defective product. 

For example, in California, to sell to an ethnic supermarket, you would need to have liability insurance of up to $1 million. However, should you wish to sell to a mainstream supermarket like Ralph’s, you will need liability insurance coverage of about $2 million. For a specialty store like Trader Joe, Safeway or Whole Foods, they would want you to have a liability insurance coverage of up to $5 million. The premium for a $2 million coverage averages to about $4,000 a year.