Brokers Beware: FDA Issues Letter to Industry about Import Review Process

On September 6, 2011, the U.S. Food and Drug Administration (FDA) issued a letter to the importing community, in which the agency provided recommendations to facilitate the FDA import entry review process for medical and non-medical radiation emitting electronic products. Specifically, the FDA recommends the use of Affirmation of Compliance (AofC) codes at the time of entry. The FDA believes that submitting AofC codes when entering radiation emitting electronic products will expedite the admissibility process by decreasing the likelihood that the FDA will hold your shipment for further review during the FDA’s import screening process.

The letter explains that Center for Devices and Radiological Health (CDRH) regulates radiation emitting electronic products under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §360 and implementing FDA and US Customs and Border Protection (CBP) regulations. Importers of radiation emitting electronic products subject to “federal performance standards” must submit information regarding each product to the FDA and CBP at entry on Form FDA-2877 http://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Forms/UCM080778.pdf.

Imported products subject to a federal performance standard include:
• Television receivers and video display monitors with cathode ray tubes only (21 CFR §1020.10)
• Diagnostic x-ray systems and their major components (21 CFR§ 1020.30) (Includes medical x-ray, fluoroscopy)
• Cabinet x-ray systems (21 CFR §1020.30) (Includes airport security x-ray system)
• Microwave ovens (21 CFR §1030.10) (Includes consumer and commercial)
• Laser products (21 CFR §1040.10) (Includes laser pointers, laser light shows, industrial laser, medical laser, surveying, leveling and alignment lasers)
• Sunlamp products and ultraviolet lamps intended for use in sunlamp products (21 CFR §1040.20) (Includes tanning beds/booths)
• High intensity mercury vapor discharge lamps (21 CFR §1040.30) (and metal halide lamps, for illumination)
• Ultrasonic therapy products (21 CFR §1050.10) (for use in physical therapy).

Form FDA-2877 is not required for imported medical radiation emitting electronic products that are not subject to federal performance standards, which include radiation therapy devices, linear accelerators, diagnostic ultrasounds for imaging, microwave diathermy, shortwave diathermy, hearing aids, cardiac radiofrequency ablation devices, and extracorporeal shock wave lithotripters. Although these products have reporting requirements, they do not require the form.

All radiation emitting electronic products will have an AofC code, but vary depending on the product and whether it is subject to a federal performance standard. Here is a sampling of the types of Radiation Emitting Electronic Product Affirmation of Compliance Codes:

• ACC --- EPRC Accession Number: Used as the Electronic Product Radiation Control Product report Accession Number issued by FDA identified in the FDA line. Example: ACC 102XXX
• RA1 – EPRC Product Declaration A1 (FD-2877): Transmitted for products that were manufactured prior to the effective date of an applicable performance standard. The date of manufacture serves as the qualifier.
• RA2 – EPRC Product Declaration A2 (FDA-2877): Transmitted for products that are excluded from the applicability clause or definition in the standard or by FDA written guidance. You must provide the specific reason for exclusion.
• RA6 – EPRC Product Declaration A6 (FDA-2877): Transmitted when the products are prototypes intended for ongoing product development by the importer. The products must be labeled “FOR TEST/EVALUATION ONLY,” and be exported, destroyed or held for future testing, but not distributed. A qualifier is not required, but the quantity is required at the FDA line level.
• RB1 – EPRC Product Declaration B1 (FD-2877): Transmitted when the most current annual report or product report contains performance standards compliance information.

For a complete list of AofC Codes, please see appendix to the Sept.6, 2011 letter http://www.fda.gov/MedicalDevices/ResourcesforYou/Industry/ucm271180.htm and to the March 24, 2011 letter. http://www.fda.gov/MedicalDevices/ResourcesforYou/Industry/ucm248321.htm

CBP Finalizes Harmonized Data Set for Automated Commercial Environment

On June 9, 2011, U.S. Customs and Border Protection (CBP) announced the final Participating Government Agencies (PGA) Message Set for the Automated Commercial Environment (ACE). ACE is the U.S. commercial trade processing system designed to (i) automate border processing, (ii) enhance border security, (iii) expedite international trade and (iv) provide a platform for information sharing between industry and government. The PGA Message Set is a harmonized set of information needed by federal agencies to allow imported cargo to enter the country.

According to the ACE 101 Publication dated June 2011, 26 PGAs currently use ACE. The June 9th press release did not specifically name the final PGAs. We submitted an inquiry to CBP and will report the list of final PGAs once we receive confirmation from CBP. However, according to the International Trade Data Service, the following are examples of the federal agencies slated for ACE integration:

• Animal and Plant Health Inspection Service (APHIS) of the Department of Agriculture
• International Trade Administration-Import Administration (ITA) of the Department of Commerce
• Food and Drug Administration (FDA) of the Department of Health and Human Services
• U.S. Fish and Wildlife Service (FWS) of the Department of Interior

According to Cindy Allen, Executive Director of the ACE Business Office, “The PGA Message Set will expedite legitimate trade by providing a single window through which the trade community can efficiently supply required data electronically through the Automated Commercial Environment.” She also touted the progress made on ACE, since its inception, during the American Association of Exporters and Importers (AAEI) Annual Conference in New York on June 6th. For example, CBP introduced a link from the ACE Portal to the Importer Security Filing (ISF) Portal for importers, brokers, carriers and surety accounts. CPB has established approximately 20,000 ACE portal accounts since June 2003.

Currently, data is submitted manually to PGAs through paper forms, rather than electronically or automatically. The submission of paper to an agency is obviously labor intensive and less efficient in time and money than submitting information electronically. Once the technology is completed, likely at the end of 2011, information that is now provided only to CBP will also be provided electronically to PGAs. The PGA Message Set is expected to streamline data submission.

General information about ACE, can be found at http://www.cbp.gov/xp/cgov/trade/automated/modernization/ace/.

The U.S. GAO Recommends Changes to FDA’s Handling of Imported Seafood

The U.S. Government Accountability Office has concluded in Report GAO-11-286 that the Federal Drug Administration (FDA) must improve its oversight of imported seafood. The GAO study was conducted at the request of several members of Congress because of concerns that the FDA was not doing enough to ensure the safety of imported seafood against residues of unapproved drugs used by foreign seafood farmers.

Farmed fish (aquaculture) account for about half of the seafood imported into the U.S. Fish grown in confined aquacultured areas can have bacterial infections, which may require foreign farmers to treat the fish with antibiotics not approved by the U.S. The concern is that the residues of some drugs in the imported seafood can cause cancer and antibiotic resistance when eaten by U.S. consumers. Specifically, the GAO was tasked with assessing whether (1) the FDA’s current program could prevent imports of seafood containing residues from unapproved drugs and (2) whether the Memoranda of Understanding (MOU) between the FDA and the National Marine Fisheries Service (NMFS) intended to enhance seafood oversight and leverage inspection resources was functioning.

The GAO concluded that the FDA did not provide enough oversight of imported seafood and that the agency was unable to ensure that seafood did not contain harmful residue from antibiotics and other drugs. The GAO also concluded that the FDA and NMFS did not implement any guidance for staff or create standard operating procedures, as required under the MOU between the agencies. Finally, the GAO concluded that the agencies did not conduct enough inspections of foreign seafood suppliers.

Based on the findings of the GAO, it recommended that the Secretary of the Health and Human Services direct the FDA to:

1. Study the feasibility of adopting other practices used by other entities, such as requiring foreign countries that want to export seafood to the United States to develop a national residues monitoring plan to control the use of aquaculture drugs;

2. Develop a more comprehensive import sampling program for seafood by more effectively using its laboratory resources and taking into account the imported seafood sampling programs of other entities and countries; and

3. Develop a strategic approach with specific time frames for enhancing collaborative efforts with NMFS and better leveraging NMFS inspection resources.

Importers of seafood should monitor closely the progress of these recommendations because they could lead to new regulations for seafood imports.

The report can be found here.

FDA Issues Interim Final Rule for Importers of Food

Pursuant to the Food Safety Modernization Act (Pub. L. 111-353), the Food and Drug Administration (FDA) amended its regulations, requiring importers of food for both people and animals to report the name of any country to which the food has been refused entry. The Act directed the FDA to shift its focus to preventing contaminated and adulterated food from entering the U.S. market, rather than on reacting to food safety issues after they occur. The FDA believes that receiving information on whether another country has refused entry to the food will assist the FDA to identify imported food that may pose health and security risks to U.S. consumers.

Section 304 of the Act, which requires a report of “any country to which the article has been refused entry,” amends section 801(m) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 381(m)). Section 801(m) was originally added by the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (the Bioterrorism Act). Under the Bioterrorism Act, food importers were required to submit certain information about the food in advance of the shipment into the United States. The FDA was permitted to refuse entry of the imported food if it did not receive adequate prior notice from the importers. Advance notice is to be submitted electronically to FDA/Customs. The Food Safety Modernization Act adds the additional requirement of providing whether another country refused admission to the food.

This interim final rule is effective July 3, 2011. Comments from the industry on the interim rule are due no later than June 6, 2011.

A copy of the Federal Register Notice can be found at: http://www.gpo.gov/fdsys/pkg/FR-2011-05-05/html/2011-10955.htm

The Impact of the Food Safety Modernization Act on Importers

To Inspect, or not to inspect… that is the question. Earlier this year, President Obama signed into law the Food Safety Modernization Act (FSMA or the Act), with the goal of shifting the focus of the Federal Drug Administration (FDA) from to responding to food contamination problems to preventing them. Yet, this week, the president’s budget proposal includes cuts to nearly all food inspection programs, including overseas inspections of foreign food manufacturers that supply U.S. importers of food. Does anyone else see the contradiction here? FSMA, which amends the Federal Food, Drug and Cosmetic Act, may have a huge impact on importers of food products. Overall, the Act contains five major elements: (1) a mandate to the FDA to establish prevention-based controls for the food industry; (2) inspections and compliance, including specifications on how the FDA should inspect food producers; (3) imported food safety, including requirement that food importers must verify that their foreign food suppliers possess sufficient preventive controls to ensure safety; (4) mandatory recall authority to the FDA for all food products and; (5) partnership among federal, state, local and foreign agencies to work together to enhance food safety. Of significance to food importers is the third element above—imported food safety—and how the requirements under that section will increase the burden, both in time and money on importers of food products. Under FSMA, food importers must have internal controls that ensure that the food they are importing into the United States is safe. One of the largest potential burdens on importers under this new requirement is the Foreign Supplier Verification Program (FSVP). Under the FSVP, importers need to verify that their foreign suppliers also have adequate public health protection controls in place that meet the U.S. standards under the new law. The FDA describes such verification as “risk-based” that should focus on validating that imported food was not contaminated or adulterated in any way and that the imported food was produced in compliance with proper FDA controls. However, left open for interpretation is what constitutes “risk.” Is it country of origin based? Is it food product based? Another open issue is what an importer needs to do if it finds that the supplier does not have adequate controls. Is it permitted to import food from that supplier while the supplier improves its controls and procedures? Or, must the importer stop production at that plant? Does it depend on what the problem was? What happens if the importer decides to continue to import while the foreign manufacturer improves its procedures and something is contaminated—is the importer liable too? Finally, the FDA has some additional duties under FSMA too. It now has the power to conduct foreign inspections and can deny an entry of a shipment of imported food if the manufacturer does not permit FDA inspection. This brings us back to the beginning. The whole purpose of the law is to protect the public, which does involve cooperation between importers and the FDA, and between importers and their foreign suppliers. However, given that the Obama administration has just proposed to cut the FDA budget for foreign supplier inspections, it is likely that the FDA is going to struggle to do its part under the Act, thus placing even more burden on the food importer.