AAEI Criticizes Lack of Detail, High Costs to Importers in FDA's FSVP Proposal

Importers Support More Flexible ‘Option 2’

FDA’s July 29 proposed FSVP rule would require importers to implement procedures to analyze the hazards associated with the food they import, and verify their suppliers’ compliance with applicable regulations (see 13072628). FDA proposed two options for supplier verification activities. Under “Option 1,” FDA would require importers to conduct annual onsite food safety audits of their foreign suppliers if they import fresh produce or food that could cause serious adverse consequences. “Option 2” would provide more flexibility, allowing importers to choose from a “menu” of options to verify supplier compliance that would include on-site audits, but also sampling and testing and reviewing foreign supplier food safety records.

AAEI favored the more flexible Option 2 in its comments because of its alignment with principles already established in the import community. “Option 1 is not a risk-based approach,” said the trade group. “It requires resources that many importers simply do not have. On the other hand, the more flexible Option 2 “aligns with risk-based approaches more commonly understood and managed by importers,” it said. The Produce Marketing Association also favored the flexibility of Option 2 in its own comments (here), citing the additional difficulties that produce importers would face if required to perform on-site audits.

But whatever option FDA chooses for on-site supplier audits, “both options have the potential to create significant data management burdens for importers,” said AAEI. “As importers assume more responsibilities for product and supply chain safety, new regulations must be manageable for importers to execute and manage if they are to be effective,” it said. “The proposed FSVP program potentially introduces onerous amounts of new data management, recordkeeping requirement and processes to implement FSVP.” And complicating matters, fundamental questions on how FSVP will be implemented remain unanswered, said AAEI.

Uncertainty Remains on Key Provisions of FSVP

AAEI said the proposal leaves much to be explained on the identity of the FSVP importer and the method by which data elements (including the FSVP importer) will be transmitted. For example, the proposed rule leaves unclear whether this information will be sent in the customs entry to as an element of Prior Notice, said AAEI. The proposed rule is also silent on whether electronic documents and signatures will be accepted and how compliance will be enforced, it said.

Guidance is urgently needed by importers if FDA expects their compliance, said AAEI. “Due to the complexity of the regulation, our members feel very strongly that the guidance documents must be published well before importers are required to come into compliance,” it said. One key area where guidance is needed is on the specific obligations of the importer. Because the proposed rule allows different entities to serve as the CBP importer of record and the FSVP importer, FDA should clarify both the differences and the overlapping obligations of each, said AAEI. That would help facilitate transactions in the new regulatory environment by ensuring that parties are clear on their respective duties. “Just as INCOTERMS are used to clarify the responsibilities of the parties in any transaction, companies will need to rely on objective and recognized trade terms to assess and manage compliance obligations when contracting to buy or sell food that will be imported into the United States,” said AAEI.

As the agency clarifies the respective responsibilities of the CBP importer of record and the FSVP importer, it should also provide that importers be able to identify themselves with either the CBP importer of record number or the DUNS number envisioned by FDA in its proposed rule, said AAEI. The trade group said that, in many cases, the CBP importer of record will also act as the FSVP importer. These importers already have importer of record numbers. On the other hand, although DUNS numbers are free, importers would incur costs to create or modify their internal systems and relationships with brokers to establish a new numbering system.

FDA should also create several more exceptions to FSVP requirements when it finalizes its rule, said AAEI. U.S. goods return should be exempt, because they often have no meaningful association to a foreign supplier. So should entities under the same corporate ownership, as long as they both use the same food safety control framework. Finally, FDA should rework its exemptions for very small importers and foreign suppliers so that they are based on import/export volumes, and not annual sales. Many importers and exporters also sell food in their own countries, and would be covered under the rule even if they don’t import or export much.

Once finalized, FDA should adopt a “phased-in informed compliance period” for FSVP, much like CBP did when it implemented Importer Security Filing (ISF) regulations, said AAEI. That would help the trade community to fully understand the program’s new requirements, and allow for companies to create and implement plans for managing FSVP. “The FSVP rule is complex and importers ill be much more likely to comply fully eventually if they have specific feedback and communication from FDA,” said AAEI.

Concern Over Requirements for Fresh Produce Importers

In separate comments to FDA (here), the United Fresh Produce Association (UFPA) cited several concerns that would particularly impact fresh produce importers. First, FDA’s proposal doesn’t take into account the role of post-harvest aggregators in the produce supply chain. “Many imported fruits and vegetables are not supplied by the entity that grows or harvests the food; rather, the importer receives them from a post-harvest handler/aggregator who may aggregate the produce from many growers,” said the produce group. As proposed, the importer would need to verify compliance not only by the aggregator, but also by individual growers. That would require costly practices like importing only from verified farmers and having the aggregator segregate their produce, or bypassing the aggregator entirely and buying directly from small farmers. “Any of these potential methods of compliance would be extremely costly without assuring a higher level of safety, are far more complex than current industry practices, and are unlikely to have been considered in FDA’s economic impact analysis,” said the UFPA.

Another potential headache for importers of produce and other risky foods is the requirement that they verify the “condition, function, and design of the foreign establishment and equipment,” said the produce group. That would require on-site verification. So even though “Option 2” seems more flexible by allowing importers to choose from a variety of verification activities, they would in effect have to conduct on-site audits of their suppliers to meet the requirement that they verify their suppliers’ facility and equipment, said the UFPA.