NMFS Proposes Requirements for New Seafood Importer Trusted Trader Program

The program would be available to importers of high-risk seafood covered by SIMP, including Atlantic cod; Pacific cod; blue crab; red king crab; dolphinfish (Mahi Mahi); grouper; red snapper; sea cucumber; sharks; swordfish; and albacore, bigeye, bluefin, skipjack and yellowfin tuna (see 1612080014). Shrimp and abalone are also set to eventually be subject to SIMP, though implementation is currently stayed pending the creation of similar requirements for domestic aquaculture establishments.

“Qualified importers who choose to participate in the CTTP would benefit from reduced reporting and recordkeeping requirements, and streamlined entry into U.S. commerce for seafood imports subject to the SIMP,” NMFS said. SIMP requires the importer or its customs broker to file data elements at entry identifying the harvester or producer, the fish harvested or processed, information on where and when the fish was harvested and landed, and an International Fisheries Trade Permit number. Participants in the Commerce Trusted Trader Program would instead only have to file the IFTP number and species codes in ACE at the time of entry.

Participants Must Have No Compliance Violations in Last Five Years

According to the proposed rule, participants in the program would need to hold an International Trade Fisheries Permit and have a clean recent compliance history. Before they are reviewed, applications, which would be submitted online, must be complete with the following information:

• The applicant’s IFTP number
• An affirmation that the applicant has no history, during the previous five years, of noncompliance (resulting in fines or penalties from violations of federal regulations on the importation of fish and fish products), and is currently in compliance with all applicable requirements
• An affirmation that the applicant is in compliance with other state and federal programs on fish and fish products
• The applicant’s Trusted Trader Compliance Plan
• An application fee, currently expected to be $30.

If the application is complete, NMFS will issue a letter of approval to the importer and notify CBP of the importer’s new streamlined filing requirements. If the application is incomplete or not approved, NMFS will notify the applicant of its decision and give the applicant an application to respond to the agency’s concerns. NMFS will then issue a second letter announcing its final decision, which is not subject to appeal.

Though an importer’s IFTP must be renewed annually, approval under the Commerce Trusted Trader Program would remain in effect unless revoked, NMFS said.

Compliance Plan to Include Supply Chain Controls

The central requirement of the Commerce Trusted Trader Program would be the importer’s compliance plan, which must demonstrate that the importer has “a secure and controlled supply chain, including, but not limited to, harvest, purchase, landing, shipping, processing, storage, and import entry.” Though the plan could delegate entry filing, record keeping and other responsibilities to other persons, “such roles must be clearly defined in the Compliance Plan,” NMFS said.

Internal control system. Participants would have to document an internal control system that includes traceability monitoring procedures for seafood subject to SIMP, including the following:

• Procedures to verify the legal harvest and landing of fish products entered into the U.S., such as through flag-state or port-state harvest and landing records
• Procedures to enable verification of the full chain of custody from point of first landing to entry into U.S. commerce, including specific processes and documentation
• Procedures to ensure chain of custody documentation may be provided to NMFS within 14 days of an agency request to support an NMFS audit of any entry in the past two years
• Procedures for performing at least one trace-back annually for each species covered by the SIMP that is imported by the participant
• Procedures for responding to information that illegally harvested or misrepresented fish or fish products have entered the supply chain or come from a vessel listed as engaging in illegal fishing
• Procedures taken in response to any supply of the importer being placed on a Food and Drug Administration import alert
• Procedures to regularly review internal controls and update procedures in response to changes in the imported fish or fish products, suppliers or operating conditions.

Annual audits. The plan would also have to include procedures for ensuring the plan and the importer’s adherence to it are audited by a certified third party at least annually.

Internal policies. The Compliance Plan would have to include the participant’s written policy and related supporting materials on preventing the import of illegally harvested and misrepresented seafood, along with a description of how it is communicated to affected employees, entry filers, representatives and suppliers.

Organization chart. An included organization chart would have to identify persons with responsibility for entry filing, record keeping, training, and developing and implementing the Compliance Plan.

Signature. A signature page would have to be completed by “the individual at the highest level of authority in the applicant’s organization assuming responsibility for implementing the Compliance Plan.”

Changes due in annual audits. Any changes to the Compliance Plan, along with an updated signature page and organization chart, would have to be included in the participant’s mandatory annual audit report.

Annual Audits Conducted by Third-Party Auditors

Participants in the Commerce Trusted Trader Program would have to schedule audits once per year, conducted by a certified third-party auditor, to evaluate the importer’s Compliance Plan. The audit would cover at least three entries selected by the auditor. Participants would have to notify NMFS at least 30 days in advance of each audit, giving the agency the chance to attend as an observer or conduct a “side-by-side” audit of the same documentation seen by the auditor.

Audit report submitted within 30 days. Audits would conclude with a closing meeting and a written audit report, completed within 30 days of the audit and submitted to the participant and NMFS, that assesses the participant’s plan and its adherence to it, and identify any non-conformities. The third-party auditor would have to certify it was not involved in developing the plan and has no financial relationship with the participant beyond the audit itself.

Corrections allowed within 60 days. The audit report is considered final if it finds no corrective action is needed. If corrective action is necessary, it is considered an initial audit report. In such cases, within 60 days after the audit, the trusted trader must ensure that a “signed and locked electronic copy of the final audit report” is provided to NMFS, detailing the corrective action taken by the Commerce Trusted Trader Program participant.

Two-Year Record-Keeping Requirement for NMFS Audits

Participants in the Commerce Trusted Trader Program would have to be able to produce all traceability documentation associated with a given entry filing within 14 days of an NMFS request to support an agency audit. The CTT would be expected to produce all traceability documentation associated with an entry filing subject to the SIMP within 14 days upon request by NMFS to support an audit and to make such documentation available for inspection “for no less than two years from the date of entry of the product into U.S. commerce,” NMFS said.

Revocation for Failure to Comply Would Bar Reapplication for One Year

Program participants that fail to comply with program requirements are subject to revocation of eligibility to participate. NMFS will first send a notification letter to the importer of the alleged failure to comply, giving the importer between 14 and 30 calendar days to respond. Importers would be able to respond with a written objection letter and request a meeting to discuss a “resolution or redefinition of the issue.” Failure to resolve the issue or failure to respond to the notification letter would result in revocation, and the importer would not be able to reapply for participation for one year.

Comments Requested on Species-Specific Participation

As proposed, the Commerce Trusted Trader Program would apply to all species subject to SIMP from a given importer. However, NMFS is considering allowing an applicant to specify that it has a “secure and controlled” supply chain for some, but not all, SIMP species and request that its trusted trader status be limited to that subset of species. NMFS says this alternative would likely have higher compliance costs because the importer would be “assuming the higher fixed costs of [Commerce Trusted Trader Program] compliance while reducing the economic benefit of that investment that accrues to every import entry of a priority species by a [participant] through the reduction of per entry, incremental costs.” It would also likely cost more in terms of ACE programming and “effective long-term compliance auditing,” the agency said. Nonetheless, “NMFS seeks comment on its assumptions and conclusions related to a species-specific” Commerce Trusted Trader Program, it said.

(Federal Register 01/17/18)