IA#53-05 --- 2/9/90, ATTACH 8/24/90
BACKGROUND:
Orlando District has identified a major labeling problem with Imported "Gray
Market" cosmetics. The "Gray Market" involves the by-passing of the
authorized U.S. dealer through the importation of a product by a third party
from a dealer often located in a country other than the country of origin.
The dealer may be an authorized dealer for the product in a foreign country
who finds it profitable to increase his volume by selling large quantities of
the product to a "Gray Market" dealer in the United States. The consumer
readily purchases these products because of a substantial discount which is
realized for name brand items.
Since these products are intended to be sold in a country other than the U.S.,
they are sometimes not labeled in English or in accordance with FDA's other
labeling requirements, such as ingredient statements, net contents, etc.
Many different products are involved. Therefore, coverage cannot be limited
to specific products, countries or manufacturers. During fiscal year 1983,
Orlando District detained 136 entries of cosmetics due to labeling
deficiencies. A total of 52 firms were responsible for the 136 detentions.
Six had five or more detentions, which demonstrated a pattern of continued
violation.
Orlando generally wharf examines the goods if the entry indicates the port of
lading is in a country that is different than that of the manufacturer. For
example, the Port of Lading may be Cozumel, Mexico but the manufacturer is in
France. Orlando also reports that the number of cosmetic entries offered in
Orlando District has recently dropped drastically, suggesting that importers
may be entering these products at other ports to circumvent FDA coverage.
GUIDANCE:
Automatically detain all entries of cosmetics offered by the importers listed
in the attachment to this Import Alert. Charge: "The article is violative
within the meaning of 801(a)(3) in that it appears to have various labeling
deficiencies such as ."
Entry of these cosmetics usually involve a number of products. Detentions may
be based on various labeling violations.
The following is offered for guidance when handling these type of
multi-product entries:
When an entry is automatically detained and there is indication on behalf of
the importer that some products in the entry are in compliance which require
no relabeling, while others have labeling deficiencies to some degree, it will
be the responsibility of the importer or designated agent to categorize the
products as those in complete compliance, those having major labeling
violations, and those with minor FPLA violations. The importer will be
required to submit copies of all product labels in the entry at the time of
detention to the district office for review. Release those products found in
complete compliance immediately. Release with comment all products with minor
FPLA deficiencies, such as type size.
Keep products with major labeling violations under detention until all label
violations (major and minor) are corrected. Major deficiencies include the
lack of: 1) name and place of business of the manufacturer, packer, or
distributor; 2) an accurate statement of quantity of contents; 3) inqredients
statement and; 4) labeling in the English lanquage. Districts may examine
relabeled goods before release.
Increased surveillance of [Gray Market] cosmetic products offered by other
importers is indicated. Pay special attention to those entries which have a
port of lading country different than that of the manufacturer.
Attachment to Import Alert #53-05 Revised 8/24/90
IMPORTERS ON AUTOMATIC DETENTION
Duty Free Shoppes, Vero Beach, Florida
European Imports, 2150 NW 93rd Ave., Miami, FL 33172
Giant Star Trading, Miami, Florida
* Incomex USA Inc., Miami, Florida
International Cosmetics Exchange, 45 Peter Court, New Britain, CT
* Monaco, Miami, Florida
* Natali or Natalie, Miami, Florida
* Niroda, Miami, Florida
* Rx Wholesale, Miami, Florida
* Torum, Inc. 11821 S.W. 57th Street, Miami, Florida
* Ziv, Inc., Miami, Florida
* The Miami Resident Post reported that Incomex USA, Inc., is also using
this firm name and address.
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