[Federal Register: February 3, 2003 (Volume 68, Number 22)]
[Proposed Rules]
[Page 5428-5468]
From the Federal Register Online via GPO Access
[wais.access.gpo.gov]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
Prior Notice of Imported Food Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice of proposed rulemaking.
SUMMARY: The Food and Drug Administration (FDA) is proposing a regulation that would require U.S. purchasers or U.S. importers or their agents to submit to FDA prior notice of the importation of food. The proposed regulation implements the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (the Bioterrorism Act), which requires prior notification of imported food to begin by December 12, 2003. The Bioterrorism Act requires FDA to issue final regulations that specify the period of advance notice by this date or a statutory notice provision requiring not less than 8 hours prior notice and not more than 5 days prior notice will take effect until a final rule is issued. DATES: Submit written or electronic comments by April 4, 2003. Submit written or electronic comments on the collection of information by March 5, 2003. ADDRESSES: Submit written comments to the Dockets Management Branch (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852. Submit electronic comments to http://www.fda.gov/dockets/ecomments. Submit written comments on the information collection provisions to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Bldg., 725 17th St. NW., rm. 10235, Washington, DC 20503, ATTN: Stuart Shapiro, Desk Officer for FDA. FOR FURTHER INFORMATION CONTACT: Mary Ayling, Center for Food Safety and Applied Nutrition (HFS-32), Food and Drug Administration, 5100 Paint Branch Pkwy., College Park, MD 20740, 301-436-2428. SUPPLEMENTARY INFORMATION: Table of Contents I. Background and Legal Authority II. Preliminary Stakeholder Comments III. The Proposed Regulation A. Highlights of This Rule B. General Provisions 1. What Imported Food is Subject to This Subpart? (Proposed Sec. 1.276) 2. What Definitions Apply to This Subpart? (Proposed Sec. 1.277) 3. What Are The Consequences of Failing to Submit Adequate Prior Notice or Otherwise Failing to Comply With This Subpart? (Proposed Sec. 1.278) C. Requirements to Submit Prior Notice of Imported Food 1. Who is Authorized to Submit Prior Notice for an Article of Food That is Imported or Offered for Import Into the United States? (Proposed Sec. 1.285) 2. When Must the Prior Notice be Submitted to FDA? (Proposed Sec. 1.286) 3. How Must You Submit the Prior Notice? (Proposed Sec. 1.287) 4. What Information Must be Submitted in a Prior Notice? (Proposed Sec. 1.288) 5. What Changes are Allowed to a Prior Notice After it Has Been Submitted to FDA? (Proposed Sec. 1.289) 6. Under What Circumstances Must You Submit a Product Identity Amendment to Your Prior Notice After You Have Submitted it to FDA? (Proposed Sec. 1.290) 7. What is the Deadline for Product Identity Amendments Under Sec. 1.290? (Proposed Sec. 1.291) 8. How Do You Submit a Product Identity Amendment or an Arrival Update to a Prior Notice? (Proposed Sec. 1.292) 9. What Are the Consequences if You Do Not Submit a Product Identity Amendment to Your Prior Notice? (Proposed Sec. 1.293) 10. What Must You Do if the Anticipated Arrival Information (Required Under Sec. 1.288(k)(1)) Submitted in Your Prior Notice Changes? (Proposed Sec. 1.294) IV. Analysis of Economic Impacts A. Preliminary Regulatory Impact Analysis 1. Need for Regulation 2. The Reason for the Regulation 3. Proposed Rule Coverage 4. Regulatory Options Considered B. Small Entity Analysis (or Initial Regulatory Flexibility Analysis) 1. Number of Establishments Affected 2. Costs per Entity 3. Additional Flexibility Considered C. Unfunded Mandates V. Paperwork Reduction Act of 1995 VI. Analysis of Environmental Impact VII. Federalism VIII. Comments IX. References I. Background and Legal Authority The events of September 11, 2001, highlighted the need to enhance the security of the U.S. food supply. Congress responded by passing the Bioterrorism Act, which was signed into law on June 12, 2002. The Bioterrorism Act includes a provision in Title III (Protecting Safety and Security of Food and Drug Supply), Subtitle A--Protection of Food Supply, section 307, which amends the Federal Food, Drug, and Cosmetic Act (the act) by adding section 801(m) (21 U.S.C. 381(m)). This new provision changes when FDA will receive certain information about imported foods by requiring the Secretary of Health and Human Services (the Secretary), after consultation with the Secretary of the Treasury, to issue implementing regulations by December 12, 2003, mandating prior notification to FDA of food that is imported or offered for import into the United States. Functions of the U.S. Customs Service (U.S. Customs) will soon be a part of the Department of Homeland Security (DHS). Future consultations may be with DHS instead of, or in addition to, the Department of Treasury. Section 801(a) of the act sets out procedures for imports under FDA's jurisdiction. When an FDA-regulated product is imported or offered for import, generally brokers submit entry information to the U.S. Customs on behalf of the importers of record. U.S. Customs then provides entry information and may deliver samples to FDA to enable admissibility decisions to be made. Under U.S. Customs authorities, entry of the merchandise must be made within 15 days after importation. U.S. Customs regulations provide for different kinds of entries. Commonly, merchandise is the subject of an entry for consumption (i.e., unrestricted, general use) under a basic importation and entry bond at the first port of arrival, but U.S. Customs authorities also allow for the entry of merchandise for transportation under a custodial bond from the port of arrival to another port where the consumption entry will be made. If no entry of any kind is made within 15 days, the article cannot move and the carrier or other authorized party must notify U.S. Customs and a general order (i.e., bonded or secure) warehouse that the article remains unentered. Generally, at that point, the article is moved to the bonded warehouse (or such other facility as the U.S. Customs port director might require) and held pending the filing of an entry or other action.
Accordingly,
under current laws and regulations, there are times when FDA
does not receive complete information about the food imports it regulates
until days after the food has arrived in the U.S. and been moved from the
port it arrived in.
FDA
receives information about imported food through its Operational and
Administrative System for Import Support (OASIS). Entry information is
usually provided electronically to OASIS by U.S. Customs via its Automated
Broker Interface (ABI) of the Automated Commercial System (ACS). The
information that is currently supplied to FDA through
this system includes: the entry type, the entry number (both ACS line
number and FDA line identifier); the mode of
transportation; the carrier code; the name and address of the
manufacturer, shipper, importer, and ultimate consignee; the country of
origin; the FDA product code; a written description of
the product in common business terms; and the quantity. If neither FDA
nor U.S. Customs wishes to examine or detain the entry, the product is
allowed to proceed.
By
adding section 801(m) to the act, Congress changed when information about FDA-regulated
food imports must be provided to FDA. The major
components of new section 801(m) of the act are:
Requires
prior notice of imported food shipments beginning on December 12,
2003;
Provides
that, if adequate notice is not provided, the food shall be refused
admission and held until adequate notice is given;
Amends
section 301 of the act to make it a prohibited act to import or offer
for import an article of food in violation of any requirements under
section 801(m) of the act; and
Mandates
that prior notice be submitted no less than 8 hours and not more than 5
days before it is imported or offered for import, if final rules are not
in effect on December 12, 2003, and until such rules become effective.
In
addition to section 307 of the Bioterrorism Act, which establishes the
requirement for prior notice for food imported or offered for import into
the U.S., FDA is relying on sections 701(a) and 701(b) of
the act (21 U.S.C. 371(a) and (b)) in issuing this proposed rule. Section
701(a) authorizes the agency to issue regulations for the efficient
enforcement of the act, while section 701(b) of the act authorizes FDA
and the Department of Treasury to jointly prescribe regulations for the
efficient enforcement of section 801 of the act.II. Preliminary
Stakeholder Comments
On
July 17, 2002, FDA sent an open letter to the members of
the public interested in food issues outlining the four provisions in
Title III of the Bioterrorism Act that require FDA to
issue regulations in an expedited time period, and FDA's
plans for implementing them (see http://www.cfsan.fda.gov/[tilde]dms/sec-ltr.html).
In the letter, FDA invited stakeholders to submit
comments to FDA by August 30, 2002, for FDA's
consideration as it developed this proposed rule. FDA
also held meetings with representatives of industry, consumer groups,
other Federal agencies, and foreign embassies after sending out the July
17, 2002, letter, to solicit stakeholder comments. In response to these
solicitations, FDA received 37 comments regarding section
307 of the Bioterrorism Act.
FDA
has considered all the comments received by August 30, 2002. FDA
will consider all comments we have received so far with the comments we
receive during the public comment period on this proposed rule in
developing the final rule. Several broad themes emerged from the comments FDA
received on or before August 30, 2002, including:
Maintaining
flexibility when setting the minimum time required for prior notice
and taking into account different modes of transportation, the nature
of perishable food, and the needs of businesses which operate close to
the U.S. border;
Permitting
the prior notice to be amended;
Integrating
with U.S. Customs and other agencies to avoid duplication of
notification requirements;
Allowing
a qualified agent to submit prior notices for authorized submitters;
Providing
immediate acknowledgement of the submission, if prior notice is
submitted electronically;
Defining
``food'' consistent with the act's definition;
Extending
FDA's hours of operation;
Complying
with international trade obligations; and
Including a model of the Prior Notice screen.III.
The
Proposed Regulation
This
rule would enhance FDA's ability to inspect imported food
when it arrives in the U.S. This in turn would result in a significant
improvement in FDA's ability to deter, prepare for, and
respond effectively to bioterrorism and other public health emergencies
that might result from imported food. Additionally, should an outbreak or
a bioterrorism event occur, prior notice would enhance FDA's
ability to respond to the event by enhancing FDA's
ability to prevent entry of shipments that appear related and to
facilitate product tracking for containment. This proposed rule would
facilitate product tracking because we would know, at the time of receipt
of prior notice, the name and address of the actual importer and consignee
in the United States. We could then use the U.S. importer and consignee
information to follow-up and trace the location of the goods. FDA
thus would be better able to ensure that consumers in the United States do
not eat food that is contaminated (whether intentionally or otherwise).
This information would also assist FDA and other
authorities in determining the source and cause of problems and in
communicating with affected firms. Finally, we believe that the
information provided by prior notice would help us use our foreign
inspection resources more effectively.
In
establishing and implementing this proposed rule, FDA
will comply fully with its international trade obligations, including the
applicable World Trade Organization (WTO) agreements and the North
American Free Trade Agreement (``NAFTA''). For example, we believe this
proposed rule is not more trade restrictive than necessary to meet the
objectives of the Bioterrorism Act.A. Highlights of This Rule
The
key features of this proposed rule are:[bull] The purchaser or importer of
an article of food (or their agent) who resides or maintains a place of
business in the United States generally is responsible for submitting the
notice.[bull] The notice must be submitted by noon of the calendar day
before the day of arrival.
Amendments
relating to product identity information are allowed under specified
circumstances.
Updates
about arrival information are required if plans change.[bull] The
notice must be submitted electronically through the Prior Notice
System unless the FDA system is not functioning. The FDA
Prior Notice System will be designed to provide an automatic
electronic acknowledgment of receipt of a complete prior notice
submission, with a time and date ``stamp.'' The notice must contain
information that identifies:
The
individual and firm submitting the prior notice;
The
entry type and U.S. Customs ACS entry number or other U.S. Customs
identification number associated with the import;
If
the article of food is under hold under proposed Sec. 1.278, the
location where it is being held;
The
identity of the article of food being imported or offered for import:
The
complete FDA product code;
The
common or usual name or market name;
The
trade or brand name, if different from the common or usual name or
market name;
The
quantity described from smallest package size to largest container;
and
The
lot or code numbers or other identifier of the food if applicable;
The
manufacturer;
All
growers, if known;
The
country from which the article originates;
The
shipper;
The
country from which the article of food was shipped;
The
anticipated arrival information;
Information
related to U.S. Customs entry process;
The
importer, owner, and consignee; and
The carrier.
Amendments
relating to product identity are allowed if complete information about
product identity does not exist by the deadline for prior notice for
the planned shipment:
Information
regarding identity of the article may be amended once;
Amendments
may not be used to change the nature of the article of food;
Quantity
may be amended; and
Any amendments must be submitted no later than 2 hours prior to arrival.[bull] If a change occurs in the anticipated port of entry or anticipated time of arrival stated in the prior notice, the information must be updated.
The
proposed rule does not apply to:
Food
that is carried by an individual entering the United States in that
individual's personal baggage for that individual's personal use; or
Meat
food products, poultry products, and egg products that at the time of
importation are subject to the exclusive jurisdiction of the U.S.
Department of Agriculture (USDA).B. General Provisions1. What Imported
Food is Subject to This Subpart? (Proposed Sec. 1.276)
Under
new section 801(m)(1) of the act, prior notice is required for all food
``being imported or offered for import into the United States.''
Accordingly, prior notice requirements apply to all food that is brought
across the U.S. border (with the following four exceptions) regardless of
whether the food is intended for consumption in the United States. In
other words, FDA believes that food that is brought into
the United States to be put into foreign trade zones, or for transshipment
or reexport immediate or otherwise, is ``imported or offered for import''
and thus must comply with the prior notice requirements.
The
proposed rule establishes four categories of imported food that are not
subject to the prior notice requirements. In each of these cases, FDA
believes that the statutory language requires this result.
The
first category is food that individual travelers carry in their personal
baggage for their own personal enjoyment. Although we believe that this
food is imported into the United States, the information that section
801(m)(1) of the act requires in a prior notice, in conjunction with the
purpose of the provision, demonstrates that Congress did not intend prior
notice to apply to food that travelers bring into the United States in
their personal baggage for personal use (i.e., consumption by themselves,
family or friends, not for sale to anyone). In particular, under section
801(m)(1) of the act, a prior notice must contain the identity of the
shipper of the food. When travelers bring food back from their travels in
their personal baggage for their own use, we do not believe that Congress
intended for us to characterize such travelers as ``shippers'' for
purposes of section 801(m) of the act. We seek comment on this reasoning.
However, when travelers bring food into the United States in their
personal baggage to sell or otherwise distribute in a broader fashion, the
travelers would seem to be acting for or on behalf of other entities.
Under these circumstances, these travelers would seem to be shippers and
subject to the provisions of this proposed rule.
The
remaining three categories of imported food not subject to the prior
notice requirement are those foods within the exclusive jurisdiction of
USDA. In accordance with section 801(m)(3)(B) of the act, FDA
is proposing to exempt from the requirements of this regulation imported
foods that, at the time of importation, are subject to USDA's exclusive
jurisdiction 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.).2. What Definitions
Apply to This Subpart? (Proposed Sec. 1.277)
The
following definitions are used throughout the proposed rule:
a.
The act. The proposed rule defines ``the act'' as the Federal Food, Drug,
and Cosmetic Act. The proposed rule applies the definitions of terms in
section 201 of the act to such terms as used in the proposed rule.
b.
Calendar day. The proposed rule defines ``calendar day'' as ``every day
shown on the calendar.''
c.
Country from which the article of food was shipped. The proposed rule
defines ``country from which the article of food was shipped'' as the
country in which the article of food was loaded onto the conveyance that
brings it to the United States. A conveyance is the means of
transportation, e.g., ship, truck, car, van, plane, railcar, etc., not the
shipping container that could be moved from a ship to a truck to a train
bed.
FDA
is requesting comment on whether this term should include the countries of
intermediate destination.
d.
Food. FDA is proposing to refer to the definition of
``food'' in section 201(f) of the act (21 U.S.C. 321(f)), which 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.'' FDA
also is proposing to include examples of products that are considered food
under section 201(f) of the act. Examples listed in the proposed rule
include: fruits; vegetables; fish; dairy products; eggs; 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. FDA already receives entry information on
all these articles of food as defined in section 201(f) of the Act.
With
respect to articles that can be used for food and non-food uses, FDA
believes that prior notice is required if the article is being imported
for use as food.
e.
Originating country. The proposed rule defines ``originating country'' as
``the country from which the article of food originates.'' FDA
is proposing this definition to be consistent with the language used in
the Bioterrorism Act. This proposed definition is also consistent with the
definition that describes one of the critical data elements that brokers
and other filers currently submit to FDA's OASIS via ACS
when entry is made. The proposed definition refers to the country where
the product that is shipped to the United States was grown or produced,
depending on the kind of article. If the article is fresh produce, for
example, the originating country is most likely to be the country where it
is grown and harvested. If, on the other hand, the article is a processed
food, e.g., canned vegetables, the originating country is likely to be the
country in which the vegetables were canned. With respect to wild-caught
fish or seafood that is harvested in the waters of the United States or by
a U.S. flagged vessel or that is processed aboard a U.S. flagged vessel, FDA
is proposing that the originating country be the United States. Otherwise,
the originating country is the country under which the vessel is flagged. FDA
aligned this aspect of the proposed definition of ``originating country''
with the principles proposed by USDA's Agricultural Marketing Service
guidance published in the Federal Register on October 11, 2002, in
response to the Farm Security and Rural Investment Act of 2002 (commonly
known as the 2002 Farm Bill).
FDA
recognizes that this proposed definition may not be identical in all
respects to the meaning of the term ``country of origin'' traditionally
used by U.S. Customs. However, FDA believes that using
the U.S. Customs meaning would not serve the purpose of the Bioterrorism
Act. The U.S. Customs term primarily serves tariff, quota, and other trade
purposes; it does not provide information needed for the evaluations that
Congress has directed FDA to make under the Bioterrorism
Act and the act. We seek comment on this interpretation and our proposed
definition of ``originating country''. FDA also seeks
comment on whether its use of a different term will have any impact, and
if so, what that impact will be.
f.
Port of entry. For purposes of the proposed rule, FDA is
defining ``port of entry'' as ``the water, air, or land port at which the
article of food is imported or offered for import into the United States,
i.e., the port where food first arrives in the United States'' FDA
is proposing this definition because the port where the food arrives in
the United States may be different than the port where the entry of the
article of food is processed for U.S. Customs purposes, i.e., where the
article is ``entered.'' Under U.S. Customs statutes, products can be
imported into one port and then transported to another port under a
custodial bond before a consumption entry is filed. For example, food may
be imported into the United States from Canada through Buffalo, NY, but
not be entered for consumption with U.S. Customs until it reaches St.
Louis, MO, several days later. In this example, under FDA's
proposed definition, the port of entry is Buffalo, NY. If food is imported
into the United States from Mexico through Otay Mesa, CA, for transport
through the United States for exportation into Canada, the port of entry
under FDA's proposed definition is Otay Mesa, CA.
The
prior notice authority in the Bioterrorism Act is intended to give FDA
better tools to deter, prepare for, and respond to bioterrorism and other
food related problems. Given this purpose, ``port of entry'' must be
defined as the port of arrival, that is, the location where the food first
physically appeared in the United States. Allowing food that is presented
for importation into the United States without prior notice to be shipped
around the country and potentially lost to government oversight simply is
not consistent with the Bioterrorism Act's stated purpose. FDA
believes that its ability to protect U.S. consumers from terrorism or
other food-related emergencies will be strongest if food can be examined,
and if necessary, held at the point when it first arrives in the United
States. FDA requests comments on the proposed definition
of ``port of entry.''
g.
You. The proposed definition of ``you'' is the description of the party
responsible for submitting the prior notice in proposed Sec. 1.285. FDA
is proposing to define ``you'' in proposed Sec. 1.277(f) as the
``purchaser or importer of an article of food who resides or maintains a
place of business in the United States, or an agent who resides or
maintains a place of business in the United States acting on the behalf of
the U.S. purchaser or importer'' or, ``if the article of food is imported
with the intention of in-bond movement through the United States for
export, i.e., Transportation for Exportation or Immediate Export entries,
the arriving carrier or, if known, the in-bond carrier.''3. What Are the
Consequences of Failing to Submit Adequate Prior Notice or Otherwise
Failing to Comply With This Subpart? (Proposed Sec. 1.278)
As
set out in section 801(m)(1) of the act, proposed Sec. 1.278(a)
provides that, if an article of food is imported or offered for import
with no prior notice or inadequate prior notice, the food shall be refused
admission under section 801(m) of the act. Examples of inadequacy are
untimely, inaccurate, or incomplete prior notice.
As
set out in section 801(m)(2)(B)(i) of the act, proposed Sec.
1.278(b) provides that if the food is refused admission under section
801(m), it must be held at the port of entry unless FDA
directs its removal to a secure facility.
In
accordance with section 801(m)(2)(B)(i), proposed Sec. 1.278(c)
provides that FDA may require that an article of food be
held in a secure facility as appropriate. FDA may
determine such storage is appropriate because of the condition of the
product, circumstances of importation, or other information available to
the government, e.g., a concern with the safety or security of the article
of food or space limitations in the port of entry.
Examples
of secure facilities include U.S. Customs Bonded Warehouses, Container
Freight Stations, and Centralized Examinations Stations. Perishables,
however, may not be stored in U.S. Customs Bonded Warehouses; thus, FDA
may direct fresh produce or seafood that requires storage to another
facility. FDA and U.S. Customs plan to issue guidance for
their field offices that will identify locations of secure storage
facilities that may be used for food required to be held for failure to
provide adequate prior notice.
In
order to minimize confusion about who is responsible for making
arrangements if food is refused admission under section 801(m) of the act,
proposed Sec. 1.278(d) provides that if FDA
requires the article of food to be held at the port of entry or in a
secure facility, the carrier or the person who submitted the prior notice
must arrange for the movement of the food under appropriate custodial bond
and promptly notify FDA of the location. This provision
also makes clear that the purchaser, owner, importer, or consignee is
responsible for transportation and storage expenses. We note that when
section 801(m) of the act requires that food be held, it does not appear
to mandate that the government take actual physical custody of the goods;
instead it limits both the movement of the goods and the potential storage
locations, thereby making government oversight straightforward. As
described previously, U.S. Customs has identified a well-established
network of storage facilities that are secure. When these storage
facilities are used, charges are borne by the private parties. We thus
believe that although Congress intended strict controls over food refused
admission under Sec. 801(m), it did not intend to require FDA
or U.S. Customs to take custody of or pay for the holding of such food. We
seek comment on this issue.
In
accordance with section 801(m)(2)(B)(i) of the act, proposed Sec.
1.278(e)(1) provides that the article of food must be held at the port of
entry or in the secure facility until prior notice is submitted to FDA
in accordance with this subpart, FDA has examined the
prior notice, FDA has determined that the prior notice is
adequate, and FDA has notified the U.S. Customs Service
and the person who submitted the prior notice that the article of food no
longer is subject to refusal of admission under section 801(m)(1) of the
act.
FDA
recognizes that food may be shipped in the same container or truck with
non-food items. Since articles that are not food are not subject to this
proposed rule, when mixed or consolidated imported freight contains
articles of food that must be held at the port of entry or moved to a
secure facility, those articles that have been refused must be dealt with
before the rest of the shipment proceeds.
In
accordance with section 801(m)(2)(B)(i) of the act, proposed Sec.
1.278(e)(2) makes clear that food under a hold may not be delivered to the
importer, owner, or consignee and that section 801(b) of the act does not
apply. Therefore, delivery will not be allowed under a basic importation
or entry bond. Even though delivery to them is not allowed, FDA
believes that importers, owners, and consignees of food that has been
refused under 801(m) of the act can make arrangements for food to be held:
these arrangements can be made without taking possession of the food.
The
proposed rule (proposed Sec. 1.278(f)) differentiates between a
refusal of admission under section 801(m)(1) of the act (prior notice) and
refusal of admission under section 801(a) and other provisions of the act
or other U.S. laws. The proposed rule makes clear that a determination
that an article of food is no longer subject to refusal of admission under
section 801(m)(1) of the act does not mean that it will be admitted to the
United States. The other provisions of the act and other U.S. laws that
currently apply to food imported or offered for import to the United
States still apply and also govern admissibility.
Although
FDA believes that information in a prior notice will help
facilitate admissibility decisions under section 801(a), FDA
is not proposing to specify in the rule that it will make an 801(a)
admissibility decision at the time it receives a prior notice. A prior
notice is a pre-entry submission to comply with requirements under section
801(m). FDA will make the 801(a) decision when the
complete entry information is submitted to U.S. Customs and transmitted to
FDA. Normally (in about 98 percent of the cases), this is
accomplished by electronically filing certified entry information with
U.S. Customs ACS, which electronically transmits it to FDA's
OASIS System. FDA's 801(a) admissibility decisions are
transmitted from OASIS to the filer.
In
accordance with section 301(ee) of the act, the proposed rule (Sec.
1.278(g)) provides that it is a prohibited act to import or offer for
import an article of food without complying with the requirements of
section 801(m) of the act or otherwise violate any requirement under
section 801(m). The proposed rule explains that, under section 302 of the
act, the United States can bring a civil action in federal court to enjoin
persons who commit a prohibited act and, under section 303 of the act, can
bring a criminal action in Federal court to prosecute persons who commit a
prohibited act. The proposed rule also explains that, under section 305a
of the act, FDA can seek debarment of any person who has
been convicted of a felony relating to importation of food into the United
States.
FDA
notes that there are several differences between refusal of admission
under sections 801(a) and (b) of the act and refusal of admission under
new section 801(m). First, in section 801(m) of the act, Congress did not
provide for any kind of application, petition, or appeal of FDA's
determination that an article shall be refused admission for failing to
comply with prior notice requirements. Congress provided that an article
that has been refused admission under section 801(m) of the act can be
admitted only if the necessary information is subsequently submitted,
examined by FDA, and found to be adequate. Second, food
refused admission under section 801(m) cannot be delivered under bond
pursuant to section 801(b) and, as we describe elsewhere, must be held at
the U.S. port of entry. Finally, the Bioterrorism Act does not provide
specific procedures for the disposition of food refused admission under
section 801(m) when no subsequent adequate notice is submitted. Section
801(a) and (b) provide that food refused admission under section 801(a)
must be destroyed or reexported. FDA thus believes that
the general requirements of Title 19 of the United States Code and the
U.S. Customs implementing regulations that apply to imports for which
entry has not been made apply in these circumstances.
Under 19 U.S.C. 1448 and 1484, entry of merchandise must be made within the time period prescribed by regulation, which is 15 days after the food arrives in the United States. See 19 CFR Part 1422. If entry is not made within this timeframe, the carrier or other authorized party is required to notify U.S. Customs and a general order warehouse. Generally, at that point the warehouse must arrange to take and store the food at the expense of the consignee. The disposition of this merchandise is governed by 19 U.S.C. 1491 and the implementing regulations at 19 CFR Part 127. Typically, after 6 months, unentered merchandise is deemed unclaimed and abandoned and can be disposed of by the United States. Before this 6 month period runs, however, such merchandise can be reexported. FDA and U.S. Customs plan to develop additional guidance to explain how the agencies will handle food when it must be placed in general order warehouses due to refusal under section 801(m) of the act.
C. Requirements to Submit Prior Notice of Imported Food
1.
Who is Authorized to Submit Prior Notice for an Article of Food That is
Imported or Offered for Import Into the United States? (Proposed Sec.
1.285)
FDA
is proposing that a purchaser or importer of an article of food who
resides or maintains a place of business in the United States is
authorized to submit prior notice. FDA is also proposing
that an agent who resides or maintains a place of business in the United
States acting on the behalf of the U.S. purchaser or U.S. importer is
authorized to submit prior notice. FDA believes that the
customs broker/filer should be authorized to be a submitter if it is the
U.S. agent of the U.S. importer or U.S. purchaser.
FDA
is proposing that, if the article of food is imported for in-bond movement
through the United States for export, the prior notice must be submitted
by the arriving carrier or, if known, the in-bond carrier. The types of
entries that cover these importations are known to FDA
and U.S. Customs as Transportation for Exportation (TE) and Immediate
Export (IE).
FDA
believes that the proposed rule should specify which parties are
responsible for submitting prior notice and that this specificity will
minimize confusion about who should or will submit prior notice among the
several parties who can be involved in importing food. Less confusion will
lead to greater compliance. Less confusion will also mean that fewer
imports will be delayed for lack of prior notice.
FDA
chose the U.S. entities in proposed Sec. 1.285(a) for several
reasons. First, we do not believe that there is importation of food to the
United States that does not involve one of the U.S. entities identified,
except in those instances where the food is imported with the intention of
in-bond movement through the United States for export (where the proposed
rule authorizes submission by the arriving carrier or, if known, the
in-bond carrier). We also believe that it is the U.S. importer or U.S.
purchaser who orders or buys the article of food, thereby initiating its
importation into the United States. These persons thus should possess, or
have the ability to obtain, the information required to be submitted in
the prior notice within the time period in proposed Sec. 1.286. As
U.S. businesses, these persons are also more likely to already have web
access than some foreign businesses, which reduces potential costs and
impacts on trade. Finally, placing responsibility on these U.S. entities
will facilitate FDA's ability to conduct audits,
investigations, and inspections, which will facilitate efficient
enforcement of section 801(m).
FDA
notes that the submitter is the entity responsible for ensuring the
adequacy and accuracy of the prior notice. For the reasons described
above, FDA believes that these entities are in the best
position to do so.
FDA
seeks comment on whether others should be authorized to provide prior
notice and, if so, why.2. When Must the Prior Notice be Submitted to FDA?
(Proposed Sec. 1.286)
Based
on consideration of the factors set out in the statute, FDA
is proposing that the prior notice must be submitted to FDA
no later than noon of the calendar day before the day the article of food
will arrive at the border crossing in the port of entry.
Section
801(m)(1) of the act makes clear that a primary purpose of prior notice is
to enable inspections or other FDA action upon arrival of
food in the United States to protect consumers in the United States from
food imports that may be at risk of intentional adulteration or that may
pose other risks. Section 801(m)(2)(A) of the act states that the deadline
for prior notice ``shall be no less than the minimum amount of time
necessary for [FDA] to receive, review, and appropriately
respond to such notification.'' In addition, section 801(m)(2)(A) provides
that FDA may take other factors into consideration when
deciding on the deadline for prior notice, specifically: its effect on
commerce; the locations of various ports; various modes of transportation;
types of food; and any other consideration. However, although the statute
gives FDA some latitude in setting the deadline for prior
notice, it nonetheless makes clear that we must establish a timeframe for
prior notice that allows FDA to receive, review, and
appropriately respond to all prior notices. Finally, section 801(m)(1)
states, ``Nothing in this section may be construed as a limitation on the
port of entry for an article of food.''
Reading
section 801(m) as a whole and in conjunction with other provisions in the
Bioterrorism Act, FDA believes that Congress intended
that FDA assess the information in the prior notice to
determine if inspection upon arrival or other action is appropriate. For FDA
to inspect, upon arrival, food imports that may be at risk of intentional
adulteration or that may pose other risks to U.S. consumers, FDA
must be able to effectively deploy its staff. Although FDA
inspectors are located throughout the United States, FDA
does not have staff located at or near all of the 250 ports where over 4.7
million entry lines of food were entered in fiscal year (FY) 2001. Port
locations are established by U.S. Customs and, under the statute, FDA
cannot limit ports at which food may be imported or offered for import.
Thus, FDA must have enough time, on a daily basis, to
process the information in the approximately 20,000 prior notices we
expect to receive and to send inspectors to any port in the United States
if necessary. FDA believes that the minimum amount of
time necessary to ensure it can plan and that its staff can travel to the
arrival point is noon of the calendar day before the day the article
arrives at the border crossing. FDA believes that this
timeframe will give it the minimum time it needs to conduct its
assessments and provide the information to its field offices so they can
allocate their inspectional resources on a daily basis and plan any
necessary travel.
Before
proposing this deadline FDA also considered its potential
effects on imported food. FDA believes that in most
circumstances information regarding imports is generated when the article
to be imported is ordered or purchased, not when it is shipped to the
United States. FDA has examined a selection of imported
food documents and compared dates of these documents with the dates of
arrival in the United States and U.S. Customs entry. FDA
asked several field offices to send entry documents with invoices covering
imported foods. Sixty-four packages of entry documents were received in
response to this request. The dates of the invoices were compared to the
dates of arrival and receipt in OASIS. In 48 cases (75 percent), the
invoice date or date of sale preceded the arrival date by least 1 day. In
31 cases (48 percent), the invoice or sale date preceded the arrival date
by 2 or more days. In 16 cases (25 percent), the invoice date was the same
as the arrival date. FDA invites comment on the
representativeness of this sampling. Based on this examination, we believe
that orders are normally placed a day or more prior to shipment. See the
compilation of imported food documents that FDA has
placed in the administrative record and the docket (Ref. 1). FDA
believes that the information required for prior notice therefore
generally does exist by noon of the calendar day before the day of
arrival. FDA recognizes, however, that currently one
person may not possess all of the information and that some practices
regarding the flow of information about food imports will have to change
to ensure that the submitter has all of the information needed to submit a
prior notice for the food shipment by the deadline.
FDA
believes that this proposed deadline will have the most impact on those
who import food by truck and rail over the land borders, with less effect
at airports, and almost no effect at water ports. However, even on the
land borders, FDA believes that the information required
by prior notice will be, in most cases, sufficiently fixed by noon of the
calendar day before arrival to allow the U.S. importer or U.S. purchaser,
or their U.S. agents, to submit prior notice to FDA that
meets the proposed requirements without slowing down the shipment.
FDA
is proposing to allow submitters to amend prior notices for that portion
of the product identity information that cannot be completed, because it
does not yet exist by noon of the calendar day prior to arrival. We
believe this may be the case with product identity for fresh products
imported from countries close to the United States (e.g., Canada or
Mexico). For example, fresh seafood may be ordered as ``catch-of-the-day''
from Canada or Mexico; the importer intends to import the fish the day
after the order is placed, but cannot find out what exact species and
quantity will arrive by the deadline for prior notice because the boat is
not due back until late afternoon on the day prior notice is due. Another
example is an importer who orders fresh lettuce for import the day after
the order but cannot find out the exact variety and quantity of lettuce
that will be shipped by the deadline for prior notice because the field
has not been harvested or the supplier has not yet received the day's
harvest by the time prior notice of the planned shipment is due. In these
instances, the importer knows generally what kind of product has been
ordered, but not the exact type (species for fish and variety for
lettuce). The proposed amendment process would allow submitters who cannot
report complete product identity information to FDA by
the prior notice deadline because it does not yet exist to maintain
current business practices. However, it would provide FDA
some of the information that it needs to begin the assessment of whether a
particular shipment of food should be investigated and if so, to ensure
that FDA personnel can be available when the food arrives
at the port. FDA does not intend this amendment process
to apply when a shipper ``tops off a container'' by filling unused space
in the container or truck bed with additional different food products.
FDA
also recognizes that information concerning the anticipated arrival may
change after the article is ordered due to unforeseen traffic or weather
issues and has accommodated those potential changes by requiring updates
of that information.
``Noon''
means 12:00 p.m. in the time zone in which the FDA office
with responsibility over the anticipated port of entry resides. For
example, if the anticipated port of entry is the Peace Bridge in the
Buffalo, NY, and the anticipated date of entry is January 9, 2004, the
prior notice must be submitted to the FDA Prior Notice
System before noon Eastern Standard Time (EST) on January 8, 2004.
FDA
is proposing that prior notice may not be submitted until all of the
information required by Sec. 1.288 exists except as provided in Sec.
1.288(e)(2) and Sec. 1.290, both of which relate to product identity
amendments. FDA is also proposing that the prior notice
may not be submitted more than 5 days before the anticipated date of
arrival of the food at the anticipated port of entry. For example, if the
anticipated date of arrival is January 12, 2004, the prior notice may not
be submitted before January 7, 2004. This 5 day limitation is consistent
with the limitation set by Congress in section 307(a)(2)(A) of the
Bioterrorism Act. Such limitations are necessary to ensure that FDA's
Prior Notice System is not overburdened with premature information or
submissions that may need to be cancelled and resubmitted.
3.
How Must You Submit the Prior Notice? (Proposed Sec. 1.287)
FDA
is proposing that the prior notice, amendments, and updates must be
submitted electronically to FDA through FDA's
Prior Notice System. The web-based FDA Prior Notice
System is under development with an anticipated completion date of no
later than October 12, 2003. A ``mock-up'' of the Prior Notice Screen a
submitter would see once he or she accessed this system is part of this
proposed rule.
FDA
has consulted with the U.S. Customs Service of the Department of the
Treasury about this proposed rule. FDA and U.S. Customs
considered modifying ACS to accommodate the new prior notice requirement.
However, during these consultations, U.S. Customs determined that ACS
could not be modified to accommodate the data requirements of the prior
notice regulation by the December 12, 2003, statutory deadline. Currently,
U.S. Customs is focusing its resources on developing the Automated
Commercial Environment (ACE) as a replacement for ACS, and integrating its
other electronic systems, such as the Automated Manifest System (AMS). FDA
is participating in the development of ACE through the International Trade
Data System (ITDS) Board and directly through integration of FDA
and U.S. Customs business practices, policies, and border cooperation. FDA
intends to allow prior notice to be submitted through ACE when it is fully
operational. However, implementation of ACE is not expected before 2005.
Given these circumstances, FDA and U.S. Customs agreed
that to meet the statutory deadline, an FDA stand-alone,
web-based electronic system to execute receipt of prior notice would be
necessary until ACE is fully operational.
FDA
seeks to minimize the submission of duplicative information. The
Bioterrorism Act requires certain prior notice information to be submitted
to FDA. FDA seeks comments on the extent
to which these proposed prior notice requirements would result in persons
submitting duplicative prior notice information to more than one federal
agency. FDA also seeks comments on whether there is any
way, consistent with the requirements and purpose of the Bioterrorism Act,
to minimize the duplication of information required to be submitted to the
federal government under these prior notice requirements. As discussed
previously, FDA and U.S. Customs are working together on
their systems to allow prior notice to be submitted to FDA
through U.S. Customs System when ACE is fully operational.
FDA
is proposing to require electronic submission of prior notice because we
believe an electronic system will be the least burdensome and most
efficient way to implement and enforce the requirement of section 801(m)
of the act. Nationwide, in FY 2001 FDA received over 4.7
million food entry lines; therefore, we believe a paper system would be
unmanageable for FDA, require a longer deadline, and
could slow down imports for some food products. Moreover, we currently
receive the majority of information we base admissibility decisions on
electronically from U.S. Customs. Thus, we already have the electronic
capability to process and screen the information. We also believe that an
electronic system will mean fewer errors than a paper system. Another
important benefit of electronic submission will be immediate and accurate
communication between FDA offices and between FDA
offices and U.S. Customs about arrivals and adequacy of the prior notice.
An
electronic prior notice system will have several key features that will
benefit firms that export to the United States, U.S. importers, and FDA.
First, the volume of submissions on a daily basis is expected to be such
that electronic submission and processing are the only practical way for FDA
to manage prior notice--FDA expects, upon average, 20,000
submissions per day. Second, an electronic system will be able to provide
instantaneous confirmation of receipt of the prior notice. Third, an
electronic system will be able to ensure that the form is filled out
completely (though not accurately) by being set to reject submissions
until all of the mandatory fields are completed. Finally, an electronic
system will make it more likely that information in the submissions is
``legible'' to FDA.
In
contrast, prior notice by mail, fax, or e-mail would have several
significant downsides for firms that export to the United States, U.S.
importers, and FDA. All three of these methods would
require FDA to input the data manually to process it,
which means that FDA would need to set a longer deadline
for submission or devote resources on data entry that are better spent on
tasks like inspections. Those whose paper submissions were not legible or
complete would not know until their shipments arrived at the port and were
refused admission.
Moreover,
FDA believes that almost all proposed submitters have
access to the Internet, either within their companies or through public
libraries, copy centers, schools, or Internet cafes, as well as through
agents or brokers. FDA requests comments on this
assumption. Because most of the persons responsible for submitting the
prior notice must reside or maintain a place of business in the United
States, the FDA Prior Notice System will be in English.
This will also allow for the information to be placed in standard data
elements that can then be maintained in a database, screened against
standard criteria, and used for communication among field offices.
In
proposed Sec. 1.287(b), FDA is proposing that if
its Prior Notice System is unable to receive prior notice electronically,
the prior notice, amendments, and updates must be submitted using a
printed version of the Prior Notice Screen delivered in person, by fax, or
by e-mail to the FDA field office with responsibility
over the geographical area in which the anticipated port of entry is
located. If the submitter does not receive electronic acknowledgement from
the FDA Prior Notice System then it should check to see
if its system is working. If it is, then the submitter should assume that
the FDA system might be down and attempt to contact the
appropriate FDA field office to confirm.
The
Prior Notice System will not provide a response to the submitter of the
agency's decision regarding the adequacy or timeliness of the prior notice
as this assessment will turn on information that will not be available
until the food arrives in the United States. FDA
anticipates the system will date and time stamp an electronic confirmation
of the system's receipt of each prior notice, amendment, and update, which
the system will send to the submitter automatically.
FDA
believes that the prior notice process under section 801(m) precedes the
review process under section 801(a). Thus, FDA's response
to the prior notice will not constitute entry review. The section 801(a)
review process will be separate from, and subsequent to, the prior notice
process. Therefore, the FDA Prior Notice System's
electronic confirmation of a prior notice submission is not an 801(a)
admissibility decision and should never be construed as an FDA
``release'' or ``may proceed.''
If a
person wishing to submit prior notice to the FDA is
unable to do so because his or her own system is not operating, FDA
expects the submitter to use an alternative Internet system for submission
(e.g., a local library or copy-center with Internet access). FDA
is developing a web-based system to reduce the likelihood that
intermittent system outages will impact prior notice submissions.
Although
the system may be developed in a way that will allow for establishment of
a personal account, users will not have to be licensed or otherwise
pre-approved or have specialized software. FDA also plans
to develop and provide guidance and training to potential submitters and
their agents that will further describe the data elements and the
submission process before December 12, 2003, which is when the requirement
to provide prior notice begins. The Prior Notice Screen of FDA's
Prior Notice System also identifies the information that must be
submitted.4. What Information Must be Submitted in a Prior Notice?
(Proposed Sec. 1.288)
Proposed
Sec. 1.288 lists the information or data elements that must be
included in each prior notice. Much of this list is taken directly from
section 801(m)(1) of the act. The remainder of the list, although not
explicitly listed in section 801(m), is information that FDA
believes is necessary for the efficient enforcement of section 801(m) of
the act and is thus authorized under section 701(b) of the act. We explain
below why each of these items is necessary for the efficient enforcement
of section 801(m). Accordingly, as set out in proposed Sec.
1.278(a), FDA is proposing that a prior notice that does
not contain all of the information listed in proposed Sec. 1.288
will be considered inadequate. FDA solicits comments on
this approach.
Most
of this information is already supplied by the filer to FDA
through ACS as part of the U.S. Customs entry process, including the entry
type; the entry number (both ACS line number and FDA line
identifier); the FDA product code; a written description
of the product in common business terms; brand name; the quantity; lot
numbers; the manufacturer; country of origin; shipper; importer; ultimate
consignee; and the carrier (the mode of transportation and the carrier
code).
Before
discussing each data element in the context of prior notice, we want to
emphasize that the prior notice requirement does not apply to a whole
shipment; for the purpose of section 801(m) of the act, it applies to
``each article of food.'' FDA believes that in section
801(m) ``each article of food'' means each article of food produced by
each manufacturer. Thus, any food product identified by a specific FDA
product code and quantity description produced by a single manufacturer
(or grower, if fresh) associated with a single entry line number (U.S.
Customs entry number plus ACS line number plus OASIS/FDA
line number) must be covered by a prior notice. Therefore, each article of
food that is represented by an FDA line must be covered
by a prior notice.
Thus,
if a shipment consists of four different kinds of food products, e.g.,
1,000 cases of 48/6 oz. cans each of Brand X tuna, 240 cases of 24/15.25
oz. cans each of yellow corn, 300 cases of 24/12 oz cans each of Brand X
tuna, and 1,500 cases of 48/6 oz. cans each of Brand P tuna, four prior
notices are required. These four prior notices may be contained in one
submission. If the shipment consists of only one product, e.g., 2,400
cases of 24/15.25 oz. cans each of yellow corn, one prior notice is
required. If this corn came from two different manufacturers, however, two
prior notices would be needed. In its Prior Notice System FDA
will give the submitter the option of completing additional prior notices
for other articles after each notice is completed. We are working with the
developers of the Prior Notice System to accept ``header'' information
that will permit repeated information to be automatically entered. This
``header'' would contain information consistent across several articles of
food within the same submission, i.e., U.S. Customs entry. This will
reduce the amount of data entry and potentially reduce typing and
transcription errors. FDA plans to develop its Prior
Notice System to allow submitters to automatically repeat information
already entered in the submission where appropriate (e.g., all information
is the same except for the identity of the article or the manufacturer).
FDA
is proposing to require the following information in the prior notice
identifying the following details for each article of food:
2.
The submitter. FDA is proposing to require the identity
of the submitter and the associated submitting firm. This information is
needed so that FDA may communicate the adequacy or
non-adequacy of the prior notice to the responsible party and to follow up
when audits, inspections, or enforcement are necessary.
Generally,
for all firms that the proposed rule requires to be identified in a prior
notice (submitter, importer, owner, consignee, manufacturer, growers (if
known), shipper), FDA is proposing that the prior notice
include the firm's name, address, phone number, fax number, and e-mail
address, and if the firm is required to register a facility associated
with the article of food, the facility's registration number. The
registration requirement is contained in a separate provision of the
Bioterrorism Act (section 305). FDA believes that it
needs identifying information in addition to the[[Page 5436]]registration
number (if one exists) to minimize the chance that typographical errors in
registration numbers will lead to prior notices being considered incorrect
and thus inadequate. We are considering designing the Prior Notice System
to require at least one ``confirmatory'' data element (firm name or city
or country) in addition to the registration number to allow for validation
edits before automatically filling in the remaining data fields.
The
phone and fax numbers and e-mail address are required (if they exist) so
that FDA can communicate with the firm, if necessary. If
the firm does not have a fax number or e-mail address, the prior notice
submission should declare this. FDA plans to develop its
Prior Notice System to allow submitters to repeat information already
entered in the submission where appropriate (e.g., where the submitter is
also the importer and consignee of the article).
b.
The U.S. Customs entry type. FDA is proposing to require
the submission of the U.S. Customs entry type associated with the article
of food being imported or offered for import (proposed Sec.
1.288(b)). Some examples of types of entries are Consumption entries,
Warehouse entries, Temporary Importation Bond entries, Transportation for
Exportation Bond entries, Trade Fair entries, mail entries, and baggage
entries. Each of these types has a pre-designated U.S. Customs entry type
code. That code must be submitted in the prior notice. This information
will tell us if the article of food is intended for consumption in the
U.S. or is intended for export or other uses. We need this information for
proper screening of the information and identification of the appropriate
articles for inspection. FDA also believes that
submission of this information is critical for matching the prior notice
to the corresponding U.S. Customs entry in order to assess the adequacy of
the prior notice when shipments arrive and are presented for review.
c.
The U.S. Customs ACS entry line number or other U.S. Customs
identification number. FDA is proposing to require the
submission of the U.S. Customs ACS entry line number, consisting of the
entry number, the U.S. Customs ACS line number, and the FDA
entry line number, which will be associated with the entry of the food for
U.S. Customs purposes (proposed Sec. 1.288(c)). For each entry
number, there may be one or more U.S. Customs ACS lines and for each U.S.
Customs ACS line there may be one or more FDA lines. For
example, U.S. Customs entry number 0123456789-0 may identify an entry of
peppers; the U.S. Customs ACS line 123456789-0-001 may identify fresh
peppers; and the FDA entry line 0123456789-0-001-001 may
identify fresh sweet peppers and FDA entry line
0123456789-0-001-002 may identify fresh hot peppers.
If
the article of food is not intended for consumption entry, FDA
is proposing to require submission of the U.S. Customs identification
number associated with that type of entry. Some examples of other types of
entries are Warehouse entries, Temporary Importation Bond entries,
Transportation for Exportation Bond entries, and Trade Fair entries.
FDA
believes that this information is necessary for proper screening of the
information and identification of the appropriate articles for inspection.
FDA also believes that submission of this information is
critical for matching the prior notice to the corresponding U.S. Customs
entry in order to assess the adequacy of the prior notice when shipments
arrive and are presented for review. FDA believes that
these numbers can be obtained by the proposed deadline for prior notice.
We seek comment on this issue.
d.
The location where the food is being held under proposed Sec. 1.278,
if applicable. FDA is proposing to require that, if the
article of food has been refused admission due to inadequate prior notice
and thus is required to be held at the port of entry or in a secure
facility, the submitter of the prior notice must inform FDA
both that the article is under hold, and the location where the shipment
is being held (proposed Sec. 1.288(d)). Additionally, FDA
is proposing to require the date that the article will arrive at that
location as well as the identification of a contact at that location. This
information is necessary to ensure FDA can locate the
food for inspection and to ensure that the hold requirement is being
compiled with.
e.
The product identity. Section 801(m)(1) states that a prior notice must
contain the identity of the article of food being imported or offered for
import. FDA is proposing the following data elements to
ensure that each prior notice adequately and completely identifies the
food being imported or offered for import.
i.
The complete FDA product code. FDA is
proposing to require the submission of the complete FDA
product code as an element of the identity of the product (proposed Sec.
1.288(e)(1)(i)). The FDA product code is a unique code
currently used for classification and analysis of merchandise. The FDA
product code is currently available via the Internet at www.accessdata.fda.gov/scripts/ora/pcb/pcb.htm
as a ``buildable'' code which is used to describe the food by industry,
industry class, subclass, container/packaging, process, and specific
product. We will work with the developers of the FDA
prior notice system to ensure that there is a link from that system to the
product code builder. We are working with the developers to design the
link to the product code builder which will allow the product code
selected to be automatically pasted back to the Prior Notice Screen. We
will also design the system so that if the submitter already knows the
product code, it can be entered directly into the Prior Notice Screen.
The FDA
product code for canned tuna fish is 16AEE45, which translates as 16=
fishery/seafood products, A= fish, E= subclass metal (cans), E=
commercially sterile, 45= tuna. The filer currently submits the FDA
product code to U.S. Custom's ACS when entry is made; it subsequently is
transmitted to FDA's OASIS for each entry line.
FDA
is proposing that if all of the information concerning the product
identity exists by noon of the calendar day before the article will arrive
at the port of entry, it must be included in the prior notice and the
prior notice may not be subsequently amended. (Proposed Sec.
1.288(e)(2)). If any of the product identity information does not exist by
the deadline, the information that does exist must be provided to FDA,
and the submitter must indicate that it will amend the prior notice. FDA
identifies the conditions appropriate for amendments related to product
identity in proposed Sec. 1.290. FDA notes that, in
determining whether the information exists, the standard set out in the
proposed rule is not whether the submitter knows the information when
filing the prior notice, but whether the information could be known by the
submitter by the noon deadline. In the discussion of proposed Sec.
1.289, we describe under what circumstances we think complete product
identity will not exist. FDA solicits comment on this
standard and whether it is sufficiently flexible to achieve our goals.
ii.
The Common or usual or market name. FDA is proposing to
require the submission of the common or usual or market name of the
article of food as an element of the identity of the product (proposed
Sec. 1.288(e)(1)(ii)). This is a description, in common terms,
detailed enough to allow the kind of product to be identified. (See 21 CFR
Sec. 102.5 for additional information about common or usual names.)
The filer currently submits the common or usual or market name to U.S.
Custom's ACS when entry is made, and it subsequently is transmitted to FDA's
OASIS for each entry line. This information is necessary to confirm the
accuracy of the product code.
iii.
The trade or brand name. FDA is proposing to require the
submission of the trade or brand name of the article of food, if it is
different than the common or usual or market name, as an element of the
identity of the product (proposed Sec. 1.288(e)(1)(iii)). For
example, the brand name of canned tuna would be XYZ brand tuna. This
information is necessary to ensure that FDA knows the
brand identity of the product, which is often a critical piece of
information when making inspection decisions. The filer currently submits
the trade or brand name to U.S. Custom's ACS when entry is made, and it
subsequently is transmitted to FDA's OASIS for each entry
line.
iv.
The quantity. FDA is proposing to require the submission
of the quantity of food described from smallest package size to largest
container as an element of the identity of the product (proposed Sec.
1.288(e)(1)(iv)). The number of container units and units of measure are
to be submitted in decreasing size of packing unit (starting with the
largest). Some examples of quantity descriptions are: 100 cartons of 48/6
oz. cans each of tuna; 100 pallets of 2/100 lb. totes each of frozen tuna
loins for a total of 20,000 pounds; 100 pallets of 2/100 lbs. cartons each
of dehydrated pig ears for a total of 20,000 lbs.; and 100 cartons of 20
lbs. of fresh watermelons each for a total of 2000 lbs. The filer
currently submits the quantity of each line entry to U.S. Custom's ACS
when entry is made, and it subsequently is transmitted to FDA's
OASIS. FDA requests comment on whether changes in
quantity will occur after the deadline for prior notice and, if so, how
commonly changes occur and how significant the changes usually are.
v.
The lot or code numbers or other identifier. FDA is
proposing to require the submission of the lot or code numbers or other
identifiers that are specific to the article of food, if applicable, as an
element of the identity of the product (proposed Sec.
1.288(f)(1)(v)). These numbers are the identification number or code of a
production lot and are needed to more specifically identify a product.
Currently, there may be more than one identifier represented in an entry
line. The prior notice system will be developed to accept more than one
lot identifier per article.
f.
The manufacturer. As provided for in section 801(m)(1), FDA
is proposing to require the submission of the identity of the manufacturer
of each article of food (proposed Sec. 1.288(f)). The filer
currently submits the identity of the manufacturer to U.S. Custom's ACS
when entry is made, and it subsequently is transmitted to FDA's
OASIS.
g.
The growers, if known. As required by section 801(m)(1), FDA
is proposing to require the submission of the identity of all growers of
each article and the growing location if different from the grower's
business address, if known at the time of submission of the prior notice
(proposed Sec. 1.288(g)). If the submission is amended, the proposed
rule provides that the identity of all growers must be provided if known
at the time of the amendment (proposed Sec. 1.290(d)). FDA
wants to emphasize that section 801(m)(1) of the act states that grower
information must be submitted if it is known. Thus, this information is
not optional: if it is known, it must be submitted. If a product is
sourced from more than one grower, the prior notice must provide the
identification of all growers, if known. The FDA Prior
Notice System will be developed to accommodate submission of up to three
different growers.
FDA
solicits comments on two particular aspects of the statutory requirement
that the grower be identified. First, does the act give FDA
any flexibility to exempt or otherwise treat differently so-called
processed foods produced with products from more than one grower? Second,
does the term ``grower'' include a harvester or collector of wild
products, e.g., some fish and botanicals?
h.
The originating country. As provided for in section 801(m)(1), FDA
is proposing to require the submission of the identity of the originating
country of the article of food (proposed Sec. 1.288(h)). This term
is defined in proposed Sec. 1.277(c)(2).
i.
The shipper. As provided for in section 801(m)(1), FDA is
proposing to require the submission of the identity of the shipper of the
article of food (proposed Sec. 1.288(i)). FDA
considers the shipper to be the person who arranges for a shipment to get
to its first destination in the United States. The shipper typically is
responsible for initiating the bill of lading or airbill covering the
transportation of the article by the carrier. The shipper is usually a
foreign firm that is located or maintains an address in the country from
which the article was shipped. The shipper is typically not the carrier.
j.
The country of shipping. As provided for in section 801(m)(1), FDA
is proposing to require the submission of the identity of the country from
which the article of food was shipped (proposed Sec. 1.288(j)). This
term is defined in proposed Sec. 1.277(c)(3).
k.
Anticipated arrival information.
i.
The anticipated port of entry. As provided for in section 801(m)(1), FDA
is proposing to require the submission of the anticipated port of entry at
which the article of food will arrive in the United States (proposed Sec.
1.288(k)(1)(i)). ``Port of entry'' is defined in proposed Sec.
1.277(c)(5).
ii.
The anticipated date of arrival. FDA is proposing to
require the submission of the anticipated date when the article of food
will arrive at the port of entry in the United States (proposed Sec.
1.288(k)(1)(ii)). FDA believes that this information is
necessary to plan inspections.
iii.
The anticipated time of arrival. FDA is proposing to
require the submission of the anticipated time when the article of food
will arrive at the port of entry in the United States (proposed Sec.
1.288(k)(1)(iii)). FDA believes that this information is
necessary to plan inspections.
FDA
is proposing to require the prior notice to be updated if any of the
anticipated arrival information changes after the submission of the prior
notice (proposed Sec. 1.288(k)(2)). Updates are necessary so FDA
can change its plan when anticipated arrival information changes. The
conditions appropriate for updates are provided in proposed Sec.
1.294.
l.
The port where entry will be made for U.S. Customs purposes. FDA
is proposing to require the submission of the identification of the port
where entry will be made for U.S. Customs purposes (proposed Sec.
1.288(l)). Often, this port will be different than the port where the
article of food arrived in the United States. FDA
believes that this information is necessary to facilitate communication
with U.S. Customs and FDA field offices concerning the
adequacy of the prior notice. It is also necessary to enable FDA
to coordinate resources for inspections, examinations, or sampling.
m.
The anticipated date of U.S. Customs entry. FDA is
proposing to require the submission of the anticipated date of entry for
U.S. Customs purposes (subpart 1.288(m)). FDA believes
that this information is critical to enable it to allocate resources for
inspecting imported food shipments and efficient communication with and
between U.S. Customs and FDA field offices.
n.
The importer, owner, and consignee. Under section 801(m)(2)(B)(i) and
proposed Sec. 1.278(e)(2), food that is offered for import with no
or inadequate notice may not be delivered to the[[Page 5438]]importer,
owner, or consignee. Thus, FDA is proposing to require
their identities so that FDA knows who they are and can
take steps to ensure that food refused admission under section 801(m) is
not delivered to them illegally. FDA is proposing that
only one importer, owner, and consignee can be identified for each prior
notice. Under most circumstances, FDA believes the
importer will be the importer of record for U.S. Customs Entry Summary
purposes.
o. The carrier. FDA is proposing to require the identity of each carrier or transporter firm that transports the article of food from the country from which the article was shipped into the United States. This identification includes the submission of the Standard Carrier Abbreviation Code. Identification of the carrier is necessary to enable FDA and U.S. Customs to identify the appropriate article of food for inspection or holding when the food arrives in the United States. FDA notes that a carrier typically is a different firm than the shipper. The filer currently submits carrier information to U.S. Custom's ACS when entry is made, and it subsequently is transmitted to FDA's OASIS.5.
What
Changes are Allowed to a Prior Notice After it Has Been Submitted to FDA?
(Proposed Sec. 1.289)
FDA is allowing additional information to be supplied once a prior notice is submitted in two situations. FDA believes that under the standards in section 801(m)(2)(A) for establishing the timeframes for submission of prior notice, amendments are appropriate when complete product identity will not exist by the deadline for the submission of a prior notice. As described in more detail elsewhere, FDA believes that these situations largely involve fresh produce and fish harvested in countries close to the United States, e.g., Mexico and Canada. Second, FDA believes that it must have accurate arrival information in order to ensure it can inspect an article or take other appropriate action. In the event that other information in the prior notice must be changed, no amendment or update is permitted. The submitter must cancel the initial prior notice and submit a new one.6.
Under
What Circumstances Must You Submit a Product Identity Amendment to Your
Prior Notice After You Have Submitted It to FDA?
(Proposed Sec. 1.290)
FDA
is proposing that the prior notice must be amended if all information
about the identity of the food required by proposed Sec. 1.288(e)(1)
does not exist by noon of the calendar day before the day of arrival. The
submitter must indicate his or her intention to amend the information at
the time the initial prior notice is submitted. FDA is
proposing that the prior notice may be amended only once. FDA
is limiting the number of times a prior notice may be amended because FDA
believes that it would be an inefficient use of its review and planning
resources to address intermediate, still incomplete submissions. FDA
wants to encourage submissions that are as complete as possible to allow FDA
to deploy its resources effectively. FDA requests comment
on our proposal to restrict the number of amendments to one.
FDA
is proposing that only the information required by proposed Sec.
1.288(e)(1) and indicated in the initial prior notice as being subject to
amendment may thereafter be amended. FDA is proposing to
limit the information that may be amended in a prior notice to the product
identification information required in proposed Sec. 1.288(e)(1). As
we explain elsewhere in this preamble, we believe that in most situations,
complete product identity will exist by noon of the calendar day before
the day of arrival. However, we recognize that in certain limited
circumstances, such as wild-caught fresh fish and fresh produce with many
varieties that are caught or harvested close to the time of shipment in
locations close to the U.S. border, this specificity may not be known by
noon of the calendar day before the day of arrival. FDA
is proposing that the last two digits of the FDA product
code and other product identity information that provides the specific
identity of the article may be amended when this information does not
exist by the prior notice deadline.
For
example, there may be occasions when an entry of lettuce is ordered and
prior notice is submitted by noon the calendar day prior to arrival, but
the specific variety of lettuce that will be shipped does not exist
because the growers that supply the shippers have not yet harvested their
crops. At or before the time when the article is placed in the carrier for
shipment, however, the complete identity of the article exists and the
prior notice must be amended to identify the specific type of lettuce
(e.g., romaine or leaf).
A
prior notice may not be amended to change completely the identity of the
article, e.g., a prior notice identifying the food as lettuce may not be
amended to identify the food as pears.
If
an article of food is not covered by a specific FDA
product code, e.g., a root vegetable not more specifically described by
numerical code in the FDA product code builder, then the
last two numbers of the product code may be provided as ``99'' which means
root vegetables, not elsewhere classified. However, this prior notice
cannot be amended later to identify the product as carrots because, even
though carrots are root vegetables, there is an FDA
product code that is specific to carrots and thus it should have been used
in the initial notice. We plan to design the prior notice system so that
it will not acknowledge that a prior notice submission is completely
filled out if it does not contain a seven-digit product code. The system
will be designed to provide, where appropriate, a reminder about the need
for amendment with the electronic message acknowledging receipt of the
initial submission.
The
information that may be amended also includes the common or usual or trade
name, brand name, lot or code or identification numbers, and quantity.
FDA is proposing that, if the identity of the grower was not provided at the time the prior notice was submitted because it was not known at that time but the identity is known at the time of the amendment, the amendment must include information that identifies all known growers.7.
What
is the Deadline for Product Identity Amendments Under Sec. 1.290?
(Proposed Sec. 1.291)
FDA
is proposing a 2 hour minimum deadline for amendments submitted under
proposed Sec. 1.291, or updates submitted under proposed Sec.
1.294.
FDA
believes that the deadline will allow submitters to provide FDA
the information it needs in order to effectively assess whether a
particular shipment of food needs to be investigated and if so, to ensure FDA
personnel are present to do so when the food arrives at the port of entry,
while allowing submitters to amend and/or update information that may not
be known with exact certainty by noon of the prior calendar day. FDA
considered the type of food in proposing the deadline for amendment to the
product identity and updates to the anticipated arrival information.
FDA
believes that product identity amendments are most likely to be needed to
accommodate articles imported by land or air rather than water arrivals. FDA
also recognizes that this limitation on amendments may also affect the
practice of ``topping off a container'' by filling unused space in the
container or truck bed with last-minute shipments of other food products
not covered by prior notice.
FDA notes that under its amendment proposal ``topping off'' with the article of food that is already the subject of a prior notice would be allowed. To the extent ``topping off'' with non-food items occurs, this practice would not be affected. FDA believes, however, that this limitation is dictated by the Bioterrorism Act's requirements and moreover is necessary to ensure that FDA has adequate notice of all FDA-regulated food imports such that FDA can deploy its resources effectively. In this case, a separate prior notice would be required for these foods not already covered by a prior notice. FDA solicits comment how common ``topping off'' is and the quantities of food involved.8.
How
Do You Submit a Product Identity Amendment or An Arrival Update to a Prior
Notice? (Proposed Sec. 1.292)
FDA
is proposing to limit the way in which a prior notice may be amended or
updated. FDA is proposing that a product identity
amendment or an arrival update to a prior notice may be submitted only in
the same manner as an initial prior notice; that is, electronically to FDA
through FDA's Prior Notice System. Only the information
concerning product identity and grower identity can be electronically
amended under proposed Sec. 1.290. Only the information concerning
the anticipated location, date, and time of arrival and grower identity
can be electronically updated under proposed Sec. 1.294.
FDA proposes to design its Prior Notice System to require identification of the type of submission (Initial, Amended, Updated) and to be capable of differentiating amongst them. If FDA's Prior Notice System is unable to receive submissions electronically, amendments or updates may be communicated directly to FDA using a printed version of the Prior Notice Screen, and delivered either in person, by fax, or by e-mail to the FDA field office with responsibility over the geographical area in which the port of entry is located, as provided by proposed Sec. 1.287(b). If the identification of the anticipated port of entry is being updated, and the FDA system is down, the updated printed version of the Prior Notice Screen should be delivered to the FDA field office with responsibility over the port covered by the initial submission. FDA intends to issue guidance for communication between the field office receiving the initial prior notice and the field office covering the updated port of entry.9.
What
Are the Consequences If You Do Not Submit a Product Identity Amendment to
Your Prior Notice? (Proposed Sec. 1.293)
FDA is proposing that if a U.S. importer or U.S. purchaser, or their U.S. agent, informed FDA in a prior notice that the submission would be amended, but subsequently does not amend it appropriately and within the applicable timeframe, then the prior notice is inadequate for the purposes of proposed Sec. 1.278(a). By telling FDA that the prior notice will be amended they are telling us that it is incomplete. We therefore will be waiting for complete information upon which to make our inspection decision. Without complete product identity, FDA cannot complete the assessment of whether to inspect or take other action when the food arrives in the United States. The consequences of inadequate prior notice are the same as the consequences for failing to provide prior notice; the food shall be refused admission and held at the port of entry unless FDA directs its removal to a secure facility. The consequences are more fully described previously in the discussion of proposed Sec. 1.278.10.
What
Must You Do If the Anticipated Arrival Information (Required Under Sec.
1.288(k)(1)) Submitted in Your Prior Notice Changes? (Proposed Sec.
1.294)
FDA
is proposing to require the submitter to update anticipated arrival
information submitted in a prior notice, if the anticipated information
changes after the submission. The types of information FDA
expects may change between submission of prior notice and actual
importation are the date, time, and location of arrival. Although the
statute requires only anticipated port of entry, accurate, up-to-date
arrival information (if different) is necessary for FDA
field offices to reschedule inspections. FDA thus
believes that it has the authority to require this information.
If
anticipated arrival information submitted in a prior notice changes, FDA
is proposing that the submitter be required to provide the new port of
entry (proposed Sec. 1.294(a)(1)), and the new time of arrival in an
update electronically filed in the Prior Notice System (proposed Sec.
1.294(c)). FDA is proposing that if the time of arrival
is expected to be more than 1 hour earlier (proposed Sec.
1.294(a)(2)) or more than 3 hours later (proposed Sec. 1.294(a)(3))
than the anticipated time of arrival, the time of arrival must be updated.
FDA is proposing that, if the identity of the grower was
not provided at the time the prior notice was submitted and that identity
is known at the time of the update, the amendment must include information
that identifies growers (proposed Sec. 1.294(b)).
The FDA
Prior Notice System will be designed to accommodate updates. As stated
above, FDA is proposing to design its Prior Notice System
to require identification of the type of submission (Initial, Amended,
Updated) and to be capable of differentiating amongst them.
FDA is proposing to limit the time within which a prior notice may be updated. The proposed regulation would require updated information to be submitted in accordance with the deadline for amendments under proposed Sec. 1.291, that is, an update to a prior notice must be submitted 2 hours prior to arrival.
IV. Analysis of Economic Impacts
A.
Preliminary Regulatory Impact Analysis
FDA
has examined the economic implications of this proposed rule as required
by Executive Order 12866. Executive Order 12866 directs agencies to assess
all costs and benefits of available regulatory alternatives and, when
regulation is necessary, to select regulatory approaches that maximize net
benefits (including potential economic, environmental, public health and
safety, and other advantages; distributive impacts; and equity). Executive
Order 12866 classifies a rule as significant if it meets any one of a
number of specified conditions, including: having an annual effect on the
economy of $100 million, adversely affecting a sector of the economy in a
material way, adversely affecting competition, or adversely affecting
jobs. A regulation is also considered a significant regulatory action if
it raises novel legal or policy issues. FDA has
determined that this proposed rule is a significant regulatory action as
defined by Executive Order 12866.
The
Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law
104-121) defines a major rule for the purpose of congressional review as
having caused or being likely to cause one or more of the following: An
annual effect on the economy of $100 million; a major increase in costs or
prices; significant adverse effects on competition, employment,
productivity, or innovation; or significant adverse effects on the ability
of U.S.-based enterprises to compete with foreign-based enterprises in
domestic or export markets. In accordance with the Small Business
Regulatory Enforcement Fairness Act, OMB has determined that this proposed
rule, when final, will be a major rule for the purpose of congressional
review.1. Need for Regulation
Section 307 of the Bioterrorism Act (Public Law 107-188), requires advance notice of all food imported or offered for import into the United States. If FDA fails to issue a final regulation by December 12, 2003, section 307 of the Bioterrorism Act provides for a default minimum period of advance notice that is not fewer than 8 hours and not more than 5 days before an article of food is imported or offered for import into the United States. This regulation is needed to implement the statutory provisions.
2.
The Reason for the Regulation
Getting
food from the farm or sea to the plate involves a complex system of
production and distribution. The system works using local knowledge and
information; each participant needs to know only as much about the overall
system as is necessary for his or her business. Market prices convey most
of the information necessary for the ordinary production and distribution
of food. In the event of an actual or suspected contamination of the food
supply, however, more complete information is needed where it can be
centrally used. The suspect food must be traced backward and forward
through the distribution chain, both to protect consumers and to find the
source and cause of the event.
No
individual firm or organization has sufficient financial incentive to
establish a central information system relating to food safety for the
entire economy. The nation's food producers and importers as a whole would
benefit from such a system because it would be easier to uncover and solve
problems, but the private costs to create the system would probably be
prohibitive for any single firm or third party organization.
The events of September 11, 2001, led Congress to conclude that public creation and provision of an information system is necessary. The Bioterrorism Act and its implementing regulations would establish an information system that would allow FDA to have a more integrated picture of the food distribution system. This particular regulation addresses one important aspect of this information system: the need to know what imported foods are entering the United States, where they came from, and when they will arrive. FDA is proposing three regulations to address these needs so the costs and benefits of any one regulation will be closely associated with related provisions in other proposed rules. With the regulations in place, the agency would have the additional tools necessary to help deter and respond to deliberate threats to the nation's food supply as well as to other food safety problems.
3.
Proposed Rule Coverage
This
proposed rule would apply to all FDA-regulated food for
human and animal consumption imported or offered for import into the
United States with the exception of food carried in a traveler's personal
baggage for personal use. As required by the Bioterrorism Act, the
notification must provide the identity of the article, the identity of
importer, manufacturer, shipper, and grower (if known), the originating
country, the country from which the article was shipped, and the
anticipated port of entry. In addition, the notification must provide the
identity of the person who submits the prior notice, the owner, the
consignee, the carrier, the U.S. Customs entry number, anticipated time
and date of arrival, and, if the food has already been refused admission
and required to be held, the location where it is held.
A
growing percentage of food consumed in the United States is imported; the
value of food imports is now close to $50 billion per year. (Ref. 2) In
the aftermath of the terrorist attacks on the United States on September
11, 2001, Congress determined that the existing requirements for the
importation of FDA-regulated food products were
insufficient to protect the safety of the U.S. food supply.
Before
September 11, 2001, FDA had approximately 150 personnel
in the field processing imported food entries based on FDA's
programs and assignments, all using guidance documents, such as Import
Alerts, Compliance Policy guides, and other manuals. After September 11,
2001, FDA hired three hundred additional counterterrorism
Consumer Safety Officers primarily for food imports. This step alone is
insufficient to ensure the safety of food imported or offered for import
into the United States.
When deciding which imported food shipments to physically inspect and sample, FDA inspectors consider, among other things, compliance programs, assignments, import alerts, and whether the product is a low-risk or high-risk food. New requirements imposed by Section 307 of the Bioterrorism Act will require importers to give notice to FDA of incoming articles of food before the shipment reaches a U.S. border, rather than when the shipment arrives at the U.S. border or as part of the official U.S. Customs entry. Requiring prior notice of imported food shipments will allow FDA inspectors to have earlier information on foods that are coming into the United States, which will enable FDA to better deploy its inspection resources and to use this increased amount of information in cases where FDA action against the food is warranted, e.g., a credible threat to the food supply is suspected.
Number
of Establishments Affected
Using
2001 FY information from FDA's OASIS system (industry
codes 02 through 52, 54, and 70 through 72), FDA has
determined that there are approximately 77,427 importers and consignees
who receive imported food shipments. Under the proposed rule, the U.S.
importers or U.S. purchasers (or their agents) of the products will be
responsible for submitting a timely and accurate prior notice to FDA.
Using information from the OASIS system, FDA was also
able to determine that there are approximately 100,000 foreign
manufacturers (of a finished product). Foreign manufacturers are not
responsible for submitting prior notice, and therefore, while not
unaffected by prior notice, foreign manufacturer costs associated with
this proposed rule will be assumed to be spread across the supply chain
and therefore are not directly addressed in this analysis.
FDA requests information on the size of establishments likely to be affected by this rule, including the foreign manufacturers of food products and the importers and consignees receiving the imported food shipments
New
and closing importer establishments
In addition to the U.S. importers currently in existence, in future years some new import businesses will open and some existing import businesses will close. According to the Small Business Administration Office of Advocacy, in 2001 about 10 percent of all businesses were new and 10 percent of all businesses closed. These new importers would have to become familiar with the FDA prior notice system, and some may need to obtain computer equipment and Internet access to comply with prior notice requirements.
Baseline
FDA considers the baseline for this analysis the current state of the world, pre-statute, and we assume this baseline has zero costs and benefits.
Current
State of The World
The
majority of the information that will be required by section 307 of the
Bioterrorism Act now is currently supplied at the time of entry by a U.S.
Customs broker or self-filer, and usually is submitted electronically.
Although importers already must notify U.S. Customs of entries, the
Bioterrorism Act requires notification to FDA prior to
the food shipment reaching the U.S. border or point of crossing. This
requirement will change the current practice of notifying U.S. Customs and
then subsequently FDA upon arrival (and as long as 15
days past arrival based on the time the Consumption Entry may be filed
with U.S. Customs) at a U.S. port of entry.
FDA's
OASIS reporting system shows that approximately 2.5 million food entry
lines were imported via sea and air transportation in FY 2001. Information
on food-importing practices indicates that U.S. Customs and FDA
are notified of imported food products traveling to the United States by
vessel before the products' arrival. Vessels can notify U.S. Customs
months before the actual shipping date, but U.S. Customs will not certify
the entry until 5 days before the ship is expected to dock at a U.S. port.
FDA is notified of the shipment then, through U.S.
Customs, as early as 5 days before the vessel's arrival at a U.S. port.
Importers
bringing food products in by airplane can notify U.S. Customs of their
intent to import food into the United States no more than 24 hours before
the scheduled flight departure time, but cannot certify their cargo
manifests with U.S. Customs until the plane has taken off from the airport
of the exporting country (``wheels-up''). FDA is then
notified through U.S. Customs of the plane's scheduled arrival. U.S.
Customs has informed FDA that they receive flight
information for 87.6 percent of the flights at time of ``wheels up.''
FDA's OASIS reporting system shows that around 2.2 million entry lines of food were imported into the United States via ground transportation in FY 2001. The usual practice today for food brought in by truck or train (mainly products coming directly from Canada or Mexico) is not to notify U.S. Customs and FDA until their actual arrival at a U.S. border or point of entry. (Filers can certify their entry data up to 24 hours before arrival at the border, but U.S. Customs does not give a ``screening response'' to the entry until actual arrival.) Even though these importers most likely have the invoices and orders for these products in advance, they do not currently notify U.S. Customs and FDA until their arrival at the border.
4.
Regulatory Options Considered
We
analyzed five options for a prior notice regulation:
1.
Current state of the world, pre-statute (baseline).
2.
Prior notice time of 4 hours or less; electronic submission of
information. This option would require the persons responsible for all
food imported or offered for import into the United States to notify FDA
of their intent to import articles of food through a United States
based-importer or purchaser (or their U.S.-based agent). This option
applies to all imported foods, except for food exclusively regulated by
USDA and food imported with personal baggage for personal use, regardless
of entry type or mode of transportation used for import. Submission of
prior notice information (including addresses of all importers, owners,
manufacturers, consignees, identity and quantity of food, originating
country, country of shipping, date, expected time of arrival, expected
port of entry, and grower if known) must be electronic.
3.
Require all components of option 2, but lengthen the minimum prior notice
time to 8 hours (statutory self-executing provision).
4.
Require all components of option 2, but lengthen the prior notice time to
noon of the calendar day prior to crossing the U.S. border.
5.
Require all components of option 4, but allow some prior notice
information to be revised prior to arrival at a U.S. port (proposed
option).
Option
one: Current state of the world, pre-statute.
Having
no prior notice requirements is option 1 in our analysis. The statute
requires that FDA issue prior notice regulations, so this
is not a legally viable option. However, OMB cost-benefit analysis
guidelines recommend discussing statutory requirements that affect the
selection of regulatory approaches. These guidelines also recommend
analyzing the opportunity cost of legal constraints that prevent the
selection of the regulatory action that best satisfies the philosophy and
principles of Executive Order 12866. This option will serve as the
baseline against which other options will be measured for assessing costs
and benefits.
Option
two: Minimum prior notice timeframe of 4 hours or less; electronic
submission of information; any change in information requires
resubmission.
Costs:
The party responsible for transmitting prior notice to FDA
will incur administrative and notification costs to comply with this
proposed regulation. The responsible party likely will become aware of the
prior notice requirement through normal business activities: reading the
trade press, reading industry news, FDA outreach, trade
outreach, or conversation with other business operators who also must
comply with prior notice. Once the U.S. importer or U.S. purchaser of the
food becomes aware of the regulation, he or she will need to learn the
requirements of the regulation, which will require finding a copy of the
prior notice requirements and reading and understanding them.
To
become familiar with the requirements for this rule, FDA
estimates that it initially will take responsible parties with Internet
access about 1 hour to research the prior notice requirements, and
responsible parties without readily available Internet access about 2
hours to research the requirements. Comments from both the Produce
Marketing Association (PMA) and the National Food Processors Association (NFPA)
indicate that about 96 percent of the industry has readily available
Internet access.
FDA
used wage rates from the Bureau of Labor Statistics National Compensation
Survey (Ref. 3), doubled to include overhead costs, to estimate the cost
of the time to research the prior notice requirement. For an
administrative worker, the cost per hour is $25.10: for a manager, $56.74.
FDA assumes that only the administrative worker's time
will be used to research the prior notice requirements. As shown in table
1, total costs of this research activity for firms with Internet access
are $1,865,683; for firms without Internet access, the total research
costs are $155,469.
Given
the 10 percent turnover in business reported by the Small Business
Administration, FDA expects 10 percent of the total
search costs to be incurred in each subsequent year after prior notice is
in effect as new firms enter the industry. This cost and the present value
of this cost, using a 7 percent discount rate, are also shown in table 1.
Cost to Research Prior |
With Internet Access | No Internet Access |
Number of Firms | 74,330 | 3,097 |
Administrative wage rate per hour (including overhead) | $25.10 | $25.10 |
Total time to research regulation | 1 hour | 2 hours |
First year one-time research costs | $1,865,683 | $155,469 |
Annual one time research costs for new firms entering industry in subsequent years | $186,568 | $15,547 |
Present value of cost of firms entering the industry | $2,665,257 | $222,100 |
Total research cost burden | $4,530,940 | $377,569 |
All
prior notices must be submitted electronically, so we will assume that the
3,097 responsible parties without Internet access will have to purchase a
computer and gain Internet access to actually transmit the information via
a prior notice screen. This one-time computer cost and a recurring
Internet access cost for these facilities of $7,559,777 are shown in table
2.
Again, given a 10 percent turnover rate for businesses in the import industry, we expect there to be new businesses in the future that may need to purchase electronic transmitting capabilities. However, it becomes more unlikely with the passage of time that persons will be purchasing this computer equipment solely to comply with prior notice. Therefore, a present value of this cost is not calculated.
Table
2.--Facilities and Responsible Parties Without Initial Internet
Number of Facilities | 3,097 |
Computer equipment cost per facility | $2,000 |
Annual cost of Internet access ($20 per month x 12) | $240 |
Search costs for equipment and access ($25.10 x 8 hours) | $201 |
Total first year one time cost of electronic transmitting capacity | $7,559,777 |
Annual one time cost of electronic transmitting capacity for firms entering industry in subsequent years | $755,978 |
Total electronic transmitting costs | $8,315,755 |
FDA
used OASIS information to find out that 4.7 million entry lines for food
were imported into the United States in FY 2001. An ``entry line'' is an FDA
term used by the OASIS reporting system, which refers to a line on an
invoice that reflects a certain article specific to manufacturer or
packaging: e.g., 100 cases containing 48 six-ounce cans of tuna. This 4.7
million entry line total includes the 2.2 million entry lines for food
that came into the United States in 2001 via ground transportation (trucks
and trains) and the 2.5 million entry lines for food that came into the
United States in 2001 via airplane and vessel.
The
entry line totals for FY 2001 do not include food brought into the United
States as personal baggage with the food intended for sale or other
distribution, not for personal use. Under the proposed rule, persons
bringing food into the United States in this manner, however, are required
to submit prior notice to the FDA. FDA
does not know how common the practice is of importing food for
non-personal use as part of personal baggage. For FY 2002, there were only
18 entry lines associated with food imported as U.S. mail and 486 food
entry lines imported by courier. FDA believes that
entries of food imported as part of personal baggage but not for personal
use will fall somewhere between mail and courier entries. Since any number
of entries in this range is minimal as compared with the 4.7 million total
OASIS entries, FDA likewise believes the costs associated
with prior notice for food in personal baggage entries will be minimal and
thus these costs are not included in this analysis. FDA
requests comment on this assumption.
According
to OASIS data, the average imported entry contains 2.6 lines, which means
that there are typically more than two different articles of food per
import entry: e.g., 100 cases of tuna and 50 cases of canned peaches in
the same shipment. A prior notice must be filed for each of the lines in
an entry.
U.S.
Customs Form 3461, Entry and Immediate Delivery Application, OMB No.
1515-0069, is the entry document upon which information is provided to
U.S. Customs by which it makes its decision to release the merchandise.
The burden estimate on U.S. Customs Form 3461 for purposes of the
Paperwork Reduction Act is 15.5 minutes. The FDA
calculation of average time for completion of the prior notice includes
verification of accuracy of the data and supervision time.
FDA
estimates that it will take, on average, 1 hour to prepare a prior notice
each time an import entry of 2.6 lines is submitted, including the time it
takes to update or amend information for each entry line as necessary.
This time is an average; some prior notices will take longer than 1 hour
to complete and other prior notices will take less than 1 hour to
complete. FDA requests comment on the time it will take
to complete a prior notice form, including the time it will take for
amendments and updates to the information.
This
hour includes 45 minutes of an administrative worker's time to gather
information to initially complete the screen and then update the
information as necessary, and then 15 minutes of the manager's time to
verify that the information is correct. Assuming that there is an average
of 2.6 lines per entry, and each line requires a prior notice, then each
line is estimated to take about 23 minutes to complete.
Using the OASIS information that the average imported entry contains 2.6 lines; we can then divide the 4.7 million OASIS lines by 2.6, which results in 1,807,692 expected import entries. Table 3 shows that the annual cost of prior notice submissions based on 1,807,692 entries would be $59,689,990.
Table 3.--Cost to fill out Prior Notice screens by import entry (must be electronic)
Administrative worker time at $25.10 wage rate | 45 minutes |
Manager time at $56.74 wage rate | 15 minutes |
Administrative worker costs per entry | $18.83 |
Manager costs per entry | $14.19 |
Total Cost per import entry | $33.02 |
FY 2001 OASIS entry total based on 4.7 million lines | 1,807,692 |
Total Annual Costs of all prior notice screens based in lines, and including updates and amendments to the information | $59,689,990 |
FDA
Costs: We assume that FDA's information technology (IT)
costs for this option and each option hereafter are the costs of
developing a stand-alone, web-based, electronic system to receive prior
notice information and then to respond electronically with an
acknowledgement of the transmission to the submitting party. The
stand-alone prior notice system will be used until U.S. Customs new
automated system, ACE, becomes operational. FDA will
coordinate with U.S. Customs to develop ACE to accommodate the information
required by prior notice. Once ACE is operational, it will simplify prior
notice transmissions. For now, building a stand-alone IT system to handle
prior notice submissions will require design, development, implementation,
maintenance, modernization, and upgrades. These costs include the labor
hours, hardware, and software costs needed to make the prior notice system
operational. Table 4 shows that FDA estimates the costs
to the agency for setting up the prior notice system to be about $4.4
million. This total cost includes FDA personnel,
contractor development of the hardware and software needed, industry
outreach and training, and a computer firewall.
Table 4.--FDA Prior notice Systems costs
Hardware | $500,000 |
Analysis, Design, Implementation | $3,000,000 |
Software licenses and Security | $500,000 |
Network Interface | $200,000 |
FTEs | 2 |
Cost per FTE | $110,588 |
Total FTE costs | $221,176 |
Total Systems Cost | $4,421,176 |
Current
operating practices affected: A 4-hour minimum prior notice requirement
would be less likely to change current food importing practices than would
a longer minimum time requirement for prior notice submission. Some
comments received indicated that it would be preferable if the minimum
prior notice time were set at 4 hours or less. Comments requested the
shorter minimum prior notice time because the source of some food products
often is close to the U.S. border, and some products are perishable.
However, it is the U.S. importer or U.S. purchaser or their U.S. agent who
is responsible for submitting the prior notice, and the information
required in prior notice should be sufficiently fixed after the order is
placed and will not depend on the location of the source of the food
product.
How
many business practices will be affected by prior notice requirements
largely depends on how early the orders for the food products are placed
compared to the time by which prior notice must be submitted. Most orders
for products, even for those of a perishable nature, are often placed days
or weeks if not months before the actual delivery date. Therefore, if the
order for the product was sent a week, or even 1 day, before the delivery
date, a minimum prior notice time of 4 hours should not cause any delay in
the order. FDA requests comments on this assumption.
Also
important in determining how business practices will be affected by the
prior notice requirements is when the prior notice was submitted compared
with when the shipment corresponding to that prior notice was loaded onto
a vehicle. For example, if the prior notice was submitted as soon as the
order was received, or even a few hours before loading the vehicle, there
is a possibility that unforeseen factors, including composition of the
actual shipment, may cause the prior notice information submitted to not
match the actual shipment on the vehicle. However, if the prior notice is
not submitted until the vehicle is actually loaded, the probability of
submitting an incomplete prior notice is greatly reduced. Thus, when the
order for the shipment is received, when the prior notice is submitted,
and when the vehicle is loaded play large roles in how much the
requirement for prior notice will affect operating practices for those
importing some perishable products from Mexico and Canada. FDA
requests specific information about how business practices for all
operations could change as a result of the prior notice requirement.
If
importers have orders for perishable products from Canada and Mexico
filled more than 4 hours before scheduled arrival at a U.S. border point,
then the only change in business practice that should occur is when they
will submit their prior notice to FDA.
There
will be those shipments by vehicle, however, for which the order was not
received in advance of the shipping time, those shipments for which the
quantity and composition of the product has changed since the time when
the prior notice was submitted, and those shipments for which other
changes to the information on the prior notice must be made. Importers,
whose shipments fall into this ``changed'' category, must resubmit the
prior notice or risk that their products will be refused admission into
the United States and held if the notice is deemed inadequate.
FDA
does not have information on the number of ground shipments that, under
this option, would need to submit or resubmit prior notice information due
to a late order or a change in the information provided on the original
notice. We know that changes will occur for some percentage of all prior
notices; until better information is available, we will assume that 20
percent of the fresh produce and seafood being imported to the United
States from Canada and Mexico would have a reason for which their original
prior notice submission must be changed and resubmitted less than 4 hours
before entry.
FDA
chooses 20 percent as the percent of prior notices that need to be
submitted based on information that most orders for products are placed
well in advance of the actual shipping date, most orders are filled with
the exact product and quantity the customer requests, and the 4 hour prior
notice entry time is minimal when compared to when the order was actually
received. Depending on the entry point, 40 to 100 percent of shipments are
loaded onto vehicles less than 4 hours before entry. We chose one-half of
the lower percent as the percent of prior notices that would need to be
resubmitted under this option.
The
following paragraphs and tables outline how FDA
calculated a loss in product value to account for the time that fresh
produce and seafood being brought by ground transportation into the United
States might have to wait to cross the border due to prior notice
resubmission. This wait at the border occurs if prior notice is
resubmitted with revised information regarding the shipment when the
shipment is closer to the border than the 4 hours required; the
transporter of the shipment must wait for the minimum prior notice time to
elapse before crossing the border or risk being refused entry.
Table
5 of this document shows the volume of fresh, perishable produce imported
into the United States from Mexico for the calendar year 2001 (Ref. 4).
Produce was included in the count if it was considered `highly or very
highly perishable' (Ref. 5) and if the produce was not regulated under
section 8e of the Agricultural Marketing Agreement Act of 1937 (AMAA).
Importers of products currently regulated by the Agricultural Marketing
Agreement Act, e.g., tomatoes, avocados, oranges, are required to notify
USDA at least 1 day prior to U.S. entry to make arrangements for
inspection[[Page 5444]]and certification of the product they are
importing. These products therefore are not included in the count because
they already have business practices in place that would accommodate the
prior notice period. FDA requests comments on the
perishability of the produce that is used in this count.
Multiplying
the volume of Mexican produce that was imported into the United States in
2001 by the current U.S. border prices per pound (Ref. 6) for these
products gives an estimate of wholesale revenue. Then we convert the
wholesale revenue to retail revenue using the retail price mark-up on
produce in the United States, which can range from 100 percent to 600
percent (Ref. 7). We will increase the wholesale revenue by 100 percent in
these estimates to represent a reasonable retail price mark-up rate across
produce commodities in the United States. We will reexamine our choice of
the 100 percent mark-up rate in a sensitivity analysis presented later in
the costs section.
Assuming
that perishable produce has an average life span of 7 days, we can then
estimate the value of the time lost (4 hours) for 20 percent of the
imports waiting to cross the border as a 2.4 percent loss (4 hours out of
168 hours) in the product's value. Applying this percent loss in value to
one-quarter of the total retail revenue of imported Mexican fresh produce
results in a $16,600,920 loss in produce value.
Table 5.--Fresh Produce Imported From Mexico
Perishable produce from Mexico | Total Volume for 2001 (100,000 lb units) |
Current |
Total
Revenues Wholesale |
Cucumbers | 6491 | 0.29 | 188,239,000 |
Peppers (all varieties) | 6088 | 0.53 | 322,664,000 |
Squash | 4158 | 0.71 | 295,218,000 |
Mangoes | 3461 | 0.57 | 197,277,000 |
Papaya | 1587 | 0.45 | 71,415,000 |
Broccoli | 1138 | 0.65 | 73,970,000 |
Eggplant | 887 | 0.40 | 35,480,000 |
Asparagus | 856 | 1.29 | 110,424,000 |
Sweet Corn | 828 | 0.26 | 21,528,000 |
Strawberries | 676 | 0.96 | 64,896,000 |
Beans | 559 | 0.58 | 32,422,000 |
Radishes | 516 | 0.31 | 15,996,000 |
Fruits-Other | 426 | 2.04 | 86,904,000 |
Vegetables-other | 365 | 2.80 | 102,200,000 |
Greens | 298 | 0.48 | 14,304,000 |
Spinach | 197 | 1.375 | 27,087,500 |
Green Peas | 129 | 2.20 | 28,380,000 |
Okra | 112 | 0.80 | 8,960,000 |
Berries-misc. | 78 | 1.67 | 13,026,000 |
Raspberries | 32 | 4.40 | 14,080,000 |
Artichokes | 23 | 1.50 | 3,450,000 |
Mushrooms | 7 | 1.60 | 1,120,000 |
Endive | 4 | 0.37 | 148,000 |
Escarole | 2 | 0.37 | 74,000 |
Wholesale Value | $1,729,262,500 | ||
Retail Value | $3,458,525,000 | ||
2.4% reduction in value for 20% of the products | $16,600,920 |
We
repeat the exercise outlined above in table 5 for Canada, as shown in
table 6. Again, until FDA acquires updated information,
we will assume that Canadian produce growers use business practices that
are similar to those used by Mexican growers. FDA
solicits comments on this assumption. While FDA
acknowledges that their business practices may be different in some ways,
it is possible that Canadian produce growers will also have to adjust
business practices so that submitters can comply with the prior notice
requirement. We seek comment on this issue.
As
with the Mexican produce, only Canadian produce that is highly or very
highly perishable and did not fall under the purview of the Agricultural
Marketing Agreement Act is included in table 6.
We
again calculate the 2.4 percent loss in product value due to the importer
having to resubmit prior notice for 20 percent of the Canadian imported
fresh produce. This loss in product value due to the 4-hour wait time
totals $1,928,765.
Table 6.--Fresh Produce Imported From Canada
Perishable produce from Canada | Total Volume for 2001 (100,000 lb units) |
Current |
Total
Revenues Wholesale |
Peppers | 753 | 0.30 | 22,590,000 |
Cucumbers | 627 | 0.145 | 9,091,500 |
Blueberries | 401 | 1.42 | 56,942,000 |
Mushrooms | 373 | 1.55 | 57,815,000 |
Lettuce-Other | 243 | 0.50 | 12,150,000 |
Raspberries | 89 | 2.78 | 24,742,000 |
Broccoli | 88 | 0.72 | 6,336,000 |
Cherries | 37 | 1.30 | 4,810,000 |
Sweet Corn | 36 | 0.22 | 792,000 |
Squash | 27 | 0.17 | 459,000 |
Spinach | 24 | 1.30 | 3,120,000 |
Radishes | 11 | 0.50 | 550,000 |
Endive | 9 | 0.17 | 153,000 |
Beans | 7 | 0.50 | 350,000 |
Strawberries | 5 | 0.575 | 287,500 |
Pears | 4 | 0.39 | 156,000 |
Green Peas | 3 | 1.60 | 480,000 |
Greens | 2 | 0.30 | 60,000 |
Eggplant | 1 | 0.29 | 29,000 |
Wholesale Value | $200,913,000 | ||
Retail Value | $401,826,000 | ||
2.4% reduction in value for 20% of the products | $1,928,765 |
We
used the same logic for seafood as we did for produce to account for the
possibility of having to resubmit prior notice, i.e., a change in the
quantity of seafood in the shipment made after the original notice was
submitted, less than 4 hours before scheduled entry. We will use the
reduction in the value of perishable imported seafood to account for the
cost of a wait at the border while prior notice is resubmitted.
We
used information from the annual imported seafood statistics published by
the National Marine Fisheries Service (Ref. 8) to estimate the weight and
wholesale value in dollars of all fresh, perishable seafood products
imported from Mexico and Canada. As we did for fresh produce, we mark-up
the wholesale price of the fresh seafood by 100 percent (Ref. 9) to
represent the retail value of the products. Then, assuming that perishable
seafood will keep for 2 days in a consumer's refrigerator, (Ref. 10) we
find that an 4-hour delay in delivery time caused by the prior notice
requirement for 20 percent of the products results in a 8.3 percent loss
in that seafood's value (4 hours out of 48 hours). Table 7 shows that the
lost time results in a $1,863,805 loss on the value of Mexican fresh
seafood imports. FDA requests comment on the
perishability of the seafood used in tables 7 and 8.
Table 7.--Fresh Seafood Imported From Mexico
2001 Fresh Mexican Seafood Products | Pounds | Dollars |
Atka Mackerel, fresh | 1,995 | 2,200 |
Bass, fresh | 1,362 | 2,218 |
Clam live, fresh | 245,498 | 274,942 |
Crab live, fresh | 405,621 | 489,856 |
Crabmeat, fresh | 287,531 | 1,540,130 |
Flatfish flounder, fresh | 1,518 | 2,199 |
Flatfish fillet, fresh | 1,705 | 3,100 |
Flatfish, fresh | 678,768 | 781,883 |
Groundfish cod, fresh | 4,000 | 2,400 |
Grouper, fresh | 4,056,054 | 7,399,434 |
Lobster, live | 8,584 | 50,474 |
Rock lobster live, fresh | 794,224 | 5,859,260 |
Mackerel, fresh | 147,334 | 127,873 |
Marine fish fillet, fresh | 2,120,250 | 7,395,902 |
Marine fish, fresh | 5,448,771 | 6,681,485 |
Marine fish scaled, fresh | 162,105 | 125,346 |
Mollusks live, fresh | 2,147 | 15,272 |
Octopus live, fresh | 31,680 | 24,214 |
Oysters live, fresh | 39,930 | 25,040 |
Salmon Atlantic fillet farmed, fresh | 405 | 2,552 |
Sardine, sardinella, brisling, sprat, fresh | 71,163 | 7,591 |
Scallops live, fresh | 472,384 | 1,418,302 |
Sea Urchin live, fresh | 10,501 | 67,331 |
Sea Urchin roe, fresh | 464,946 | 4,641,659 |
Shark, fresh | 1,500,877 | 711,349 |
Shrimp, shell-on, fresh | 452,714 | 861,897 |
Snapper, fresh | 5,835,775 | 9,254,300 |
Squid live, fresh | 88,042 | 39,952 |
Swordfish, fresh | 1,615,546 | 3,759,096 |
Trout, fresh | 82,958 | 131,353 |
Rainbow trout farmed, fresh | 80,384 | 161,526 |
Bigeye tuna, fresh | 9,819 | 12,200 |
Bluefin tuna, fresh | 82,471 | 332,250 |
Tuna, fresh | 78,747 | 155,069 |
Yellowfin tuna, fresh | 2,012,848 | 3,771,488 |
Whitefish fillet, fresh | 3,590 | 7,560 |
Total Wholesale Value | 27,302,246 | 56,138,703 |
Total Retail Value | $112,277,406 | |
8.3% reduction in value for 20% of products | $1,863,805 |
Table
8 shows the 4 hours of lost time due to prior notice resubmission for 20
percent of all imported Canadian fresh seafood causes a value loss of
$30,929,417.
Table 8.--Fresh Seafood Imported From Canada
2001 Fresh Canadian Seafood Products | Pounds | Dollars |
Bass, fresh | 727,830 | 740,152 |
Caviar | 20,189 | 272,770 |
Clam geoduck live, fresh | 155,927 | 1,097,902 |
Clam live, fresh | 9,144,304 | 22,064,683 |
Crab live, fresh | 9,479,765 | 24,066,021 |
Crabmeat, fresh | 27,601 | 80,431 |
Crustaceans live, fresh | 148,925 | 574,989 |
Fish liver and roe, fresh | 51,154 | 229,569 |
Flatfish flounder fillet, fresh | 750,468 | 1,238,031 |
Flatfish flounder, fresh | 6,264,346 | 4,367,780 |
Flatfish halibut Atlantic, fresh | 1,948,791 | 7,542,598 |
Flatfish halibut Pacific, fresh | 12,553,266 | 39,850,556 |
Flatfish fillet, fresh | 853,224 | 3,536,120 |
Flatfish, fresh | 1,693,516 | 796,383 |
Flatfish sole fillet, fresh | 1,099,430 | 2,968,610 |
Flatfish sole, fresh | 1,062,030 | 1,096,079 |
Flatfish turbot Greenland fillet, fresh | 700,456 | 2,069,006 |
Flatfish turbot Greenland, fresh | 862,211 | 3,146,300 |
Freshwater fish fillet, fresh | 2,824,811 | 4,970,127 |
Freshwater fish, fresh | 549,956 | 1,008,302 |
Groundfish cod Atlantic fillet, fresh | 1,646,363 | 4,489,788 |
Groundfish cod Atlantic, fresh | 4,904,368 | 5,199,471 |
Groundfish cod fillet, fresh | 107,994 | 288,644 |
Groundfish cod, fresh | 239,987 | 249,991 |
Groundfish cusk, fresh | 8,281 | 22,060 |
Groundfish cusk, pollock fillet, fresh | 218,854 | 362,293 |
Groundfish haddock fillet, fresh | 708,261 | 2,109,607 |
Groundfish haddock, fresh | 17,391,202 | 19,469,582 |
Groundfish hake fillet, fresh | 160,972 | 93,941 |
Groundfish hake, fresh | 14,070,217 | 9,182,974 |
Groundfish ocean perch fillet, fresh | 5,415,106 | 10,029,520 |
Groundfish ocean perch, fresh | 898,964 | 518,431 |
Groundfish pollock Atlantic, fresh | 2,362,637 | 1,595,615 |
Groundfish pollock, fresh | 161,121 | 130,308 |
Herring, fresh | 4,009,469 | 671,338 |
Lingcod, fresh | 612,093 | 812,597 |
Lobster, fresh | 7,707 | 60,030 |
Lobster, live | 49,200,925 | 244,567,173 |
Rock lobster live, fresh | 196,858 | 1,133,246 |
Mackerel, fresh | 943,155 | 595,937 |
Marine fish fillet, fresh | 10,272,946 | 24,235,390 |
Marine fish, fresh | 9,084,029 | 6,610,870 |
Mollusks live, fresh | 809,461 | 907,048 |
Monkfish, fresh | 89,861 | 154,267 |
Mussels live, fresh farmed | 18,545,254 | 13,693,263 |
Mussels live, fresh wild | 98,842 | 104,273 |
Oysters live, fresh farmed | 2,918,098 | 4,378,548 |
Oysters live, fresh wild | 579,011 | 1,236,868 |
Perch fillet, fresh | 529,366 | 2,079,677 |
Perch, fresh | 337,273 | 727,284 |
Pickerel fillet, fresh | 850,256 | 3,715,248 |
Pickerel, fresh | 1,682,743 | 3,500,552 |
Pike, fresh | 214,390 | 395,706 |
Pike perch, yellow pike, fresh | 125,114 | 197,396 |
Sablefish, fresh | 21,648 | 48,845 |
Salmon Atlantic fillet, fresh farmed | 28,972,418 | 97,270,694 |
Salmon Atlantic fillet, fresh wild | 404,012 | 1,281,582 |
Atlantic Salmon, fresh farmed | 107,101,696 | 248,809,617 |
Atlantic Salmon, fresh wild | 68,732 | 84,035 |
Chinook Salmon, fresh farmed | 5,752,197 | 10,614,163 |
Chinook Salmon, fresh wild | 225,509 | 530,368 |
Salmon chum, fresh | 1,651,221 | 1,133,029 |
Salmon coho, fresh farmed | 1,382,572 | 1,963,499 |
Salmon coho, fresh wild | 183,427 | 270,138 |
Salmon fillet, fresh | 1,640,485 | 4,361,707 |
Salmon, fresh | 2,820,957 | 5,430,272 |
Pink Salmon, fresh | 79,981 | 60,403 |
Sockeye salmon, fresh | 265,505 | 457,427 |
Salmonidae, fresh | 57,787 | 149,760 |
Scallops live, fresh | 6,955,476 | 31,688,064 |
Sea urchin live, fresh | 5,053,710 | 4,367,434 |
Sea urchin roe, fresh | 11,414 | 94,706 |
Dogfish shark, fresh | 3,300,398 | 1,003,294 |
Shark, fresh | 223,788 | 206,838 |
Shrimp peeled, fresh | 5,401 | 27,934 |
Shrimp shell-on, fresh | 479,483 | 1,478,634 |
Smelts, fresh | 509,586 | 606,463 |
Snail live, fresh | 46,174 | 121,239 |
Snapper, fresh | 37,316 | 94,366 |
Swordfish, fresh | 1,809,654 | 6,488,992 |
Trout, fresh | 1,574,672 | 2,891,806 |
Rainbow trout, fresh farmed | 361,121 | 608,347 |
Albacore tuna, fresh | 25,859 | 70,076 |
Bigeye tuna, fresh | 426,547 | 1,448,778 |
Bluefin tuna, fresh | 288,361 | 2,464,619 |
Tuna, fresh | 13,429 | 50,299 |
Yellowfin tuna, fresh | 205,812 | 666,809 |
Whitefish fillet, fresh | 988,816 | 1,864,542 |
Whitefish, fresh | 8,224,484 | 11,262,979 |
Yellow perch fillet, fresh | 1,174,798 | 6,401,844 |
Total Wholesale Value | 382,663,829 | 931,608,947 |
Total Retail Value | $1,863,217,894 | |
16.7% reduction in value for 20% of products | $30,929,417 |
Table
9 presents a summary of the costs associated with option 2. Also presented
in table 9 is the present value of the costs associated with this option,
calculated using the OMB-recommended discount rate of 7 percent.
Table 9.--Summary of Costs for Option 2
Research costs | $4,908,509 |
Computer acquisition costs | $8,315,755 |
Annual costs to fill out prior notice screens (including updates and amendments) | $59,689,990 |
FDA prior notice system cost | $4,421,176 |
Lost value for Mexican produce | $16,600,920 |
Lost value for Canadian produce | $1,928,765 |
Lost value for Mexican seafood | $1,863,805 |
Lost value for Canadian seafood | $30,929,417 |
Total Costs for Option 2 | $128,658,337 |
Present value of costs | $1,603,543,969 |
Option three: Minimum prior notice timeframe of 8 hours; electronic
submission of information; any change in information requires
resubmission.
Option
three is to allow the minimum timeframe for prior notices, as dictated by
the statute, to take effect. Comments indicated that Canadian and Mexican
produce growers and seafood processors are concerned that the longer the
minimum time required for the prior notice, the less fresh their products
will be when they reach customers. Less-than-optimal fresh (i.e., lower
quality) products would result in a lower price paid for the imported
produce or seafood shipments, or possibly even the loss of a customer's
business to a domestic producer. For importers of perishable products such
as seafood and produce, the 8-hour minimum time for prior notice might
change business practices in the industry. These changes in business
practices would be in addition to the costs of learning about the proposed
regulation, submitting forms, and the FDA IT costs
outlined in option two.
How
much importer, produce grower, and seafood processor business practices
will be affected by prior notice requirements again will depend on how
early the orders were received compared with how early prior notice must
be submitted. If the order for the product was placed more than 8 hours
before the truckload is scheduled to arrive at the border, then there
should be no delay in the importation of the product.
What
is more likely to cause a wait before crossing the border is if the
information on the prior notice changes after the prior notice was
submitted. For example, if the prior notice is submitted just a few hours
before loading the truck, unforeseen factors, including composition of the
actual shipment, may cause the prior notice information submitted to not
match the actual shipment on the truck. This is just one example of how
information on a prior notice submission might change after the prior
notice has already been submitted to FDA, thus requiring
a cancellation of the prior notice and a resubmission of the corrected
information.
Having
to resubmit a prior notice to FDA may not cause any delay
of the shipment if the original submission was placed early enough.
However, it is likely that the necessary corrected prior notice
information will be resubmitted not long before the articles start heading
for the border. Therefore it is likely that some shipments may have to
wait several hours and possibly the full 8-hour minimum for the
resubmitted prior notice to be accepted by FDA.
If
the prior notice time for submission is 8 hours instead of 4 hours, the
probability of having to adjust and resubmit prior notice information will
be higher. Now, instead of 20 percent of the importers of perishable
products from Canada and Mexico having to resubmit their notices, we will
assume that the 8-hour submission timetable means that 25 percent will
have to resubmit their notices. We do not expect the number of
resubmissions to increase greatly as the minimum timeframe for prior
notice is still minimal and FDA expects most orders to be
placed well in advance of the 8-hour timeframe. We assume that as the
minimum notice time increases, the likelihood of a resubmission also
increases, but less than proportionally to the change in minimum notice
time.
Carriers
of these products may not be able to cross the border for 8 hours instead
of 4 hours, which affects 4.8 percent of the produce life span (8 hours
out of 168 hours) and 16.7 percent of the seafood life span (8 hours out
of 48 hours).
Table 10 shows the loss in value caused by the resubmitted prior notice information for the 25 percent of imported Mexican and Canadian fresh seafood and produce affected.
Table
10.--Loss in Value Caused by Resubmitted Prior Notice Under Option
Perishable Produce
2001 Imported Mexican Produce Total Retail Value | $3,458,525,000 |
4.8% reduction in value for 25% of Mexican produce | $41,502,300 |
2001 Imported Canadian Produce Total Retail Value | $401,826,000 |
4.8% reduction in value for 25% of Canadian produce | $4,821,912 |
Perishable Seafood
2001 Imported Mexican Seafood Total Retail Value | $112,277,406 |
16.7% reduction in value for 25% of Mexican seafood | $4,687,582 |
2001 Imported Canadian Seafood Total Retail Value | $1,863,217,894 |
16.7% reduction in value for 25% of Canadian seafood | $77,789,347 |
Table
11 presents a summary of the costs associated with option 3. Also
presented in table 11 is the present value of the costs associated with
this option using the OMB-recommended discount rate of 7 percent.
Table 11.--Summary of Costs for Option 3
Research costs | $4,908,509 |
Computer acquisition costs | $8,315,755 |
Annual costs to fill out prior notice screens (including updates and amendments) | $59,689,990 |
FDA prior notice system cost | $4,421,176 |
Lost value for Mexican produce | $41,502,300 |
Lost value for Canadian produce | $4,821,912 |
Lost value for Mexican seafood | $4,687,582 |
Lost value for Canadian seafood | $77,789,347 |
Total Costs for Option 3 | $206,136,571 |
Present value of costs | $2,710,375,883 |
Option
four: prior notice received by noon of the calendar day prior to the day
of crossing; electronic submission of information; any change in
information requires resubmission.
This
option requires that prior notification be submitted no later than noon of
the calendar day prior to the expected day of crossing. Under this option,
prior notice submitters will have to let FDA know of the
incoming food shipment at least 12 hours before the shipment reaches a
U.S. point of crossing. This fourth option would likely cause a change in
importer business practices and the business practices of their clients in
much the same way as option three, but the potential loss of product value
is higher because the minimum prior notice time has increased.
Again,
how business practices will be affected by prior notice requirements
depends on how early the invoice orders are received, the timeframe in
which the truck was loaded, and when prior notice is submitted. FDA
requests comments on any additional costs that might result from changes
in business practices as a result of this proposed rule.
As
before, we assume that as the minimum notice time increases, the
likelihood of a resubmission also increases, but less than proportionally
to the change in minimum notice time. Thus, since the prior notice
timeframe for submission is at least 12 hours instead of 8 hours, the
probability of having to adjust and resubmit prior notice information is
higher. Instead of 25 percent of the importers of perishable products from
Canada and Mexico having to resubmit their notices, we will assume that
the 12-hour submission timetable means that 40 percent will have to
resubmit their notices.
We
increase the percentage of resubmission this time by 15 percent because as
the prior notice timeframe increases relative to the time of entry, it
becomes more likely that the prior notice information will change after
the notice is submitted to FDA, thus requiring
resubmission. The transporters of products with resubmitted prior notices
may then have to wait as long as 12 hours, which affects 7.1 percent of
the produce life span (12 hours out of 168 hours) and 25 percent of the
seafood life span (12 hours out of 48 hours).
Table 12 shows the loss in value caused by the resubmitted prior notice information for the 40 percent of imported Mexican and Canadian fresh seafood and produce that might be affected. As a result of having to give prior notice by noon the calendar day prior to entry, the Mexican fresh produce industry would lose $98,222,110 and the Canadian fresh produce industry would lose $11,411,858. The Mexican fresh seafood industry would lose $11,227,741 and the Canadian fresh seafood industry would lose $186,321,789 in value.
Table 12.--Loss in Value Caused by Resubmitted Prior Notice Under Option Four Perishable Produce
2001 Imported Mexican Produce Total Retail Value | $3,458,525,000 |
7.1% reduction in value for 40% of Mexican produce | $98,222,110 |
2001 Imported Canadian Produce Total Retail Value | $401,826,000 |
7.1% reduction in value for 40% of Canadian produce | $11,411,858 |
Perishable Seafood
2001 Imported Mexican Seafood Total Retail Value | $112,277,406 |
7.1% reduction in value for 40% of Mexican Seafood | $11,227,741 |
2001 Imported Canadian Seafood Total Retail Value | $1,863,217,894 |
7.1% reduction in value for 40% of Canadian Seafood | $186,321,789 |
Table 13 presents a summary of the costs associated with option 4. Also presented
in table 13 is the present value of the costs associated with this option using the
OMB-recommended discount rate of 7 percent.
Table 13.--Summary of Costs for Option 4
Research costs | $4,908,509 |
Computer acquisition costs | $8,315,755 |
Annual costs to fill out prior notice screens (including updates and amendments) | $59,689,990 |
FDA prior notice system cost | $4,421,176 |
Lost value for Mexican produce | $98,222,110 |
Lost value for Canadian produce | $11,411,858 |
Lost value for Mexican seafood | $11,227,741 |
Lost value for Canadian seafood | $186,321,789 |
Total Costs for Option 4 | $384,518,928 |
Present value of costs | $5,258,695,269 |
Option
five: prior notice received by noon of the calendar day prior to the day
of crossing; electronic submission of information; allow changes to the
prior notice submission up to two hours prior to entry (proposed option).
We
now take the estimates in option 4 and adjust them to account for the
effects of allowing changes to the prior notice submission. Since prior
notice must be submitted by noon on the calendar day prior to U.S. entry,
it is reasonable to expect that not all the information required on a
prior notice will be final. Allowing changes to the original submission,
in the form of electronic product identity amendments and arrival updates,
should improve the flow of import traffic by reducing the number of prior
notice resubmissions and thereby reducing the loss of value for perishable
foods, since they will not have to wait much extra time, if any at all,
before crossing the U.S. border.
The
prior notice screen will have required fields for the addresses of the
submitter, importer, owner, and consignee, as well as transporter,
manufacturer, and grower if known. Required information would also include
the identity of the article of food, its originating country, the country
from which the food was shipped, its U.S. Customs entry number, and the
date, time, and expected port of entry.
Increasing
the number of required fields that can be changed on the prior notice
screen prior to entry reduces the likelihood that the information would
have to be completely resubmitted by importers. This change would lessen
the time burden, and therefore the cost, of having to submit prior notice.
Allowing a 2 hour amendment and updates to prior notice would provide some
flexibility for importers in industries where pieces of information, such
as the quantity of the product being imported, time to port of arrival,
and the anticipated port may change or is not known until just before
shipping.
Assuming
that prior notice can be amended and updated would reduce the number of
resubmissions that would normally occur. For this option then, with
amendment and updates, we will assume that the number of prior notice
resubmissions necessitated by changes in information on the notice will be
reduced from 40 percent (as in option 4) to 5 percent.
This option lowers the prior notice costs to importers (as compared to option 4) and therefore to Mexican and Canadian fresh produce growers and seafood processors, because they will not have to resubmit their prior notices when importing food to the United States as frequently. Instead they can amend or update the notices. Option 5 would save a minimum of 10 hours wait time per entry that can be amended or updated for the prior notice over the time used in option 4; the maximum time products would have to wait at the border would be 2 hours, or 1.2 percent of the fresh produce life span (2 hours out of 168 hours) and 4.2 percent of the fresh seafood life span (2 hours out of 48 hours). Table 14 shows the costs of submitting prior notice for a 12-hour minimum time, with a 2-hour amendment and updates, for Canadian and Mexican fresh produce and seafood.
Table
14.--Loss in Value Caused by Resubmitted Prior Notice Under Option
Perishable Produce
2001 Imported Mexican Produce Total Retail Value | $3,458,525,000 |
1.2% reduction in value for 25% of Mexican produce | $2,075,115 |
2001 Imported Canadian Produce Total Retail Value | $401,826,000 |
1.2% reduction in value for 25% of Canadian produce | $241,096 |
Perishable Seafood
2001 Imported Mexican Seafood Total Retail Value | $112,277,406 |
1.2% reduction in value for 25% of Mexican Seafood | $235,783 |
2001 Imported Canadian Seafood Total Retail Value | $1,863,217,894 |
1.2% reduction in value for 25% of Seafood produce | $3,912,771 |
Table
15 compares the reduction in the costs of this rule if an amendment and
update to prior notice is allowed (option 5) as opposed to the
no-amendment option 4.
Table 15.--Comparison of Option Four With Option Five
Perishable Mexican Produce Value loss
Option 4-12 hour minimum notice | $98,222,110 |
Option 5-12 hour notice with changes | $2,075,115 |
Savings with amendment and update | $96,146,995 |
Perishable Canadian Produce Value loss
Option 4-12 hour minimum notice | $11,411,858 |
Option 5-12 hour notice with changes | $241,096 |
Savings with amendment and update | $11,170,762 |
Perishable Mexican Seafood Value loss
Option 4-12 hour minimum notice | $11,227,741 |
Option 5-12 hour notice with changes | $235,783 |
Savings with amendment and update | $10,991,985 |
Perishable Canadian Seafood Value Loss
Option 4-12 hour minimum notice | $186,321,789 |
Option 5-12 hour notice with changes | $3,912,758 |
Savings with amendment and update | $182,409,031 |
Table
16 presents a summary of the costs associated with option 5. Also
presented in table 16 is the present value of the costs associated with
this option using the OMB-recommended discount rate of 7 percent.
Table 16.--Summary of Costs for Option 5
Research costs | $4,908,509 |
Computer acquisition costs | $8,315,755 |
Annual costs to fill out prior notice screens (including updates and amendments) | $59,689,990 |
FDA prior notice system cost | $4,421,176 |
Lost value for Mexican produce | $2,075,115 |
Lost value for Canadian produce | $241,096 |
Lost value for Mexican seafood | $235,783 |
Lost value for Canadian seafood | $3,912,758 |
Total Costs for Option 5 | $83,800,182 |
Present value of costs | $962,713,183 |
Summary
of Options
Table
17 gives a summary of the costs associated with the prior notice rule for
each option presented.
Table 17.--Summary of Costs Associated With Each Option
Costs | Option 1 | Option 2 | Option 3 | Option 4 | Option 5 |
Research Costs | $0 | $4,908,509 | $4,908,509 | $4,908,509 | $4,908,509 |
Costs of acquiring electronic capacity | $0 | $8,315,755 | $8,315,755 | $8,315,755 | $8,315,755 |
FDA prior notice system cost | $0 | $4,421,176 | $4,421,176 | $4,421,176 | $4,421,176 |
Total annual cost to submit prior notice forms | $0 | $59,689,990 | $59,689,990 | $59,689,990 | $59,689,990 |
Lost value for perishable foods | $0 | $51,322,907 | $128,801,141 | $307,183,498 | $6,464,752 |
First year cost of each option | $0 | $128,658,000 | $206,137,000 | $384,519,000 | $83,800,000 |
Annual cost of each option | $0 | $114,656,000 | $192,134,000 | $370,517,000 | $69,798,000 |
Present value total cost of each option | $0 | $1,603,544,000 | $2,710,376,000 | $5,258,695,000 | $962,713,000 |
Sensitivity
Analysis
We
estimate that the social costs of the proposed rule (option 5) would be
about $84 million in the first year and $70 million in later years. At a 7
percent discount rate, the present value of the costs of the proposed
rule, discounted indefinitely into the future, would be about $963
million. These estimates rely on several important assumptions:
In
option 4, forty percent of prior notices will need to be changed if
the notice must be submitted by noon on the calendar day prior to
entry. (Option 4 is the base for option 5 before amendment.)
Five
percent of prior notices will still need to be changed even when the
amendment option is available.
The
amendment option will eliminate all but 1.2 percent of the lost value
of imported fresh produce and all but 4.2 percent of the lost value of
imported fresh seafood.
The
amendment or update time is two hours before entry.
The
retail value of imported fresh seafood and produce is 100 percent
higher than its wholesale value.
The
number of import entries requiring prior notice will not increase over
time.
The
discount rate for calculating present value is 7 percent.
We
now show how our estimates of costs for the proposed option change under
different assumptions. We substitute the following assumptions for those
used above:
In
option 4, fifty percent of prior notices will need to be changed if
the notice must be submitted by noon on the calendar day prior to
entry. (Option 4 is the base for option 5 before amendment.)
15
percent of prior notices will still need to be changed even when the
amendment option is available.
The
amendment option will eliminate all but 5 percent of the lost value of
imported fresh produce and all but 12 percent of lost value of
imported fresh seafood.
The
amendment or update time is 4 hours before entry.
The
retail value of imported fresh seafood and produce is 200 percent
higher than its wholesale value.
The
number of import entries requiring prior notice will increase 3
percent per year over time.
The
discount rate for calculating present value is 3 percent.
Tables
18 and 19 show the results of the sensitivity analysis. The tables show
that the estimated cost of the proposed rule is most sensitive to the
assumed fraction of prior notices that will need to be changed. The
present value of the proposed rule is most sensitive to the rate of
discount.
Table 18.--Sensitivity Analysis for Assumptions Made for Option 5 (Proposed Option)
Test | Annual Cost Under Base Assumption | Annual Cost Under Test Assumption | Change in Annual Cost (or Value) |
Percent Change |
50% prior notices changed | $370,516,823 | $447,312,699 | $76,795,876 | 21 |
15% prior notices changed with amendment | $69,798,077 | $71,727,578 | $1,929,501 | 3 |
5% lost value for produce, 12% lost value for seafood | $69,798,077 | $84,837,174 | $15,039,097 | 22 |
Amendment time is 4 hours | $69,789,077 | $123,843,623 | $54,045,546 | 77 |
Retail value is 200% of wholesale value | $69,798,077 | $73,030,451 | $3,232,374 | 5 |
Prior notice entries increase 3% in second year | $69,798,077 | $71,588,777 | $1,790,700 | 3 |
Table 19.--Present Values for Sensitivity Analysis for Assumptions Made for Option 5 (Proposed Option)
Test |
Present Value of |
Present Value of New Total Cost Under Test Assumption | Change in Present Value | Percent Change |
50% prior notices changed | $5,258,695,269 | $6,355,779,211 | $1,097,083,942 | 21 |
15% prior notices changed with amendment | $962,713,183 | $1,042,325,126 | $79,611,943 | 8 |
5% lost value for produce, 12% lost value for seafood | $962,713,183 | $1,177,557,426 | $214,844,243 | 22 |
Amendment time is 4 hours | $962,713,183 | $1,786,840,054 | $824,126,871 | 86 |
Retail value is 200% of wholesale value | $962,713,183 | $1,008,889,954 | $46,176,771 | 5 |
Prior notice entries increase 3% in second year | $962,713,183 | $988,294,611 | $25,581,428 | 3 |
3% Discount rate | $962,713,183 | $2,222,803,507 | $1,260,090,324 | 131 |
Benefits:
Requiring prior notice of imported food shipments and defining the
required data elements should improve FDA's ability to
detect accidental and deliberate contamination of food and deter
deliberate contamination. Having notice of an imported food shipment
before it reaches a U.S. border would allow FDA personnel
to be ready to respond to shipments that appear to be adulterated, whether
through intentional or accidental means, as well as when FDA
receives credible evidence that an entry represents a serious threat to
human or animal health.
Historical
evidence suggests that a terrorist or other intentional strike on the food
supply is a low-probability, but potentially high-cost event. FDA
lacks data to estimate the likelihood and resulting costs of a strike
occurring. Without knowing the likelihood or cost of an event, we cannot
quantitatively measure the reduction in probability of an event occurring,
or the possible reduction in cost of an event associated with each
regulatory option. Further hindering any quantification of benefits are
the complementary effects of the other regulations that are being
developed to implement Title III of the Bioterrorism Act.
To
understand possible costs of an intentional strike on the food supply, FDA
examined five outbreaks resulting from accidental and deliberate
contamination, and from both domestic and imported foods. An intentional
attack on the food supply that sought to disrupt the food supply and
sicken many U.S. citizens could be much larger than the examples given.
Table 20.--Summary of Five Foodborne Outbreaks
Pathogen | Location and year | Vehicle | Confirmed or reported cases | Estimated number of cases |
Total illness |
Salmonella enteritidi | Minnesota,1994 | Ice cream | 150 cases; 30 hospitalizations | 29,100 in MN 22,400 Nationwide | $3,187,744,000
to $5,629,792,000 |
Shigella sonnei | Michigan, 1988 | Tofu salad | 3,175 cases |
Not available |
$45,183,000 to $79,795,000 |
Outbreaks resulting from deliberate contamination
Pathogen | Location and year | Vehicle | Confirmed or reported cases | Estimated number of cases |
Total illness |
Salmonella Typhimurium | Dalles, Oregon 1984 | Salad bars | 751 cases; 45 hospitalizations | Not available | $10,687,000 to $18,875,000 |
Shigella dysentreriae type 2 | Texas, 1996 | Muffins and doughnuts | 12 cases; 4 hospitalizations | All cases identified | $83,000 |
Outbreaks resulting from imported foods
Pathogen | Location and year | Vehicle | Confirmed or reported cases | Estimated number of cases |
Total illness |
Cyclospora cayaetanensis | United States and Canada, 1996 | Raspberries (probably
imported from
Guatemal |
1465 cases identified, less than 20 hospitalization | Not available | $3,941,00 |
Salmonella
enteritidis in ice cream
In
1994, approximately 224,000 people were sickened by ice cream contaminated
with Salmonella enteritidis. The source of the contamination appeared to
be pasteurized pre-mix that had been contaminated during transport in
tanker trailers that previously had carried non-pasteurized eggs. There
were 150 confirmed cases of salmonellosis associated with the outbreak in
Minnesota. However, ice cream produced during the contamination period was
distributed to 48 states. To calculate the total number of illnesses
associated with the outbreak, researchers calculated an attack rate of 6.6
percent. This attack rate was extrapolated to the population that consumed
the ice cream, giving a total number sickened of 224,000 (Ref. 11).
Salmonellosis
most commonly causes gastrointestinal symptoms. Almost 91 percent of cases
are mild and cause one to three days of illness with symptoms including
diarrhea, abdominal cramps, and fever. Moderate cases, defined as
requiring a trip to a physician, account for 8 percent of the cases. These
cases typically have duration of two to 12 days. Severe cases require
hospitalization and last 11 to 21 days. In addition to causing
gastroenteritis, salmonellosis also can cause reactive arthritis in a
small percentage of cases. Reactive arthritis may be short or long term
and is characterized by joint pain. Just over one percent of cases develop
short-term reactive arthritis and two percent of cases develop chronic,
reactive arthritis.
In
table 21, FDA estimated the costs associated with
salmonellosis, including medical treatment costs and pain and suffering.
Pain and suffering is measured by lost quality adjusted life days (QALDs).
QALDs measure the loss of utility associated with an illness. A QALD is
measured between zero and one, with one being a day in perfect health. The
total loss of a Quality Adjusted Life Year (QALY), or the loss of a year
of life is valued at $100,000, based on economic studies of how consumers
value risks to life (Ref. 12). Thus, an entire lost QALD would be valued
at $274 and fractions of QALDs are a fraction of the day's value. FDA
presents two estimates of values of pain and suffering associated with
arthritis, one based on physician estimates (Ref. 13) and another based on
a regression analysis approach (Ref. 14). This gives a range of costs for
the average case of salmonellosis between $14,231 and $25,133.
Table 21.--The Cost of an Average Case of salmonellosis
Severity | Case Breakdown | Total QALDs Lost per Illness | Health Loss per Case (Discounted) | Medical Costs per Case (Discounted) |
Weighted Dollar Loss |
Illness | |||||
Mild | 90.7% | 1.05 | $660 | $0 | $599 |
Moderate | 8.1% | 3.68 | $2,310 | $283 | $209 |
Severe | 1.2% | 9.99 | $6,266 | $9,250 | $188 |
Arthritis Regression Approach |
|||||
Short-Term | 1.26% | 5.41 | $3,391 | $100 | $44 |
Long-Term | 2.40% | 2,613.12 | $452,554 | $7,322 | $11,048 |
Direct Survey Approach | |||||
Short-Term | 1.26% | 10.81 | $6,778 | $100 | $87 |
Long-Term | 2.40% | 5,223.15 | $904,573 | $7,322 | $21,906 |
Death | 0.04% | $5,000,000 | $2,143 | ||
Total Expected Loss per Case | |||||
Regression Approach | $14,231 | ||||
Direct Survey Approach | $25,133 |
To estimate the economic cost due to illness associated with this outbreak, FDA used the range for the average cost per case. For 224,000 people, this is a total cost of between $3,187,744,000 and $5,629,792,000 from this accidental food disaster.
Shigella sonnei in tofu salad
In 1988, a tofu salad at an outdoor music festival was contaminated with Shigella sonnei and sickened an estimated 3,175 people. Over 2,000 volunteer food handlers served communal meals at the festival. (Ref. 15) Shigellosis causes similar symptoms and is of similar duration to salmonellosis. It also is associated with short term and chronic reactive arthritis; thus, FDA assumed the average case of shigellosis has the same cost as salmonellosis. This gives a total cost of $45,183,000 to $79,797,000.
Salmonella typhimirium in salad bars
During
September and October of 1984, two outbreaks of Salmonella typhimirium
occurred in association with salad bars in restaurants in The Dalles,
Oregon. At least 751 people were affected. Members of the local
Rajneeshpuram commune intentionally caused the outbreak by spraying
Salmonella typhimirium on the salad bars in local restaurants. Their
apparent motivation was to influence a local election by decreasing voter
turnout. Intentional contamination was not suspected immediately and no
charges were brought until a year after the attacks (Ref. 16).
The 751 people affected primarily were identified through passive surveillance: thus the true number of people actually sickened is undoubtedly much higher. The Dalles is located on Interstate 84 in Oregon and is a frequent stop for travelers who were unlikely to be identified by passive or active surveillance for salmonellosis. However, since we do not have any estimates of the true size of the outbreak, we estimated the costs associated with known cases, recognizing this is an underestimate of the true cost of the outbreak. We use the cost estimates for salmonellosis as ranging from $14,231 to $25,133. This gives an estimated cost of known cases for the outbreak of $10,687,000 to $18,875,000.
Shigella dysenteriae
type 2 among laboratory workers
Twelve
people working in a laboratory who consumed muffins left in the laboratory
break room contracted shigellosis in Texas in 1996. Affected workers had
diarrhea, nausea, and abdominal discomfort. Investigators concluded that
the outbreak likely was the result of deliberate contamination. All twelve
affected workers were treated by, or consulted with, a physician. Nine
affected workers went to the emergency room, four of whom were
hospitalized (Ref. 17).
To
estimate the cost of this outbreak, FDA assumed that the
eight cases that required consultation with a doctor, but did not require
hospitalization, had the same cost as a moderate case of salmonellosis.
The four cases requiring hospitalization were estimated to have the same
cost as a severe case of gastroenteritis resulting from salmonellosis.
This gives a cost of $82,808 for illnesses associated with the event.
Table 22.--Summary of Costs for an Outbreak of Shigellosis
Severity |
Number of |
Cost per case | Total cost |
Mild | 0 | $0 | $0 |
Moderate | 8 | $2,593 | $20,744 |
Severe | 4 | $15,516 | $62,064 |
Total | 12 | $82,808 |
Cyclospora
cayatanensis in imported raspberries
In
1996, 1,465 cases of cyclosporiasis were linked to consumption of
raspberries imported from Guatemala. Nine hundred and seventy eight of
these cases were laboratory confirmed. No deaths were confirmed and less
than 20 hospitalizations were reported (Ref. 18). Case control studies
indicated that raspberries imported from Guatemala were the source of the
illnesses. Fifty-five clusters of cases were reported in 20 states, two
Canadian provinces, and the District of Columbia (Ref. 19).
Cyclosporiasis
typically causes watery diarrhea, loss of appetite, weight loss, and
fatigue. Less common symptoms include fever, chills, nausea, and headache.
The median duration of illness associated with the outbreak was more than
14 days and the median duration of diarrheal illness was 10 days (Ref.
20). We estimated the cost of a mild case of cyclosporiasis as two and one
half times higher than the cost of a mild case of gastroenteritis from
salmonellosis due to the longer duration. The reports of cyclosporiasis
outbreaks did not include information on the number of physician visits.
We assumed that the percentage of total cases that result in physician
visits would be larger than the corresponding percentage for salmonellosis
illnesses, due to the longer duration of illnesses. We assumed, therefore,
that 40 percent of those infected with cyclosporiasis visited a physician.
Less than 20 hospitalizations were reported from the cyclosporiasis
outbreak. No deaths were confirmed.
Table 23.--Summary of Costs of an Outbreak of Cyclosporiasis
Severity |
Number of |
Cost per case | Total cost |
Mild | 879 | $1,650 | $1,450,000 |
Moderate | 586 | $3,748 | $2,196,000 |
Severe | 19 | $15,516 | $294,000 |
Total | 1,465 | $3,941,000 |
B. Small Entity Analysis (or Initial Regulatory Flexibility
Analysis)
FDA
has examined the economic implications of this proposed rule as required
by the Regulatory Flexibility Act (5 U.S.C. 601-612). If a rule has a
significant economic impact on a substantial number of small entities, the
Regulatory Flexibility Act requires agencies to analyze regulatory options
that would lessen the economic effect of the rule on small entities
consistent with statutory objectives. The analysis below, together with
other relevant sections of this document, serves as the agency's initial
regulatory flexibility analysis under the Regulatory Flexibility Act.1.
Number of Establishments Affected
FDA finds that this proposed rule would affect the 77,427 U.S. importers. Most of these importers have fewer than 500 employees, thus making them small businesses according to the definitions of the Small Business Administration. Because most of the importers affected are small, all options considered in the Benefit-Cost Analysis in section IV.A above are regulatory relief options.
2. Costs Per Entity
Small
businesses will be affected by this proposed rule in a couple of ways.
First, this proposed rule requires importers to notify FDA
of incoming products electronically before the food arrives at the U.S.
border. The annual cost of doing so is about $770 per importer (see tables
1, 2, and 17 of this document). As discussed above and shown in tables 1
and 2, about 3,100 U.S. importers do not have electronic transmitting
capacity and will have to obtain computer equipment (at a cost of about
$2,000 per importer) and Internet access (at a cost of about $240
annually) in order to comply with this proposed rule. FDA
could not provide flexibility for those importers who do not have
electronic transmitting capacity, as paper notices could not be submitted
and processed in the proposed prior notice timeframe and would therefore
actually be more burdensome to importers because paper notices would need
to be submitted earlier.
Second, this proposed rule will potentially cause some loss of product value if the prior notice requirement causes perishable products to have to wait any length of time before crossing the U.S. border. The costs of lost product value vary with the required notice timeframe. We discuss the various costs associated with this possibility in the options previously outlined. FDA requests comments on the effect of this proposed rule on small entities.
3.
Additional Flexibility Considered
Because of the requirements of the Bioterrorism Act, FDA is precluded from selecting some of the options that typically would be considered to lessen the economic effect of the rule on small entities, including granting an exemption to small entities. FDA tentatively concludes that it would be inconsistent with section 307 of the Bioterrorism Act to allow small entities a later effective date, since the Bioterrorism Act established a deadline for beginning prior notice that applies to all FDA-regulated imported food. Although the recordkeeping provision of the Bioterrorism Act directs FDA to take into account the size of a business when issuing implementing regulations, the prior notice provision contains no such language. Thus, it appears that Congress intended for all entities to be subject to the effective date established in the Bioterrorism Act. Nonetheless, the agency recognizes that the prior notice requirement will cause an economic burden on small businesses; therefore, we are seeking comment on whether it would be consistent with section 307 for the agency to set staggered effective dates that would give small businesses more time to comply. FDA also seeks comment on how FDA could effectively distinguish between large and small businesses if it considered staggered effective dates.
C.
Unfunded Mandates
Title II of the Unfunded Mandates Reform Act of 1995 (Public Law 104-4) requires cost-benefit and other analyses before any rule making if the rule would include a ``Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any 1 year.'' The current inflation-adjusted statutory threshold is $112 million. FDA has determined that this proposed rule does not constitute a significant rule under the Unfunded Mandates Reform Act. See table 17 for the total costs.
V.
Paperwork Reduction Act of 1995
This
proposed rule contains information collection provisions that are subject
to review by the Office of Management and Budget (OMB) under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501-3520). A description of these
provisions is given below with an estimate of the annual reporting burden.
Included in the estimate is the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing each collection of information.
FDA
invites comments on: (1) Whether the proposed collection of information is
necessary for the proper performance of FDA's functions,
including whether the information will have practical utility; (2) the
accuracy of FDA's estimate of the burden of the proposed
collection of information, including the validity of the methodology and
assumptions used; (3) ways to enhance the quality, utility, and clarity of
the information to be collected; and (4) ways to minimize the burden of
the collection of information on respondents, including through the use of
automated collection techniques, when appropriate, and other forms of
information technology.Title: Prior Notice of Imported FoodDescription:
Section 801(m) of the Federal Food, Drug, and Cosmetic Act (the Act) (21
U.S.C. 381(m)) requires prior notification to the Secretary of Health and
Human Services of an article of food that is being imported or offered for
import into the United States. The purpose of this notification is to
enable the food to be inspected at ports of entry into the United States.
Section
801(m) of the Act states that the Secretary shall by regulation identify
the parties responsible for providing the notice and explain the
information that the prior notice is required to contain, the method of
submission of the notice, and the minimum and maximum period of advance
notice required. Section 801(m)(1) of the Act states that the Secretary
shall require submission of notice providing the identity of each of the
following: the article of food; the manufacturer; the shipper; the grower,
if known at the time of notification; the originating country; the
shipping country; and the anticipated port of entry. Section 801(m)(2)(A)
of the Act states that the Secretary shall by regulation prescribe the
time of submission of the notification in advance of importation or the
offering of the food for import, which period shall be no less than the
minimum amount of time necessary for the Secretary to receive, review, and
appropriately respond to such notification, but may not exceed five days. FDA's
prior notification of imported food shipments proposed regulation would
implement these statutory provisions.
FDA
estimates the burden for this information collection as follows:
Table 24.--Estimated Annual Reporting Burden
21 CFR Part 1, Subpart I | No. Of Respondents | Annual Frequency per Response | Total Annual Responses | Hours per Response | Total Capital Costs | Operating and Maintenance Costs | Total Hours |
1.285-1.290, 1.294\1\ | 77,427 | 23.3 | 1,807,692 | 1-2 | $6,194,000 | $743,280 | 1,888,216 |
1.278(d)\1\ | 90,385 | 1 | 90,385 | 0.5 | $0 | $0 | 45,193 |
1.278(d), 1.285-1.290, 1.294\2\ | 77,427 | 23.8 | 1,844,116 | 0.5-1 | $620,000 | $817,680 | 1,833,822 |
Total hours for first year | 1,888,216 | ||||||
Total recurring hours | 1,833,822 |
\1\ First year burden.\2\ Recurring burden.
Burden Estimate
Number of
Establishments Affected
Using 2001 FY information from FDA's OASIS system (industry codes 02 through 52, 54, and 70 through 72), FDA has determined that there are approximately 77,427 importers and consignees who receive shipments of food for human and animal consumption into the United States. It is these 77,427 U.S. importers or U.S. purchasers (or their agents) that will be primarily responsible for submitting the prior notice information.
New
and Closing Importers
In
addition to the U.S. importers currently in existence, in future years,
new import businesses will open and some existing import businesses will
close. These new importers would have to become familiar with the FDA
prior notice system and possibly obtain computer equipment and Internet
access to comply with prior notice requirements.
According
to the Small Business Administration Office of Advocacy, in 2001, about 10
percent of all businesses were new and 10 percent of businesses closed.
Using the 10 percent opening and closing business statistic, and given
that there are currently 77,427 U.S. importers, FDA will
assume, then, that on a yearly basis 7,743 importers will leave the market
and 7,743 importers will enter the market.Hour Burden Estimate Researching
the Prior Notice Requirement
To
become familiar with the requirements for this rule, FDA
estimates it will initially take responsible parties with Internet access
(74,330 importers) about one hour to research the prior notice
requirements and responsible parties without readily available Internet
access (3,097 importers) about 2 hours to research the requirements. This
one-time search burden for the existing importers is 80,524 hours.
In the years that follow the start-up year for prior notice, it is reasonable to expect a certain percentage of importing firms to enter and leave the market. Thus, in addition to the first year burden to research prior notice, it is expected that 8,053 hours will be spent annually researching the prior notice requirement by the anticipated 7,743 new importers entering the market annually that must learn about prior notice, 7,433 of whom are estimated to have Internet access and 310 of whom do not.
Submitting
Prior Notice
To estimate the repetitive effort of submitting a prior notice, and updating and amending the information, as needed, FDA will assume the activity takes one hour each time an entry (based on an average of 2.6 lines, and therefore notices, per entry) must be submitted. This includes 45 minutes of an administrative worker's time to fill out the screen, including updating, and then 15 minutes of the manager's time to verify the information. FDA does not have information on how many prior notices will come from each of the 77,427 importers. However, we assume that 1,807,692 prior notices will be submitted annually (based on FY 2001 OASIS information); we can take this number and divide by the 77,427 importers to get an average response frequency per importer of 23.3 notices.
Secure
Storage and Notifying FDA
If
an article of food is imported or offered for import with no prior notice
or inadequate (e.g. untimely, inaccurate, or incomplete) prior notice, the
food must be held at the port of entry or in a secure facility. In these
cases, the submitter or carrier must promptly notify FDA
of the location where the goods are held.
It
is quite likely that more imported products will be held during the first
year that the prior notice is required than in subsequent years as
importers will learn from experience. Therefore, FDA
estimates that imported products with insufficient prior notice will be
held or sent to secure storage about 5 percent of the time during the
first year and 2 percent of the time thereafter. This means that of the
1,807,692 prior notice entries received annually, in the first year prior
notice is in effect we would expect 90,385 of the entries to be held or
sent to secure storage; 36,154 entries would be held or sent to secure
storage in subsequent years.
Most port storage facilities and secure storage facilities located at or near ports are probably familiar to submitters or carriers; therefore it should only take one-half hour per entry to notify FDA of the shipment's location. Thus, in the first year of the regulation, submitters or carriers will spend 45,193 hours notifying FDA of secure storage locations; 18,077 hours in subsequent years.
Capital
Cost and Operating and Maintenance Cost Burden
Since
all prior notices must be submitted electronically, we will assume that
the 3,097 responsible parties without Internet access will have to
purchase the appropriate IT equipment and gain Internet access to actually
transmit the information. Assuming computer equipment costs each firm
$2,000 and yearly Internet access costs each firm $240 ($20 per month for
12 months), this results in a one-time computer cost for these facilities
of $6,194,000 and a recurring Internet access cost of $743,280. For the
7,743 new firms that enter the import market each year, we can expect 310
of them to need to purchase computer equipment and obtain Internet access.
Thus, on an annual basis we can expect new importers to spend $620,000 on
computers and $74,400 on Internet access to be able to submit prior notice
information.
In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the agency has submitted the information collection provisions of this proposed rule to OMB for review. Interested persons are requested to send comments regarding information collection to the Office of Information and Regulatory Affairs, OMB, New Executive Office Bldg., 725 17th St. NW., rm. 10235, Washington, DC 20503, Attn: Stuart Shapiro, FDA Desk Officer.
VI.
Analysis of Environmental Impact
The agency has carefully considered the potential environmental effects of this action. FDA has concluded under 21 CFR 25.30(h) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
VII.
Federalism
FDA has analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the proposed rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the agency tentatively concludes that the proposed rule does not contain policies that have federalism implications as defined in the Executive Order and, consequently, a federalism summary impact statement has not been prepared.
VIII.
Comments
Interested
persons may submit to the Dockets Management Branch (see ADDRESSES)
written or electronic comments regarding this document. Submit a single
copy of electronic comments to http://www.fda.gov/dockets/ecomments
or two hard copies of any written comments, except that individuals
may submit one hard copy. Comments are to be identified with the docket
number found in brackets in the heading of this document. FDA
cannot be responsible for addressing comments submitted to the wrong
docket or that do not contain a docket number. Received comments may be
seen in the Dockets Management Branch between 9 a.m. and 4 p.m., Monday
through Friday.
FDA
notes that the comment period for this document is shorter than the 75-day
period that the agency customarily provides for proposed rules that are
technical or sanitary or phytosanitary (SPS) measures. FDA
believes that a 60-day comment period is appropriate in this instance.
Executive Order 12889, ``Implementation of the North American Free Trade
Agreement'' (58 FR 69681, December 30, 1993), states that any agency
subject to the Administrative Procedure Act must provide a 75-day comment
period for any proposed Federal technical regulation or any Federal SPS
measure of general application. Executive Order 12889 provides an
exception to the 75-day comment period where the United States considers a
technical regulation or SPS measure of general application necessary to
address an urgent problem related to the protection of human, plant, or
animal health or sanitary or phytosanitary protection. FDA
has concluded that this proposed rule is subject to the exception in
Executive Order 12889.
The
Bioterrorism Act states that it is intended ``[t]o improve the ability of
the United States to prevent, prepare for, and respond to bioterrorism and
other public health emergencies.'' In order to meet these objectives,
section 307 of the Act requires the FDA to propose and
issue final regulations requiring prior notice of food imported or offered
for import into the United States within 18 months of the Bioterrorism
Act's enactment, which is by December 12, 2003. Section 307 also provides
that if FDA does not issue final regulations by this
date, FDA still must receive prior notice of food
imported or offered for import into the United States by December 12,
2002, of no less than 8 hours and no more than 5 days, subject to
compliance with the final regulations when the final regulations are made
effective. This expedited timeframe reflects the urgency of the United
States government's need to prepare to respond to bioterrorism and other
food-related emergencies and FDA's need to have the final
rule in place, tested, and fully operational by December 12, 2003. This
means that the final rule must publish in early October 2003.
FDA will not consider any comments submitted after the 60-day comment period closes and does not intend to grant any requests for extension of the comment period due to the Bioterrorism Act's requirement to have a final regulation in effect by December 12, 2003, which requires publication on or before October 12, 2003.IX.
References
The following references have been placed on display in the Dockets Management Branch (see ADDRESSES) and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday. (FDA has verified the Web site address, but FDA is not responsible for any subsequent changes to the non
FDA
Web sites after this document publishes in the Federal Register.)
1.
Compilation of food entry documents, with corresponding invoices and
screens, taken from FDA's Operational and Administrative
System for Import Support (OASIS).
2.
Bureau of Economic Analysis, http://www.bea.doc.gov
3.
United States Department of Labor, Bureau of Labor Statistics, National
Compensation Survey: Occupation Wages in the United States, 2000, Summary
01-04. Available at http://www.bls.gov/ncs/ocs/sp/ncbl0354.pdf
.
4.
USDA Agricultural Marketing Service (March 2002) Fresh Fruits and
Vegetable Shipments. www.ams.usda.gov
5.
Kasmire, Dr. Robert F. Vegetable Marketing Specialist, www.thepacker.com/rbcs/handbookarticles/properis.htm
Accessed on September 16, 2002.
6.
USDA Agricultural Marketing Service produce point price reports for
various border crossings for the dates September 12, 2002 and September
16, 2002. www.ams.usda.gov
7.
Florida Department of Agriculture and Consumer Services (FDACS) www.ffva.com/rps.htm.
8.
National Marine Fisheries Service, Fisheries Statistics and Economics
Division, www.st.nmfs.gov
accessed September 2002.
9.
Florida Department of Agriculture and Consumer Services, http://doacs.state.fl.us/press/1999/090999.html
and www.ffva.com/rps.htm
10.
Center for Food Safety and Applied Nutrition, http://www.cfsan.fda.gov/
[tilde]dms/qa-sto8.html
11.
Hennessy T.W., C.W. Hedberg, L. Slutsker, K.E. White, J.M. Besser-Wiek,
M.E. Moen, J. Feldman, W.W. Coleman, L.M. Edmonson, K.L. MacDonald, M.T.
Osterholm, and the Investigation Team, ``A National Outbreak of Salmonella
Enteritidis Infections From Ice Cream,'' The New England Journal of
Medicine, May 16, 1996, pp. 1281-1286.
12.
Cutler, D., E. Richardson, 1999, ``Your Money and Your Life: The Value of
Health and What Affects It,'' Working Paper 6895, National Bureau of
Economic Research.
13.
Zorn, D., K. Klontz, 1998, ``Appendix: The Value of Consumer Loss to
Foodborne Reactive Arthritis,'' Federal Register, 63 FR 24292-24299, May
1, 1998.
14.
Scharff, R., and A. Jessup, ``Valuing Chronic Disease for Heterogenous
Populations: the Case of Arthritis,'' 2002, Mimeo.
15.
Lee, L.A., S.M. Ostroff, H.B. McGee, D.R. Johns, F.P. Downes, D.N.
Cameron, N.H. Bean, and P.M. Griffin, ``An Outbreak of Shigellosis at an
Outdoor Music Festival,''[[Page 5460]]American Journal of Epidemiology,
133:6:608-615.
16.
Trook, T.J., R.V. Tauxe, R.P. Wise, J.R. Livengood, R. Sokolow, S. Mauvais,
K.A. Birkness, M.R. Skeels, J.M. Horan, and L.R. Foster, ``A Large
Community Outbreak of Salmonellosis Caused by Intentional Contamination of
Restaurant Salad Bars,'' The Journal of the American Medical Association,
278:5:389-397.
17.
Kolavic, S.A., A. Kimura, S.L. Simons, L. Slusker, S. Barth, and C.E.
Haley, ``An Outbreak of Shigella Dysenteriae Type 2 Among Laboratory
Workers Due to Intentional Food Contamination,'' The Journal of the
American Medical Association, 278:5:396-403.
18.
Colley, D.G., Widespread Foodborne Cyclosporiasis Outbreaks Present Major
Challenges (letter), Emerging Infectious Diseases, 2:4:354-356.
19.
Herwaldt, B.L., M.L. Ackers, and Cyclospora Working Group, ``An Outbreak
in 1996 of Cyclosporiasis Associated with Imported Raspberries,'' New
England Journal of Medicine, May 29, 1997, 1548-1556.
20.
Small Business Administration Office of Advocacy, ``Small Business By the
Numbers,'' May 2002, http://www.sba.gov/advo/.List
of Subjects in 21 CFR Part 1
Cosmetics,
Drugs, Exports, Food labeling, Imports, Labeling, Reporting and
recordkeeping requirements.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, it is proposed that 21 CFR part 1 be amended as follows:
PART
1--GENERAL ENFORCEMENT REGULATIONS
1.
The authority citation for 21 CFR part 1 continues to read as follows:
Authority:
15 U.S.C. 1453, 1454, 1455; 21 U.S.C. 304, 321, 331, 334, 343, 350c, 350d,
352, 355, 360b, 362, 371, 374, 381, 382, 393; 42 U.S.C. 216, 241, 243,
262, 264.
2. Subpart I is added to part 1 to read as follows:
Subpart I--PRIOR NOTICE OF IMPORTED FOOD
General Provisions
Sec.1.276
What imported food is subject to this subpart?
1.277 What definitions apply to this subpart?
1.278 What are the consequences of failing to submit adequate prior notice
or otherwise failing to comply with this subpart?
Requirements to Submit Prior Notice of Imported Food
Sec.1.285
Who is authorized to submit prior notice for an article of food that is
imported or offered for import into the United States?
1.286 When must the prior notice be submitted to FDA?
1.287 How must you submit the prior notice?
1.288 What information must be submitted in the prior notice?
1.289 What changes are allowed to a prior notice after it has been
submitted to FDA?
1.290 Under what circumstances must you submit a product identity
amendment to your prior notice after you have submitted it to FDA?
1.291 What is the deadline for product identity amendments under Sec.
1.290?
1.292 How do you submit a product identity amendment to a prior notice?
1.293 What are the consequences if you do not submit a product identity
amendment to your prior notice?
1.294 What must you do if the anticipated arrival information (required
under Sec. 1.288(k)(1)) submitted in your prior notice changes?
General
Provisions
Sec.
1.276 What imported food is subject to this subpart?
(a)
This subpart applies to food for humans and other animals that is imported
or offered for import into the United States (U.S.), including U.S.
foreign trade zones, for consumption, storage, immediate export from the
port of entry, transshipment through the United States to another country,
or import for export.
(b)
This subpart does not apply to:
(1)
Food that is carried by an individual entering the United States in that
individual's personal baggage for that individual's personal use;
(2)
Meat food products that at the time of importation are subject to the
exclusive jurisdiction of the U.S. Department of Agriculture (USDA) under
the Federal Meat Inspection Act (21 U.S.C. 601 et seq.);
(3)
Poultry products that at the time of importation are subject to the
exclusive jurisdiction of USDA under the Poultry Products Inspection Act
(21 U.S.C. 451 et seq.); and
(4) Egg products that at the time of importation are subject to the exclusive jurisdiction of USDA under the Egg Products Inspection Act (21 U.S.C. 1031 et seq.).
Sec.
1.277 What definitions apply to this subpart?
(a)
The act means the Federal Food, Drug, and Cosmetic Act.
(b)
The definitions of terms in section 201 of the act (21 U.S.C. 321) apply
when the terms are used in this subpart.
(c)
In addition, for the purposes of this subpart:
(1)
Calendar day means every day shown on the calendar.
(2)
Country from which the article of food was shipped means the country in
which the article of food was loaded onto the conveyance that brings it to
the United States.
(3)
Food has the meaning given in section 201(f) of the act. Examples of food
include, but are not limited to, fruits, vegetables, fish, dairy products,
eggs, 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, bakery goods, snack foods, candy, and canned
foods.
(4)
Originating country means the country from which the article of food
originates. If the article of food is fresh produce or fresh aquacultured
fish or seafood, the originating country is the country in which it is
grown and harvested. If the article of food is wild-caught fish or seafood
and it is harvested in the waters of the United States or by a U.S.
flagged vessel or processed aboard a U.S. flagged vessel, the originating
country is the United States. Otherwise, the originating country is the
country in which the article of food is produced.
(5)
Port of entry means the water, air, or land port at which the article of
food is imported or offered for import into the United States, i.e., the
port where food first arrives in the United States. This port may be
different than the port where the article of food is entered for U.S.
Customs Service purposes.
(6) You means the purchaser or importer of an article of food who resides or maintains a place of business in the United States, or an agent who resides or maintains a place of business in the United States acting on the behalf of the U.S. purchaser or importer or, if the article of food is imported with the intention of in-bond movement through the United States for export, i.e., Transportation for Exportation or Immediate Export entries, the arriving carrier or, if known, the in-bond carrier.
Sec.
1.278 What are the consequences of failing to submit adequate
prior notice or otherwise failing to comply with this subpart?
(a)
If an article of food is imported or offered for import with no prior
notice or inadequate (e.g., untimely, inaccurate, or incomplete) prior
notice, the food shall be refused admission under section 801(m)(1) of the
act (21 U.S.C. 381(m)(1)).
(b)
If an article of food is refused admission under section 801(m)(1), it
must be held at the port of entry unless FDA directs its
removal to a secure facility in accordance with Sec. 1.278(c).
(c)
If FDA determines that removal to a secure facility is
appropriate (e.g., due to a concern with the security of the article of
food or due to space limitations in the port of entry), FDA
may direct that the article of food be removed to a Bonded Warehouse,
Container Freight Station, Centralized Examination Station, or another
appropriate secure facility that has been approved by FDA.
(d)
The person submitting the prior notice or the carrier must arrange for
movement of the article of food, under appropriate custodial bond, within
the port of entry or to the secure facility and must promptly notify FDA
of the location. Transportation and storage expenses shall be borne by the
owner, purchaser, importer, or consignee.
(e)
(1) The article of food must be held at the port of entry or in the secure
facility until prior notice is submitted to FDA in
accordance with this subpart, FDA has examined the prior
notice, FDA has determined that the prior notice is
adequate, and FDA has notified the U.S. Customs Service
and the person who submitted the prior notice that the article of food no
longer is subject to refusal of admission under section 801(m)(1) of the
act.
(2)
Notwithstanding section 801(b) of the act (21 U.S.C. 381(b)), while any
article of food that has been refused admission under section 801(m)(1) of
the act is held at its port of entry or in a secure facility, it may not
be delivered to any of its importers, owners, or consignees.
(f)
A determination that an article of food is no longer subject to refusal
under section 801(m)(1) is different than, and may come before,
determinations of admissibility under other provisions of the act or other
U.S. laws. A determination that an article of food is no longer subject to
refusal under section 801(m)(1) does not mean that it will be granted
admission under other provisions of the act or other U.S. laws.
(g) Any person who imports or offers for import an article of food without complying with the requirements of 21 U.S.C. 381(m) as set out in this subpart, or otherwise violates any requirement under 21 U.S.C. 381(m), or any person who causes such an act, commits a prohibited act within the meaning of 21 U.S.C. 331 (ee). Under 21 U.S.C. section 332, the United States can bring a civil action in Federal court to enjoin persons who commit prohibited acts. Under 21 U.S.C. section 333, the United States can bring a criminal action in Federal court to prosecute persons who commit prohibited acts. Under 21 U.S.C. 335a, FDA can seek debarment of any person who has been convicted of a felony relating to importation of food into the United States.
Requirements to Submit Prior Notice of Imported Food
Sec.
1.285 Who is authorized to submit prior notice for an article
of food that is imported or offered for import into the United States?
(a)
A purchaser or importer of an article of food who resides or maintains a
place of business in the United States, or an agent who resides or
maintains a place of business in the United States acting on the behalf of
the U.S. purchaser or importer, is authorized to submit to FDA
prior notice of the article of food being imported or offered for import
into the United States, except as specified in paragraph (b) of this
section.
(b) If the article of food is imported for in-bond movement through the United States for export, i.e., Transportation for Exportation or Immediate Export entries, the arriving carrier or, if known, the in-bond carrier is authorized to submit prior notice to FDA.
Sec.
1.286 When must the prior notice be submitted to FDA?
(a)
You must submit the prior notice to FDA no later than
noon of the calendar day before the day the article of food will arrive at
the border crossing in the port of entry.
(b) You may not submit the prior notice until all of the information required by Sec. 1.288 exists, except as provided in Sec. Sec. 1.288(e)(2) and 1.290, which both relate to product identity amendments. You may not submit prior notice more than 5 days before the anticipated date of arrival of the food at the anticipated port of entry.
Sec.
1.287 How must you submit the prior notice?
(a)
You must submit prior notice, product identity amendments, and arrival
updates electronically to FDA through FDA's
Prior Notice System at [a Website that will be provided in the final
rule], except as provided in paragraph (b) of this section.
(b) If FDA's Prior Notice System is unable to receive prior notice electronically, you must submit prior notice, product identity amendments, and arrival updates using a printed version of the Prior Notice Screen from FDA's Prior Notice System delivered in person, by e-mail, or fax to the FDA field office with responsibility over the geographical area in which the anticipated port of entry identified in your initial prior notice is located.
Sec.
1.288 What information must be submitted in the prior notice?
For
each article of food that is imported or offered for import into the
United States, you must submit the information listed in this section.
(The Prior Notice Screen of FDA's Prior Notice System
also identifies the information that you must submit to FDA.)
(a)
The name of the individual submitting the prior notice, the submitting
firm's name, address, phone number, fax number, and e-mail address, and,
if the firm is required to register for a facility associated with the
article of food under 21 CFR part 1, subpart H, the registration number
assigned to that facility;
(b)
The entry type as designated by the U.S. Customs Service;
(c)
The U.S. Customs Service's Automated Commercial System (ACS) entry number,
or if the article of food is an import that is not subject to ACS, the
other U.S. Customs Service identification number associated with the
importation;
(d)
If the article of food is under hold under Sec. 1.278, the location
where it is being held, the date the article will arrive at that location,
and identification of a contact at that location.
(e)(1)
The identity of the article of food being imported or offered for import,
as follows:
(i)
The complete FDA product code;
(ii)
The common or usual name or market name;
(iii)
The trade or brand name, if different from the common or usual name or
market name;
(iv)
The quantity of food described from smallest package size to largest
container; and
(v)
The lot or code numbers or other identifier of the food if applicable.
(2)
If all of the information required by this subsection exists by noon of
the calendar day before the day the article of food will arrive at the
border crossing in the port of entry, you must include it in your prior
notice and you may not amend the prior notice under Sec. 1.290. If
any of this information does not exist by noon of the calendar day before
the day the article of food will arrive at the border crossing in the port
of entry, you must give FDA as much information as does
exist at that time and tell FDA that you will amend the
prior notice as required under Sec. 1.290.
(f)
The name, address, phone number, fax number, and e-mail address of
the[[Page 5462]]manufacturer, and if it is required to register for a
facility associated with the article of food under 21 CFR part 1, subpart
H, the registration number assigned to that facility;
(g)
The name, address, phone number, fax number, and e-mail of all growers,
and the growing location if different from business address, if known at
time of submission of your prior notice;
(h)
The originating country of the article of food;
(i)
The name, address, phone number, fax number, and e-mail address of the
shipper and, if it is required to register under 21 CFR part 1, subpart H,
for a facility associated with the article of food, the registration
number assigned to that facility;
(j)
The country from which the article of food was shipped;
(k)
(1) Anticipated arrival information about the article of food being
imported or offered for import, as follows:
(i)
The anticipated port of entry and, if the anticipated port of entry has
more than one border crossing, the specific anticipated border crossing
where the food will be brought into the United States;
(ii)
The anticipated date on which the article of food will arrive at the
anticipated port of entry; and
(iii)
The anticipated time of that arrival;
(2)
If any of the anticipated arrival information required under this
paragraph changes after you submit your prior notice, you must update your
notice in accordance with Sec. 1.294.
(l)
The port where entry of the article of food will be made for purposes of
the U.S. Customs Service;
(m)
The anticipated date of entry for purposes of the U.S. Customs Service;
and
(n)
The name, address, phone number, fax number, and e-mail address of the
importer, and, if the importer is required to register for a facility
associated with the article of food under 21 CFR part 1, subpart H, the
registration number assigned to that facility;
(o)
The name, address, phone number, fax number, and e-mail address of the
owner, and if the owner is required to register for a facility associated
with the article of food under 21 CFR part 1, subpart H, the registration
number assigned to that facility;
(p)
The name, address, phone number, fax number, and e-mail address of the
consignee, and if the consignee is required to register for a facility
associated with the article of food under 21 CFR part 1, subpart H, the
registration number assigned to that facility; and
(q)
The names, addresses, phone numbers, fax numbers and e-mail addresses of
all the carriers which are or will be carrying the article of the food
from the country from which the article of food was shipped to the United
States, and the carriers' Standard Carrier Abbreviation Codes (SCAC) if
appropriate.Sec. 1.289 What changes are allowed to a
prior notice after it has been submitted to FDA?
After
a prior notice has been submitted to FDA, it may only be
changed as set out in Sec. 1.290 which relates to product identity
amendments or Sec. 1.294 which relates to arrival updates. If other
information provided in the prior notice changes, you must cancel the
prior notice in the FDA Prior Notice System and submit a
new prior notice to FDA.Sec. 1.290
Under what circumstances must you submit a product identity amendment to
your prior notice after you have submitted it to FDA?
(a)
If any of the information required by Sec. 1.288(e)(1) did not exist
at the time you submitted your prior notice and the prior notice you
submitted was therefore incomplete, you must amend your prior notice with
complete product identity information by the deadline specified in Sec.
1.291.
(b)
You may only amend your prior notice once.
(c)
You may not change the general identity of the article of food that is the
subject of the prior notice by amendment. However, if the article is fresh
produce or fresh, wild-caught fish, you may amend the last two digits of
the product code when you do not know the specific identity of the article
at the time of initial prior notice. If your initial prior notice
submission identifies the product by the FDA product code
for ``fresh peppers, refrigerated,'' when you amend your submission, you
must give the product code that identifies with specificity the type of
pepper--``fresh green bell peppers, refrigerated.'' You may also include
more than one article in your amendment if the industry and class and
process (of the FDA product code) are the same. A prior
notice for ``refrigerated fresh fish'' may be amended as ``refrigerated
fresh cod'' and ``refrigerated fresh salmon,'' but not ``refrigerated
fresh cod'' and ``canned shrimp.'' You may not amend the product identity
to refer to another food, e.g., apples, or another process, e.g., canned.
(d) If you did not provide grower identity at the time you submitted your prior notice under this subpart, but you know the identity of the grower when you submit a product identity amendment to your prior notice, you must include in your amendment: the name, address, phone number, fax number, and e-mail of all growers, and growing location if different from business address.
Sec. 1.291 What is the deadline for
product identity amendments under Sec. 1.290?
Your product identity amendment must be submitted no later than 2 hours prior to the time of arrival.
Sec. 1.292 How do you submit a
product identity amendment to a prior notice?
You
must submit product identity amendments in accordance with Sec.
1.287.Sec. 1.293 What are the consequences if you do not
submit a product identity amendment to your prior notice?
(a)
If you informed FDA in your prior notice that you would
be submitting a product identity amendment but you do not amend your prior
notice completely, the prior notice is inadequate for the purposes of Sec.
1.278(a).
(b)
If you informed FDA in your prior notice that you would
be submitting a product identity amendment and you submit your amendment
after the deadline provided in section 1.291, the prior notice is
inadequate for the purpose of Sec. 1.278(a).Sec. 1.294
What must you do if the anticipated arrival information (required under
Sec. 1.288(k)(1)) submitted in your prior notice changes?
(a)
If any of the anticipated arrival information required under Sec.
1.288(k)(1) changes after you submit a prior notice to FDA,
you must submit an arrival update updating the information in your prior
notice in accordance with Sec. 1.287. Your arrival update must
provide the following information:
(1)
If the anticipated port of entry changes, provide the updated port of
entry;
(2)
If the time of arrival is expected to be more than 3 hours later than the
anticipated time of arrival, provide the updated time of arrival;
(3)
If the time of arrival is expected to be more than 1 hour earlier than the
anticipated time of arrival, provide the updated time of arrival.
(b)
If you did not provide grower identity at the time you submitted your
prior notice under this subpart, but you know the identity of the grower
when you update your prior notice, you must include in your update: the
name, address, phone number, fax number, and e-mail of all growers, and
growing location if different from business address.
(c)
You must update the information in accordance with the requirements of
Sec. Sec. 1.291 and 1.292.
(d)
If you do not submit an arrival update when one is required by paragraph
(a) of this section, the prior notice is inadequate for the purposes of
Sec. 1.278(a).
Dated:
January 27, 2003.Tommy G. Thompson,
Secretary of Health and Human Services.
Dated: January 27, 2003.
Kenneth
W. Dam,
Acting Secretary of the Treasury.
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