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This document also available in French and Spanish.
Welcome and Introductions
Louis J. Carson, Deputy Director
Office of Food Safety, Defense and Outreach
Center for Food Safety and Applied Nutrition, FDA
Overview of Final Rules for Records
Leslye M. Fraser, J.D. Director
Office of Regulations and Policy
Center for Food Safety and Applied Nutrition, FDA
Additional Questions and Answers from Public Meetings in:
MR. CARSON: Welcome to the Center for Food Safety and Applied Nutrition, and the Harvey W. Wiley Auditorium.
My name is Lou Carson, and I'm Lead for the Bioterrorism Outreach Effort.
As you can see, we have a record crowd today, as well as talking about record-keeping, and today's meeting--if you haven't already noticed--is being recorded. We are taping this session so that we can produce CD-ROMs and distribute, for those who could not attend one of our public meetings that we're holding around the country. I'll be talking a little bit more about that later, but suffice it to say we are taping--video and audio today.
And in your packages that you have, you should have an agenda, the slide set that we will be presenting today. You should also have received a question sheet, if you wish to write down your questions ahead of time so that we can compile them for the question and answer period, or there will be mikes that will be available for each one of you to individually ask your question during the question and answer period.
In your packages you also have a fact sheet that briefly describes the bioterrorism record-keeping rule.
As I mentioned, today's meeting is the first in a series of seven meetings that we're holding around the country. The purpose of these meetings is to explain and clarify the rule that we published in December. We are assembling--and we have already received comments and questions concerning the rule--and we will be compiling a list of questions and answers that we can then post on our website and distribute to one and all, that would further help you understand the rule and how it will be implemented.
So your questions today are an important part of us further clarifying the rule.
As I mentioned, we are taping today's session. We are taping both video and audio. So if you choose, you may write your question, that we will then take here up front and answer, or you can be on camera, and ask your question, with your affiliation, during the question and answer period. It is your choice. We would like to have some people volunteer to do that because it would add to the video itself.
If you don't already know, as you came into the building, the restrooms are up the stairway and down the hall on the right--both men and women's are there on the right-hand side.
This morning we are going to have a presentation by Ms. Leslye Fraser, Director of our Office of Regulations and Policy, who will be walking you through the slides. We will then have a short break, and then we will go into the questions and answers.
We will take the live questions first. So if you have a question, we will have microphones at both sides for people to ask, and then we will go to the questions that were submitted in writing, so that we can capture all of the questions today.
At the end of the session we'll have some closing remarks, depending on the types of questions or the comments made.
With that, I'd like to introduce Ms. Leslye Fraser who will be walking you through the rule today.
[See Presentation slides for Ms Fraser.]
MS. FRASER: Thanks, Lou, and good morning, good morning, good morning to everyone. Thank you for joining us so bright and early out here in College Park. It's always a pleasure to have visitors here, and so we thank you for coming out.
I want to first start with--and I saw him in the back of the room, and I don't know if he's tried to duck out--but I wanted to introduce Dr. Nega Beru. One, I have had the privilege of leading a fabulous cross-agency team in developing all of the bioterrorism regulations. But Dr. Beru has been my right hand on the record-keeping rule. It was he who led the day-to-day activities. And the other ulterior motive I have here is that when you do have questions that come up, he's going to have the lead on developing guidance documents and responses for you on those documents.
But I do want to thank both the team members and, in particular I want to thank Nega for his excellent leadership in developing both the proposed and the final rule. He is our Acting Deputy Director for the Office of Plant, Dairy Foods and Beverages here in CFSAN.
With that, we will get started going through the rule. It will really be an overview of what's in the rule. You may find copies of the rule itself, as well as our Fact Sheets. The electronic versions of much of what is in your packet is available on our website, and we encourage you to download it from there.
We will be--just to follow up on what Lou said with respect to the tapes that we are producing, they will be produced in English, French and Spanish--the three WTO official languages.
[Slide.]
In terms of the history--and I see a lot of familiar faces out there in the audience, and people who have provided comments to us, so you know this as well as I do--but we did publish the proposed rule in May of 2003. We did receive significant comments on the proposed rule. We received about 212 individual submissions--so these were letters, some were very thin--few were very thin. Most were rather substantial. And they raised over 220 major issues that we have addressed in the preamble to the final rule. I know reading Federal Register documents may not be your best and favorite reading, but I do encourage you to look at the comments and the responses, because many of the questions that you may have are addressed there. We did look at each issue that was raised, and we gave you our response, we gave you our interpretation, and we gave you our rationale for making changes or not making changes between the proposed and the final rule.
And here is the long web link of where you may obtain a copy of all of our information. The short web link is www.fda.gov, and then on the right-hand side you may click on "Bioterrorism Act."
[Slide.]
The other thing I would note for you, for some of you who may not be on our listserve, at the bottom of this homepage for the Bioterrorism Act is a web link where you may sign up for our Listserve. And when we have any new information on any of the bioterrorism regulations, or any other thing related to that, you will get an automatic e-mail announcement, and then you don't have to remember to check it every Monday, or Wednesday, or whatever your practice may be.
Between the proposal and final rule phase, I would say there were about 12 major changes we made. There were some other changes around the margin. So before we get into the details of the rule itself, for those of you who are familiar with the proposed rule, I will walk you through what changed between proposed and final.
In the proposed rule, we applied the rule to domestic facilities that manufacture, process, pack, hold, transport, distribute, receive or import food. We had an inadvertent inclusion that said "for consumption in the United States." That was not intentional. That was language that was left over from the registration rule. The record-keeping provision in the Bioterrorism Act did not have such a limitation, and so you see on the domestic side there is no "for consumption in the United States." So it's any party performing those covered activities that are subject to the rule domestically.
At the proposed rule stage we only had planned to apply the rule for foreign entities that were subject to the registration rule. So, essentially, it was foreign facilities that manufactured, processed, packed or hold food for consumption in the United States. That was where the inadvertent error got transcribed over.
What you see in the final rule is that all foreign persons are excluded, unless they are transporting food within the United States. So, essentially, for those transporters that are coming across the border and driving the food within the United States, they are subject to the rule. All other foreign persons are excluded.
In the proposed rule, with respect to food contact substances, they were originally included. Those persons who manufactured, processed, packed--etcetera. In the final rule we essentially have excluded food contact substances from the obligation to establish and maintain records, unless you happen to be the person that is placing the food product into the finished container that is contacting the food, and then you are subject to the full requirements.
You are subject--as food contact substance person or a packing person--to the records access requirements which we will talk about late! But you do not have an obligation to establish and maintain records under this rule.
With respect to a "lot number" or other identifier, at the proposed rule stage we proposed it to apply throughout the distribution chain, all the way from the manufacturer down to the retailer. In the final rule, the obligation to record the lot number's or a similar identifier is only to the extent it's available, and it only applies to those who manufacture, process or pack the food.
[Slide.]
Record retention requirements we extended by six months for all types--I'm sorry, we changed it from one and two years, to six months, 12 months or two years, depending on the type of food. And we did change our categories of food to be similar to those that are provided by the National Institute of Standards and Technology.
For transporters, they do remain subject to this BT Act Records rule. But you will see, we have offered five options for transporters to choose from to comply, including compliance with existing regulations that are contained right now by the Department of Transportation.
[Slide.]
Record availability: we had, in the proposed rule, a time requirement of four hours upon receipt of a request if it were business hours, and eight hours outside of business hours. That response time has been modified to be "as soon as possible, but not to exceed 24 hours." We do emphasize the "as soon as possible." We are not looking for everyone to take the full 24 hours unless they absolutely need it. We are asking that you have mechanisms in place to meet the "as soon as possible" if that is feasible.
"Compliance dates" is where we have extended it six months across the board for all size entities from what we had proposed.
In the proposed rule we did have an exclusion for pet food. We did receive comments from the trade associations here, asking that the exclusion be deleted so that there would not be a vulnerability in the food supply with respect to that food. And we have removed the exclusion in the final rule, so pet foods are covered.
[Slide.]
The requirement to record "responsible individual" by all entities that was in the proposed rule has been deleted. And we have modified the definition of "recipe" such that we do have access to a list of ingredients, because that is not defined as a "recipe."
So, with that--I'm sorry, there are two more.
[Slide.]
Exclusion for retail facilities: we did have in the proposed rule an exclusion for roadside stands within a nearby vicinity of a farm. That has been deleted, and there is a general exclusion with respect to retail facilities that have 10 or fewer full-time equivalent employees--or FTEs.
And we have added two additional exclusions--exercising our discretion--for non-profit food establishments and for packaging.
[Slide.]
With that, I'll start with definitions, so that as we get into the requirements of the rule you will have an understanding of what are the terms that we're talking about. And many of these definitions should be familiar to you. They are in the registration rule and other rules.
We start with a "farm," which is generally a facility in one general physical location that grows crops, raises animals, or does both. And we do have some examples in the rule, including orchards, dairy farms, feedlots and aquaculture facilities.
[Slide.]
We do have, within the definition of "farm," the ability for a farm to pack or hold food on the farm if it is food that is grown, raised or consumed on that farm or another farm owned by the same entity. So if a person owns a farm that may be 10 miles apart, and they have a packing shed on one farm, in which they pack all of the food that is grown on both farms, they still are excluded as a farm.
We also allow farms to manufacture and process food, if it is for consumption on that farm. So if a farm has a feed mill, for example, as long as the feed that they are producing is for their own animals on that farm or another farm that that entity owns, they remain excluded. If they have a feed mill and they are producing feed to sell into commerce, or to another farm, then the manufacturing processing facility is subject to these requirements. The general farming activity and practices remain exempt.
For a type of facility we define in the rule--or we explain in the rule as a "mixed" type facility, so you may be excluded with respect to those activities that fit within an exclusion, but subject to the rule for those activities that fall within the requirements of the rule.
[Slide.]
"Food" we define with respect to our Federal Food, Drug and Cosmetic Act. It is: articles used for food or drink for man or other animals; chewing gum; and articles used for components of any such food. Again, this is the same definition that we used at the proposed rule stage.
[Slide.]
We do have examples in the rule of the types of food we regulate. This is primarily for clarification, and also to ensure that people around the world that may have different interpretations of what food is in their countries understand that, for us, food does include drink--alcoholic beverages are included under our jurisdiction; pet food; dietary supplements--and so forth; fish, live food animals--those are all within FDA's definition of food.
[Slide.]
What foods are not subject to this rule? It is foods that are under the exclusive jurisdiction of the United States Department of Agriculture. And so these are the typical exclusions that ran through the other regulations in the Bioterrorism Act.
[Slide.]
We define "manufacturing" and "processing" as basically doing something to the food. It's making a food from one or more ingredients, or it's manipulating the food in some way. It's synthesizing, preparing, treating, modifying--etcetera.
We do have examples of what types of activities we include as manufacturing and processing activities. These are examples. They are not meant to be an exclusive list. It really is designed to encompass all those activities that manipulate the food.
[Slide.]
A "nonprofit food establishment"--and, again, there is an exclusion in the rule for nonprofit food establishments--is a charitable entity that prepares or serves food directly to consumers or otherwise provides food or meals for consumption by humans or animals in the United States. So we're including establishments within this term, such as: central food banks, soup kitchens, and nonprofit food delivery services.
The rule specifies that the establishment, to qualify for this exemption, must meet the terms of the United States Internal Revenue Code in Section 501(c)(3). I want to underscore: it is "meets the terms of." You do not have to have submitted the paperwork to receive a 501(c)(3) exemption to meet this exclusion. You just have to meet the criteria specified for getting that exclusion. So it's "meets the terms of" 501(c)(3), whether you actually have the formal exemption in hand or not.
[Slide.]
The term "Packaging" we're using here as a noun. It is specifically the outer packaging of the food that has the label and does not contact the food. One example could be your cereal box. We're talking the packaging would be the outer box that says "cornflakes" or "Wheaties" or another product, not the inner plastic liner in which the cereal is contained. The inner plastic liner would be the food contact substance that is directly contacting the food. Here the "packaging" is that outer box.
[Slide.]
A "recipe" we have defined--this is a modified definition, again--as the formula, which includes the ingredients, the quantities, and the instructions. So, for us, a recipe is everything that is needed to make that food product.
We would be accessing--if we meet the standards for accessing records--we would be requesting access to the list of ingredients that were used in a particular food product. We would not need the quantities or the instructions that make up the recipe.
To the extent that you want to keep those separate, that is your prerogative, but the access requirements that we will talk about later are the ones that will apply, and it does not include time for you, at the time of request, to redact the "recipe" as you would have it defined. So, to the extent that you want to limit our access, up front we ask that you think about making sure you have the list of ingredients readily available upon request.
[Slide.]
A "restaurant" is an establishment one that prepares and sells food directly to consumers for immediate consumption. When we say "immediate consumption" it doesn't mean they have to eat the food on site. It basically means they do not have to do any further preparation to the food. So it can be take-out food. It could be a pie you pick up from your favorite bakery, birthday cake that you're serving later. But "immediate consumption" means that it is ready-to-eat food.
And "serving the food directly to consumers" or providing the food directly to consumers is critical to meet the definition of a restaurant. If you are a central kitchen, a caterer in the sense of that term being used--an interstate caterer--those who provide food to airlines or trains, they are not providing food directly to consumers. They do not meet the restaurant definition.
[Slide.]
A "transporter" is one who has possession, custody, or control of the food only for the purpose of transporting that food and--so that's the first part of the definition. The second part of the definition is: if you happen to be a foreign person transporting the food in the United States, you would comply with the transporter requirements, even if you happen to be a foreign manufacturer who has its own transportation fleet. So, any person transporting the food in the United States as a foreign entity would comply with the transporter definition--the transporter requirements.
Within the United States, it's any person who has custody of the food for the sole purpose of transporting it.
[Slide.]
And then a "non-transporter" is anyone else. For example, if you happen to be a manufacturer, and you have your own transportation fleet, and so you do the manufacturing of the product, you transport it to your warehouse, from the warehouse you transport it to the retail store, you are a "non-transporter," and you only have to comply with the non-transporter requirements. You do not have to comply with both non-transporter and transporter requirements. You are a non-transporter from the start to the finish. And as we get into the requirements of the rule, you only have to keep records of the food products that you receive. And in that example, it would be the products or the ingredients you receive as a manufacturer, and the food products you release. And in that example it would be release to the retail grocery store. WE do not require, as part of this rule, that you to keep records of your internal corporate transfers. It's when you release it to another person, as that term is defined under the rule.
[Slide.]
So who is subject to this rule? It is persons who manufacture, process, pack, transport, distribute, receive, hold, or import food in the United States. In the subsequent slides you'll see this abbreviated as "M to I." All of those are subject to the rule, whether the food leaves the state or remains within the same state.
As well as foreign persons who transport food in the United States. And we define "persons" as not only individuals, but they can be partnerships, corporations or associations.
[Slide.]
Who is excluded from all of the requirements in this rule? Farms are excluded. All foreign persons, except those who are transporting food in the United States. Restaurants are excluded.
[Slide.]
We also have exercised our discretion and provided an exclusion for restaurant/retail facilities, if the sales from the restaurant part of the operation is more than 90 percent of the total food sales. So we're looking at, for example, it could be, say, a Cracker Barrel--for those of you who like Cracker Barrel--but they have a restaurant in one part, and then they have a general store in the other part. We would consider them still exempt as a restaurant/retail facility if, just looking at the food sales--we're not interested in the other merchandise they may sell--but just looking at the food sales, if more than 90 percent of the food sales comes from the restaurant part of that activity, they would remain exempt. And this is to take into account that a restaurant, as we defined it, is one that prepared and sells food to consumers that many restaurants purchase condiments, candies, mints and other--chewing gum--that they may sell from the counter, it would not fall under the "prepare or sells" part of the definition. But this allows them, for that retail part, to still be exempt as a restaurant.
And our rationale was that most restaurants have some incidental sales of a retail nature, and they should not lose the exemption Congress gave them as a restaurant because of those incidental sales.
We also have the exclusion that's in the statute for facilities regulated exclusively by the United States Department of Agriculture.
[Slide.]
We have included an exclusion for persons who are manufacturing, processing, packing, holding, distributing, importing, receiving food--or transporting food--for their own personal consumption. And "personal" here means--this is sort of what we had in the prior notice rule, sort of the "family and friends plan," we don't count "personal consumption" as you have your own business. This is really for you, yourself and your friends as personal consumption.
Persons who receive and hold food for others generally would be exempt if that is just sort of what they're doing as an incidental part. They are not in the business. And here this exclusion was really to recognize if, for example, you lived in an apartment, and you had bottled water delivered to you when you're at work, and the bellman or the concierge at your apartment building receives the bottle water until you come home, that person should not be subject to the rule. That is the intent of this. The same with the hotel concierge who may be receiving a package on your behalf. So that is the exclusion here for specific individual consumers who are not parties to the transaction.
[Slide.]
There is an exclusion for fishing vessels not engaged in processing. If you happen--and this is for ships that might just behead/clean the fish, or gut it just for the purposes of storage, they would not be subject to the rule, in terms of the establishment and maintenance requirements. They would remain subject to the records access requirements for any records they may happen to keep on their own.
If you are a factory ship, where you're doing the full manufacturing and processing of that fish product on board, you are a manufacturing/processing facility subject to the entire requirements in the rule.
We do have the partial exclusion here for retail food establishments that have 10 or fewer full-time equivalent employees. And this is, again, no requirement to establish and maintain records. They remain subject to the records access requirements for any existing records they may have.
And here, for this exclusion, we are looking at retail facilities on a facility-by-facility basis. So even if one entity owns multiple retail facilities, for purposes of this exclusion, they can count the number of full-time equivalent employees at each facility. That is different than how we determine the compliance dates--and you'll see that later.
[Slide.]
We have, again, the same partial exclusion with respect to establishment and maintenance for nonprofit food establishments. They remain subject to the records access provisions.
And then, for food contact substances, those entities also remain subject to the records access provisions only.
[Slide.]
For packaging, there's a slide that probably explains it a little better than--this is the terminology from the rule. But for the outer packaging that has the label--again, the example is the outside cereal box--they are also only subject to records access; no independent requirement to establish and maintain records--unless you happen to be the one that is in other ways subject to the rule.
[Slide.]
This is a little hard to read on the screen, but it is in your packet.
Packaging got to be a little complicated, I think, to understand, so we do have this table in the rule itself. But, basically, if you have the outer packaging of the food, and you are the manufacturer or processor--you're doing something with that packaging--no requirements other than records access; no obligations. And so you just need to make sure you have provisions in place within your operations that you can provide access if we meet the standard within the 24 hours of the request that the rule requires.
If you have a food contact substance--any other food contact substance, other than the one that is touching the food, again, you are only subject to the records access provisions. You will need to make sure you have those--the ability to provide access upon request.
If you are the entity--and this typically may be the manufacturer, it might be the packer--but if you are the one that is actually taking the food and putting it into the container that is touching the food, you are subject to the rule for identifying the immediate previous sources of that packaging, as well as the food ingredients; and you're also responsible for identifying the immediate subsequent recipient. At that point, it is the food as packaged. You don't have to have separate records, it's the food as packaged.
And anyone else that has the cereal liner and other types of food contact substances touching the food only would be subject to the records access provisions.
[Slide.]
With respect to retailers and those providing food directly to consumers, we have a partial exclusion, where you do not have to keep records identifying the immediate subsequent recipient. So if you're selling food to consumers, or otherwise providing it to consumers, you do not have to identify who the individual consumers are in those records. You do need to identify immediate previous sources.
If you are selling and providing food to non-consumers--and we don't count businesses as "consumers," then to the extent the information is reasonably available to you, you would have to identify those transactions. It may be reasonably available because they have a business account, for example.
[Slide.]
So here are the requirements. We'll start with non-transporters. And this is the establishment and maintenance of records by non- transporters. On the slides you'll see that there are two sets of arrows. And, basically, the non-transporter has to identify both the non-transporter immediate previous source, the non-transporter immediate subsequent recipient, and then the same for the transporter.
So, in this example, if I'm starting with the manufacturer, the non-transporter's immediate previous source for all of the ingredients are reflected by the yellow arrow on the screen. The non-transporter's immediate subsequent recipient--in this case, it's the retail store--is at the very bottom. That is shown on the screen. And then the manufacturer also would have to tell us who was the transporter that brought to the food to them, and who was the transporter that took the food to the next step. So, in this case, it's Company A--the trucking company.
So the manufacturer would have a list of ingredients, the retail store, the trucker, the other transporter that brought the food to them, and the trucking company or other transporter that took the food from them, as part of their records. And that is what's specified in the next couple of slides.
[Slide.]
We need the non-transporter and transporter immediate previous source. In that, we're asking for the firm name and contact information for that; the description of the type of food received. We're looking for some specificity here: "cheddar cheese," as opposed to just a general statement of "cheese."
[Slide.]
We need the date the food was received. If you are a person that's manufacturing, processing, or packing, and you use lot numbers or other identifiers, that information must be included in those records. We do not require you to start keeping track of lot numbers if that information does not currently exist.
We need quantity, and we need the identity of the transporter that brought the food to you. And there are similar requirements for immediate subsequent recipient, for both the non-transporter, immediate subsequent recipient, and the transporter immediate subsequent recipient.
[Slide.]
The one new piece for immediate subsequent recipient records is we are looking to link incoming ingredients with outgoing product, to the extent that is reasonably available. And we do not define "reasonably available." We do give examples in the rule, because it is something that you would decide on a case-by-case basis.
We are not looking to have manufacturing plants reconfigure, or buy new equipment to make this reasonably available. But if your operations are set up such that you can link incoming ingredients with outcoming product, that is something the rule would require.
[Slide.]
And we have the same examples we had at the proposed rule stage. This is my favorite cookie company manufacturer. Here, they are getting flour from three different sources, and they put the flour in a common silo, and the silo does not empty as a plug, it empties in a co-mingled fashion. And so, in this case, for each batch of cookies that are produced, the records would show that the source of the flour could be companies A, B and C. Or, depending on if you didn't have any supplies from C for a period of time, it may be A and B. But that is all that is reasonably available to this manufacturer.
[Slide.]
In this company's case, though, they actually have dedicated silos so they can track the quality of the product that they are receiving; whether they get better cookies from one supplier versus another. And in this case they should be able to tell us--meaning it is reasonably available for them to tell us, when they're doing a production run--which silo valve has been opened to access the flour.
[Slide.]
With respect to transporters--and you will see the slides--but we have given transporters five options for complying with the regulations. The first option: we specify the information ourselves, and it's pretty similar to what we required for the non-transporter.
And you'll see that here: the route of movement during the time the food is transported will be shown on the diagram. And that's here--unlike the non-transporter that had to identify both a non-transporter and a transporter, one up, one back, here the transporter just literally has to go one up, one back, regardless of whether it's a non-transporter or a transporter there.
[Slide.]
And in this case, where there are various transportation companies involved, Company A, for example, their immediate previous source is the manufacturer. Their immediate subsequent recipient is Company B--and so forth. For Company B, one back is Company A, one down is Company C.
[Slide.]
But in this case, you have a company that owns a variety of vehicles. They own their own trucks and planes. And so in this case, when we say the "route of transportation," we actually would be looking for our Purple Transportation Company to tell us their immediate previous source was the manufacturer, their immediate subsequent recipient was the retail store; that the food did move from truck one, to the airplane to truck two--because that is the only way we will be able to identify if, for example, the contamination occurs on the airplane, no one else is going to know that the airplane was involved; we will not be able to identify other shipments that may have been on that same airplane.
So in this case, where the same company owns multiple vehicles, we do need that specificity as to how the food moved, if it changed one vehicle to the other.
So that was option one.
[Slide.]
Option 2 is if you are in compliance with the requirements in the DOT Federal Motor Carrier Safety Administration regs for carriers, then you would be in compliance with the establishment and maintenance part of this rule.
You do not have to be subject to those regs to take advantage of this option. My understanding is those regs only apply to those moving interstate. Intrastate carriers do not have to comply with these DOT regs. Nonetheless, the intrastate carrier may choose to use the requirements in these regulations for compliance, as opposed to the other options.
The third one is the DOT regs that apply to rail and water.
[Slide.]
And the fourth one is the Warsaw Convention regulations that apply to air carriers.
And then, lastly, we did receive comments from certain non-transporters who said they would be willing to keep records on behalf of their transporters, and so we gave them the option and the opportunity to do that. But we do specify certain requirements for those agreements so that we know who was the responsible party. And those requirements are also included in the rule--including the effective date, a printed name so we can read it, a description of the records that are subject to the agreement.
An agreement may cover records establishment, it may cover establishment and maintenance, or it may cover maintenance only. But it is a private matter. We do not need a copy of the agreement. It is between private contracting parties how they are going to allocate responsibility for the regulations. And it must include provision for giving us the same access that we would otherwise obtain if the transporter kept the records themselves.
[Slide.]
And we also ask for a termination clause, just so everyone knows that if you terminate the agreement, the transporter is again responsible.
[Slide.]
With respect to record retention period, it depends on the type of food you are carrying or handling, and it depends on whether you are a non- transporter or a transporter.
Transporters have to retain records for one year or less, depending on the type of food. The reason for the distinction is that that is the maximum retention period under the DOT regulations, and we were balancing the cost of increasing the retention period for transporters who may or may not know exactly whether they have some food products on the truck, and non-food products, with our ability to have the maximum effectiveness on a trace-back. And so we struck the balance with respect to having the requirements under the DOT regs, since we provided that option as a way of complying with the record-keeping provisions be the same for transporters.
For non-transporters--which is essentially where we think a lot of our trace-back activity would be--we do have the full range, up to two years. For long shelf-life products, two years was the maximum amount of time that the Bioterrorism Act allowed us, so we could not go longer, even though we know certain foods may remain in commerce longer.
All pet foods, one-year retention period, and that is because pet food tends to have a shorter shelf-life than human food. I don't know about your kitchen cabinets but, you know, usually you buy enough pet food, and you give it to your pets, and then you buy more, and you buy whatever looks like it's on sale, and it may sit in your cabinet for a little longer. And so that is part of the rationale here.
[Slide.]
Records generally must be created at the time the activity occurs. So at the time you receive the food or release the food, the records are supposed to be created simultaneously. The only difference is if you are relying on existing records. So if you're relying on a bill of lading that may have been created and handed to you, for example, as part of your transaction, you do not have to re-write that as a new record.
The records must be retained at the establishment where the activity occurs, or at a reasonably accessible location. And, again, the access requirements will apply. So if it's "reasonably accessible," it means that you should still be able to meet the "as soon as possible, not to exceed 24 hours." And we count electronic access, for those who keep records via computer, and you can access it on the computer. We count off-site storage of the electronic server and hub as on-site retention.
[Slide.]
There are new prohibited acts that were contained in the Bioterrorism Act. It is a prohibited act not to keep the records required by this rule if you are subject to it, or not to give us access to those records once we make a proper request.
[Slide.]
And we've included a new prohibited act that if you enter into an agreement voluntarily with a transporter to keep records for them and you fail to do so, or fail to provide access, again, you are committing a prohibited act.
[Slide.]
In terms of the compliance dates, it is based on the size of your business. And here we count all employees at all locations in determining compliance dates.
If you have 500 or more full-time equivalent employees, you must be in compliance by December 9, 2005
If you have between 11 and 499 FTEs, you have 18 months to come into compliance.
And if you are a very small business--which is 10 or fewer FTEs--you have two years to come into compliance.
[Slide.]
In terms of other statutes or regulations that may apply, those continue to apply. So if you're subject to other FDA regulations or other regulations, they are in addition to this. But we do note that whatever records you may be keeping that meet the requirements here can be used. And you can supplement records just for those pieces that you may be missing. So we do not require you to duplicate records.
We also don't require that you have one set of records that has all of the information. So you may have one set that has some information, another set that has the supplemental information. As long as all of those records collectively meet the access requirements, and meet the establishment and maintenance requirements, that would be satisfactory.
[Slide.]
Record availability--under the authority of the Bioterrorism Act--and I underscore that piece--FDA can only access records when we have a reasonable belief an article of food is adulterated and presents a threat of serious adverse health consequences or death to humans or animals--that's my shortcut for SAHCODHA. That's a mouthful. That is the same standard for administratively detaining food under the rule we issued this past June.
So only when we have that SAHCODHA level and a reasonable belief can we invoke the authority in the Bioterrorism Act. And it's mandatory access authority at that point to access records.
We can access not only the records that are required to be kept under this rule, but we can access any records that pertain to that food product, as we've identified it, that you may keep on your own or in compliance with other obligations--with certain statutory exceptions.
And so when I went back to the food contact substances, for example, and the packaging manufacturers, and I said they were subject to the records access provisions, we did not require them to keep new records to comply with this rule, but whatever existing records they may happen to keep, if we met this threshold of a SAHCODHA threat, we could access those records under this rule.
[Slide.]
Here are the records that are excluded. Recipes are excluded. And, again, a recipe is not only the list of ingredients but must also show the instructions and the quantities. So we will not be able to see that full complete set.
Financial data, pricing data, personnel data, research data and sales data--these are all taken directly from the exclusions provided by Congress in the Bioterrorism Act.
[Slide.]
We estimated about 700,000 entities would be subject to this rule. About 600,000 are domestic persons, or domestic facilities. There is a full economic analysis in the rule--for those of you who like to see how we estimated costs and so forth.
But our estimate really is that while the total costs of the rule are large, it's because there are a large number of persons affected by this rule. It goes from manufacturer all the way down to distributor and to the retailer. But the cost is less than $1,000 per facility as we have estimated it.
So that is the rule. That is what is contained in the rule itself
[Slide.]
We also published, at the same time we issued this rule, a draft guidance document. This was in response to comments that a number of people wanted to know: okay, yes you have this access authority. I'll note that the access authority actually took effect in June 2002 when Congress passed and President Bush signed it. We have not yet had to invoke the authority--which I count as a blessing, since the standard for invoking it means we're in a public health emergency, because we would be under a SAHCODHA threat.
But the access authority did take effect. People wanted to know what procedures would we use so we know that it's not someone running off on their own, invoking this authority. And so we have issued guidance, and it specifies the procedures that we would apply to ourselves to access the records, and also gives you notice on when and where we would be coming to you.
This is subject to comment. So if you have comments on our procedures--our draft procedures--please get them in. We will be issuing the guidance in final form. I use "final" loosely here, because our guidance documents are never truly final, as they are with regulations. You can comment on guidance at any time, and we will consider those comments as we receive them.
But, basically, you'll see here, through these procedures, that it is something that even if it's a problem potentially identified in the field, headquarters and our emergency response operations center, our Office of General Counsel, and our Office of Regulatory Affairs--along with the pertinent center, whether it's the Center for Veterinary Medicine for animal feed, or the Center for Food Safety and Applied Nutrition for human food, all of us together are making the determination of whether access under the BT Act is appropriate and necessary.
So we involve the Emergency Operations Staff at this step. As well as, we involve the appropriate center. At this stage, we're looking to have concurrence and agreement that we have met both the reasonable belief standard--which is a legal standard--and we have met the "serious adverse health consequences" standard, which is more of a scientific/public health standard.
And once all of that information has been collected and a determination made, the Director--the District Director-- will be involved. So, again, it is not just an independent inspector. And then the investigator goes out, presents the credentials and the request to access those records.
[Slide.]
Another area of comment was--and disagreement, in terms of what people thought in the comments on the rule--was whether FDA should have the authority to access confidential business information or trade secrets. And the answer is: yes, we do. There is nothing in the Bioterrorism Act that precludes us from accessing that. And the fact that you may not have to disclose the 10 secret herbs and spices on the label, that is really a disclosure to consumers and to the public. It is not a prohibition on disclosure to the regulating agency, which is us.
But what it does say is that we have an obligation--and this is a personal obligation--to protect confidential business information and trade secrets. Individual employees are personally liable for violating the Trade-Secret Act and so forth. And we do have existing regulations, we do have existing guidance in place for our inspectors, and those are the procedures and the limitations that would apply in terms of disclosure outside of the agency. And that's specified here.
We have training sessions planned for our investigators to underscore this again. But this is not new to FDA. It may be new to the food industry, in terms of records access, but our investigators generally are not just focusing on foods work. The same personnel are dealing with other products we regulate, and they regularly see confidential information in the drug arena, in the device arena, in the biologics arena, and they do comply with non-disclosure provisions in statutes and regulations.
[Slide.]
So, with that, we're almost to our break. Here is, again, our long web link. And, again, it's fda.gov "Bioterrorism."
We do have, on our website we also have these pretty books if you want to distribute the hardcopies, contact Lou. But we do have--I call these the "cliff notes" versions for those of you who relied on those in high school and college periodically on deadlines. This is the easy-to-understand view of the registration and prior notice interim final rules. We are working on similar documents for detention and record-keeping--and you'll see what the covers look like here. We already have the covers planned. These will be coming out shortly.
And, in addition, as you submit to us questions, we will pretty much try to get you a fairly quick answer. For those questions we've already answered in the rule, we'll point you to the rule, or give you the answer. Again, we encourage you to read the rule first before you come see us, because our time is--there's few of us and many of you.
To the extent it is a new question, you will see more of a delay because we will be issuing the answers in a question-and-answer guidance document. That is our procedure for handling questions so that they go through the same rigorous scrutiny internally as the rest of the questions we answered in the rule. And so if it's a question--and we have received new questions--those will come out in Q&A guidance documents, and we will try to get those out as quickly as possible.
So, with that, we'll take a 15-minute break. Again, there's restrooms at the top. And if you have questions, we'd love for you to put them on the mike. We will do a wide angle shot. It won't be a close-up.
[Laughter.]
But if you really feel uncomfortable with that, please put them in writing and we will still address them.
So I will see you at about 10:17, by my watch. Thank you.
[Applause.]
[Recess.]
MR. CARSON: Thank you. We are now going to start the question and answer period. As I mentioned at the beginning, we will be taking the live questions first. And then I have a number of written questions that we will handle following that part of this session.
So, I ask you, if you have a question that you would like to ask personally, to raise your hand. We will have microphones on each side of the hall.
And first is Caroline to ask a question.
MS. SMITH-DEWAAL: Good morning. I'm Carline Smith Dewaal with the Center for Science in the Public Interest.
First of all, I'd just like to congratulate Leslye Fraser and her team on actually getting this regulation finalized. It wasn't that long ago that the Bioterrorism Act was passed. It required extensive rulemaking from this agency. And, although this rule was a year delayed over what the statutory deadline was, I still think you guys have done a tremendous job at getting these regulations finalized.
I, secondly, just want to--I think sometimes regulations like this need illustrations. And I just want to point out that the importance of trace-back is extraordinary, when it comes to controlling food-borne hazards. In the Chi-Chi's outbreak, for example, imported scallions--raw onions--were responsible for 500 illnesses. I think it's now over 600 illnesses--and three to four deaths were linked to contaminated scallions.
Now, there had been three other outbreaks prior to the one that involved Chi-Chi's. And if FDA had had the capacity and the ability to actually trace back that product earlier, it would have saved hundreds of people from getting ill. It would have saved quite a few lives. But, very importantly, it also would have saved the business reputation of that company, that then had to deal with a massive outbreak that was linked to its name.
Now, I have a couple of questions on the regulation. First of all, Leslye, when you say that you changed the requirement for "lot code" numbers and other identifiers, and you deleted that requirement--what does that mean, exactly?
MS. FRASER: Well, first let me respond to your two comments. And thank you for those. As I noted earlier, I had the real privilege of leading a phenomenal team. And a lot of late hours. I would say, we all as taxpayers, you all got your money's worth. There was a lot of hard work, a lot of dedicated people who worked to make sure that the agency issued regulations. And for those of you who do rule-making, to do proposed and final on four sets of rules really took a lot of work by a lot of people. And people see me, but there's a tremendous team behind me. So I want to thank you for those comments.
The other piece, on the importance of trace-back, I also want to underscore. And you will see in our rule, there are some examples in terms of both where we describe the need for the rule, and in estimating the economic analysis and the impact of the rule. But where we have had failed trace-back investigations because of the lack of records--and what we have done with this rule is tried to just look at what are those minimal requirements we need to have an effective trace-back. And that's what you see the different requirements in.
With the comment with "lot number" or "lot code", what I hoped to convey--and obviously didn't do as well as I had intended--in the proposed rule we planned to require all persons subject to the rule to keep lot number or other identifier. The comments we received in the rule discussed how cost prohibitive that would be, and significant change of business practice from the warehouse on down, and that it was--maybe technology would be there in the future, but right now manufacturers, processors and packers could readily do that to the extent lot numbers were something that already existed.
And so what we deleted in the final rule was the requirement for all covered persons to keep lot numbers, including transporters no longer have to keep lot numbers. But, we retained that requirement for these manufacturers, processors and packers.
And so it's a lot number or other--some people have their own internal code, and the internal code could be used, as long as it's easily decipherable upon request.
MS. SMITH-DEWAAL: My next question is: how will you enforce the "as soon as possible" requirement for records' availability. This is a significant change in what was proposed. And if I were a business manufacturer, I might consider the rule really saying that I don't have to give you records for 24 hours--which could be very, very problematic, and have very severe public health consequences.
So how do you really plan to enforce this "as soon as possible."
MS. FRASER: I think that is a case-by-case basis. I think that in many ways, you know, when you're looking at what the rule says is access must be provided as soon as possible, not to exceed 24 hours, what would be legally sustainable in a charge I leave to the enforcement folks to think about.
I guess my expectation, as a person here at FDA--and I think the one that we share--is that for us to be accessing records under this authority, we are in a public health emergency. We have a threat of serious adverse health consequences or death to humans or animals. And our expectation is that people will make sure they have mechanisms in place that they can meet 24 hours on the outside, but whatever is necessary to be sooner if that is possible.
In some instances, you know, we have an access request that comes in at 10 p.m. You know, getting the personnel available and ready and able to get into wherever records may be is one scenario. But, you know, the specifics of enforcing--I issue the regulations, and the Office of Regulatory Affairs has the pleasure of enforcing them.
But I do think our expectation is: in those kind of emergencies, we will be working cooperatively, as we have done before. The difference, really, now is that there is an expectation of what the timetable is: no longer than 24 hours. And there is an expectation and a requirement to meet established specificity of those records so that we don't have holes in the distribution chain while we're looking at a trace-back.
MS. SMITH-DEWAAL: This is my final concern. The standard "serious adverse health consequences or death to humans and animals" is indeed an urgent standard. Why wasn't it activated during the Chi-Chi's outbreak?
MS. FRASER: That one is outside my area of expertise to answer, because that was really involved in the trace-back investigation people. So I don't know that there was a lack of sharing of records. My understanding from the Chi-Chi outbreak was that there were no records in many places to access. So, the access authority in the Bioterrorism Act says that if we've met the standard, you have to show us the records. I don't think we'd had a lack of cooperation, we had a lack of existence of records in many places.
MS. SMITH-DEWAAL: [Off mike.]
What about raw agricultural products?
MS. FRASER: It does. The records authority applies to all food under our jurisdiction, including raw agricultural products. The difference, though, is that there is an exemption for farms. So to the extent that the raw agricultural products is still on the farm, we have no authority to invoke the Bioterrorism Act and go on that farm and access records.
So, "products" is one issue, and "persons subject to the rule" is a different issue.
MR. ETIENNE: My name is Philippe Etienne, Swiss Embassy.
To what extent does this new legislation apply for foreign embassies or consulates?
MS. FRASER: Foreign embassies and consulates are officially your foreign land. So, you know, the French Embassy is a part of France, in which case you are foreign persons. And unless you leave the embassy and transport food in the United States someplace else, then you would not be subject. But other than that, for the foreign entities that are physically here in the U.S., they would not be subject to the rule.
MR. CABES: My name is Scott Cabes with TechniCAL, Incorporated. I have two questions.
First of all, what was the reasoning behind exempting or excluding the foreign facilities? And, secondly, we deal in the low-acid canned food industry, and a lot of questions have come up whether or not can suppliers--container suppliers, whether it be pouch, glass, cans--are they covered under this regulation? You talked about a cereal box as an explanation, but what about the container itself that contains the food?
MS. FRASER: Yes, with respect to the rationale for exempting foreign persons except for those transporting food in the United States, we looked at what are the other provisions we have in the Bioterrorism Act. And we do have the prior notice rule. And so for the prior notice rule, which does apply to food imported or offered for import into the United States, whether it will be consumed here or not, those persons are already providing us notice of the food. They're telling us the facility that manufactured the food, the country of origin. There's a number of other detailed specificity in that food product.
To the extent that we would be involved in a trace-back investigation within a foreign country, we do not have independent authority to just go over to those facilities. We would be working with the competent authorities in those countries, at which point we would be looking to them to garner access, or something along that nature.
So it really was looking at we already have--they are subject to the prior notice rule. Domestic entities do not have that type of requirement. And a lot of that already provides us the information that we would otherwise need. And to the extent we need to go further than--this rule goes to the importer. So we're finding out from the importer here that they received the product from a specific--their immediate previous source might be a facility in Country X. To the extent we need to go back from the facility in Country X up through the chain, we're going to have to deal with the foreign government anyway, and we might as well use their authorities, because that's the authority we would have to go further.
You had another question about the canned foods. All containers that contact food--actually anything that contacts food is considered food under our definition of food. It would be a "food contact substance." And so, on that chart that talked about whether your subject is "packaging" or not, in the case of a can, you really don't have "packaging," unless you count the label that may go on the outside of a can.
But the can itself--for canned string beans, for example--that can would be food contact substance, and then you would fall under--if you happen to be the person who's putting the string beans in the can, you're subject to all of the requirements of the rule. If you happen to be anybody else in the distribution, manufacturer of the can and transport of the can, you're not subject to the establishment and maintenance requirements, but you are subject to the records access requirements.
MR. HAHN: I'm Bob Hahn from Olsson, Frank and Weeda. If a farm packs food for another farm not under the same ownership it loses its farm exemption?
MS. FRASER: Correct.
MR. HAHN: Must it then maintain records for all of the food it packs, or only for the food that was grown on the other farm.
MS. FRASER: Only for the food that's grown on the other farm, because that's the only thing that's--that's, again, it's a mixed type facility. So it's packing shed is its separate facility. It retains the farm exemption for its own activities, its own products. But for the packing shed activities with respect to somebody else's product, then it has to retain records that apply to that food.
MR. GOLDBERG: My name is Jim Goldberg. I represent the National Alcohol Beverage Control Association, which--for explanation--are the state agencies around the country that run state-operated liquor stores. And I have two questions actually.
Many of the states operate what are called "agency stores," where a private owner-operator actually sells the inventory which is owned by the state. It's sort of an outsourced retail store, if you will. In that situation, who keeps the records? Both parties? Or the owner of the inventory? Or the agent-operator?
MS. FRASER: We actually--you know, if you look at who is responsible under the rule, it's the person who is manufacturing, processing, packing, holding, distributing, receiving, importing. We don't need two sets of people to keep the same records. So you're really talking about who is liable if nobody keeps the records, versus if one entity keeps the records, does that satisfy the obligation of both.
We're looking to make sure the records are in place for that transaction that has happened. And so persons who feel that one of those labels fit them need to make sure they have arrangements in place to make sure compliance obligation is taken care of.
MR. GOLDBERG: So we need to work it out with the agent to make sure--
MS. FRASER: Yes.
MR. GOLDBERG: --the records are kept.
MS. FRASER: Exactly.
MR. GOLDBERG: Whoever keeps them.
MS. FRASER: Whoever keeps it.
MR. GOLDBERG: And the second question relates to--just so I understand correctly--the retail store exemption.
Retail store is a true retail store in that 50 percent or more of its sales are made to end-use consumers, and it has less than 10 full-time employees in the store.
MS. FRASER: More than 50 percent. But go ahead.
MR. GOLDBERG: More than 50 percent.
MS. FRASER: Right.
MR. GOLDBERG: 51 or more.
MS. FRASER: Right.
MR. GOLDBERG: To the extent that that store also sells product--in this case, alcohol beverages--to another business--a restaurant, a tavern--whatever--question: it has to maintain records only if they are readily available? It does not have to create new records?
MS. FRASER: It still has to establish and maintain records of all incoming.
MR. GOLDBERG: Right.
MS. FRASER: Because all retail stores have to do that. With respect to the distribution to non-consumers, to the extent it's readily available, they have to keep records specifying who the recipients are. And to the extent, for example, the restaurant and so forth may have a business account, we would count that as "readily available," because you can identify--if they're charging their sales against their business account, then you know that that business has purchased so many cases of alcoholic beverages.
MR. GOLDBERG: In the case I'm thinking of, it may actually be an over-the-counter sale, where there is no charge. I mean--
MS. FRASER: Then we don't require you to ask "are you a restaurant, are you a business, are you a--"--
MR. GOLDBERG: I mean, they will show a license number in order that sales tax is not charge, for example. But the only thing that's kept is the same cash register tape.
MS. FRASER: Right. In that case, we would not say that's "readily available."
MR. GARFIELD: Leslye? Bob Garfield with the American Frozen Food Institute. I need a clarification--and do you want me to stand up?
MS. FRASER: It's easier to find you.
MR. GARFIELD: A clarification, and then a follow-up.
If I am a food processor, and I have an internal distribution system such that I use my own fleet of trucks to distribute product to my own warehouses that ultimately get to a retailer, what are my record-keeping requirements as a food processor?
MS. FRASER: As a food processor you would be still under the non-transporter requirements, and so you have to identify both the non-transporter immediate previous source, and the transporter immediate previous source, and then you'd have to identify the non-transporter immediate subsequent recipient and the transporter immediate subsequent recipient.
In your case, you have your incoming ingredients into your manufacturing plant. You have your retailers identified as your recipient. And then the transporter--whoever brings in the food to you, or the food ingredients--but the transporter immediate subsequent recipient happens to be yourself.
What I was trying to convey is: you don't have to look at the section that says "here are the requirements that apply to non-transporters" and then again "here are the requirements that apply to transporters." You're either one or the other. You're not both.
And in that case you would be a non-transporter. The transporter identification obligations are already folded into those requirements, and you just happen to be the manufacturer and the transporter in that instance.
MR. GARFIELD: Okay--and just one follow-up.
What if, under that scenario, I'm using independent carriers as well as my own carriers to ship product to my own warehouse--under that scenario; using both.
MS. FRASER: These are still, though, internal--I mean, this is still internal movement of the food that's under your possession, custody and control.
MR. GARFIELD: Correct.
MS. FRASER: So we would not count that release of the food until it actually went to the retailer, or to a warehouse that might not be your warehouse. But we're not looking to track inter-corporate transfer of product. We're looking for when it's a different person taking custody and control of that food. It's sort of a legal determination of the "person."
MR. SPILLER: Bob Spiller, a consumer and a former bureaucrat.
I'm delighted that you have not had chances to implement this, and to see that you have careful steps for the SAHCODHA determination. I hope you have done some drills to see how long it takes FDA to work through the initial recipient, the center, the Office of Enforcement and the District Director to make the determination.
Either based on those drills, or on your estimate, what is the comparison of that timeline to the time-to-death for fast acting neurotoxins like butolinum or cyanobacteria.
MS. FRASER: Well, let's see--that's complicated.
The timeframes in the rule and our ability to go to 24 hours were done in consultation with our Office of Crisis Management, based on the responses for other public health emergencies and toxins, and how--and these procedures in place are pretty much the kinds of interactions that take place when we do have significant outbreaks, or outbreaks of public health.
Whether we have actually done a drill, per se, for a food--and we are doing practice scenarios on various outbreaks. I mean, that's part of our crisis training here that involves all levels of the agency. And, you know, they pop up in the news from time to time of the different scenarios, and what has happened here, there and everywhere.
So we have used that as the model and the premise that we can conduct an effective trace-back with the time frames that are specified in the rule, without, I guess, specifically have we done a drill that is this rule itself. But it's really based on what we have undergone in various training exercises for general crisis responses.
MR. GARFIELD: How long did it take?
MS. FRASER: That I don't remember right off hand.
MR. DETLEFSEN: Clay Detlefsen with the International Diary Foods.
First, Leslye, Lou, thank you very much for your hard efforts during the whole promulgation process, and the enormous outreach before, during and--now--after. You guys have done a great job. So--our thanks to you.
Leslye, earlier today you said that you had SAHCODHA access to the records, basically, when the President signed the law into effect. I think over the last two-and-a-half years since that time, you know, certain industry people have been frightened that FDA would run into their facility at the slightest concern. And to put that into perspective, in the last two-and-a-half years, have there been any SAHCODHA threats that would have triggered this record access--that you're aware of?
MS. FRASER: I think we have had incidents for which we have had concerns. And whether it's food products that we've had alerts with and so forth. I think in terms of doing a full trace-back to the point where--or a full place where we would have had to administratively detained food, for example--which authority also took effect when the act went into law--we have not had that type of an incident.
But I cannot stand here and say there have been food products that have been of concern, that we have done investigations on. I think none have risen to the level of a SAHCODHA threat that we think warrant invocation of the Bioterrorism Act.
We have always said the Bioterrorism Act provisions give us additional tools in our tool kit that do not replace the existing ones we have used. And whether it's a recall authority, by working with industry to recall products or so forth. And we have continued to use whatever tools we think appropriate under the circumstances--but nothing that has risen to that public health emergency.
And I'm not minimizing the comments that Caroline made earlier about the scallion outbreak. Part of that was just trying to get our hands around where was the outbreak coming from, what was the product distribution. And it was not a failure to invoke or say that this wasn't a public health emergency. It was really an issue of--and that example is explained in the rule--it was an example of the distributor--one of the key distributors--bought onions kind of randomly, no predictable pattern, and there were no records. And so we had to wait for finding other places where there were outbreaks and going up that chain to figure out where the source was. Whereas if the distributor had had records, we could have done it a lot quicker.
MR. DETLEFSEN: I think that puts it in perspective. And I think that--hopefully, never a SAHCODHA event will happen, or it will be very rare, and when it does happen, I think if the rule says "up to 24 hours" I think you'll see the folks that are responsible turning around that information as fast as possible, for their benefit as well as the consumers.
The second question had to do with what I've heard a bit about: it doesn't appear that, if you're a food manufacturer and there are lot codes, that you're creating any new practice or responsibility. By that I mean, a lot of food manufacturers, I would guess, are not currently associating the lot codes associated with their food contact packaging materials with the final finished products that are put out into retail. You can think of, you know, your green bean example, or the cereal example. The inner liner of the cereal box is food contact and may have a lot number associated with it. The outer package is going to have, you know, lot code or other identifying information, and you would see that, of course, at retail.
I don't think that food manufacturers will be able to effectively--at this point in time--link and associate lot codes associated with some or all of the food contact packaging, all the way through the system.
Is it correct that you're not requiring us to change and do that now?
MS. FRASER: That's not one I would give a blanket answer to. I think that's a case-by-case determination. I think that one of the changes in the rule in response to comments of people needing more time was we did extend the compliance date from six months to a year; and that was to give--for the large businesses, and up to two years for very small--that was to give covered entities time to make appropriate adjustments, and adjustments that could be made in that time period.
So for me to stand here and say we don't expect any changes across the board, I will not say that. I think we think that, to the extent that there is a lot number, and that there is an ability--it's reasonably available for you to trace incoming product without outgoing product, we expect that to happen. And, as we said, that will be a case-by-case determination.
I did the flour example, but your liner example is another one. And to the extent that you do have lot number of product coming in and, you know, whether it's a big roll that's coming in, or however it's cut up, for somebody standing here in the abstract, it seems to me for somebody to add a record that says, "We've now changed out the roll--"--or the supply, and now for this run, for this period of time, we used lot number 12345, and we changed it out at 10:00 a.m. I think that's reasonably available.
But I do think it's a case-by-case determination, and I do think we expected some changes to be made, which was why we extended the compliance time.
MR. DETLEFSEN: I think when you get into bottle caps and, you know, jar lids, etcetera, where you've got co-mingling and, you know, 20 or more lot codes associated with those particular food contact packaging items, trying to trace those individuals through the system will get difficult.
MS. FRASER: But then it may be that what's reasonably available is 20 lot numbers.
MR. DETLEFSEN: Right.
MS. FRASER: Like the co-mingled flour--as opposed to a specific one lot number at a time.
MR. DETLEFSEN: Okay. Thank you very much.
MS. McINTYRE: Hi, I'm Linda McIntyre from Center for Science in the Public Interest.
Is there any limitation on the 10 or fewer employees exemption for operations like dairies that might have few employees, put process very large quantities of product?
MS. FRASER: No. I think for retail facilities it's 10 or fewer at that facility. I think generally our experience is that if you have relatively few number of employees there's product-wise, and impact on where you would see outbreaks, the volume is sort of limited by number of employees--to some extent.
So we did not say retail facilities that are only in certain food products are exempted. It is a retail facilities with 10 or fewer employees--full-time equivalent--are exempt from establishment and maintenance requirements, not access requirements.
MR. CRISTOL: Richard Cristol with the Cahlen Company. My question relates to the guidance document, the last item, which discusses the confidentiality of trade secrets and confidential information.
The provisions of non-disclosure notwithstanding, the response to the item says that FDA personnel may disclose non-public information otherwise protected from disclosure, if that disclosure is permitted by law or FDA procedures. And you go on to provide one example related to disclosing this non-public information to Federal, state, local or foreign government officials.
In all candor, I haven't read 21 CFR 20 and 21, but I'm assuming that the non-disclosure requirements--the personal ones that you discussed--extend to those officials, if you disclose the information to them. And I'm wondering how would you enforce this with foreign governments?
Secondly, I'm wondering if it's possible for the agency to provide, in the guidance document, further examples of what FDA procedures exist that would allow further disclosure?
MS. FRASER: The first part of your question--our regulations provide that if we are going to disclose to another entity--Federal, state, local, foreign--that we do so under an agreement that clearly specifies that they're under the same non-disclosure obligations as we are. And for some entities, we are not able to enter into those agreements, and so we cannot disclose, because they may have local sunshine laws that preclude such agreements.
And so that is the first step, is to make sure there is an agreement in place. We are working to get some agreements in place with other foreign governments, for example, who are interested in knowing the name and identity of the facilities that are registered with us under the registration rule. That is something that is precluded under FOIA. We have told those embassy officials and other foreign officials that we can let them know who are their specific registered facilities if they enter into that agreement. So that is the first step.
In terms of whether we can add additional examples, I would say please provide that comment in writing to the docket so there's an official record, and we will look at that and consider it.
MS. FAY: Good morning, I'm Elizabeth Fay with Cargill, Incorporated. I have two questions.
Could you give greater clarification to intracompany transfers' not being subject to additional record-keeping? Specifically in a case where there's a company's joint-venture that is a separate entity, would they be considered an intra transfer?
And then the other question would be: what are the record-keeping requirements for a manufacturer that utilizes a toll processor? The product is shipped out to the toll processor, then sent back to the manufacturer.
MS. FRASER: I'm sorry--that utilizes a--?
MS. FAY: A toll processor for further--
MS. FRASER: What's an example of that?
MS. FAY: It gets shipped out for further blending, or--
MS. FRASER: Okay.
MS. FAY: --or formulation.
MS. FRASER: I think, with respect to the first, when you look at the definition--it goes back to the definition of "person." So if you look at the definition of "person," it's an individual, association, partnership, corporation.
If you have a different legal entity, and you're sending it off to that different legal entity, then I think you have now changed who your immediate previous source or immediate subsequent recipient is, and that is not truly an intra-person transfer. When we look at intra-person transfer, we're really looking at it's, you know, manufacturing Company X which really is still dealing under the same person, entity or the same legal entity and if it's--you know, this is 100 percent owned by Company X, and then somebody else's 50-50 venture, that's a different legal entity, and so it's a different--it is not an intra-company transfer.
And I think the same would apply for sending it out to a different processor. We really are--if you look at the purpose of the trace-back--or the records--is really to help us identify, if some contamination occurs, where it could have occurred. And once we trace back to the source--because consumers in State X got sick and we traced back to the source, we want to be able to see what other batches were done at the same time and trace forward and get them off the market.
And so to the extent that you have all of that under your umbrella that's fine, but to the extent we start bringing in other entities, they need to have their own records that's showing incoming and outgoing and what else was processed there.
MR. RASKIEWICZ: Good morning. My name is Matt Raskiewicz, and I'm with the Stevens Group.
To your knowledge, how does 306 compare to the EU 178 regulation that took effect this past January? And what changes, if any, does the EU processor have to do to comply with 306?
MS. FRASER: I can't answer the first question, because I don't--one thing is I never answer things without having them in front of me, and that is not one that I'm personally familiar with to answer.
With respect to what does any foreign processor have to do--nothing, with respect to this regulation, because all foreign persons are exempt unless they happen to be transporting the food in the U.S., in which case they would be subject to the transporter requirements in the regulation.
MR. LEDWELL: Hi, my name is Ken Ledwell, and I'm with Steinwig in the U.S.A., based here in Baltimore. We're a stevedore/warehousing operation, and I have two questions.
Trucks that come in, I don't always have the information for. I have the information of brokers that I use. Is the information of the broker who contracts the truck to come in and pick up a product, is that sufficient? Or is the information of the actual truck that comes in to pick it up--the owner-operator, whoever it may be?
And my second question is: in regards to the record-keeping, typically we import things by container--things are stored by container number of warehouse lot number. Is that sufficient to be able to find things that way? Or is it possible to come in one day and say, "Well, can you show us your records for the last two months?" Would it be easier to look things up like that?
MS. FRASER: With respect to whether the records you have are sufficient, that's not a determination we would make here. What we have done is specify what information you must have in records, and then we leave it to you to determine with the records you obtain meet those requirements and, if not, to either keep a new set or supplement them with what's deficient. So to the extent you have truckers coming in, and they're giving you a bill of lading or something else, then you need to compare what's on your bill of lading, because it changes from entity to entity, and see if it satisfies your obligation as a non-transporter--as a warehouse--to have all of the information that's in there.
You can either choose to modify your contracts, or specify the information, keep the record yourself--but, again, that's sort of the private business matter of how you choose to comply with the rule. And we were very careful not to say, "This record would work" or "This record won't." We've left it to you to figure out what combination works for your particular operation.
And the same thing applies for how you receive product by container. I think you may need to look at what information you're getting in your container records. And to the extent it's not giving you the information that you need, that might be something you want to look at as part of your contract review, or whatever else, or specify additional information.
But we will, for pet food and food that is not going to lose its shelf-life within 60 days, look for access to those records up to a year later. So two months would not be sufficient--two months wouldn't even be sufficient for the perishables, because the record retention period is for six months there.
MR. GUAY: I'd like to also offer my congratulations to FDA for the work they've done. My name is Chris Guay from Procter and Gamble. I have three questions.
The first one pertains--
MS. FRASER: Let's do them one at a time.
MR. GUAY: Sure.
MS. FRASER: My short-term memory is going.
MR. GUAY: Agreed. Mine, too.
The first one deals with samples. FDA has an exemption for organoleptic reference standards and organoleptic testing. You know, part of the taste experience deals from the time the food enters the mouth all the way to swallowing it. Does that mean that any samples that are brought in for taste-testing and swallowed are exempt from this regulation? Or, if not, what is the distinction so we can tell what samples are covered and which ones are not.
MS. FRASER: There is a discussion in the rule on samples. And, basically, if the food is intended to be consumed--whether it's going to be consumed in the U.S. or not--but if it is intended to be a food to be consumed at a small sample level or at a macroscopic distribution level, those records are required. We do not require records--or we did not require samples for testing. But we have had outbreaks associated with samples that have come in, where they've test marketed it in a restaurant and a number of people have gotten sick because the food product has had--it's been adulterated in some way.
So there is a discussion in there on samples. But, basically, the number of people who might eat something is not the limiting factor. It's the fact that it might be consumed.
MR. GUAY: Okay--second question: we do a lot of consumer testing and work with contract agencies or facilities that will actually do focus-group testing for food products oftentimes, them tasting the product.
Now, for those contract facilities that have more than 10 FTEs--as far as we can tell, based on the rule, the intent is for them to be covered. The question we have then is: from a record-keeping standpoint, is it permissible for a company in that facility to contract to agree that the supplier of the materials for the focus group--the food products--would maintain the records for that contract facility? Or would that contract facility be required to keep their own set of records on site, even if the companies are willing to work out an agreement along those lines?
MS. FRASER: I guess I'd need to think about it. And I'll leave that--and, by the way--I'm going to embarrass Nega--but Dr. Nega Beru gets to stand up for a hot minute, because he's returned. But this is sort of my right hand here on the record-keeping rule.
I think that one is one we may need to defer to the guidance document, because I'm not quite sure that we have--here's what goes through my head when you ask the question of you have contracted with someone. And I'm not sure that a contract with someone makes them someone different, or if they're really a part of you. I think, legally, they may still be considered part of your entity. It's like hiring employees: the fact that you have employees doing something doesn't mean that entity gets to be an independent group.
But we need to think about that and weigh that as to whether the example you posed--are they truly a retailer or not? I don't have the specifics there. So if you could send that to us in writing with the specifics, we can answer that.
With respect to can you contract to have someone else keep records on your behalf, the only place we have allowed an agreement for someone else to establishment and maintenance the records is for the transporter. And so there is not a similar provision for a non-transporter to get someone else to keep the records on their behalf. That is just the provision for transporters.
MR. GUAY: Last question: FDA inspectors are notorious for being very aggressive. And already, we're having facilities where they're asking for these records even after the rule was in the proposed stage. A lot of these facilities are not traditionally ones that have been--especially upstream suppliers--that have been regulated by FDA, and are unfamiliar with FDA.
And the question we have: is FDA willing to put out some kind of notice on their website or something that these facilities can use to show inspectors, when inspectors start asking for records that they're not entitled to as part of a routine inspection?
MS. FRASER: I think, to the extent that you ever think an FDA inspector is acting inappropriately, that's an issue to raise with their District Director, or even here with the Office of Regulatory Affairs--Steve Needleman or John Taylor.
I will say that there is a distinction between records access that is mandatory access that is established in the Bioterrorism Act, where you are committing a prohibited act if we have met the threshold for accessing those records, and what inspectors will ask for voluntary access to records as part of a routine compliance investigation. And that the Bioterrorism Act mandatory access in no way says that inspectors are not going to ask for a company to voluntarily disclose. A company can say no. But there are different scenarios.
But, again, to the extent that you think investigators are not behaving appropriately, or inappropriately invoking the mandatory access authority, I think that should be immediately raised to the District Director, because there are communications and there is training going on to make sure inspectors do understand the limitations on using this authority.
MR. GUAY: Okay, because there is a lot of confusion about routine inspections out there--at least from what happened before the final rule.
MS. FRASER: Right.
MR. CARSON: I might add to the answer to that: just for your information, there was a specific food security assignment that was performed in the last part of Fiscal Year 2004, and calendar year 2004. And part of that food security assignment, our investigators did go to specific facilities looking for food security improvements or problems, and they did, as part of that in many cases, ask about records.
But your point is well taken.
MR. HAHN: Bob Hahn, Olsson, Frank and Weeda.
If a food processor acts as a contract carrier of food for another company, is it still a non-transporter?
And, secondly, if it has a subsidiary, the food processor sometimes acts as a contract carrier, is it a transporter or a non-transporter?
MS. FRASER: I think in both of those scenarios they are a transporter, because in that scenario they are transporting the food for the sole purpose of transporting it. What we really were trying to respond to were comments on the proposed rule, where some of the manufacturers who have their own fleet to transport their own food said, "Do we have to comply with both sets of requirements? It looks like we have to comply with the non-transporter requirement and then we have to comply with the transporter requirement. And do we also have to comply when we do intra-corporate transfers?"
In that scenario, if you're hiring out your fleet to a different manufacturer, the only reason you have custody and control of their food is for the sole purpose of transporting it, and you are the transporter like any other transporter with respect to that food. So you have transporter obligations, not non-transporter obligations.
MR. HAHN: So the food processor would be both a non-transporter for the food that it processes, and a transporter for the food that it contracts to carry--
MS. FRASER: Absolutely.
MR. HAHN: --for other companies.
MS. FRASER: Right.
MR. HAHN: Thanks.
MR. HURBURGH: Charles Hurburgh from Iowa State University Extension.
I work primarily with the bulk grain handling system, and bulk grain elevators, as you know, take in small lots from farmers and aggregate them into larger ones, along the way blending them to whatever customer specifications there might be. This means that for a grain elevator shipping grain to a processor, the inbound supplier list may range from the entire list of customers that delivered grain to that elevator in the past two years, down to some subset thereof.
What's the test for reasonability in the handling of unidentified bulk commodities?
MS. FRASER: Unidentified bulk commodities, once the compliance date has arisen for that facility based on number of employees, is they are not in compliance. And it is not tied to--we should not just have a list of, "Here's who the people are who might be supplying food." What we're really doing is tracing the food as it arrives. So when a shipment of grain shows up, it is food received, and for every food received that's the list of--the non-transporter needs to keep records of who's the firm that delivered it, what's the transporter that brought the food, what's the date it received it, what was the quantity, what's the description of the food.
So those requirements that apply attach to food it receives. And then when it ships the food out, food it releases. And to the extent that it has food--say there is a large grain elevator, more than 500 employees, and their compliance date is this December--to the extent that next January they have food in house and they don't know where they received it, that is not a valid record under the regulation.
MR. HURBURGH: One follow-up to that, then: are you saying then the elevator needs to reasonably try to associate inbound receipts with outbound shipments when they store the grain in large facilities, and sometimes transfer it in house and so forth, so that its identity is obscure?
MS. FRASER: To the extent that their operations are such--and were not asking them to reconfigure, manually, the facility. But to the extent that they can identify that "We filled up this silo Week 1 from 20 different grain suppliers," or 40 different grain suppliers, and it was co-mingled, "And we processed it and produced feed out the other end and we shipped it out Week 2--"--to the extent that they have that kind of a process flow, there should be an identification that for these bags shipped to these 30 retailers, or 30 other businesses, it came from these 20 suppliers.
But there should be some thought about how their business operations work; what's the throughput of product coming in and going out the other end. And my sense would be--from eons ago dealing with manufacturing--that they know that to some extent just for business records, business processes. You know, they need to know how much more grain they need to order; what's the productivity of one supplier versus another; are they getting better grain, less grain.
But they need to be keeping track and thinking about what records they need to be able to establish that, either at a macro level if that's what's reasonably available to them, or at a more micro level if they have that kind of set-up.
MR. CARSON: Are there any other questions from the audience before I go to the written questions?
MS. FRASER: We have one more on the--
MR. GOLDBERG: Again, Jim Goldberg, National Alcohol Beverage Control Association.
With regard to number of employees that triggers the compliance date: I understand it's not based on employees per location, but employees per business. In the case where a state agency is the seller of alcohol beverages, are we going by the number of employees in that agency, or the number of employees in the whole government?
[Laughter.]
MS. FRASER: That's a good question. We'll add that one to the guidance list, too. That's a good question.
MR. GOLDBERG: Okay. MS. FRASER: I know which answer you'd like, too.
MR. CARSON: Are there any other questions from the audience before I go to the written questions?
Yes, there's one more there. Wait for the microphone, please?
MR. AJDARI: Good morning. My name is David, with Sierra International. And I have a question.
When operating solely as a contract packager, in which we simply receive, repackage and send out food products and basically, at no point in time we would actually have ownership of the products--what, if any records, are we obligated to keep?
MS. FRASER: You are obligated to keep the records that are under the non-transporter records, because you are packing food. And the obligation really ties to the activity you are doing with the food, not necessarily whether you have ownership rights to the food.
So, to the extent you're in that chain of M to I, you're packing food--re-packing is a form of packing--so you have to keep records of immediate previous source, non-transporter and transporter, and immediate subsequent recipient, non-transporter and transporter, and how you received it, how you relinquished it.
MR. AJDARI: Okay. Thank you.
MS. FRASER: I've got to tell you, I feel like I'm on the dunking booth, and I think I've been in the water twice--figuratively speaking.
[Laughter.]
MR. CARSON: Okay, I'm going to go to the written questions, then.
First, Leslye: "I'm a seafood or produce manufacturer, and I don't sell with a brand name. Do I need to change anything so the retailer can identify me or my product as the immediate previous source?"
MS. FRASER: No, we're just asking, to the extent you have a brand name, then that should be recorded. But we're not asking you to reconfigure your label or how you do business, or what products you're producing. We're just trying to get--and here the idea is to try and pinpoint, with as much specificity as possible, so if we are in a public health emergency and doing a trace-back, we can isolate just that product that needs to be potentially removed, and not sweep in, you know, all potato chips if it happens to be just one brand, or one lot number.
So it's really trying to protect both the public health as specifically as possible, and to do a rapid a trace-back and isolate just that product as rapidly as possible.
MR. CARSON: Next question: "Can the previous non-transporter information be satisfied using the corporate address of that supplier, or must it be the physical shipping point that we received the product from?"
MS. FRASER: Nega?
DR. BERU: [Inaudible.] repeat that?
MR. CARSON: Can the previous non-transporter information be satisfied using the corporate address of that supplier, or must that information include the physical shipping point as opposed to the corporate address?
DR. BERU: We link the records to where the activity takes place. So my initial response would be the latter as opposed to the corporate headquarters.
MS. FRASER: Thank you.
MR. CARSON: Next question: "What is our responsibility as a non-transporter, as well as a transporter regarding foods we distribute but do not manufacture?"
MS. FRASER: That was similar to Bob Hahn's question. But it basically is for food that you manufacture yourself and transport, you comply with the non-transporter requirements. For food that someone else manufactures that you transport for the sole purpose of transporting it, you are subject to the transporter requirements.
MR. CARSON: Next question: "In the partial exclusions paragraph you say that we must have records of transactions when we deal with businesses who are our final consumers. The question is: must we maintain records of lot numbers included in that delivery if the information is not currently recorded as part of those transactions today?"
MS. FRASER: No. The obligation to record lot numbers if they exist is only applicable to manufacturers, processors and packers.
MR. CARSON: Next question: "To the extent that required records are maintained in an electronic format, are these records subject to the requirements in 21 CFR Part 11?"
MS. FRASER: No--and I did not cover that--but at the very end, if you turn to the rule, the very last page, there is an exemption from Part 11, which talks about the standards that electronic records must meet to be kept in electronic form.
There is an exclusion that we've added to Part 11 for records kept solely to comply with this regulation. And the rationale for that was we wanted to allow persons to use existing records as much as possible, and if you happen to be keeping electronic records on your own and you wanted to use those, then we weren't going to make you subject to Part 11.
If, however, you are keeping the electronic records to comply with a different FDA regulation that is already subject to Part 11, and you're going to use those records to satisfy the obligation under this rule, then they would have to comply with Part 11. So this exemption doesn't trump your ability to use it for the other regulation.
MR. CARSON: Next question: "You mentioned that this rule does not apply to those products under the exclusive jurisdiction of the Department of Agriculture. The question is: if a manufacturing facility is subject to both FDA and USDA jurisdiction, how do we interpret the exclusion statement for our production?"
MS. FRASER: You're not exclusively under USDA, so you get the benefit of this rule.
[Laughter.]
MR. CARSON: Another question on how we can help them: "Is the previous non-transporter for imported products either the importer of record or the physical overseas shipping location?"
MS. FRASER: It should be--again, it should be the entity that actually shipped it from abroad. If the importer of record is just a paper transaction, we're really looking at what is the non-transporter's immediate previous source. So, what's the facility that manufactured it.
MR. CARSON: There's a question concerning, I guess "at the port of entry." There is an agent who handles the goods from the pier to a warehouse. And the question is--I can't quite read what that type of agent is: is that person considered a transporter and are they required to maintain and establish records?
MS. FRASER: Not knowing the specifics, my sense--and--but are they really just the agent of somebody else? I mean, are they really part of either the source receiving the food, or are they an independent person that's taking control of the food?
AUDIENCE MEMBER: Typically, independent.
MS. FRASER: Then they would be in that chain of distribution. They would be a non-transporter subject to the rule if they're handling the--I mean, again, is it a paper transaction or are we talking about physically doing something with the food? We probably need to answer that one in guidance, too. I think I just went back in the water.
MR. CARSON: The next question--again, I'm trying to read between the lines because it's not real clear--but if the load is leased, does the non-transporter record the trip lessee, which is used here as an example as "C.H. Robinson," or the actual carrier that has been used to transport the product?
See if you can do a better job.
MS. FRASER: [Reads the question.]
Well, you're actually recording who is the transporter that picked up the food from you, and who is the transporter that delivered the food to you. So, if Company A is who you contracted with, but they subcontracted and Company B actually dropped it off, all you see is Company B, so that's who--we're looking for who is the non-transporter.
Unless, is it--I'm trying to understand this: your contract says "Company A?" Or your contract says "Company B?" Or--
AUDIENCE: It's the load. We book it with the example, and then they're going to find an owner-operator to bring the load. So what we typically see now, from a records perspective, is who we leased it with.
But you're telling me now we have to--
MS. FRASER: Well, then--okay, so you leased it with Company A. Then I think that is your--let me correct that. I think if that's who you've leased, that's who you know, and then it's for Company A to tell us--that gets back to that transporter--it's for Company A to tell us how they handled that product specifically when we do a trace-back and we end up back with Company A.
AUDIENCE: Well, then that would apply to that importer.
MS. FRASER: That would apply to that one, as well.
AUDIENCE: Okay.
MS. FRASER: We probably should talk, or at least get more facts, because that sounds like a good example for us to add to a guidance document for general applicability.
MR. CARSON: The next question: "A single-serve beverage is packaged with a foil seal under a plastic cap. Which of these packaging materials falls under the rule?"
MS. FRASER: All of the packaging materials are subject to the records access provision. The food contact substance that directly contacts the food would be the plastic bottle and the plastic cap, because both are contacting the food.
No?
AUDIENCE: The foil is in contact.
MS. FRASER: Oh, it's a plastic cap with a foil liner? Then it's the foil liner that's subject to the food contact substance. The plastic cap that never touches the beverage is the packaging material.
It really is--I mean, if you start with--it's case-by-case--what is touching the food. If it's touching the food it's the food contact substance in direct contact with food. And if you have a barrier, then you're like the cereal plastic liner with the outer box.
But what may apply in one case is different for--it's how you package your food.
MR. CARSON: This question comes from a small transportation company that handles a multitude of products, with a variety of lot codes. And they do not have the current wherewithal to maintain and establish records that includes all the different lot codes that they may be shipping solely as a transporter.
And they want to make sure that they understand what is it that they must maintain, as it is a great cost burden to them.
MS. FRASER: As a transporter you have no obligation to record lot numbers. Only manufacturers, processors and packers have to record lot numbers. But as a transporter, you do have to establish and maintain records, and ensure you can give us access as soon as possible not to exceed 24 hours. And then there are five options for you, as a transporter, to meet those obligations.
If you are a trucker, you can meet the obligations that we have listed ourselves in the rule, or you can use the DOT obligations for carriers, even if you're not subject to them now. Or you can enter into a contract with either your non-transporter immediate previous source or your non-transporter immediate subsequent recipient to keep the records on your behalf.
But you do have to comply.
MR. CARSON: The last question that I have is: "How does this act--"--the Bioterrorism Act "impact the drug industry? Is there another act specific to drugs?"
MS. FRASER: This does not impact the drug industry at all. The Bioterrorism Act only applied to food under FDA's jurisdiction. And so if you are in the drug industry, then you're not subject to this.
And is there another act like this? No. I don't know that one's coming. I think there are other safeguards for the drug industry. There's pre-market approval for the drug industry, whereas food is mostly post-market approval.
So this is strictly food under FDA's jurisdiction is subject to these requirements.
Any others out there? One last--
MR. LONGENECKER: Eric Longenecker with Snow Valley Water. I handed in a question and it wasn't quite understood.
We are a manufacturer. We also deliver all of our manufactured goods--almost all of them--to final customers, some of whom are offices that consumer them--which are businesses, I assume--and some are home consumers.
My question is: do I need to provide in my records lot numbers for those offices that I deliver to? That's not a piece of information that we record now. It's not one that's going to be easy to record.
MS. FRASER: Let's see.
MR. LONGENECKER: And could you answer that for both the products that we manufacture and those that we resell?
MS. FRASER: So you're a manufacturer, you're producing a product that has a lot number.
MR. LONGENECKER: yes.
MS. FRASER: And then you're distributing that product to, let's say, a retail store or a consumer.
MR. LONGENECKER: The retail store is the rare exception. Most of the consumers are going to be hones or offices that will consume it.
MS. FRASER: For consumers, you don't have to keep records of deliveries to consumers at all.
MR. LONGENECKER: I understand that. It's the offices--
MS. FRASER: So it's the offices--that is essentially a business that is then giving it to another consumer?
MR. LONGENECKER: No, they're consuming it in their office. In other words, this building probably has bottled water, which is what we produce, in water coolers.
MS. FRASER: I think if you're essentially delivering it--if you're delivering here to FDA--when we used to get water--
[Laughter.]
--then essentially, even though it's coming to FDA, it's being delivered to a consumer. It's not coming into a business for resale. So it's just that--so that is a consumer.
MR. LONGENECKER: Very good.
MS. FRASER: Yes, So, you like that answer.
MR. LONGENECKER: That's what I was hoping you'd say, yes.
[Laughter.]
MS. FRASER: I made somebody happy today.
[Laughter.]
MR. CARSON: Are there any other questions?
Yes? One down in front, here.
MR. ROWE: Hi, Leslye. My name is Greg Rowe, I'm with Uniform Code Council. I just want to ask one question.
If I'm a manufacturer and I manufacture a product, and I'm going to ship it to a retailer, I'm required to keep the lot number of that product in my record?
MS. FRASER: Yes. As a manufacturer, processor or packer, you have the lot number requirement.
MR. ROWE: Okay, now--
MS. FRASER: But the commenters told us that manufacturers, processors and packers could readily do it.
MR. ROWE: What lot number do I keep? Is it a lot number on a case? A lot number of the item within the case? Or is it the lot number defined as a shipment that went out on a particular day?
MS. FRASER: I think it's lot number to the extent it's readily available. So what is your normal process of--you know, how do you stamp? I mean, we're not requiring lot numbers to the extent you don't do lot numbers. If you already produce lot numbers, we're just asking you to record that. So if your practice is to record it case-by-case, then that's what we would be asking you to record. If your practice is to do it can-by-can, then that's what we would ask you to record. It's really what is in your practice.
MR. ROWE: Well, if our practice is to ink-jet a lot number on a case of product, does that information need to be recorded by us as we're picking and packing and shipping out?
MS. FRASER: I guess it's really for how far down does it have to go for immediate subsequent recipient, or is it just when you produce it? Is that really where the clarification is needed?
MR. ROWE: Well, for me as a manufacturer to keep a lot number, if I sell a perishable mayonnaise-type product, and we have a lot number on the case of the product itself that identifies the lot, when that product was produced, and I pick it and palletize it, am I required to keep that lot number within my records of when I'm picking and building a pallet that I'm going to ship to a retailer?
MS. FRASER: Let's think about that one. Let us think about that one.
Because I think if our intent was to say it's manufacturer, processor and packer, we're not trying to penalize you because you happen to do all of it at one time. But I think we just need to think about and clarify that in guidance.
MR. ROWE: Thank you.
MS. FRASER: In the way back, far right.
MR. WANKOWSKI: Hi, Leslye. Dave Wankowski with Kraft. Just one point of clarification on the samples.
If you have samples coming into an R&D center, regardless of quantity, that R&D center then would meet the non-transporter requirements? So if you've got, you know, a pound of product coming in for an R&D sampling--a taste sampling, for instance; let's just use that example--
MS. FRASER: Right.
MR. WANKOWSKI: It would be required to meet the non-transporter record rule?
MS. FRASER: Right. If it's a taste sample, then the research and development center would be required to meet the requirements for non- transporter. If it is coming into a research and development center for testing only--you know, you want to see stability and so forth, then you would not be subject to these requirements.
[Pause.]
I think in the far top corner.
MS. FLANAGAN: Hi, I'm Linda Flanagan. I'm doing independent research on this.
My question is how do you know when you've complied?
[Laughter.]
MS. FRASER: How do we know, or how do they now?
MS. FLANAGAN: How do you as a business person know when you've complied.
MS. FRASER: That's probably best answered by the business community, but I think it really is--you know, somebody asked me--I think Bob Spiller, "former bureaucrat" as he described himself--you know, had we done sample runs, I guess, basically, to see how this would work, and I think that's something for the industry to figure out, is can they meet the 24-hour access requirement, and how would they go about making sure those records were available.
In terms of how are they in compliance otherwise, it really is how they do compliance checks with any other regulation to which they're subject. They look at what the requirements are of the regulations, and they look at what their practices are. And here the practice would be what records are they establishing and maintaining, and do they have that traceability and record-keeping for each lot of food, or each incoming food ingredient, and each outgoing food product.
And that is a function of what businesses--the responsibility for ensuring compliance is, in the first instance, on the business to determine. And they do that, generally, on a routine basis with laws with which--state, local and Federal laws with which they're subject.
MR. BAIR: Jim Bair, North American Millers Association.
Your example about the miller that provided flour to the baker was clear enough, but going backwards, particularly during harvest time, a miller may be taking in as many as 300 trucks in a day from different farmers. And that grain, based on its moisture or protein content or other intrinsic quality attributes may be put in different bins. And then, in order to make the specific flour desired by that baker or food manufacturer, we may pull from three or four different bins simultaneously in order to make up that specific blend of flour.
So I just want to confirm that I understand this correctly: are you saying that for each sale that we make to a downstream manufacturer we have to be able to provide the names of the immediate providers to us, which would very likely be hundreds or even thousands of names for each one of those sales.
MS. FRASER: Right. I mean, to the extent it's available to you to link--and in your case, you know, you have four bins or 10 bins, each of which might have 30 loads being dumped in, so maybe you have 120 grain suppliers in that. But you still, it would seem to me, be able to say, "Okay, for the production runs on this day, we pulled from these four bins," which might be 120 different suppliers, it might be 200 suppliers. "And that's as reasonably available as we get." Or, "We only pulled from bin one," which might have been these 30 suppliers.
So we are asking--and, again, if we're looking at the importance of having good records, to the extent that we found that there's a problem on a certain farm, and the only way we're going to find that out is from the grain. We see a bunch of animals getting sick or dying. We want to be able to narrow it back to that particular farm as quickly as possible--recognizing that we can't access--you know, the farms aren't subject to this regulation.
So we really need as much specificity as is reasonably available to you, even if it becomes 30 to 100, because that's how your grain silos are.
MR. BAIR: Follow-up question: okay, then going downstream, again, shipping the flour to the baker, that data will be easily available. But we also have by-products, and those by-products will be sold.
And my question is: in the case where the piece of paper that represents a purchase of 1,000 tons of by-products, that piece of paper may get traded or sold multiple times. So let's say that it's sold three times, and then Buyer No. 3 holds that piece of paper, comes with a truck to get those by-products, is the immediate subsequent recipient the person to whom we fist sold the by-products, or the person who shows up to actually take possession.
MS. FRASER: I think it's what you know. I mean, if your contract is with person A, but then person A later sold it to person F, what you know is the immediate subsequent recipient as Person A. But what you will show is both--because you're a non-transporter, you will be able to tell us that it's my non-transporter immediate subsequent recipient is Person A, but my transporter immediate subsequent recipient is whoever showed up with the truck--I think.
I guess I would say to the extent that you all have comments on how the rule is unclear and how you think it should work, I would encourage you to send those in to us, because that is--you know, we'll start thinking about what make sense. We really do want to document it and put it in guidance document, and really think about it in a little more detail.
And how things operate in your industry--I mean, we try to provide a general rule, but the specifics--and particularly paper transactions versus physical transfer of product--whether you think, and whether we think it makes more sense to tie it to the physical transfer, or does it make more sense to tie it to what you know as a business transaction, I think we really need to clarify.
And so we welcome thoughts on that--and some real-world examples, because that's what people--as somebody asked me: can we put more examples in our guidance documents for records access? That's what we try to do with our question and answer guidance documents.
So if you have that question, and you have that question--and, I mean, it's come up in about four different ways, give us some examples and say, "Here's what we think makes sense and why." I mean, the why helps us kind of process it, as well.
MR. BAIR: Thank you.
MR. BALDWIN: David Baldwin with Pinnacle Foods. I have a follow-up question to the one about facilities that manufacture both FDA and USDA regulated foods.
I understand that with both agencies regulating that plant that the FDA foods would not be exempt. But are the USDA-regulated foods also required to comply with the requirements in the rule.
MS. FRASER: No. If the food is under--I mean, there are plants that have co-jurisdiction as a facility, and those co-jurisdiction facilities have to register with us because they're not exclusively USDA's.
But for the record-keeping rule's purposes, to the extent that they have food that is exclusively USDA's, and food that is exclusively FDA's, and some food that we both look at, or both have jurisdiction over--like fruits and vegetables, for example--then just food that has an FDA tag on it is subject to the rule. So, either just ours, or ours and USDA's. But anything that is solely USDA's--which is basically meat products, poultry products and egg products--are not subject to these requirements.
MR. CARSON: Any other questions?
One more in the back?
MR. JORDAN: Just take your current example--it's Kevin Jordan with 3M--your current example: if you have a food that's packaged together that is both under FDA and USDA jurisdiction, how would you track the contamination or the adulteration of that product, if you didn't track the USDA portion of that food in that package? So, say a prepared meal?
MS. FRASER: It makes it more difficult, but the authority that we have here is solely ours. And I think USDA, for the USDA product, there are different authorities. They have an inspector in the plant and so forth. And so whatever records that are kept on the USDA side, we would need to invoke the USDA authority.
But the Bioterrorism Act was solely--I mean, people question all the time, you know, "Well, why are farms out? Why are restaurants out?" And the answer is because Congress didn't write the law that way. And, you know, other than that--we are just addressing the authority we were given to deal with FDA-regulated foods, primarily because the assessment was that we didn't have enough resources to deal with a public health emergency, and that's what the Bioterrorism Act was addressing.
MR. CARSON: Any final question?
Proctor and Gamble.
MR. GUAY: I resisted actually asking the question when they were all up there. I didn't want to make them walk down here.
[Laughter.]
MR. GUAY: One last question of clarification: if we have sales samples, and we to a Kroger buyer, or give one to a Safeway buyer, or one to a Stop-and-Shop buyer for them to test before they buy or choose to buy a new product, going back to the analogy you made about the water going into a facility. This is just, you know, a onesy-twosy type thing for them to consume there at that time.
Is that something which is covered? Or to what extent is it covered?
MS. FRASER: It's covered. We don't count how many people are consuming. And so, yes, it is covered. Where we drew the line is if the food is intended to be consumed, whether here or anywhere, then it is subject to the rule.
MR. GUAY: And how is that different than the case of the water going into a facility where--again, you can look at this as being final distribution direct to a consumer, because their the ones consuming it. So how do you decide what is and what's not?
MS. FRASER: But you're not distributing it directly--we actually--you know, I guess you could say in some ways it's similar, and in some ways we see it as different. In your example, you're actually distributing it to a business. And so we're trying to follow the chain--
MR. GUAY: Well, we're giving it to a purchaser, who is a consumer too, with the intent of them to consume it. So I guess I'm trying to get clear on that because it can make a big difference.
MS. FRASER: But you're giving it to Safeway, who will then give it to a consumer.
MR. GUAY: No, we're giving it to the buyer for Safeway. Our agent's giving it directly to the Safeway buyer for them to sample before they choose whether they want to purchase it for putting it in their stores.
MS. FRASER: Oh, you're giving it to a consumer in Safeway.
MR. GUAY: Right.
MS. FRASER: See, I took "Safeway buyer" as the business person to--I'm sorry. Okay, so you're giving it to a consumer--
MR. GUAY: Or we're giving it to the Safeway buyer, who is also a consumer.
MS. FRASER: Well, the Safeway--see, to me, there's a difference between are you giving it to a business, and--when you come and give me something here, you're giving it to me in my official capacity. You're not giving it to me as a consumer.
MR. GUAY: Okay.
MS. FRASER: If you're giving it to a Safeway buyer, that is in their capacity as a business person, trying to look to influence sales. You're not giving it to them as a consumer, per se. So we're talking business-to-business transfer. That is something that we are--there is not an exemption. And, you know, in fact, there was no exemption in the Act for retailers, period. This is one that we created a partial exemption, not to keep track of sales to consumers.
If you are providing food to consumers, then we do have a partial exemption, but I think, you know, it starts getting a little murky to say, "Well, this person, I'm really trying to deal with in a business capacity, but I want to treat them as a consumer," that is not the intent of the exemption.
MR. GUAY: I just wanted to be clear, because it's an important distinction, and I'm just trying to make sure I understand the logic going into it.
MS. FRASER: Right. We tried to draw a line between individual consumers as consumers, and businesses as businesses. And, yes, it does get kind of dicey when we're talking one, two, three, four, but we drew the line at businesses versus consumers.
MR. CRAVEN: Hi. I wanted to follow up on that a little bit further.
So, if I wished to--oh, David Craven, Riggle and Craven--if I wished to have a buyer sample my product, I can't give him the product because I'm giving it to him in the capacity of the business, but I can certainly serve it to him.
[Laughter.]
Or does that constitute an impermissible transfer?
MS. FRASER: I will say we will think about this some more. But I ask you to think of the intent of the reg. And the intent of the reg was to give businesses a break in not recording individual transactions to consumers. So when I come into the Giant Grocery store, we're not asking the Giant employees to ask am I buying it for me to take home to my family, or am I buying it because I own the 7-Eleven next store. We were trying to avoid that.
MR. CRAVEN: But I guess where I'm looking at is a situation of a company has 15, 20 buyers that come to them to taste a product before they determine whether they want to even commercially consider it. It would seem to me that taking Proctor and Gamble's example to where it looks like you might be taking it, I have to record, as a transaction in the records, the individual samples that they take, even if I make them eat it in my presence in my facility. And that seems--extreme.
MS. FRASER: What I will say is you can ask us to reconsider, through guidance, or even a change to the rule if that's necessary, how we exercised our enforcement discretion to grant the exemption for samples in the first place, if you don't think we've done that appropriately, and we will consider that.
But we did try to create an exemption for samples for testing, but not for tasting. And we did not get into whether you were having ones or twos. And it goes back--and the rationale for that is, we have had samples that have caused people to go to the hospital. We have had samples that have killed people--not any of yours, I'm sure. So, when you look at it from our perspective on whether there should be an exemption for tasting, for samples--which is what this falls under--what you're also talking about now is how does the sample exemption compare to the distribution to consumer exemption.
MR. CRAVEN: But, see, the problem though--I don't want to belabor the point, but if I went out and I gave the samples to consumers that were private citizens and had them test it, that would apparently be exempt as a distribution to an ultimate consumer. So you're saying that samples that I'm giving to an ultimate consumer to test are less dangerous than giving it to a business--
MS. FRASER: I understand your point. I think what I said was: what we're running into is we have an exemption for samples, and we have another exemption for consumers, and how do these two interrelate, and should we think about whether samples given to consumers, which essentially as any other food need to be recorded? And we will think about that.
But they came up in two different places, and I started answering his question--it's a very good question. But I started answering his question in terms of the sample exemption, and I think you're addressing it from the consumer perspective. And we just need to think about that.
MR. CARSON: Any further questions?
[No response.]
Okay. We want to thank you very much. Have a good afternoon.
[Applause.]
[Whereupon, at 11:55 a.m., the meeting concluded.]
