Background Information
Points to Consider Regarding FDA-Issued Export Certificates for Foods
FDA's long-established role in the U.S. government has been that of a domestic public health agency charged with protection of the health and economic1 interests of American consumers with regard to the safety and labeling of foods, drugs, cosmetics, biologics, radiologic products and medical devices.
The agency's statutory mandates, defined primarily by the Federal Food, Drug, and Cosmetic Act (FFDCA), focus squarely on ensuring that American consumers are protected against unsafe products, and from the adverse health or economic consequences of false or misleading labeling. Therefore, throughout its history, FDA has concentrated on development of science-based regulations governing product safety, quality and labeling and implementing effective enforcement regimens aimed at ensuring that FDA-regulated products that are either produced in, or imported into, the United States comply with these regulations.
With the emergence of a global economy over the last twenty years, the international environment in which the United States -- and FDA -- operate has changed dramatically. U.S. export issues, while sometimes having a compelling public health component, are principally related to means of facilitating export of U.S.-manufactured products. Consequently, FDA has not participated actively in this "export trade" environment. However, foreign governments, including developed countries with established regulatory infrastructures and developing countries without basic regulatory frameworks, are increasingly looking to FDA, as the "national competent authority" for FDA-regulated products, to ensure that products imported into their countries from the United States meet specific requirements. Thus, recently FDA has become increasingly and substantively involved in attesting to the safety and quality of U.S.-produced, FDA-regulated products exported to other countries.
Until recently, FDA has not had an explicit statutory mandate to address export-specific issues pertaining to the safety of FDA-regulated products that are produced in the United States and exported to other countries. To provide FDA with additional authority in this area, Congress enacted the 1996 FDA Export Reform and Enhancement Act and the 1997 FDA Modernization Act, which, among other provisions, provided the agency with additional authorities with regard to some exported FDA-regulated products. For example, the FDA Export Reform and Enhancement Act provides a statutory framework for FDA to charge fees and to issue export certificates for human and animal drugs, medical and radiologic devices and biologics. It provides FDA with the authority to collect a fee of up to $175 for each such export certificate, provided that the certificate is issued within 20 days of request. However, this fee authority for export certificates does not apply to export certificates for foods or animal feeds.
Agencies of the Department of Agriculture (USDA) with responsibilities for food safety and quality and for other food-related issues are currently authorized, in some circumstances, to collect fees associated with issuance of export certificates for designated agricultural products, including foods. The Food Safety and Inspection Service (FSIS) has authority to collect fees and to issue export certificates for foods under its authority -- meat, poultry, processed egg products -- when a foreign government's requirements are different than those covered by U.S. regulations. The Animal and Plant Health Inspection Service (APHIS) charges fees for issuance of food-related export certificates pertaining to plant and animal health issues. The Agricultural Marketing Service (AMS) has fee authority for food export certificates for issues relevant to product quality and to certain food safety attributes. The Grain Inspection, Packers and Stockyard Administration (GIPSA) collects fees for export certificates for various aspects of grain safety and quality.
The National Marine Fisheries Service (NMFS) of the National Oceanic and Atmospheric Administration (NOAA), Department of Commerce is authorized to collect fees to recover both the inspectional and administrative costs associated with its issuance of export certificates for fish and fishery products under its Seafood Inspection Program (SIP). FDA, as the principal federal agency in the United States responsible for seafood safety, is also requested by the U.S. seafood industry and foreign governments to attest to the safety of U.S. harvested/produced seafood and to issue export certificates. FDA issues such certificates on a discretionary basis, but does not recover any of the administrative costs associated with this activity.
While FDA is looked to by the U.S. food industry and foreign governments as the competent authority to attest to the safety of U.S.-produced foods, it has neither the legislative mandate to issue export certificates for foods, nor general authority to collect fees for export certificates that the agency may choose to issue on a discretionary basis. Moreover, FDA does not now receive other federal funds that might be transferred to FDA from another agency's fee-supported certificate program in order to provide FDA staff support for inspectional or administrative activities needed to maintain lists of "export eligible firms". Such lists are based primarily on FDA's domestic enforcement and inspectional findings. In some cases, FDA must obtain inspectional information, review the findings and assess the general compliance history of candidate firms before another, fee-supported U.S. agency can issue an export certificate.
Resources within the agency to support FDA's discretionary export-related activities are extremely limited and must be diverted from resources (appropriated funds) that are intended to support FDA's public health activities and programs. Consequently, FDA is now finding it increasingly difficult to strike an appropriate balance between its paramount mission of protecting the health of American consumers through programs aimed at ensuring the safety of domestic and imported products, and its emerging, but unmandated role of facilitating the international trade of U.S.-produced foods by attesting to the safety of food products exported from the United States.
In its December 1999 Affirmative Agenda for International Activities, FDA's Center for Food Safety and Applied Nutrition (CFSAN) stated its intent to try to find effective and resource-efficient approaches to issuing export certificates for foods. The Affirmative Agenda stated that FDA would seek means to:
"Attest to the Safety or Other Attributes of Foods and Cosmetics Produced in the United States
Issue Certificates for Export - Issue Certificates for Export (formerly Certificates of Free Sale) to U.S. food and cosmetic producers and exporters as necessary to satisfy the requests of foreign governments for U.S. attestation that the particular products are produced and marketed in the United States in general conformity with U.S. requirements.
- Assist Other Federal Agencies with Issuance of Foreign-Mandated Export Health Certificates - Develop, in cooperation with USDA agencies and the National Marine Fisheries Service, a resource-efficient procedure based on FDA attestation to the safety of exported products for U.S. government issuance of export health certificates required by some foreign governments for certain animal-derived foods."
Because of the increasing demand for food-related export certificates, FDA accomplishment of these objectives depends on the agency's ability to acquire the resources necessary to offset at least a portion of the costs associated with issuance of export certificates for foods.
The President's budget request for FDA for Fiscal Year 2002 included a proposal for $5.3 million in user fees that would be used to support FDA activities associated with issuance of export certificates. The proposed user fees were not authorized for FDA for FY 2002 and they were not included as part of the President's FY 2003 budget proposal for the agency.
A draft bill that would amend the FFDCA to provide FDA with authority to collect user fees for food export certificates was also prepared by the Administration and sent to Congress late in 2001. The "FDA Export and Import Fee Act of 2001" also contained provisions for user fees to support part or all of the costs of certain import-related activities of FDA. The proposed bill was not introduced last year and so far has not been introduced in the current session of Congress.
The purpose of the President's FY 2002 budget proposal for FDA user fees for food-related export certificates and of the proposed authorizing legislation was to provide the agency with a statutory framework to issue food export certificates that support the trade and economic interests of U.S manufacturers in a manner that does not detract substantially from appropriated resources devoted to protecting public health. The beneficiaries of FDA-issued and FDA-supported export certificates are U.S. food manufacturers and exporters.
The following "Points to Consider" provide a summary of the above background and some additional information on FDA's activities related to food export certificates. In addition, information on other types of export certificates issued by FDA may be found at: http://www.fda.gov/cber/guidelines.htm
FDA is the "competent regulatory authority" for most U.S. foods.
The Food and Drug Administration (FDA) is the principal "competent regulatory authority" on matters pertaining to the safety and quality of most foods and animal feeds, human and animal drugs, devices and biologics. Foreign governments and industries increasingly look to FDA to attest to the safety/quality of U.S.-manufactured products and to issue consignment-specific export certificates for these products.
FDA currently has no authority to collect fees for food-related export certificates.
Under current authority, FDA can charge a fee of up to $175 to cover some costs associated with issuing an export certificate for an FDA-regulated drug, device or biologic. However, FDA does not have corresponding general authority to charge a process-related fee for issuance of an export certificate for FDA-regulated foods or animal feeds. Department of Agriculture (USDA) agencies already have authority to collect fees for food and agriculture-related export certificates.
FDA currently charges a fee of $10 per certificate for foods/feeds associated with agency issuance of "Certificates of Free Sale". These are general certificates (not pertaining to a particular production lot or export consignment) that state that the particular product(s) is produced in the United States, that it is marketed in the United States, and that the particular manufacturer has no unresolved enforcement actions pending before or taken by FDA. The fees charged by FDA for the Certificates of Free Sale must be returned to the general fund and, therefore, are not available to FDA to cover any costs. These very general certificates do not always satisfy the certification requirements of foreign governments.
Other countries are increasing their demands on FDA for food export certificates.
There is a significant and growing resource demand on FDA to issue food-related export certificates, including general Certificates of Free Sale, as well as, a variety of "health certificates" required by foreign governments. These "health certificates", currently required primarily by the European Union (EU), are usually consignment-specific and often contain language pertaining to "compliance" of the particular product/consignment with foreign regulations. FDA does not sign export certificates that attest to compliance with another country's regulations and, consequently, usually works with other governments to develop mutually acceptable language for the certificate, e.g., language recognizing "equivalence" rather than "compliance".
In 1999, an agency workgroup estimated that FDA (primarily its field component, but also including one headquarters' Center) was expending approximately 10 full time equivalent positions to issue nearly 15,000 seafood "health" certificates to the EU. Another FDA position was expended to coordinate issuance of dairy export certificates by USDA/Agricultural Marketing Service -- AMS (based on an FDA-supplied list of export-eligible firms).
Since the 1999 workgroup conducted its assessment, the volume and types of food-related export certificates have increased. Certificates are most often required for seafood and dairy products, but certificates for other food products are also requested. For example, FDA has been engaged in protracted discussions with the EU for about a year to reach agreement on text of an EU health certificate for gelatin. FDA has insisted that the certificate be based on the equivalence of the U.S. and EU safety measures for gelatin. FDA has already spent significant personnel resources to demonstrate equivalence of U.S. gelatin safety measures and on the text of the certificate.
Other European countries outside the EU, including a number of prospective members of the EU, have begun to request "EU-type health certificates". Countries in South America and South and East Asia have begun to request/demand similar export certificates. FDA has resisted issuing these additional certificates (beyond those demanded by the EU as a condition for export), but the clear trend is toward a greater demand by foreign governments for export certificates.
FDA works unreimbursed with other agencies/organizations in order to attest to the safety of U.S. foods.
FDA has cooperated/collaborated with other U.S. agencies, which already have export fee authority, to address the need for food-related export certificates. USDA/AMS issues dairy export certificates to the EU based on a list of export-eligible firms that have passed FDA or State inspections. The National Marine Fisheries Service (NMFS) issues seafood export certificates based on a list of export-eligible firms maintained by FDA. FDA and USDA/Food Safety and Inspection Service (FSIS) are working out arrangements for FSIS to issue certificates for sausage casings based on a list of export-eligible firms provided by FDA. Yet, none of FDA's resource expenditures for these activities are offset by fees.
U.S. trade agencies (USDA/Foreign Agricultural Service -- FAS and the Office of the United States Trade Representative -- USTR) have encouraged FDA to implement policies and procedures that would enable/facilitate agency issuance of food export certificates.
Many state government agencies issue food export certificates. These certificates may or may not be accepted by foreign governments or importers. The Association of Food and Drug Officials (AFDO) has formed a committee/workgroup to examine the overall issue of food export certificates. The committee/workgroup is chaired by FDA.
The Codex Committee on Food Import and Export Inspection and Certification Systems (CCFICS) has elaborated a draft food export certificate that has been adopted by the Codex Commission which would help to standardize the format of food export certificates used in international trade.
The President's 2002 budget request included $5.3 million in user fees for FDA to partially offset the costs of FDA-issued/supported export certificates for foods.
The President's budget request for FDA for Fiscal Year 2002 included $5.3 million in user fees that would be used to support FDA activities associated with issuance of export certificates. The fees were not authorized by Congress for FY 2002. The President's proposed FY 2003 budget for FDA did not include a specific request for the fees.
Proposed legislation would give FDA authority to collect fees for food export certificates.
A bill entitled the "FDA Export and Import Fee Act of 2001" was prepared by the Administration (FDA/DHHS) and sent to Congress in late 2001. It was not introduced in Congress. The bill, if enacted, would authorize FDA to charge a fee of up to $175 to cover part of the costs associated with issuance of food-related export certificates. All collected fees would be used solely to cover the agency's administrative costs associated with reviewing the necessary information on file with FDA, or in obtaining such information about the particular manufacturer, product, and consignment that would be necessary to enable FDA to issue a requested export certificate. As drafted, the bill would also authorize FDA to collect on entry fees on FDA-regulated products offered for import into the United States -- these fees would be used to cover some costs associated with FDA's import-related activities.
The U.S. food industry would benefit from an enhanced FDA system for issuing export certificates for foods.
The U.S. food industry has raised the issue of export certificates with FDA and other U.S. agencies. The industry has indicated that it is now facing an increasingly complex array of foreign food export certificate requirements and has asked U.S. agencies to explore options to develop a workable U.S. food export certificate strategy coordinated by U.S. federal agencies. However, the food industry has not yet indicated that it would support a user fee structure for FDA to recover some of the costs of an export certificate program.
FDA intends only to issue export certificates for foods that attest to compliance with U.S. regulations
As stated above, any FDA-issued export certificates for foods, currently or in the foreseeable future, will attest to compliance of the particular product and manufacturer with relevant U.S. regulations. FDA does not intend to provide export certificates for foods that attest to compliance with other countries' regulations
1 FDA's primary role is public health protection. However, the agency has authority to address certain "economic" issues pertaining to FDA-regulated products, including foods. For example, FDA can establish food quality standards, or standards of identity for some types of foods. These standards are intended to ensure that consumers and producers can be assured that foods, principally processed/manufactured foods, meet basic standards of quality and identity. In this way, consumers are not misled into purchase of lesser quality products that may be represented as an "authentic" food and producers are generally assured that substandard quality products do not undermine public confidence in the "standardized" authentic product. Generally, however, because of limited resources, enforcement of these "economic" issues is not currently a high priority for FDA.