Tag Archives: imports

Compliance, food safety

Leveraging FSVP Compliance: Do Less, Get More

By Benjamin England, Nicole Trimmer
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Compliance, food safety

With an ever-expanding international food trade and new government demands for food safety and supply chain transparency, the U.S. regulatory landscape is becoming increasingly more complex. FSMA (especially the Foreign Supplier Verification Program) aims to shift responsibilities for imported food safety from FDA to importers in an effort to reduce the regulatory burden on FDA. New regulations bring new burdens to food trade stakeholders, requiring significant investment. However, many of the data obligations of the FSVP rule dovetail with other agencies’ requirements.

Investments in one dataset can be leveraged to improve a company’s overall compliance related to international trade. The key is to integrate FSVP requirements into a strong regulatory compliance program without breaking the bank. This requires identifying data overlap, utilizing compliance integration to work smarter, not harder, leveraging the window of opportunity to collect more (and necessary) data from your foreign suppliers, and calling in the right help when needed.

TRUST…..BUT VERIFY: 2018 FSMA Focuses on Supplier Verification Activities | Learn more at the Food Safety Supply Chain Conference | June 12–13, 2018 | Rockville, MDToday’s International Supply Web

No longer can we reasonably talk about establishing, monitoring and maintaining a supply “chain” when importing anything. International trade in food and its ingredients is rarely bilateral—except for perhaps fresh produce, meat and seafood. Instead, food moves throughout a complex supply web of international transactions. Most processed food now contains ingredients from multiple countries, leading to food safety verification challenges and country of origin questions for finished goods.

The international supply web includes farms (land and aquaculture), agriculture cooperatives, food grade chemicals manufacturers, color and flavoring formulators and manufacturers, raw materials processors and fabricators, finished food processors & packers, warehouses, transportation companies, cooking, canning and irradiating facilities, shippers, exporters, product and commodities brokers, importers, wholesalers, retailers and e-tailers. Any (or all) of these players may be small operations located in different countries or multi-national conglomerates operating on several continents. There is very little food consumed in the United States that is not affected, in some way or another, by international commerce and trade.

Shift to a Preventive System

In 2011, Congress passed FSMA with the goal of moving U.S. food safety from a reactive to a preventive system, and integrating HACCP-like principles into the production of all food. Over the ensuing years, FDA issued seven major regulations that address various facets of food safety.

The Foreign Supplier Verification Program (FSVP) rule was included as a way to ensure that foods imported into the United States are produced in a manner that meets U.S. safety standards. FSVP requires that “importers,” which can be the distributors or retailers of products, verify and document the steps taken to ensure safe production of animal and human food. While the exact FSVP requirements vary depending on the commodity, the FSVP process often includes developing, maintaining and documenting a food safety plan and, as its name suggests, verifying that foreign suppliers are controlling for appropriate hazards. Developing and implementing these plans requires a wide variety of skills, including hazard analysis and risk assessment, establishing preventive controls, developing recall plans, and careful documentation of the process. FSVP also requires that verification activities be carried out by parties who have specific preventive control training, or “PCQIs” (Preventive Control Qualified Individuals).

Most importantly, FSMA and the FSVP rule shift the burden of safety from FDA to the importer. With increased interconnectedness, flaws in food safety documentation can become magnified throughout the system. Note that FSVP covers food safety only—not necessarily food traceability or food security defense—although there are opportunities for crossover ROIs. To achieve FSVP compliance, you need to know who is handling your food before it is imported, what they know about food safety, and how they apply food safety principles.

Cross-agency Data Usage

Approaching FSVP as a stand-alone regulatory compliance initiative is expensive and inefficient. Many activities and data elements that must be kept for other government agencies and their compliance programs should be linked together. The data your foreign suppliers must provide to international carriers for advanced notice to U.S. Customs and Border Protection (“CBP” or “Customs”) by importing carriers (airlines, trucking companies and vessel operators) is relevant to both Customs entry and FDA food safety compliance and documentation. This overlap presents an ideal opportunity to relieve the burden of the new FSVP requirements and kill two birds with one stone. And the overlap and leveraging opportunities are actually quite substantial—if one knows where and how to look for them.

For example, the USDA’s National Organic Program (NOP) regulations specify requirements for the processing, handling and labeling of raw materials and processed goods to meet organic standards. Organic labeling and marketing claims are affirmative assertions that the labeled food has not been exposed to processing steps, processing chemicals or particular substances (e.g., sewage sludge, ionizing radiation) that would cause it to fall out of the regulatory bounds of an organic food product. Where organic processing and handling crosses over to food safety, leveraging organic compliance documentation buttresses the safety of the resulting food—and the importer’s FSVP program.

Additionally, much of the information that the importer must know to properly classify their product under the Harmonized Tariff Schedule (HTS) is the same information that the importer needs for their FSVP plan; the importer must know the products, what they are made from, how they are processed, and how they are intended to be used to both properly classify and verify the safety of their product. Because FDA requires the importer to verify that its foreign supplier has a system that meets the domestic food safety standards, the foreign supplier must also be able to identify its own ingredient and raw material suppliers and their systems for food safety, as applicable. Therefore, the food importer’s FSVP process promotes documentation compliance with CBP’s and other government agencies’ requirements governing the country of origin of materials for applicability of preferential duty rates (e.g., under a free trade agreement) and country of origin labeling.

Another example of data overlap is the FSVP requirement for supplier verification and the responsibility to show correct valuation of your product for Customs. FSVP requires that you verify your suppliers and ensure your product is genuine, and Customs requires that you declare an appropriate valuation and identity for your shipment. If Customs investigates your shipment and determines your valuation is incorrect, it may trigger the Department of Commerce to investigate whether there are anti-dumping and countervailing issues going on with the product.

Issues with anti-dumping and countervailing duties are extremely time-consuming and expensive. In both 2008 and 2016, federal authorities investigated rumors of companies circumventing anti-dumping duties by transshipping food products through third countries (to conceal actual origin of the material). When Customs investigated a honey processing plant, they found evidence that the purported processor of Vietnamese honey was receiving finished product from China and relabeling it as originating from Vietnam. When importers declared imported Vietnamese honey, Customs determined from trace mineral testing that the honey was, as they suspected, Chinese. Customs seized the product. The lesson to learn from this is to know your suppliers and the actual supply web. In the case of country of origin violations, not verifying the country of origin can be costly. Where CBP finds negligence is involved, the agency can look back five years to recoup lost duty plus interest, and can even reopen old liquidated entries and assess monetary penalties. In completing your FSVP plan, requesting documentation demonstrating origin is a small additional step that furthers the strength of CBP-required documentation to support the origin declaration at entry. That’s leveraging.

Document, Document, Document

Under the Customs Modernization Act of 1993, the compliance watch-words for all importers (and customshouse brokers) are “record keeping,” “shared responsibility,” “reporting,” and “due diligence.” Anything that is required for a proper importation is subject to CBP review and audit—whether the requirement arises as supply chain and source data under the Seafood Import Monitoring Program (SIMP) under the National Marine Fisheries Service (NMFS), or organic labeling and compliance under USDA’s NOP regulations, or speciation documentation under the Lacey Act enforced by U.S. Fish and Wildlife (USFW), or FSVP implemented by FDA. Therefore, the engagement between food importer and foreign food supplier forced by FSVP opens the opportunity for the importer to clarify and shore up its documentation obligations for many other coexisting regulatory regimes.

A clear demonstration of this fact is borne out by the regular process that ensues when CBP issues to an importer of record a Customs Form 28 (or “CF28”). The CF28 is a CBP request for additional information relating to an imported shipment. The importer is usually required to respond within 30 days of its issuance. But ordinarily the CF28 is issued months (and sometimes years) after the importation occurred. Therefore, the CF28 process represents a significant challenge to the importer’s record keeping and compliance documentation systems, and legal liability to the importer’s bottom line.
Documents needed to respond adequately to a CF28 include contracts, purchase orders, packing lists, shipping documents, declarations to government authorities throughout the import process, powers of attorney, country of origin certifications, emails and other communications discussing any of these documents. CBP requests these documents to confirm the proper electronic data was submitted with the importation. And, of course, CBP is checking to see if the importer is attempting to circumvent U.S. import or export laws that may deprive the government of revenue.

The identity and location of an importer’s trading partners (including the foreign supplier and its suppliers), contracts between and among them (e.g., related to description, processing methods, equipment used, quality and condition of goods), origin documentation, proofs of packing and shipping, etc., are all subject to production via the CF28 process. Penalties for errors in the documentation that result in a regulatory or administrative action are imposed upon the importer (for failing to document or exercise due diligence in performing its function as an importer under U.S. law).

The FSVP regulation presents an ideal opportunity for the importer to establish and populate a compliance program that integrates its FDA import regulatory obligations with those of CBP and other regulatory agencies, as applicable. Failing to take this rare opportunity—at a time when foreign suppliers are expecting probing questions from their U.S. trading partners—is a mistake.

Because the government is more connected, it is essential to change how you prepare for and respond to issues that arise. Just as the FDA’s FSVP rule aims to move food safety from a reactionary to preventive system, coordinated proactive compliance with all government agency requirements will be necessary for the future. Further, with new regulations, your customs broker may not be equipped to deal with certain areas or when administrative matters escalate. But how do you prepare for any eventuality when the enforcement possibilities seem endless?

When preparing your FSVP plans, reviewing your Customs documentation, and reviewing other government agency requirements, it is critical that you think through all the potential issues that may arise with your product or its supply chain, and address them proactively in your documentation. What might an inspector or compliance officer think about the information provided? Is it thorough, clear, and logical? Does it tell a consistent narrative? What if another agency sees this information? Will they have further questions? The ultimate goal is accurate and thorough data for submissions to FDA, Customs and any other partner government agencies.

Key Steps to Prepare for the Worst-case Scenario

Lastly, let’s not forget that part of being prepared is preparing for the worst-case scenario. What happens when you are confronted by an issue? We recommend taking four key steps. First, marshal your resources (documents, documents). Second, ask, “Who are the key players in the story (e.g., which agencies are involved or could possibly be involved, and what are they requesting)?” The third question, a bit less straightforward, is, “How must I respond? (e.g., is the agency within its regulatory authority and required time constraints; are there conflicts of interest; what is the potential legal exposure to risk for different actions)?” Finally, do a gut check: Are the examinations subjective in nature or qualitative (rather than quantitative)? Is any required testing appropriate for the product? If you feel you cannot confidently answer these questions using current staff, we recommend you prepare for import issues by selecting professionals who have experience with integrated agency regulations and legal compliance requirements. The keys to expediting the process when working with multiple government regulatory agencies are integrating your compliance to ensure you have a true green-means-go light before you ship and being able to present a clear and consistent regulatory narrative to all agencies. This requires a clear understanding of how the government regulatory requirements actually intersect.

FDA

FDA Recognizes ANAB as First Accreditation Body

By Food Safety Tech Staff
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FDA

In an effort to improve oversight of imported food, today FDA announced its recognition of the first accreditation body under FSMA’s voluntary accredited third body certification program. ANSI-ASQ National Accreditation Board (ANAB) has been recognized by FDA after meeting agency requirements, which were validated via an application review and on-site assessment.

“Accreditation bodies recognized by FDA will have the authority to accredit third-party certification bodies, also known as third-party auditors. These certification bodies, once accredited, can conduct food safety audits and issue certifications of foreign food facilities (including farms) and the foods – both human and animal – that they produce.” – FDA

Today FDA also launched the Voluntary Qualified Importer Program (VQIP), which provides expedited review and entry of human and animal food into the United States. Importers that want to participate in the program must meet certain requirements, including making sure that the facilities of their foreign suppliers are certified under the Accredited Third-Party Certification Program.

FDA

FDA Issues Draft Guidance on Inspection Refusal for Foreign Food Facilities

By Food Safety Tech Staff
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FDA

Today FDA released a draft guidance to provide information about what actions by a foreign food establishment or government are considered a refusal of inspection. “FSMA gives the U.S. Food and Drug Administration the authority to refuse imported food admission into the United States if the agency is not permitted to inspect the foreign establishment that produced the food,” FDA stated in a release.

The 12-page draft guidance, Refusal of Inspection by a Foreign Food Establishment or Foreign Government, outlines how the agency goes about scheduling inspections of foreign establishments (despite the fact that FDA is not required to pre-announce inspections), the inspection activities themselves, and very detailed examples of what it considers an inspection refusal from a facility (from a lack of communication with FDA that delays the agency’s request to schedule an inspection, to preventing an FDA investigator from entering a facility, when a facility sends staff home and tells FDA that it is not producing product).

The draft also details what it considers to be refusal of inspection by a foreign government. Some of the actions include preventing FDA investigators from entering the country or asks them to leave the country before an inspection is scheduled; and limiting access to areas of the facility that manufacturing, processing and packaging occurs; and limiting investigators from collecting samples for analysis.

If either a foreign food establishment or a foreign government refuses an inspection, they will stay on the agency’s Red List of Import Alert 99-32 until FDA is able to schedule and conduct an inspection.

Bill Bremer is Principal, Food Safety Compliance at Kestrel Management LLC
FST Soapbox

FSMA Checklist: Foreign Supplier Verification Program Requirements

By Bill Bremer
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Bill Bremer is Principal, Food Safety Compliance at Kestrel Management LLC

As all the FSMA rules move to enforcement status, food companies must prepare to best respond to requirements and, correspondingly, to develop required programs such as the Foreign Supplier Verification Program (FSVP) rule. The FSVP requires impacted companies to document specific verification steps to satisfy regulations and meet foreign-supplied shipment information requirements. These requirements took effect on May 30, 2017 for companies importing certain food products to the United States.

How much do you know about FSVP? Test your smarts by taking the FSMA FSVP IQ Test here Ultimately, the purpose of the FSVP is to document the shipping paperwork necessary to provide evidence and verification that a foreign supplier’s food-grade product shipped to a U.S. customer meets the requirements of FSMA. A company’s FSVP may include providing an additional level of evidence that the foreign company distributes safe foreign-supplied food products to the United States, the qualification of these suppliers, verification of supplier and shipment information, and records to verify the shipment of all imported food under FSMA and food safety plans. This information provides the U.S. customer receiving the product necessary proof of compliance and a record that the foreign-supplied material meets imported food product requirements.

Self-Diagnostic Assessment Tool

The following self-diagnostic assessment tool can help organizations better determine their current state of planning when it comes to implementing and managing FSMA FSVP requirements. To complete your own assessment, review and compare your programs to the questions in Table I.

FSMA, Foreign Supplier Verification Program
Table I. Kestrel Management’s self-diagnostic tool can help a company assess its Foreign Supplier Verification Program (FSVP) for FSMA compliance.

Get Compliance-Ready

Companies must have the appropriate systems in place to comply with FSMA FSVP requirements or face possible willful non-conformance, which can include fines and criminal penalties under FDA enforcement. The questions above will help companies identify areas to consider regarding their FSVP programs. Kestrel can also help answer questions, provide input on solutions, discuss how to better manage all your food safety requirements, and change “No” responses into “Yes” responses that promote best practices for FSMA and food safety compliance.

Beef ban

USDA Suspends Imports of All Fresh Beef from Brazil

By Food Safety Tech Staff
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Beef ban

Yesterday Sonny Perdue, U.S. Secretary of Agriculture announced that the USDA would be halting all imports of fresh beef from Brazil. The USDA has been inspecting all of the meat products entering the United States from Brazil since March, and has refused entry to 11% of fresh beef products. According to an agency press release, this figure is “substantially higher than the rejection rate of 1% of shipments from the rest of the world”. The increased inspection has resulted in refusal of entry to about 1.9 million pounds of Brazilian beef products over concerns related to public health, sanitary conditions and animal health.

“Although international trade is an important part of what we do at USDA, and Brazil has long been one of our partners, my first priority is to protect American consumers. That’s what we’ve done by halting the import of Brazilian fresh beef.” – Sonny Perdue, U.S. Secretary of Agriculture

The USDA is suspending shipments until the Brazilian Ministry of Agriculture takes corrective action that the agency finds adequate.

FSMA, Food Safety Tech, FDA

FSMA Update: FDA Launches Accredited Third-Party Certification Site

By Food Safety Tech Staff
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FSMA, Food Safety Tech, FDA

On Wednesday FDA launched a website where organizations can apply to be recognized as a third-party accreditation body. The certifications are used either to establish eligibility to participate in the voluntary qualified importer program, which provides expedited review and entry of food for eligible participants, or in circumstances in which FDA requires an imported food to be certified to keep potentially harmful food from entering the United States.

“Accredited Third-Party Certification is a voluntary program in which FDA recognizes ‘accreditation bodies’ that will have the responsibility of accrediting third-party ‘certification bodies’. The certification bodies will conduct food safety audits and issue certifications of foreign food facilities.” – FDA

Organizations can fill out a program application on FDA’s website.

Ask the FDA: Recognizing Third Party Accreditation Bodies

American beef

USDA Announces American Beef to Return to Chinese Market

By Food Safety Tech Staff
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American beef

Today U.S. Secretary of Agriculture Sonny Perdue praised a trade agreement reached between the United States and China that is allowing the return of American beef to the Chinese market for the first time in 13 years. The ban has been in place since 2003 following a case of mad cow disease. However, China’s domestic cattle population is not keeping up with the increased consumer demand.

“This is tremendous news for the American beef industry, the agriculture community, and the U.S. economy in general.  We will once again have access to the enormous Chinese market, with a strong and growing middle class, which had been closed to our ranchers for a long, long time.  I commend the persistence of President Trump, Commerce Secretary Wilbur Ross, Treasury Secretary Steve Mnuchin, the U.S. Trade Representative’s officials, and our own USDA professionals.  I also thank our Chinese counterparts, who worked so hard to get this agreement into place.  When the Chinese people taste our high-quality U.S. beef, there’s no doubt in my mind that they’ll want more of it.” – Sonny Perdue, U.S. Secretary of Agriculture

Under the trade agreement, cooked Chinese poultry may be imported into the United States once issues related to safety and hygiene are addressed.

Imports

Panama Canal Expansion Helps Boost Produce Imports

By Food Safety Tech Staff
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Imports

Following the expansion of the Panama Canal, a massive construction project that intended to double the cargo capacity of the canal, U.S. ports on the East Coast are enjoying an import boom. In Philadelphia, the Parker Avenue Marine Terminal in South Philadelphia (ranked the 12th nationwide) experienced a 28% bump in April alone.

Over the past year, the Philadelphia port has brought in additional imports of fresh produce from several companies, including Walmart, according to The Inquirer. Since last summer, Mediterranean Shipping Co. has been shipping grapes, blueberries and other fruits from Chile, Peru and Ecuador to Philadelphia on a weekly basis. The company’s cargo ships are the largest to ever have sailed up the Delaware River. Fyffes, a European fresh produce company, began delivering bananas, plantains and pineapples from Costa Rica, Columbia and Guatemala in January.

Patty Murray
FST Soapbox

Chilean Gourmet Food Companies Eager to Learn about FSMA

By Patty Murray
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Patty Murray

Whenever possible, I try to spread the word about food safety and share the knowledge gained from my years of experience in various sectors of the food industry, especially from my time managing the Food Safety Tech conferences and webinars. Recently, I even worked it into a presentation about social media marketing for a Pro-Chile Trade Board Event where food safety issues were hot topics throughout the day.

Representatives of more than 30 food manufacturers from Chile attended the event, which was held at the Summer Fancy Food Show in New York City and organized with The Food Institute and Grover Global Food Marketing.  Well established in Chile, these producers of gourmet specialty food products wanted to learn the intricacies of selling their cured meats, olive oils, edible flowers, teas, preserves, desserts and snacks in the United States.

(left to right) vent sponsor, Mauricio Banchieri, Trade Commissioner, Trade Commission of Chile in New York - ProChile, with speakers Lauren Handel, Janis Grover, Patty Murray and Andrea Sapag of the Trade Commission.
(Left to right) vent sponsor, Mauricio Banchieri, Trade Commissioner, Trade Commission of Chile in New York – ProChile, with speakers
Lauren Handel, Janis Grover, Patty Murray and Andrea Sapag of the Trade Commission.

The reason: Americans spend a lot on food—$1.5 trillion annually, which is 28% of all retail trade in the United States, according to Brian Todd, president and CEO of The Food Institute, a firm that provides industry news, data and trends. He shared that consumer spending was up 2.3% in 2014 to $6,759 per year per household. Products on the rise include fresh fruits and vegetables, dairy, olive oil, confections and beverages. Key qualities include grab-and-go/convenience, non-GMO, organic, all-natural, healthy, fortified, gluten-free and air-popped/baked.

Todd and other speakers addressed new U.S. government regulations including FSMA, food labeling (nutrition and front of package), bioterrorism, customs, facility registration and certifications.  Drilling down into many of the legal details was Lauren Handel, Esq., of Handel Food Law in New Jersey. Handel emphasized the importance of FSMA compliance, in particular, preventive controls, produce safety and foreign supplier verification.

Janis Grover, of Grover Global Food Marketing, who has more than 30 years experience in brand management, pointed out that non-U.S. food manufacturers have an extra hurdle to overcome with the new food safety laws. Grover explained that establishing food safety confidence in their brand with U.S. buyers is critical before they can begin negotiating any importing and distribution deals. According to Grover, to be successful, non-U.S. food manufacturers need to verify with U.S. buyers that they will comply will all U.S. food manufacturing and labeling laws, and that they have the required certifications and other quality control documentation to support their claims.

Sometimes at our FST conferences, speakers and attendees ask about the implementation of our new food safety laws. Will top management provide the funding for quality systems and traceability? Will companies be vigilant about the entire supply chain? Will there be significant and meaningful enforcement by government? Will foreign suppliers comply?  I was heartened by the tone and content of the Pro-Chile event and optimistic as I walked the Summer Fancy Food Show with another international client. One of the first statements made to us by a potential U.S. partner was “Do you have a GFSI certificate?” My client did.

FDA

Part of FDA FY 2017 Budget Request to Hold Food Importers Accountable

By Food Safety Tech Staff
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FDA

UPDATE 2/22/2016 – According to an updated FDA alert, the FY2017 budget requests include an increase of $25.3 million of new budget authority to implement FSMA, with FDA focusing on two main areas:

  • National Integrated Food Safety System  ($11.3 million). Support state capacity to implement the produce safety rule via education and technical assistance to farmers and on‑going compliance support and oversight
  • New Import Safety Systems ($14.0 million). Implementing the FSVP rule, which makes importers responsible for ensuring that the foods they bring in from other countries are produced in a manner that is consistent with U.S. food safety standards

– END UPDATE –

FDA wants 8% more money for its FY 2017 budget, requesting a total of $5.1 billion.  Part of this $14.6 million net increase in budget authority will go toward FSMA implementation. Specifically related to food safety, FDA is asking for more than $18.4 million in budget authority and more than $193.2 million in user fees. According to an FDA press release, the agency will be using the budget to support federal and state efforts related to enforcing safety standards on produce farms. In addition, FDA wants to use the money “to hold importers accountable for verifying that imported food meets U.S. safety standards, as well as conduct food safety audits of foreign food facilities”.

FDA is also requesting more than $3 million for building and facilities funding, and more than $600,000 to support other areas to improve the agency’s infrastructure. The fiscal request is for October 1, 2016 through September 30, 2017.