Everyone with even a cursory interest in FSMA continues to ask, “So when are the four key proposed rules (Produce Safety Standards, Preventive Controls for Human Food, Preventive Controls for Animal Food, and Foreign Supplier Verification Program) going to be published?” I have to confess right up front that I don’t have any better idea of the right answer to that question than you do. However, despite the lack of clarity on release dates, there have been a couple of instances recently when representatives from FDA have talked about the imported programs. Thus we felt it would be helpful to share what we have heard.
Our belief is that a combination of the economic impacts and the potential impact on international trade are at least two of the main issues that have needed further attention, resulting in the publication delays. Once the rules are formally published, which several of our government contacts are continuing to indicate should happen soon, FDA will schedule public hearings in Washington D.C.; Chicago, Ill.;Oakland,Calif.; and overseas at locations yet to be named. The public hearings will be held approximately 30 days after the rules post to the Federal Register.
One key question is what will happen on July 3rd when the preventive control rules are due to go into effect? At least in theory, registered firms will have to be compliant with new rules that are not yet final (or possibly even released by that date). The answer from FDA is “enforcement discretion.” While this term is a bit non-specific, I believe it will mean that FDA will continue business as usual and focus on the areas that they currently have rules around, such as seafood, juice, LACF, etc. But this looming date clearly makes everyone just a little nervous.
Turning now to the import provisions, as previously reported, FSMA’s Foreign Supplier Verification Program (FSVP) and Voluntary Qualified Importer Program (VQIP) are two provisions of key interest to non-U.S. suppliers and importers. For one thing, the definition of “importer” differs between the FSVP, for which importer is defined as the owner or consignee at the time of entry, and the VQIP, for which it is listed as the person who causes the importation of the product. Moving forward with FSMA, FDA expects that an importer will be defined ultimately is the importer of record whether within theU.S. or overseas.
While VQIP, by its very name, is a voluntary program, an importer’s participation will have a positive impact on their FDA’s PREDICT score. This risk-based screening system for imports is a composite of several factors, including a broker’s rating. A better score means facilitated entry into the United States and thus there is likely to be a significant incentive to become part of the VQIP.
Criteria for participation
FDA is currently working with U.S. Customs to ensure a harmonized approach to entry. Based on what we have heard recently, our understanding is that, in order to participate in VQIP, an importer must:
– Be validated as Tier II of Custom’s CTPAT program. FDA understands that this may exclude some commodities, thus how VQIP will ultimately be related to CTPAT is not yet known.
use paperless filers/brokers and import documents through ITACS.
– Be in compliance with all provisions of the FSVP – yet to be released. If a product is on import alert, an importer will not be eligible to have shipments of those products participate in VQIP, however, the importer may apply to participate for other foods. (Seafood will be exempt from preventive control requirements since HACCP is already mandatory for the industry. However, there may be other elements of the FSVP that the seafood industry and importer may need to implement such as record keeping requirements).
– Be in good standing with the federal agencies in the U.S.and not subject to an FDA action.
In addition, the supplier of the product must be certified by a third-party auditor who is accredited by FDA. This program, however, has not yet been established; it is estimated that details will be released 2-3 weeks after the information on FSVP is released.
The Process and Benefits
To apply for the program, importers will need to submit a letter of intent to apply, after which the first formal step in VQIP participation is an application process. (We have no insight yet on exactly what that process will look like). The second step is verification. FDA needs to verify that the information contained in the application is true and that the stated processes are being followed.
Although these are still being finalized, there are benefits to application and verification in this voluntary program. At the applicant level, there would be a reduction in inspection so that the likelihood of products being stopped is decreased. If a product is stopped for inspection and testing, those who have applied for VQIP will receive expedited processing and laboratory analysis.
Upon FDA’s verification that the processes described in the application are being implemented, the importer is accepted into the program. At that point, shipments would seldom be stopped, sampling would generally be collected only for cause, and processing and lab analysis would be expedited. At both levels, the applicant would receive adjusted risk scores.
Although criteria for revocation or suspension of VQIP status is also not yet finalized, areas under consideration appear to be situations in which the applicant is no longer compliant with any of the criteria for application (above), applicable fees are not paid within 60 days, or any application, or entry information is found to be falsified.
FDA is authorized to collect user fees to cover the cost for FDA to build and administer the program. The fees have not yet been determined, nor has the “start” time for the fees (e.g., when you submit a letter of intent, after the application is submitted, etc.). It is likely that there will be both an application fee and then an annual fee thereafter, but we have not seen anything specific in this regard. Whether fees will be based on the number of products being imported is also still not known. In addition, if an applicant is refused participation in the VQIP, the user fee is not likely to be refunded.
Even once the rules are published, there are several things that need to happen before the VQIP can be fully implemented. First, there will be some time allotted for firms to meet the requirements of the FSVP. (FSMA states an effective date of January 2013 which does not seem realistic at this point.) Next, there will be a few weeks before details will be published on the third-party certification program for the auditing of overseas suppliers. Again, it will take some time for the program to become operational. Then, user fees must be established and published six months prior to collection.
With all these factors, FDA predicted that VQIP could become operational in October 2014 (The FSMA due date was July 2012.) Of course, with so many unknowns, it is impossible to say with certainty when the program will launch.
Overall the VQIP is shaping up to be a very important program for anyone who is importing finished products or ingredients, or is relying on such products for their business. Many details are missing but we are now seeing the general shape of this program and all indicants suggest it is a program to watch and be part of, because it will allow FDA regulated food products to move across the border much faster than for those not part of VQIP.
FDA Budget Update
While FDA continues to attempt to move forward with FSMA implementation, it is looking as though it may receive no additional funding for the coming year. Under the 2013 House Agriculture Appropriations bill, the FDA would receive a budget cut of $16.3 million. This comes after an April Senate bill that, as we reported then, would give FDA a $22 million increase, with $12.5 million specifically appropriated for FSMA implementation. The final appropriation will need to be passed by the full House and Senate. So FSMA continues to be an unfunded mandate for FDA and there is no sign this is going to change any time soon.
David Acheson, former Assistant Commissioner for Food Protection in the FDA, is a partner at Leavitt Partners. This commentary was originally posted June 7, 2012 on the Leavitt Partners Food Safety blog.© Food Safety News