Might You Be An “Importer” for Purposes of FSMA’s FSVP Requirement? Now You Know.

July 30, 2013

By Ricardo Carvajal

Last Friday, FDA released two additional proposed rules that are fundamental to the agency’s implementation of the Food Safety Modernization Act (FSMA): Foreign Supplier Verification Programs for Importers of Food for Humans and Animals (FSVP rule) and Accreditation of Third-Party Auditors/ Certification Bodies to Conduct Food Safety Audits and to Issue Certifications (Third-Party Auditor rule).   Federal Register publications of the two rules are available here and here.  Background information and explanatory materials on the two rules’ major provisions are available here and here.

For the import community, one of the key questions posed by FSMA’s import provisions was whether the statutory definition of “importer” would be interpreted by FDA to sweep in importers of record.  As amended by FSMA, FDC Act section 805(a)(2) defines “importer” as ‘‘(A) the United States owner or consignee of the article of food at the time of entry of such article into the United States; or (B) in the case when there is no United States owner or consignee as described in subparagraph (A), the United States agent or representative of a foreign owner or consignee of the article of food at the time of entry of such article into the United States.”  Concerns were raised that, if FDA were to interpret “importer” to sweep in importers of record, such importers would be saddled with obligations that some might be ill positioned to meet.  Evidently, FDA was sympathetic to those concerns.  For purposes of FSVP, proposed 21 CFR § 1.500 states:

Importer means the person in the United States who has purchased an article of food that is being offered for import into the United States. If the article of food has not been sold to a person in the United States at the time of U.S. entry, the importer is the person in the United States to whom the article has been consigned at the time of entry. If the article of food has not been sold or consigned to a person in the United States at the time of U.S. entry, the importer is the U.S. agent or representative of the foreign owner or consignee at the time of entry.

In the preamble, FDA explained its rationale as follows:

Under the proposed definition, the importer of an article of food might be, but would not necessarily be, the importer of record of the article, i.e., the individual or firm responsible for making entry and payment of import duties.  We agree with the majority of comments we received on how to define “importer,” which stated that the person who caused a food to be imported is the person who should be responsible for verifying that the food was produced in accordance with applicable U.S. safety requirements. This person has a direct financial interest in the food and is most likely to have knowledge and control over the product’s supply chain. This person is more likely to be the food’s U.S. owner (or consignee) than the importer of record for the food, which might be an express consignment operator with little to no knowledge of the safety regulations applicable to the products for which they obtain clearance from U.S. Customs and Border Protection (CBP).

Under proposed § 1.509, the importer for purposes of FSVP would have to be identified by name and DUNS number for each line entry of food offered for import when filing an entry with CBP.  FDA intends to use importers’ identifying information for several purposes, including (1) helping the agency to evaluate risks presented by imported foods and to target its resources accordingly (as noted by FDA, FSMA directs FDA to examine imported foods based on specified risk factors, “including the rigor and effectiveness of the importer’s FSVP”); (2) helping FDA “create a comprehensive and up-to-date database that will enable [the agency] to efficiently and effectively monitor compliance with and enforce the FSVP regulations”; and (3) maintaining on FDA’s website a list of the names, locations, and other information about importers “participating under” the FSVP. 

While some who ply their trade as importers of record should be more at ease in light of FDA’s proposed definition of “importer,” any individuals or entities that are likely to fall within that definition will find much to digest in the proposed FSVP and Third Party-Auditor rules – particularly when considered in light of the previously published Preventive Controls and Produce Safety rules.  Among the questions to consider is whether vertical integration of supply chains might offer potential advantages under the coming regime.  FDA’s preamble suggests that corporate structure could matter:

Some importers obtain food from foreign suppliers who are part of the same corporate structure as the importer and who may, along with the importer, be subject to a single integrated, company-wide approach to food safety in which hazards are controlled and verified by a common supply chain management system. We request comment on whether importers should not be required to conduct foreign supplier verification, or should be subject to different FSVP requirements, when importing food from entities under the same corporate ownership and, if so, the specific justifications and conditions under which foreign supplier verification should not be required or should be modified.

Comments on the rules are due by November 26.