FDA's FSVP Rule Gives Two Options for Verifications; Exceptions for Small Businesses

Exceptions for Small Businesses, Some Countries and Products

The FSVP regulations would apply to “all food imported into the United States and to the importers of such food,” with certain exceptions, FDA said. Food from facilities that have to comply with juice and seafood hazard analysis and critical control point (HACCP) regulations would be exempt, as would food imported for research or evaluation purposes as long as it's labeled as such and accompanied by an electronic statement to that effect at entry. Food for personal consumption, alcoholic beverages, and food that is transshipped or imported for further processing and export would also be exempt.

Very small importers/suppliers. Modified requirements would apply to very small importers and importers of food from very small suppliers. Both would be defined as having average annual sales of less than $500,000 during the previous three-year period. Instead of having to do hazard analyses and verifications of their suppliers, very small importers and importers of food from very small suppliers would only be required to get written assurance every two years from their foreign suppliers that they’re complying with applicable food safety regulations.

Equivalent food safety systems. Importers of food from countries with officially recognized or equivalent food safety systems would also be largely exempt from FSVP requirements. The importer would have to document that its foreign supplier is in compliance with its respective food safety authority, but would not be required to do hazard analysis or verification activities, FDA said. New Zealand is currently the only country recognized by FDA as having an equivalent food safety system (see 12121326).

Dietary supplements. For dietary supplements and dietary supplement components, importers that establish and verify compliance with provisions of the dietary supplement current good manufacturing practice (CGMP) regulations would be exempt from most FSVP requirements, including hazard analysis and verification. The exemption would also apply for importers whose customer is required to establish and verify compliance with the dietary supplement CGMPs. But importers of finished dietary supplements would be required to comply with most of the standard FSVP requirements, including verification.

Low acid canned foods. Importers of low acid canned foods would be exempt from addressing microbiological hazards through their FSVP. All other hazards would still need to be covered, however.

Other potential exemptions and exceptions. FDA is considering whether it should exempt or create modified requirements for other situations as well, it said. The agency is asking for comments on how to address foreign supplier verification by importers who could be subject to both the FSVP and preventative controls regulations, to avoid duplicative requirements. It’s also asking for comment on whether importers should be exempt from FSVP or subject to modified requirements if it importers food from related parties under the same corporate ownership.

Key Definitions Exempt Some Foreign Labelers, U.S. Brokers

Under the proposed FSVP regulations, all foreign firms required to register with FDA would not necessarily be foreign suppliers. By the same token, the importer would not necessarily be the CBP importer of record.

Foreign supplier. Under the proposed FSVP regulations, the foreign supplier would be “the establishment that manufactures/processes the food, raises the animal, or harvests the food that is exported to the United States without further manufacturing/processing by another establishment, except for further manufacturing/processing that consists solely of the addition of labeling or any similar activity of a de minimis nature.” So importers would not have to have foreign supplier verification programs for firms that only pack or hold food, even if they are required to register with FDA.

Importer. For the purposes of FSVP, the importer would not necessarily be the importer of record under CBP’s definition. Instead, importer would be defined as the U.S. owner or consignee of the food at time of entry, or the U.S. agent or representative of the foreign owner or consignee at time of entry. FDA’s definition ensures that the person who caused the food to be imported, with a direct financial interest in the food, is the importer, it said. That person would have the most knowledge and control over the product’s supply chain, and 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 [CBP].”

FSVP Programs to Include Hazard Analysis, Verification, and Reassessment

Under FDA's proposal, importers included under the rule would have to implement and document FSVP plans. Each FSVP would require an analysis of hazards that are reasonably likely to occur, verification of their suppliers to ensure they're addressing those hazards, reassessment of FSVPs to make sure they're effective, and more detailed importer identification through DUNS numbers. Noncompliance would result in refusal of admission at the border.

Compliance status review. Before importing from a foreign supplier, importers would have to review the compliance status of the food they intend to import and the foreign supplier. At this stage, FDA would only expect the review to include publicly available information like warning letters, import alerts, or certification requirements.

Hazard analysis. The next step would be a hazard analysis. Here, the importer would identify the potential hazards associated with the food, and would also look at the foreign supplier’s hazard analysis. Importers would have to identify “only the hazards that are reasonably likely to occur in the foods they import,” FDA said, which could include biological hazards like parasites and pathogens, chemical hazards like pesticides and drug residues, physical hazards, and radiological hazards.

Verification. The verification requirement would be the “core component” of food safety activities performed by importers under FSVP, said FDA. After listing all foreign suppliers and documenting the hazards associated with each, importers would have to audit their foreign suppliers to ensure they are controlling the identified hazards. FDA is proposing two alternative regulations on verification requirements -- a high-cost option that mandates on-site verifications for serious hazards and a lower-cost option that gives more flexibility to the importer -- and is asking for comments on which it should adopt in the final FSVP regulations. The two options are detailed below.

Even if it goes with the higher-cost option that requires on-site verifications, FDA does not expect each importer will have to send personnel to inspect their suppliers, it said. Instead, because of the flexibility FDA is giving as to who can conduct verifications, FDA said it expects a system to develop where the food suppliers themselves hire third parties to verify them, and in turn send documentation to importers.

It is possible that the imported food would not have any hazards that are reasonably likely to occur, FDA said. In those cases, importers would not have to do verifications. For example, there is no public health reason for importers to verify salt and food-grade chemicals like citric acid. FDA says it plans to put out a list of examples of foods for which no hazard is likely to occur.

Investigative and corrective actions. Importers would be required to review complaints concerning the foods they import, investigate possible adulteration or misbranding, take certain corrective actions when the foods they import do not meet applicable U.S. requirements, and revise their FSVPs when appropriate. Corrective actions could include discontinuing use of the noncompliant supplier until the problems are corrected, FDA said.

Reassess FSVP. The proposal would be require importers to reassess the effectiveness of their FSVP at least every three years. A reassessment could be required sooner than every three years if the importer finds out about new hazards associated with the food it imports.

Ensure importer identification at entry. The proposed rule would require importers to obtain a DUNS number (if the importer does not already have one). For each line entry of food product offered for importation into the U.S., the importer would have to provide their name and DUNS number electronically when filing the entry with CBP. That would allow FDA to develop a database of importers, including information on the importer’s last entry and what types of food it is importing.

If there is no U.S. importer or consignee of the imported food, the foreign owner or consignee would have to designate a U.S. agent to act as the “importer” for the purposes of the FSVP regulations. FDA said that under the proposed regulations, the U.S. agent or representative may rely on qualified individuals to perform FSVP activities on its behalf.

Recordkeeping. Importers would have to retain most records for two years. Some records, like hazard analysis determinations, documentation of hazard control by an importer or its customer, and determinations that use of a particular foreign supplier verification activity, would have to be retained “for as long as the records remain in use and are not revised or replaced.” Importers would have to keep those records for two years after their use is discontinued.

Noncompliance. An importer’s failure to comply with the FSVP regulations would make the food they import subject to refusal of admission, FDA said.

Qualified Individual Must Develop FSVP, Perform Related Activities

Importers would have to have a “qualified individual” put together their foreign supplier verification program and carry out any activity related to verification. This person would need to have the “education, training, and experience” necessary to carry out FSVP activities. That includes training in preventative controls for products subject to the preventative controls regulations.

May come from outside company. The qualified individual would not have to be an employee of the importer. Third-party qualified individuals would be able to perform FSVP activities, including foreign supplier audits, even if they’re not approved through FDA’s formal third-party accreditation process, the agency said. “We expect that this will reduce the costs of complying with the FSVP regulations for both importers and foreign suppliers by reducing the number of onsite audits that importers conduct themselves.”

Some activities exempt. Only a qualified individual would be able to review food and suppliers’ compliance status, conduct hazard analyses and foreign supplier audits, review complaints, conduct investigations, take corrective actions, and reassess and change an importers’ FSVP. But some activities would not have to be done by a qualified individual. Activities not subject to the qualified individual requirement would include listing foreign suppliers, importer identification at entry, and recordkeeping.

FDA Considering Two Options for Verification Scheme

When hazards are likely to occur for a particular foreign supplier, importers would have to verify their supplier's compliance with applicable food safety regulations. FDA is proposing two different options for how the verification requirement could look:

Option 1: Stricter Requirements, Higher Cost

Option 1 would divide hazards into four categories. On-site verification of foreign suppliers would be mandated for serious food safety hazards.

• Hazards controlled by importer or customer: document importer or customer is controlling the hazard.
• Hazards controlled by a foreign supplier that could cause serious adverse consequences or death: conduct an initial onsite audit, and then conduct on-site audits annually.
• For microbiological hazards in produce: conduct an initial onsite audit, then do on-site audits annually.
• For other hazard: Choose supplier verification activities from a menu of options, including on-site audits, sampling and testing, review of foreign supplier food safety records, and “other appropriate procedures.”

In FDA’s estimate of the total cost of the proposed FSVP requirements, it said option 1 would cost importers between $472,971,342 and $473,380,038 annually.

Option 2: Menu of Options, Lower Cost

Option 2 would give the importer more discretion. All hazards at foreign facilities would be treated the same, with no regulatory requirement for on-site auditing.

• Hazards controlled by importer or customer: document importer or customer is controlling the hazard.
• For other hazard: Choose supplier verification activities from a menu of options, including on-site audits, sampling and testing, review of foreign supplier food safety records, and “other appropriate procedures.”

FDA estimates the FSVP program cost burden on importers if it goes with option 2 would be between $461,406,455 and $461,821,706 annually.

Agency Anticipates Third-Party Audit System

Under either option, FDA’s proposed rule would not require the importer itself to do on-site verifications. Although the importer could do the audits if it has a qualified individual on staff, it could also contract third parties to perform on-site audits, or get documentation from the foreign supplier that an audit has already been done by a third-party or foreign government auditor, it said. FDA is also working on an accreditation program for third-party auditors. Once accredited, the auditors would become qualified individuals that are allowed to perform verification activities. Although accreditation wouldn’t be required for verification activities, FDA said the scheme will improve the trustworthiness of third-party auditors.

FDA said it expects that many importers will request their foreign suppliers get audited by accredited third-parties, and then provide a certification to the importer that it has been verified. Eventually, FDA said the system should evolve into one where foreign suppliers would hire accredited third parties to conduct audits, and then would provide documentation of the audit to most of their customers. “By minimizing the number of onsite audits conducted at each foreign supplier facility, this system will more efficiently leverage the resources of importers, processors, and suppliers,” FDA said. The proposed FSVP regulations are designed to permit this systematic use of accredited third parties.”