New FDA regs include hazards for importers and consumers

By: | at 08:00 PM | Channel(s): International Trade  

Agency imposes steep hourly fees for re-inspectionsBy Peter A. Buxbaum, AJOTFood importers and operators of domestic and foreign food facilities are now facing a new risk in the event the Food and Drug Administration has to take a second look at their products or buildings. As of October 1, the FDA will be imposing steep hourly fees to conduct those activities.
The fees may be imposed if the FDA conducts a facility or import re-inspection or if there has been a failure to comply with a recall order. The hourly rate to be imposed for these activities: $224 if no foreign travel is required and a whopping $335 if foreign travel is required.
The fees came about as part of an announcement of new regulations the FDA promulgated under the FDA Food Safety Modernization Act (FSMA). The law, which came on the books in January 2011, initiates a number of requirements for domestic and foreign food facilities that handle exporting to the United States, some of which took effect immediately and some of which are still years away. The purpose of the legislation is to reduce food safety risks and foodborne illness.
“What has happened over the last five or six years is that there have been a number of high profile cases of foodborne illnesses that have made a big splash,” said Mike Lahar, National Post Entry Supervisor at A.N. Deringer, Inc., an international freight forwarder headquartered in Champlain, N.Y.
“There was a big peanut butter fiasco as well as incidents involving produce such as spinach and tomatoes. The FDA has responded piecemeal as each situation has come up but Congress decided to modernize FDA regulations. Consumers are concerned about the safety of the food they are bringing home from the store.”
The imposition of the kinds of fees the FDA contemplates amounts to a new tax on food which could hurt small businesses and consumers, according to former FDA regulatory counsel Benjamin England. “The new fee structure that will increase the cost of importing food and the overall burden on taxpayers,” he said. “The FDA will charge U.S. food importers for the time and resources it takes for the FDA to re-examine or re-inspect any imported food shipment for which FDA has identified a questionable food safety issue. This holds true even if it is proved that there was no food safety issue whatsoever.”
Once FDA initiates its re-examination, the clock will start ticking against the hourly rate. “Due to FDA’s definition of an examination, U.S. food importers will be charged for FDA time that amounts to little more than data retrieval in FDA’s data systems and involve no physical inspection of the imported food at all,” said England. “In addition to the immense burden of fees and testing that the U.S. importer will have to bear, the American taxpayer will be footing the bill for the infrastructure of the process as well.”
Indeed, the regulations note that the purpose of the hourly fees is “to capture 100 percent of the costs of each activity.” The hourly fees can be imposed, not only for the re-inspections themselves but also for “making preparations and arrangements,” and for travel time.
“The FDA might review documents related to the shipment or detain the shipment without any physical examination, for instance, because the foreign manufacturer might be subject to an FDA import alert,” said England. “FDA might review private laboratory test results or conduct an examination at the importer’s warehouse, just to make sure the import declaration was right. All of these activities will be performed at the hourly rate of $224. In most cases, the shipment will be released for consumption.”
“The hourly rates are enough to stop most mortal hearts,” acknowledged Lahar. “It won’t take long for these re-inspections to get very expensive.”
But there are a couple of things to keep in mind, Lahar urged. “One is that the re-inspection fees only apply to imports,” he said. “They don’t apply to domestic product. They also don’t apply if you have imported product but it passed

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Peter Buxbaum has been writing about international trade and transportation, as well as security, defense, technology, and foreign policy, for over 20 years. Besides contributing to the AJOT, Buxbaum's work has appeared in such leading publications as [em]Fortune, Forbes, Chief Executive, Computerworld, and Jane's Defence Weekly[/em]. He was educated at Columbia University.