How to Successfully Import Natural Products to the USA


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How to import natural and organic products to the United States.
• Foods and Dietary Supplements
• How FDA, USDA and Customs interact
• Import Compliance
• Import Alerts and FDA detentions
• Organic and Natural claims
• Food Safety Modernization Act

Originally presented by Rick Quinn, Principal, at the 2012 Natural Products Expo Asia in Hong Kong.

© 2012 and

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How to Successfully Import Natural Products to the USA

  1. 1. How to Successfully Import NaturalProducts to the United StatesHow to Navigate FDA Requirements, U.S. Customs and the FoodSafety Modernization Act for Successful Importation of Foods andDietary Supplements to the USA. August 23, 2012 Rick D. Quinn, J.D., Principal,, LLC Originally presented at Natural Products Expo Asia
  2. 2. Outline• Understanding the U.S. Agencies• Understanding the Import Process• Importing Foods & Dietary Supplements• The Food Safety Modernization Act
  3. 3. What are the Federal Agencies?
  4. 4. Who are the Federal Agencies?• U.S. Food and Drug Administration (FDA) o Foods, drugs, biologics, medical devices, animal foods and drugs, cosmetics, & electronic radiation emitting products• U.S. Department of Agriculture (USDA) (& Customs Ag) o Meat (beef and poultry), meat containing products, eggs, plant pests• Environmental Protection Agency (EPA) o Pesticides (Tolerances on Food Commodities)• Customs and Border Protection (Customs)• FTC, USFW, and U.S. States
  5. 5. What Is A Dietary Supplement ?• Dietary Supplement: means a product (other than tobacco) intended to supplement the diet that bears or contains one or more of the following dietary ingredients: Vitamin, mineral, an herb or other botanical, an amino acid, a dietary substance for use by man to supplement the diet by increasing the total dietary intake or a concentrate, metabolite, constituent, extract, or combination of any ingredient described above
  6. 6. Pre-Shipment & Pre-Arrival Compliance Issues
  7. 7. Pre-Shipment/Pre-Arrival• Certain issues you must verify before you import FDA-regulated products – or you will find FDA refusing admission. o FDA Food Facility Registration o FDA Product Code and Prior Notice o Labeling Compliance o Approvals: New Dietary Ingredient Notification o Ingredients: Regulatory Safety Compliance o Multi-agency and State issues • Customs: Tariff Classification, Valuation • States: e.g., Californias Proposition 65
  8. 8. FDA Law and Procedure
  9. 9. Principal import authorities• 21 U.S.C. 381(a) (FDCA sec. 801(a)) o Sampling Authority – given notice, importer, owner or consignee may appear to give testimony regarding admissibility of imported products o Covers import examinations, inspections, label reviews, records reviews and physical sampling and testing
  10. 10. FDAs Legal Authority to REFUSE 21 USC 381• U.S. Law (Food Drug & Cosmetic Act)• If it “appears” from the examination of samples “or otherwise” that an imported product: o (1) was manufactured, processed, packed under insanitary conditions o (2) is forbidden or restricted in sale in the country in which it was produced or from which it was exported o (3) is adulterated, misbranded, unapproved• Then such article “shall be refused admission”
  11. 11. FDA’s Import Authority• FDA “shall refuse” admission to a regulated product if “it appears from the examination of samples or otherwise” to violate legal requirements. (21 USC 381(a))• “Appearance” of a violation – FDA does not have to prove the article is in violation.• “Or Otherwise” – Import Alerts
  12. 12. After Refusal• Once FDA refuses a shipment it must be o Destroyed Unless Exported o Within 90 days of the Refusal o Under Supervision of the Customs Importation Bond• Customs issues a “Demand for Redelivery” pursuant to the Bond Agreement• Failure to Redeliver (export or destroy FDA refused goods) results in Customs issuing a “Claim for Liquidated Damages” o 3x import value up to the limit of the bond
  13. 13. FDA Import Procedure• FDA receives information from U.S. Importer about the imported product o Description of product o FDA “Product code” o Name/address of manufacturer & shipper (exporter) o FDA Registration numbers & Listing numbers  Drug, Device, Food facilities o Commercial invoice and shipping records
  14. 14. FDA Import Procedure (2)• FDA Reviews information to decide: o “May Proceed” or “Release” shipment o Inspect shipment, examine or sample product and its labeling o “Detain” based upon info supplied (perhaps based upon an Import Alert) o Release shipment after inspection, examination, sampling/testing, or based upon the information supplied at the initial declaration
  15. 15. FDA Import Procedure (3)• If FDA determines the article “may be subject to refusal”• FDA “detains” the shipment, sends a written notice to the importer to correct problems or prove that the problems do not exist  Importer might do something to remove the violation (cook food, segregate and retest it, relabel it): Reconditioning  Importer might provide evidence that the violation does not exist (submit required information or lab reports)
  16. 16. FDA Detentions / Refusals• FDA has authority to detain and refuse imported products if the food or the manufacturer “appears” to be in violation of the law• FDA evidence for detention can come from: o Documents provided to FDA at entry o Inspections of foreign facility o Testing imported product; reviewing its label o Reviewing prior shipments of product from the same manufacturer o Foreign Governments, news releases
  17. 17. FDA Import Alerts (“or otherwise”)• If FDA believes a foreign manufacturer or its products are not in compliance with FDA requirements, FDA may issue: o Import Alerts o All future shipments “automatically detained” of that product from that manufacturer o Importer and manufacturer must prove each shipment complies o Can be expensive o THESE CAN BE FIXED!
  18. 18. FDA Import Alerts (2)• Different kinds of import alerts include: o Product appears to be adulterated or misbranded (prior testing, label review) o Manufacturer appears to be in violation of Good Manufacturing Practices so its product appears to be adulterated o Country/Region appears to have ongoing safety problem related to food manufacturing, growing, or harvesting
  19. 19. FDA Import Alerts (3)• Companies listed on or affected by an FDA Import Alert can petition FDA to be removed from the Import Alert. o Identify the problem o Correct the problem o Prove the corrections were implemented o Prove the corrections worked o Prepare, submit and prosecute the petition
  20. 20. Importing Foods &Dietary Supplements into the U.S
  21. 21. FDA Law• Adulteration – DS imported into the U.S. must be unadulterated o Microbiological (Salmonella, E. coli, Listeria, etc.) o Chemical (pesticides or antibiotic residues, illegal or uncertified color additives) o Physical (Filth, Decomposition)• Misbranded – DS imported into the U.S. must be properly labeled o Easiest violation for FDA to find is a labeling violation o It is right there in front of them – no testing
  22. 22. New Dietary IngredientsBefore 1994 dietary supplements were subject to thesame regulatory requirements as other foods.What is a New Dietary Ingredient (NDI)?“A new dietary ingredient (NDI) is a dietary ingredientthat was not marketed in or as a dietary supplement inthe United States prior to October 15, 1994. ” - Section413, FFDCA
  23. 23. New Dietary Ingredients (2)Because no safety information exists on the use of NDIs in or as dietarysupplements, a dietary supplement which contains an NDI will be deemedadulterated unless(1) It has been used for food in a form in which the food has not been chemically altered, or(2) Evidence of safe use 75 days before introducing the supplement into interstate commerce, with premarket notification to FDA
  24. 24. NDI NotificationsFDA requires the submission of a premarket notification to the Agencybefore an NDI is introduced into interstate commerce.An NDI will only be exempt from premarket notification if: (1) it was present in the food supply prior to October 15, 1994 as an article used for food in a form in which the food has not been chemically altered, (2) it has been listed or affirmed as GRAS for direct addition to food or approved as a direct food additive in the U.S., it has been used in the food supply, and is to be used as an NDI without chemical alteration.FDA’s July 2011 Guidance discusses: • The steps for determining whether an NDI notification is necessary; • What to Include in an NDI notification; and • Notification Procedures and Timeframes
  25. 25. FDA and “Organic”The USDA and FDA share oversight of organic products• USDA’s National Organics Program (NOP) haspublished organic standards for production and labeling• FDA has no such regulations for organics• FDA simply requires organic claims to comply withUSDA NOP regulations
  26. 26. FDA and “Natural”FDA has no formal definition for the term “natural.” FDAdoes not object to the term as long as the product:• Is truthful and not misleading in its labeling• Does not contains color additives, artificial flavors,chemical preservatives or synthetic substances
  27. 27. Food Facility Registration• FDA Food Facility Registration - owner, operator, or agent in charge of a domestic or foreign food facility must register the facility with the FDA.• Law exempts farms from registration but requires foreign manufacturers, processors, packers, and storage facilities to register.• Registration is not required for foreign facility if another facility performs additional processing before the food is exported to the U.S.• Food Safety Modernization Act (FSMA) now requires food facilities to renew their registrations every two years
  28. 28. U.S. Agents for FDA• Foreign food facilities must also appoint a U.S. Agent when they register with FDA• “U.S. Agent” acts as official correspondent for FDA• Provides assistance to FDA and to the foreign facility by facilitating communications for inspections, records requests, concerns of FDA regarding imported foods
  29. 29. The Food SafetyModernization Act
  30. 30. Basics of the FSMA• Enacted: January 4, 2011• Applicability – Specifically Designed for “food” – Implication for Pharma Industry• Did not include appropriations• Congressional hostility
  31. 31. Food Industry Generally  Hazard Analysis & Risk Preventive Controls  Facility Inspections  Mandatory Recall Authority  Reportable Food Registry  Facility Registrations  Record Inspection & Maintenance  Other Information
  32. 32. Hazard Analysis & Risk Preventive Controls (HARPC)• Akin to the already established HACCP standards• Requirements: – Conduct hazard analysis, develop and implement preventive controls, and monitor the control’s effectiveness – Develop a written plan for controlling hazards – Reanalyze for potential hazards at least every three years – Verify the effectiveness of the controls – Maintain records of the verification process
  33. 33. HARPC Cont.• Facilities Exempt from HARPC Requirement: – Facilities subject to Standards of Produce Safety – Facilities subject to the HACCP requirement and low-acid canned food standards – Facilities subject to dietary supplement cGMPs  Effective Date: July 4, 2012 (unless small or very small business)
  34. 34. Facility Inspections• Domestic Food Facilities – High Risk Facilities: Once by January 2016 • (then every three years) – Non-High Risk Facilities: Once by January 2018 • (then every five years)• Foreign Food Facilities – 600 inspections by January 4, 2012 – 19,200 inspections by January 4, 2017• Import Alert or Registration Suspension for foreign facilities refusing or delaying FDA inspection
  35. 35. Mandatory Recall Authority• Initial Burden – Reasonable probability the food is adulterated or misbranded by failing to disclose major food allergens – Reasonable probability the food will cause serious adverse health consequences or death
  36. 36. Reportable Food Registry• FDA may require responsible party to submit consumer-oriented information: –Description of food –Affected product’s identification code –Contact information –Any other information deemed necessary
  37. 37. Reportable Food Registry Cont.• FDA must prepare a standardized one page summary of reportable food & publish it on the internet.• Grocery stores (with more than 15 locations) must: – Post notification of reportable food within 24 hours of report – Display notification for no less than 14 days• FDA must establish this reportable food system not later than July 4, 2012.
  38. 38. Facility Registration• Bi-annual registration requirements• Additional information required with listing: Contact Person & Email Address• FDA Authority to revoke registration – For causing a class 1 recall situation – For refusing or delaying a foreign inspection – For failing to renew registration as required
  39. 39. Record Inspection & Maintenance• Two Routes: – Adulterated food – Use of or exposure to food• Both routes allow FDA greater access to records – “an article…and any other…affected in a similar manner”• Both routes act as a ‘stepping stone’ for – Revoking a facility registration – Initiating a mandatory food recall
  40. 40. Record Inspection & Maintenance Cont. • FDA requires additional record keeping for “High-Risk Foods” – FDA to designate “high-risk foods” by January 4, 2012 – FDA to propose regulations by January 4, 2013
  41. 41. Other Information• Administration Detention of Food: Lower Burden – FSMA reduces detention threshold by changing language from “credible evidence to believe” that a food is likely to “cause serious adverse health events” to “reasonable belief” that food is “adulterated or misbranded”• FDA to establish regulations by July 4, 2012 – Protection against international adulteration – Sanitary Transportation of Food
  42. 42. Importers & Imported Food • Foreign Supplier Verification Program • Qualified Importer Program • Other Information
  43. 43. Foreign Supplier Verification Program• Every importer must establish a plan that verifies: – That the foreign supplier complies with HARPC or Standards for Produce Safety – That the food is not adulterated or misbranded by failing to disclose major food allergens• Importer must maintain records for no less than 2 years• Noncompliance is grounds for refusal of an imported article
  44. 44. Foreign Supplier Verification Program Cont. • Exemptions: – Facilities required to comply, and are in compliance, with • Seafood HACCP requirements • Juice HACCP requirements or • Low-acid food package standards • Effective date: January 4, 2013
  45. 45. Qualified Importer Program• FDA must establish voluntary program in order to expedite importation.• Eligibility is determined by overall safety of food offered for import.• Importers must obtain certification by third-party auditors (designated by FDA).
  46. 46. Qualified Importer Program Cont.• FDA to review importers eligibility no less than once every three years.• Effective Date: FDA to establish regulations by – January 4, 2012
  47. 47. BEWARE! FSMA “Time Bombs”What is a “Time Bomb”? • Not a headliner • Vague statutory language • Ignored due to context of FDCA • Bioterrorism & “National Security” • The “Foreign Supplier”…Who? • International Trade: Bilateral? • Reinforced Import Alert Powers • Which Hazards/Risks?
  48. 48. Other Information• Importation Certificates – Grants FDA authority to require certification for certain foods based on risks associated with either • The food or • The country of origin of the food• Prior Notice – Prior to importation, importers must notify FDA if any country has refused admission of the food – Effective Date: July 3, 2011
  49. 49. Implementation Timeline February 2013January 2012 July 2012 July 2013 February 2012 January 2013 v v v v v v* Specific guidance, rulings and reports due each key date
  50. 50. Conclusions• Immediate effect on industry is limited• FDA has a lot of guidance, regulations and standards to develop• Establishes greater emphasis on Prevention – HARPC & Standards for Produce Safety• Establishes greater industry responsibility – New industry standards – Importers verifying foreign suppliers
  51. 51. FDAIMPORTS.COM 810 Landmark Drive Suite 126 Glen Burnie, MD 21061USA 410-220-2800 (Phone) 443-583-1464 (Fax) EXPORTTOUSA.COM.CN Bing 402, Today Business Building No. 10 Shandong Rd.CHINA Qingdao, China 266000 Phone: 0532-86676270 Fax: 0532-86676250