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cargo damage, cargo claims, C-TPAT/CTPAT, customs law,

 
cargo damage, cargo claims, C-TPAT/CTPAT, customs law,

Customs Update:  FDA and Export Records
(Published in the Journal of Commerce Online on August 12, 2004)

In the June 1, 2004 Federal Register, the Food and Drug Administration issued its latest thoughts about the records it expects companies to possess when exporting food and cosmetics. Written comments are due to the agency no later than Aug. 16.

The FDA Export Reform and Enhancement Act establishes record-keeping and notification provisions for companies which export certain FDA regulated products. If exporting a drug or device, notification must be given to the agency identifying that drug or device when exports first start. Originally these rules were to become effective in March 2002, but have been delayed due to objections filed by industry.

The focus of these objections are two-fold. First, there is the question of giving FDA access to these records. Does FDA have authority to seek export records when it is food or cosmetics which are exported? Second, what type of records must be maintained by a company to confirm its exports do not conflict with the foreign country's laws?

The food and cosmetic industries assert that FDA has the burden to show an exporter violated the foreign law, not the other way around. Further, it was argued the form of the records need not be affidavits from high-ranking company officials. Instead, certification should be required only if FDA has established a label warning for a product or if there is a specific limit on the presence of an ingredient or substance because of safety concerns. Otherwise, a company should be free to maintain any records which satisfy its internal corporate compliance requirements.

In this Federal Register notice, FDA has asked the public to comment regarding its ability to inspect export records held by food and cosmetic exporters. Additionally, FDA wants to know what records should an exporter be required to maintain. The notice asks specific questions under each topic, such as:

    1) Is it enough if the company has records but FDA has no access to them?

    2) What about FDA's ability to confirm that import for export product is actually being exported?

    3) Should there be specific records required?

    4) Who needs to sign any certifications which might be required?

    5) Should certification be limited to only those circumstances where FDA has a policy position in place?

    6) What regulatory standard should apply?

    7) What records are sufficient to provide an exporter with a reasonable belief there is compliance?

    8) What records will allow enforcement in the U.S., and can they be fashioned to be simple and easy to identify?

How will these policy questions affect your company? What will be required to show due diligence? What, if any, implication does this have on a company's Sarbanes-Oxley compliance/internal controls if it is publicly traded? What are the implications if the company is privately held?

Let us know.
 
cargo damage, cargo claims, C-TPAT/CTPAT, customs law,