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Food
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Prior Notice Final Rule pp 66382-66410
[Federal Register: November 7, 2008 (Volume 73, Number 217)] [Rules and Regulations] [Page 66382-66410] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr07no08-13] [[Page 66382]] ----------------------------------------------------------------------- IV. Analysis of Economic Impacts A. Final Regulatory Impact Analysis FDA has examined the impacts of the final rule under Executive Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The agency believes that this final rule is not a significant regulatory action under the Executive order. The Regulatory Flexibility Act (RFA) requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. The requirements of this final rule have not changed significantly from the IFR, although there are changes, such as those relating to the identity of the manufacturer. Because of these changes, FDA has determined that this final rule may have a significant economic impact on a substantial number of small entities. Under the requirements of the RFA, and as explained in section IV.B of this document, FDA has analyzed the economic impacts of this rule on small entities. Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing ``any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.'' The current threshold after adjustment for inflation is $130 million, using the most current (2007) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1-year expenditure that would meet or exceed this amount as compared to the IFR. In this regulatory impact analysis for the prior notice final rule we: (1) Respond to comments on the economic analysis of the IFR, (2) revise the economic analysis of the IFR using new data, (3) present an economic analysis of the leading alternative to the IFR using new data, and (4) explain the marginal benefits and costs of the final rule itself, relative to the IFR. 1. Need for Regulation Section 307 of the Bioterrorism Act of 2002 requires prior notice of all food imported or offered for import into the United States. Before the prior notice requirement was instituted in 2003, there were no security assessments made specifically on imported food products, and all such shipments were allowed to move into the United States prior to FDA being notified of their existence, which legally could have occurred up to 15 days after the food had arrived in the United States and been moved to its final destination. Requiring prior notice of imported foods allows FDA to target food that may pose a significant risk to public health and inspect it upon arrival. The prior notice submission requirement protects the Nation's food supply against actual or threatened terrorist acts and other food-related emergencies. It helps ensure that imported food shipments that appear to pose a significant threat to public health are stopped at the border upon arrival before they are allowed to move into the United States. This final rule replaces the IFR that is already in effect. 2. Final Rule Coverage This final rule applies to all food for humans and other animals that is imported or offered for import into the United States for use, storage, or distribution in the United States, including food for gifts and trade and quality assurance or quality control samples, food for transshipment through the United States to another country, food for future export, and food for use in a U.S. Foreign Trade Zone. This final rule does not apply to food for an individual's personal use when it is carried by or otherwise accompanies the individual when arriving in the United States; food that was made by an individual in his or her personal residence and sent by that individual as a personal gift to an individual in the United States; or food that is imported then exported without leaving the port of arrival until export. This final rule also does not apply to meat food products that at the time of importation are subject to the exclusive jurisdiction of USDA under the Federal Meat Inspection Act (21 U.S.C. 601 et seq.); poultry products that at the time of importation are subject to the exclusive jurisdiction of USDA under the Poultry Products Inspection Act (21 U.S.C. 451 et seq.); or egg products that at the time of importation are subject to the exclusive jurisdiction of USDA under the Egg Products Inspection Act (21 U.S.C. 1031 et seq.). Finally, prior notice is not required for articles of food subject to Art. 27(3) of The Vienna Convention on Diplomatic Relations (1961), i.e., shipped as baggage or cargo constituting the diplomatic bag. As required by the Bioterrorism Act, prior notice submissions must provide [[Page 66383]] the identity of the article, manufacturer, shipper, and grower (if known), the FDA Country of Production, the country from which the article is shipped, and the anticipated port of arrival. In addition, the notification must provide the identity of the person who submits and transmits the prior notice, the importer, the owner, the consignee, the carrier, the CBP entry identifier, the anticipated time and date of arrival, anticipated shipment information, and, if the food has been refused admission and required to be held, the location where it is held. For food shipments arriving in the United States through international mail, notification of the import must be sent before the article is mailed. Only the prior notice information that is relevant to that type of shipment must be submitted for articles of food arriving by international mail. 3. Comments on the Interim Final Regulatory Impact Analysis (Comment) The extra work of completing prior notices because each separate food line in an entry needs a prior notice has forced brokers to raise their fees to clients and forced manufacturers to raise their prices to U.S. consumers. (Response) FDA agrees this is a possible impact of the rulemaking, and noted in the IFR regulatory impact analysis that the costs of prior notice would likely be partially passed on to consumers in the form of higher retail prices for some foods (68 FR 58974 at 59024). (Comment) One comment states that smaller U.S. importers cannot afford the additional costs charged by a broker to submit the FDA information via the ABI system. As a result, they are having their foreign suppliers submit prior notice. Some small companies estimate that, including Web site disruptions, 80 packages would take 40 to 80 hours for prior notice. The comment believes that this is totally unmanageable. (Response) We account for increase in broker costs due to prior notice in our analysis; the comment estimate of the time it takes to complete prior notice is accurately reflected in the IFR and final rule analysis. FDA expects importers to modify their business practices to find the most cost effective way to deal with prior notice requirements. In this case, the small importer can avoid higher broker fees by having the foreign supplier submit the prior notice. Another alternative would be for the small importer to submit prior notice themselves through PNSI. We would expect small firms would comply in whichever manner is most cost effective. It is also possible some of the costs of prior notice could be passed on to consumers in the form of higher retail prices for some foods; in this case the small importer would not feel the complete impact of the higher broker submission costs. (Comment) The costs of the IFR were underestimated because some types of imported fruits and vegetables were not included in the ``loss of freshness, loss in value'' calculation. (Response) Some fruits and vegetables are regulated by USDA's APHIS regulations (certain types of citrus, tomatoes, avocados, and other products) and already have to be inspected or checked at the port of entry regardless of the prior notice regulation. For importers of these fruits and vegetables, the requirement to have certain documentation available at the port of entry and coordinating times to be at the port of entry is not new. Thus, persons importing fruits and vegetables subject to APHIS' requirements are not included in the ``loss of freshness'' calculation as these costs of doing business are already taken into account when scheduling importation of the produce. FDA believes we have accounted for every other type of possible instance where a fruit or vegetable regulated under this rulemaking could experience a loss in freshness or value. Several fresh produce importers commented on the IFR that they considered prior notice redundant as their produce shipments already have to be inspected at the port of entry by USDA. These comments further support the exclusion of some fruits and vegetables from the ``loss of freshness'' cost calculations presented here and in the IFR's regulatory impact analysis. (Comment) The cost to complete a prior notice to send food by mail, for companies that ship low volumes of inexpensive food products, is higher than the value of the product being shipped and therefore shipping to the United States may be discontinued. (Response) FDA stated in the analysis of the IFR that the costs of completing prior notice submissions may be partially passed along to the consumer in the form of higher retail prices for some foods (68 FR 58974 at 59024). FDA's IFR analysis also acknowledged the possibility that companies in the business of sending small shipments of food to private individuals in the United States may stop shipping to U.S. addresses (68 FR 58974 at 59067). (Comment) A number of postal services take issue with the requiring of filing prior notice for personal food items. The comments state that the labor-intensive process of mailing personal food items will cause a decrease in the items being shipped, thus decreasing the business of the mail system. (Response) When the cost of shipping increases, the number of items shipped is indeed likely to decrease. Although some of the reduction in postal revenues would represent a dead-weight loss, it is primarily a transfer, not a social cost and therefore is not included in the cost estimates for this analysis. (Comment) Several comments express concern about their continued ability to import fine wine because although they can obtain the name and address of the site-specific manufacturer of the wine, obtaining the manufacturers' (i.e., the wineries') registration numbers for these products often is difficult to those not in the winery's direct distribution chain. The comments state that smaller importers, wholesalers, retailers, restaurants, clubs or hotels will be negatively affected by not having the registration number for the manufacturer of the fine wine. The comments further state that the prior notice rule will negatively impact small producers by reducing the number of potential representatives and sales venues as secondary fine wine market importers disappear. (Response) FDA does not believe that the fine wine industry will be negatively affected by the prior notice final rule. The final rule at Sec. 1.281(a)(6) requires the identity of the manufacturer as follows: The name of the manufacturer and either: (1) The registration number, city, and country of the manufacturer or (2) both the full address of the manufacturer and the reason the registration number is not provided (hereafter ``the identity of the manufacturer''). Even if a wine importer, retailer, or wholesaler cannot obtain the registration number (e.g., the winery refuses to disclose its registration number because the importer, retailer, or wholesaler is outside the winery's distribution chain), the prior notice can include the name and full address of the winery, which comments stated is obtainable. We do not include additional costs to fine wine manufacturers or importers in this final rule analysis; however, we do refine the estimate of the difference between the IFR requirements and this final rule modification. (Comment) Smaller importers that buy from brokers and wholesalers because they are too small to buy directly from larger food manufacturers will be put out of business. These smaller importers allege that they will not be able to provide the [[Page 66384]] manufacturers' registration numbers on their prior notices as required by the final rule. The comments argue that the registration number requirement interferes with small businesses' rights to free trade because now only larger businesses that deal with the manufacturers directly, rather than buying through brokers and wholesalers, will be able to obtain the manufacturer's information that is required for prior notice. (Response) The final rule provides an alternative for submitters to provide the identity of the manufacturer when the manufacturer's registration number is not obtainable. Under the final rule, submitters may provide the name and full address of the site-specific manufacturing facility along with a reason as to why the registration number was not used in the prior notice. (Comment) While most comments state that the name and address of the manufacturer could be submitted in prior notice, one comment states that re-sellers will not normally supply the name of their supplier or the name of the manufacturer of a particular product to their customers. The comment asserts that supplying the name of the manufacturer would allow that customer to circumvent the re-seller and attempt to make direct contact with the supplier or manufacturer, thus taking business away from the re-seller. Another comment states, however, that smaller importers buy from brokers and wholesalers specifically because they are too small to buy directly from larger manufacturers and other corporations, as large entities typically would not find it cost-effective to deal with smaller importers. (Response) Depending on the business atmosphere, FDA believes that it is likely that many resellers will be willing to supply the name and the address of the manufacturers of the products they sell. Unlike the manufacturer's registration number, which many may view as confidential business information that is to be disclosed only on a ``need to know'' basis, the name and full address of a facility is public information that not only is typically in phone books and on the Internet, but it also often is provided on documents typically exchanged between buyers and sellers (e.g., receipts, purchase orders, and bills of lading). The issues discussed in these comments are addressed further in Options 1 and 3. 4. Regulatory Options Considered In the analysis of the IFR, FDA analyzed 12 options. The 12 options focused on varying timeframes for prior notice submission and prior notice submission by transport type. The options regarding shorter submission timeframes by transport type are similar to the options presented in this analysis; we do not analyze those options with longer minimum submission timeframes (e.g. 8 hours, 12 hours) or options that do not vary prior notice submission timeframe by transport type again here, although this final rule analysis updates the analysis of the chosen IFR option. The costs and benefits of all twelve options analyzed for the prior notice IFR can be found in the Federal Register of October 10, 2003 (68 FR 58974 at 59025). This final regulatory impact analysis emphasizes the differences between the IFR and final rule, and compares new options against the IFR. Each option covers all food subject to the final rule that is imported or offered for import into the United States; the mode of transportation for the food is specifically addressed in options where minimum prior notice time constrains importation. Option 1 (IFR). The minimum prior notice time will be 2 hours for articles of food arriving by land by road, 4 hours for articles of food arriving by land by rail and by air, and 8 hours for articles of food arriving by water, with electronic submission of information. Most changes in prior notice information require resubmission of corrected or new information.\6\ --------------------------------------------------------------------------- \6\ You do not have to resubmit your prior notice if there are changes in: (1) The estimated quantity of product, (2) the anticipated arrival information, (3) the planned shipment information, or (4) the anticipated date of mailing for shipments by mail. --------------------------------------------------------------------------- Option 2. This option includes all components of Option 1, but would reduce the minimum prior notice time for food arriving by land by road to 1 hour for general entries and 30 minutes for FAST\7\ participants, reduce minimum prior notice time for food arriving by land by rail to 2 hours, and reduce the minimum prior notice time for food arriving by air on flights originating in North and Central America, South America (north of the equator only), the Caribbean, and Bermuda to ``wheels-up''. This option would integrate FDA's prior notice timeframes with the timeframes required by CBP's Advance Manifest Rule. --------------------------------------------------------------------------- \7\ The Free and Secure Trade (FAST) program is a Border Accord Initiative between the United States, Mexico, and Canada designed to ensure security and safety of imported and exported products. Eligibility for the FAST program requires participants (carrier, drivers, importers, and southern port of entry manufacturers) to submit an application, agreement, and security profile depending on their role in the Customs and Trade Partnership Against Terrorism (C-TPAT) and FAST programs. The FAST program allows known low risk participants to receive expedited CBP entry processing. (Ref. 2) --------------------------------------------------------------------------- Option 3 (Final Rule). This option includes all components of Option 1, except the final rule now allows, when the submitter is unable to determine the registration number of the manufacturer, the site-specific facility name and full address instead of the facility's, name, partial address, and registration number. Option 1: Minimum prior notice time is 2 hours for articles of food arriving by land by road, 4 hours for articles of food arriving by land by rail and by air, and 8 hours for articles of food arriving by water; information is submitted electronically, most changes in information require resubmission. This option is already in place as the IFR and will be compared against other options for assessing costs and benefits of the changes between the IFR and final rule. a. Option 1--Prior Notice IFR. In the economic analysis of the IFR we calculated the number of entities that would submit prior notice and the costs to those entities of: Learning prior notice, computer acquisition, information coordination, submitting prior notice, creating the PNSI, not being able to use CBP's BRASS\8\ system, and loss of value to fresh produce that waits longer at the port of arrival than before prior notice was required. --------------------------------------------------------------------------- \8\ Border Release Advance Screening and Selectivity (BRASS) is a CBP program that allows expedited arrival processing for high- volume, repetitive shipments that have been judged by CBP to be low risk. --------------------------------------------------------------------------- i. Number of entities affected. Prior Notice for an article of food may be submitted by any person with knowledge of the required information, e.g., a foreign food manufacturer, a food exporter or importer, a consignee. The flexibility of the identity of the prior notice submitter makes it difficult to get a precise count of the number of unique people or firms who submit at least one prior notice annually. In the IFR we estimated, based on FDA OASIS data from 2001, that there were 77,427 unique people or firms who submitted prior notice. To update the number of prior notice submitters in the final rule we use two sources of data: U.S. Census data and data from OASIS. First we use U.S. Census data by North American Industry Classification System (NAICS) codes. Six-digit NAICS codes for Industry, 42-Food Wholesalers, indicates that there are 68,651 U.S. businesses registered under this code. We use this information because, in general, establishments importing products into the United States are classified in Wholesale Trade [[Page 66385]] (Ref. 3) (http://www.naics.com). Thus the number of U.S. businesses engaged in the wholesale food industry could likely be the number of persons who submit prior notice for the goods they receive. Table 3 of this document shows a breakdown of business by six-digit NAICS code for food wholesalers.
6 digit NAICS Code |
Numbers of U.S. Busi- nesses |
|
|---|---|---|
| 424210 | Drugs and Druggists' Sundries Merchant Wholesalers2 | 8,288 |
| 424410 | General Line Grocery Merchant Wholesalers | 8,061 |
| 424420 | Packaged Frozen Food Merchant Wholesalers | 1,250 |
| 424430 | Dairy Product (except Dried or Canned) Merchant Wholesalers | 2,195 |
| 424440 | Poultry and Poultry Product Merchant Wholesalers | 899 |
| 424450 | Confectionery Merchant Wholesalers | 3,202 |
| 424460 | Fish and Seafood Merchant Wholesalers | 4,157 |
| 424470 | Meat and Meat Product Merchant Wholesalers | 3,299 |
| 424480 | Fresh Fruit and Vegetable Merchant Wholesalers | 5,494 |
| 424490 | Other Grocery and Related Products Merchant Wholesalers | 14,763 |
| 424510 | Grain and Field Bean Merchant Wholesalers | 5,217 |
| 424520 | Livestock Merchant Wholesalers | 5,106 |
| 424590 | Other Farm Product Raw Material Merchant Wholesalers | 2,158 |
| 424810 | Beer and Ale Merchant Wholesalers | 2,181 |
| 424820 | Wine and Distilled Alcoholic Beverage Merchant Wholesalers | 2,381 |
| Total Number of Businesses | 68,651 | |
1Source of original data: NAICS Association, September 29, 2008, available online at http://www.naics.com/naics42.htm.
2This category is included to capture wholesale merchants of botanicals, herbs, and vitamins.
Next, using OASIS data, we are able to estimate that there were
123,063 unique manufacturers and 25,929 unique importers of food in FY
2007. Combining the OASIS data with the Census data we estimate that
the number of prior notice submitters annually ranges from 68,000 to
149,000. We use the average of this range, 108,500, as the number of
entities likely affected by having to submit prior notice.
ii. Costs to entities. We update the cost calculations to the new
number of entities affected for learning prior notice, buying
computers, and information coordination. We do not update the costs of
FDA information technology here. Table 4 of this document shows these
cost calculations; for a complete discussion of how these costs were
calculated refer to the preamble in the prior notice IFR (68 FR 58974
at 59025).
Table 4.--Cost Calculations for Learning PN, Information Technology, Information Coordination, and FDA System Costs
| Manager cost | Admin. Worker cost (two workers) | |
|---|---|---|
| Number of firms | 108,500 | 108,500 |
| Wage rate per hour for manager and admin. worker (including overhead) | $56.74 | $25.10 |
| 1-day learning seminar | 8 hours | 8 hours |
| First year one time learning costs | $49,250,320 | $21,786,800 |
| Total first year learning costs for learning | $71,037,000 | |
| Annual learning costs for new entrants | $7,103,700 | |
| Facilities and Responsible Parties Without Initial Internet Access | |
| Number of facilities | 4,340 |
| Computer equipment cost per facility | $2,000 |
| Annual cost of Internet access ($20 per month x 12) | $240 |
| Search costs for equipment and access ($25.10 x 8 hours) | $201 |
| Total first year one time cost of electronic transmitting capacity | $10,593,940 |
| Annual one time cost of electronic transmitting capacity for firms entering industry in subsequent years | $1,059,394 |
| Information Gathering and Coordination Costs | |
| Number of firms submitting notices | 108,500 |
| Administrative worker wage rate (doubled to include overhead) | $25.10 |
| Time to coordinate existing accounts | 16 hours |
| First year cost of coordination of information on current accounts | $43,573,600 |
| Annual cost of coordination of information on new accounts | $4,357,360 |
| FDA Prior Notice System Costs | |
| Infrastructure design and implementation | $7,400,000 |
| Contractor services | $5,100,000 |
| FDA PN system interface cost | $12,500,000 |
| CBP ABI/ACS system modification costs | $500,000 |
| Total prior notice system cost | $13,000,000 |
We also have new data on the number of prior notices submitted
based on 2007 data collected by FDA's PNC. Therefore, we do update, for
the IFR and all other options, the costs of submitting prior notices,
the costs of not being able to use CBP's BRASS system, and the lost
value of fresh produce and seafood.
Also, due to an oversight in the calculation of the costs for the
IFR, FDA did not calculate the costs to importers of providing the
imported product's manufacturer registration number and full facility
address on prior notice. We correct that oversight here.
b. Updated annual costs to submit prior notice. FDA's PNC received
9,804,050 prior notices for FY 2007, which is about 3 million more
prior notices than we estimated in the analysis of the IFR. The
difference in number of submissions is in part due to an increase in
the number of prior notices submitted for each imported food entry. In
the IFR analysis, we estimated that there were about 2.6 lines (prior
notices) submitted for each food shipment.\9\ New OASIS shipment data
show that for 2007, the average number of lines per entry for food,
food related, infant food, and food additive industry codes is 3.6
lines per entry.
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\9\ As explained in more detail in the economic analysis of the
interim final rule, OASIS data indicate there are typically more
than two different articles of food per import entry; e.g., 100
cases of canned tuna and 50 cases of canned peaches in the same
shipment. A prior notice must be filed for each of the lines in an
entry.
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We use these new data on entry lines to estimate that FDA receives
9,804,050 prior notices per year, which translates into approximately
2.7 million imported food entries (based on 3.6 lines per entry\10\)
annually. Table 5 of this document shows that the annual costs to
complete a prior notice will be $202.5 million instead of the $187.5
million estimated in the IFR.
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\10\ This is likely a slight overestimate of prior notices per
entry because food-related items (such as eating utensils) are not
subject to prior notice.
| Broker cost per entry to submit prior notice |
$75 |
| Entry total based on 9.8 million lines |
2,700,000 |
| Total annual costs of all prior notices, including updates to the informa- tion |
$202,500,000 |
c. Updated costs to BRASS users. Under the prior notice rule, no food product shipments imported into the United States are eligible to take advantage of CBP's BRASS system. We update the number of entries that used the BRASS system in FY 2002 (242,000) to estimate the number of imported food entries that would have used the BRASS system in FY 2007 (305,000) if it would have been available to them. Table 6 of this document shows that the updated costs to BRASS users are $61 million annually; the previous estimate was about $48 million annually.
| Additional Submission Costs | |
|---|---|
| Total Cost per import entry | $75 |
| FY2002 BRASS line total for FDA-regulated products | 1,098,054 |
| BRASS yearly entry total (3.6 lines per entry) | 305,015 |
| Additional annual costs of submissions for BRASS users | $22,876,125 |
| Additional Border Wait Time | |
|---|---|
| Cost per half hour | $125 |
| BRASS yearly entry total | 305,015 |
| Additional annual border wait costs for former BRASS users | $38,126,875 |
| Total Annual additional food importing costs for BRASS users | $61,003,000 |
d. Updated costs to submit prior notice by mode of transport. i. 2-hour minimum prior notice time for food arriving by land by road. Prior notices for perishable articles of food from Canada and Mexico that arrive in the United States by land by road must be submitted at least 2 hours before the food arrives in the United States. In the analysis of the IFR, we assumed that this minimum submission time should eliminate the probability of having to resubmit prior notice (due to proximity to the U.S. port of entry) for all but 5 percent of those perishable products imported from Canada and Mexico. Data from the FDA PNC for 2007 indicate that 85 percent of the articles of food arriving from Canada enter the United States by land by road; and approximately 94 percent of the articles of food arriving from Mexico enter the United States by land by road.\11\ Using these updated estimates, we calculate the proportion of the total retail value of highly perishable produce and seafood from Canada and Mexico that arrive in the United States by land by road. We then calculate the lost product value for the 5 percent of highly perishable produce and seafood from Canada and Mexico for which importers may have to resubmit the prior notice when the minimum submission time is 2 hours. Table 7 of this document shows the revised estimated loss in value caused by the cancelled and resubmitted prior notice information for the 5 percent of imported Mexican and Canadian perishable seafood and produce affected. --------------------------------------------------------------------------- \11\ The mode of transportation field in prior notice is user defined; thus, the person submitting the prior notice is responsible for informing FDA by what mode of transport the food will enter the United States. As mode of transport is user defined, there is a possibility of error. --------------------------------------------------------------------------- We do not include the lost value for perishable seafood and produce imported from Central America because perishable products from Central America are most likely to arrive by air into the United States. We also do not include the cost of additional truck time [[Page 66387]] with this option because the minimum prior notice time for articles of food arriving by vehicle is only 2 hours.
| Perishable Produce | Dollars |
|---|---|
| 2001 Imported Mexican produce total retail value | $3,458,525,000 |
| 94% of total retail value for Mexican produce | $3,251,014,000 |
| 1.2% Reduction in value for 5% of Mexican produce | $1,951,000 |
| 2001 Imported Canadian produce total retail value | $401,826,000 |
| 85% of total retail value for Canadian produce | $341,552,000 |
| 1.2% Reduction in value for 5% of Canadian produce | $205,000 |
| Total lost value for produce | $2,156,000 |
| Perishable Seafood | Dollars |
|---|---|
| 2001 Imported Mexican seafood total retail value | $112,277,000 |
| 94% of total retail value for Mexican seafood | $105,540,000 |
| 4.2% Reduction in value for 5% of Mexican seafood | $222,000 |
| 2001 Imported Canadian seafood total retail value | $1,863,218,000 |
| 85% of total retail value for Canadian seafood | $1,583,735,000 |
| 4.2% Reduction in value for 5% of Canadian seafood | $3,326,000 |
| Total lost value for seafood | $3,548,000 |
ii. 4-hour minimum prior notice time for food arriving by land by rail and by air. The 4-hour minimum submission time for prior notice applies to articles of food imported or offered for import by land by rail and by air. A 4-hour minimum prior notice time for railroads and airplanes could constrain products arriving from the countries bordering the United States. Data from the PNC for 2007 show that about 4 percent of the articles of food arriving from Canada were imported into the United States by land by rail and only about 2 percent of the articles of food arriving from Mexico were imported into the United States by land by rail. Similarly, about 8 percent of the articles of food arriving from Canada were imported into the United States by air, while only about 3 percent of the articles of food arriving from Mexico were imported into the United States by air. To estimate potential lost value for produce imported from Canada and Mexico by rail and air, we adjust the total retail value of highly perishable produce and seafood from Canada and Mexico to account for the 12 percent from Canada and the 5 percent from Mexico that are imported by land by rail or by air. Table 5 of this document shows the articles of food arriving by rail and air from Canada and Mexico that may have to resubmit prior notice when the minimum prior notice timeframe is 4 hours before arrival in the United States. For Central American and Caribbean countries, most, if not all, of their perishable products are imported to the United States by air. Table 8 of this document shows the loss of value for the estimated 20 percent of air shipments from Central America for which prior notice needs to be resubmitted under Option 1.\12\ --------------------------------------------------------------------------- \12\ The estimated 20 percent cancellation and resubmission rate for prior notices when the minimum submission time is 4 hours is used in the IFR analysis. (See 68 FR 58974 at 59045.)
| Perishable Produce | Dollars |
|---|---|
| 2001 Imported Mexican produce total retail value | $3,458,525,000 |
| 5% of total retail value for Mexican produce | $172,926,000 |
| 2.4% reduction in value for 20% of Mexican produce | $830,000 |
| 2001 Imported Canadian produce total retail value | $401,826,000 |
| 12% of total retail value for Canadian produce | $48,219,000 |
| 2.4% reduction in value for 20% of Canadian produce | $231,000 |
| 2.4% reduction in value for 20% of Central American and Caribbean produce | $1,044,000 |
| Total lost value for produce | $2,105,000 |
| Perishable Seafood | Dollars |
|---|---|
| 2001 Imported Mexican seafood total retail value | $112,277,000 |
| 5% of total retail value for Mexican seafood | $5,614,000 |
| 8.3% reduction in value for 20% of Mexican seafood | $93,000 |
| 2001 Imported Canadian seafood total retail value | $1,863,218,000 |
| 12% of total retail value for Canadian seafood | $204,954,000 |
| 8.3% Reduction in value for 20% of Canadian seafood | $3,712,000 |
| 2001 Imported Central American and Caribbean seafood total retail value | $251,796,000 |
| 8.3% Reduction in value for 20% of Central American and Caribbean seafood | $4,180,000 |
| Total lost value for seafood | $7,985,000 |
e. Updated IFR costs to include the costs of manufacturer name, registration number and partial address on prior notice. Section 1.281(a)(6), (b)(5), and (c)(6) of the IFR requires that prior notice for an article of food that is no longer in its natural state include the name and address of the manufacturer and the registration number assigned to the facility that is associated with the article of food.\13\ This IFR requirement has not been fully enforced by FDA, as described in CPG Sec. 110.310; however, it is a requirement of the rule and therefore we evaluate it as a cost of the IFR. We correct an oversight in the calculation of the costs of the IFR by including the costs of submitting the food manufacturer registration number and facility address on prior notice here. --------------------------------------------------------------------------- \13\ The interim final rule further states that a registration number is not required for a facility associated with an article of food if the article is imported or offered for import for transshipment, storage, and export, or further manipulation and export. The interim final rule also provides that if the article of food is sent by an individual as a personal gift (i.e., for nonbusiness reasons) to an individual in the United States, he or she may provide the name and address of the firm that appears on the label under Sec. 101.5 instead of the name, address, and registration number of the manufacturer. If a registration number is provided, city and country may be provided instead of the full address. --------------------------------------------------------------------------- f. How some importers will be affected. The November 2004 revision of the IFR CPG stated that if the manufacturer's registration number was not given on the prior notice, the submitter should select the appropriate reason identifying why the manufacturer's registration number and/or name and address was not provided. The reason codes provided by PNSI and ABI/ACS were: <bullet> A--facility is out of business <bullet> B--facility is a private residence <bullet> C--facility is a restaurant <bullet> D--facility is a retail food establishment <bullet> E--facility is a nonprocessing fishing vessel <bullet> F--Facility is nonbottled water collection and distribution establishment <bullet> G--Individual gift-label name/address <bullet> H--Grower-satisfies farm exemption <bullet> I--Samples-quality assurance, research or analysis purposes only <bullet> J--U.S. manufacturing facility that is not required to register <bullet> K--Unable to determine the registration number of the manufacturer <bullet> L--Unable to determine identity of manufacturer-providing identity of manufacturer's headquarters <bullet> M--Unable to determine identity of manufacturer or headquarters-providing invoicing firm's identity <bullet> O--Gift pack for nonbusiness purposes-providing single prior notice and identity of packer Prior notices submitted without manufacturer registration numbers but using reason codes A through F, H, and J would be compliant with IFR requirements because the manufacturer would be exempt from being registered according to the Registration of Food Facilities rule (21 CFR part 1, subpart H). Prior notices submitted without manufacturer registration numbers but using reason code G would be compliant with IFR requirements because the prior notice IFR allows that if an article of food is sent by an individual as a personal gift (i.e., for nonbusiness reasons) to an individual in the United States, the submitter may provide the name and address of the firm that appears on the label instead of the name, address, and registration number of the manufacturer. A prior notice submitted without the manufacturer name, address, and/or registration number but using reason code I, K through M, or O would not be compliant with IFR requirements. However, FDA's enforcement policy was that it should typically consider not taking any regulatory action for prior notice violations in these cases. We can use information from the PNC on the CPG code reasons given for FY 2007 to determine how many submitters had trouble providing the manufacturer registration number and facility address as is required by the IFR (submitters who used reason codes I, K through M, and O). [[Page 66389]] The PNC was able to determine that about 92.5 percent of prior notices contained the manufacturer's name, address, and registration number as required by the IFR. Table 9 of this document shows that about 2.9 percent of prior notice submissions (2.91 percent) for 2007 used reason codes I, K, L, M, and O.
| Reason Code | Description | PN Lines Count |
% of Total Lines |
|---|---|---|---|
| Total prior notice submissions for fiscal year 2007 | 9,804,050 | ||
| A | Facility is out of business | 43,479 | 0.44% |
| B | Facility is a private residence | 30,801 | 0.31% |
| C | Facility is a restaurant | 5,146 | 0.05% |
| D | Facility is a retail food establishment | 47,705 | 0.49% |
| E | Facility is a nonprocessing fishing vessel | 2,488 | 0.03% |
| F | Facility is a nonprocessing drinking water collection and distribution establishment | 1,417 | 0.01% |
| G | Individual gift label name/address in lieu of registration number | 36,808 | 0.38% |
| H | Grower satisfies farm exemption | 267,369 | 2.73% |
| I | Samples--quality assurance, research or analysis purposes only | 55,374 | 0.56% |
| J | U.S. manufacturing facility that is not required to register | 15,142 | 0.15% |
| K | Unable to determine the registration number of the manufacturer | 166,647 | 1.70% |
| L | Unable to determine identity of the manufacturer--providing identity of manufacturer's headquarters | 15,674 | 0.16% |
| M | Unable to determine identity of manufacturer or headquarters providing invoicing firms identity |
15,839 | 0.16% |
| O | Gift pack for nonbusiness purposes--providing single prior notice and identity of packer | 32,371 | 0.33% |
| Total times a reason code was given (includes submission for PNSI and ABI/ACS) for fiscal year 2007 | 637,153 | 7.51% | |
FDA posits that larger entities (e.g., medium to large importers)
that deal directly with foreign manufacturers will not be impacted by
this IFR requirement (are not part of the 2.91 percent) as they will be
able to obtain the manufacturers' registration numbers and facility
addresses for the products they are importing. Therefore, it is mostly
the small U.S. retailers or individuals that buy from other wholesalers
or retailers in foreign countries that may have a problem obtaining the
registration number, city, and country of the actual food manufacturing
facility.
Using data from the U.S. Census Bureau, FDA was able to determine
that for 2006, about $64.8 billion foods, feeds, and beverages were
imported into the United States. Some of this value of imported food
could be affected by the IFR requirement that the registration number,
city, and country of the manufacturer be provided on prior notice; to
assess how this imported value may be affected, we present best and
worst case scenarios.
In our best case scenario, few imported foods would be affected by
manufacturer registration number, name and partial address being
required on prior notice. For our best case scenario we subtract the
full import value of the potentially ``unaffected'' categories listed
in table 10 of this document from $64.8 billion, the total value of
food, feeds, and beverages imported into the United States in 2006
(Ref. 4). In essence, we subtract out those food categories that are
likely comprised of foods that are still in their natural state such
that a manufacturer is not required for the prior notice (e.g., green
coffee). This is our ``best case'' scenario because not all foods
imported from the categories below will come from facilities that are
not required to be registered (i.e., vegetables could be farm
commodities or could be processed). The remaining imported foods value,
about $29 billion, represents the value of alcoholic beverages, bakery
products, non-agricultural, and ``other'' imported foods, which are
products from facilities more likely to be subject to the food facility
registration requirements.
About 2.91 percent of the prior notice submissions for FY 2007
indicated that the importer could not provide the name, address, and/or
registration number of the actual manufacturing facility. While we do
not know the value of imported foods for each of the prior notice
submissions in the 2.91 percent affected, in the absence of better
information, for our best case scenario we reduce the value of imported
foods affected to $843 million, or 2.91 percent of $29 billion. For the
worst case scenario, we apply the 2.91 percent of import lines for 2007
that could not provide the registration number, city, and country of
the actual manufacturer to the entire value of FDA-regulated imported
food shipments, $59 billion, giving us a possible $1.7 billion in
imported foods value that could be affected by the prior notice IFR
requiring the name, registration number, and partial address of the
manufacturing facility on most prior notices.
The estimated $843 million to $1.7 billion in imported food
affected by the facility name, registration number, and partial address
requirement for prior notice is an overestimate of the imported value
likely affected for two
[[Page 66390]]
reasons. First, the 2.91 percent of prior notice submissions that could
not supply the information required by the IFR are most likely goods
imported by small or very small U.S. retailers or individuals. These
goods are likely purchased for import not through the manufacturer but
through middlemen, thus the importers often do not have access to, or
knowledge of, the manufacturer registration number and facility
address. These small U.S. retailers or individuals would not be
importing large quantities of food; therefore, the value of their
imported shipments should be small, much smaller in total than the $843
million to $1.7 billion estimate.
Second, we expect that most of those persons importing without
knowledge of the manufacturing facility's registration number or
address will adjust business practices, and perhaps their supply chain,
to other entities in the supply chain that will provide them with this
information for prior notice submissions. For the persons who can
adjust business practices, the value of the food imported will be
affected by prior notice, but not lost, because importation of those
products will not cease. However, some of these businesses will find
that the costs associated with changing business practices to supply
the necessary information on prior notice will cause importing food
products into the United States to no longer be profitable. These
persons will cease importing and the value of these imported goods that
is lost will be a cost of the rule. Thus we must adjust our value of
imported food affected by the manufacturer identity requirement to
reflect that: (1) Most importers will adjust business practices to
continue importing and (2) some importers will cease doing so.
To account for the businesses that cease importing food into the
United States, we estimate that 3 percent of the possible $843 million
to $1.7 billion of imported food value is lost. We do this because
according to the Small Business Administration, about 3 percent of
small businesses closed between 2003 and 2007 (Ref 5). We estimate this
value to be $25 million to about $52 million.
To account for the businesses that change importing practices, we
estimate that 3,157 prior notice submitters (2.91 percent of the
estimated 108,500 submitters) will spend 80 hours adjusting their
supply chain.\14\ As with table 4 of this document, we use the manager
wage rate, including overhead, of $56.74 per hour.
---------------------------------------------------------------------------
\14\ These costs are costs incurred beyond the information
gathering and coordination costs presented in table 4 of this
document.
---------------------------------------------------------------------------
Taking the midpoint of the lost value due to cessation of
importation ($38.5 million) plus the costs to the 3,157 firms to change
business practices, we estimate that the cost of the manufacturer
identity requirement in the IFR to be about $52.8 million.
| Best Case Scenario (Millions) |
Worst Case Scenario (Millions) |
|
|---|---|---|
| Foods, feeds, and beverages (FFB) total1 | $64,782 | $64,782 |
| Categories of imported food products subtracted | ||
| Meat products | $5,611 | $5,611 |
| Fish and shellfish | $9,867 | |
| Vegetables | $4,943 | |
| Cane and beet sugar | $1,121 | |
| Cocoa beans | $520 | |
| Tea, spices, etc. | $715 | |
| Food oils, oilseeds | $1,999 | |
| Feedstuff and food grains | $1,577 | |
| Nuts | $856 | |
| Green coffee | $2,035 | |
| Dairy products and eggs | $1,070 | |
| Remaining value of imports that may be affected by the IFR identity of the manufacturer requirement | $28,965 | $59,171 |
| Imported value reduced further to represent that 2.91% of prior notice submissions could not provide registration number and site-specific information on prior notice for fiscal year 2007 |
$843 | $1,722 |
| 3 percent of imported food value lost through cessation of importation into U.S. | $25.3 to $51.7 million | |
| Costs that reflect change in business practices for 3,157 submitters (80 hours x $56.74 per hour) | $14.3 million | |
| Total Value Affected | $52.8 million | |
1Source of original data: U.S. Census Bureau, U.S. Bureau of Economic Analysis, US DOC News, November 9, 2007, pages 12 and 15, available online at http://www.bea.gov/newsreleases/international/trade/2007/pdf/trad0907.pdf. (FDA has verified the Web site address, but FDA is not responsible for any subsequent changes
to the Web site after this document publishes in the Federal Register.)
[[Page 66391]]
Table 11 of this document presents a summary of the revised
estimated costs associated with Option 1, including the marginal costs
to importers who may be affected by the IFR requirement that a
facility's name, registration number and partial address be provided on
prior notice. Also included in the summary table 11 of this document
are the discounted present value of the costs at the OMB-recommended
discount rates of 3 and 7 percent.
| (In Thousands of Dollars) |
|
|---|---|
| Learning costs | $71,037 |
| Coordination costs | $43,574 |
| Computer acquisition costs | $10,594 |
| FDA prior notice system cost | $13,000 |
| Annual costs to fill out prior notice screens | $202,500 |
| Additional costs for BRASS users | $61,003 |
| Lost value for produce | $4,261 |
| Lost value for seafood | $11,533 |
| Cost for truck time | $0 |
| Costs of manufacturer registration number and full facility address requirement | $52,800 |
| Total first year costs for Option 1 | $470,302 |
| Annual costs after first year1 | $293,118 |
| PV of costs at 7% for 20 years | $3,270,884 |
| PV of costs at 3% for 20 years | $4,532,872 |
1Annual costs include the start-up costs of prior notice to the estimated 10 percent of new businesses that enter the market each year.
g. Benefits of Option 1. FDA's prior notice system provides us with enhanced knowledge of what articles of food are being imported or offered for import into the United States. Requiring prior notice of imported food shipments and defining the required data information improves our ability to detect accidental and deliberate contamination of food and to deter deliberate contamination. Before prior notice was required, FDA received almost no advance notice information about food products entering the United States from foreign sources, or the location of the food's anticipated port of arrival. With the information required by prior notice, FDA does know what articles of food are being imported or offered for import before they arrive at the port. In the event of a credible threat for a specific product or a specific manufacturer or processor, for example, FDA will be able to mobilize and assist in the detention and removal of products that may pose a serious health threat to humans or animals. FDA's PNC reviews prior notices and assesses the risk related to imported food shipments. Personnel at the PNC decide on a case-by-case basis whether the article of food needs to be held for examination upon arrival at the port. Having notice of an article of food imported or offered for import into the United States before it reaches a U.S. port allows FDA personnel to be ready at any time to respond to shipments that appear to pose a significant health risk to humans or animals. h. Cost benefit summary table. Table 12 presents the costs of Options 1 annualized over 20 years.
| Annualized Costs Over 20 Years at 7% Discount Rate (Millions) | Annualized Costs Over 20 Years at 3% Discount Rate (Millions) | |
|---|---|---|
| Option 1--2 hour prior notice for vehicle, 4 hour for rail and air, 8 hour for vessels (IFR) | $304 | $301 |
| Benefits--FDA will know what articles of food are being imported or offered for import, before they arrive at the port. In the event of a threat of significant public health risk to humans or animals, FDA and CBP will be able to mobilize and assist each other in the detention and removal of those products. | ||
Option 2 (A and B): Minimum prior notice time frame would be 1 hour before arrival for articles of food arriving by land by road or 30 minutes for FAST participants, 2 hours before arrival for articles of food arriving by land by rail, ``wheels-up'' for flights originating in North and Central America, South America (north of the equator only), the Caribbean, and Bermuda; 4 hours for all other flights, and 8 hours before arrival for vessels; information would be submitted electronically, most changes in information would require resubmission This option coordinates FDA minimum prior notice times with those of CBP for imports arriving by land by road, by land by rail, and by air.\15\ For this option's timeframes we present two scenarios: (1) The costs and benefits of Option 2 when FDA's PNC is staffed at its current level and must review and respond to prior notices received within the minimum timeframe required and (2) the costs and benefits of Option 2 when the PNC has increased its staff to review and respond to prior notices received within the minimum timeframe required. --------------------------------------------------------------------------- \15\ We do not examine or integrate timeframes for products arriving by water. Persons that use vessels to import their products are usually dealing with merchandise that is not highly perishable in nature and thus less time-sensitive. FDA did not receive comments requesting the coordination of FDA and CBP timeframes for food arriving by water. FDA's current minimum prior notice timeframe for notification of food being imported by water is 8 hours before arrival; CBP's current minimum prior notice timeframe for articles being imported by water is 24 hours before arrival. --------------------------------------------------------------------------- Option 2A: PNC is Staffed at its Current Level and Must Review and Respond to Prior Notices Within the Minimum Timeframe Required a. Costs of Option 2A. i. 1-hour or 30 minute minimum prior notice time for food arriving by land by road. A significant portion (approximately 31 percent) of the prior notices reviewed by the PNC on a daily basis is for articles of food that arrive in the United States by land by road. The PNC conducts a more intensive security review on at least 225 to 250 prior [[Page 66392]] notices per day. Of these prior notices that are flagged as potentially high-risk and require a more intensive security review, about 77 (31 percent of 250) are for articles of food arriving by land by road. Complicating matters further is that prior notice submissions and expiration times are not evenly distributed over an 8-hour shift or 24- hour day; an overwhelming majority of prior notice submissions arrive during a certain 12-hour time period. The PNC has estimated using 2007 data that most prior notices submitted for land border entries took between 30 and 110 minutes to review. This range indicates that if the prior notice minimum submission time frames were reduced from 2 hours to 1 hour, approximately 27 percent of those high risk prior notices for articles of food arriving by land by road that are selected for a more intensive review would exceed the minimum prior notice timeframe and would have to be delayed at the port of arrival while the PNC completes its review and risk assessment, as discussed earlier in this document. If the minimum prior notice submission time for articles of food arriving by land by road is shortened to 30 minutes, the intensive security reviews (described previously) on approximately 69 percent of the high-risk targeted land border prior notices would not be completed within the prior notice timeframe. Again, as a result of the shorter timeframe, it would be necessary for the PNC to delay the movement of these shipments at the port of arrival in order to complete their review and risk assessment. The synopsis stated in the previous paragraph implies that the PNC likely will not be able to review and respond to all prior notices received for articles of food arriving by land by road within the minimum time if the minimum prior notice submission time for articles of food arriving by land by road is either 1 hour or 30 minutes. The loss of value to fresh produce and seafood calculated in table 8 of this document reflects that some articles of food (about 27 to 69 percent of high risk prior notices) will be held at the port of arrival past the 30 minutes or 1 hour minimum prior notice submission time frame while the PNC completes its review. In table 13 of this document, we first calculate the lost value to fresh produce and seafood as if FDA had the additional staff necessary to receive, review, and respond to prior notices within the minimum prior notice submission time\16\ and then increase those costs (in terms of lost value to perishable produce and seafood arriving in the United States by land by road by 48 percent--the average of 27 and 69 percent) to account for the fact that some of these articles of food will be held up at the port pending prior notice review completion given the current PNC staffing level. --------------------------------------------------------------------------- \16\ We use the same probability of resubmission structure established in the analysis of the IFR (68 FR 58974 at 59025). This minimum submission time should eliminate the probability of having to resubmit prior notice for all but 2.5 percent of those perishable products imported from Canada and Mexico by land by road. --------------------------------------------------------------------------- We note that we base this analysis on the typical (average) prior notice review time. Given that most prior notices for land border entries took between 30 and 110 minutes to review, the typical article of food arriving by land by road should not have to wait longer than 2 hours to enter; which is equivalent to the time that articles of food arriving by land by road will have to wait to enter the United States under Option 1. However, no matter what the minimum prior notice submission timeframes are, there will always be some articles of food whose review will take longer than the minimum allotted prior notice review timeframes.
| Perishable Produce | Dollars |
|---|---|
| 2001 Imported Mexican produce total retail value | $3,458,525,000 |
| 94% of total retail value for Mexican produce | $3,251,014,000 |
| 0.6% Reduction in value for 2.5% of Mexican produce | $488,000 |
| 48% Increase in lost value due wait time past minimum submission timeframe | $234,000 |
| Total lost value for Mexican produce | $722,000 |
| 2001 Imported Canadian produce total retail value | $401,826,000 |
| 85% of total retail value for Canadian produce | $341,552,000 |
| 0.6% Reduction in value for 2.5% of Canadian produce | $51,000 |
| 48% Increase in lost value due wait time past minimum submission timeframe | $24,000 |
| Total lost value for Canadian produce | $75,000 |
| Total lost value for produce | $797,000 |
| Perishable Seafood | Dollars |
|---|---|
| 2001 Imported Mexican seafood total retail value | $112,277,000 |
| 94% of total retail value for Mexican seafood | $105,540,000 |
| 2.1% Reduction in value for 2.5% of Mexican seafood | $55,000 |
| 48% Increase in lost value due wait time past minimum submission timeframe | $26,000 |
| Total lost value for Mexican seafood | $81,000 |
| 2001 Imported Canadian seafood total retail value | $1,863,218,000 |
| 85% of total retail value for Canadian seafood | $1,583,735,000 |
| 2.1% Reduction in value for 2.5% of Canadian seafood | $831,000 |
| 48% Increase in lost value due wait time past minimum submission timeframe | $399,000 |
| Total lost value for Canadian seafood | $1,230,000 |
| Total lost value for seafood | $1,311,000 |
ii. 2-hour minimum prior notice time for food arriving by land by rail and ``wheels-up'' or 4-hour minimum prior notice time by air. The 2-hour minimum submission time for food imported by land by rail should reduce the probability of having to resubmit prior notice for virtually all articles of food imported from Canada and Mexico by rail. However, with current staffing levels at the PNC, the possibility exists that some articles of food arriving by rail may be held at the minimum prior notice submission timeframe. Data from the PNC for 2007 show that only about 4 percent of the articles of food imported from Canada and only about 2 percent of the articles of food imported from Mexico are imported by land by rail. Thus, articles of food arriving by land by rail represent only a slight fraction of all prior notices received and are therefore not necessarily the constraining factor when the PNC is staffed at its current level. Although we cannot rule out the possibility that some additional effects may be associated with articles of food imported from by land by rail under Option 2A, we assume those effects would be negligible. We therefore do not estimate additional costs for articles of food arriving by land by rail for Option 2A. Reducing the prior notice submission timeframe to ``wheels-up'' for food imported by air on flights originating in North and Central America, South America (north of the equator only), the Caribbean, and Bermuda will eliminate the need for any resubmission of prior notice information for those shipments. Because prior notice does not need to be submitted until ``wheels-up,'' the probability of not having the correct prior notice information on the shipment is eliminated. However, according to 2007 data from the PNC, if the minimum prior notice submission time is reduced from 4 hours to ``wheels up'' for some articles of food arriving by air, approximately 5 percent of the prior notice reviews would not be completed in time if flight time was less than 3 hours given the current PNC staffing level. Perishable produce and seafood imported into the United States from the Bahamas, Belize, the Dominican Republic, El Salvador, Haiti, Honduras, Jamaica, and Nicaragua can all be flown to Miami, Florida in less than 3 hours. Perishable produce and seafood imported by air from Canada and Mexico also can be flown into the United States in less than 3 hours. Table 14 of this document shows that while there is no value loss from perishable produce and seafood having to resubmit prior notice (because the minimum prior notice submission timeframe is ``wheels- up''), there may be a loss of value for about 5 percent of perishable produce and seafood coming from the locations listed previously if the PNC does not have more than its current level of personnel to review and respond to prior notices when the minimum prior notice time frame is ``wheels-up.'' Even if the PNC cannot respond to all prior notices for articles of food arriving in the United States by air when the flight time is less than 3 hours, we would still not expect the costs (value loss on perishable produce and seafood) to importers of these articles of food to be less than the costs in Option 1 where the minimum prior notice time frame is 4 hours for articles of food arriving by air. Again we note that this analysis is based on the typical review time for prior notice for articles of food arriving by air. No matter what the minimum prior notice submission timeframe, there will always be some articles of food for which the PNC will not be able to respond and complete its risk assessment within the timeframe allotted. To estimate the potential loss in value for perishable products due to a delay in PNC review, we use the following information in table 14 of this document: (1) The total retail value of the perishable products from Central America, adjusted to encompass perishable products coming from countries whose flight times to the United States are less than 3 hours; (2) the total retail value of perishable products from Canada and Mexico, adjusted to reflect the proportion of these articles of food that arrive into the United States by air (8 percent for Canada and 3 percent for Mexico); and (3) the estimated loss for the delay in review, which we equate to 1 hour\17\ of the perishable product's lifespan. --------------------------------------------------------------------------- \17\ We chose 1 hour as the loss in value because the PNC, staffed at its current level, will not complete its review for articles of food arriving by air when flights are less than 3 hours and prior notice is required at ``wheels-up,'' but generally will complete its review when the minimum prior notice time for articles of food arriving by air is 4 hours. [[Page 66394]]
| Perishable Produce | Dollars |
|---|---|
| 2001 Imported Mexican produce total retail value | $3,458,525,000 |
| 3% of total retail value for Mexican produce | $103,756,000 |
| 5% Experience a 0.6% loss in value due wait time past minimum submission timeframe | |
| Total lost value for Mexican produce | $31,000 |
| 2001 Imported Canadian produce total retail value | $401,826,000 |
| 8% of total retail value for Canadian produce | $32,146,000 |
| 5% Experience a 0.6% in value due wait time past minimum submission timeframe | |
| Total lost for Canadian produce | $10,000 |
| 2001 Imported Central American produce total retail value (coming from countries that are less than 3 hours by air to U.S.) | $62,510,000 |
| 5% Experience a 0.6% loss in value due wait time past minimum submission timeframe | |
| Total lost value for Central American produce | $19,000 |
| Total lost value for produce | $60,000 |
| Perishable Seafood | Dollars |
|---|---|
| 2001 Imported Mexican seafood total retail value | $112,277,000 |
| 3% of total retail value for Mexican seafood | $3,368,000 |
| 5% Experience a 2.1% loss in value due wait time past minimum submission timeframe | |
| Total lost value for Mexican seafood | $4,000 |
| 2001 Imported Canadian seafood total retail value | $1,863,218,000 |
| 8% of total retail value for Canadian seafood | $149,057,000 |
| 5% Experience a 2.1% loss in value due wait time past minimum submission timeframe | |
| Total lost value for Canadian seafood | $157,000 |
| 2001 Imported Central American seafood total retail value (coming from countries that are less than 3 hours by air to U.S.) | $73,021,000 |
| 5% Experience a 2.1% loss in value due wait time past minimum submission timeframe | |
| Total lost value for Central American seafood | $77,000 |
| Total lost value for seafood | $238,000 |
Table 15 of this document presents a summary of the costs associated with Option 2A, including the costs of the option at the OMB-recommended discount rates of 3 and 7 percent.
| (In Thousands of Dollars) |
|
|---|---|
| Learning costs | $71,037 |
| Coordination costs | $43,574 |
| Computer acquisition costs | $10,594 |
| FDA prior notice system cost | $13,000 |
| Annual costs to fill out prior notice screens |
$202,500 |
| Additional costs for BRASS users | $0 |
| Lost value for produce | $857 |
| Lost value for seafood | $1,549 |
| Cost for truck time | $0 |
| Costs of manufacturer registration number and full facility address requirement |
$52,800 |
| Total first year costs for Option 2 | $395,911 |
| Annual costs after first year | $218,727 |
| PV of costs at 7% for 20 years | $2,482,785 |
| PV of costs at 3% for 20 years | $3,426,122 |
b. Implications for the benefits of Option 2A. If FDA cannot appropriately review and respond to submitted prior notices within the reduced submission times frames under Option 2A given current FDA PNC staffing, there are two possible outcomes: (1) Prior notice screening and risk assessment requirements will have to be relaxed so that fewer prior notices are forwarded to the PNC for intensive review. Taking this action will reduce the social benefits of the rule by increasing the probability that an article of food posing a significant health threat to humans or animals will enter the United States unchecked; or (2) The PNC will be unable to complete its intensive review process for some or all of the prior notices forwarded to it within the shortened timeframes, and will frequently cause an unpredictable delay in the movement of these articles of food at the port of arrival until the PNC completes its review. This additional time for review will result in higher private costs to individuals importing articles of food into the United States than implied by the prior notice times. Had the shortened review time frames in Option 2A been in effect in FY 2007, the PNC would have held at least 6,000 to 16,000 articles of food arriving by land by road. For air shipments, if the minimum prior notice submission time frame had been shortened to ``wheels-up'', approximately 728 prior notice reviews in FY 2007 would not have been completed for flights less than 3 hours. As a result, it would have been necessary for the PNC to delay the movement of these shipments at the port of arrival in order to complete their review and risk assessment. To be able to review prior notices within a 1 hour prior notice submission time for articles of food arriving by land by road (given the current number and dispersion of prior notices by land by road and by other modes of transportation), the PNC estimates that it would need more than twice its current level of resources. The additional resources needed would include increasing the number of permanent employees who review prior notices from 27 to at least 50 FTEs, an increase in the number of first line supervisors, a tripling of computer access to both FDA and CBP systems, and a tripling of the current number of telephone lines. If the minimum timeframe to submit prior notices for articles of food arriving by land by road was reduced to 30 minutes, the PNC may need 3 times the number of staff to handle the prior notice review volume within this timeframe. c. Cost benefit summary table. Table 16 presents the costs of Options 2A annualized over 20 years.
| Annualized Costs Over 20 Years at 7% Discount Rate (Millions) | Annualized Costs Over 20 Years at 3% Discount Rate (Millions) | |
|---|---|---|
| Option 2A--1 hour or 30 minute prior notice for food arriving by land by road, 2 hours for rail, ``wheels-up'' or 4 hours for air, 8 hour for vessels; The PNC is staffed at its current level | $230 | $227 |
| Benefits--FDA will know what articles of food are being imported or offered for import, before they arrive at the port. In the event of a potential threat of significant health risk to humans or animals, FDA will be able to mobilize and assist in the detention and removal of those products from U.S. commerce. | ||
Option 2B: PNC has Increased Staff to Review and Respond to Prior Notices within the Minimum Time Frame Required a. Costs of Option 2B. For Option 2B we assume the PNC staff has been at least doubled, if not tripled. As stated earlier in this analysis, the PNC estimates that it would need more than twice, and possibly three times its current number of permanent employees to review prior notices if the minimum submission timeframe was 1 hour or 30 minutes before arrival for articles of food arriving by land by road, ``wheels-up'' for food arriving by air, and 2 hours for food arriving by land by rail. In addition to increasing prior notice permanent review staff from 27 to 50 or even 100 or more FTEs, an increase in the number of first line supervisors would be necessary, as would a corresponding increase in both computer access and telephone lines to FDA and CBP systems. Assuming that the costs to hire additional FTEs including overhead is $150,000 per FTE, then doubling the number of prior notice reviewers by adding an additional 27 permanent employees to the existing 27 employees would cost at least $4,050,000; tripling the number of prior notice reviewers would cost at least $8,100,000. These costs could be higher if additional overhead is required. We include $6,075,000 in our summary cost table for Option 2B as this represents the midpoint in costs between doubling and tripling the number of permanent employees at the PNC. These costs could be higher if additional overhead is required. i. 1-hour or 30-minute minimum prior notice time for food arriving by land by road. Under this option, prior notices for perishable articles of food from Canada and Mexico that arrive in the United States by land by road must be submitted 1 hour or 30 minutes before the food arrives in the United States. Using the same probability of resubmission structure established in the analysis of the IFR (68 FR 58974 at 59025), this minimum submission time should eliminate the probability of having to resubmit prior notice for all but 2.5 percent of those perishable products imported from Canada and Mexico by land by road. Using the same formula we used in the analysis of Option 1, we calculate the proportion of the total retail value of highly perishable produce and seafood from Canada and Mexico that arrives in the United States by land by road. We then adjust the new retail value, to calculate the lost product value (1 hour out of 168 hours for produce, 1 hour out [[Page 66396]] of 48 hours for seafood) for the 2.5 percent of highly perishable produce and seafood from Canada and Mexico for which prior notices would have to be resubmitted due to changes in the shipment when the minimum submission time is 1 hour or 30 minutes.\18\ --------------------------------------------------------------------------- \18\ In the IFR, we assumed a 2.5 percent prior notice resubmission rate when the minimum notice submission time for food imported by land by road was 1 hour. In this option, that minimum submission timeframe is 1 hour or 30 minutes for participants of CBP's accelerated entry programs. --------------------------------------------------------------------------- Table 17 of this document shows the loss in value caused by the cancelled and resubmitted prior notice information for the 2.5 percent of imported Mexican and Canadian perishable seafood and produce affected. We do not include the cost of truck time for this option, because the minimum prior notice time for articles of food arriving by vehicle is only 1 hour or 30 minutes.
| Perishable Produce | Dollars |
|---|---|
| 2001 Imported Mexican produce total retail value | $3,458,525,000 |
| 94% of total retail value for Mexican produce | $3,251,014,000 |
| 0.6% Reduction in value for 2.5% of Mexican produce | $488,000 |
| 2001 Imported Canadian produce total retail value | $401,826,000 |
| 85% of total retail value for Canadian produce | $341,552,000 |
| 0.6% Reduction in value for 2.5% of Canadian produce | $51,000 |
| Total lost value for produce | $539,000 |
ii. 2-hour minimum prior notice time for food arriving by land by rail and ``wheels-up'' or 4-hour minimum prior notice time by air. The 2-hour minimum submission time for food imported by land by rail should reduce the probability of having to resubmit prior notice for virtually all articles of food imported from Canada and Mexico by that mode of transport. Data from the PNC for 2007 show that only about 4 percent of the articles of food imported from Canada and only about 2 percent of the articles of food imported from Mexico are imported by land by rail. We do not calculate any lost value due to prior notice resubmission for products shipped by rail. Reducing the prior notice submission time frame to ``wheels-up'' for food imported by air on flights originating in North and Central America, South America (north of the equator only), the Caribbean, and Bermuda will eliminate the need for any resubmission of prior notice information for those shipments. Because prior notice does not need to be submitted until ``wheels-up'', the probability of not having the correct prior notice information on the shipment is eliminated. A 4-hour minimum prior notice time for flights not originating in North and Central America, South America (north of the equator only), the Caribbean, and Bermuda will not constrain these imports because flights from locations other than those listed will all take longer than 4 hours. Therefore, the probability of having incorrect shipment information is all but eliminated as the shipment information can be verified before the prior notice is sent. Table 18 of this document presents a summary of the costs associated with Option 2B, including the costs of the option at the OMB-recommended discount rates of 3 and 7 percent.
| (In Thousands of Dollars) | |
|---|---|
| Learning costs | $71,037 |
| Coordination costs | $43,574 |
| Computer acquisition costs | $10,594 |
| FDA prior notice system cost and cost of additional FTEs |
$19,075 |
| Annual costs to fill out prior notice screens |
$202,500 |
| Additional costs for BRASS users | $0 |
| Lost value for produce | $539 |
| Lost value for seafood | $886 |
| Cost for truck time | $0 |
| Costs of manufacturer registration number and full facility address requirement |
$52,800 |
| Total first year costs for Option 2 | $401,005 |
| Annual costs after first year | $218,353 |
| PV of costs at 7% for 20 years | $2,483,938 |
| PV of costs at 3% for 20 years | $3,425,873 |
b. Benefits of Option 2B. Importers will benefit from the shorter times for submitting prior notice under Option 2B because it is less likely that articles of food will need to ``wait'' longer than the minimum prior notice time frame before entering the United States. Submitting FDA's Prior Notice information at the same time as CBP's entry information may reduce costs for submitters.\19\ If FDA's Prior Notice and CBP submissions can be done simultaneously, submitters may be able to coordinate the two entry submissions so as to reduce total submission costs. --------------------------------------------------------------------------- \19\ Comments on the IFR stated several reasons for recommending that prior notice timeframes be the same as CBP's advance electronic information timeframes for food arriving by air and by land (both by road and by rail): (1) It would minimize the complexity of the process by presenting a more streamlined flow of information and avoid unnecessary duplication, (2) it would result in fewer errors, (3) it would provide better compliance rates, (4) it would allow for fewer disruptions at the border, (5) it would significantly reduce the burden on the trade community without creating additional security risks, and (6) it would allow operators at close border points to load and verify truck loads and travel routes prior to submitting notice. --------------------------------------------------------------------------- c. Cost benefit summary table. Table 19 presents the costs of Options 2B annualized over 20 years.
| Annualized Costs Over 20 Years at 7% Discount Rate (Millions) | Annualized Costs Over 20 Years at 3% Discount Rate (Millions) | |
|---|---|---|
| Option 2B--1 hour or 30 minute prior notice for food arriving by land by road, 2 hours for rail, ``wheels-up'' or 4 hours for air, 8 hour for vessels; the PNC has increased staff | $229 | $226 |
| Benefits--FDA will know what articles of food are being imported or offered for import, before they arrive at the port. In the event of a potential threat of significant health risk to humans or animals, FDA will be able to mobilize and assist in the detention and removal of those products. | ||
Option 3: Minimum prior notice time is 2 hours for articles of food arriving by land by road, 4 hours for articles of food arriving by land by rail and by air, and 8 hours for articles of food arriving by water; information is submitted electronically, most changes in information require resubmission; the manufacturer registration number is not required when the submitter is unable to determine it. Option 3 represents Option 1 but with a change to the requirement for providing the identity of the manufacturer. As stated in Option 1, smaller importers or individuals that buy food for import into the United States from brokers, wholesalers, or foreign retailers because they are too small to buy directly from food manufacturers may find it difficult to continue importing certain products when manufacturer name, registration number, and partial address is required on prior notice. However, the final rule provides an alternative for submitters in providing the identity of the manufacturer when they are unable to determine the manufacturer's registration number. Under the final rule, submitters may provide the name and full address of the site-specific manufacturing facility along with the reason why the registration number was not provided. Most of the comments concerned with the identity of the manufacturer were concerned about submitters not being able to provide registration number; a smaller percentage of the comments also raised concerns about being able to provide the name and address of the manufacturer. Unlike the manufacturer's registration number, which many may view as confidential business information that is to be disclosed only on a ``need to know'' basis, the name and full address of a facility is public information that not only is typically in phone books and on the Internet, but it also often is provided on documents typically exchanged between buyers and sellers (e.g., receipts, purchase orders, and bills of lading). Even with the flexibility of not requiring the manufacturer registration number on prior notice when the submitter is unable to determine it, there will likely be some adjustment costs for small importers and individuals. These adjustments to business practices should be less costly and occur less often than those in Option 1 because importers no longer have to provide the manufacturer registration number but may instead provide only the site-specific facility name and full address and the reason the registration number is not provided. We adjust the costs of the final rule to now reflect the requirement that if the manufacturer's registration number is not available, then the name and full address of the site-specific manufacturing facility must be provided. For Option 1, using information from table 9 of this document, we estimated that about 2.91 percent of prior notices submitted for FY 2007 did not contain the appropriate manufacturer name, address, and/or registration number as required by the codified of the IFR. With the extra flexibility in manufacturer identity allowed by Option 3, we expect the percentage of prior notices still affected by this requirement to be 1.21 percent (2.91 percent - 1.70 percent). We expect those who submitted prior notice under the IFR using reason code K--Unable to determine the registration number of the manufacturer (1.70 percent), should likely be able to submit the manufacturer site-specific name and full address as required by the prior notice final rule codified. We expect that those who submitted prior notice under the IFR using reason codes I, L, M, and O (0.56 percent, 0.16 percent, 0.16 percent, and 0.33 percent, respectively), [[Page 66398]] could still have problems submitting the identity of the manufacturer as required by the final rule. We must further adjust the 1.21 percent of prior notices expected to still be affected by the manufacturer identity requirement of prior notice to address the fact that the final rule is more restrictive than the IFR in regards to providing the identity of the manufacturer on prior notice for food sent by an individual as a personal gift. In cases of food sent by an individual as a personal gift, the IFR allows the name and address on the product label to substitute for the manufacturer's name, address, and registration number on prior notice. The final rule requires that if the manufacturer's registration number is not available, the full name and address of the site-specific facility that manufactured the gift must be included on prior notice.\20\ Therefore, we add 0.38 percent (for reason code G-- Individual gift label name/address in lieu of registration number from the November 2004 revision of the IFR CPG) to the 1.21 percent we expect may have problems with the manufacturer identity requirement of the final rule. Thus, we expect a total of 1.59 percent of all prior notices annually to be affected by the revised manufacturer identity requirement of the final rule as opposed to the 2.91 percent affected by the manufacturer identity requirement of the IFR. --------------------------------------------------------------------------- \20\ FDA plans to continue its enforcement policy that it should typically consider not taking any regulatory action for prior notice violations relating to individual gifts; however, the final rule does require at least the name and full address of the site-specific facility where the gift was manufactured. --------------------------------------------------------------------------- We can again use the data from table 10 of this document, adjusted now by 1.59 percent instead of 2.91 percent, to determine the potential imported food value affected by the final rule requirement that either the registration number or the name and address of the site-specific facility be included in prior notice. We repeat the data from table 10 here in table 20 of this document. As with Option 1, we present the best and worst case scenarios to represent the possible range of imported foods value that may be affected by the final rule requirement and then adjust that value to reflect changes in business practices and businesses ceasing importing food into the United States. Taking the midpoint of the lost value due to cessation of importation ($21 million) plus the costs to the 1,725 firms to change business practices, we estimate that the cost of the manufacturer identity requirement in the final rule to be about $28.8 million.
| Best Case Sce- nario (Millions) |
Worst Case Sce- nario (Millions) |
|
|---|---|---|
| Foods, feeds, and beverages (FFB) total1 | $64,782 | $64,782 |
| Categories of imported food products subtracted | ||
| Meat products | $5,611 | $5,611 |
| Fish and shellfish | $9,867 | |
| Vegetables | $4,943 | |
| Cane and beet sugar | $1,121 | |
| Cocoa beans | $520 | |
| Tea, spices, etc. | $715 | |
| Food oils, oilseeds | $1,999 | |
| Feedstuff and food grains | $1,577 | |
| Fruits, frozen juices | $5,503 | |
| Nuts | $856 | |
| Green coffee | $2,035 | |
| Dairy products and eggs | $1,070 | |
| Remaining value of imports that may be affected by identity of the manufacturer requirement | $28,965 | $59,171 |
| Imported value reduced further to represent that only 1.59% of prior notice submissions could not provide manufacturing facility site-specific information on prior notice for CY 2007 | $461 | $941 |
| 3 percent of imported food value lost through cessation of importation into U.S. | $13.8 to $28.2 million | |
| Costs that reflect change in business practices for 1,725 submitters (80 hours x $56.74 per hour) | $7.8 million | |
| Total Value Affected | $28.8 million | |
1Source of original data: U.S. Census Bureau, U.S. Bureau of Economic Analysis, US DOC News, November 9, 2007, pages 12 and 15, available online at http://www.bea.gov/newsreleases/international/trade/2007/pdf/trad0907.pdf. (FDA has verified the Web site address, but FDA is not responsible for any subsequent changes to the Web site after this document publishes in the Federal Register.)
a. Changes in to the final rule that are not quantified. The final rule is more restrictive than the IFR in regards to providing the identity of the manufacturer on prior notice for the importation of transshipments. For transshipments, the IFR allows the name and full address of the manufacturer to substitute for the manufacturer's name and partial address, and registration number on prior notice. The final rule requires that if the manufacturer's registration number is not available, the site-specific full name and address of the facility that manufactured the article of food must be included on prior notice. We do not expect this requirement of the final rule to affect transshipments significantly as the final rule does allow the importer to provide the site-specific name and full address of the manufacturing facility instead of the registration number. Also, for the final rule, FDA removed a few of the prior notice data elements that are required in the IFR. Specifically, submitters no longer need to include the fax number of the submitter and transmitter, the anticipated border crossing, the country [[Page 66399]] of the carrier, or the 6-digit HTS code on their prior notices. Other changes include making the shipper's registration number optional but always requiring its full addresses; and the option of submitting the tracking number for articles of food arriving by express consignment instead of anticipated arrival information when the prior notice is submitted through PNSI. However, these and other changes in filing requirements, on net, are not large enough to affect the time needed to file prior notice or the costs charged by brokers to file prior notice; therefore, we do not update the estimated time needed or the estimated costs charged to file prior notice. Table 21 of this document presents a summary of the revised estimated costs associated with Option 3, the final rule, including the marginal costs to importers who may be affected by the identity of the manufacturer requirement. Also included in table 21 of this document are the discounted present value of the costs at the OMB-recommended discount rates of 3 and 7 percent.
| (In Thousands of Dollars) |
|
|---|---|
| Learning costs | $71,037 |
| Coordination costs | $43,574 |
| Computer acquisition costs | $10,594 |
| FDA prior notice system cost | $13,000 |
| Annual costs to fill out prior notice screens |
$202,500 |
| Additional costs for BRASS users | $61,003 |
| Lost value for produce | $4,261 |
| Lost value for seafood | $11,533 |
| Cost for truck time | $0 |
| Costs of change in manufacturer identity requirement |
$28,800 |
| Total first year costs for Option 3 | $446,302 |
| Annual costs after first year1 | $293,118 |
| Present value (PV) of costs at 7% for 20 years |
$3,248,454 |
| PV of costs at 3% for 20 years | $4,509,571 |
1Annual costs include the startup costs of prior notice to the estimated 10 percent of new businesses that enter the market each year
b. Benefits of Option 3 (final rule). Option 3 allows for the submission of alternative manufacturer information that could be used to verify the registration status of the manufacturer. This is more flexible to importers than the requirements of Option 1, the IFR. Once the facility has been identified in the database and a valid registration has been verified, the manufacturer information required on prior notice for Option 3 provides the same level of security and assurance as the registration number required by Option 1. c. Cost benefit summary table. Table 22 presents the costs of Option 3 annualized over 20 years.
| Annualized Costs Over 20 Years at 7% Discount Rate (Millions) | Annualized Costs Over 20 Years at 3% Discount Rate (Millions) | |
|---|---|---|
| Option 3--2-hour prior notice for vehicle, 4-hour for rail and air, 8-hour for vessels; change in the identity of the manufacturer requirement (Final rule) | $655 | $652 |
| Benefits--FDA will know what articles of food are being imported or offered for import, before they arrive at the port. In the event of a threat of significant public health risk to humans or animals, FDA will be able to mobilize and assist in the detention and removal of those products. The benefits of the final rule are enhanced by the change in the identity of the manufacturer requirement. | ||
Summary Table of All Options Analyzed
| Costs | Option 1 | Option 2A | Option 2B | Option 3 |
|---|---|---|---|---|
| In Thousands of Dollars | In Thousands of Dollars | In Thousands of Dollars | In Thousands of Dollars | |
| Learning costs | $71,037 | $71,037 | $71,037 | $71,037 |
| Coordination costs | $43,574 | $43,574 | $43,574 | $43,574 |
| Computer acquisition costs | $10,594 | $10,594 | $10,594 | $10,594 |
| FDA prior notice system cost | $13,000 | $13,000 | $19,075 | $13,000 |
| Annual costs to fill out prior notice screens | $202,500 | $202,500 | $202,500 | $202,500 |
| Additional costs for BRASS users | $61,003 | $0 | $0 | $61,003 |
| Lost value for produce | $4,261 | $857 | $539 | $4,261 |
| Lost value for seafood | $11,533 | $1,549 | $886 | $11,533 |
| Cost for truck time | $0 | $0 | $0 | $0 |
| Costs of change in manufacturer identity requirement | $52,800 | $52,800 | $52,800 | $28,800 |
| Total first year costs | $470,302 | $395,911 | $401,005 | $446,302 |
| Annual costs | $293,118 | $218,727 | $218,353 | $293,118 |
| PV of costs at 7% for 20 years | $3,270,884 | $2,482,785 | $2,483,938 | $3,248,454 |
| PV of costs at 3% for 20 years | $4,532,872 | $3,426,122 | $3,425,873 | $4,509,571 |
| Benefits for all options (benefits not quantified) FDA will know what articles of food are being imported or offered for import, before they arrive at the port. In the event of a threat of significant public health risk to humans or animals, FDA will be able to mobilize and assist in the detention and removal of those products. |
||||
Sensitivity Analysis
The prior notice rule is unique in that the rule is published with
an accompanying Compliance Policy Guide (CPG). The CPG provides
guidance regarding enforcement of the prior notice requirements,
including describing the circumstances where FDA and CBP should
typically consider not taking any regulatory action even though certain
requirements are not met. In some of these circumstances, the
compliance policy applies when alternative information is submitted. If
we estimate the costs of the IFR taking into account information from
the IFR CPG and compare those costs to the final rule taking into
account information from the final rule draft CPG, the main cost
difference, as when comparing Option 1 and Option 3, is the cost of the
change regarding providing the manufacturer identity.
For Option 1 (the IFR) we estimated that this cost was about $52.8
million and for Option 3 (the final rule) we estimated this cost was
about $28.8 million. If information based on the CPG is included in the
estimate of the cost of the IFR and final rule, then the rule costs
regarding providing the identity of the manufacturer are $0 and $5.9
million respectively. The costs regarding providing the identity of the
manufacturer is $0 under the IFR taking into account information from
the IFR CPG based on the assumption that the submitter would use one of
the reason codes in table 9 (A through O) when the submitter is not
able to satisfy some or all of the requirements regarding providing the
identity of the manufacturer of the product. The same cost under the
final rule taking into account information from the final rule draft
CPG is about $5.9 million\21\ based on the assumption that if the
submitter would otherwise use reason code L or M in table 9, because it
was unable to determine the identity of the site-specific manufacturer,
it would now change supply chains, find some other means to continue
importing the food, or cease importing the food because it finds it
unprofitable to attempt to continue to do so under the circumstances
(0.32 percent or 31,513 of the 9.8 million entry lines for which prior
notice was submitted in 2007).
---------------------------------------------------------------------------
\21\ We calculated this cost using the same method we used in
Option 1 (table 10) and Option 3 (table 20) except we use 0.32
percent for the reduction of imported value and to reduce the number
of submitters from 108,500 to reflect changing business practices.
---------------------------------------------------------------------------
As discussed in more detail elsewhere in this document, the benefit
of not including reason codes L and M in the final rule draft CPG is
that knowing the identity of the facility involved in the food's
production, as opposed to the identity of the facility's headquarters
or the invoicing firm, is critical to ensuring that FDA can effectively
determine whether food should be held because it is from an
unregistered manufacturing facility.
B. Small Entity Analysis (or Final Regulatory Flexibility Analysis)
FDA has examined the economic implications of this final rule as
required by the Regulatory Flexibility Act (5 U.S.C. 601-612). If a
rule has a significant economic impact on a substantial number of small
entities, the Regulatory Flexibility Act requires agencies to analyze
regulatory options that would lessen the economic effect of the rule on
small entities consistent with statutory objectives. FDA finds that
this final rule may have a significant economic impact on a substantial
number of small entities. While this final rule provides more
flexibility to small entities than the IFR because the final rule
allows the full address of the site-specific manufacturer to be given
instead of the partial address and registration number on prior notice,
this information may still be difficult for some businesses to obtain.
Comments on the IFR Related to Small Businesses
(Comment) One comment states that smaller U.S. importers cannot
afford the additional costs charged by a broker to submit the FDA
information via the ABI system. As a result, they are having their
foreign suppliers submit prior notice. Some small companies estimate
that, including Web site disruptions, 80 packages would take 40 to 80
hours for prior notice. The comment believes that this is totally
unmanageable.
(Response) We account for increase in broker costs due to prior
notice in our analysis; the comment estimate of the time it takes to
complete prior notice is accurately reflected in the IFR and final rule
analysis. FDA expects importers to modify their business practices to
find the most cost effective way to deal with prior notice
requirements. In this case, the small importer can avoid higher broker
fees by having the foreign supplier submit the prior notice. Another
alternative would be for the small importer to submit prior notice
[[Page 66401]]
themselves through PNSI. We would expect small firms would comply in
whichever manner is most cost effective. It is also possible some of
the costs of prior notice could be passed on to consumers in the form
of higher retail prices for some foods; in this case the small importer
would not feel the complete impact of the higher broker submission
costs.
(Comment) The cost to complete a prior notice to send food by mail,
for companies that ship low volumes of inexpensive food products, is
higher than the value of the product being shipped and therefore
shipping to the United States may be discontinued.
(Response) FDA stated in the analysis of the IFR that the costs of
completing prior notice submissions may be partially passed along to
the consumer in the form of higher retail prices for some foods (68 FR
58974 at 59024). FDA's IFR analysis also acknowledged the possibility
that companies in the business of sending small shipments of food to
private individuals in the United States may stop shipping to U.S.
addresses (68 FR 58974 at 59067).
(Comment) A number of postal services take issue with the requiring
of filing prior notice for personal food items. The comments state that
the labor-intensive process of mailing personal food items will cause a
decrease in the items being shipped, thus decreasing the business of
the mail system.
(Response) When the cost of shipping increases, the number of items
shipped is indeed likely to decrease. Although some of reduction in
postal revenues would represent a dead-weight loss, it is primarily a
transfer, not a social cost and therefore is not included in the cost
estimates for this analysis.
(Comment) Several comments express concern about their continued
ability to import fine wine because although they can obtain the name
and address of the site-specific manufacturer of the wine, obtaining
the manufacturers' (i.e., the wineries') registration numbers for these
products often is difficult to those not in the winery's direct
distribution chain. The comments state that smaller importers,
wholesalers, retailers, restaurants, clubs, or hotels will be
negatively affected by not having the registration number for the
manufacturer of the fine wine. The comments further state that the
prior notice rule will negatively impact small producers by reducing
the number of potential representatives and sales venues as secondary
fine wine market importers disappear.
(Response) FDA does not believe that the fine wine industry will be
negatively affected by the prior notice final rule. The final rule at
Sec. 1.281(a)(6) requires the identity of the manufacturer as follows:
The name of the manufacturer and either: (1) The registration number,
city, and country of the manufacturer or (2) both the full address of
the manufacturer and the reason the registration number is not provided
(hereafter ``the identity of the manufacturer''). Even if a wine
importer, retailer, or wholesaler cannot obtain the registration number
(e.g., the winery refuses to disclose its registration number because
the importer, retailer, or wholesaler is outside the winery's
distribution chain), the prior notice can include the name and full
address of the winery, which comments stated is obtainable. We do not
include additional costs to fine wine manufacturers or importers in
this final rule analysis; however, we do refine the estimate of the
difference between the IFR requirements and this final rule
modification.
(Comment) Smaller importers that buy from brokers and wholesalers
because they are too small to buy directly from larger food
manufacturers will be put out of business. These smaller importers
allege that they will not be able to provide the manufacturers'
registration numbers on their prior notices as required by the final
rule. The comments argue that the registration number requirement
interferes with small businesses' rights to free trade because now only
larger businesses that deal with the manufacturers directly, rather
than buying through brokers and wholesalers, will be able to obtain the
manufacturer's information that is required for prior notice.
(Response) The final rule provides an alternative for submitters to
provide the identity of the manufacturer when the manufacturer's
registration number is not obtainable. Under the final rule, submitters
may provide the name and full address of the site-specific
manufacturing facility along with a reason as to why the registration
number was not used in the prior notice.
(Comment) While most comments state that the name and address of
the manufacturer could be submitted in prior notice, one comment states
that re-sellers will not normally supply the name of their supplier or
the name of the manufacturer of a particular product to their
customers. The comment asserts that supplying the name of the
manufacturer would allow that customer to circumvent the re-seller and
attempt to make direct contact with the supplier or manufacturer, thus
taking business away from the re-seller. Another comment states,
however, that smaller importers buy from brokers and wholesalers
specifically because they are too small to buy directly from larger
manufacturers and other corporations, as large entities typically would
not find it cost-effective to deal with smaller importers.
(Response) Depending on the business atmosphere, FDA believes that
it is likely that many resellers will be willing to supply the name and
the address of the manufacturers of the products they sell. Unlike the
manufacturer's registration number, which many may view as confidential
business information that is to be disclosed only on a ``need to know''
basis, the name and full address of a facility is public information
that not only is typically in phone books and on the Internet, but it
also often is provided on documents typically exchanged between buyers
and sellers (e.g., receipts, purchase orders, and bills of lading). The
issues discussed in these comments are addressed further in Options 1
and 3.
Costs per Small Entity
FDA does not have detailed information on the approximately 108,500
persons (e.g. exporters, U.S. importers or U.S. purchasers or their
agents) that will be primarily responsible for submitting the prior
notice information; table 3 gives a description of some of these
entities. Many of these submitters may have fewer than 100
employees\22\, thus making them small businesses as defined by the
Small Business Administration. Because many of the prior notice
submitters are likely to be small businesses, all options considered in
the Final Regulatory Impact Analysis in section IV.A of this document
are regulatory relief options.
---------------------------------------------------------------------------
\22\ For NAICS industry sector 42-Wholesale Trade, a business is
defined as small by SBA if it has fewer than 100 employees.
---------------------------------------------------------------------------
FDA does not have enough information about the 108,500 prior notice
submitters to perform a detailed analysis of the costs per small
business by industry sector. We do, however, update some of the costs
per submitter that were presented in the IFR Regulatory Flexibility
Analysis (68 FR 59066). Table 24 of this document shows the average
costs per submitter to learn the rule, coordinate information, and
submit prior notice. Table 24 also shows the average costs to the
submitter to absorb the costs of not being able to use BRASS, to absorb
costs of lost value of perishable products, and the cost regarding
providing the identity of the manufacturer.
[[Page 66402]]
| Activity | Total Costs | Cost per importer (n = 108,500) |
|---|---|---|
| Learning costs | $71,037,000 | $655 |
| Coordination costs | $43,574,000 | $402 |
| Annual costs to fill out prior notice screens | $202,500,000 | $1,866 |
| Costs for BRASS users | $61,003,000 | $562 |
| Lost value for perishables | $15,794,000 | $146 |
| Costs of change in manufacturer identity requirement | $28,800,000 | $265 |
| Total estimated average costs per submitter | $3,896 | |
C. Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA) Major Rule SBREFA (Public Law 104-121) defines a major rule for the purpose of Congressional review as having caused or being likely to cause one or more of the following: An annual effect on the economy of $100 million or more; a major increase in costs or prices; significant adverse effects on competition, employment, productivity, or innovation; or significant adverse effects on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic or export markets. In accordance with the Small Business Regulatory Enforcement Fairness Act, OMB has determined that this final rule is not a major rule for the purpose of Congressional review. V. Paperwork Reduction Act of 1995 The collection of information provisions of this final rule are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in Sec. Sec. 1.280, 1.281, 1.282, 1.283, and 1.285 have been approved under OMB Control No. 0910-0520. From the IFR to the final rule, FDA removed a few of the required prior notice data elements. Specifically, submitters no longer need to include the fax number of the submitter and transmitter, the anticipated border crossing, the country of the carrier, or the 6-digit HTS code in their prior notices. Other changes include the addition of the registration number of the transshipper for articles of food for transshipment, storage and export, or manipulation and export; flexibility in submitting the registration number and the city and country of the manufacturer and shipper instead of full addresses of these entities; and the option of submitting the tracking number for articles of food arriving by express consignment instead of anticipated arrival information when the prior notice is submitted through PNSI. However, these and other changes in filing requirements, on net, are not large enough to affect the time needed to file prior notice or the costs charged by brokers to file prior notice. Therefore we do not re- estimate a Paperwork Reduction Act burden for this final rule. VI. Analysis of Environmental Impact The agency has carefully considered the potential environmental effects of this action. FDA has concluded under 21 CFR 25.30(h) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required. VII. Federalism FDA has analyzed this final rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the agency has concluded that the rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required. VIII. References The following references have been placed on display in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852, and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday. (FDA has verified the Web site addresses, but FDA is not responsible for any subsequent changes to the Web sites after this document publishes in the Federal Register.) 1. Taube, Anthony C., Memorandum to file, November 13, 2006. 2. U.S. Customs and Border Protection, http://www.cbp.gov/ linkhandler/cgov/trade/cargo_security/ctpat/fast/fast_ref_ guide.ctt/fast_ref_guide.pdf. 3. The NAICS Association, September 29, 2008, available online at http://www.naics.com. 4. U.S. International Trade in Goods and Services September 2007, U.S. Census Bureau, U.S. Bureau of Economic Analysis, US DOC News, November 9, 2007, pages 12 and 15, available online at http:// www.bea.gov/newsreleases/international/trade/2007/pdf/trad0907.pdf. 5. The Small Business Administration, Office of Advocacy, Frequently Asked Questions Updated September 2008, available online at http://www.sba.gov/advo/stats/sbfaq.pdf. List of Subjects in 21 CFR Part 1 Cosmetics, Drugs, Exports, Food labeling, Imports, Labeling, Reporting and recordkeeping requirements. 0 Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 1 is amended as follows: PART 1--GENERAL ENFORCEMENT REGULATIONS 0 1. The authority citation for 21 CFR part 1 continues to read as follows: Authority: 15 U.S.C. 1453, 1454, 1455; 19 U.S.C. 1490, 1491; 21 U.S.C. 321, 331, 332, 333, 334, 335a, 343, 350c, 350d, 352, 355, 360b, 362, 371, 374, 381, 382, 393; 42 U.S.C. 216, 241, 243, 262, 264. 0 2. Subpart I, consisting of Sec. Sec. 1.276 through 1.285, is revised to read as follows: [[Page 66403]] Subpart I--PRIOR NOTICE OF IMPORTED FOOD General Provisions Sec. 1.276 What definitions apply to this subpart? 1.277 What is the scope of this subpart? Requirements to Submit Prior Notice of Imported Food Sec. 1.278 Who is authorized to submit prior notice? 1.279 When must prior notice be submitted to FDA? 1.280 How must you submit prior notice? 1.281 What information must be in a prior notice? 1.282 What must you do if information changes after you have received confirmation of a prior notice from FDA? Consequences Sec. 1.283 What happens to food that is imported or offered for import without adequate prior notice? 1.284 What are the other consequences of failing to submit adequate prior notice or otherwise failing to comply with this subpart? 1.285 What happens to food that is imported or offered for import from unregistered facilities that are required to register under subpart H of this part? General Provisions Sec. 1.276 What definitions apply to this subpart? (a) The act means the Federal Food, Drug, and Cosmetic Act. (b) The definitions of terms in section 201 of the act (21 U.S.C. 321) apply when the terms are used in this subpart, unless defined in this section. (1) Calendar day means every day shown on the calendar. (2) Country from which the article originates means FDA Country of Production. (3) Country from which the article is shipped means the country in which the article of food is loaded onto the conveyance that brings it to the United States or, in the case of food sent by international mail, the country from which the article is mailed. (4) FDA Country of Production means: (i) For an article of food that is in its natural state, the country where the article of food was grown, including harvested or collected and readied for shipment to the United States. If an article of food is wild fish, including seafood that was caught or harvested outside the waters of the United States by a vessel that is not registered in the United States, the FDA Country of Production is the country in which the vessel is registered. If an article of food that is in its natural state was grown, including harvested or collected and readied for shipment, in a Territory, the FDA Country of Production is the United States. (ii) For an article of food that is no longer in its natural state, the country where the article was made; except that, if an article of food is made from wild fish, including seafood, aboard a vessel, the FDA Country of Production is the country in which the vessel is registered. If an article of food that is no longer in its natural state was made in a Territory, the FDA Country of Production is the United States. (5) Food has the meaning given in section 201(f) of the act, except as provided in paragraph (b)(5)(i) of this section. (i) For purposes of this subpart, food does not include: (A) Food contact substances as defined in section 409(h)(6) of the act (21 U.S.C. 348(h)(6)); or (B) Pesticides as defined in 7 U.S.C. 136(u). (ii) Examples of food include fruits, vegetables, fish, including seafood, dairy products, eggs, raw agricultural commodities for use as food or as components of food, animal feed (including pet food), food and feed ingredients, food and feed additives, dietary supplements and dietary ingredients, infant formula, beverages (including alcoholic beverages and bottled water), live food animals, bakery goods, snack foods, candy, and canned foods. (6) Full address means the facility's street name and number; suite/unit number, as appropriate; city; Province or State as appropriate; mail code as appropriate; and country. (7) Grower means a person who engages in growing and harvesting or collecting crops (including botanicals), raising animals (including fish, which includes seafood), or both. (8) International mail means foreign national mail services. International mail does not include express consignment operators or carriers or other private delivery services unless such service is operating under contract as an agent or extension of a foreign mail service. (9) Manufacturer means the last facility, as that word is defined in Sec. 1.227(b)(2), that manufactured/processed the food. A facility is considered the last facility even if the food undergoes further manufacturing/processing that consists of adding labeling or any similar activity of a de minimis nature. If the food undergoes further manufacturing/processing that exceeds an activity of a de minimis nature, then the subsequent facility that performed the additional manufacturing/processing is considered the manufacturer. (10) No longer in its natural state means that an article of food has been made from one or more ingredients or synthesized, prepared, treated, modified, or manipulated. Examples of activities that render food no longer in its natural state are cutting, peeling, trimming, washing, waxing, eviscerating, rendering, cooking, baking, freezing, cooling, pasteurizing, homogenizing, mixing, formulating, bottling, milling, grinding, extracting juice, distilling, labeling, or packaging. Crops that have been cleaned (e.g., dusted, washed), trimmed, or cooled attendant to harvest or collection or treated against pests, or polished are still in their natural state for purposes of this subpart. Whole fish headed, eviscerated, or frozen attendant to harvest are still in their natural state for purposes of this subpart. (11) Port of arrival means the water, air, or land port at which the article of food is imported or offered for import into the United States. For an article of food arriving by water or air, this is the port of unloading. For an article of food arriving by land, this is the port where the article of food first crosses the border into the United States. The port of arrival may be different than the port where consumption or warehouse entry or foreign trade zone admission documentation is presented to the U.S. Customs and Border Protection (CBP). (12) Port of entry, in section 801(m) and (l) of the act (21 U.S.C. 381(m) and (l)), means the port of entry as defined in 19 CFR 101.1. (13) Registration number means the registration number assigned to a facility by FDA under section 415 of the act (21 U.S.C. 350d) and subpart H of this part. (14) Shipper means the owner or exporter of the article of food who consigns and ships the article from a foreign country or the person who sends an article of food by international mail or express consignment operators or carriers or other private delivery service to the United States. (15) United States means the Customs territory of the United States (i.e., the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico), but not the Territories. (16) You means the person submitting the prior notice, i.e., the submitter or the transmitter, if any. Sec. 1.277 What is the scope of this subpart? (a) This subpart applies to all food for humans and other animals that is imported or offered for import into the [[Page 66404]] United States for use, storage, or distribution in the United States, including food for gifts and trade and quality assurance/quality control samples, food for transshipment through the United States to another country, food for future export, and food for use in a U.S. Foreign Trade Zone. (b) Notwithstanding paragraph (a) of this section, this subpart does not apply to: (1) Food for an individual's personal use when it is carried by or otherwise accompanies the individual when arriving in the United States; (2) Food that was made by an individual in his/her personal residence and sent by that individual as a personal gift (i.e., for nonbusiness reasons) to an individual in the United States; (3) Food that is imported then exported without leaving the port of arrival until export; (4) Meat food products that at the time of importation are subject to the exclusive jurisdiction of the U.S. Department of Agriculture (USDA) under the Federal Meat Inspection Act (21 U.S.C. 601 et seq.); (5) Poultry products that at the time of importation are subject to the exclusive jurisdiction of USDA under the Poultry Products Inspection Act (21 U.S.C. 451 et seq.); (6) Egg products that at the time of importation are subject to the exclusive jurisdiction of USDA under the Egg Products Inspection Act (21 U.S.C. 1031 et seq.); and (7) Articles of food subject to Article 27(3) of The Vienna Convention on Diplomatic Relations (1961), i.e., shipped as baggage or cargo constituting the diplomatic bag. Requirements To Submit Prior Notice of Imported Food Sec. 1.278 Who is authorized to submit prior notice? A prior notice for an article of food may be submitted by any person with knowledge of the required information. This person is the submitter. The submitter also may use another person to transmit the required information on his/her behalf. The person who transmits the information is the transmitter. The submitter and transmitter may be the same person. Sec. 1.279 When must prior notice be submitted to FDA? (a) Except as provided in paragraph (c) of this section, you must submit the prior notice to FDA and the prior notice submission must be confirmed by FDA for review as follows: (1) If the article of food is arriving by land by road, no less than 2 hours before arriving at the port of arrival; (2) If the article of food is arriving by land by rail, no less than 4 hours before arriving at the port of arrival; (3) If the article of food is arriving by air, no less than 4 hours before arriving at the port of arrival; or (4) If the article of food is arriving by water, no less than 8 hours before arriving at the port of arrival. (b) Except in the case of an article of food imported or offered for import by international mail: (1) If prior notice is submitted via Automated Broker Interface/ Automated Commercial System (ABI/ACS), you may not submit prior notice more than 30-calendar days before the anticipated date of arrival. (2) If prior notice is submitted via the FDA Prior Notice System Interface (FDA PNSI), you may not submit prior notice more than 15- calendar days before the anticipated date of arrival. (c) Notwithstanding paragraphs (a) and (b) of this section, if the article of food is arriving by international mail, you must submit the prior notice before the article of food is sent to the United States. (d) FDA will notify you that your prior notice has been confirmed for review with a reply message that contains a Prior Notice (PN) Confirmation Number. Your prior notice will be considered submitted and the prior notice time will start when FDA has confirmed your prior notice for review. (e) The PN Confirmation Number must accompany any article of food arriving by international mail. The PN Confirmation Number must appear on the Customs Declaration (e.g., CN22 or CN23 or U.S. equivalent) that accompanies the package. (f) A copy of the confirmation, including the PN Confirmation Number, must accompany any article of food that is subject to this subpart when it is carried by or otherwise accompanies an individual when arriving in the United States. The copy of the confirmation must be provided to U.S. Customs and Border Protection (CBP) or FDA upon arrival. (g) The PN Confirmation Number must accompany any article of food for which the prior notice was submitted through the FDA PNSI when the article arrives in the United States and must be provided to CBP or FDA upon arrival. Sec. 1.280 How must you submit prior notice? (a) You must submit the prior notice electronically to FDA. You must submit all prior notice information in the English language, except that an individual's name, the name of a company, and the name of a street may be submitted in a foreign language. All information, including the items listed in the previous sentence, must be submitted using the Latin (Roman) alphabet. Unless paragraph (c) of this section applies, you must submit prior notice through: (1) The U.S. Customs and Border Protection (CBP) Automated Broker Interface of the Automated Commercial System (ABI/ACS); or (2) The FDA PNSI at http://www.access.fda.gov. You must submit prior notice through the FDA Prior Notice System Interface (FDA PNSI) for articles of food imported or offered for import by international mail, and other transaction types that cannot be made through ABI/ACS. Prior notice for articles that have been refused under section 801(m)(1) of the act and under this subpart must be submitted through the FDA PNSI until such time as FDA and CBP issue a determination that ACS or its successor system can accommodate such transactions. (b) If a customhouse broker's or self-filer's system is not working or if the ABI/ACS interface is not working, prior notice must be submitted through the FDA PNSI. (c) If FDA determines that FDA PNSI or the Operational and Administration System for Import Support (OASIS) is not working, FDA will post prominent notification and instructions at http:// www.fda.gov. FDA will accept prior notice submissions in the format it deems appropriate during the system(s) outage. Sec. 1.281 What information must be in a prior notice? (a) General. For each article of food that is imported or offered for import into the United States, except by international mail, you must submit the information for the article that is required in paragraphs (a)(1) through (a)(17) of this section: (1) The name of the individual submitting the prior notice and his/ her business address, phone number, and e-mail address, and the name and address of the submitting firm, if applicable. If the business address of the individual submitting the prior notice is a registered facility, then the facility's registration number, city, and country may be provided instead of the facility's full address; (2) If different from the submitter, the name of the individual and firm, if applicable, transmitting the prior notice on behalf of the submitter and his/her business address, phone number, and e- [[Page 66405]] mail address. If the business address of the individual transmitting the prior notice is a registered facility, then the facility's registration number, city, and country may be provided instead of the facility's full address; (3) The entry type; (4) The U.S. Customs and Border Protection (CBP) entry identifier (e.g., CBP entry number or in-bond number), if available; (5) The identity of the article of food being imported or offered for import, as follows: (i) The complete FDA product code; (ii) The common or usual name or market name; (iii) The estimated quantity of food that will be shipped, described from largest container to smallest package size; and (iv) The lot or code numbers or other identifier of the food if required by the act or FDA regulations, e.g., low-acid canned foods, by Sec. 113.60(c) of this chapter; acidified foods, by Sec. 114.80(b) of this chapter; and infant formula, by Sec. 106.90 of this chapter; (6) For an article of food that is no longer in its natural state, the identity of the manufacturer, as follows: (i) The name of the manufacturer; and (ii) Either the registration number, city, and country of the manufacturer or both the full address of the manufacturer and the reason the registration number is not provided; (7) For an article of food that is in its natural state, the name and growing location address of the grower, if known. If the submitter does not know the identity of the grower or, if the article has been consolidated and the submitter does not know the identity of any of the growers, you may provide the name and address of the firm that has consolidated the articles of food from different growers or different growing locations; (8) The FDA Country of Production; (9) If the shipper is different from the manufacturer, the identity of the shipper, as follows: (i) The name of the shipper; and (ii) The full address of the shipper. If the address of the shipper is a registered facility, you also may submit the registration number of the shipper's registered facility; (10) The country from which the article is shipped; (11) Anticipated arrival information about the article of food being imported or offered for import, as follows: (i) The anticipated port of arrival; (ii) The anticipated date on which the article of food will arrive at the anticipated port of arrival; (iii) The anticipated time of that arrival; and (iv) Notwithstanding paragraphs (a)(11)(i) through (a)(11)(iii) of this section, if the article of food is arriving by express consignment operator or carrier, and neither the submitter nor transmitter is the express consignment operator or carrier, and prior notice is submitted via the FDA PNSI, the express consignment operator or carrier tracking number may be submitted in lieu of the information required in paragraphs (a)(11)(i) through (a)(11)(iii) of this section. Until such time as FDA and CBP issue a determination that ACS or its successor system can accommodate such transactions, the tracking number may not be submitted in lieu of information required in paragraphs (a)(11)(i) through (a)(11)(iii) of this section, if the prior notice is submitted via ABI/ACS. (12) The name and full address of the importer. If the business address of the importer is a registered facility, you also may submit the registration number of the importer's registered facility. The identity of the importer is not required for an article of food that is imported or offered for import for transshipment through the United States under a Transportation and Exportation entry; (13) The name and full address of the owner if different from the importer or ultimate consignee. If the business address of the owner is a registered facility, you also may submit the registration number of the owner's registered facility. The identity of the owner is not required for an article of food that is imported or offered for import for transshipment through the United States under a Transportation and Exportation entry; (14) The name and full address of the ultimate consignee. If the business address of the ultimate consignee is a registered facility, you also may submit the registration number of the ultimate consignee's registered facility. The identity of the ultimate consignee is not required for an article of food that is imported or offered for import for transshipment through the United States under a Transportation and Exportation entry; (15) The mode of transportation; (16) The Standard Carrier Abbreviation Code (SCAC) or International Air Transportation Association (IATA) code of the carrier which is, or will be, carrying the article of food from the country from which the article is shipped to the United States to the port of arrival, or if this code is not applicable, then the name of the carrier. If the carrier is a privately owned vehicle, the license plate number of the vehicle and the State or Province that issued the license plate number; (17) Planned shipment information, as applicable to the mode of transportation and when it exists: (i) The Airway Bill number(s) or Bill of Lading number(s), as applicable. This information is not required for an article of food when carried by or otherwise accompanying an individual when entering the United States. If the article of food is arriving by express consignment operator or carrier, and neither the submitter nor transmitter is the express consignment operator or carrier, and the prior notice is submitted via the FDA PNSI, the express consignment operator or carrier tracking number may be submitted in lieu of the Airway Bill number(s) or Bill of Lading number(s), as applicable. Until such time as FDA and CBP issue a determination that ACS or its successor system can accommodate such transactions, the tracking number may not be submitted in lieu of the Airway Bill number(s) or Bill of Lading number(s), if the prior notice is submitted via ABI/ACS; (ii) For food arriving by ocean vessel, the vessel name and voyage number; (iii) For food arriving by air carrier, the flight number. If the article of food is arriving by express consignment operator or carrier, and neither the submitter nor transmitter is the express consignment operator or carrier, and the prior notice is submitted via the FDA PNSI, the express consignment operator or carrier tracking number may be submitted in lieu of the flight number. Until such time as FDA and CBP issue a determination that ACS or its successor system can accommodate such transactions, the tracking number may not be submitted in lieu of the flight number, if the prior notice is submitted via ABI/ ACS; (iv) For food arriving by truck, bus, or rail, the trip number; (v) For food arriving as containerized cargo by water, air, or land, the container number(s). This information is not required for an article of food when carried by or otherwise accompanying an individual when entering the United States; and (vi) For food arriving by rail, the car number. This information is not required for an article of food when carried by or otherwise accompanying an individual. (b) Articles arriving by international mail. For each article of food that is imported or offered for import into the United States by international mail, you must submit the information for the article that is required in paragraphs (b)(1) through (b)(11) of this section: (1) The name of the individual submitting the prior notice and his/ her [[Page 66406]] business address, phone number, and e-mail address, and the name and address of the submitting firm, if applicable. If the business address of the individual submitting the prior notice is a registered facility, then the facility's registration number, city, and country may be provided instead of the facility's full address; (2) If different from the submitter, the name of the individual and firm, if applicable, transmitting the prior notice on behalf of the submitter and his/her business address, phone number, and e-mail address. If the business address of the individual transmitting the prior notice is a registered facility, then the facility's registration number, city, and country may be provided instead of the facility's full address; (3) The entry type (which will be a mail entry); (4) The identity of the article of food being imported or offered for import, as follows: (i) The complete FDA product code; (ii) The common or usual name or market name; (iii) The estimated quantity of food that will be shipped, described from largest container to smallest package size; and (iv) The lot or code numbers or other identifier of the food if required by the act or FDA regulations, e.g., low-acid canned foods, by Sec. 113.60(c) of this chapter; acidified foods, by Sec. 114.80(b) of this chapter; and infant formula, Sec. 106.90 of this chapter; (5) For an article of food that is no longer in its natural state, the identity of the manufacturer, as follows: (i) The name of the manufacturer; and (ii) Either the registration number, city, and country of the manufacturer or both the full address of the manufacturer and the reason the registration number is not provided; (6) For an article of food that is in its natural state, the name and growing location address of the grower, if known. If the submitter does not know the identity of the grower or, if the article has been consolidated and the submitter does not know the identity of any of the growers, you may provide the name and address of the firm that has consolidated the articles of food from different growers or different growing locations; (7) The FDA Country of Production; (8) If the shipper is different from the manufacturer, the identity of the shipper, as follows: (i) The name of the shipper; and (ii) The full address of the shipper. If the address of the shipper is a registered facility, you also may submit the registration number of the shipper's registered facility; (9) The country from which the article is shipped (i.e., mailed); (10) The anticipated date of mailing; and (11) The name and address of the U.S. recipient. (c) Refused articles. If the article of food has been refused under section 801(m)(1) of the act and under this subpart, you must submit the information for the article that is required in paragraphs (c)(1) through (c)(18) of this section. However, if the refusal is based on Sec. 1.283(a)(1)(iii) (Untimely Prior Notice), you do not have to resubmit any information previously submitted unless it has changed or the article has been exported and the original prior notice was submitted through ABI/ACS. If the refusal is based on Sec. 1.283(a)(1)(ii), you should cancel the previous submission per Sec. 1.282(b) and (c). (1) The name of the individual submitting the prior notice and his/ her business address, phone number, and e-mail address, and the name and address of the submitting firm, if applicable. If the business address of the individual submitting the prior notice is a registered facility, then the facility's registration number, city, and country may be provided instead of the facility's full address; (2) If different from the submitter, the name of the individual and firm, if applicable, transmitting the prior notice on behalf of the submitter and his/her business address, phone number, and e-mail address. If the business address of the individual transmitting the prior notice is a registered facility, then the facility's registration number, city, and country may be provided instead of the facility's full address; (3) The entry type; (4) The CBP entry identifier (e.g., CBP entry number or in-bond number), if available; (5) The identity of the article of food being imported or offered for import, as follows: (i) The complete FDA product code; (ii) The common or usual name or market name; (iii) The quantity of food that was shipped, described from largest container to smallest package size; and (iv) The lot or code numbers or other identifier of the food if required by the act or FDA regulations, e.g., low-acid canned foods, by Sec. 113.60(c) of this chapter; acidified foods, by Sec. 114.80(b) of this chapter; and infant formula, by Sec. 106.90 of this chapter; (6) For an article of food that is no longer in its natural state, the identity of the manufacturer, as follows: (i) The name of the manufacturer; and (ii) Either the registration number, city, and country of the manufacturer or both the full address of the manufacturer and the reason the registration number is not provided; (7) For an article of food that is in its natural state, the name and growing location address of the grower, if known. If the submitter does not know the identity of the grower or, if the article has been consolidated and the submitter does not know any of the growers, you may provide the name and address of the firm that has consolidated the articles of food from different growers or different growing locations; (8) The FDA Country of Production; (9) If the shipper is different from the manufacturer, the identity of the shipper, as follows: (i) The name of the shipper; and (ii) The full address of the shipper. If the address of the shipper is a registered facility, you also may submit the registration number of the shipper's registered facility; (10) The country from which the article is shipped; (11) Arrival information about the article of food being imported or offered for import, as follows: (i) The port of arrival; and (ii) The date on which the article of food arrived at the port of arrival. (iii) Notwithstanding paragraph (c)(11) of this section, if the article of food arrived by express consignment operator or carrier, and neither the submitter nor transmitter is the express consignment operator or carrier, and the prior notice is submitted via the FDA PNSI, the express consignment operator or carrier tracking number may be submitted in lieu of the information required in paragraph (c)(11) of this section. Until such time as FDA and CBP issue a determination that ACS or its successor system can accommodate such transactions, the tracking number may not be submitted in lieu of information required in paragraph (c)(11) of this section, if the prior notice is submitted via ABI/ACS; (12) The name and full address of the importer. If the business address of the importer is a registered facility, you also may submit the registration number of the importer's registered facility. The identity of the importer is not required for an article of food that is imported or offered for import for transshipment through the United States under a Transportation and Exportation entry; (13) The name and full address of the owner, if different from the importer or [[Page 66407]] ultimate consignee. If the business address of the owner is a registered facility, you also may submit the registration number of the importer's registered facility. The identity of the owner is not required for an article of food that is imported or offered for import for transshipment through the United States under a Transportation and Exportation entry; (14) The name and full address of the ultimate consignee. If the business address of the ultimate consignee is a registered facility, you also may submit the registration number of the ultimate consignee's registered facility. The identity of the ultimate consignee is not required for an article of food that is imported or offered for import for transshipment through the United States under a Transportation and Exportation entry; (15) The mode of transportation; (16) The SCAC or IATA code of the carrier which carried the article of food from the country from which the article is shipped to the United States to the port of arrival, or if this code is not applicable, then the name of the carrier. If the carrier is a privately owned vehicle, the license plate number of the vehicle and the State or Province that issued the license plate number; (17) Shipment information, as applicable to the mode of transportation and when it exists: (i) The Airway Bill number(s) or Bill of Lading number(s), as applicable; however, this information is not required for an article of food when carried by or otherwise accompanying an individual when entering the United States. If the article of food arrived by express consignment operator or carrier, and neither the submitter nor transmitter is the express consignment operator or carrier, and the prior notice is submitted via the FDA PNSI, the express consignment operator or carrier tracking number may be submitted in lieu of the Airway Bill number(s) or Bill of Lading number(s), as applicable. Until such time as FDA and CBP issue a determination that ACS or its successor system can accommodate such transactions, the tracking number may not be submitted in lieu of the Airway Bill number(s) or Bill of Lading number(s), if the prior notice is submitted via ABI/ACS; (ii) For food that arrived by ocean vessel, the vessel name and voyage number; (iii) For food that arrived by air carrier, the flight number. If the article of food arrived by express consignment operator or carrier, and neither the submitter nor transmitter is the express consignment operator or carrier, and the prior notice is submitted via the FDA PNSI, the express consignment operator or carrier tracking number may be submitted in lieu of the flight number. Until such time as FDA and CBP issue a determination that ACS or its successor system can accommodate such transactions, the tracking number may not be submitted in lieu of the flight number, if the prior notice is submitted via ABI/ ACS; (iv) For food that arrived by truck, bus, or rail, the trip number; (v) For food that arrived as containerized cargo by water, air, or land, the container number(s); however, this information is not required for an article of food when carried by or otherwise accompanying an individual when entering the United States; and (vi) For food that arrived by rail, the car number; however, this information is not required for an article of food when carried by or otherwise accompanying an individual; (18) The location and address where the article of refused food will be or is being held, the date the article has arrived or will arrive at that location, and identification of a contact at that location. Sec. 1.282 What must you do if information changes after you have received confirmation of a prior notice from FDA? (a)(1) If any of the information required in Sec. 1.281(a), except the information required in: (i) Section 1.281(a)(5)(iii) (quantity), (ii) Section 1.281(a)(11) (anticipated arrival information), or (iii) Section 1.281(a)(17) (planned shipment information), changes after you receive notice that FDA has confirmed your prior notice submission for review, you must resubmit prior notice in accordance with this subpart unless the article of food will not be offered for import or imported into the United States. (2) If any of the information required in Sec. 1.281(b), except the information required in Sec. 1.281(b)(10) (the anticipated date of mailing), changes after you receive notice that FDA has confirmed your prior notice submission for review, you must resubmit prior notice in accordance with this subpart, unless the article of food will not be offered for import or imported into the United States. (b) If you submitted the prior notice via the FDA PNSI, you should cancel the prior notice via the FDA PNSI. (c) If you submitted the prior notice via ABI/ACS, you should cancel the prior notice via ACS by requesting that CBP cancel the entry. Consequences Sec. 1.283 What happens to food that is imported or offered for import without adequate prior notice? (a) For each article of food that is imported or offered for import into the United States, except for food arriving by international mail or food carried by or otherwise accompanying an individual, the consequences are: (1) Inadequate prior notice--(i) No prior notice. If an article of food arrives at the port of arrival and no prior notice has been submitted and confirmed by FDA for review, the food is subject to refusal of admission under section 801(m)(1) of the act (21 U.S.C. 381(m)(1)). If an article of food is refused for lack of prior notice, unless U.S. Customs and Border Protection (CBP) concurrence is obtained for export and the article is immediately exported from the port of arrival under CBP supervision, it must be held within the port of entry for the article unless directed by CBP or FDA. (ii) Inaccurate prior notice. If prior notice has been submitted and confirmed by FDA for review, but upon review of the notice or examination of the article of food, the notice is determined to be inaccurate, the food is subject to refusal of admission under section 801(m)(1) of the act. If the article of food is refused due to inaccurate prior notice, unless CBP concurrence is obtained for export and the article is immediately exported from the port of arrival under CBP supervision, it must be held within the port of entry for the article unless directed by CBP or FDA. (iii) Untimely prior notice. If prior notice has been submitted and confirmed by FDA for review, but the full time that applies under Sec. 1.279 for prior notice has not elapsed when the article of food arrives, the food is subject to refusal of admission under section 801(m)(1) of the act, unless FDA has already reviewed the prior notice, determined its response to the prior notice, and advised CBP of that response. If the article of food is refused due to untimely prior notice, unless CBP concurrence is obtained for export and the article is immediately exported from the port of arrival under CBP supervision, it must be held within the port of entry for the article unless directed by CBP or FDA. (2) Status and movement of refused food. (i) An article of food that has been refused under section 801(m)(1) of the act and paragraph (a) of this section shall be considered general order merchandise as described in section 490 of the Tariff Act of 1930, as amended (19 U.S.C. 1490). [[Page 66408]] (ii) Refused food must be moved under appropriate custodial bond unless immediately exported under CBP supervision. If the food is to be held at the port, FDA must be notified of the location where the food is held at that port before the food is moved there. If the food is to be held at a secure facility outside the port, FDA must be notified of the location of the secure facility before the food is moved there. The refused food shall not be entered and shall not be delivered to any importer, owner, or ultimate consignee. If the food is to be held at a secure facility outside a port, the food must be taken directly to that secure facility. (3) Segregation of refused foods. If an article of food that is refused is part of a shipment that contains articles of food that have not been placed under hold or other merchandise not subject to this subpart, the refused article of food may be segregated from the rest of the shipment. This segregation must take place where the article is held. FDA or CBP may supervise segregation. If FDA or CBP determines that supervision is necessary, segregation must not take place without supervision. (4) Costs. Neither FDA nor CBP are liable for transportation, storage, or other expenses resulting from refusal. (5) Export after refusal. An article of food that has been refused under paragraph (a) of this section may be exported with CBP concurrence and under CBP supervision unless it is seized or administratively detained by FDA or CBP under other authority. If an article of food that has been refused admission under paragraph (a) of this section is exported, the prior notice should be cancelled within 5-business days of exportation. (6) No post-refusal submission or request for review. If an article of food is refused under section 801(m)(1) of the act and no prior notice is submitted or resubmitted, no request for FDA review is submitted in accordance with paragraph (d) of this section, or export has not occurred in accordance with paragraph (a)(5) of this section, the article of food shall be dealt with as set forth in CBP regulations relating to general order merchandise (19 CFR part 127), except that, unless otherwise agreed to by CBP and FDA, the article may only be sold for export or destroyed. (b) Food carried by or otherwise accompanying an individual. If food carried by or otherwise accompanying an individual arriving in the United States is not for personal use and does not have adequate prior notice or the individual cannot provide FDA or CBP with a copy of the prior notice (PN) confirmation, the food is subject to refusal of admission under section 801(m)(1) of the act. If before leaving the port, the individual does not arrange to have the food held at the port or exported, FDA or CBP may destroy the article of food. (c) Post-Refusal prior notice submissions. (1) If an article of food is refused under paragraph (a)(1)(i) of this section (no prior notice) and the food is not exported, prior notice must be submitted in accordance with Sec. Sec. 1.280 and 1.281(c). (2) If an article of food is refused under paragraph (a)(1)(ii) of this section (inaccurate prior notice) and the food is not exported, the prior notice should be canceled in accordance with Sec. 1.282 and you must resubmit prior notice in accordance with Sec. Sec. 1.280 and 1.281(c). (3) Once the prior notice has been submitted or resubmitted and confirmed by FDA for review, FDA will endeavor to review and respond to the prior notice submission within the timeframes set out in Sec. 1.279. (d) FDA review after refusal. (1) If an article of food has been refused admission under section 801(m)(1) of the act, a request may be submitted asking FDA to review whether the article is subject to the requirements of this subpart under Sec. 1.277, or whether the information submitted in a prior notice is complete and accurate. A request for review may not be used to submit prior notice or to resubmit an inaccurate prior notice. (2) A request may be submitted only by the carrier, submitter, importer, owner, or ultimate consignee. A request must identify which one the requester is. (3) A request must be submitted in writing to FDA and delivered by fax or e-mail. The location for receipt of a request is listed at http://www.fda.gov_see Prior Notice. A request must include all factual and legal information necessary for FDA to conduct its review. Only one request for review may be submitted for each refused article. (4) The request must be submitted within 5-calendar days of the refusal. FDA will review and respond within 5-calendar days of receiving the request. (5) If FDA determines that the article is not subject to the requirements of this subpart under Sec. 1.277 or that the prior notice submission is complete and accurate, it will notify the requester, the transmitter, and CBP that the food is no longer subject to refusal under section 801(m)(1) of the act. (e) International mail. If an article of food arrives by international mail with inadequate prior notice or the PN confirmation number is not affixed as required, the parcel will be held by CBP for 72 hours for FDA inspection and disposition. If FDA refuses the article under section 801(m)(1) of the act and there is a return address, the parcel may be returned to sender marked ``No Prior Notice--FDA Refused.'' If the article is refused and there is no return address or FDA determines that the article of food in the parcel appears to present a hazard, FDA may dispose of or destroy the parcel at its expense. If FDA does not respond within 72 hours of the CBP hold, CBP may return the parcel to the sender or, if there is no return address, destroy the parcel, at FDA expense. (f) Prohibitions on delivery and transfer. (1) Notwithstanding section 801(b) of the act, an article of food refused under section 801(m)(1) of the act may not be delivered to the importer, owner, or ultimate consignee until prior notice is submitted to FDA in accordance with this subpart, FDA has examined the prior notice, FDA has determined that the prior notice is adequate, and FDA has notified CBP and the transmitter that the article of food is no longer refused admission under section 801(m)(1) of the act. (2) During the time an article of food that has been refused under section 801(m)(1) of the act is held, the article may not be transferred by any person from the port or other designated secure facility until prior notice is submitted to FDA in accordance with this subpart, FDA has examined the prior notice, FDA has determined that the prior notice is adequate, and FDA has notified CBP and the transmitter that the article of food no longer is refused admission under section 801(m)(1) of the act. After this notification by FDA to CBP and transmitter, entry may be made in accordance with law and regulation. (g) Relationship to other admissibility decisions. A determination that an article of food is no longer refused under section 801(m)(1) of the act is different than, and may come before, determinations of admissibility under other provisions of the act or other U.S. laws. A determination that an article of food is no longer refused under section 801(m)(1) of the act does not mean that it will be granted admission under other provisions of the act or other U.S. laws. Sec. 1.284 What are the other consequences of failing to submit adequate prior notice or otherwise failing to comply with this subpart? (a) The importing or offering for import into the United States of an article of food in violation of the requirements of section 801(m) of the act, including the requirements of this subpart, is a prohibited act under [[Page 66409]] section 301(ee) of the act (21 U.S.C. 331(ee)). (b) Section 301 of the act prohibits the doing of certain acts or causing such acts to be done. (1) Under section 302 of the act (21 U.S.C. 332), the United States can bring a civil action in Federal court to enjoin persons who commit a prohibited act. (2) Under sections 301 and 303 of the act (21 U.S.C. 331 and 333), the United States can bring a criminal action in Federal court to prosecute persons who are responsible for the commission of a prohibited act. (c) Under section 306 of the act (21 U.S.C. 335a), FDA can seek debarment of any person who has been convicted of a felony relating to importation of food into the United States or any person who has engaged in a pattern of importing or offering for import adulterated food that presents a threat of serious adverse health consequences or death to humans or animals. Sec. 1.285 What happens to food that is imported or offered for import from unregistered facilities that are required to register under subpart H of this part? (a) Consequences. If an article of food from a foreign facility that is not registered as required under section 415 of the act (21 U.S.C. 350d) and subpart H of this part is imported or offered for import into the United States, the food is subject to being held under section 801(l) of the act (21 U.S.C. 381(l)). (b) Hold. Unless CBP concurrence is obtained for export and the article is immediately exported from the port of arrival, if an article of food has been placed under hold under section 801(l) of the act, it must be held within the port of entry for the article unless directed by CBP or FDA. (c) Status and movement of held food. (1) An article of food that has been placed under hold under section 801(l) of the act shall be considered general order merchandise as described in section 490 of the Tariff Act of 1930, as amended (19 U.S.C. 1490). (2) Food under hold under section 801(l) of the act must be moved under appropriate custodial bond unless immediately exported under CBP supervision. If the food is to be held at the port, FDA must be notified of the location where the food is held at the port before the food is moved there. If the food is to be held at a secure facility outside the port, FDA must be notified of the location of the secure facility before the food is moved there. The food subject to hold shall not be entered and shall not be delivered to any importer, owner, or ultimate consignee. If the food is to be held at a secure facility outside a port, the food must be taken directly to that secure facility. (d) Segregation of held foods. If an article of food that has been placed under hold under section 801(l) of the act is part of a shipment that contains articles that have not been placed under hold, the food under hold may be segregated from the rest of the shipment. This segregation must take place where the article is held. FDA or CBP may supervise segregation. If FDA or CBP determine that supervision is necessary, segregation must not take place without supervision. (e) Costs. Neither FDA nor CBP will be liable for transportation, storage, or other expenses resulting from any hold. (f) Export after hold. An article of food that has been placed under hold under section 801(l) of the act may be exported with CBP concurrence and under CBP supervision unless it is seized or administratively detained by FDA or CBP under other authority. (g) No registration or request for review. If an article of food is placed under hold under section 801(l) of the act and no registration number or request for FDA review is submitted in accordance with paragraph (j) of this section or export has not occurred in accordance with paragraph (f) of this section, the food shall be dealt with as set forth in CBP regulations relating to general order merchandise, except that, unless otherwise agreed to by CBP and FDA, the article may only be sold for export or destroyed. (h) Food carried by or otherwise accompanying an individual. If an article of food carried by or otherwise accompanying an individual arriving in the United States is not for personal use and is placed under hold under section 801(l) of the act because it is from a foreign facility that is not registered as required under section 415 of the act and subpart H of this part, the individual may arrange to have the food held at the port or exported. If such arrangements cannot be made, the article of food may be destroyed. (i) Post-hold submissions. (1) To resolve a hold, if an article of food is held under paragraph (b) of this section because it is from a foreign facility that is not registered, the facility must be registered and a registration number must be obtained. (2) The FDA Prior Notice Center must be notified of the applicable registration number in writing. The notification must provide the name and contact information for the person submitting the information. The notification may be delivered to FDA by fax or e-mail. The contact information for these delivery methods is listed at http:// www.fda.gov_see Prior Notice. The notification should include the applicable CBP entry identifier. (3) If FDA determines that the article is no longer subject to hold, it will notify the person who provided the registration information and CBP that the food is no longer subject to hold under section 801(l) of the act. (j) FDA review after hold. (1) If an article of food has been placed under hold under section 801(l) of the act, a request may be submitted asking FDA to review whether the facility associated with the article is subject to the requirements of section 415 of the act. A request for review may not be submitted to obtain a registration number. (2) A request may be submitted only by the carrier, submitter, importer, owner, or ultimate consignee of the article. A request must identify which one the requestor is. (3) A request must be submitted in writing to FDA and delivered by fax or e-mail. The location for receipt of a request is listed at http://www.fda.gov_see Prior Notice. A request must include all factual and legal information necessary for FDA to conduct its review. Only one request for review may be submitted for each article under hold. (4) The request must be submitted within 5-calendar days of the hold. FDA will review and respond within 5-calendar days of receiving the request. (5) If FDA determines that the article is not from a facility subject to the requirements of section 415 of the act, it will notify the requestor and CBP that the food is no longer subject to hold under section 801(l) of the act. (k) International mail. If an article of food that arrives by international mail is from a foreign facility that is not registered as required under section 415 of the act and subpart H of this part, the parcel will be held by CBP for 72 hours for FDA inspection and disposition. If the article is placed under hold under section 801(l) of the act and there is a return address, the parcel may be returned to sender marked ``No Registration--No Admission Permitted.'' If the article is under hold and there is no return address or FDA determines that the article of food in the parcel appears to present a hazard, FDA may dispose of or destroy the parcel at its expense. If FDA does not respond within 72 hours of the CBP hold, CBP may return the parcel to the sender marked ``No Registration--No Admission Permitted'' or, if there is no return address, destroy the parcel, at FDA expense. (l) Prohibitions on delivery and transfer. Notwithstanding section 801(b) [[Page 66410]] of the act, while an article of food is under hold under section 801(l) of the act, it may not be delivered to the importer, owner, or ultimate consignee. If an article of food is no longer subject to hold under section 801(l) of the act, entry may be made in accordance with law and regulation. (m) Relationship to other admissibility provisions. A determination that an article of food is no longer subject to hold under section 801(l) of the act is different than, and may come before, determinations of admissibility under other provisions of the act or other U.S. laws. A determination that an article of food is no longer under hold under section 801(l) of the act does not mean that it will be granted admission under other provisions of the act or other U.S. laws. Dated: October 29, 2008. Michael Chertoff, Secretary of Homeland Security. Dated: July 1, 2008. Michael O. Leavitt, Secretary of Health and Human Services. [FR Doc. E8-26282 Filed 10-31-08; 11:15 am] BILLING CODE 4160-01-S
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Prior Notice Final Rule
Prior Notice of Imported Food Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002; Draft Compliance Policy Guide; ``Sec. 110.310 Prior Notice of Imported Food Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002
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