[Federal Register: June 1, 2004 (Volume 69, Number 105)]
[Proposed Rules]
[Page 30842-30845]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01jn04-16]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 30842]]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Part 1
[Docket No. 1998N-0583]
Exports; Notification and Recordkeeping Requirements
AGENCY: Food and Drug Administration, HHS.
ACTION: Advance notice of proposed rulemaking.
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SUMMARY: The Food and Drug Administration (FDA) is considering whether
to revise its regulations pertaining to export notification and
recordkeeping. FDA has received a petition for reconsideration claiming
that the agency lacks legal authority to inspect export records held by
food and cosmetic companies. The petition also claimed that the
regulations describing the types of records that should be kept to
demonstrate that an exported product does not conflict with the foreign
country's laws are overly burdensome. FDA is inviting comment on the
issues raised by the petition.
DATES: Submit written or electronic comments by August 16, 2004.
ADDRESSES: You may submit comments, identified by Docket No. 1998N-
0583, by any of the following methods:
Federal eRulemaking Portal: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.regulations.gov.
Follow the instructions for submitting comments.
Agency Web site: http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.fda.gov/dockets/ecomments.
Follow the instructions for submitting comments on the agency Web site.
E-mail: fdadockets@oc.fda.gov. Include Docket No. 1998N-
0583 in the subject line of your e-mail message.
FAX: 301-827-6870.
Mail/Hand delivery/Courier [For paper, disk, or CD-ROM
submissions]: Division of Dockets Management, 5630 Fishers Lane, rm.
1061, Rockville, MD 20852.
Instructions: All submissions received must include the agency name
and Docket No. or Regulatory Information Number (RIN) for this
rulemaking. All comments received will be posted without change to
http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.fda.gov/dockets/ecomments, including any personal
information provided. For detailed instructions on submitting comments
and additional information on the rulemaking process, see section IV of
the SUPPLEMENTARY INFORMATION section of this document.
Docket: For access to the docket to read background documents or
comments received, go to http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.fda.gov/dockets/ecomments and/or
the Division of Dockets Management, 5630 Fishers Lane, rm. 1061,
Rockville, MD 20852.
FOR FURTHER INFORMATION CONTACT: Philip L. Chao, Office of Policy and
Planning (HF-23), Food and Drug Administration, 5600 Fishers Lane,
Rockville, MD 20857, 301-827-0587.
SUPPLEMENTARY INFORMATION:
I. Introduction
In the Federal Register of December 19, 2001 (66 FR 65429), we
published a final rule to establish notification and recordkeeping
requirements for products exported under section 801(e) or 802 of the
Federal Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 381(e) or
382), as amended by the FDA Export Reform and Enhancement Act (Public
Law 104-134, as amended by Public Law 104-180).
The FDA Export Reform and Enhancement Act significantly changed and
simplified the export requirements for unapproved human drugs,
biological products, devices, and animal drugs. For example, before the
law was enacted, most exports of unapproved new drug products could
only be made to the 21 countries then identified in section 802 of the
act, and these exports were subject to numerous restrictions. The FDA
Export Reform and Enhancement Act amended section 802 of the act to
allow, among other things, the export of unapproved new human drugs to
any country in the world if the drug complies with the laws of the
importing country and has valid marketing authorization from any of the
following countries: Australia, Canada, Israel, Japan, New Zealand,
Switzerland, South Africa, and the countries in the European Union (EU)
and the European Economic Area (EEA) and certain other requirements are
met (see section 802(b)(1)(A) of the act). Currently, the EU countries
are Austria, Belgium, Cyprus, the Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia,
Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal,
Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. The EEA
countries are the EU countries, Iceland, Liechtenstein, and Norway.
(The list of countries under section 802(b)(1)(A) of the act will
expand automatically if any country accedes to the EU or becomes a
member of the EEA.) This provision of section 802 of the act also
applies to the export of certain devices that cannot be sold or
marketed in the United States.
The FDA Export Reform and Enhancement Act also established
recordkeeping and notification requirements. Section 802(g) of the act
requires an exporter of a drug or device under section 802(b)(1)(A) of
the act to provide a ``simple notification'' to the agency
``identifying the drug or device when the exporter first begins to
export such drug or device'' to any of the countries identified in
section 802(b)(1)(A). For exports to other, nonlisted countries,
section 802(g) of the act requires the exporter to provide a simple
notification ``identifying the drug or device and the country to which
such drug or device is being exported.'' This section also requires
persons exporting under any provision of section 802 of the act to
``maintain records of all drugs or devices exported and the countries
to which they were exported.''
The final rule was originally scheduled to become effective on
March 19, 2002. However, within days of the effective date, four
different parties (the law firm of Sandler, Travis and Rosenberg; the
Consumer Healthcare Products Association; INDA; and the Cosmetic,
Toiletry, and Fragrance Association) requested a 180-day stay in the
rule's effective date. In general, the parties acknowledged that they
had not submitted comments during the rulemaking process, but stated
that they did not realize the rule's applicability to their products.
Consequently, the parties claimed they needed additional time to comply
with the final rule, and they raised other questions regarding the
rule. In response, on March 18, 2002, we notified the parties that we
would stay the rule's effective date for
[[Page 30843]]
90 days, and we published a notice in the Federal Register on May 14,
2002 (67 FR 34387), announcing that the rule's new effective date was
June 19, 2002. We also issued separate letters responding to the
parties' questions on May 7, 2002.
On June 17, 2002, 2 days before the final rule was to become
effective, the law firm of Covington and Burling, on behalf of the
Grocery Manufacturers of America and the Cosmetic, Toiletry, and
Fragrance Association, submitted a petition for reconsideration and
stay of action. The petition challenged two specific provisions in the
final rule.
The first provision involved the last sentence in Sec. 1.101(b)
(21 CFR 1.101(b)), which states that export records must be made
available to FDA upon request during an inspection for review and
copying. We included such records access in the final rule because most
exports under sections 801(e)(1) and 802 of the act do not involve any
prior FDA oversight. Therefore, we depend on records access during
inspections to evaluate compliance with the export provisions. In the
preamble to the final rule, we explained that records enable a person
to show, and for us to verify, that a person has complied with its
legal obligations. Nevertheless, the firm asserted that we lack the
authority to require food or cosmetic companies to disclose records
because our inspection authority does not extend to the mandatory
examination of records maintained by food and cosmetic manufacturers,
and asked us to revoke the sentence in Sec. 1.101(b) as it pertains to
access to food and cosmetic records.
The second provision involved Sec. 1.101(b)(2) which describes the
records that could be used to demonstrate that an exported product does
not conflict with a foreign country's laws. Section 801(e)(1)(B) of the
act requires exported products to not be in conflict with ``the laws of
the country to which it is intended for export.'' In the preamble to
the proposed rule (April 2, 1999, 64 FR 15994), we stated that the
records demonstrating compliance with section 801(e)(1)(B) of the act
would normally consist of a letter from the appropriate foreign
government agency, department, or other authorized body. We received
many comments that opposed our interpretation, and so, in response to
the comments, we revised the final rule to state that the records:
may consist of either a letter from an appropriate foreign
government agency, department, or other authorized body stating that
the product has marketing approval from the foreign government or
does not conflict with that country's laws, or a notarized
certification by a responsible company official in the United States
that the product does not conflict with the laws of the importing
country and that includes a statement acknowledging that he or she
is subject to the provisions of 18 U.S.C. 1001.
The preamble to the final rule did not specify who would be a
``responsible company official in the United States,'' but it did
explain that 18 U.S.C. 1001 makes it a criminal offense to knowingly
and willfully make a false or fraudulent statement, or make or use a
false document, in any matter within the jurisdiction of a department
or agency of the United States (see 66 FR 65429 at 65436).
The petition for reconsideration, however, asserted that exporters
do not have to demonstrate compliance with foreign law; instead, it
asserted that FDA had the burden to show that the exporter violated
foreign law. The petition added that Sec. 1.101(b)(2) would, if
enforced, have ``serious practical and economic impacts on food and
cosmetic companies'' because it would ``require the preparation of tens
of thousands of affidavits just for shipping products to our neighbors
in Mexico * * * and Canada * * *, and new affidavits would be required
for every product variation and every label change'' (Ref. 1). Later,
after meeting with FDA, the petitioners stated in correspondence to the
agency that ``there can be no objection from a policy standpoint to a
general requirement that every company must have adequate documentation
in its files to support its conclusion that the product does not
violate the laws of the foreign country to which it is exported'' (Ref.
2). The firm continued to advocate eliminating ``the need for an
affidavit by a high-ranking company official,'' but suggested ``the
possibility of continuing the requirement of an affidavit in the unique
and limited situation where FDA has established a specific requirement
for a food or cosmetic in order to prevent a serious health hazard and
the product to be exported does not meet that requirement'' (id.). The
firm explained that the ``affidavit'' requirement would arise in two
instances:
The first instance would be where FDA has established a label
warning for a product. An example would be the warning for aspartame
in 21 CFR 172.804. The second instance would be where FDA has
established a specific limit on the presence of an ingredient or
substance because of substantial safety concerns. Examples would be
Compliance Policy Guides 555.300 for salmonella and 555.400 for
afflatoxin [sic] in food and the limit on mercury in cosmetics in 21
CFR 700.13. This would not, however, include the limits customarily
established in food additive, GRAS, and color additive regulations
because these are set simply at the level requested by the
manufacturer and are not because of a specific determination by FDA
that any higher limit is a serious health hazard. It also would not
apply to a food ingredient or a color ingredient which FDA has not
reviewed and therefore has taken no action. It is common industry
practice to manufacture products in the United States that contain
ingredients or levels of ingredients approved or permitted by
foreign countries but not by FDA. If affidavits were required for
all of these types of situations, it would simply drive food and
cosmetic manufacturers abroad.
Id. at pages 1-2.
In response to the petition for reconsideration, we decided to
exercise enforcement discretion regarding access to records of food and
cosmetic exporters under Sec. 1.101(b) and to exercise enforcement
discretion regarding all exporters and the requirement for specific
types of records under Sec. 1.101(b)(2) demonstrating that the
exported product is not in conflict with the foreign country's laws
(Ref. 3). We stated that affected parties must still comply with the
statutory requirements pertaining to exports, and added that we would
evaluate whether to issue an advance notice of proposed rulemaking ``to
obtain public comment on questions related to the issues raised in your
petition'' (id. at page 2).
II. Issues For Discussion
We invite comment on the following issues.
1. What is our ability to inspect export records held by food and
cosmetic firms?
The petition for reconsideration asserted that we lack legal
authority to inspect records related to food and cosmetic exports.
Given that food and cosmetic exports under section 801(e)(1) of the act
do not require any prior FDA review or even notice to FDA before a firm
exports a food or cosmetic, it could be extremely difficult for us to
determine a food or cosmetic company's compliance with the act's export
provisions if we could not inspect export records. Without access to
such records, our enforcement of section 801(e)(1) of the act would
likely depend on information submitted voluntarily to us, and it is
hard to rely on a company to provide information about itself that
would indicate a possible violation of Federal law. It also would be
unlikely that third parties would have or provide information showing
that a food or cosmetic firm failed to meet the act's export
requirements. At best, outside parties might be able to provide
information to suggest a failure to comply, but we would still need
additional information before pursuing regulatory action.
[[Page 30844]]
Additionally, if we could not inspect export records in a food or
cosmetic company, then an unscrupulous food or cosmetic firm might be
tempted to not comply with the export requirements at all because it
would know that, without access to export records, our ability to
evaluate compliance with those export requirements would be severely
limited. Noncompliance with export requirements could expose
populations in foreign countries to unsafe products.
Complicating our situation further is the fact that section
801(d)(3) of the act allows certain unapproved or otherwise
noncompliant articles to be imported into the United States as long as
those articles are further processed or incorporated into a product
that is then exported. Section 801(d)(3) of the act is commonly known
as the ``import for export'' authority in the act, and it applies to
food additives, color additives, and dietary supplements. Section
801(d)(3)(A)(iv) of the act expressly requires the initial owner or
consignee to maintain ``records on the use or destruction'' of the
imported article and to submit to the Secretary of Health and Human
Services (the Secretary) ``any such records requested by the
Secretary.'' Thus, if a food company imported a food additive under
section 801(d)(3) of the act, section 801(d)(3)(A)(iv) requires the
food company to maintain certain records, including those pertaining to
any exports involving the article, and also requires the food company
to submit ``any such records.'' Accordingly, the petitioners' request
to revoke Sec. 1.101(b), as it relates to access to food records, is
in tension with section 801(d)(3)(A)(iv) of the act.
Consequently, we seek comment on:
Our ability to access or inspect food and cosmetic export
records; and
Whether we need to provide alternative methods for
determining whether a food or cosmetic firm has complied with the act's
export requirements. For example, one might argue that a certification
should be satisfactory, but a certification would be contrary to the
petitioners' claim that ``affidavits'' are burdensome.
2. What records should an exporter have to show that the export
does not conflict with the foreign country's laws?
Although Sec. 1.101(b)(2) states that the records demonstrating
that the export does not conflict with the foreign country's laws
``may'' consist of either a letter from the appropriate foreign
government entity or a certification from a ``responsible company
official'' in the United States, the petitioners apparently interpret
Sec. 1.101(b)(2) as requiring the record to be either a letter from a
foreign government entity or a certification from a ``high-ranking
company official'' (Ref. 2). In other words, the petitioners appear to
interpret the word ``may'' in Sec. 1.101(b)(2) as ``must.''
Therefore, we invite comment on the following issues:
Should FDA amend the rule?
Does the word ``may'' provide sufficient flexibility to
give affected parties the ability to keep whatever records they wish to
demonstrate that the export does not conflict with the foreign
country's laws?
Given that the petitioners focused on the certification,
would a clarification that the ``responsible company official'' does
not necessarily mean a ``high-ranking company official'' be sufficient?
For example, if a company's regulatory affairs director determined that
the export did not conflict with the foreign country's laws, the
regulatory affairs director could provide the certification (unless
company policy dictated a different result). We do not necessarily
equate ``responsible'' with ``high-ranking.''
What are the advantages and disadvantages in the
petitioners' suggestion of a certification in some, but not all, food
export situations? The petitioners identified two scenarios in which
such certifications would be provided: Cases where FDA has established
a label warning for a product and cases where FDA has established a
specific limit on the presence of an ingredient or substance because of
substantial safety concerns. The petitioners' suggestion thus depends
on the existence of a regulation that imposes a label warning or that
limits an ingredient's or substance's use due to ``substantial safety
concerns.'' However, the petitioners' suggestion would exclude
customary limits established in food additive, generally recognized as
safe, and color additive regulations, so few food exports would need a
certification. While the petitioners' suggestion would free most food
exports from the certification provision, we are concerned that it
might not provide sufficient guidance on what records would be
acceptable to show that the export did not conflict with the foreign
country's laws. Moreover, when coupled with the petitioners' assertion
that we have no authority to inspect food records, could the
petitioners' position eliminate our ability to determine whether a food
export complied with a foreign country's laws?
Is there another alternative that would be simple and
reliable? Ideally, the alternative would meet most, if not all, of the
following conditions for a regulatory requirement:
A consistent regulatory standard for all firms affected by
or subject to the same statutory requirement. A consistent standard
would be easier for our investigators to apply and easier to implement
by firms that export more than one type of product that would be
subject to section 801(e)(1) of the act.
A record that provides a reasonable basis for the
exporter's belief that the export does not conflict with the foreign
country's laws. For example, a statement such as, ``To the best of my
knowledge, the export did not conflict with the foreign country's
laws,'' may be unreliable because the phrase, ``to the best of my
knowledge'' does not mean that the exporter knows about or even
attempted to know about the foreign country's laws. Similarly, a
statement claiming that someone in the foreign country affirmed that
the export did not conflict with the foreign country's laws may be
unreliable because the foreign citizen making the statement might not
have been qualified to determine whether the export did not conflict
with the foreign country's laws.
A record that is simple and easy to identify. We conduct
inspections to determine whether a firm complied with the appropriate
export requirements, so the inspection would be shorter and easier if
all parties could agree on the types of records that would demonstrate
compliance with a particular regulatory requirement.
A record that permits enforcement action in the United
States. When we stated that the certification had to be from a
responsible company official in the United States, the official's
physical presence in the United States would give us the ability to
pursue enforcement action against the official if the certification
proved to be false or misleading. In contrast, if the record was
created by an unknown foreign citizen in a foreign country, we might
find it difficult to take action against the foreign citizen, and our
ability to enforce the statute could be compromised.
III. References
The following references have been placed on display in the
Division of Dockets Management (see ADDRESSES) and may be seen by
interested persons between 9 a.m. and 4 p.m., Monday through Friday.
1. Petition for Reconsideration and Stay of Action, Covington
and Burling, pp. 2 and 3, June 17, 2002.
2. Letter from Peter Barton Hutt, Covington and Burling, to
Daniel E. Troy, General
[[Page 30845]]
Counsel, Food and Drug Administration, p. 1, dated July 16, 2002.
3. Letter from Margaret M. Dotzel, Associate Commissioner for
Policy, Food and Drug Adminstration, to Peter Barton Hutt, Covington
and Burling, July 22, 2002.
IV. Request For Comments
Interested persons may submit to the Division of Dockets Management
(see ADDRESSES) written or electronic comments regarding this document.
Submit a single copy of electronic comments or two paper copies of any
mailed comments, except that individuals may submit one paper copy.
Comments are to be identified with the docket number found in brackets
in the heading of this document. Received comments may be seen in the
Division of Dockets Management between 9 a.m. and 4 p.m., Monday
through Friday.
This ANPRM is issued under section 201 et al. of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 321 et al.) and under authority of
the Commissioner of Food and Drugs.
Dated: April 21, 2004.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. 04-12271 Filed 5-28-04; 8:45 am]
BILLING CODE 4160-01-S