2002N-0276 - Small Entity Compliance Guides on Registration of Food Facilities and Prior Notice of Imported Food; Availability
FDA Comment Number : EC370
Submitter : Mr. Tony Van der haegen Date & Time: 05/19/2004 08:05:12
Organization : European Commission Delegation
Other Government
Category :
Issue Areas/Comments
Comments to FDA on the interim final rules on Registration of Food Facilities Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002

Docket No. 2002N-0276

The European Commission welcomes this opportunity to provide additional comments on the implementation process associated with the Public Health Security and Bioterrorism Preparedness and Reponse Act (BTA) of 2002.

We appreciate the flexible introduction of the rules and the educational outreach effort the FDA has undertaken to prepare the international business community to comply with these rules. Our main concern, however, remains the possible distortive effects of the new rules on international trade. These effects can be fully assessed only after the system is enforced in its entirety and the long-term changes in trade patterns have become clear. The comments below are based on problems which we can identify already now.

Cost of recruiting an agent

The impact of the BTA requirements to register facilities appears to have been minimal apart from the need to appoint a U.S. agent.
According to information received so far, the basic fee for hiring a U.S. agent is between $ 175 and $ 750 per year. However, any personalised assistance can easily multiply these costs (as work is often charged by hour).

The Hindu Business Line at www.blonnet.com <http://www.blonnet.com> quoted estimates (attributed to the U.S. FDA) that the appointment of a U.S. agent would cost firms between $ 750 and $ 2,000 a year; with a total cost to businesses exporting to the U.S.A. (estimated at 205,000) of $ 320 million a year for the first year, plus $ 228 million for every year thereafter.
Queries received from smaller businesses indicate that it is difficult if not impossible for them to afford fees at the levels indicated above, and therefore they try to appoint as agent the U.S. shipping or forwarding agent being used to clear their goods into the U.S.A. However, if they do that they must use that agent for all their U.S. traffic, and this often isn't practical or even possible. The relative cost of a U.S. agent is particularly high in case of food samples that are used in trade fairs or sent to potential importers.
While no exact figures are yet available, the Commission is aware that a significant number of small businesses have ceased to export to the U.S.
Against this background, it would be appropriate to check how many times U.S. agents have been contacted to resolve a query since December 2003, and to assess whether or not the actual number of queries has justified the estimated $ 320 million annual cost to business.
As indicated on various occasions in the past, the European Commission does not see any added value in having a U.S. agent. This cost is not justified, therefore, and together with other formalities required for exporting goods to the U.S., constitutes a serious impediment to small
producers wanting to export to the U.S.

A practical and effective alternative way of dealing with any problems with food exports would be a direct contact between Customs authorities and the EU exporter, rather than the method currently used. If the EU exporter fails to respond then the goods can be returned back to the exporter, at their expense. A more general way to address these situations is co-operation with the competent authorities in the exporting country.