Guidance for Industry: Implementation of the Fee Provisions of Section 107 of the FDA Food Safety Modernization Act
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The purpose of this document is to provide guidance to industry on the implementation of the fee provisions of Section 107 of the FDA Food Safety Modernization Act of 2011 (FSMA). The guidance in this document is in the form of Questions and Answers and is intended to provide answers to common questions that might arise about the new fee provisions and FDA’s plans for their implementation in Fiscal Year 2012.
FDA's guidance documents, including this guidance, do not establish legally enforceable responsibilities. Instead, guidances describe the Agency's current thinking on a topic and should be viewed only as recommendations, unless specific regulatory or statutory requirements are cited. The use of the word should in Agency guidances means that something is suggested or recommended, but not required.
On October 1, 2011, FDA will begin implementation of the fee provisions of section 107 of FSMA. Section 107 of FSMA amended section 743 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) to provide FDA with the authority to collect fees related to food. Specifically, section 743(a)(1) of the FD&C Act provides FDA with the authority to assess and collect fees from, among others:
(1) the responsible party for each domestic facility and the US agent for each foreign facility subject to a reinspection to cover reinspection-related costs;
(2) the responsible party for a domestic facility and an importer who does not comply with a recall order issued under section 423 or 412(f) of the FD&C Act, to cover food recall activities associated with such order performed by FDA; and
(3) each importer subject to a reinspection, to cover reinspection-related costs.
In the Federal Register of August 1, 2011, FDA published a notice establishing fee rates for Fiscal Year 2012 for domestic and foreign facility reinspections, recall orders, and importer reinspections (76 FR 45820).
III. Questions and Answers on the Implementation of the Fee Provisions of Section 107 of the FDA Food Safety Modernization Act
This list of Questions and Answers is intended to provide answers to common questions that might arise about the new fee provisions and FDA’s plans for their implementation in Fiscal Year 2012.
Q: What specifically is going to happen on October 1, 2011?
A: Starting October 1, 2011, FDA will begin the process of tracking, assessing, and collecting facility reinspection fees related to domestic and foreign facilities and fees for failure to comply with recall orders. FDA intends to assess a facility reinspection fee in circumstances where the initial facility inspection begins on or after October 1, 2011. FDA intends to assess recall order fees when the recall order has been issued on or after October 1, 2011.
FDA does not intend to send out the invoices for any such fees prior to January 1, 2012.
Q: What can be expected concerning import reinspection fees?
A: The agency is still evaluating comments received in response to the August 1, 2011 Federal Register notice establishing fee rates for Fiscal Year 2012 (76 FR 45820). Recognizing the particular complexities involved in these issues, FDA is not in a position to assess import reinspection fees until the agency has resolved these issues and the agency notifies the public.
Q: What do I need to do as a business/manufacturer that may be affected by these fees?
A: While firms are not required to take any specific advance actions related to these fees, FDA recommends that all firms assess their compliance with all statutory and regulatory requirements.
Q: What triggers the facility reinspection fee?
A: This fee may be assessed if FDA conducts a reinspection to evaluate corrective actions following a previous FDA inspection of the same facility that was classified Official Action Indicated (OAI) and FDA determined the non-compliance was materially related to a food safety requirement.
Q: What triggers the fee for non-compliance with a recall order?
A: This fee may be assessed for not complying with a recall order issued by FDA under section 423 or 412(f) of the FD&C Act.
Q: How will a company know if a facility reinspection fee may be assessed?
A: Beginning October 1, 2011, FDA will distribute an information sheet during the initial inspections outlining the circumstances under which a facility reinspection fee could be collected. The firm will be informed at the time of the initial inspection that they could be assessed a fee for a reinspection, if the initial inspection is classified OAI and the violations are materially related to a food safety requirement of the FD&C Act. This fee would cover costs related to any reinspection conducted to determine if corrective actions have been implemented and compliance with the requirements found to be violated in the initial inspection has been achieved.
Q: What are some examples of “non-compliance materially related to a food safety requirement” of the FD&C Act that could warrant a facility reinspection for which fees could be assessed?
A: Most violations that would support an adulteration charge under section 402 of the FD&C Act and certain violations that support misbranding charges (e.g., under section 403(w) of the FD&C Act) could be non-compliance materially related to a food safety requirement of the FD&C Act. Specific examples of non-compliance that FDA would consider to be materially related to a food safety requirement include:
Foodborne pathogens in ready to-eat products
Pesticide residues on a food or feed product above tolerance levels
Failure to declare the presence of a major food allergen (e.g., peanuts) in product labeling
Lack of adequate hazard controls for seafood or juice
Q: How will FDA calculate the total fee assessed?
A: For Fiscal Year 2012, the hourly rate is $224 if no foreign travel is required and $325 if foreign travel is required. The total fee that is assessed will depend on the number of hours FDA spends directly on the reinspection-related activities or food recall activities associated with a recall order.
Reinspection-related activities could include conducting compliance reinspection at the facility, making preparations and arrangements for the reinspection, traveling to and from the facility, analyzing records, analyzing samples, preparing reports or examining labels, and performing other activities as necessary to determine compliance with the requirements found to be violated in the initial inspection.
Food recall activities associated with a recall order could include conducting recall audit checks, reviewing periodic status reports, analyzing the status reports and the results of the audit checks, conducting inspections, traveling to and from locations, and monitoring product disposition.
Q: How will FDA determine the number of employees sent out for a reinspection?
A: FDA makes the determination on a case-by-case basis, based on the size of the firm, number of products, number and nature of the violations observed in the initial inspection, and expected resources needed to evaluate the firm’s corrective actions and current state of compliance with the requirements found to be violated in the initial inspection.
Q: Will FDA give firms any sort of estimate of approximate costs prior to a reinspection?
A: We are not able to estimate total fees that will be assessed in a given situation. Facilities will receive a notice containing the hourly fee schedule for Fiscal Year 2012, but FDA cannot estimate the total fees until its reinspection-related activities are completed. Because the fees are based on an hourly rate, total fees assessed could depend on a number of factors, including the extent of the initial violative conditions and a firm’s ability to clearly and succinctly document and demonstrate appropriate corrective actions.
Q: Has FDA established a process for requesting a reduction of fees assessed in Fiscal Year 2012?
A: Section 107 of FSMA directed FDA to develop proposed guidelines in consideration of the burden of fee amounts on small businesses. As a first step in developing these guidelines, FDA invited public comment on the potential impact of fees established by section 107 of FSMA on small businesses (76 FR 45818, Aug. 1, 2011). The comment period for this request ends October 31, 2011. However, because FDA recognizes that for some small businesses the full cost recovery of FDA reinspection or recall oversight could impose severe economic hardship, for Fiscal Year 2012 FDA intends to consider waiving, in limited cases, some or all of a fee based on severe economic hardship, the nature and extent of the underlying violation, and other relevant factors. FDA is currently developing a guidance document to outline the process through which firms may request such a reduction of fees. FDA does not intend to issue invoices for reinspection or recall order fees until this guidance document has been finalized.
Q: How much money in fees does the Agency expect to collect?
A: Under FSMA, FDA is authorized to collect fees to cover reinspection-related costs and costs associated with a failure to comply with a recall order. Reinspection-related fees will be assessed where FDA has identified non-compliance materially related to a food safety requirement of the FD&C Act. This is a new endeavor for FDA, and similar kinds of activities in other areas that FDA regulates suggest a high degree of variability from year to year. The FD&C Act provides a general annual limitation on the collection of fees of $20 million for fees for non-compliance with recall orders and $25 million for fees for domestic and foreign facility reinspection and importer reinspection, with certain exceptions.
1.This guidance has been prepared by the Office of Foods and the Office of Regulatory Affairs at the U.S. Food and Drug Administration.
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All written comments should be identified with this document's docket number: FDA-2011-D-0721.