The U.S. Food and Drug Administration (FDA) is in the process of implementing sweeping new regulations governing the production of both domestic and imported food products. Many foreign food producers will be at a disadvantage in accessing the U.S. market unless they take active steps to become compliant with these new food safety standards.
The FDA has issued proposed regulations that will allow the agency to implement significant portions of the Food Safety Modernization Act (FSMA), which was signed into law on January 4, 2011. The legislation has the twin goals of modernizing the FDA's oversight of food safety and minimizing future outbreaks of foodborne illness from imported and domestic food. FSMA was created to allow the FDA to play a proactive role in food safety rather than the reactive role required under pre-existing laws.
Background on the Proposed Regulations
The proposed regulations build on existing voluntary industry guidelines for food safety, many of which are followed by U.S. growers and processors but may not currently be followed by producers outside of the United States. As a result, while the new regulations will apply equally to U.S. parties and foreign parties, many U.S. parties will already be in substantial compliance with the regulations due to their previous adoption of voluntary U.S. industry guidelines or customary practices.1
The proposed regulations were published in the Federal Register on January 16, 2013, with an original deadline for submission of comments 120 days later, on May 16, 2013. Given the high level of interest in and the importance of this rulemaking, that deadline was extended by another 120 days, to September 16, 2013. Upon receipt of these comments, the FDA will consider them and then may revise the proposed regulations in response. It is expected that the final regulations will be issued sometime in 2014.2
Even though final implementation is many months away, the overall structure of the regulations is unlikely to change. Foreign food producers are advised to keep a close watch on these regulatory developments and plan for how they will implement the new standards.
Produce Safety Regulations for Farms
The first set of regulations — the "Produce Safety" regulations — establish minimum standards for the growing, harvesting and packing of fruits and vegetables grown on farms for human consumption.3 The standards target identified routes of microbial contamination of produce. Such contamination occurs when biological hazards, such as E. coli or salmonella, are introduced into the food supply by contact with fruits and vegetables. The new standards apply to all fruits and vegetables grown on farms except: (a) those produced for personal consumption; (b) those rarely consumed raw; and (c) those destined for commercial processing.
The Produce Safety regulations focus on each of the following routes of potential microbial contamination in the agricultural setting:
agricultural water (requirements for annual inspection of water system components and period analytical testing)
biological soil amendments (to include storage and use of products of animal origin, such as composted manure)
health and hygiene (requirements for training of farm personnel in hygienic practices)
domesticated and wild animals (to include treatment of grazing animals as well as wild animal intrusion into farm premises)
equipment, tools and buildings (use of sanitary practices regarding such equipment)
Under certain circumstances, exemptions will be available to farms whose overall sales per year are $500,000 or less for the preceding three-year period.4 Farms with sales of less than $25,000 per year are completely exempt from the regulations. There is also a provision for foreign governments to seek variances from provisions of these regulations due to local growing conditions. Farms will have at least two years (and in some cases longer) after the effective date of the issuance of the final regulations to come into compliance with these regulations.
Preventive Controls Regulations for Processed Foods
The second set of regulations — the "Preventive Controls" regulations — apply to food manufactured and/or processed for human consumption.5 These regulations require any domestic or foreign facility that processes food to adopt a significant written compliance plan, known as a Food Safety Plan. Such a Plan will identify hazards, specify procedures to minimize or prevent those hazards and provide for remediation in the event that a problem occurs.
Specifically, each covered facility will have to implement a plan to include the following elements:
hazard analysis (identifies known or reasonably foreseeable hazards for each product such as those introduced by any biological, chemical, physical or radiological agent which are reasonably likely to cause illness or injury)
risk-based Preventive Controls (to include process controls, food allergen controls, sanitation controls and a recall plan)
monitoring procedures (to be conducted periodically and recorded)
corrective actions procedures (to allow for prompt correction of any problem and systemic correction)
verification (to include periodic validation and full reassessment of the Plan at least every three years)
recordkeeping (to include the Plan, hazard analysis, and evidence of monitoring and corrective actions taken)
The proposed regulation would essentially require adoption of the Hazard Analysis and Critical Control Points (HAACP) systems that are already used in the juice and seafood industries. Plans will be site-specific and will need to be tailored to each covered entity. They will need to be prepared by persons known as "qualified individuals" who will also audit them from time to time to ensure effectiveness over the time of the Plan. "Qualified individuals" will be those persons who have completed certain training or are otherwise qualified through job experience to develop this type of system.
The regulations also serve to revise the existing Current Good Manufacturing Practice (CGMP) regulations found in 21 CFR Part 110. The new Preventive Control requirements and the modified CGMP regulations will be placed in a new Part 117.
Various exemptions will apply as follows. Food producers currently subject to: (a) HAACP procedures (that is, all seafood and juice producers), or (b) the Low-Acid Canned Food (LACF) regulations are exempt from the new regulations, but these producers must still comply with HAACP or LACF regulations, respectively, as well as the CGMP regulations. Dietary supplements are also exempt as long as they are produced in compliance with the dietary supplements CGMPs. Exemptions also apply to facilities with food sales that are less than $500,000 per year for the preceding three years. Food producers will have a phase-in period of one to three years (depending on the type of entity) to come into compliance with the Preventive Controls regulations.
Overall Development of Regulations under FSMA
The two sets of regulations described in this alert are the first of five sets of proposed regulations that will carry out the mandate of FSMA.6 Future regulations (to be proposed by the FDA no later than November 30, 2013) will address: (1) an importer foreign supplier verification program; (2) controls on the processing of food for consumption by animals; and (3) accreditation of third-party auditors. Of these three new sets of regulations, the new importer foreign supplier verification program will be of particular relevance for foreign exporters because it will likely require food exporters to provide certain certifications about compliance with the produce safety regulations and the Preventive Controls regulations to any U.S. importer who agrees to import and distribute a foreign food product. In fact, U.S. importers are expected to require such certifications as a condition of importing the products into the United States. Failure to provide such certifications (or submissions of false certifications) could then be a basis for termination of business relationships and could also become the basis for civil litigation over breach of contract under U.S. law. Therefore, foreign suppliers will need to implement compliance plans for these regulations and be able to certify in good faith that such programs comply with the FDA requirements.
An Increasing Burden on Importers to the U.S.
It is important to note that what the FDA is doing is not new to most members of the U.S. importer community. U.S. federal agencies that have the task of monitoring imports entering via hundreds of U.S. ports of entry are placing an increasingly large burden on importers to manage the legal compliance of their own supply chain. Examples include various supply chain security programs managed by U.S. Customs and Border Protection and import certifications required by the U.S. Consumer Product Safety Commission. The concept behind FSMA is very much in line with these programs; it places responsibility on the U.S. importer to "know its customer" (that is, the foreign exporter) and only do business with those exporters who are willing to comply with U.S. legal standards for safety.
For all of these reasons, foreign companies that export food products to the United States, either from farms or food processing facilities, should plan for the future by engaging U.S. compliance counsel to assist them in becoming educated about these regulations. The regulations are expected to be finalized in 2014, and those exporters who are already substantially in compliance with the regulations will have the best access to U.S. importers and the U.S. market.
1 It should be noted that the FDA is reaching out to foreign governments and other member of the international community through the FDA's own international offices and the USDA's Foreign Agricultural Services offices to promote these food safety standards.
2 On June 21, 2013, a federal judge in California ruled on a lawsuit brought by two consumer interest groups against the FDA. The groups argued that the FDA was not in compliance with deadlines set forth in FSMA for issuance of various regulations. The recent ruling will require the FDA to publish all proposed regulations required under FSMA by November 30, 2013 and publish all final rules by June 30, 2015. In light of this ruling, it is expected that no further extensions for comments will be granted after the September 16, 2013 date and that the rules discussed in this alert will go into effect sometime in 2014.
3 "Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption," 78 Fed. Reg. 3504 (Jan. 16, 2013).
4 This exemption would apply to farms who sell primarily (in a direct manner) to local consumers or to a local retail establishment and would still require the farms to follow certain labeling requirements.
5 "Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Human Food," 78 Fed. Reg. 3646 (Jan. 16, 2013). These provisions will apply to all foreign facilities that are already required to register with FDA under FDA's current food facility registration regulations (section 415 of the Federal Food, Drug and Cosmetics Act (FDCA)). Examples of covered facilities include food manufacturers, food processors, warehouses that store food and grain elevators. Farms where some food processing is conducted on-site would be required to follow the Preventive Control rules for the processing activities and the Produce Safety rules for the growing and harvesting activities.
6 "In addition, the FSMA amended Section 415(a)(2) of the Food, Drug and Cosmetics Act by requiring food facilities to submit registrations to FDA containing new and additional information. Renewals of existing registrations will need to contain this new information. Such registration requirements will continue in addition to the other new regulatory requirements under FSMA.