FDA
FDA RAMPS UP INSPECTIONS
11/01
As a result of the September terrorist
attacks, the U.S. Food and Drug Administration has announced it will
increase the depth and frequency of importer record audits and shipment
inspections. FDA also plans to dramatically increase the number of
inspectors and investigators from 165 to 365 and shift to 24 hour
operations at many major ports. Whether importers or their suppliers
will be required to create and maintain records of their security
programs remains an open question.
NEW BOND AMOUNT FOR FDA GOODS
4/01
In T.D. 0126, Customs announced revised guidelines for bonds required at
time of entry where FDA goods are imported. It confirms the three times
the value standard currently in use but also allows Customs to insist on
a bond equal to the domestic value of the goods being imported.
SHRIMP IMPORTER CONVICTED
1/00
An Atlanta federal appeals court recently
upheld the conviction of a company and two executives who were accused
of altering paperwork to avoid cargo detention by Customs and FDA. The
sentence was five (5) years probation and a $1 million fine against the
company. The sentence of the executives will be altered. Sigma
International Inc. was accused of altering its import paperwork to avoid
automatic detention of imported Indian shrimp. An FDA inspector randomly
sampled a shipment and discovered a different packer's name. Later the
FDA learned Sigma was reselling some Chinese shrimp which had been
rejected as rotten. The company was also accused of washing this shrimp
in a chlorine mixture as a means to eliminate foul odors.
FDA GETS TOUGH
10/99
Is it an isolated instance or the waive
of FDA enforcement in the future? That is the question posed by a few
recent warning letters issued by FDA to importers of goods subject to
its regulations. In those warning letters, importers were advised that
importing their goods stating FDA compliance when the goods were
non-compliant was a misrepresentation which was seen as an attempt to
circumvent the FDA rules and regulations - so far the standard warning.
In addition, however, these warning letters referred to potential
violations of the Customs rules and regulations, including both the
fraud statute (19 U.S.C. § 1592) and the corresponding criminal statute
(18 U.S.C. § 542)!
STAKES RAISED FOR
FDA VIOLATIONS
8/99
Dissatisfied with the
deterrent effect of three (3) times the value fines in stopping the
importation of products and foodstuff violating the FDA rules and
regulations, Customs is now proposing to increase the penalty for
importing such foodstuff and products to their domestic value if not
treated or disposed of as required by law! Domestic value is defined as
"the price at which such or similar property is freely offered for
sale at the time and place of appraisement, in the same quantity or
quantities as seized, and in the ordinary course of trade."
While
everyone agrees the importation of these products and foodstuffs is a
problem, a better solution would likely be to change the current FDA law
so that release of these goods to the importer pending final FDA action
is not allowed.
FDA STEPS UP
ENFORCEMENT
5/99
FDA is expected to issue guidance to field offices in the near
future to identify “high-risk” imported products which could be susceptible to
contamination, including produce, baked goods, heat-and-serve products and
infant formula. Low-acid canned and acidified foods such as vegetables,
canned tuna, sardines, pet food, salsa, pickles and sauces. Seafood will
continue to be a focus of attention, including mahi-mahi, pompano, tuna, salmon,
swordfish, grouper, snapper and uncooked molluscan shellfish. Mexican
parsley, cilantro and green onions as well as Guatemalan raspberries will also
be carefully looked at.
In the border context, FDA and Customs have
explored ways to collaborate more effectively. Field inspectors are reported to
have a goal of collecting 1,000 samples between March 1 and September 30, 1999
of broccoli, parsley, cilantro, strawberries, head lettuce, green onions and
scallions, celery, and cantaloupe. Screening is reported to focus on total
bacteria count, coliforms, E. coli, Salmonella and Shigella. To meet these
ambitious goals, FDA is shifting more personnel to the border region.
SAN DIEGO CUSTOMS OUT OF SYNC
11/97
For some time now, San Diego Customs has been seizing goods subject to FDA
approval if they move in-bond and are not FDA approved. Customs Headquarters
issued a public bulletin a few months back which referred to only unapproved
drugs as prohibited goods. What about unapproved food or medical devices? Why
only San Diego? The matter is currently under further review at Customs
Headquarters which has preliminarily indicated that goods may move in-bond even
if they are not FDA approved because an FDA Compliance Policy (which Customs is
supposedly enforcing) states unapproved goods are subject to entry (even
in-bond) determination on a case-by-case basis, rather than San Diego Customs'
blanket prohibition.
UNAPPROVED DRUGS 6/97
What started as a U.S. attempt to assist Mexico to eliminate
bogus pharmaceutical companies operating at its border has turned into a
nightmare for the U.S. companies involved. For many years, the U.S. has served
as a transit point for goods intended for Mexico but originating elsewhere.
Those goods are frequently off-loaded at U.S. ports and shipped in-bond to
Mexico. However, in order to help Mexico eliminate bogus drug dispensers,
Customs took a closer look at the entire process and concluded that unapproved
drugs may not transit the U.S. They are not approved by the Food & Drug
Admin. and so are considered prohibited merchandise. As such, they are subject
to immediate seizure. Interestingly, the seizure remedy is being enforced only
at the Port of Otay Mesa and is in contradiction to an informal FDA policy which
finds that so long as the goods are actually intended for export, FDA seemingly
waives application of its regulations.
Equally interesting, on May 29, 1997 Customs issued a reminder
to the trade that unapproved drugs are subject to seizure. However, that notice
does not mention unapproved medical or other devices (such as t.v. sets) which
are also subject to FDA approval.
FEDERAL LAW IS NOT ALWAYS SUPREME
In the recent case of Medtronic. Inc. vs. Lohr (1996), 64 USLW 4625,
56 CCH S CT BULL B2857, a Florida manufacturer was sued by a recipient of one of
its pacemakers. The patient alleged design,manufacturing and labeling defects.
The manufacturer argued that the federal Medical Device Amendments of 1976, 21
USC §360e, preempted state action. The U.S. Supreme Court ruled that state law
did indeed govern in certain instances, in part because FDA determinations
regarding the pacemakers dealt with their substantial equivalency with other
products on the market and not with their safety, i.e., the FDA process is not
designed to address public safety but rather to maintain the status quo
regarding existing medical devices.
In a matter related only because it also involved FDA activity, the U.S.
Court of Appeals for the Western (Ninth) District recently upheld a seizure by
the FDA of allegedly adulterated drugs. The veterinary drug manufacturer was
inspected on several occasions by FDA. Citations were issued which culminated
with an arrest warrant for various drugs with an approximate total worth of
$100,000. A condemnation action to dispose of the seized drugs followed with the
manufacturer arguing that the drug seizure was unconstitutional as an
unreasonable search and seizure. The court disagreed finding that "persons
engaging in pervasively regulated industries have a diminished expectation of
privacy." The court went on to point out the types of industries it had in mind
- selling or dispensing liquor or firearms or disposition of misbranded or
adulterated goods.
Should traders be concerned about the potential for application of this
principle in the import/export context?
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