Draft Guidance on Good Importer Practices: All You Need to Know
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1 Draft Guidance on Good Importer Practices: All You Need to Know February 5, 2009 Rebecca L. Dandeker Robert G. Hibbert Eric L. Stone Jerome J. Zaucha
2 Overview of Today s Webinar Overview of FDA s Good Guidance Practices Overview of Draft Guidance on Good Importer Practices FDA, Drugs & Devices Rebecca Dandeker FDA, USDA, Food Bob Hibbert CPSC, Consumer Goods Eric Stone CBP Perspective Jerry Zaucha 1
3 Overview of FDA s Good Guidance Practices Formal Policy Since 2000, 21 CFR Describe FDA s interpretation of or policy on a regulatory issue Do not establish legally enforceable rights or responsibilities You may choose another approach if it complies with FDA s statutes and regulations Provide the FDA s current thinking on the matter Practical effect: Safe harbor 2
4 Overview of FDA s Good Guidance Practices Guidance Documents are posted on FDA s website The public may provide input on Guidance Documents at any time FDA will review the public s comments before issuing the Guidance in final form The comments will be published in the applicable FDA Docket 3
5 Overview of FDA s Good Guidance Practices To comment on the Draft Guidance, Good Importer Practices: Submit comments by April 12, 2009 Submit to Docket No. FDA-2009-D-0675 Via paper to FDA s Division of Dockets Management, 5630 Fishers Lane, Rockville, MD Electronically to Submit a courtesy copy to a specific FDA staff member if you are aware that they have a particular interest in the issue 4
6 Overview of the Draft Guidance Outgrowth of July 2007 Executive Order, Interagency Working Group on Import Safety, and September 2007 Strategic Framework Report Availability of Draft Guidance was published January 13, 2009, 74 Fed. Reg Can be accessed at html Questions to FDA: Jeffrey Shuren, Office of Policy and Planning,
7 Issued by Numerous U.S. Government Agencies HHS / FDA USDA CPSC EPA U.S. Dept of Homeland Security / Customs and Border Protection U.S. Dept of Commerce U.S. Dept of Transportation U.S. Trade Representative 6
8 Purpose To specify that importers should have practices in place that can prevent or detect potential problems at critical points along the product s life cycle to avoid placing the U.S. consumer at risk To help importers increase the likelihood that the products they import are in compliance with applicable U.S. safety and security requirements To facilitate a paradigm shift from the previous intervention, border-focused strategy 7
9 Scope Foreign-sourced products, ingredients and components Re-importation of U.S.-made products Importers, manufacturers, retailers Life cycle = growing, harvesting, designing, manufacturing, processing, packing, receiving, storing, transporting, importing, and distributing Decrease the risk of the product causing harm to people, animals or the environment Principles are suggested or recommended but not required 8
10 Draft Guidance s General Recommendations Know the foreign firms that you import from, and their partners and vendors Understand the products you are importing, and their associated vulnerabilities Understand the hazards that may arise throughout the product life cycle Ensure proper control and monitoring of hazards 9
11 Guiding Principle I Establishing a Product Safety Management Program Job functions covering imported products supply chains SOPs and quality assurance systems Corporate communication mechanisms and defined reporting relationships Ensure corporate responsibility for product safety Knowledgeable and experienced employees 10
12 Guiding Principle II Knowing the Product and Applicable U.S. Requirements Regulatory compliance history and current status of products Regulatory compliance history and current status of firms involved in product s design, production and handling Previous product safety problems Methods of manufacturing, processing, transport, storage Regulatory framework of countries of origin Official documentation of compliance 11
13 Guiding Principle III Verifying Product and Firm Compliance with U.S. Requirements throughout the Supply Chain and Product Life Cycle Qualifying your suppliers Work with foreign firms to develop appropriate controls at critical points, monitor those points, and periodically evaluate them to make certain they are effective For CBP, accurately identify facility, product-coding information, product description, Tariff class, etc., to expedite entry Maintain ability to trace product after distribution to your customers 12
14 Guiding Principle IV Taking Corrective and Preventive Action When the Imported Product or Firm Is Not Compliant with U.S. Requirements Establish a CAPA Plan Product Disposal/Destruction Procedures Root cause analysis Remediate present and future shipments End that business relationship, if necessary 13
15 FDA Perspective - Pharmaceuticals and Medical Devices You become the policeman for your vendors and suppliers Supply chain management Due diligence Preventive control principles Easier implementation for large firms where systems approach is already in place (e.g., cgmps) Doesn t affect border documents proof of marketing authorization from relevant Agency Implementation of Practices may facilitate admissibility determinations and expedite product entry remains to be seen 14
16 Take-Aways Challenges for contracts, purchase orders and related negotiations with third parties Price of goods factor in cooperativeness of vetted third parties when considering new suppliers Recourse for defaults Competitive advantage for domestic-sourced goods 15
17 Unanswered Questions Will the Obama Administration support the Guiding Principles? Will the Obama Administration finalize the Draft Guidance Document? Will the Guiding Principles form the basis for deficiency observations during FDA inspections? Will the Guiding Principles form the basis for other FDA Compliance activities? 16
18 Food Perspective Current Context Global Industry National Statute Melamine, Tomatoes and Peanut Butter FDA Responsibilities and Resources Protectionism and Localism 17
19 Food Perspective Key Elements Knowledge Chain of Accountability Hazard Awareness and Control Monitoring and Documentation HACCP and the USDA/FDA Models 18
20 Food Perspective Implications Government Enforcement Recalls and Import Alerts Customer Requirements Audits and Guarantees Liability Meeting the Standard of Care Ultimate Consumer Flexibility of Demand 19
21 Consumer Product Safety Commission Consumer Product Safety Improvement Act of 2008 (CPSIA) (Public Law , August 14 th, 2008) Amended CPSA and other CPSC laws. Imposed on importers many of the concepts in the Good Importer Practices draft. 20
22 Import Provisions - Agency Authority Agency can refuse admission to non-complying products. CPSIA favors destruction and gives importer no more than 90 days to decide what to do with the product or it will be destroyed. CPSC and CBP can require bond to insure cost of destruction. Requires CBP and CPSC cooperation on targeting and other information sharing. CPSC to have personnel at CBP National Targeting Center. Study of future options including recall bond and inspection of foreign manufacturers. 21
23 Compliance Burden on Importers Importers must test and certify products conform to any rule, standard, or ban. Product may be refused entry based on a failure to do so. Third party conformance testing is required for children s products. Limited stay in effect until February 10, 2010 for some testing and certification provisions (lead, phthalates, new toy requirements). 22
24 Other Import Provisions Prohibition on products with unauthorized safety certification mark. Export notification requirements. 23
25 Other Key Provisions - Substantial Hazards Must report violations of all Commission rules under section 15(b) of the CPSA. Previously had to report only defective products that could create a substantial hazard or products that presented an unreasonable risk of serious injury or death and violations of CPSA rules. Commission may now recall non-complying toys or children s products under the CPSA as well as the FHSA. Commission may use voluntary standards as basis for substantial hazard rules. 24
26 Insights - What is CPSC Doing? New import team with inspectors at ports. If CPSC budget increases, expect increase in import team. Targeting cooperation between CPSC and CBP already under way. Generally, 90 day rule as new standards kick in. 25
27 Practical Tips for Manufacturers and Importers Most important: comply with standards and bans. Reduce risk by properly testing and certifying product. Where possible or required, use reputable third party testers to maximize reliability and minimize scrutiny. Expect agency to be more aggressive about seizing and destroying non-complying children s products. Get broker the certificate of compliance. 26
28 U.S. Customs Procedures for Dealing with Imports Subject to Another Agency s Jurisdiction Non-Customs Statutes Enforced by U.S. Customs Entry Requirements Entry Procedures Customs Enforcement Mechanisms Before, During and After Entry
29 Non-Customs Statutes Enforced by U.S. Customs U.S. Customs is responsible for enforcing a wide variety of statutes including the following: CPSC s Consumer Product Safety Act, Federal Hazardous Substances Act, Flammable Fabrics Act, and Poison Prevention Packaging Act FDA s Federal Food, Drug and Cosmetic Act USDA s Filled Milk Act, Poultry Products Inspection Act, and Federal Meat Inspection Act
30 Entry Requirements Possible certification/declaration requirements for regulated/restricted items International Trade Data System ( ITDS ) concept is a single-window system for electronic filing of import and export documentation which would allow an importer, broker, carrier and exporter to submit a single filing instead of multiple filings to multiple agencies. Currently 27 U.S. Government agencies are able to obtain, in near real time, detailed information about imports reported through an electronic filing. APHIS, CPSC, FDA, FSIS, and NMFS currently acquire data through ITDS (or ACE) and can request U.S. Customs to hold shipments.
31 Entry Procedures After merchandise has arrived at a U.S. port, U.S. Customs works with the appropriate agency to decide whether to release, seize, detain or reject merchandise. Release means the merchandise can enter into the commerce of the United States. The following types of merchandise may be seized by U.S. Customs: Prohibited merchandise (e.g., controlled substances, counterfeit goods); Restricted merchandise; or Undeclared, unreported or smuggled merchandise. Any merchandise that is not seized or released within the appropriate time frame is considered detained and U.S. Customs must issue a detention notice no later than 5 working days. Rejected merchandise ordinarily can be either exported or destroyed under U.S. Customs supervision.
32 Customs Enforcement Mechanisms (Before, During and After Entry) Reject or deny entry/detention/seizure Demand for redelivery Liquidated damages Monetary penalty 19 U.S.C. Sections 1592 and 1595a
33 Thank You! Questions? Eric L. Stone Rebecca L. Dandeker Robert G. Hibbert Jerome J. Zaucha
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