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									     ST&R Presents....

The FDA’s BTA Rulemaking
                                Presented by Lauren V. Perez


  Navigating the Maze of International Trade
Navigating the Maze of International Trade

                                              The Law:
       Public Health Security and Bioterrorism Preparedness and Response Act of
                                2002 (Public Law 107-1888)
                                              The Effect:
       All food facilities located anywhere in the world that store, pack, process, hold,
        label or manufacture food or beverages must be registered with the FDA NOW
       The FDA must be provided with Prior Notice of all arriving food articles
       All domestic food manufacturers, processors, packers, labelers, warehouses,
        holders, distributors, importers and transporters as well as foreign food
        transporters must maintain and provide access to particular and complex records
        related to each separate article of food
       The FDA has the ability to administratively detain any food or beverage upon
        credible evidence of threat of death or injury to human or animal no matter that
        article is in the distribution system
Navigating the Maze of International Trade

                 What’s The “Best Thing” About The Current
                         State of BTA Rulemaking?

              The FDA Heard You!

                 The Agency Took Measures To Protect the
                 Marketplace Without Sacrificing Competitive Trade
Navigating the Maze of International Trade

        The Highlights of Revisions re: Prior Notice:

        Importers Can Import Without Confidential Registration
        Numbers – Include Reason Code
        Shippers Can Ship Via Express Courier Without Without
        Knowing Exactly When It Will Arrive – Use Tracking Number
        Competitors Can Sample Without Permission – Use Non
        Commercial Shipper and ship in small quantities
        Colleagues Can Send Xmas Gifts Through International Mail
        Grandma Can Send You Your Favorite Holiday Candies No
        Matter Where They Come From!
Navigating the Maze of International Trade

         Combining the Old…

         Only food articles from registered facilities will be admitted
         into the United States for consumption

         With the New…
         Importers can provide reasons to the FDA indicating why the
         manufacturing facility’s registration number is not included
         on the Prior Notice and it is up to the FDA to then validate
         the registration status of the manufacturing facility
Navigating the Maze of International Trade

                                        Give the FDA A Reason:
   A. Facility is out of business
   B. Facility is private residence
   C. Facility is a restaurant
   D. Facility is retail food establishment
   E. Facility is non-processing fishing vessel
   F. Facility is non-bottled drinking water collection and distribution establishment
   G. Individual gift - label name/address in lieu of registration number
   H. Grower - satisfies farm exemption
   I. Samples - quality assurance, research or analysis purposes only
   J. U.S. manufacturing facility that is not required to register
   K. Unable to determine the registration number of the manufacturer.
   L. Unable to determine identity of manufacturer - providing identity of manufacturer's headquarters
   M. Unable to determine identity of manufacturer or headquarters - providing invoicing firm's identity
   O. Gift pack for non-business purposes - providing single prior notice and identity of packer
Navigating the Maze of International Trade

       And Then They Might Give You One…

       F           Foreign consignee
       R           Missing Registration
       F           Registration Not on File
       M           Mismatch in registration
       I           Invalidated registration
       C           Cancelled registration
Navigating the Maze of International Trade
Navigating the Maze of International Trade

                                              PNSI vs. ABI
         Need PN Confirmation Prior To Loading Food But Container
         will be on water for 7 days? PNSI
         Don’t want to have to give PN Confirmation Number to
         Carrier? ABI
         Need to resubmit PN after refusal? PNSI
         Not an authorized ABI user? PNSI
         Get frustrated by Internet delays? ABI
         ABI not working? PNSI
         PNSI not working? ABI, Email or Fax
         ABI and PNSI not working? Email or Fax
Navigating the Maze of International Trade

       PN Can Be Disclaimed on FD3s - if the product is not a food for
               consumption by human or animal in the U.S.
    Examples of FD3s for which disclaimer may be appropriate:
    0505902040 Bird Skins w/Feathers; feathers & parts, other
    0507900090 Tortoise –Shell, Whalebone, Horn, Other
    0713401000 Lentils; Seeds Used for Sowing
    1508100000 Peanut (Grnd Nut) Oil & Its Fractions; not chem
    2804300000 Nitrogen
    2918111000 Lactic Acid
    3507907000 Enzymes; Prepared Enzymes, Other
    4102101000 Raw Sheep or Lamb Skins; w/wool
    9801001015 U.S. Goods Returned; Chap 2 or 16; N/advanced in Value
    98050050 Effects of U.S. Gov Extended Duty Employee & Family or Evacuee
    98060050 Personal Use Articles For Other Representatives of Foreign Governments
Navigating the Maze of International Trade

      Some Urban Legends….Already –

      •Registration has to be annually renewed
      •Your U.S. Agent distributes directly to the retailer
      •You can purchase a list of registered food facilities
      •A product that enters the U.S. from an unregistered facility, will
      always be allowed to enter the U.S. from an unregistered facility
      •Final regulations for all BTA provisions have finally been
Navigating the Maze of International Trade

    Some Thoughts To Ponder…
    When is a Commercial Shipment a Commercial Shipment?
    When it is imported for non-commercial purposes from a non-commercial shipper
    Why is a Carrier not the Shipper?
    Because the shipper is the entity who owns or exports the goods to the U.S., not
    necessarily the entity who gets it there
    Can Samples Be Imported Without A Prior Notice if Sampling will take place
    at a promotional tasting event?
    No! Test marketing is not the same as sampling (quality assurance, research and
    Is International Mail Sent Through Federal Express?
    No! International Mail is mail sent through foreign national mail services only –
    not express couriers
Navigating the Maze of International Trade

                Have You Heard About The Recordkeeping Regs???
                 Compliance Efforts Underway, but what a Mess!!!!
Navigating the Maze of International Trade

     Pressure from Tommy Thompson prompts publication of
     complicated, politically correct regulations:

                                             For the life of me, I cannot
                                         understand why the terrorists have
                                        not attacked our food supply because
                                                  it is so easy to do

                                              Quote from speech announcing
                                              resignation: 12/3/04
Navigating the Maze of International Trade

   FDA publishes final recordkeeping regulations on December 9,

   •All domestic persons, corporations, partnerships, and associations that manufacture, process, pack, store, distribute,
   import, receive, or transport food or beverages, whether or not for consumption in the US, must establish and
   maintain       required    records     accessible      to     the      FDA      within     24      hours        notice.
   • Foreign and domestic food transporters, whether or not located in the US, are also governed by these regulations,
   without regard to whether or not they actually have possession, custody, or control of the food articles.
   • Domestic manufacturers, packers, and processors are required to maintain records detailing product lot numbers or
   other identifiers.
   • All animal food, feed, and related products are covered by these regulations, without exception.
   • Records required to be established and maintained by non-transporters in connection with both sources and
   recipients, whether foreign or domestic, include the following: the name of the firm; address; telephone number; fax
   number and e-mail address, if available; type of food, including brand name and specific variety; date
   received/released; quantity and type of packaging; and identity of the immediate transporter previous source and
   subsequent recipient, including the name, address, telephone number and, if available, fax number and e-mail
   • Food transporters can comply with the regulations either by establishing and maintaining the records required by the
   FDA, the Department of Transportation (DOT), or the Warsaw Convention, or by contracting with a non-transporter
   to keep the required records on their behalf.
Navigating the Maze of International Trade

      FDA publishes final recordkeeping regulations on December 9,
      2004 (cont’d)

      •Retailers are not required to maintain records as to immediately subsequent consumer recipients of food
      products, but must establish and maintain records to identify immediately previous sources of food and business
      recipients of those products.
      •The regulations do not apply to customs brokers provided that they act only to facilitate distribution, sale, or
      transportation of food by processing information or paperwork.
      • The regulations do not apply to truck terminals or similar facilities if they are merely part of the transportation
      process providing a location for trucks to transfer possession.
      • Consumers, if they are not part of the actual shipping transaction, are not subject to the regulations.
Navigating the Maze of International Trade

      The Agency tried to make everyone happy

      and, as a result, issued confusing, complex and complicated
Navigating the Maze of International Trade

         The final regulations are binding upon only domestic persons
         (i.e. individuals, corporations, partnerships or other
         associations) that manufacture, process, pack, transport,
         distribute, receive, hold or import food; foreign persons that
         transport food in the U.S.; and persons who place food directly
         in contact with its finished container.

         Accordingly, foreign manufacturers are not required to keep
         records, but must be registered; foreign carriers must keep
         records but do not need to be registered and some food packers
         may need to keep records but others may not depending upon
         how “directly in contact” the finished food packaging is to the
         food product.
Navigating the Maze of International Trade

   The final regulations provide food transporters with the ability to (i) maintain the records
   specifically described in the Rules; or (ii) to establish and maintain the records required by
   the Department of Transportation's Federal Motor Carrier Safety Administration; or (iii) to
   establish and maintain the records required by the Department of Transportation's Surface
   Transportation Board; or (iv) to establish and maintain the records required of
   international air transporters by the Warsaw Convention; or (v) to enter into an agreement
   with a non-transporter immediate previous source or immediate subsequent recipient (if
   located in the United States) to establish, maintain, or establish and maintain the required
   Each of these options carries with it different definitions and different requirements and is
   more than likely going to only be good news ---
                                              FOR LAWYERS!
Navigating the Maze of International Trade

      The final rules include 4 different possible retention requirements
      of between 6 months to 2 years, depending upon whether the
      records are kept by transporters or non-transporters and/or whether
      the food may spoil after, within or before 6 months. Again, the
      FDA has mitigated the possibility of resentment against these
      regulations because no one can be certain for how long they are
      bound by them.
Navigating the Maze of International Trade

                                  The FDA tried to make everyone happy…
                    with regulations that do little to protect America’s food supply

      The final regulations only require domestic food manufacturers, packers and processors to keep records that
      include lot number identification and hold food transporters to some vague, undefined standard of “describing”
      the food articles they carry from one nontransporter to another

      The final regulations specifically list those “persons” who are entirely exempt from the rulemaking, some who are
      exempt from some but not all portions of the rules and others who may be exempt but only in particular
Navigating the Maze of International Trade

                                   And…it’s not over yet ----

          Final Facility Registration and Prior Notice Rules expected
          Spring 2005
          Import Strategic Plan – promised by Fall 2004
          Continued, Necessary Port Shopping
          No method of verifying facility registration prior to export
          Shipper Registration Number still required on Prior Notice
          Each FDA-regulated Entry Still Treated Separately – OASIS
          has no memory
Navigating the Maze of International Trade

       Overall…the BTA regulations are definitely
        new and improved

       Although, probably of little use in protecting American
       citizens against threats of bioterrorism
Navigating the Maze of International Trade

                          But…There are always Opportunities…
              Especially in the Midst of Complicated, Confusing and
                   Overwhelming Federal Agency Regulations

                        All supply chain participants need assistance
    •Product Labeling
    •SID/FCE/HAACP registration, certification
    •Food facility registration
    •Timely communication of prior notice information
    •Compliance with recordkeeping regulations
    •Negotiation of vendor agreements, purchase orders, bills of lading and invoices
    •A Knowledgeable, Accessible and SMART Customs Broker!
Navigating the Maze of International Trade

            And everyone
             needs some
              Give Me A
                                              Lauren V. Perez
       Call Us For More Information About ST&R’s FDA Compliance Program,
          its ongoing seminar series and related services for all importers and
                          exporters of FDA-regulated goods
          Please log on to or call us directly at 305-267-9200.

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