Ka/dw/1243

Peter Kurz Esq

Minister-Counselor for Agricultural Affairs

United States Department of Agriculture

Embassy of the United States of America

24 Grosvenor Square, Box 48

London W1A 1AE

4 April, 2003

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# US Bioterrorism Act 

Thank you for your letter of 20 February, addressed to my colleague,
Martin Paterson, on the proposed US bioterrorism legislation. FDF[^1]
welcomes the opportunity to comment on these proposals as our trade with
the US is of critical importance. Currently trade flows for food and
drink are approaching £1billion in each direction and many of our
leading member companies have significant links and long-standing
trading interests with the US.

Equally, food safety is of fundamental importance to FDF companies and
we share the FDA's objective of protecting the safety of food supplies.
At the same time, we are deeply concerned at the impact these measures
may have on trade, notably where these are likely to add cost, delay and
uncertainty for exporters.

Indeed FDF is particularly concerned about the disproportionate
character of Sections 305 (Registration of food facilities) and, more
significantly, 307 (Prior Notice) of the Public Health Security and
Bioterrorism Preparedness and Response Act of 2002 ("the Bioterrorism
Act"). On the latter, concerns are such that our US sister federation,
the GMA, is calling for the FDA to fundamentally re-think its proposal
on prior notice, which FDF would firmly endorse.

We consider that the proposed measures to be applied to food imports
into the US will impose heavy and costly burdens upon UK and other EU
exporters and will act as a clear non-tariff trade barrier. Small and
medium sized companies in particular risk being prevented from
continuing to export to the US, especially where the new regulations and
the administrative burdens imposed on them would render their exports
too costly to be economically viable.

The US law also appears to contradict attempts made within the WTO in
the context of current negotiations to agree on measures that would
facilitate trade through the simplification and streamlining of customs
procedures.

Also, it is essential that confidential and trade secret information is
protected from public disclosure and we would therefore urge the FDA to
ensure that measures are put in place to ensure the confidentiality of
information that it may obtain through the new records access provision
of the Act.

Furthermore, FDF believes that the FDA has significantly underestimated
the costs of researching, understanding and applying the new
legislation.

FDF is increasingly concerned at the number of security related
initiatives, launched by the US authorities following September 11,
which are not readily compatible. While having total sympathy with the
need to strengthen security, we are nevertheless concerned that this
proposal is aimed at those who import into the US, the Container
Security Initiative (CSI) is adding burdens to exporters, while already
in existence are demands of the US Customs Authority. Therefore all
three need to inform one another and work in step to prevent duplication
or even "triplication" of information. On top of all this, there are
already strict EU regulations that member companies need to comply with
before products leave our shores.

In addition, FDF believes that companies who participate in the US
Customs Trade Partnership Against Terrorism (C-TPAT) initiative (aimed
at protecting global commerce from terrorism) should be subject to less
scrutiny by the FDA, granted expedited processing at the ports of entry
and given an abbreviated prior notice form to submit. Known traders who,
by definition, are not considered a security risk to the supply chain
should also be able to benefit from reduced checks and inspections,
allowing US Customs to focus on those consignments which do not come
from "trusted" or reputable sources. Each of our member companies pride
themselves on their reputation as trusted traders.

Please find enclosed detailed comments on certain provisions of the
proposed laws, which we strongly urge should be simplified and amended
in order to relieve some of the burden that our traders will have to
bear.

I trust that you will find our comments helpful and we look forward to
being kept informed of further developments on this critical issue.

# Jonathan Peel

Director, European and International Policy

<jpeel@fdf.org.uk>

# Detailed comments on the proposed measures in connection with the Bioterrorism Act

# Section 305 -- Docket No. 02N-0276 (Registration of food facilities)

This provision requires the owner, operator, or agent in charge of a
domestic or foreign facility to register with the FDA between 12 October
and 12 December 2003. Our specific concerns are as follows:

-   it is essential that confidential and trade secret information
    obtained through the registration process is protected from public
    disclosure

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-   as stated in the notification, total costs of registration would be
    higher for foreign companies than for US ones, particularly for
    those whose product range varies regularly

-   many foreign companies only send processed or semi-processed goods
    or even raw materials direct to their particular subsidiaries in the
    US, where these products undergo further processing; these companies
    should be exempt from registering with the FDA, as the US subsidiary
    is responsible for introducing the finished products into the food
    chain in the US

-   under the proposed provision, foreign facilities who merely pack raw
    materials for final processing in the US, and their suppliers in
    turn as well, would all have to register with the FDA; this would
    place an extreme administrative burden on the non-US based company,
    not least as some of its suppliers may be located in other third
    countries, where there may not be so detailed requirements to
    register; again this should not be necessary as FDF would argue that
    the US subsidiary's registration should suffice, especially if the
    consequences of failing to register (detention at the port of entry)
    would possibly be borne by the foreign facility sending the packed
    products

-   FDF is deeply concerned about the obligation to have an agent in the
    US; as recognized in the notification text, a number of EU exporters
    do not have an agent and the additional cost a company will incur in
    hiring an agent may remove the economic incentive to export to the
    US at all*;* small exporters and /or SMEs would be most affected by
    the measure

-   in any case, the requirement to have a single agent in the US will
    not cover those UK or European producers, where these regularly deal
    with two or more importers in the US (due to geographical or product
    variations)

-   FDF believes that the collecting of the proposed FDA product code
    categories would not be useful in reducing threats to the food
    supply as they would not accurately describe all of the categories
    of food being produced and would greatly complicate the registration
    process; instead, the FDA may like to consider the collection of
    "establishment type" data being made mandatory rather than voluntary
    (section 9 of the proposed registration form refers)

-   regarding the mechanics of gathering the registration data, while we
    agree that interactive registration over the internet is likely to
    be efficient both for FDA and for those companies registering only a
    few facilities, we recommend that the agency also accept
    transmission of electronic data files instead of interactive data
    entry; this would offer companies registering a large number of
    facilities the option to process registration data electronically
    but without using time-consuming interactive data entry; equally we
    would stress that systems must be compatible with those already in
    existence

-   in order to get the system operational and not disrupt trade flows,
    a period of exemption from prosecution should be introduced for
    operators who are unable to register correctly (or in full) in time.

**Section 307 -- Docket No. 02N-0278 (Prior Notice)**

#  

It is proposed that as from 12 December 2003 US importers or their agent
must submit to FDA prior notice by noon of the calendar day before the
article of food arrives at the port of entry and no more than 5 days
before arrival.

Overall, FDF believes that this Section is unduly complex, creating the
potential for failure of the entire prior notice system. The provision
as it stands would impose heavy and possibly untenable administrative
burdens on operators as a prior notification would have to be submitted
for each different product in a shipment, and for each different format
/ packaging of the same product. Despite the prescriptive nature of the
provisions, this Section is unlikely to be effective in eliminating the
risk of contamination or adulteration, not least as it could extend
transit times and possibly even opportunities for unauthorized
tampering. Indeed there is widespread concern that the rigidity of the
requirements will lead to gridlock.

Our specific concerns are as follows:

-   FDF supports the assertion of our US sister federation, the GMA,
    that the FDA is requesting information which goes beyond the scope
    of section 307 of the Bioterrorism Act, an action which it does not
    have the authority to do

-   indeed the FDA is calling for considerably more information than is
    actually necessary; for practical reasons, it is impossible to
    include the FDA registration numbers for all operators that have
    handled the food to be imported in the prior notice; in addition, it
    is difficult to see why this information should be necessary for all
    shipments; in case of a risk related to food imports, the
    requirement to keep records of suppliers / customers ("one up-one
    down"), as is practiced elsewhere, notably over identity-preserved
    non-GM products, should be sufficient

-   FDF believes that the time periods proposed are too rigid, and do
    not take into account the commercial realities for traders; FDF
    would favour the deletion of the requirement that the notice be
    filed by noon of the day before the food is scheduled to arrive at
    the port of entry; instead it should be replaced with flexible
    rolling notices periods (four hours before anticipated arrival); in
    addition, the amendment and update process should be made more
    flexible

-   FDF deeply regrets the FDA's failure to coordinate the prior notice
    requirement with existing customs measures, resulting in duplication
    of systems; for control purposes it should be sufficient to receive
    the same data that US Customs receive from the importer; more
    specifically, the classification of food that the FDA requires not
    only differs in part from Customs classifications but is also more
    detailed; FDF strongly opposes such duplication of security measures
    and is calling for a close coordination between the FDA and US
    Customs Service so as to avoid unnecessary and redundant regulations
    which are costly for both the industry and the administration and
    possibly detrimental, through extra delay, to the foodstuff itself

-   on this same point, the prior notice provision is similar to the
    "24-hour" rule of the Container Security Initiative (the
    responsibility for notifying the US authorities in this instance
    lying with the [exporter]{.underline}), where again FDF, and all UK
    and EU exporters, would stress that systems must be integrated
    rather than duplicated

-   when this requirement takes effect, we understand the existing data
    collection system of the US Customs Service (ACS) will not be used
    because it cannot be modified in time to accommodate the additional
    data requirements of the prior notice system prior to the 12
    December 2003 deadline; in this regard while we also understand that
    US Customs is in the process of developing a new system as a
    replacement for the ACS, implementation is not expected before 2005

-   on the sanction regime, although under the proposed rule the
    purchaser, owner, importer or consignee would be responsible for the
    correct implementation of the rules, ultimately the exporter will
    bear the economic consequences of a detention of the products;
    moreover, exporters will be subjected to sanctions even though the
    same data will be available in another agency, namely Customs

-   as already stated in connection with registration of food
    facilities, in order to get the system operational without
    disrupting trade flows, operators who supply inadequate or
    incomplete information should be exempt from prosecution for a
    defined period after implementation

Finally, FDF would be in favour of integrating the registration and
prior notice systems: eliminating the need to enter for each prior
notice, information that has already been recorded into the facility
registration system would greatly reduce the administrative burden.

For the reasons explained above, FDF stresses that it will not be
sufficient to make superficial amendments to the prior notice proposals,
indeed we believe that they need to be fundamentally re-designed. We
fear that if this does not happen, the measures, as currently proposed,
will result in "systemic failure". This will not only create an
unnecessary trade barrier but also cause severe loss of trade at a time
of economic uncertainty without tackling the issue at stake - increased
risk to US food supplies.

# Footnote

One FDF member, a major food casings company, has expressed particular
concern at the proposals, as these will exacerbate their trading
problems, whose worldwide business is already threatened due to the
failure between the EU and the FDA to agree "equivalence" for gelatine.
We wish to clarify which "general product category" in section 11
applies to collagen food film.

[^1]: FDF represents the UK food and drink manufacturing industry. It
    purchases some £11 billion worth (about two thirds) of UK
    agricultural produce but also imports a further £7 billion worth of
    produce for processing. UK food and drink exports in 2001 were £8.55
    billion. Some two fifths, £3.4bn, of these exports went to non-EU
    countries.