Document ID: FDA-2011-N-0144-0024
Agency: fda
Document Type: Notice
Title: Draft Guidance for Industry on the Voluntary Qualified Importer Program
for Food Importers and Guidelines in Consideration of the Burden of the
Voluntary Qualified Importer Program Fee Amounts on Small Business;
Availability
Posted Date: 2015-06-05T04:00Z

[Federal Register Volume 80, Number 108 (Friday, June 5, 2015)]
[Notices]
[Pages 32136-32140]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-13706]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2011-N-0144]

Draft Guidance for Industry on the Voluntary Qualified Importer 
Program for Food Importers and Guidelines in Consideration of the 
Burden of the Voluntary Qualified Importer Program Fee Amounts on Small 
Business; Availability

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA or Agency) is announcing 
the availability of a draft guidance for industry on the Voluntary 
Qualified Importer Program (VQIP) for importers of human or animal 
food. The draft guidance describes VQIP, which provides for expedited 
review and importation of food offered for importation by importers who 
voluntarily agree to participate in the program. The draft guidance 
describes the eligibility criteria for, and benefits of, participation 
in VQIP. The draft guidance also provides information on submitting an 
application for VQIP participation, obtaining a facility certification 
for the foreign supplier of a food imported under VQIP, the VQIP user 
fee, conditions that might result in the revocation of VQIP 
eligibility, and criteria for reinstatement of eligibility. We are 
issuing the draft guidance in accordance with the Federal Food, Drug, 
and Cosmetic Act (FD&C Act).

DATES: Although you may comment on any guidance at any time (21 CFR 
10.115(g)(5)), to ensure that the Agency considers your comments on 
this draft guidance before it completes a final version of the 
guidance, submit either electronic or written comments on the draft 
guidance by August 19, 2015. Submit either electronic or written 
comments on the proposed collection of information by August 4, 2015.

ADDRESSES: Submit written requests for single copies of this draft 
guidance to the Office of Enforcement and Import Operations (ELEM-
3108), Office of Regulatory Affairs, Food and Drug Administration, 
12420 Parklawn Dr., Element Bldg., Rockville, MD 20857. Send two self-
addressed adhesive labels to assist that office in processing your 
request. See the SUPPLEMENTARY INFORMATION section for electronic 
access to the draft guidance.
    Submit electronic comments on the draft guidance, including 
comments

[[Page 32137]]

regarding the proposed collection of information, to http://www.regulations.gov. Submit written comments on the draft guidance, 
including comments regarding the proposed collection of information, to 
the Division of Dockets Management (HFA-305), Food and Drug 
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: 
    With regard to this draft guidance: Domenic Veneziano, Office of 
Enforcement and Import Operations (ELEM-3108), Office of Regulatory 
Affairs, Food and Drug Administration, 12420 Parklawn Dr., Element 
Bldg., Rockville, MD 20857, 301-796-0356.
    With regard to the proposed collection of information: FDA PRA 
Staff, Office of Operations, Food and Drug Administration, 8455 
Colesville Rd., COLE-14526, Silver Spring, MD 20993-0002, 
PRAStaff@fda.hhs.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    The FDA Food Safety Modernization Act (FSMA) (Pub. L. 111-353) 
(FSMA) enables FDA to better protect public health by helping to ensure 
the safety and security of the food supply. It enables FDA to focus 
more on preventing food safety problems rather than relying primarily 
on reacting to problems after they occur. FSMA recognizes the important 
role industry plays in ensuring the safety of the food supply, 
including the adoption of modern systems of preventive controls in food 
production. Under FSMA, those that import food have a responsibility to 
ensure that their suppliers produce food that meets U.S. safety 
standards.
    FSMA also requires FDA to establish a voluntary, fee-based program 
for the expedited review and importation of foods from importers who 
achieve and maintain a high level of control over the safety and 
security of their supply chains. This control includes importation of 
food from facilities that have been certified under FDA's accredited 
third-party audit program, as well as other measures that support a 
high level of confidence in the safety and security of the food they 
import. Expedited entry incentivizes importers to adopt a robust system 
of supply chain management and further benefits public health by 
allowing FDA to focus its resources on food entries that pose a higher 
risk to public health.
    Section 302 of FSMA amended the FD&C Act by adding new section 806, 
Voluntary Qualified Importer Program (21 U.S.C. 384b). Section 
806(a)(1) of the FD&C Act directs FDA to establish this voluntary 
program for the expedited review and importation of food, and to 
establish a process for the issuance of a facility certification to 
accompany food offered for importation by importers participating in 
VQIP. Section 806(a)(2) directs FDA to issue a guidance document 
related to participation in, revocation of such participation in, 
reinstatement in, and compliance with VQIP.
    In accordance with section 806 of the FD&C Act, we are announcing 
the availability of a draft guidance for industry on VQIP. The draft 
guidance provides information on all aspects of VQIP participation, 
including the following:
     Benefits of VQIP participation;
     Eligibility criteria;
     Instructions for obtaining facility certifications for 
foreign suppliers;
     Instructions for completing a VQIP application;
     VQIP user fees;
     Conditions that might result in revocation of VQIP 
benefits; and
     Criteria for reinstatement of VQIP benefits.
    When this program begins, we encourage food importers with robust 
supplier verification programs to apply for participation in VQIP. We 
believe that the benefits of VQIP participation, including expedited 
entry and reduced sampling by FDA, will be of substantial value to 
importers. We also anticipate that VQIP will benefit the public health 
by incentivizing the adoption of robust supplier verification programs 
and by allowing FDA to focus its resources on food shipments that pose 
a higher risk to public health and will facilitate risk-based 
admissibility practices.
    We anticipate that VQIP application review will need to be limited 
in the program's first year of operation due to the demands on Agency 
resources necessitated by the initial establishment of the program and 
review of applications. For the purpose of calculating the fee, we have 
estimated that we would receive 200 notices of intent to participate 
and be able to review 200 applications in the first year. However, 
depending on the amount of resources needed in initiating the program, 
it might be possible that we will be able to review fewer or more than 
200 applications in the first year. Applications will be reviewed in 
the order that they are submitted. We request comment on this potential 
limitation on participation in the initial year of VQIP.

II. Guidelines in Consideration of the Burden of the VQIP Fee Amounts 
on Small Business

    FSMA directs FDA to collect fees to fund the VQIP program. Under 
the process established by FSMA, FDA must issue a proposed set of 
guidelines that consider the burden of the VQIP fee on small businesses 
and provide for a period of public comment on these guidelines. It is 
important to note that these guidelines have no binding effect on the 
Agency or the industry; instead they provide an opportunity for FDA to 
consider the burden of VQIP fee amounts on small businesses, and for 
the public to comment. By publishing these guidelines, FDA intends to 
gather the necessary information to determine if the fee will burden 
small businesses. After we issue these guidelines and consider the 
comments, FDA will publish a Federal Register notice with information 
about the actual fee schedule for the program at least 60 days prior to 
the start of the program in accordance with section 743(b)(1) of the 
FD&C Act.
    More specifically, section 107 of FSMA amended the FD&C Act by 
adding new section 743, Authority to Collect and Use Fees (21 U.S.C. 
379j-31). Section 743(a) of the FD&C Act authorizes FDA to assess and 
collect fees from each importer participating in VQIP to cover the 
administrative costs of the program. Each fiscal year, fees are to be 
established based on an estimate of 100 percent of the costs for the 
year. The fee rates must be published in a Federal Register notice not 
later than 60 days before the start of each fiscal year (section 
743(b)(1) of the FD&C Act).
    Consistent with section 743(b)(2)(B)(iii) of the FD&C Act, this 
notice sets forth a proposed set of guidelines in consideration of the 
burden of fee amounts on small business. These guidelines provide an 
opportunity for public comment.
    In order for small businesses to comment effectively, FDA has 
preliminarily estimated a possible fee amount based on an estimate of 
the number of importers we expect to participate in VQIP (200 in Fiscal 
Year (FY) 2018) and our estimate of 100 percent of the costs of 
administering the program, which we anticipate will be $3.4 million in 
FY 2018. The total estimated administrative costs of the program 
includes the costs of the application review process for 200 
applications, the costs of conducting inspections of importers (both 
foreign and domestic) accepted into the program, the costs of our final 
determination of eligibility into the

[[Page 32138]]

program, and annual Information Technology (IT) maintenance costs. 
Using these assumptions, FDA estimates, at this time, that the annual 
fee would be approximately $16,400, if an equal fee were assessed on 
each of 200 participants. This number is only a preliminary estimate 
and intended to provide small businesses with an estimate of what the 
program might cost so that they can comment on any burden the fee might 
impose. After considering all comments on these guidelines, we will 
publish the actual fee in a Federal Register notice published in 
accordance with section 743(b)(1) of the FD&C Act prior to the fiscal 
year when we begin program benefits.
    We estimate a flat $16,400 fee to be paid by all VQIP participants. 
We have used this model for this estimate in light of the voluntary 
nature of this program. There is no requirement for an importer to pay 
a fee unless the importer decides to participate in the program. We do 
not anticipate that fees charged as part of a voluntary program that 
provides the benefit of expedited review and importation of foods would 
present a burden on small businesses because a business will choose to 
apply only if the anticipated benefit exceeds the fee amount.
    Based upon our current estimate of approximately $16,400 for the 
annual VQIP fee, we are requesting comment on whether and how this fee 
might be a burden on small business. Please provide as detailed 
information as possible regarding any potential burden. In addition, we 
seek comment on the following questions:
     If the fee does create a burden on small business, should 
FDA consider a reduction in the fee?
     If FDA were to consider a reduction in the fee, how should 
FDA define a small business for purposes of determining who is eligible 
for a fee reduction? Should FDA consider annual gross sales or value of 
the import entry (based on U.S. Customs and Border Protection data)? 
What other criteria could be used?
     If FDA were to consider a reduction in the fee, should the 
fee be increased for larger importers to ensure full reimbursement of 
FDA costs for the program?
     If FDA were to consider a reduction in the fee, how should 
any reduction be structured? Should the reduction be an established 
percentage of the full fee for all small businesses? What percentage 
would be appropriate? Should it vary based on annual gross sales or the 
value of the import entry?
     Should FDA consider an alternative structure that might 
indirectly reduce fees for small businesses by charging different fee 
amounts to different VQIP participants depending on the number of 
facilities included in the application and/or the number of products 
included in the application? Would such an approach result in small 
businesses paying lower fees than larger businesses?

III. Paperwork Reduction Act of 1995

    The draft VQIP guidance document contains information collection 
provisions that are subject to review by the Office of Management and 
Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 
3501-3520). A description of these provisions is given below with 
estimates of the annual recordkeeping and reporting burdens. Included 
in the estimate is the time for reviewing instructions, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing each collection of information.
    We invite comments on these topics: (1) Whether the proposed 
collection of information is necessary for the proper performance of 
FDA's functions, including whether the information will have practical 
utility; (2) the accuracy of FDA's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on respondents, 
including through the use of automated collection techniques, when 
appropriate, and other forms of information technology.
    Title: Draft Guidance for Industry: FDA's Voluntary Qualified 
Importer Program.
    Description: This draft guidance document describes the FDA policy 
regarding requests for participation by food importers in the Agency's 
Voluntary Qualified Importer Program (VQIP). The VQIP provides for 
expedited review and importation of food offered for importation by 
importers who voluntarily agree to participate in VQIP. An importer who 
has voluntarily agreed to participate in VQIP will meet the application 
and inspection criteria outlined in the guidance document, including a 
facility certification for the VQIP food offered for import.
    Description of respondents: FDA anticipates a need to limit the 
number of applications for the VQIP program to 200 applicants for FY 
2018, which is the first year that VQIP will be operational. Each 
applicant will be an importer of record (IOR), the manufacturer, owner, 
or consignee. This limit will enable FDA to conduct a timely and 
efficient review of the applications to ensure that approved applicants 
begin receiving the benefits of participation in VQIP by October 2018.
    Information collection burden estimate: The burden of this 
information collection consists of preparation of documents for VQIP 
application, completion of VQIP application package, annual renewal of 
VQIP status, and development of written procedures and other 
documentation of the VQIP Quality Assurance Program (QAP).
    Recordkeeping Burden: In summary, the total one-time recordkeeping 
burden on importers under VQIP is estimated at 32,000 hours (see table 
1). The annual recordkeeping burden of complying with the draft VQIP 
guidance document is estimated at 3,200 hours (see table 2).

                              Table 1--Estimated One-Time Recordkeeping Burden \1\
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                                                                                  Average burden
                                     Number of       Number of    Total one-time        per
   Guidance document provision     recordkeepers    records per       records      recordkeeping    Total hours
                                                   recordkeeper                     (in hours)
----------------------------------------------------------------------------------------------------------------
QAP preparation.................             200               1             200             160          32,000
                                 -------------------------------------------------------------------------------
    Total One-Time Recordkeeping  ..............  ..............  ..............  ..............          32,000
     Burden.....................
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\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

[[Page 32139]]

                               Table 2--Estimated Annual Recordkeeping Burden \1\
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                                                                                  Average burden
                                     Number of       Number of     Total annual         per
   Guidance document provision     recordkeepers    records per       records      recordkeeping    Total hours
                                                   recordkeeper                     (in hours)
----------------------------------------------------------------------------------------------------------------
QAP modification................             200               1             200              16           3,200
                                 -------------------------------------------------------------------------------
    Total Annual Recordkeeping    ..............  ..............  ..............  ..............           3,200
     Burden.....................
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

    The draft guidance describes how VQIP applicants will prepare and 
document implementation of a QAP. Written policies and procedures 
related to the QAP are to be organized and submitted with the VQIP 
application (see Section F of the draft guidance document). The QAP 
will include information on the applicant's company profile, 
organization structure, and quality policy statement. The QAP will also 
include information on the applicant's company food safety system, food 
defense system, training, documentation of contracts that fulfill any 
task within the QAP, and procedures for record retention.
    The majority of provisions in the QAP Food Safety Policies and 
Procedures section are similar to proposed requirements for food safety 
plans in FDA's proposed rule on Current Good Manufacturing Practice and 
Hazard Analysis and Risk-Based Prevention Controls for Human Food (PC 
proposed rule) (78 FR 3646, January 16, 2013), or proposed requirements 
in FDA's proposed rule on Focused Mitigation Strategies to Protect Food 
Against Intentional Adulteration (IA proposed rule) (78 FR 78014, 
December 24, 2013). The QAP Food Safety Policies and Procedures section 
states that the VQIP applicant should provide the following: (1) 
Analysis of the regulations and requirements that apply to the imported 
food, the processor, grower, transporter and importer; (2) risk 
analysis that identifies the safety and security vulnerabilities and 
the preventive controls that should be instituted to ensure product 
safety (similar to the hazard analysis requirement in the PC proposed 
rule (Sec.  117.130)); (3) mitigation strategies for each safety 
vulnerability identified during your risk analysis (similar to the 
corrective actions requirement in the PC proposed rule (Sec.  117.145) 
and mitigation strategies in the IA proposed rule (Sec.  121.135(b)); 
(4) mechanism for verifying food and firm compliance throughout the 
supply chain; (5) process for periodic review of food and firm 
compliance (similar to verification requirements in the PC proposed 
rule (Sec.  117.150)); (6) procedures for communicating information; 
(7) corrective action procedures (similar to corrective actions 
requirements in the PC proposed rule (Sec.  117.145)); and (8) training 
plan.
    The QAP Implementation section directs the VQIP applicant to 
describe its procedures for auditing and updating the QAP, and its 
procedures for ensuring its VQIP QAP is current and appropriately 
implemented (similar to the verification implementation and 
effectiveness requirements in the PC proposed rule (Sec.  117.150(d)).
    Under the PC proposed rule, the food safety plan requirements 
include written hazard analysis, description of preventive controls, 
monitoring the implementation of the preventive controls, corrective 
action procedures, verification procedures, and recall plan. In the PRA 
analysis for the PC proposed rule, the recordkeeping burden for 
preparing a food safety plan is estimated at 110 hours (Ref. 1). We use 
the recordkeeping burden of preparing a food safety plan, 110 hours, as 
a proxy for the burden to prepare QAP Food Safety Policies and 
Procedures.
    The VQIP food defense security criterion is similar to the Food 
Defense Plan requirement under proposed Sec.  121.126 in the IA 
proposed rule. Under the IA proposed rule, the food defense plan must 
include the written identification of actionable process steps, focused 
mitigation strategies, procedures for monitoring, corrective action 
procedures, and verification procedures. In the Preliminary Regulatory 
Impact Analysis (PRIA) of the IA proposed rule, we estimated that, on 
average, it would take an operations manager and a legal counsel 20 
hours each to prepare a food defense plan (Ref. 2). Therefore, we 
estimate that, on average, it would take 40 hours for an applicant to 
prepare the food defense portion of the VQIP QAP.
    We expect that it will take a VQIP applicant no longer than 10 
hours to provide its company profile, organization structure, quality 
policy statement, documentation of contracts, and procedures for record 
retention. On average, the preparation of a QAP by a VQIP applicant is 
estimated at approximately 160 hours (110 + 40 + 10). In estimation of 
the one-time recordkeeping burden to prepare a QAP manual, we assume 
that VQIP importers do not already have a similar manual in place 
(e.g., food safety plan under the PC proposed rule, food defense plan 
under the IA proposed rule). The one-time recordkeeping burden for 200 
VQIP applicants to prepare QAPs is estimated at 32,000 hours (200 
applicants x 160 hours/applicant) (see table 1). To the extent that 
some importers do have QAP manuals in place, the burden would be 
overestimated.
    A VQIP importer is expected to update its QAP on an on-going basis. 
We estimate that it would take 10 percent of the effort to prepare the 
QAP, or 16 hours, to update the QAP each year. Therefore, we estimate 
the annual recordkeeping burden of modification of the QAP for 200 VQIP 
importers at 3,200 hours (200 importers x 16 hours/importer) (see table 
2).
    Reporting Burden: In summary, the total one-time reporting burden 
of participation in VQIP by 200 importers is estimated at 18,000 hours 
(see table 3). Total annual recordkeeping burden for VQIP importers is 
estimated at 4,000 hours (see table 4).

[[Page 32140]]

                                Table 3--Estimated One-Time Reporting Burden \1\
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                                                     Number of                    Average burden
   Guidance document provision       Number of     responses per  Total one-time   per response     Total hours
                                    respondents     respondent       responses      (in hours)
----------------------------------------------------------------------------------------------------------------
Initial VQIP application........             100               1             100              80           8,000
Initial VQIP application with re-            100               1             100             100          10,000
 submissions....................
                                 -------------------------------------------------------------------------------
    Total One-Time Reporting      ..............  ..............  ..............  ..............          18,000
     Burden.....................
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\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

                                 Table 4--Estimated Annual Reporting Burden \1\
----------------------------------------------------------------------------------------------------------------
                                                     Number of                    Average burden
   Guidance document provision       Number of     responses per   Total annual    per response     Total hours
                                     responses      respondent       responses      (in hours)
----------------------------------------------------------------------------------------------------------------
Renewal of VQIP application.....             200               1             200              20           4,000
                                 -------------------------------------------------------------------------------
    Total Annual Reporting        ..............  ..............  ..............  ..............           4,000
     Burden.....................
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

    The draft guidance document allows for food importers to apply for 
VQIP. We estimate that up to 200 qualified importers will be accepted 
in the first year of VQIP. We estimate that it will take 80 person-
hours to compile all the relevant information and complete the 
application for the VQIP program. For the purpose of this analysis, we 
assume that 50 percent of all applications received will require 
additional information and it would take an additional 20 person-hours 
by the importer to provide that information. Therefore, we estimate 
that 100 importers will spend 8,000 hours (80 hours/importer x 100 
importers) and 100 importers will spend 10,000 hours (100 hours/
importer x 100 importers) to submit their initial VQIP applications for 
a total one-time reporting burden of 18,000 hours (see table 3).
    The draft guidance document states that each VQIP participant will 
submit to FDA a notice of intent to maintain its participation in VQIP 
and update information on its original application on an annual basis. 
We expect that each of the expected 200 importers in VQIP would apply 
to renew their intent to maintain their participation in VQIP. We 
expect that annual applications to renew participation in VQIP will 
take significantly less time to prepare than initial applications. We 
use 25 percent of the amount of effort to prepare and submit the 
initial application for acceptance in VQIP. Therefore, it is expected 
that, on average, each VQIP importer will spend 20 hours every year to 
complete and submit an application for renewal of its VQIP status. The 
annual burden of completing the renewal application for VQIP status by 
200 importers is estimated at 4,000 hours (200 applications x 20 hours/
application) (see table 4). For the purposes of the PRA analysis of the 
draft guidance document, we have estimated costs assuming that, during 
the annual application process, affected importers will do their 
paperwork properly and completely the first time. Because we assume 
that importers will have learned about supporting documentation they 
need to submit during the initial application process, we have not 
estimated an additional burden for less than complete annual 
applications. If we assumed a less consistent outcome, the annual 
burden might be slightly higher.

IV. Comments

    Interested persons may submit either electronic comments regarding 
this draft guidance to http://www.regulations.gov or written comments 
to the Division of Dockets Management (see ADDRESSES). It is only 
necessary to send one set of comments. Identify comments with the 
docket number found in brackets in the heading of this document. 
Received comments may be seen in the Division of Dockets Management 
between 9 a.m. and 4 p.m., Monday through Friday, and will be posted to 
the docket at http://www.regulations.gov.

V. Electronic Access

    Persons with access to the Internet may obtain this draft guidance 
at either http://www.fda.gov/Food/GuidanceRegulation/FSMA/ucm253380.htm 
or http://www.regulations.gov. Use the FDA Web site listed in the 
previous sentence to find the most current version of the guidance.

VI. References

1. U.S. Food and Drug Administration. Proposed Analysis of Economic 
Impacts--Current Good Manufacturing Practice and Hazard Analysis and 
Risk-Based Preventive Controls for Human Food, available under 
Docket No. FDA-2011-N-0920.
2. U.S. Food and Drug Administration. Focused Mitigation Strategies 
to Protect Food Against Intentional Adulteration (78 FR 78014, 
December 24, 2013).

    Dated: May 29, 2015.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2015-13706 Filed 6-4-15; 8:45 am]
 BILLING CODE 4164-01-P