January/February 2007 AFI Newsletter
Customs Amends Regulations on Conditional Release of FDA Products; Developing AFI Shipping Program for Discounted Freight Rates; FDA Schedules Food Defense Workshop; FDA to Define "Gluten-Free" and Proposes Changes to "Low-Fat" Claims; Commerce Amends AD on Frozen Shrimp; AFI Reception at SIAL Montreal; and more.
• Freight rates – a source of constant concern for everyone in the food import trade. AFI is exploring the creation of a “shipping association” for AFI members that would be designed to keep these costs in check. This isn’t something that will happen overnight but we need the cooperation of members to help us determine fairly quickly if this is something worth pursuing.
All domestic members should have received a survey regarding their shipping needs. (If you did not, please contact the AFI office.) Please take the necessary time to complete the survey and return it to AFI. Individual company information will not be shared with anyone. The information will be compiled by AFI staff and used on an aggregate basis.
• Sections within AFI are undertaking and/or continuing several ambitious projects this year. From standard-setting within the industry to pushing for standards of identity on the state and national level, to certification programs and efforts to eliminate duplicative government inspections, AFI and its sections are actively seeking to make the business of food importing a more efficient process.
• It’s been a few years since the Bioterrorism Act was implemented, so I want to take this opportunity to remind U.S. members to encourage their suppliers to become members of AFI. Rather than pay someone else they’ll never hear from again to be their agent, your suppliers can get that service and receive valuable information from AFI. It also helps importers because it ensures them their suppliers are aware of any new U.S. regulations. - Bob Bauer, President, AFI CUSTOMS AMENDS REGULATIONS ON
CONDITIONAL RELEASE OF FDA PRODUCTS U.S. Customs & Border Protection has issued a final rule effective May 1 amending the regulations to establish a new period for conditional release from Customs custody of any food, drug, device and cosmetic article imported into the U.S.
As background, FDA-regulated imported products are conditionally released under bond from Customs custody. Once the conditional release period has expired, Customs has 30 days in which to demand redelivery to Customs custody of FDA-regulated products. Failure to comply with a properly issued demand for redelivery may result in the assessment of liquidated damages equal to three times the value of the merchandise or equal to the domestic value of the merchandise. In 2002, Customs proposed to amend the regulation to provide that the release from Customs custody of any FDA-regulated food, drug, or device would be deemed conditional during the180-day period following the date of release of the merchandise. Under the proposed regulation, Customs would have been authorized to issue the demand for redelivery up to 210 days after the date of release of the merchandise (180 days plus 30 days). Based upon opposition from the importing community, Customs reduced the conditional release period to 30 days. However, Customs also granted FDA authority to extend the period indefinitely.
The final rule now states that, unless extended under subsection (2), the conditional release period for FDA regulated products will terminate upon the earliest occurrence of the following events: -
The date FDA issues a notice of refusal of admission;
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The date FDA issues a notice that the merchandise may proceed;
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Upon the end of the 30-day period following the date of release.
Subsection (2) extends the conditional release period if FDA issues a written or electronic notice of sampling, detention or other FDA action to the bond principal (i.e.,importer of record) within 30 days of the release of the merchandise. The regulation does not specify what event will terminate the conditional release period in such cases.
The new regulation will have little impact upon current CBP and FDA procedures for release and recall of FDA regulated articles. So long as FDA issues a notice of FDA action or similar document within 30 days of the date of entry, the goods will be deemed subject to an indefinite conditional release. That extended conditional release period will presumably end once FDA issues a notice of release or refusal of admission. However, the Courts have ruled that final liquidation of the entry discharges the importer’s obligation to redeliver under the Customs bond. Thus, Customs’ notice to redeliver must still be issued before liquidation is final.
The only material change created by the new regulation is that if FDA fails to issue any notice within 30 days after entry, the conditional release period will be deemed to have expired on the 30th day. CBP’s interpretation of the regulatory scheme is that CBP will then have 30 more days to issue a valid demand for redelivery (for a total of 60 days from date of entry). An FDANotice of Action issued more than 30 days after release will not have the effect of extending the conditional release period.
FDA SCHEDULES FOOD
DEFENSE WORKSHOP The FDA Southwest Region is co-sponsoring a Food Defense Workshop with the Risk Management Small Business Development Center. The public workshop intends to provide information about food defense, the regulations authorized by the Bioterrorism Act and other related subjects to food facilities including farms, manufacturers, processors, distributors, retailers, food service and restaurants. The workshop will be held on March 29 from 8 a.m. to 5 p.m. in Dallas, Texas. Registration is available at http://www.ntsbdc.org/Food%20Def%20Registration%20form.pdf.
FDA TO DEFINE “GLUTEN-FREE”
FDA is proposing to define the term “gluten-free” for voluntary use in the labeling of foods, to mean that the food does not contain any of the following: -
an ingredient that is any species of the grains wheat, rye, barley, or a crossbred hybrid of these grains (all noted grains are collectively referred to as “prohibited grains”);
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an ingredient that is derived from a prohibited grain and that has not been processed to remove gluten (e.g., wheat flour);
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an ingredient that is derived from a prohibited grain and that has been processed to remove gluten (e.g., wheat starch), if the use of that ingredient results in the presence of 20 parts per million (ppm) or more gluten in the food; or 20 ppm or more gluten.
A food that bears the claim “gluten-free” or similar claim in its labeling and fails to meet the conditions specified in the proposed definition of “gluten-free” would be deemed misbranded. FDA also is proposing to deem misbranded a food bearing a gluten-free claim in its labeling if the food is inherently free of gluten and if the claim does not refer to all foods of that same type (e.g., “milk, a gluten-free food” or “all milk is gluten-free”).
In addition, a food made from oats that bears a gluten-free claim in its labeling would be deemed misbranded if the claim suggests that all such foods are gluten-free or if 20 ppm or more gluten is present in the food.
FDA says establishing a definition of the term “gluten-free” and uniform conditions for its use in the labeling of foods is needed to ensure that individuals with celiac disease are not misled and are provided with truthful and accurate information with respect to foods so labeled.
Comments on the proposed rule may be submitted by April 23.
FDA PROPOSES REGULATORY
CHANGES ON LOW-FAT CLAIMS FDA is seeking comments by April 23 on a proposed rule to amend the regulation authorizing a health claim on the relationship between soluble fiber from certain foods and the risk of coronary heart disease (CHD). The amendment proposes to exempt certain foods from the nutrient content requirement of “low fat.” The exemption would apply if the food exceeds this requirement due to fat content derived from whole oat sources, such as oat bran, rolled oats, whole oat flour and oatrim. FDA is taking this action in response to an industry petition by the Quaker Oats Company that stated these changes would encourage food manufacturers to create products lower in added sugar while retaining the heart-protective qualities of these whole oat-based foods as well as enhance consumers’ ability to incorporate beta-glucan soluble fiber in their diets while reducing their sugar consumption.
FDA has tentatively concluded that, for purposes of the oat beta-glucan health claim, it is appropriate to exempt foods that exceed the “low fat” criterion due to fat contained in whole oat sources from the requirement of “low fat” because:
The fat profile in whole oats is consistent with the 2005 Dietary Guidelines for Americans;
The consumption of foods containing beta-glucan soluble fiber, such as whole oat products, is helpful in reducing the risk of CHD;
The amount by which the fat content from whole oat sources may exceed the criterion of 3 g of fat per reference amount customarily consumed (RACC) is not likely to be a health concern.
FDA is seeking comments on whether or not whole oat food products that contain sources of fat other than whole oat sources should be exempt from the “low fat” requirement and, if so, how much and what type(s) of fat contributed by these sources would be acceptable. U.S. BRINGS CASE TO WTO
AGAINST CHINESE SUBSIDIES The USTR announced that the U.S. has requested WTO dispute settlement consultations with China regarding China’s continued use of subsidies that appear to be prohibited by WTO rules. Several of the subsidy programs at issue appear to grant export subsidies, which provide incentives for foreign investors in China and their Chinese partners to export to the U.S. and other markets, according to a USTR press release. It cited a WTO report as finding that the companies targeted for many of these subsidies accounted for nearly 60 percent of China’s exports of manufactured goods in 2005. Other subsidy programs provide incentives for companies in China to purchase domestic equipment and accessories instead of buying from U.S. exporters. Both the USTR and Commerce pledge to intensify efforts to identify and analyze Chinese subsidy programs in 2007. COMMERCE AMENDS ORDERS ON
FROZEN SHRIMP On February 1, 2005 Commerce published its notices on amended final determinations of sales at less than fair value and antidumping duty order of certain frozen warmwater shrimp from Brazil, Ecuador, India, Thailand, China and Vietnam. Subsequently, Commerce noticed the scope language might suggest that the warmwater shrimp subject to the order includes warmwater shrimp in non-frozen form. Therefore, they have now amended the scope language to to clarify that only frozen warmwater shrimp and prawns are subject to the order. AFI TO HOST RECEPTION
AT SIAL MONTREAL Attending SIAL Montreal? Make plans to attend AFI’s reception, 5:30 p.m.-7:30 p.m., Thursday, March 29 in Room 511C of the Palais des Congres de Montreal. AFI is partnering with the SIAL organizers to invite many suppliers to the reception to give both importers and suppliers an informal way to introduce themselves.
There is no cost to attend the reception, though pre-registration is requested. For complete details visit www.afius.org or call 732-922-3008.
AFI CONVENTION
APPROACHING QUICKLY
Register today for the AFI Convention being held April 26-29 at the Resort at Longboat Key Club in Longboat Key, Florida.
This year’s convention program is one you won’t want to miss. Our keynote speaker, Tom Shay, will drive home the importance of cash management, inventory control, business planning, marketing, staffing/training and technology in his “Small Businesses Don’t Die, They Just Commit Suicide” presentation. Attendees will be empowered with the knowledge of tried and proven ideas to master the day-to-day operations of their businesses. This entertaining and thought-provoking presentation is sure to be a hit.
Members will also hear information-packed presentations on China: Land of Opportunity by Jeffrey Levin, special counsel, Saul Ewing and Siva Yam, president, United States of America-China Chamber of Commerce. Attendees will gain a better understanding of the business environments and cultural traditions relevant to doing business successfully in both countries. There also will be presentations on Customs Compliance, updates on AFI’s olive effort and discussion on tuna duties. In addition, delegations from India, Brazil, Vietnam and Africa have been invited to discuss the AFI Cashew Standard. Complete details are available on www.afius.org. With three networking receptions, two networking breakfasts, planned recreational activities and a Saturday evening dinner, the AFI convention is the perfect mix of educational sessions and networking events. We hope to see everyone there. If you have any questions on the AFI convention, please contact the AFI office. CLOSING DATE TO ADVERTISE
IN THE AFI ANNUAL APPROACHING Don’t miss your chance to advertise in the upcoming AFI Annual which is distributed to supermarket buyers, foodservice buyers, overseas suppliers, brokers and trade offices. It’s a year-round resource used by companies here and abroad that want to do business with the marketers, importers and import agents in AFI and its sections. By advertising, you identify yourself in a high-profile way with your association. You assure your company of the recognition it deserves in the industry, here and abroad. The closing date is March 15 so hurry to reserve your space! Mitsui Foods, Inc. announced the appointment of William Butler as chief operating officer. Having extensive experience within the packaged goods and food industry, his experience includes sales management positions with Proctor & Gamble, Foodways National (Frozen Division of H.J. Heinz), Weetabix and Chiquita Brands International. Mr. Butler has been with Mitsui Foods for 15 years and most recently was senior vice president of sales & marketing for all business in North America. The following companies were approved for membership in AFI by the Board of Directors at its February 13 meeting. Mediterranean Delight, Alexandria, VA – importer/wholesaler of olive oil, artichokes and sun dried tomatoes
Port Royal Sales, Woodbury, NY – importer of canned food products: fruits, vegetables, tuna, pasta Agroindustrial Diaguitas Ltda., Santiago, Chile – manufacturer of artichokes
Consorcio Peru-Murcia, Arequipa, Peru – manufacturer of canned foods: pimientos, roasted peppers, artichokes
Four Season Fruits Corporation, Tagum City, Philippines – manufacturer of banana chips
Kotak Exim Pvt. Ltd., Mumbai, India – exporters of agri products and electrical hardware
Sorab Enterprise Pte. Ltd., Singapore – trader in desiccated coconut, cocoa powder, spices and food ingredients AFI will host a reception at SIAL Montreal on March 28.
The 2007 AFI Convention will take place April 26-29 at the Longboat Key Club and Resort, Longboat Key, Fla.
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