The U.S. Food Supply and Bioterrorism

We're very pleased today to be able to host a briefing on the subject of the U.S. food supply and Bioterrorism. And in that regard, we're pleased to be able to welcome to our podium Leslye Miller Fraser, the Associate Director for Regulations at the Center for Food Safety and Applied Nutrition at the U.S. Food and Drug Administration, popularly known as FDA.

Ms. Fraser will have an opening statement to make and after that, will be very glad to take your questions.

Ms. Fraser.

MS. FRASER: Good morning.

I'm here to give an update on our implementation of the Bioterrorism act. I know many of you have been following it since Congress passed the Public Health Security and Bioterrorism Prepared and Response Act of 2002, which we have shortened to the Bioterrorism Act.

In June of 2002, you also likely know, we had a very expedited timeframe for issuing four regulations, both proposed rules and final rules. We published two proposed rules in February of 2003. That was the Registration of Food Facilities and Prior Notice of Imported Food Shipments. And we published the other two proposed rules in May of 2003, which were: Recordkeeping and Administrative Detention.

We then turned to publishing as interim final rules the Prior Notice and Registration rules, and that was on October 10th, 2003; they were jointly published by the Department of Homeland Security and the Department of Health and Human Services. FDA falls under the Department of Health and Human Services; Customs and Border Protection is a part of the Department of Homeland Security. So these are jointly published regulations.
We did publish them as interim final rules, which means they do have the full force and effect of law. The obligations did take effect on December 12th, 2003, as required by the Bioterrorism Act. But by taking the not required -- but we thought very important -- step of publishing them as interim final rules, affected parties have an additional opportunity to comment, and we will consider those comments as we determine whether changes need to be made to the rules, or whether they should be confirmed as they were initially published.

We had two comment periods in those interim final rules. The first one was for 75 days, and that closed on December 24th; and we've received about 170 comments on each rule. The comment period will reopen this week or early next week for 30 days, and it will coincide with the publication of a joint plan, which I will talk about in a little bit.

We have had a massive outreach effort. We have participated in over 100 meetings throughout the United States, Mexico, Canada and Europe. We have held three satellite downlink meetings to explain the rules, and I'm sure all of you have seen those -- and if not, videotapes and transcripts are available on our website at www.fda.gov, and click on bioterrorism.

With respect to Records and Detention, our goal is still to publish those as final rules by the end of this month. The other rules, the Registration and the Prior Notice interim final rules, we will be looking at all of the comments we receive both from reopening of the comment period as well as the ones that we have received to date.

In terms of what we have seen, our Registration system went operational December 16th. The Prior Notice systems went operational December 12th. And by and large, they have been performing well. We do have some typical glitches that are common with most computer systems. We've had periodic times where the systems have been unavailable, but we have corrected them. We've also had people calling and notifying us of different issues, and we've been able to work through them and either found out they were glitches on our end or glitches on the users' end.

There are tutorials online that people can avail themselves of to understand the requirements, or actually how to comply. And we also have a help desk that is a phone service, mostly for technical questions, also for questions we have already answered in the rules; and that help desk is available from 7:00 a.m. to 11:00 p.m. Eastern Standard Time. And to date, they have fielded over 80,000 inquiries, and that's just them. Other parts of the Agency have probably fielded an equal number of questions.

We have answered quite a number of the applicability questions in the rules themselves. The new questions we are answering through guidance documents that are posted on our website. We are working on the fourth edition of the Registration Guidance document and the second edition of the Prior Notice guidance document. And there are new clarifications in there.

There's clarification with respect to the farm exemption. We specify additional activities that farms may engage in without losing their exemption. There's also clarifications regarding facilities that just hold food as part of the normal shipping process, such as: Post offices, express carrier facilities and trucking terminals. And we also have clarified that they do not have to register if they are just holding food in the usual course of business as a carrier.

As many of you know, we did issue an enforcement discretion guide, a compliance policy guide, in December, with Customs and Border Protection in which noted that we would be emphasizing education over hard enforcement for the first eight months of the rule, or until August 12th, 2004. It is a phased-in enforcement and we did begin the second phase last Friday on March 12th. And in this phase, we will begin to assess civil monetary penalties against violators who are importing food with no Prior Notice. This does not apply to food that individuals are bringing in or food arriving by international mail. Our general enforcement discretion will continue for those.

But for other shipments, we will begin enforcing civil monetary penalties if there is a history of repeated violations of a similar nature by a person who has been previously notified by us or Customs of their violations, or if the violation appears to be intentional or flagrant. We are enforcing registration through the Prior Notice, and we are continuing our education and outreach efforts.

Although we are exercising enforcement discretion, I would like to underscore that we do expect good faith compliance because we have not delayed the effective dates of the rules.

We also signed a commissioning agreement with Customs and Border Protection in December. And under that agreement, we have commissioned over 6,000 customs officials to do investigations and inspections our behalf.

As of last Friday, we had approximately 192,000 facilities worldwide registered. That is less than half of the expected number. We estimated that 420,000 facilities needed to register -- about half within the United States and about half outside. To date, out of that 192,000, about 94,000 are domestic and about 98,000 are foreign.

What we are seeing is that many submitters are not completing Section V of the registration, which is the Emergency Contact, or Section VII, which is the U.S. Agent for Foreign Facilities. We also have about 5,000 facilities registered where the U.S. Agent did not agree to be the U.S. Agent even though they are named on the registration, and we will be working with those facilities to have them correct their registrations.

The most common problem, I would say, with registration is people are forgetting their passwords. It's very case sensitive: Upper case, lower case symbols, special characters, and people forget what it is and then they can't get back into the system. In the grand scheme of things, that's not such a big problem, but it is one that's important to note.

With less than 50 percent of the estimated facilities registered, we have enhanced our outreach efforts. We are currently engaged this month in a nine-city domestic tour. And in April we will have a four-country Asia tour. We will be going to Tokyo, Beijing, Seoul and Bangkok.

With respect to registration for foreign facilities, as I said, we are enforcing through Prior Notice. In terms of Prior Notice, in February, which is when we looked at our summary, we were getting about 140,000 Prior Notices submitted each day.

About 88 percent of those are coming through Customs Automated Broker Interface. We had estimated in the rule we would get about 90 percent, so we feel pretty close at 88 percent. The other 12 percent are coming through FDA's Prior Notice interface, which we call PINSI, for short.

And we do see a slow increase in the number of Prior Notice submissions. Also, either this week or early next week, we will be publishing a summary guide that will give you an overview of the types of submissions we are getting through both systems, and the types of errors we are seeing through both systems.

Generally, what we are seeing is that slightly less than half of the Prior Notices coming in are complete. And when we say complete, that means they put something in every data field. It does not mean that what they put in the data field is accurate, because right now we are exercising enforcement discretion, so if they typed in a registration number, we aren't checking yet to make sure it is the right one.

So about half have at least all data fields completed. A little more than half are incomplete in one or more of the Prior Notice fields, and very few are coming through with no Prior Notice, so people are trying. And that is really good news from our perspective.

We will start looking at the accuracy of the data in this phase. The other thing that we are seeing is that compliance for imported food coming in by land and mostly trucks is much lower than other modes of transportation, so we will be looking at enhancing our compliance and outreach efforts with that mode and with that industry. And we're getting good information on quantity coming in.

One of the other things I will note is that we get, frequently, people telling us that, "You're in enforcement discretion and my food is being held because of Prior Notice." And generally, that is not accurate. Food is being held under our normal import procedures; again, Prior Notice does not replace our general import procedures, but generally, food is not being held for a Prior Notice violation.

In terms of our next steps, and then I'll stop and take questions, we will be publishing with Customs this week or early next week our Joint Implementation Plan. This is something we said we would do in the interim final rule. And in this plan, we outline a schedule and the process by which we will look to integrate our Prior Notice timeframes with the timeframes that Customs has in its Advance Electronic Information Rule.

The Customs timeframes, particularly for trucks and certain air shipments, are lower than the timeframes we have in Prior Notice, and this plan will outline how we look to coordinate the two.

When we publish the plan, we will reopen the comment period, as I said, for 30 days, and we will consider all of the comments we receive on both the plan and the two rules at that time when we look to finalize the rules.

So again, thank you for your attention and I'd be happy to entertain any questions you may have.

MR. DENIG: Let me ask you, as usual, to use the microphone and identify yourself and your news organization.

All right, let's take the lady back there, please.

QUESTION: Good morning. My name is Jilma Prada from Panama, El Panama America.

My question is, what measures are you taking for those producers of goods whose documents or paperwork is not in order? Can they lose their merchandise?

MS. FRASER: Currently, we are not holding the food for that Prior Notice violation. We are informing them as they come through -- most of them are coming through Customs, some are coming through and filing Prior Notice through our system.

Or for the few that aren't filing Prior Notice at all, Customs knows who they are when they file entry of the merchandise with them. And at that point, we are notifying them that they are in violation of not filing the Prior Notice requirements, but we generally are allowing the food to proceed.

And as I said, starting this past Saturday, for people that Customs views as egregious violators -- people that have been educated and warned in the past -- they will start exercising their discretion and imposing civil monetary penalties. But generally, the food still we be allowed to proceed. And we do expect full compliance to begin no later than August 12th.

MR. DENIG: Okay. Next question. Yes, sir, in the back.

QUESTION: Hi. Fernando Pizzarro, Univision.

This is for threats for products coming from outside the country. What about threats, and how do you control threats -- bioterrorism for products that are inside that are produced here in the United States? What are the measures that you take for that?

MS. FRASER: Well, let me clarify in part of your question, registration applies both to domestic and foreign facilities, so that is something that is equally applicable in some ways, and in other ways is actually broader within the United States than outside the United States because there is an exemption in the registration rule for foreign manufacturers. If there is a second foreign manufacturer of a food product, such as a food ingredient, then the upstream foreign manufacturers do not have to register. There is no similar exemption within the United States. So generally, with registration, we have a very good picture of who is producing food for American consumers.

You are correct though, that the Prior Notice requirement only applies to products that are being imported. And that is to give us an advance notice of what food is coming in.
Most of the information we get in Prior Notice is information we would have gotten later, when entry is filed. We now are getting it sooner, so we can decide where to deploy our investigators, if we think that's necessary. And if we have a particular concern about a food product, we can meet it at the border, and investigate it.

Within the United States, we don't need advance notice. Our inspectors can show up unannounced, and present their credentials. They can show up and do examinations and investigations. We have our state authorities with whom we closely work to also arrange inspections on our behalf. And so, there is an ability to, more or less, walk in and do an on-site investigation and examination and sampling, where we don't have that authority to be able to do that without working through the competent authorities in your countries.

So, we view it as an equal way of looking at inspections. It 's just that because we can't do investigations outside the United States as we can inside the United States that the Prior Notice information becomes important.

MR. DENIG: Let's go to Russia up front, here.

QUESTION: Dmitry Kirsanov, Russian News Agency, TASS. Ma'am, I have a number of -- basically, I just wanted to -- I just wanted you to clarify a number of points, because I'm not --

MS. FRASER: Let's do them one at a time, then.

QUESTION: Thank you. First, you said that there are currently 192,000 enterprises registered. As far as I understand, those are the companies that sell food to the United States, right? Both abroad and here?

MS. FRASER: The companies -- and they're actually facilities, not by company, and the reason I clarify that is, if a company owns ten facilities, we would need ten registrations, not one. It's only facilities that manufacture, process, pack or hold food that will be consumed by humans or animals in the United States that have to register. So if the food will not be consumed here, then registration would not be required.

QUESTION: Mm-hmm. So, basically all the food producers abroad who sell their food here should register with FDA, right? And if they don't --

MS. FRASER: Correct, if they are the last manufacturer, yes.

QUESTION: Mm-hmm. Do you receive any complaints so far from them? And what are those?

MS. FRASER: I think generally, we haven't received what I would say are complaints. We heard concerns during the rule-making process, and I would say probably the biggest concern raised during the proposal by foreign entities was the requirement of the U.S. agent.

And that is a requirement that is included in the Bioterrorism Act. It is not something that the agency had discretion to waive. And I would say that was the biggest area of concern. The other concerns I have heard -- and I wouldn't say they are as widespread as that one -- but we have had requests for the systems to be in other languages besides English. And we have posted some of our fact sheets and some of our guidance documents in other languages, and some of the instruction guides are in other languages -- but the systems themselves are in English.

MR. DENIG: Okay. We'll take the gentleman right here.

QUESTION: Yui with NHK, Japan.

I have two questions. First is tourists -- tourists who'd like to bring the foods -- how are you going to handle with those kind of tourists? And the second question is, outreach effort. You mentioned about going to Asian tour. Why Asia? I mean are Asian companies didn't register food?

MS. FRASER: First, let's see -- tourists coming in with food.

In terms of Prior Notice, if you are bringing food as a person coming back from abroad, and you bring food in with you, and it's for yourself -- what we call personal use -- it's for you, your family, your friends -- then Prior Notice is not required.

If you are a tourist and you're bringing in food for commercial reasons, you're going to bring it in give to someone to sell, or you're going to sell it yourself, then Prior Notice is required, and you would have to file the Prior Notice before you left over our system. That is not one that can come through over Customs' system. And you would get a copy of the confirmation, and that needs to accompany your shipment when you arrive. So there is a distinction based on that.

In terms of the registration number in a Prior Notice, if you are bringing in the other thing for the one distinction with the registration number, if it is something you've gone in and purchased for yourself, or you purchased it as a gift and you're shipping it to someone, then instead of having to have the registration number of the manufacturer, which you otherwise would have to have, for personal shipments you could look at the label on the back of the bottle or the can and just copy the name, the address.

One of the areas we've gotten significant comment in during the first comment period -- a number of people say personal shipments should be exempted entirely. And that is something we are looking at.

QUESTION: How about Asia?

MS. FRASER: I'm sorry.

I think we see collectively that worldwide, including in the United States, that half of the entities that we think need to register have not. And we have already been to the EU, we've been to Canada, we've been to Mexico. We have not been to Asia. And so that is part of just additional outreach.

I can't tell you right now that facilities in one country are any better than another country or any worse, but when we look at total numbers, we expected about 210,000 facilities in the United States to register. We have less than half of that.

And we expected about 210,000 facilities outside the United States to register, and we have less than half of that. And we're just trying to get as many people contacted as we can.

MR. DENIG: Let's go to the gentleman here, followed by the man in the back.

QUESTION: Randy Fabi with Reuters.

Do you find any evidence that food import prices have increased due to these regulations, or do you expect import prices to increase?

MS. FRASER: We don't see any evidence of that.

I don't think that we expect it to increase. I think that there is a learning curve that people need to undergo to understand what they need to do to comply, and what are the business practices that they have to modify, perhaps. And again, I'll go back to Prior Notice.

Registration is -- it's free to register with us. If you do it online, it takes you about 15 minutes. It's a pretty straightforward process.

Prior Notice -- most of the information we're asking for is information that brokers currently give us when they're filing entry. So, the biggest change is really modifying your communications system, your processes of getting that information to us sooner. And one of the reasons we have the enforcement discretion period for eight months is to allow people to try different things -- trial and error -- make adjustments without having that kind of an impact where prices would have to increase. We did it intentionally to minimize the impact on trade.

MR. DENIG: Okay. Let's go back there.

QUESTION: Fernando Pizzarro from Univision again.

I just wanted to gauge the level of reaction the government -- the Administration would have -- or the FDA, for that matter -- would have in case of a bioterrorist attack on the food supply. Let's say milk is tampered with in a certain area -- whatever -- you know, fruit coming in from overseas, even if it's local. What are the steps -- what would happen -- what are the steps that the FDA would take in case something like this does take place?

MS. FRASER: That's a very broad question and it really will depend on the depth of our information, how widespread we think it is, I think. So, I will answer it probably as broadly, and not really with a great deal of total specificity.

What I will say is, if we look at the authorities we have in the Bioterrorism Act, registration -- unless they were at the threat level where we just know food has been tampered with or we heard food has been tampered with -- one of the benefits we have now with the registration data base, assuming all of those affected facilities have registered, is the ability to communicate with them and let them know that there -- and let's go to your milk example. If we have a listing in our database of who are the milk facilities, we know the target, the threat is specific to a certain area, then we could notify them.

If we think it's specific to a widespread, or we don't know where the threat is coming from, at minimum we could notify all of those facilities in addition to affected governments.

If it's a big enough threat, it might be something we communicate with the media. So, it really is going to be the nature of the threat. In terms of, again, going back to, let's say, we heard of a threat where a particular shipment was tampered with but the shipment is already en route before the facility notified us or the authorities in that country notified us, that's one of the advantages of Prior Notice. We now know when the shipment is coming in, when it's expected to arrive. It's one we could stop at the border, sample it to see whether that product actually has been tampered with or not.

Administrative detention is a new authority in the Act. It's actually in effect now. The regulations we're doing specify the procedures we would use, but we actually do have the authority to administratively detain any food in our country that we think poses a threat of serious adverse health consequences or death to humans or animals.

And then I would say Record Keeping -- to the extent, again, we think we have that serious health threat; we have the authority to access records so that we can do a tracing to find out where that shipment has been distributed. And that's in addition to the other authorities we already have, like to work with industry for voluntary recalls or whatever else.

MR. DENIG: Okay. Let's go to Japan on the left, there.

QUESTION: My name is Wada; I'm with Japan's Mainichi newspaper.

I have two questions. One is do you plan to take any additional measures in this field? I mean, in the protection against bioterrorism in response to the terror attacks in Spain?

And the second question is about -- do you have any cost estimates for the introduction of this program on the part of the federal government, as well as the companies that need to register with this system? Thanks.

MS. FRASER: In terms of what's happened in Spain, I can't speak to that at all. That's not my area of expertise.

I'm the one that's leading developing these regulations. I think what we look at in terms of just safeguarding, generally, the U.S. food supply, and what steps we need to take along those lines to implement the Bioterrorism Act.

In terms of the cost impact of each of these rules, if you go on our website, at the back half of each of these documents is a detailed economic impact statement of what we think the economic impact will be to affected parties. We published our Proposed Economic Impact statement with the Proposed Rules. We got comments on that, as well as the comments on the substantive requirements. And we considered those comments as we adjusted and modified what we thought the impact would be. So, those numbers I don't have memorized, but there is a very thorough analysis in each rule.

QUESTION: Do you have a kind of a ballpark figure?

MS. FRASER: I honestly -- I just don't remember that.

Yeah, the economists won't be happy with me, but there is a very detailed economic analysis in there.

I mean, the impact for -- I do know it for registration. I mean, I think the impact we saw for registration was really primarily tied to -- for foreign entities, since that's primarily our interest, was really tied to the U.S.-Asian impact. And we saw it as a range. It is one of the areas we specifically are requesting comment on. I think we thought the estimate might be about $500 -- what parties may charge to be a U.S. agent.

What we have seen is that -- and let me back up a step. The only requirements we put on somebody to be a U.S. agent is that they had to reside, or maintain a place of business in the U.S. and be physically present here. And it could be -- when we say a person, it could be an individual, it could be a company, it could be a trade association, it could be a broker, it could be a relative. So, it really can be anybody.

So, if you think of that broad scope, you know, your relative may not charge you anything, depending on whether they like you or not, I guess. But it really can be a broad scope. As with anything else, we encourage people to shop wisely. There are people who are charging, I think, high prices to be U.S. agents. There are people who are charging moderate prices to be U.S. agents. And one of the things we did request comment on is what is the true economic impact of that requirement. And we're looking at the comments we got in on that regard.

MR. DENIG: Let's go back to Panama.

QUESTION: Hello, Ms. Fraser.

Compliance with these FDA rules will be eliminated when Free Trade Agreements between U.S. and other countries are in effect, or is this going to be a permanent rule?

MS. FRASER: As with all U.S. rules, I think they are subject to comment in whether they should be revised, removed.

As of now, the way the statue is written, because these regulations are implementing the Bioterrorism Act, it would have to be a requirement that Congress actually removes since, right now, the statute says facilities have to register with FDA by December 12th if they manufacture, process, pack or hold food. So on our own, as an agency which is implementing that law, we couldn't say, "You no longer have to register."

I think as different discussions take place in the international arena, each country, not just the United States, but each country, will be assessing which of the laws that they have on the books need to be modified, removed, added to -- whatever. So I think that's just a broader international question.

MR. DENIG: Okay, any other questions? All right.

Thank you very much, Ms. Fraser.