Foreign Supplier Verification & Voluntary Qualified Importer Programs Food Law Current Issues Seminar Michigan State University; July 12, 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 FSMA Cornerstones Preventive Controls (Human and Animal Food) Produce Safety Foreign Supplier Verification Voluntary Qualified Importer Program Accreditation of Third Party Auditors Certification of Foreign Facilities/Foods Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

GMA Four Pillars (September 2007) Mandatory Foreign Supplier Quality Assurance Program Voluntary Qualified Importer Food Safety Program Building Capacity of Foreign Governments Expand the Capacity of FDA Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 FSVP Basics Importers must develop, maintain, and follow an FSVP for each food imported, unless exempt Elements and requirements of FSVP vary Type of food Category of importer (very small, for ex) Nature of hazard Who is to control hazard Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 Exemptions Importation of juice and seafood whose suppliers are in compliance with HACCP regulations Food imported for research and evaluation Food imported for personal consumption Alcoholic beverages Food that is transshipped or imported for future export and not consumed or distributed in the US Products from facilities subject to FDA low acid canned food requirements (exempt as to microbiological hazards only) Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 Who is the Importer? “Importer” – The US owner or consignee of the food offered for import “US owner or consignee” – The person in the US who, at the time of entry, owns the food, has purchased the food, or has agreed in writing to purchase the food If no US owner or consignee, the importer is the US agent or representative of the foreign owner or consignee Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

What is a Foreign Supplier? “Foreign supplier” – The establishment that manufactures/processes the food, raises the animal, or grows the food (without further manufacturing/processing of more than a de minimis nature) “Food” – as defined in the FD&C Act -- raw materials, ingredients, finished food and food contact substances (but not pesticides) Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Basic FSVP Requirements Conduct hazard analysis for imported food Evaluate the risk posed by a food – based on the hazard analysis and the foreign supplier’s performance Using evaluation, approve (or not) suppliers Determine appropriate supplier verification activities Conduct supplier verification activities Conduct corrective actions Maintain records Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 Some Nuances Each food and each supplier require a FSVP One hazard analysis for different foods of same type from a single foreign supplier, if those foods have similar hazard profile Evaluation of risk and supplier’s performance must be re-evaluated every three years or when you acquire new information about a potential hazard or the supplier’s performance No FSVP required if importer has adequate assurances that a subsequent entity (importer’s customer, for example) will process the food for food safety. Documents accompanying the food must disclose (“not processed for microbiological safety”) Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 More nuances No FSVP required if importer has adequate assurances that a subsequent entity (importer’s customer, for example) will process the food for food safety. Documents accompanying the food must disclose (“not processed for microbiological safety”) And, annually obtain from customer a written assurance An importer can rely on another entity to conduct the hazard analysis. “Other entity” cannot be the foreign supplier Importer must review and assess the “relevant documentation” No evaluation or supplier verification required if there are no hazards to control Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 Hazard Analysis Assessment -- based on experience, illness data, scientific reports, and other info – about the known or reasonably foreseeable hazards Hazards – Biological Chemical Physical Includes naturally occurring hazards, unintentionally introduced hazards, and intentionally introduced hazards Probability and severity Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Scope of Hazard Analysis Formulation Condition, function, design, of the establishment and equipment of a typical entity that produces the food Raw materials/ingredients Transportation Harvesting, raising, manufacturing, processing, packing, packaging and labeling Storage and distribution Likely use Sanitation Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Evaluation of Food and Supplier Performance Hazard Analysis Entity controlling the hazards (supplier or supplier’s raw material supplier, for example) Foreign supplier’s procedures, processes, and practices related to food safety Applicable FDA regulations and supplier’s compliance history (FD 483, warning letters, import alerts) Supplier’s food safety history (testing, audits, corrective actions) Storage and transportation practices Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 Approved Suppliers Importer must have – in writing – written procedures to ensure that it imports only from approved suppliers and it must conduct appropriate verification activities Unapproved supplier can be used temporarily, provided food is subjected to verification activities before importation Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Supplier Verification Importers should tailor verification activities to food and supplier (not one size fits all) Purpose of verification activities: provide assurance that the hazards requiring control are significantly minimized or prevented Importer must establish and implement written procedures to ensure verification activities occur Examining written procedures is where FDA inspection typically begins Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

What are Verification Activities? Annual onsite audits Required where there is reasonable probability that exposure to a hazard controlled by the supplier will result in serious adverse health consequences or death to humans or animals (SAHCODHA) Unless the importer documents that an alternative approach to verification is appropriate and provides assurance that the food meets US standards Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

More Verification Activities Sampling and Testing Review of foreign supplier’s food safety records Other appropriate verification activities Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 On-Site Audits Must be conducted by qualified auditor Audit not subject to Third-Party Certification Body rule If food is subject to FDA food safety regulations, audit must consider those regulations and review foreign supplier’s food safety plan (including implementation) GFSI audit – not presumptively compliant Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 More On-site Audits In lieu of on-site audit, importer may rely on a food safety inspection by: FDA Other federal, state, local, tribal or territorial agency Food safety authority of country whose food safety system has been recognized by FDA as comparable/equivalent to the US system (NZ/Canada) If, the inspection is done within one year of the date the onsite audit would have been required Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 Corrective Actions Corrective actions are required when – Importer determines foreign supplier has not used processes and procedures to provide same level of public health protection as FDA rules Supplier produced food that was adulterated or misbranded with respect to allergen labeling If importer learns of supplier problems by means other than verification activities or re-evaluation of foreign supplier, investigation is required to determine if FSVP needs modifying Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 Entry Process Importer must provide, for each line entry (to U.S. Customs and Border Protection (CBP)): Importer’s name Importer’s email address Unique facility identifier acceptable to FDA (DUNS number for facility where FSVP records are maintained) Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Importer Identification FDA will create list of FSVP importers to be posted on its website Importer information used for inspectional purposes Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 Recordkeeping Critically important Virtually everything related to FSVP (and FSMA more generally) must be recorded Records must be available to FDA upon request during inspection and submitted to FDA on request (remote request) promptly English translation will be required for records requested Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 Who Can Do a FSVP? Only qualified individuals may develop an FSVP and a QI must perform all required FSVP tasks QI is someone who has training, education, or experience (or some of each) necessary to perform a particular FSVP activity QI must be able to read and comprehend foreign language records Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Auditor Qualifications Qualified auditor must be used to conduct onsite audit of foreign supplier QA must have education, training and/or experience and some actual audit experience Could be foreign government official Agent of accredited third-party certification body May not be an employee of the foreign supplier (obvious conflict of interest; beware the supplier’s “brother-in-law”) Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Modified Requirements Very small importers Food from small foreign suppliers Food from foreign supplier in country with an officially recognized or equivalent food safety system Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 Compliance Dates Importers must comply by latest of: May 27, 2017 (18 months after publication of rule) If foreign supplier is subject to preventive controls or product safety rule, 6 months after compliance for that rule is required If importer is “receiving facility,” the date the importer is required to comply with the supply chain provisions in the preventive controls rule Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Voluntary Qualified Importer Program The HOV lane for importers (maybe) Draft guidance for VQIP (June 2015) How will program work How can importers qualify? Voluntary program (user fee) Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 VQIP Definitions Importer – person that brings food or causes food to be brought from foreign country into customs territory of the US (unlike FSVP, can be located outside US) Foreign supplier – same definition as FSVP Food – excludes pesticides and food contact substances Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 Eligibility for VQIP 3-year history of importing food into US Current facility certification for each foreign supplier (by accredited third-party certification body) No food importer imports (whether in or out of VQIP) subject to import alert or Class I recall Annual fee payable by October 1 Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 More Eligibility Neither importer nor non-applicant entities are subject to an ongoing FDA administrative or judicial action (import alert, injunction, debarment) or have history of noncompliances related to food safety (OAI inspection with no corrective action taken) No CBP penalties, forfeitures, sanctions related to safety of security of FDA-regulated products during prior three years Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 Even More Eligibility FSVP or HACCP importer in compliance with supplier verification requirements Importer must use paperless filers/brokers with passing rating during last FDA Filer Evaluation Importer must have VQIP quality assurance program (QAP) (QAP documentation accompanies VQIP application) Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 What Goes in a QAP? Corporate policy statement related to food safety and security (supply chain wide) Organizational structure/management structure for QAP Food safety policies and procedures Food defense policies and procedures Training and experience requirements for employees responsible for QAP Procedures to ensure QAP implementation Procedures for record maintenance Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

VQIP Annual Application Annual notice of intent between January 1 and May 31 Importer application, QAP, labels of each food under VQIP Annual fee paid by October 1 Importer must promptly amend application for changes (food, supplier, broker, label, etc.) Identify food as VQIP at entry Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

FDA Identified Benefits Expedited entry FDA will not examine/sample VQIP entries except for cause, as part of surveillance, and as part of VQIP audit FDA will examine/sample at importer’s preferred location FDA will expedite analysis of for cause & audit samples FDA will assist with CBP if exportation is required FDA VQIP Help Desk Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016 VQIP – Worth it? Not clear from comments that VQIP is likely to succeed or garner sufficient participation Timing Final guidance – summer 2016? Fee schedule August 2018 First applications – January 2018 First fiscal year for benefits – October 2018 Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016

Stuart M. Pape, Polsinelli / FSVP & VQIP /July 2016