As you all know, under the FDA’s Bioterrorism Act of 2002, domestic and foreign food facilities that manufacture/process, pack, or hold food for human or animal consumption must register their facilities with FDA by December 12, 2003.  Also on this date, all shipments containing food for human and/or animal consumption entering the U.S. (including in-bond shipments) must meet the “Prior Notice” rules that are part of this Act by electronically presenting the FDA with information about each shipment at least 2 hours prior to arrival at the border for imports arriving via truck.  Some facilities such as farms are exempt from the registration process but are not exempt from the prior notice requirements.  Please refer to FDA’s website for registration exemptions.  Recent information from the FDA states that live animals, imported for slaughter and intended for food are also subject to the prior notice requirements.

Please read this notice in its entirety.  We will cover the topics in two parts; Registration and Prior Notice.

PRIOR NOTICE

There are two ways that most of the prior notice information will be submitted.  They are via the ABI/ACS system used by brokers to submit data to U.S. Customs (who will relay the information to FDA) and the (PN) Prior Notice System Interface available on the FDA website.  FDA expects 80% or more of the data to be submitted via the Broker’s ABI/ACS system due to the tracking capabilities available through this system (such as the customs entry number assigned by the broker or the bill of lading number).  Neither of these systems is available for testing at this time.  According to the FDA website the PN system will not be available until December.  There has been no notice as to when Customs will have their system ready or when they will release their programming specifications to the importing community so we can update our systems to provide the required information.

According to the FDA, it is prudent for the carriers to be in possession of the prior notice confirmation information upon arrival at the border.  For a prior notice that is submitted through the ABI/ACS interface, the prior notice confirmation number together with a “PN received” message will be available to Great Lakes through ABI to resolve any problems at the border. If the FDA PN system is used the transmitter will receive a confirmation online as soon as the submission is confirmed. This information will not be available to Great Lakes. Therefore, this confirmation must be printed and accompany the shipment to the border with all the other Customs documentation and be presented to obtain release of the goods.  This system will most likely require time consuming data entry into the FDA website for each individual shipment.

With both systems, starting December 12^th there will be much more information about each shipment that will need to be submitted than is currently required.  This could result in the broker keying much of the data at the border which could lead to a drastic increase in the amount of time spent on completing each transaction.  This of course will result in higher per transaction pricing.  Fortunately, Great Lakes’ utilizes SmartBorder.com.  SmartBorder® is a web-based software application that specializes in the exchange of required import / export data and documentation with U.S. Customs. The application is designed to run in real-time, completely via the Internet. SmartBorder.com is available for all Great Lakes clients for the completion of your U.S. Customs documentation.  To apply contact you Great Lakes customer service team to obtain the attached application.  By utilizing SmartBorder.com we believe that much of the redundant data entry can be eliminated by pre-entering much of the repetitive data in advance, thereby greatly reducing the amount of time spent on creating the documents and prior notice information required for entry of merchandise and consequently reducing the time Great Lakes will spend on each individual transaction.  Although additional time will undoubtedly be required on our part, the use of SmartBorder.com will keep our transaction fees for processing of the FDA Prior Notice requirements from rising drastically.  Further, if you already utilize SmartBorder, you are aware that you can obtain your ABI information immediately on-line to determine the release status of your shipments, including the FDA release status.  We are sure that this will also be utilized for the FDA prior notice information, submitted by Great Lakes through the ABI/ACS system to Customs/FDA. 

One of the biggest changes most companies will face with FDA prior notice is that, each item that is subject to the Act, must be declared as a separate line of data.  Let us explain further with an example. Paper Cups are regulated by the FDA.  For each size paper cup shipped and/or each packaging size the cups are shipped in, a separate line of product must be declared on the Customs paperwork and submitted to FDA on the prior notice.  For example, if a shipment contains 9 oz. cups packed in cardboard boxes in counts of 50 and on the same shipment there are 6 oz paper cups packed in cardboard boxes in counts of 250, even though these have the same FDA product code information these will have to be declared as separate prior notice line items to FDA.  While this has always been the case with many FDA governed products (such as soda pop, i.e., each flavor declared separately and each size container 12 oz. cans, 1 litre plastic bottles, 2 litre plastic bottles declared separately), this is going to be more strictly enforced starting December 12^th.  The FDA is still taking public comment on their proposed rules.  We believe that many companies could submit information as to why, providing separate information for each item shipped, if they are essentially the same product covered by the same FDA code, would not greatly enhance security.  In fact, at the most recent trade meeting we attended, both Customs and FDA urged importers to submit their comments.  Importers are asked to submit their comments by December 24^th 2003.  Submit written comments to the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852. Submit electronic comments to http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.fda.gov/dockets/ecomments  

Even though U.S. Customs has not yet released the programming specifications required for by the brokerage community to change the programming for the presentation of the data, we are 100% confident that once the specifications are released that our system, SmartBorder.com will be ready within days.  Further, we are also confident that the use of SmartBorder.com to prepare the Customs documentation will greatly reduce the price increases that are going to result from the new requirements.  It is probably going to take a lot of last minute work on all our parts to be ready but, we are confident that we can work through this patiently and effectively.

Should you have any further questions please contact your Great Lakes Customs Brokerage Inc. team representatives. However, please keep in mind that since the systems and specifications are not yet in place to perform testing there are some questions that simply cannot be answered at this stage.  Nobody, including Customs and FDA (as was evident at the recent trade meeting we attended where many questions were unanswered.) are completely sure of the procedures and processes.  Please be patient and cooperative.  Great Lakes Customs Brokerage Inc. is happy to assist in the navigation through these new requirements.