Broker Evaluations for VQIP Should Distinguish Between Serious and Minor Problems, Says NCBFAA

The Food and Drug Administration should allow for distinctions between major and minor mistakes within the filer/customs broker evaluation when considering Voluntary Qualified Importer Program eligibility, said the National Customs Brokers & Forwarders Association of America. The FDA should also improve its data collection and create an agency rulings system before the VQIP is implemented, said the NCBFAA in comments to the agency on VQIP (here). Other commenters (here) included the American Association of Exporters and Importers (here), the Grocery Manufacturers Association (here) and the European Union (here).

The FDA should modify the evaluations to better reflect the seriousness of an filer/broker error, said the NCBFAA. While brokers work hard to avoid clerical errors, the potential penalty for such errors -- a lost VQIP client -- "is disproportionate to the offense when minor errors can be the basis for a less than satisfactory filer rating," it said. "At the same time, the penalty for the VQIP importer is even more severe: suspension from the VQIP program because his customs broker received a less than satisfactory filer rating." The FDA should differentiate between the major and minor errors that don't impact health or safety and only let serious and continuing broker filing errors to affect VQIP status, said the NCBFAA.

The agency should also improve its product code builder, which lacks commonly used descriptions, said the trade group. Toward that end, the FDA should implement a CBP-like rulings system to allow for binding rulings and add certainty for product codes for more complex products. The agency should also allow for more specific categorizations, the lack of which "only leads to unnecessary inspections or requests for documents," it said. Filers should also be able to request more descriptive product codes, it said.

Also problematic is the proposed "one-size-fits-all fee structure" that would reduce the incentives for participation by smaller importers, said the NCBFAA. Early comments on the draft similarly said the VQIP program may only help the biggest food importers (see 1508170014). Under VQIP, which FDA has said it intends to launch in 2017, FDA would require importers source their products from foreign exporters certified by accredited third-party auditors. In return, participants would receive immediate release, limited sampling, and expedited laboratory analysis. Comments on the draft guidance were due Aug. 19 (see 1506040017).

There's some confusion over the definition of "importer" within the guidance, said the European Union. The draft VQIP importer definition differs from FDA’s definition of importer for the purposes of the Foreign Supplier Verification Program or CBP’s definition of importer of record. "The inconsistency between this draft guidance and the proposed rule on FSVP is of particular concern given the close relationship between the two programmes," said the EU. There's also continued "major reservations about the requirement of DUNS numbers for all FDA registered food facilities," it said.

AAEI Prefers More Account-Based Approach

The program would also benefit from a more "account-based trusted trader system" similar to CBP's Customs-Trade Partnership Against Terrorism program, said the AAEI. The FDA could align its import resources in a similar manner to its domestic oversight, said the AAEI. "If domestically the FDA is saying that they do not need to approve each article shipping out of a domestic facility because they know the partner, they know the product, manufacturing processes, procedures, safeguards, etc., the stance should be the same if the FDA has similar knowledge for importers," said the association.

Under the current proposal, the possibility of frequent shipments that combine foods with and without VQIP approval could limit the benefits of such a program. Importers that chose to ship and manifest approved products separately from the non-approved ones "could see increased costs of transportation, forwarder fees, broker fees, bank fees and loss of benefits such as reaching a Merchandise Processing Fee maximum per entry as a result," the AAEI said. "It will be unlikely that importers will feel that these costs are out-weighed by the benefit of the VQIP treatment at the time of entry."

Another troubling aspect is the broad language eliminating an importer from VQIP eligibility if "any product they import is subject to an import alert or Class 1 recall," said the AAEI. The process to "remove a product or manufacturer from an Import Alert is extremely difficult and time-consuming" and a "manufacturer who had a problem in the past may well have changed their controls and enjoyed years of compliant shipments, but they are still listed on that Import Alert." The FDA should "explore ways to minimize the burden of import alerts on VQIP importers," the group said.

While the proposed expedited entry benefit for VQIP importers would add predictability, the FDA should also include "routine and consistent pre-arrival release" within the program, said the Grocery Manufacturers Association. "Specifically, we are asking FDA to provide VQIP products with a 'May Proceed,' 'Conditional Release,' or notification of the need for additional examination and sampling as early as possible after departure from the foreign port and preferably at least five days before the product arrives in the U.S," said the GMA. That benefit would make the program far more attractive and "without a pre-arrival release benefit, many of our members would be unlikely to apply to join the program," it said. There's CBP precedent of allowing for a "conditional release" prior to arrival and "we are not aware of any regulatory barriers that would keep FDA from making and communicating an admissibility determination prior to arrival," the group said.