[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



  IMPLEMENTATION OF THE FOOD SECURITY PROVISIONS OF THE PUBLIC HEALTH 
        SECURITY AND BIOTERRORISM PREPAREDNESS AND RESPONSE ACT

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 25, 2004

                               __________

                           Serial No. 108-114

                               __________

       Printed for the use of the Committee on Energy and Commerce


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house


                               __________

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                    ------------------------------  

                    COMMITTEE ON ENERGY AND COMMERCE

                      JOE BARTON, Texas, Chairman

W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
RALPH M. HALL, Texas                   Ranking Member
MICHAEL BILIRAKIS, Florida           HENRY A. WAXMAN, California
FRED UPTON, Michigan                 EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio                EDOLPHUS TOWNS, New York
JAMES C. GREENWOOD, Pennsylvania     FRANK PALLONE, Jr., New Jersey
CHRISTOPHER COX, California          SHERROD BROWN, Ohio
NATHAN DEAL, Georgia                 BART GORDON, Tennessee
RICHARD BURR, North Carolina         PETER DEUTSCH, Florida
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia             ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming               BART STUPAK, Michigan
JOHN SHIMKUS, Illinois               ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico           ALBERT R. WYNN, Maryland
JOHN B. SHADEGG, Arizona             GENE GREEN, Texas
CHARLES W. ``CHIP'' PICKERING,       KAREN McCARTHY, Missouri
Mississippi, Vice Chairman           TED STRICKLAND, Ohio
VITO FOSSELLA, New York              DIANA DeGETTE, Colorado
STEVE BUYER, Indiana                 LOIS CAPPS, California
GEORGE RADANOVICH, California        MICHAEL F. DOYLE, Pennsylvania
CHARLES F. BASS, New Hampshire       CHRISTOPHER JOHN, Louisiana
JOSEPH R. PITTS, Pennsylvania        TOM ALLEN, Maine
MARY BONO, California                JIM DAVIS, Florida
GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
LEE TERRY, Nebraska                  HILDA L. SOLIS, California
MIKE FERGUSON, New Jersey            CHARLES A. GONZALEZ, Texas
MIKE ROGERS, Michigan
DARRELL E. ISSA, California
C.L. ``BUTCH'' OTTER, Idaho
JOHN SULLIVAN, Oklahoma

                      Bud Albright, Staff Director

                   James D. Barnette, General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

                         Subcommittee on Health

                  MICHAEL BILIRAKIS, Florida, Chairman

RALPH M. HALL, Texas                 SHERROD BROWN, Ohio
FRED UPTON, Michigan                   Ranking Member
JAMES C. GREENWOOD, Pennsylvania     HENRY A. WAXMAN, California
NATHAN DEAL, Georgia                 EDOLPHUS TOWNS, New York
RICHARD BURR, North Carolina         FRANK PALLONE, Jr., New Jersey
ED WHITFIELD, Kentucky               BART GORDON, Tennessee
CHARLIE NORWOOD, Georgia             ANNA G. ESHOO, California
  Vice Chairman                      BART STUPAK, Michigan
BARBARA CUBIN, Wyoming               ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois               GENE GREEN, Texas
HEATHER WILSON, New Mexico           TED STRICKLAND, Ohio
JOHN B. SHADEGG, Arizona             DIANA DeGETTE, Colorado
CHARLES W. ``CHIP'' PICKERING,       LOIS CAPPS, California
Mississippi                          CHRIS JOHN, Louisiana
STEVE BUYER, Indiana                 BOBBY L. RUSH, Illinois
JOSEPH R. PITTS, Pennsylvania        JOHN D. DINGELL, Michigan,
MIKE FERGUSON, New Jersey              (Ex Officio)
MIKE ROGERS, Michigan
JOE BARTON, Texas,
  (Ex Officio)

                                  (ii)




                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Cady, John R., President and CEO, National Food Processors 
      Association................................................    28
    Clarke, Roger, Williams and Clarke Company...................    33
    Crawford, Lester M., Acting Commissioner, Food and Drug 
      Administration.............................................     5
    French, David, Senior Vice President, Government Relations, 
      International Foodservice Distributors Association.........    37
    Sauceda, Cathy, Director, Special Enforcement Division, U.S. 
      Customs and Border Protection..............................    11
    Saunders, R. Douglas, Chair, Association of Food and Drug 
      Officials (AFDO) Food Security Task Force, accompanied by 
      Betsy Woodward, Special Advisor to the AFDO Board of 
      Directors..................................................    46
    Stout, Susan M., Vice President of Federal Affairs, Grocery 
      Manufacturers of America...................................    42
Additional material submitted for the record:
    Cady, John R., President and CEO, National Food Processors 
      Association, letter dated August 9, 2004, enclosing 
      response for the record....................................    60
    French, David, Senior Vice President, Government Relations, 
      International Foodservice Distributors Association, letter 
      dated August 9, 2004, enclosing response for the record....    63
    Stout, Susan M., Vice President of Federal Affairs, Grocery 
      Manufacturers of America, letter dated August 9, 2004, 
      enclosing response for the record..........................    65
    Ronan, Patrick, Assistant Commissioner for Legislation, Food 
      and Drug Administration, Department of Health and Human 
      Services:
        Letter dated October 7, 2004, to Hon. Michael Bilirakis, 
          enclosing response for the record......................    68
        Letter dated September 13, 2004, to Hon. John D. Dingell, 
          enclosing response for the record......................    77

                                 (iii)

  

 
  IMPLEMENTATION OF THE FOOD SECURITY PROVISIONS OF THE PUBLIC HEALTH 
        SECURITY AND BIOTERRORISM PREPAREDNESS AND RESPONSE ACT

                              ----------                              


                         FRIDAY, JUNE 25, 2004

                  House of Representatives,
                  Committee on Energy and Commerce,
                                    Subcommittee on Health,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:34 a.m., in 
room 2123, Rayburn House Office Building, Hon. Michael 
Bilirakis (chairman) presiding.
    Members present: Representatives Bilirakis, Shimkus, Brown, 
Stupak, Green, and Capps.
    Staff present: Nandan Kenkeremath, majority counsel; Jeremy 
Allen, policy coordinator; Ryan Long, majority professional 
staff; Michael Abraham, legislative clerk; Edith Holleman, 
minority counsel; and Voncille Hines, minority professional 
staff.
    Mr. Bilirakis. I am going to call this hearing to order. 
Mr. Brown, as I understand it, is on his way. So he will 
probably be here before I finish up.
    This morning we will hold our second hearing this year on 
Homeland Security programs within this committee's 
jurisdiction. In May, we held a legislative hearing focused on 
ways to improve H.R. 3266, the Faster and Smarter Funding for 
First Responders Act, a bill originally drafted by the Select 
Committee on Homeland Security. Subsequent to our hearing, 
changes were made to that legislation to address the concerns 
this committee had with the legislation, which we supported.
    Today, however, we will be focusing on the implementation 
of one of the most important pieces of legislation this 
committee has produced over the past several years. The Public 
Health Security and Bioterrorism Preparedness and Response Act 
of 2002 represents Congress' bipartisan response to the dire 
threat caused by biological, chemical, and radiological 
weapons. This law has gone a long way toward improving our 
ability to prevent an attack of this nature. This hearing will 
focus on the food safety provisions contained in the act.
    Congress provided the Food and Drug Administration with new 
authority to ensure the safety of our food supply. 
Specifically, the new law requires the registration of food 
processors, the prior notification of proposed food imports, 
the establishment and maintenance of records, and new 
administrative food detention authority. The FDA published two 
interim final rules on October 10 of last year to implement 
these provisions.
    I am pleased that Dr. Lester Crawford, the Acting 
Commissioner of the FDA, is here to discuss these regulations 
with us this morning. It is always a pleasure to welcome you to 
our subcommittee, sir.
    These rules are designed to help domestic and foreign food 
establishments minimize the risk that food under their control 
could be subject to intentional contamination.
    The rules were implemented on December 12, 2003, but, as I 
am sure Dr. Crawford will point out, FDA has asked its 
inspectors to flexibly enforce while affected establishments 
and traders become accustomed to the new system. I am also 
interested in learning more about the extended education 
program here and abroad to inform participants along the farm 
to table continuum about the new requirements.
    I am also glad that Ms. Cathy Sauceda, the Director of the 
Special Enforcement Division of the U.S. Bureau of Customs and 
Border Protection, is here. Your insight of course into the 
collaboration between FDA and Customs should prove valuable, 
and we certainly welcome you here this morning.
    As we work to fine-tune our Nation's ability to respond to 
attacks on our homeland, I am very interested in how different 
agencies interact. While we can do great things when agencies 
with differing expertise work together, I want us all to remain 
vigilant in ensuring that duplication of efforts doesn't result 
in wasted resources.
    Finally, I am pleased that our second panel contains a 
number of affected stakeholders. I know that the food 
processing and distribution industry have worked closely with 
Congress and with the FDA to ensure that the 2002 Bioterrorism 
Prevention Act is properly implemented. I am aware of your 
testimony that some of you do have concerns, and I am 
interested in hearing them. And I would hope, by the way, Dr. 
Crawford, at this point I realize--I know that you have to 
leave, and we will let you go just as soon as you have to 
leave, about 10:30. But if you could have someone from your 
office stay in the audience so they might take notes as we 
listen to these affected stakeholders, it could really be 
helpful. Thank you.
    Open dialog between all interested parties is critical to 
the success of the law. This is an important hearing, and I 
want to once again--we worked late last night, to well after 
midnight, and so I think people will be streaming in little by 
little. But in any case, that is the reason we have hardly 
anyone else here. But I do want to thank you again for joining 
us this morning. And, with that, I am very happy to yield to 
the ranking member for an opening statement. He looks pretty 
good for having been up that late.
    Mr. Brown. Thanks, Mr. Chairman.
    Food security provisions of the 2002 bioterrorism law 
recognize the very real challenge of food import security, and 
they give the FDA the tools to meet that challenge. The task 
before you and for us is a challenging one, to be sure. 
Protecting the food supply of a country as big and open as the 
United States from the threat of bioterrorism is a difficult 
proposition. Fifteen percent of vegetables consumed in the U.S. 
are imported, 40 percent of the food we eat, 55 percent of the 
seafood that we consume. In all, we import 5 million shipments 
of food every year under FDA's jurisdiction. The challenge we 
face is a serious one but not insurmountable.
    The 2002 law gives FDA powerful new legal tools. It 
requires foreign facilities that are in America's food chain to 
register with the FDA, requires importers to give FDA prior 
notice before shipment arrives, requires that businesses in our 
food chain maintain records necessary to permit effective 
trace-backs in an emergency, allows detention of a shipment if 
FDA believes it may pose a threat, and allows FDA to disbar 
companies with a track record of noncompliance.
    FDA has received hundreds of millions of dollars in 
additional appropriations to implement the new law, and FDA has 
used these resources to both beef up technology, improve 
systems, and hire hundreds of new field agents, lab analysts, 
criminal investigators, and other professionals who can put 
these new security protections into effect. So I say one of the 
strengths of the 2002 act is its flexibility. The law gives FDA 
significant discretion in key areas to ensure that requirements 
like facility registration and prior notice are tailored to 
provide maximum protection for the public and minimum 
compliance burden for industry.
    Industry has raised some concerns about the actual 
implementation. These are serious considerations, and as this 
hearing demonstrates, Congress is serious about getting the 
implementation with you right.
    But let me be clear. The 2002 act gives FDA ample 
flexibility to address legitimate concerns. I stand ready to 
work with industry to improve the system within the framework 
of current law, And I look forward to the testimonies of our 
witnesses.
    Mr. Bilirakis. I thank the gentleman, and I would now yield 
to the gentleman from Illinois, Mr. Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman.
    And I guess one of the few conferences that I was ever to 
be able to be a part of was this one, and so I am here with 
great interest to hear how the legislation and actually the 
implementation is moving forward.
    We have a great food safety program here in this country. 
The concerns of the world are still prevalent and very evident. 
I, like many, will want to ensure that, as best as possible, 
that we are maintaining that food safety supply without that 
now that very dangerous opportunity of destroying the small 
businesses that will become overwhelmed by the bureaucratic 
efforts to maintain them in this new environment. I think there 
is great concern. The more government we have to have to 
intervene to protect, really, the bigger the organizations have 
to be and the larger staffs and the more legal advice and the 
more clerks to comply. And that is good in major corporations 
of large sizes, but as we say so much here in Washington, it is 
the smaller institutions, sole proprietorships, and the 
partnerships and stuff that people who are trying to administer 
and make the country grow are also trying to do those other 
areas. And this area is even more challenging with the safety 
implications of what we are talking about.
    So that is my concern, and I think that will be raised by 
other members. I look forward to hearing this, and I thank you 
for your attendance. And, Mr. Chairman, I yield back the 
balance of my time.
    Mr. Bilirakis. I thank the gentleman.
    Does Mr. Stupak have an opening statement?
    Mr. Stupak. I will waive, Mr. Chairman.
    Mr. Bilirakis. Thank you, sir.
    [Additional statement submitted for the record follows:]

 Prepared Statement of Hon. Joe Barton, Chairman, Committee on Energy 
                              and Commerce

    Thank you Mr. Chairman for holding this hearing. I would also like 
to thank our witnesses for agreeing to testify about this important 
subject.
    The terrorist attacks of September 11, 2001, and the subsequent 
anthrax attack on the Capitol transformed our understanding of the 
threats facing our nation. We have been forced to assess the risks of 
unconventional attacks that were previously un-imagined. We have also 
identified frightening vulnerabilities that could be used to threaten 
the safety of millions of Americans.
    One area of particular concern that was identified after 9-11 was 
the vulnerability associated with a possible terrorist threat to our 
food supply. Under the leadership of this Committee, Congress responded 
to this threat by passing the Public Health Security and Bioterrorism 
Preparedness and Response Act.
    The new law will protect our food supply by broadening the FDA's 
authority to better track and prevent potential food adulteration and 
to give the agency more information about the food supply. The new law 
authorizes FDA to register food processors, require advance 
notification on imports and impound suspicious shipments.
    The new law will require continuing collaboration between industry, 
the regulating agencies, and Congress in order to allow the successful 
implementation of the new requirements.
    This hearing will provide a forum to discuss implementation of the 
Act up to this point, and allow for comments on how best to proceed 
forward. I am pleased to hear that the FDA has been receptive to 
industry suggestions on how to implement the Bioterrorism Act. I also 
want to learn the status of current efforts to register food processors 
in order to ensure a seamless transition to the new regulatory 
structure that is slated to begin in August.
    Congress, the Administration, and industry have an obligation to 
continue to work together to balance the economic demands for the free 
flow of commerce while securing our nations food supply. This hearing 
will provide us with an opportunity to review all of our efforts to 
date and determine what more needs to be done. Thank you again Mr. 
Chairman for holding this important hearing and I yield back the 
balance of my time.

    Mr. Bilirakis. Let us go right into the panel then.
    The first panel consists of, as I have already indicated, 
Dr. Lester Crawford, as the Acting Commissioner of the FDA, and 
Ms. Cathy Sauceda, Director of the Special Enforcement Division 
with U.S. Customs and Border Protection.
    I am going to set the clock to 5 minutes, but by all means, 
if you haven't completed your statement, please continue on. 
Don't worry about the time.
    Dr. Crawford, we will start off with you. Thank you, sir. 
Your written statements of course are a part of the record, so 
we would hope you would complement and supplement those. And 
the written opening statements of all members of the 
subcommittee, without objection, will be made a part of the 
record.
    Please proceed, sir.

STATEMENTS OF LESTER M. CRAWFORD, ACTING COMMISSIONER, FOOD AND 
   DRUG ADMINISTRATION; AND CATHY SAUCEDA, DIRECTOR, SPECIAL 
    ENFORCEMENT DIVISION, U.S. CUSTOMS AND BORDER PROTECTION

    Mr. Crawford. Thank you very much. It is a pleasure to be 
here, and I appreciate the invitation, Mr. Chairman, members of 
the subcommittee. I am also pleased to be here with my 
colleague Cathy Sauceda from Customs and Border Protection. 
Thank you very much for all you have done to help us in this 
effort and to work together.
    Thank you for this opportunity to discuss FDA's actions to 
implement the food safety provisions in the Public Health 
Security and Bioterrorism Preparedness and Response Act of 
2002. I wish to thank the members of this subcommittee for your 
leadership in enacting this landmark legislation. The 
Bioterrorism Act has provided us with significant new tools to 
protect the Nation's food supply against the threat of 
intentional contamination and other food-related emergencies.
    FDA regulates 80 percent of the Nation's food supply, 
everything we eat except for meat, poultry, and certain egg 
products. FDA's responsibility extends to live food animals and 
to animal feed.
    Since the Bioterrorism Act was signed into law just over 2 
years ago, FDA has been working hard to implement this law 
effectively and efficiently. Section 305 of this act requires 
registration of foreign and domestic food facilities that 
manufacture, process, pack, or hold food for consumption by 
humans or animals in the United States. FDA will have for the 
first time a roster of foreign and domestic food facilities 
that provide food for American consumers. In the event of a 
potential or actual terrorist incident or an outbreak of food-
borne illness, the registration information will help FDA to 
quickly identify, locate, and notify the facilities that may be 
affected. On October 10, 2003, FDA and CBP jointly published an 
interim final regulation to implement the registration 
requirement.
    Section 307 of the act requires submission to FDA of prior 
notice of food, including animal feed, that is imported or 
offered for import into the United States. This advance 
information enables FDA, working closely with CBP, to more 
effectively target inspections at the border to ensure the 
safety of imported foods before they move into the U.S.
    On October 10, 2003, FDA and CBP jointly published an 
interim final regulation to implement this provision. Since 
this rule became effective on December 12 last, we have 
processed approximately 4 million prior notice submissions. We 
recently reopened and extended the public comment period on 
this rule through July 13, 2004.
    Last December, CBP and FDA issued a compliance policy guide 
that explains our intention to focus initially on educating 
affected firms and individuals about the new requirement while 
gradually phasing in enforcement. This phase-in period will end 
August 12, at which time routine enforcement will begin.
    This week, FDA, with CBP concurrence, announced that we 
would continue our policy of focusing on education for certain 
noncommercial shipments until the final rule is published. We 
took this action in response to concerns about different kinds 
of noncommercial shipments such as household goods that contain 
food items and shipments by individuals sent through 
international mail or express carriers for noncommercial 
purposes.
    Section 306 of the Bioterrorism Act authorizes FDA to have 
access to certain records when FDA has a reasonable belief that 
an article of food is adulterated and presents a threat of 
serious adverse health consequences or death to humans or 
animals.
    On May 9 of last year, FDA published a proposed rule to 
implement this section. We intend to issue a final rule in the 
near future. When finalized, the recordkeeping regulations will 
help FDA track and contain foods that pose a serious threat.
    Section 314 of the act authorizes FDA to commission other 
Federal officers and employees to conduct examinations and 
investigations. FDA and CBP have signed a memorandum of 
understanding to commission CBP officers to conduct 
investigations and examinations on FDA's behalf.
    I am pleased to report, Mr. Chairman, that some 8,100 CBP 
officials have been commissioned and trained in FDA activities. 
This collaboration significantly strengthens our ability to 
secure the border while ensuring the movement of legitimate 
trade.
    Section 303 of the Bioterrorism Act gives FDA new authority 
to administratively detain any article of food for which FDA 
has credible evidence or information that the food presents a 
threat of serious adverse health consequences or death to 
humans or animals. On June 4 of this year, FDA published a 
final rule that included expedited procedures for perishable 
foods as well as procedures describing how FDA will detain an 
article of food and the process for appealing a detention 
order.
    Thank you very much for having me here. I look forward to 
comments and questions. Thank you, sir.
    [The prepared statement of Lester M. Crawford follows:]

Prepared Statement of Lester M. Crawford, Acting Commissioner, Food and 
                          Drug Administration

                              INTRODUCTION

    Good morning, Chairman Bilirakis and Members of the Subcommittee. I 
am Dr. Lester M. Crawford, Acting Commissioner of the Food and Drug 
Administration (FDA or the Agency), which is part of the Department of 
Health and Human Services (HHS or the Department). I am pleased to be 
here today with my colleague, Ms. Cathy Sauceda from Customs and Border 
Protection (CBP) in the Department of Homeland Security (DHS). Thank 
you for this opportunity to discuss FDA's actions to implement the food 
safety provisions in Title III, Subtitle A--Protection of Food Supply--
in the Public Health Security and Bioterrorism Preparedness and 
Response Act of 2002 (Bioterrorism Act). I wish to thank the Members of 
this Subcommittee for your leadership in enacting this landmark 
legislation. This legislation represents the most fundamental 
enhancement to our food safety authorities in many years. As you know, 
it provided us with significant new tools to protect the nation's food 
supply against the threat of intentional contamination and other food-
related emergencies. Implementing these new authorities has been a top 
priority for FDA.
    In my testimony today, I will first provide some background on HHS' 
food safety responsibilities. Then, I will describe the many actions 
FDA has taken to implement the food safety provisions in the 
Bioterrorism Act.

                   HHS' FOOD SAFETY RESPONSIBILITIES

    FDA is the Federal agency that regulates 80 percent of the nation's 
food supply(everything we eat except for meat, poultry, and certain egg 
products, which are regulated by our partners at the United States 
Department of Agriculture (USDA). FDA's responsibility extends to live 
food animals and animal feed. FDA is also responsible for ensuring that 
human drugs, human biological products, medical devices, and 
radiological products as well as veterinary drugs are safe and 
effective, and that cosmetics are safe. In addition, FDA is responsible 
for assuring that the health consequences of foods and medicines are 
accurately and honestly represented to the public, so that they can be 
used as effectively as possible to protect and improve the public 
health.
    While FDA has the lead responsibility within HHS for ensuring the 
safety of food products, the Centers for Disease Control and Prevention 
(CDC) within HHS has an important complementary and non-regulatory 
public health role. As the lead Federal agency for conducting disease 
surveillance, CDC monitors the occurrence of illness in the U.S. 
attributable to the entire food supply. The disease surveillance 
systems coordinated by CDC, in which FDA participates, provide an 
essential early-information network to detect dangers in the food 
supply and to reduce foodborne illness. In addition, these systems can 
be used to indicate new or changing patterns of foodborne illness. 
Because CDC detects and investigates outbreaks of foodborne illness 
through its networks, CDC is able to alert FDA and USDA about 
implicated food products associated with an outbreak and works closely 
with the agencies to take protective public health action. In keeping 
with its agency mission, CDC also identifies, evaluates, and offers 
expert scientific opinion on the effectiveness of foodborne disease 
prevention strategies.
    FDA contributes to the Foodborne Diseases Active Surveillance 
Network (FoodNet), the principal foodborne disease component of CDC's 
Emerging Infections Program (EIP). FoodNet is a collaborative activity 
of CDC, FDA, the Food Safety and Inspection Service of USDA, and ten 
EIP sites, (California, Colorado, Connecticut, Georgia, New York, 
Maryland, Minnesota, Oregon, Tennessee, and New Mexico). Through this 
active surveillance system, these sites actively seek out information 
on foodborne illnesses identified by clinical laboratories, collect 
information from patients about their illnesses, and conduct 
investigations to determine which foods are linked to specific 
pathogens. This surveillance system provides important information 
about changes over time in the burden of foodborne diseases. These data 
help public health and food safety agencies evaluate the effectiveness 
of current food safety initiatives and develop future food safety 
activities. FDA provides both monetary support and technical expertise 
to the program.
    In addition, just as FDA works with Federal, state, and local food 
safety counterparts, CDC works extensively with Federal, state, and 
local health departments to build their epidemiology, laboratory, and 
environmental health expertise in foodborne disease surveillance and 
outbreak response. All of these collaborations draw on and apply the 
unique expertise within HHS to address significant and emerging 
challenges to our food supply.

   IMPLEMENTATION OF SUBTITLE A OF TITLE III OF THE BIOTERRORISM ACT

    Subtitle A of Title III of the Bioterrorism Act provides the 
Secretary of Health and Human Services with new authorities to protect 
the nation's food supply against the threat of intentional 
contamination and other food-related emergencies. FDA is responsible 
for implementing these provisions. These new authorities improve our 
ability to act quickly in responding to a threatened or actual 
terrorist attack, as well as other food-related emergencies. Since this 
legislation was signed into law just over two years ago, FDA has been 
working hard to implement this law effectively and efficiently. 
Throughout this process, FDA has enjoyed close cooperation from our 
colleagues at CBP.

Registration of Food Facilities
    Section 305 of the Bioterrorism Act requires registration of 
foreign and domestic food facilities that manufacture, process, pack, 
or hold food for consumption by humans or animals in the U.S.. Thanks 
to this provision, FDA will have, for the first time, a roster of 
foreign and domestic food facilities that provide food for American 
consumers. In the event of a potential or actual terrorist incident or 
an outbreak of foodborne illness, the registration information will 
help FDA to quickly identify, locate, and notify the facilities that 
may be affected.
    On October 10, 2003, FDA and CBP jointly published an interim final 
regulation to implement the registration requirement. This regulation 
became effective on December 12, 2003. We have provided two public 
comment periods that allowed a total of 105 days for interested parties 
to comment on certain provisions in the interim final rule. We 
currently intend to publish the final rule in the spring of 2005 after 
considering all the timely comments we have received.
    FDA's electronic registration system became operational on October 
16, 2003, which allowed facilities almost two months to register with 
FDA before the regulation became effective. We worked hard to develop 
an electronic system that is easy to use. The system is available 24 
hours a day, seven days a week, to anyone with access to the Internet. 
We are also providing technical assistance to persons who need help 
with the registration process. The electronic system will provide the 
facility with its registration number nearly instantaneously upon 
successful completion of the registration process. While facilities are 
not required to register electronically, FDA strongly encourages 
facilities to use the electronic system to register. Although it will 
take longer for facilities that register by mail to receive their 
registration numbers, registration by paper also is relatively easy to 
accomplish. As of June 24, 2004, 208,277 facilities have registered. 
This includes 98,896 domestic and 109,381 foreign facilities.
    Our goal has been to phase-in enforcement of the registration rule 
in a manner that ensures a smooth transition with minimal effect on 
commerce. Last December, FDA published two Compliance Policy Guides 
that stated our intention to focus initially on educating industry 
about how to comply with the new registration requirement. For domestic 
facilities, FDA expects it typically would discover a registration 
violation during a routine inspection and would enforce the 
registration provision as appropriate in each situation. Circumstances 
that could merit regulatory action include a continuing failure to 
register or a threat to the food supply associated with food from an 
unregistered facility. In addition, FDA may consider the failure to 
register as an additional charge in an enforcement action that is based 
on other statutory violations. Regarding foreign facilities, Section 
305 states that food from a foreign facility that is required to 
register, but has not done so, must be held at the port of entry until 
the facility is registered. Accordingly, FDA is enforcing the 
registration requirement for manufacturers and shippers through the 
prior notice interim final rule, which I will discuss in a moment. In 
most cases, the failure of a facility, domestic or foreign, to be 
registered is a violation that can be readily corrected. As mentioned 
above, electronic registration may be accomplished with minimal effort. 
Thus, the ability to remedy a failure to register is relatively 
straightforward for both domestic and foreign facilities.

Prior Notice of Imported Food Shipments
    Section 307 of the Bioterrorism Act requires the submission to FDA 
of prior notice of food, including animal feed, that is imported or 
offered for import into the U.S. This advance information enables FDA, 
working closely with CBP, to more effectively target inspections at the 
border to ensure the safety of imported foods before they move into the 
U.S. On October 10, 2003, FDA and CBP jointly published an interim 
final rule to implement this provision. This regulation became 
effective on December 12, 2003. We recently reopened and extended the 
public comment period on the Prior Notice Interim Final Rule for an 
additional 60 days. Comments will be accepted through July 13, 2004. 
Interested parties will have had a total of 165 days to comment on the 
provisions. We currently intend to publish the final rule in March 
2005. Since December 2003, we have been receiving approximately 150,000 
notifications each week about articles of food being imported or 
offered for import into the U.S.
    FDA and CBP worked collaboratively to ensure the new regulations 
promote a coordinated strategy for border protection. Thanks to this 
collaboration, prior notice may be submitted electronically either by 
licensed brokers using CBP's Automated Commercial System (ACS) or by 
anyone using FDA's Prior Notice System Interface. FDA's and CBP's 
systems are linked together. Regardless of which system a submitter 
uses to transmit the prior notice to FDA, the notices submitted are 
reviewed in the same timeframes and in accordance with the same 
procedures.
    Based on FDA's current assessment, the timeframes in the interim 
final rule for submitting prior notice are the least amount of time 
that FDA needs to meet our statutory responsibility to receive, review, 
and respond to the prior notice submission. They take into account 
different modes of transportation. The regulations require prior notice 
at least two hours in advance of arrival by land via road, at least 
four hours in advance of arrival by air or land via rail, and at least 
eight hours in advance of arrival by water. The staggered prior notice 
submission timeframes allow FDA reviewers to expedite their review of 
shipments with shorter transport times without negatively affecting the 
review times of shipments with longer transport times.
    FDA and CBP are committed to further increasing integration of our 
agencies' respective advance notice requirements with a goal of: (1) 
achieving a uniform, integrated system; (2) building on current 
operational procedures; and (3) implementing the law with minimal 
disruption to current entry practices. Toward this goal, on April 4, 
2004, FDA and CBP issued a plan, ``Joint FDA-CBP Plan for Increasing 
Integration and Assessing the Coordination of Prior Notice 
Timeframes.'' The plan describes the process by which FDA and CBP 
intend to increase integration and examine whether we could amend the 
timeframe requirements in FDA's prior notice interim final rule to be 
the same as those in CBP's advance electronic information rule. The 
plan was issued with an initial 30-day comment period, which FDA has 
extended for an additional 60-day period that ends July 13, 2004.
    Although the interim final rules became effective December 12, 
2003, FDA and CBP issued a Compliance Policy Guide that explains our 
intention to focus initially on educating affected firms and 
individuals about the new prior notice requirement while gradually 
phasing in enforcement of the prior notice interim final rule. This 
phase-in period will end August 12, 2004, at which time full 
enforcement will begin.
    While we cannot physically inspect every shipment, it is important 
to note that every shipment that contains FDA-regulated products that 
is entered for consumption or warehouse storage through CBP's ACS is 
electronically reviewed by FDA's Operational and Administrative System 
for Import Support to determine if the shipment meets identified 
criteria for physical examination or sampling and analysis or warrants 
other review by FDA personnel. This electronic screening allows FDA to 
concentrate its limited inspection resources on high-risk shipments 
while allowing low-risk shipments to proceed into commerce.
    With the new prior notice requirement, specific information 
mandated by the Bioterrorism Act must be submitted to FDA before the 
imported food arrives in the U.S. This not only allows the electronic 
system to review and screen the shipments for potential serious threats 
to health (intentional or otherwise) before food arrives in the U.S., 
but it also allows FDA staff to review prior notices of those products 
flagged by the systems as presenting the most significant risk and 
determine whether the shipment should be held for further 
investigation. FDA worked very closely with CBP in developing this 
screening system.
    In addition, FDA has been actively working with the analysts at 
CBP's National Targeting Center to utilize their Automated Targeting 
System as an additional tool to enhance the Agency's ability to focus 
attention on those imported foods that may pose a serious threat to 
public health. We anticipate that the use of FDA's and CBP's screening 
systems will enable both agencies to effectively target shipments 
posing the greatest risk in order to further focus our border 
inspection efforts.
    In developing the interim final rules to implement the registration 
and prior notice requirements, FDA carefully considered all the 
comments received during the public comment periods and strived to 
develop provisions that were consistent with the Bioterrorism Act and 
that achieve its objectives while minimizing the impact on trade to the 
extent feasible. FDA and CBP have conducted extensive domestic and 
foreign outreach to explain the rules to consumers and the food 
industry. FDA has been commended by numerous parties throughout the 
world for what many describe as an unprecedented level of outreach.

Administrative Detention
    Section 303 of the Bioterrorism Act gives FDA new authority to 
administratively detain any article of food for which the Agency has 
credible evidence or information that the food presents a threat of 
serious adverse health consequences or death to humans or animals. This 
authority is self-executing and provides an added measure to ensure the 
safety of the nation's food supply. Section 303 also requires FDA to 
provide by regulation procedures for instituting on an expedited basis 
certain enforcement actions against perishable foods subject to a 
detention order. On June 4, 2004, FDA published a final rule to 
implement this section. The rule includes procedures for detaining an 
article of food, expedited procedures for detaining perishable foods, 
and the process for appealing a detention order.

Maintenance and Inspection of Records for Foods
    Section 306 of the Bioterrorism Act authorizes FDA to have access 
to certain records when the Agency has a reasonable belief that an 
article of food is adulterated and presents a threat of serious adverse 
health consequences or death to humans or animals. It authorizes the 
Secretary to publish regulations to establish requirements regarding 
the establishment and maintenance, for not longer than two years, of 
records by persons (excluding farms and restaurants) who manufacture, 
process, pack, transport, distribute, receive, hold, or import food. On 
May 9, 2003, FDA published a proposed rule to implement this section. 
We have received approximately 200 comment letters that we have 
carefully considered. We intend to issue a final rule in the near 
future. When finalized, the recordkeeping regulation will enhance FDA's 
ability to track and contain foods that pose a threat of serious 
adverse health consequences or death to American consumers from 
accidental or deliberate contamination of food.

Authority to Commission Other Federal Officials to Conduct Inspections
    Section 314 of the Bioterrorism Act authorizes the Secretary to 
commission other Federal officers and employees to conduct examinations 
and investigations. Pursuant to this new authority, FDA and CBP have 
signed a Memorandum of Understanding to commission CBP officers to 
conduct examinations on FDA's behalf at ports where FDA may not 
currently have staff or to augment FDA staff in the enforcement of 
FDA's prior notice requirements. This unprecedented FDA-CBP 
collaboration significantly strengthens our ability to secure the 
border while ensuring the movement of legitimate trade. In accordance 
with this new authority, FDA has already commissioned over 8,150 CBP 
officers. The Agency will continue to explore use of this authority 
with other agencies as a tool to further improve efficiencies.
Authority to Mark Articles Refused Admission into U.S.
    Section 308 authorizes the Secretary to require the marking of 
refused food (other than food required to be destroyed). This provision 
is intended to prevent unsafe foods that have been refused entry into 
the U.S. from entering U.S. markets via the practice of ``port 
shopping.'' This is a practice by which importers send goods that have 
been refused entry at one port to a different port in the hope of 
obtaining admission for the refused goods. Obviously, this practice 
puts American consumers at risk. Before passage of the Bioterrorism 
Act, FDA had published a proposed rule to require the marking of 
refused food. This proposal was withdrawn in light of the new and 
additional statutory requirements. We are considering a new rulemaking 
to implement Section 308.

Protection Against Adulteration of Food
    Section 302 of the Bioterrorism Act contains numerous provisions 
intended to increase protection against adulteration of food. One of 
the requirements in this section is for the Secretary to give high 
priority to increasing the number of inspections of food offered for 
import. Thanks to a fiscal year 2002 supplemental appropriation, FDA 
received counterterrorism funds that enabled us to hire additional 
staff, most of whom were hired to address food safety issues, primarily 
at the border. With these additional employees, we have more than 
doubled the number of ports that have an FDA presence from 40 to 90 
ports. We have increased by more than six-fold the number of food 
examinations at the border.
    In compliance with another requirement in this section, on October 
16, 2003, we submitted a report to Congress, ``Testing for Rapid 
Detection of Adulteration of Food,'' about the research that is 
underway to develop tests and sampling methodologies to rapidly detect 
adulterated food. FDA has commenced more than 90 different research 
projects to develop tests and sampling methodologies to increase the 
detection of adulterated food. A number of the research projects are 
designed specifically to develop tests suitable for inspections of 
foods at ports of entry. For example, commercially available test kits 
are currently being analyzed for a variety of food matrices to evaluate 
their suitability for use in the field at ports of entry. We are in the 
process of preparing the second annual report on our research 
activities.
    Also pursuant to a requirement in Section 302, HHS provided a 
report to Congress on assessments of the threat of the intentional 
adulteration of food.

                               CONCLUSION

    In conclusion, thanks to the new authorities provided by the 
Bioterrorism Act along with HHS' other food safety activities, the 
nation's food safety system is stronger than ever before. As you might 
imagine, it has been a tremendous undertaking for FDA to implement the 
provisions in the Bioterrorism Act in such a short period of time. We 
are proud of our accomplishments and will continue our efforts to 
implement the Bioterrorism Act in an efficient and effective manner. We 
are thankful to Congress for these new authorities that will serve to 
bolster the safety of our food supply.
    In addition to the new authorities provided to us in the 
Bioterrorism Act, I would like to briefly mention some other activities 
in which FDA has been involved to ensure the safety and security of our 
nation's food supply. We have enhanced coordination with our partners 
in Federal, state, and local governments, academia, and industry. To 
minimize the risk that food will be subject to tampering or other 
malicious actions, we have issued guidance for the food industry on the 
security measures it may take. We are also working with DHS to carry 
out our Sector-Specific Agency responsibilities under Homeland Security 
Presidential Directive 7/Critical Infrastructure Identification, 
Prioritization, and Protection for food other than meat, poultry, and 
egg products. FDA has embarked on an ambitious research agenda 
throughout the Agency to address potential terrorist threats. To 
increase laboratory surge capacity, FDA has worked closely with CDC and 
USDA to expand the Laboratory Response Network by establishing the Food 
Emergency Response Network. Through this aggressive and collaborative 
program, FDA has made significant progress in strengthening the safety 
and security of the nation's food supply.
    Thank you for this opportunity to discuss our efforts to implement 
the food safety provisions of the Bioterrorism Act. I look forward to 
continuing to work with you and would be pleased to respond to any 
questions.

    Mr. Bilirakis. Thank you, Dr. Crawford. And I did not 
intend to speed up your testimony there.
    Ms. Sauceda.

                   STATEMENT OF CATHY SAUCEDA

    Ms. Sauceda. Yes, sir. Good morning. Thank you, sir. Good 
morning, Mr. Chairman, other members of the subcommittee. I am 
Cathy Sauceda, and I am the Director of Special Enforcement 
with Customs and Border Protection, the Department of Homeland 
Security. I am pleased to be here with Dr. Crawford, Acting 
Commissioner of the Food and Drug Administration.
    I want to thank you for this opportunity to discuss Customs 
and Border Protection's actions to implement the food safety 
provisions of the PublicHealth Security and Bioterrorism 
Preparedness Act of 2002, or what we call the Bioterrorism Act.
    This legislation presented a significant opportunity to 
enhance protection of our imported food supply chain against 
the threat of intentional contamination and other food-related 
emergencies while challenging us to facilitate the movement of 
legitimate goods. Meeting this balance between safety and 
facilitation has been a top goal for Customs and Border 
Protection.
    In my testimony today, I will first provide some background 
on Customs and Border Protection's responsibilities, and then 
describe some of the key actions that CBP has taken to 
implement the food safety provisions of the act and ensure that 
legitimate trade is facilitated.
    The primary mission of Customs and Border Protection is 
detecting and preventing terrorists and terrorist weapons 
entering the United States. As the single border security 
agency, Customs and Border Protection has twin goals: To secure 
America's borders while facilitating the flow of legitimate 
trade and travel.
    With respect to the Bioterrorism Act, CBP has worked in 
concert with the Food and Drug Administration to detect and 
intercept violator shipments by providing personnel with 
experience in targeting and CBP officers to perform BTA-related 
work in over 300 ports of entry.
    Joint targeting and training in our automated targeting 
system and use of our automated commercial system to meet the 
regulatory submission requirements for the prior notice that 
was required under the act has been undertaken. Use of our 
automated broker interface as part of our automated commercial 
system allows the trade to meet timely prior notice 
requirements without having to enter prior notice data into two 
different systems, which would be the Food and Drug 
Administration's PNSI system and CBP's ACS. Using ACS also 
ensured that these new requirements would be less likely to 
disrupt the flow of trade.
    As part of the joint targeting, Customs and Border 
Protection and FDA are collocated at CBP's National Targeting 
Center, where FDA has established their Prior Notice Center. A 
jointly developed scoring rule set for FDA which enables them 
to use CBP's automated targeting system has been developed and 
is being continuously refined. By working together to define 
and determine risk, FDA can more readily identify anomalies in 
food importations and concentrate efforts in areas of high 
risk.
    Cooperative agency efforts also allow CBP and FDA to 
perform joint targeting so goods will not be inspected twice, 
once for FDA and once for CBP, for terrorism.
    In addition, we have worked, as Dr. Crawford says, with the 
FDA to commission some 8,000 Customs and Border Protection 
officers to take action on behalf of FDA in a 24 by 7 mode. 
This commissioning allows FDA to assert a 24 by 7 presence to 
enforce the act at all ports when FDA staffing is either 
limited or nonexistent. This 24 by 7 presence at all ports 
allowed FDA to lessen the prior notice timeframe stated in the 
notice of proposed rulemaking to 8 hours by vessel, 4 hours by 
air and rail, and 2 hours by truck, which is listed in the 
interim final rule.
    Recognizing the impact on the trade and the possibility of 
having ports literally closed due to the failure to comply with 
this legislation, Customs and Border Protection has worked 
diligently with the Food and Drug Administration and 
independently on outreach programs both domestically and 
internally. We trained our Customs and Border Protection 
attaches, and we, independently and with FDA, went to Europe, 
South America, Central America, and Mexico to conduct outreach 
to train our customers. Special care has been taken to ensure 
that our immediate neighbors, Canada and Mexico, have been 
included in the training and operational discussions, 
addressing their concerns to the extent possible, while still 
remaining in compliance with the law.
    Our efforts to ensure that legitimate trade would not be 
compromised led us in cooperation with FDA to apply a phased-in 
approach to enforcement. This phased-in approach started on 
December 12, the date of the implementation of the act, 2003, 
and is progressing through four phases that started with 
informed compliance and is moving toward full enforcement on 
August 13.
    We are currently in phase three of the enforcement plan. 
For the first time, in phase three, shipments were refused for 
failure to file prior notice. Despite this, there has been very 
minimal disruption in the trade as our efforts in outreach have 
been successful. Only 2,479 shipments have been found to be not 
in compliance since June 4.
    During the phased-in approach, we have continued our 
outreach in addition to jointly issuing the compliance guide 
explaining the four phases of increasing enforcement and 
possible consequences of noncompliance. As we move closer to 
full enforcement, we will continue to refine procedures, 
identify, and correct systemic or logical problems, and address 
legitimate trade concerns with compliance of the act. We will 
continue to work with FDA in improving their target ability and 
to coordinate timeframes with those listed in CBP's advanced 
electronic role.
    I would like to thank you for this opportunity to discuss 
our efforts and implementation of the food safety provisions of 
the Bioterrorism Act. I looked forward to continuing to work 
with you, and would be pleased to respond to any questions.
    [The prepared statement of Cathy Sauceda follows:]

  Prepared Statement of Cathy Sauceda, Director, Special Enforcement, 
                     Customs and Border Protection

    Good morning, Chairman Bilirakis and Members of the Subcommittee. I 
am Cathy Sauceda, Director of Special Enforcement, Customs and Border 
Protection (CBP), which is part of the Department of Homeland Security 
(DHS). I am pleased to be here today with Dr. Lester M. Crawford, 
D.V.M., PH.D., Acting Commissioner of the FDA.
    Thank you for this opportunity to discuss CBP's actions to 
implement the food safety provisions in Title III, Subtitle A--
Protection of Food Supply--included in the Public Health Security and 
Bioterrorism Preparedness and Response Act of 2002 (Bioterrorism Act). 
This legislation presented a significant opportunity to enhance 
protection of our imported food supply chain against the threat of 
intentional contamination and other food-related emergencies, while 
challenging us to facilitate the movement of legitimate goods without 
causing undue delays and economic hardship. Meeting this balance 
between safety and trade has been a top priority for CBP.
    In my testimony today, I will first provide some background on 
CBP's responsibilities. Then, I will describe the many actions taken by 
CBP to implement the food safety provisions of the Act and ensure the 
facilitation of legitimate trade.
    The primary mission of Customs and Border Protection is detecting 
and preventing terrorists and terrorist weapons from entering the 
United States. As the single border security agency, CBP has twin 
goals: to secure America's borders while facilitating the flow of 
legitimate trade and travel. With respect to the Bioterrorism Act, CBP 
has worked in concert with FDA to detect and intercept violative 
shipments by providing personnel with expertise in targeting and CBP 
officers to perform BTA related work at more than 300 ports of entry.
    Joint targeting and training in the use of our Automated Targeting 
System (ATS), and use of our Automated Commercial System (ACS) to meet 
the regulatory submission requirements for Prior Notice as required 
under the Act was undertaken. Use of our Automated Broker Interface 
(ABI), a part of ACS, allows the trade to timely meet the Prior notice 
requirements without having to enter Prior Notice information into two 
electronic systems (FDA's PNSI and CBP's ACS). Using ACS also ensured 
that these new requirements would be less likely to disrupt the flow of 
legitimate trade. We have jointly enhanced both of our systems, ACS and 
OASIS, the FDA automated system, to accommodate the new user 
requirements as required to meet the statute.
    As part of the joint targeting, CBP and FDA are co-located at CBP's 
National Targeting Center, where FDA has established their Prior Notice 
Center. A jointly developed scoring rule set for FDA which enables them 
to use CBP's Automated Targeting System has been developed and is 
continuously being refined. By working together to define and determine 
the risk, FDA can more readily identify anomalies in food importations 
and concentrate resources in areas of risk. Cooperative agency efforts 
also allows CBP and FDA to perform joint targeting so goods will not be 
inspected twice--once for each agency for the purpose of prevention of 
terrorism.
    In addition, we have worked with FDA to Commission over 8,000 CBP 
officers to take action on behalf of the FDA under the Act. This 
commissioning allows FDA to assert a 24 X 7 presence to enforce the Act 
at all ports, even when FDA staffing is limited or non-existent. This 
24 X 7 presence at all ports allowed FDA to lessen the Prior Notice 
timeframes stated in the Notice of Proposed Rulemaking to 8 hours by 
vessel, 4 hours by air or rail and 2 hours by truck as stated in the 
Interim Final Rule.
    Recognizing the impact on the trade and the possibility of having 
ports literally closed due to failure to comply with this legislation, 
CBP has worked diligently both with the FDA and independently on an 
outreach program, both domestically and internationally. We trained CBP 
attaches as to the requirements of the Act, which allowed them to 
conduct training in their respective foreign countries. These sessions 
supplemented additional presentations that were given by CBP to 
governmental and trade associations throughout Europe, Asia, and South 
America. Special care has been taken to ensure that our immediate 
neighbors, Canada and Mexico, have been included in the training and 
operational discussions, addressing their concerns to the extent 
possible while still complying with the law. Presentations have been 
given to various domestic trade organizations such as the Pacific Coast 
Counsel, who is also here to speak, and we have formed a joint task 
force with the National Customs and Brokers Association (NCBFAA), who 
are also in attendance.
    Our efforts to ensure that legitimate trade would not be 
compromised led us, in cooperation with the FDA, to apply a ``phased 
in'' approach to enforcement. This phased in enforcement started on 
December 12, 2003 (the implementation date required under the 
Bioterrorism Act) and is progressing through four phases that started 
with informed compliance and is moving towards full enforcement on 
August 13, 2004.
    We are currently in Phase III of the enforcement plan. For the 
first time, shipments were refused for failure to file Prior Notice. 
Despite this, there has been minimal disruption in trade as our efforts 
in outreach programs were rewarded.
    During the phased in approach we have continued our outreach, 
publishing pamphlets in English, Spanish and French for the traveling 
public, jointly issuing a Compliance Guide explaining the four phases 
of increasing enforcement and the possible consequences for failing to 
meet the requirements under the statute. In addition, we have issued an 
internal and public version of mitigation guidelines for the issuance 
of penalties.
    As we move closer to full enforcement we will continue to refine 
procedures, identify and correct systemic or logistical problems and 
address legitimate trade concerns with regard to the Act. We will 
continue to work with the FDA in improving their targeting ability so 
as to coordinate its timeframes with those in CBP's Advance Electronic 
Rule. This will lead to more accurate targeting of possible high threat 
shipments, thus ensuring the safety of imported food while 
simultaneously not acting as a barrier to trade.
    Thank you for this opportunity to discuss our efforts to implement 
the food safety provisions of the Bioterrorism Act. I look forward to 
continuing to work with you and would be pleased to respond to any 
questions.

    Mr. Bilirakis. Thank you very much, Ms. Sauceda. I will 
start off the questioning. There is a long list of questions, 
and as per usual we submit them to our witnesses and then they 
respond in writing. So we would hope you would do that in a 
timely fashion.
    I am just going to focus on one. Ms. Sauceda and Dr. 
Crawford, take us to the border--to a border. There are a 
number of means whereby manufacturers, researchers, plain 
people, ships bringing in, you know, containers, et cetera, et 
cetera, bring in food to this country. Take a couple of those 
of your choosing, and explain to us exactly what happens, sort 
of a step-by-step process in terms of how you coordinate with 
FDA. You know, the interaction--apparently both of you have 
indicated that the interaction of your two agencies works well, 
and I am very happy to hear that. We don't always get that 
information. But sort of take us through something like a--pick 
an illustration, if you will, and take us through step by step.
    Ms. Sauceda. Speaking on our land border, which is my main 
area of expertise, now with the filing of prior notice, FDA 
becomes aware, as does Customs and Border Protection, in 
advance of the arrival of the shipment of the goods. If those 
goods are determined to be suspicious, then those goods are 
actually held at the border location, they are not allowed to 
proceed. Both FDA and CBP will become aware at the same time 
that these are violated goods that will be held. The 
determination is made jointly by Customs and Border Protection 
and FDA at a Customs headquarters office here in Washington 
where they are collocated.
    Mr. Bilirakis. Excuse me. You know in advance that these 
goods are coming?
    Ms. Sauceda. Yes.
    Mr. Bilirakis. Might there be any instances of that type of 
volume where you would not know in advance?
    Ms. Sauceda. No. Under the prior notice rule, we will have 
the--the only way we would not know in advance is if someone 
tried to make an entry without following the proper paperwork. 
But assuming they are in compliance, we would know in advance. 
Jointly, we determine that we will inspect the goods. Jointly, 
we, CBP, look to see if we have a need to inspect while at the 
same time FDA has a need to inspect. We contact the ports of 
entry so that they are very aware, they are aware the goods are 
coming, and we--both agencies meet these goods as they arrive 
at the location and we do our inspections. That could also 
include the Customs inspections for x-rays, dogs, any other 
type of activity. And we both clear the goods, one examination, 
and then we would allow the goods to proceed. Or, if we needed 
to send it to some kind of a facility for examination, under 
the Bioterrorism Act of course it has to go to a secure 
facility and can't go to the owners or importers' premises. But 
FDA and CBP know the whole time what is happening to the goods, 
and we know when the goods are in compliance and when the goods 
are allowed to be released.
    Mr. Bilirakis. All right. Now, under what type of instances 
might you be sort of suspicious at the outset and feel that a 
better examination is required? Would it be based on the 
particular organization that is bringing the goods in or their 
history, that sort of thing? Where they maybe have initiated 
from?
    Ms. Sauceda. Prior to December 12, the actual 
implementation, CBP and FDA took their best and brightest 
targeters and all the intelligence that we had through FDA's 
system and through our intelligence and our system, including 
what we know of importers, what we know of suspicious 
countries, and all the types of items that go together to 
confirm a risk. And we put all of that into what we call a rule 
set. And when those criteria come up in a shipment, maybe it is 
a first-time importer, maybe it is--we have always had problems 
with bottled water from Turkey, for example. The system sees 
that and kicks it out and says, wait a minute, this is a 
shipment that perhaps we need to look at.
    And then, of course, there is always human intervention; 
that we see something, it doesn't look right, and then we go 
ahead and target it for examination.
    Mr. Bilirakis. I am sorry, Dr. Crawford. Did you have 
something you wanted to add?
    Mr. Crawford. Just that we also from time to time, as Ms. 
Sauceda well knows, receive tips or information that it is 
given to us, and we consider those also.
    Mr. Bilirakis. All right. Now, you know, in coming in, I 
guess maybe we have all made mistakes from overseas trips 
bringing in, oh, I don't know, maybe some figs or an apple or 
something of that nature. And obviously, if you report that, it 
is confiscated. And that was done for reasons other than 
concerns of terrorism and what not, obviously, in those days. 
Has that slacked off a little bit because of more emphasis 
being put into homeland security, if you will?
    Ms. Sauceda. The emphasis of just taking goods from 
passengers?
    Mr. Bilirakis. Routine, yeah. The routine check for foods 
coming in, which was for health purposes and what not.
    Ms. Sauceda. The Department of Agriculture is still very 
much involved, and they regulate many of the items that come 
in. The Bioterrorism Act is not concerned necessarily with 
personal shipments brought in by the traveler. But still, if a 
passenger brings in a mango or brings in some kind of food that 
is prohibited by them, they would still be asked to abandon the 
goods or I guess return them back to the country of export.
    Mr. Bilirakis. But your resources have not been shifted to 
any large degree from the one to the other, to put more 
emphasis on the homeland security, as far as you know?
    Ms. Sauceda. Well, generally, in these locations the 
parties that are detecting this are the same parties that are 
clearing them from Immigration. So they are really doing multi-
functions on this passenger at the same time.
    Mr. Bilirakis. Thank you.
    Dr. Crawford, anything you wanted to add?
    Mr. Crawford. No. The Animal and Plant Health Inspection 
Service continues, and I believe their strength has actually 
even increased some. I do not know whether the confiscation of 
things like sausages and whatever that are brought in has 
increased or decreased. But we can communicate with them and 
get that for the record, if you would like.
    Mr. Bilirakis. No, that is okay. I think you would know.
    Mr. Brown to inquire.
    Mr. Brown. Dr. Crawford, the prior notice requirement took 
effect last December. And even though you won't be enforcing 
them--my understanding--enforcing the requirement for another 
couple of months, you I would guess have some idea after 6 
months of operation as to how it is going. And I would like, if 
possible--I don't expect answers to this today, but if in 
writing you could get us some statistics on how the program is 
working.
    Mr. Crawford. We will.
    Mr. Brown. Okay. Thank you. How many shipments reach ports 
of entry without prior notice, how many prior notice 
submissions have simple clerical errors that could result in a 
shipment being turned back, how many are prior notice 
submissions complete except for the manufacturer's registration 
number, and how these and other numbers have changed, if folks 
have gotten used to the new system? If you could get us that.
    Mr. Crawford. Absolutely.
    [The following was received for the record:]

    Q: How many shipments reach ports of entry without prior notice?
    A: A recent review of entry data from Customs and Border 
Protection's Automated Commercial System (ACS) during the week of June 
27 through July 3 shows that prior notice was not submitted for 625 
food items. This represents less than 0.5% of a total of 128,829 food 
items entered through ACS for which prior notice should have been 
submitted.
    Q: How many prior notice submissions have simple clerical errors 
that could result in a shipment being turned back?
    A: At the present time, we are operating in a period of enforcement 
discretion in which shipments are generally not being refused for 
failure to submit a complete and accurate prior notice. Thus, FDA has 
not been turning back shipments due to simple clerical errors. After 
this transition period, submitters will have the opportunity to correct 
faulty data submissions, including those resulting from clerical 
errors, because both the ACS and FDA's Prior Notice System Interface 
will not accept a submission until all required fields are completed. 
If, however, a shipment is refused because of inaccurate prior notice, 
the person may resubmit the prior notice instead of exporting the 
shipment.
    Q: How many prior notice submissions are complete except for the 
manufacturer's registration number?
    A: Based on a snapshot of activity in July, approximately 13% of 
prior notice submissions in ACS contain no registration information 
(i.e., name, address, and registration number associated with the 
article of food) and approximately 3% contain a registration number 
that is not on file at FDA.
    Q: How have these and other numbers changed as folks have gotten 
used to the new system?
    A: The percentage of shipments entered through ACS that contain all 
the required data fields has increased from 49% in January to 78% in 
July. We expect the completeness of the prior notice submissions to 
continue to improve as people gain experience with the system and as we 
near the period of increased enforcement.

    Mr. Brown. I want to shift gears slightly, and I know the 
substance of this hearing and I appreciate your being here. And 
I am troubled by the--and this was not really on your watch, 
although it is beginning to be--troubled by the increased 
politicization of what I think once was the finest, perhaps the 
finest agency in the Federal Government. And it started 2 or 3 
years ago, when I remember in this subcommittee and in a 
meeting prior to that--and, again, this is not your fault or 
under your watch. But the FDA, top people at the FDA came in, 
and in a presentation to us about safety, about what I thought 
was about the FDA's major charge, safety, protecting the 
public, talked about their pride--in leading off their 
presentation, their pride in the fact that the U.S. drug 
industry now has a higher percentage of the world market than 
ever before, how we were going to together increase that. Which 
is a good thing, but not the charge of the FDA.
    And now I am further troubled by two other more recent 
events. One is during the reimportation legislation the fact 
that the FDA actually lobbied Members of Congress--which I 
thought was illegal; it is certainly untoward--and then now the 
sort of continued scare tactic FDA is putting out to the 
American public that drugs from Canada are or could be 
potentially contaminated, as if there are new stories in the 
front page of the French, French and Germans and Japanese and 
Israelis and Canadians dropping dead on the streets from 
contaminated drugs. You know, we are safely importing food for 
Yemen and Iran and places that State Department says that 
clearly are more troubling places, and yet we can't seem to 
safely--the FDA, some of your spokespeople seem to say we can't 
safely import prescription drugs from Canada.
    My question is that, rhetorical and otherwise.
    And also, I would like--if the FDA is going to continue to 
say these drugs aren't safe, if you would begin to give us some 
names of people who have been harmed by contaminated drugs. I 
do know that Jeffrey Truitt, the FDA--not the FDA; sometimes I 
get them mixed up too often anymore--PhRMA's--I apologize for 
that, bit of a cheap shot, but unfortunately there seems to be 
more leaning that way in this agency. But PhRMA's top 
spokesperson, made a statement to a paper in my hometown that 
15 percent of drugs coming from--this is passed through a 
reporter saying this. Either 15 percent of drugs imported from 
Canada or imported overall were counterfeit, which is the term 
he used, which is misleading, which I believe means not FDA 
approved. But nonetheless.
    can--but if these statements are going to keep coming from 
the FDA, we would like to see real specific cases. Are there 
any?
    Mr. Crawford. We have very little in the way of adverse 
reactions or deaths from Canada or any other country that 
exports to the U.S.
    Mr. Brown. Very little, or none?
    Mr. Crawford. Very little. From time to time there is a 
reaction of some sort or another. We also have reactions from 
U.S. produced drugs. However, we can provide you what 
information we have. But as you know, we are in the business of 
preventing these kinds of events from taking place. And FDA is 
required, as you also well know, by law to go and conduct 
inspections at any plant that is going to be producing drugs 
for the U.S. market, wherever it is. So obviously we have more 
comfort with drugs that are produced and remain in the United 
States. That is sort of natural.
    And I would also say that we still have the pride in FDA. I 
haven't--I have been at FDA four different times, but I mostly 
in my career have been elsewhere. But as you know and as you 
indicated, around the world and here in the United States this 
is a very respected agency. We must maintain that integrity and 
respect. And I appreciate your comments about that, and we will 
provide what we have.
    Mr. Brown. Thank you.
    [The following was received for the record:]

    Question (paraphrased): Is FDA aware of deaths resulting from the 
importation of prescription drugs?
    Answer: First, we want to emphasize that FDA is unable to ensure 
the safety and effectiveness of drugs imported by individuals from 
other countries. It is FDA's goal to prevent death or serious injury 
from adverse reactions to marketed drugs to the greatest extent 
possible, and we have not waited for deaths to occur before expressing 
our strong concern about the importation of medications outside of the 
regulatory system established by Congress in the Food, Drug, and 
Cosmetic Act.
    FDA remains concerned about the public health implications of 
unapproved prescription drugs obtained from entities seeking to profit 
by getting around U.S. legal standards for drug safety and 
effectiveness. Many drugs shipped to U.S. consumers by foreign sellers 
that are purported to be the same as FDA-approved prescription drugs 
are, in fact, of unknown quality. Consumers are thus exposed to a 
number of potential risks, such as expired, subpotent, contaminated or 
counterfeit product, the wrong or a contraindicated product, an 
incorrect dose, or medication unaccompanied by adequate directions for 
use. The labeling of the drug may not be in English and therefore 
important information regarding safe use and side effects may not be 
available to the consumer.
    These concerns are amplified by the experience with state programs 
that facilitate access to Canadian prescription drugs. Recent research 
by the state of Minnesota pointed out significant problems related to 
purchasing non-FDA approved pharmaceuticals from Canadian pharmacies. 
Minnesota State health officials observed Canadian pharmacies engaging 
in problematic practices during a single, voluntary, pre-announced 
``visit.'' The officials noted dozens of safety problems, such as:

1. Several pharmacies used unsupervised technicians, not trained 
        pharmacists, to enter medication orders and to try to clarify 
        prescription questions;
2. One pharmacy had its pharmacists review 100 new prescriptions or 300 
        refill prescriptions per hour, a volume so high as to make it 
        impossible to assure safety;
3. One pharmacy failed to label its products, instead it shipped the 
        labels unattached in the same shipping container, even to 
        patients who received multiple medications in one shipment; and
4. Drugs requiring refrigeration were being shipped un-refrigerated 
        with no evidence that the products would remain stable.
    At least one of the Canadian pharmacies visited by Minnesota health 
officials dispensed many drugs that apparently were not even of 
Canadian origin, and many of the drugs were obtained from prescriptions 
that had been written and rewritten across multiple Canadian provinces. 
These types of systematic safety problems would generally be clear 
regulatory violations that would not be tolerated under the 
comprehensive system of Federal and state regulation of drug safety in 
the U.S.
    Similar problems have become evident in the operation of the state 
of Wisconsin's Prescription Drug Resource Center. In reviewing the 
reports submitted by the three Canadian pharmacies linked to the 
Wisconsin website, the Pharmacy Society of Wisconsin has identified 
serious breaches of the agreements under which the pharmacies 
participate in the state program. The Society found that of the 765 
prescriptions dispensed by the pharmacies, 316 (over 41%) violated the 
state agreements. Specifically, 127 of the dispensed drugs were 
products not approved by FDA or available in the U.S., while 189 of the 
drugs were products not authorized by the state program. In six 
instances, the pharmacies improperly sent drugs requiring refrigeration 
through the mail. Additionally, one of the Canadian pharmacies advised 
the state that it intended to obtain drugs from a European supplier, 
even though that was specifically prohibited by its agreement. 
Responding to these reports, the Wisconsin Department of Health and 
Family Services sent letters to the three pharmacies on April 27, 2004 
ordering them to cease these prohibited practices, however, these 
problems have not abated. In reaction to these reports, the executive 
director of the Wisconsin Pharmacy Society, the professional 
association representing licensed pharmacy practitioners in the state, 
concluded that ``no one in Wisconsin has any real idea what these 
Canadian businesses are doing.''
    Significant safety issues surfaced when representatives of New 
Hampshire Governor Craig Benson visited the Canadian Internet pharmacy 
known as CanadaDrugs.com, located in Winnipeg, Manitoba. The ``terms of 
service'' for CanadaDrugs.com requires purchasers to agree that they 
``will not be liable for damages arising from personal injury or 
death'' from the use of drugs sold by the pharmacy. Under this 
practice, the consumer has no recourse for injuries arising from the 
use of drugs from this shipper. Additionally, the website allows 
patients to send in their prescriptions by fax, when the practice is 
illegal under the law in New Hampshire and other states.
    FDA is generally unable to quantify adverse events from imported 
prescription drugs for a number of reasons. First, the adverse event 
reporting system in the U.S. is not geared towards distinguishing 
between foreign or domestically obtained drugs. Second, there is a 
natural reluctance on the part of patients or their representatives to 
report adverse effects of drugs that were obtained outside of the 
normal, legal channels.
    While FDA has not attempted to quantify the number of deaths or 
serious injuries resulting from imported prescription drugs, we are 
keenly aware of testimony provided to as many as three Congressional 
committees by numerous families who have suffered the loss of loved 
ones as a result of taking prescription medications obtained through 
the Internet or foreign sources.

    Mr. Bilirakis. The Chair recognizes Mr. Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman, and I appreciate my 
colleague from Ohio's concerns. That is a current political and 
policy debate. But I know that our Oversight and Investigations 
Subcommittee has held hearings on that issue and I know Jim 
Greenwood actually has bottles labeled as if it was in the 
United States and stuff. And I kind of used some of that 
oversight investigation in my discussion of that issue that we 
are talking about. It is not just--it may be dilution of drug, 
it may be not the proper instructions, it could be again, 
dosage, labeling, and use and handling and other things that 
may not be just the empirical aspects of the drugs. So--but it 
is something that we need to continue to get a handle on.
    I want to now follow up with a question on this prior 
notice stuff that--and to you, Dr. Crawford, in the information 
the person filing the prior notice has to supply includes 
shipper and manufacturing details such as manufacturer's FDA 
registration number. But there are many cases where this 
information is not available. How will manufacturers and 
research laboratories be able to submit prior notices to get 
samples of food into the United States when that information 
needed to file a prior notice cannot be obtained?
    Mr. Crawford. Well, what we have tried to do with this 
registration number is we have tried to link the registration 
provisions of the act with the prior notice provisions. And one 
thing that helps us a great deal in FDA is if there is a 
registration number. Because if the number is there and we can 
check very quickly to see if it is valid, electronically, then 
we know that they are registered. If the number--if we didn't 
use the numbering system or numerical system, we would be--we 
would not have improved our surveillance at all because we 
would be back into the old days of trying to look at what the 
address in France, Germany, or wherever it was, and wondering 
if they were people that we didn't need to check. And so we 
would be detaining shipments that we did not need to detain, 
and it would be time consuming and we might miss something 
because of that. So this gives us efficiency and it also links 
these two provisions together. But there are----
    Mr. Shimkus. We understand that. I mean, that is the 
presupposition of the question. So if they don't, then what are 
we going to do about it? Or, I mean, are they not going to be 
able to submit?
    Mr. Crawford. There are people that, there is like a gray 
market and there is also a market where people buy substances 
from manufacturers and then ship them without the permission of 
the manufacturer. And there is always this kind of trade going 
on. We have been working with CBP to try to improve this 
situation and make sure that we don't impede trade because of 
this particular kind of circumstance. There are also goods that 
are returned to the U.S. after they leave the U.S., and some of 
these are foods that are sold at Costco and stuff like that. So 
we may need to come back to the Congress with some suggestions 
of our experience at some point and say to you that maybe we 
need some help.
    Mr. Shimkus. Let me briefly ask one more. There are 
facilities exempted in the act and in the FDA's regulation from 
registration. Should other types of facilities be exempted 
also?
    Mr. Crawford. Well, I think we would like to have a little 
more experience with that. I think that Congress got it right. 
However, in the practicality of policing the borders we may 
come up with some new categories. And also, as you know, trade 
changes all the time. Since 1994 and the World Trade 
Organization treaty, food trade has increased about fivefold in 
the United States, as I believe the chairman mentioned. So over 
the years it could be that niches develop that aren't covered 
and don't need to be covered, and then we can exempt them. We 
are open-minded about that.
    Mr. Shimkus. I think that the testimony is there is 
estimated 400,000 facilities that need to be registered with 
the agency. Have they in fact been registered. Why are so many 
facilities not yet in compliance?
    Mr. Crawford. We estimated, based on the best information 
we had, that there would be around 400,000 that needed to 
register. Not that many have registered so far. So it could be 
that we overestimated the number of facilities. However, we are 
continuing on our outreach program to help them register, and 
we have a hotline that is open to help them.
    Mr. Shimkus. Thank you.
    Mr. Chairman, I think this speaks to the importance of this 
hearing, and probably a need to return in the appropriate time 
when some of these questions can be answered. I yield back.
    Mr. Bilirakis. Well, we hear the bells ringing. We have got 
a problem here. I was hoping we could finish up with this panel 
before 10:30, because I know Dr. Crawford--again, he is willing 
to stay if need be.
    Bart, you have 8 minutes, according to the rules. Gene, you 
have 5 minutes. If you plan to take virtually all of the time, 
I guess the only thing I can do is break.
    Mr. Stupak. I would probably take all of my time.
    Mr. Bilirakis. Okay. Well, we have more than one vote, 
apparently. So, forgive me, but I guess that is the only thing 
we can do. All right. We will break until, I don't know what we 
are talking about here, probably about 15, 20 minutes. Okay. 
Assuming it is only two votes at the most.
    [Brief recess.]
    Mr. Bilirakis. Is Ms. Capps prepared to inquire at this 
point in time?
    Mrs. Capps. Thank you, Mr. Chairman. And I apologize, I was 
on the floor during your testimony. But I do have some 
questions that I was hoping I would could ask of FDA.
    On page 9 of your testimony, you state that with the new 
prior notice requirement, specific information mandated by the 
Bioterrorism Act must be submitted to FDA before the imported 
food arrives in the United States.
    I wonder if you could be--list some specific information to 
which you refer and provide citations to this statute.
    Mr. Crawford. Yes. I can do that for the record; but let me 
just summarize what we are looking for. That is, we are looking 
to see whether or not they have registered with FDA, and that 
would be manifest by a registration number. And then we are 
also matching them with CBP toward a list to see whether or not 
we have any information about the firm that might cause us to 
be suspicious about it. And also, we are very interested, as 
you would know, of the origin of the shipment. And we need also 
at that point to know where it came from--not just where it was 
manufactured, but where it came from and where it is going. It 
is called ``one up and one back'' rule.
    And then my experience in working with FDA off and on for 
30 years is that if they don't know where it came from, they 
don't know where it is going, then we don't need it.
    Mrs. Capps. And this is an ongoing and well understood 
policy?
    Mr. Crawford. It is, yes, and we maintain a hotline for 
shippers 24 hours a day, 7 days a week, which is called a prior 
notice center. So they are well aware of how to communicate 
with us. And it is working, I think, very well indeed.
    Mrs. Capps. So you feel that there is great both knowledge 
of the regulations and compliance with it?
    Mr. Crawford. Yes.
    Mrs. Capps. It is a smooth--it hasn't really--9/11 and all 
of these implementations have not really delayed or caused 
serious problems?
    Mr. Crawford. Correct. What some people were worried about 
was long backups at the border, and we have not had that, 
absolutely have not had that.
    Mrs. Capps. That is good. Whether or not there was a 9/11, 
that is good information to have.
    If I could turn to section 307 of the act, which 
establishes the prior notice of the--and in doing so lists 
several items that the notice must contain. It doesn't mention 
or require that the registration numbers specified in section 
305 for food facilities be required in the prior notification. 
And I will go on and then you can comment any way you would 
like. It appears to be the case that the interim final rule on 
prior notification requires a registration number because FDA 
believes it is helpful to achieve the purpose of the act and it 
is not being required because the statute says so. Am I 
understanding this correctly?
    Mr. Crawford. You are correct. That statute does not call 
for a registration number. We believe it--well, we know that it 
is useful to us.
    Mrs. Capps. A registration number?
    Mr. Crawford. Yes, because that is really the only way we 
know that they have registered, unless we take their address 
and so forth and check it, and that might cause backups at the 
border. So we think it is an efficient way to do business, but 
it is not called for by the statute.
    Mrs. Capps. So do you think it should be?
    Mr. Crawford. I think it is a tool that we cannot do 
without and do our job, and that is up for the Congress to 
decide.
    Mrs. Capps. Well, that is why this hearing is going on, and 
I certainly would hope that you feel that that is a good reason 
for you to be here so that you can let us know. How do you know 
something works until you try it for a while?
    Mr. Crawford. Absolutely.
    Mrs. Capps. And this is one area, it wouldn't be hard to 
require it, right?
    Mr. Crawford. No, it would not be.
    Mrs. Capps. So that is one thing I am taking note of.
    Mr. Crawford. Thank you.
    Mrs. Capps. Maybe just try to do one more since I have 
another minute.
    In some of the testimony that will be presented for the 
second panel, there is an indication that FDA needs to step 
up--you need to step up your education efforts to be sure that 
industry properly understands what constitutes prior 
notification. It didn't sound like that was a need from you. 
But if we are going to be hearing that in the second panel, I 
would like to give you a chance to respond. Some of this must 
wait for a final rule, clearly, but can you tell us what you 
are doing now and what you plan to do when this rule is final? 
In other words, what can we anticipate?
    Thank you.
    Mr. Crawford. I have had the privilege of reading some of 
that testimony, and assuming they stick to the testimony, I 
think I can answer that.
    Mrs. Capps. Thank you.
    Mr. Crawford. I believe that what the witnesses are 
probably calling for is a continuing education program, an 
outreach program. Prior to the implementation of the rule, we 
did considerable outreach in the United States. But also we 
visited or had group regional meetings with 80 countries, and 
these are the primary ones that ship food to the U.S. Those 
were done outside of this country and also here. But the 
temptation is, is that once it starts you might not need to do 
that again. But that is wrong. FDA needs to continue its 
outreach and its education programs on an ongoing basis. In the 
past, as you know, with some of our food safety rules like 
HACCP and the low acid canned foods and some things like that, 
we have at some point delegated with FDA oversight to third-
party organizations to continue that. And I think that is now 
beginning. We use organizations like the Food and Drug 
Institute, National Food Processors Association, and others, 
that we work carefully with. And I think, I think we must be 
held accountable for continuing that. Whoever is sitting in my 
position, it ought to continue.
    Mrs. Capps. One quick thing. Is this a burden? I mean, do 
you have staff for it? We all get a little lax sometimes, and 
we think we have done our job and we move on and we find that 
there are new players, and just as you have mentioned.
    Mr. Crawford. We can do it. As you know, we have an 
exquisitely balanced set of resources, is the nicest way to put 
it. But we are committed to doing this, and we can get it done.
    Mrs. Capps. Thank you.
    Mr. Crawford. Thank you.
    Mr. Bilirakis. Mr. Stupak for 8 minutes.
    Mr. Stupak. Thank you, Mr. Chairman.
    Dr. Crawford, since you have to go, let me try to get a 
couple questions in before you have to leave here. Does the FDA 
have a goal for the percentage of the import shipments it would 
like to inspect?
    Mr. Crawford. Actually, that is based on a risk assessment. 
We have this computer program and we also have our people on 
the ground now, and we have also commissioned CBP people. So 
there is no percentage that we are striving toward. Some 
shipments we are going to need to inspect more than others. It 
is based on what our concerns are. Others would be less. So 
there is no percentage that we are shooting for.
    Mr. Stupak. Well, what is the actual percentage of 
inspections you are doing then?
    Mr. Crawford. Of food shipments?
    Mr. Stupak. Yes, sir.
    Mr. Crawford. Around 2 percent.
    Mr. Stupak. So you are doing 2 percent. So is your goal 4 
percent? 10 percent?
    Mr. Crawford. We have no goal. It is based on the risk. And 
if we believe that on a given day everything needs to be 
inspected, then that would be 100 percent. And some days----
    Mr. Stupak. How are you going to do it? If you are doing 2 
percent, and if some day your goal is 100 percent, how are you 
going to do it? You are going to use people all over the place, 
which is impossible to do.
    Mr. Crawford. We just slow them down, and we comb through 
and we get extra help. We can--as you know, we have 
commissioned CBP, and we also can commission other agencies.
    Mr. Stupak. If you just slow them down, why don't you slow 
them down now and do more than 2 percent of actual inspections?
    Mr. Crawford. Because, based on risk assessments, we don't 
believe that it is indicated that we do that. We don't think 
the risk is there to do 100 percent.
    Mr. Stupak. Risk from terrorism, or risk from human health?
    Mr. Crawford. Both. We treat them the same. We believe that 
if we are extremely concerned about terrorism, we will do a 
better job of general food safety. And I think that has turned 
out to be the case. And the bill, the act has helped us with 
that to focus ourselves. So I think the two go hand in hand.
    Mr. Stupak. Well, let us go to the act for a minute. 
Because long-term, the rules, the final rules on facility 
registration and prior notice narrow the definition of food to 
exclude food contact materials such as packaging. While the 
legal analysis is interesting, it omits any consideration, much 
less discussion, of the basic purpose of the Bioterrorism Act, 
which is to protect Americans from intentional food 
contamination. Acts of terrorism certainly could be carried out 
via tampering with the food contact materials which in turn 
contaminate food that is consumed.
    Given the act that the act is designed to address, can you 
comment on whether you may reconsider this decision and go back 
to the definition contained in the proposed regulation? My 
question is not whether or not you can support a definition, 
whether you should adopt it and given the purposes of the act.
    Mr. Crawford. Well, we can provide for the record our 
experiences and also an analysis of what we think the risks are 
from food packaging materials. And----
    Mr. Stupak. But isn't your experience basically none, zip, 
zilch? You haven't had that concern until after 9/11. Are you 
trying to tell me you have had material contact problems since 
9/11?
    Mr. Crawford. No.
    Mr. Stupak. And you didn't have any prior to?
    Mr. Crawford. No. We have had material contact problems 
since FDA started.
    Mr. Stupak. How much is that?
    Mr. Crawford. The relative risk is very, very small. We can 
give you an analysis based on decade by decade, something like 
that. But it is very small indeed.
    Mr. Stupak. Well, when you look at a shipment, do you look 
for pesticide use?
    Mr. Crawford. If there is a country that has a history of 
pesticide concern.
    Mr. Stupak. Let's say Mexico.
    Mr. Crawford. We do a sampling of product that comes in 
from Mexico on a random basis to check for pesticides.
    Mr. Stupak. Do you hold that vehicle there then until that 
inspection is done?
    Mr. Crawford. No, we do not. We let them go.
    Mr. Stupak. You let them go. Then how do you recall them 
then?
    Mr. Crawford. We have a record now, thanks to the 
Bioterrorism Act, of where the product is going. We also have 
it identified so we can issue a recall after the fact.
    Mr. Stupak. When a shipment comes in, when a shipment comes 
in and they say--and correct me if I am wrong. But if it is 
coming up from Mexico and they are sending a number of trucks 
up, do you inspect every one of those trucks containing that 
shipment?
    Mr. Crawford. We do not.
    Mr. Stupak. And if there are six trucks, you might check 
one out of six?
    Mr. Crawford. It could be that many. Yeah. It depends on 
what the risk analysis shows, I mean, what our concerns are at 
that present time. We may check all six of them if we have 
reason to do so.
    Mr. Stupak. See, my concern, in Michigan we had the 
outbreak there in 1997, just strawberries found to have 18.4 
percent violation of illegal level of pesticides. If you are 
only checking 2 percent, and we know strawberries have about 18 
percent, we are not catching very many.
    Mr. Crawford. Well, I think using the Bioterrorism Act and 
making it work, we are going to get better and better at that 
because we will know better about what we are doing. The key to 
finding this is not, in my view, the percentage of tests that 
you do, but the wisdom of the tests that you pull off. I mean, 
you have to know what you are doing, and you can't test safety 
into the food. But if you believe that the food is 
contaminated, you should hold it up and test it and take 
whatever action you need to take. Like, for instance, the green 
onions that we just picked up from Mexico.
    Mr. Stupak. Well, my concern, when you take a look at FDA 
inspections, domestic and imports, have steadily decreased. 
From 1981, you had 21,000 inspections. By 1996, you are down to 
5,000. And you are telling me you are at 2,000 now. If those 
inspections continue to go down but the threat level is up, you 
have changed the definition that we had in the Bioterrorism Act 
and you made it narrower, and you are telling me you are doing 
2 percent but you can't give me what an ideal goal is, that is 
based upon threat assessment. I guess I am really skeptical 
that anything is going to change here.
    Mr. Crawford. Well, the number of inspections actually is 
12,000 now, and--but inspections again are not the way to do 
it. For example, with the cantaloupe situation that you are 
aware of, we decided that--you know, testing is not the only 
thing we have at hand. But in the event of an outbreak, it is 
not the thing we use. What we do is we require the detention 
without physical examination. For example, every load of 
cantaloupes that came in were detained. And we are doing 
something similar now with onions because we are back in the 
onion season from Mexico, and that is like a 100 percent hold 
and evaluate.
    Mr. Stupak. So this inspection, the quality of it would 
depend upon what your inspectors feel may be the threat at the 
time.
    Mr. Crawford. The totality of what we have to use, 
including laboratory analysis, testing and so forth.
    Mr. Stupak. Let me go to Ms. Sauceda. You peaked my 
interest when you said you are using experienced people. My 
concern is, before you all merged together when they had the 
big thing, Immigration and Border Patrol and others and 
Customs, there is a thing called--other than full-time 
employees. And these employees have some--at least 5 years, 
some as much as 20 years working the border are being forced to 
compete with permanent full-time CBP officer positions. 
Shouldn't these people who have a lot of experience on a border 
be given priority or preferential consideration for permanent 
positions in your Agency?
    Ms. Sauceda. Sir, I don't have an answer for you at this 
time, but I would like to answer your question for the record.
    Mr. Stupak. Let me ask you this then, last year, right 
around labor day, you claim you ran out of money so you laid 
people off at the ports. My State of Michigan, which borders 
Canada, Port Huron, Detroit, Sault St. Marie, were all laid 
off. What happens then to the inspections if you are laying 
people off because you run out of money before the end of the 
fiscal year?
    Mr. Bilirakis. Very brief answer, although it is a very 
significant question.
    Ms. Sauceda. Sir, I will have to answer that question for 
the record.
    Mr. Bilirakis. Without objection, you will submit that 
information.
    Mr. Green, Dr. Crawford has to be gone by 11, to inquire 
for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman.
    I would like to ask my full statement be placed into the 
record.
    This question is for either witness. I have a district in 
Houston and, in my opening statement, talked about how I have 
both the Port of Houston and the Intercontinental Airport. And 
we have both air cargo and a big container port.
    And I know Congressman Stupak found out about 2 percent of 
the imports are being inspected. That is basically close to 
what our percentage is for containers. It is for general cargo. 
And I have been there with my Border Patrol agents or formerly 
Customs agents before. And the food safety imports are a 
concern, and I know the statistics.
    Who performs these inspections for the Border Patrol and 
Customs? Is it actually Customs and Border Patrol agents that 
perform the food safety inspections on the docks?
    Ms. Sauceda. The actual personnel in many cases that are 
located at the borders are CBP personnel which now include the 
legacy Agriculture persons and legacy Customs personnel. And I 
certainly don't want to misspeak here, but some 90 ports of 
entry, there are additional Food and Drug representatives co-
located. So it is a very joint effort.
    As far as inspections are conducted for the Bioterrorism 
Act, part of the commissioning we have done is cross-training 
on FDA, sampling, examination, invoice detections and anomalies 
where we can inspect for FDA where they are not located. So we 
do have a coordinated effort. But the principal party at the 
border location is the combined unit of CBP officers, which 
constitutes the legacy Immigration and the legacy CBP.
    Mr. Green. Legacy USDA officers, I guess, for food 
inspection?
    Ms. Sauceda. That is legacy Agriculture.
    Mr. Green. Dr. Crawford, do you have anything else to add 
to that?
    Mr. Crawford. I do not.
    Mr. Green. Ms. Sauceda , we have been contacted by a number 
of the former USDA workers at the Port of Houston who have been 
moved to DHS and specifically Customs. And while port security 
is certainly part of their job, these workers have been trained 
specifically in plant, animal and food safety, and yet they 
claim they are being asked to carry weapons and engage in port 
security, which they haven't been trained for.
    And it is unusual because, typically, every Texan wants to 
carry a gun anyway, particularly legally. But there is a 
problem. I am concerned that our ports may be secured by these 
folks that, again, they are the legacy USDA employees without 
the proper training for the protection, like carrying a 
firearm. And second, these workers, if they are being diverted 
sometimes, because I know in earlier days under INS, oftentimes 
the naturalization side would lose folks because they had to do 
the Border Patrol issue and not Customs at that time. And I 
understand the need for cross-training.
    I just want to make sure, one, they are trained--USDA 
legacy officers are trained. But also, would they be diverted 
from food safety inspections to do, you know, for example, our 
container cargo that may not be food-inspection related? And if 
you could comment on those developments.
    Ms. Sauceda.  Sir, I do know we have extensive training 
undergoing, being undertaken. We have training for the new 
agriculture inspector position and the one-face-at-the-border 
training, which includes all of the cross-training. I am not an 
expert in that area, so I will make sure we get an answer for 
you for the record.
    Mr. Green. Other question we have, industry has expressed 
concerns about prior notice system and the different 
requirements imposed by FDA and Customs. And while we 
understand that it always takes time to iron out the details 
when you have a new process that we have gone into the last 
couple of years, that enforcement date is rapidly approaching. 
Can you talk about the steps you have taken to harmonize the 
two prior notice systems as compared to--you know, it would 
have to be completed by August, I believe. I know it is both 
agencies.
    Ms. Sauceda. One of the most significant things that did 
happen was between the proposed rule or the notice of proposed 
rulemaking and the interim rule, where the timeframes went from 
noon the day before the date of arrival in the February rule to 
8 hours for vessel, 4 hours for air and rail and 2 hours for 
truck. FDA published--and I am not certain of the exact date, I 
believe it was in March--that discussed that we will be 
analyzing the timeframes to try to be consistent with the 
tradeout timeframes for us, which is 24 hours by vessel, 4 by 
air, 2 by rail and 1 by truck. And we will begin that analysis 
once we get a complete handle of the compliance of the act, 
which will begin on August 13.
    So I believe we fully anticipate FDA beginning August 13 
trying to reduce the timeframes to the extent possible while 
allowing FDA to complete their mission of being able to stop 
violative shipments.
    Mr. Crawford. We would share that analysis with the 
committee and give a staff briefing if you would like.
    Mr. Green. I think that would be helpful. I know my time is 
over, and I have other questions, and we will submit those.
    Mr. Bilirakis. I would say to the Members of the panel, we 
have talked about possibly holding a gathering with these good 
people, not a formal hearing, but sitting down around a table 
where we could accomplish a lot more in a more informal way.
    Dr. Crawford and Ms. Sauceda , thank you very much for 
being here today. I am sorry with what our schedules are like 
here, just kind of terrible, but not a good way to operate, but 
thank you very much. We appreciate it. And please respond to 
the questions that we have sent to you.
    As the next panel comes forward I want to take this 
opportunity to recognize a very important member of my staff, 
and that is Jeremy Allen. I am sure that all of you know that 
Jeremy is my health policy coordinator on the Energy and 
Commerce Committee. He is leaving my office next week. That is 
something that is one of the hazards up here. I guess the 
Energy and Commerce Committee is a breeding ground or certainly 
a training ground for people to better themselves downtown.
    But I would like to take a moment to thank him for his 
extraordinary work, both for me and for the committee. He has 
worked for me off and on for the past 5 years. And during that 
time, he has been instrumental in passing historic legislation 
such as the Children's Health Act, the Organ Donation and 
Recovery Improvement Act and, especially, more recently the 
Medicare Prescription Drug Improvement Modernization Act. These 
are better laws because of Jeremy's hard work.
    I wish him all the best in his future endeavors, including 
his wedding next month, and I know that he will be a great 
success because he is hard-working, diligent, extremely 
intelligent and really a fine, nice person.
    So Jeremy, while your success is clearly my loss and this 
committee's loss, we all wish you good luck. And we will miss 
you.
    Thank you for joining us in that.
    The second panel consists of Mr. John Cady, President and 
CEO of National Food Processors Association; Mr. Roger Clarke, 
Williams and Clarke Company; Mr. David French, Senior Vice 
President, Government Relations, for the International 
Foodservice Distributors; Ms. Susan M. Stout, Vice President of 
Federal Affairs, Grocery Manufacturers of America; and Mr. Dick 
Saunders, Program Manager, Office of Dairy and Foods, VA 
Department of Agriculture and Consumer Services--Virginia 
Department of Agriculture and Consumer services.
    Welcome.
    As I am sure many of you know--most of you, if not all of 
you--your written statement is a part of the record. We will 
set the clock to 5 minutes, and, hopefully, you will be able to 
stay within that timeframe.

 STATEMENTS OF JOHN R. CADY, PRESIDENT AND CEO, NATIONAL FOOD 
   PROCESSORS ASSOCIATION; ROGER CLARKE, WILLIAMS AND CLARKE 
   COMPANY; DAVID FRENCH, SENIOR VICE PRESIDENT, GOVERNMENT 
RELATIONS, INTERNATIONAL FOODSERVICE DISTRIBUTORS ASSOCIATION; 
  SUSAN M. STOUT, VICE PRESIDENT OF FEDERAL AFFAIRS, GROCERY 
   MANUFACTURERS OF AMERICA; AND R. DOUGLAS SAUNDERS, CHAIR, 
  ASSOCIATION OF FOOD AND DRUG OFFICIALS (AFDO) FOOD SECURITY 
 TASK FORCE, ACCOMPANIED BY BETSY WOODWARD, SPECIAL ADVISOR TO 
                  THE AFDO BOARD OF DIRECTORS

    Mr. Cady. Thank you, Mr. Chairman.
    My name is John Cady, and I am President and Chief 
Executive Officer of the National Food Processors Association. 
We serve as the $500-billion food and beverage industry's voice 
on scientific and public policy issues involving food safety, 
food security, nutrition, technical and regulatory matters and 
consumer affairs.
    We supported the Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002. And to assure broad 
industry input on FDA regulatory proposals, we have provided 
comments to the Food and Drug Administration on behalf of our 
375 member companies as well as leading the food industry's 
coalition in Bioterrorism Act regulations. FDA has adopted a 
number of the industry's recommendations, so my comments today 
focus on remaining industry concerns about FDA's rules for 
registration of food facilities, prior notice of imported food 
shipments and the establishment, maintenance and availability 
of records.
    FDA has reported that about half of approximately 400,000 
domestic and foreign facilities subject to the registration 
requirement have registered. This calls for more outreach in 
the form of guidelines and clarifications from FDA to educate 
the regulated industry about the registration requirements. 
While FDA has clarified that certain facilities are exempt from 
registration, such as private residences that hold food for 
distribution to consumers, we believe additional facility 
exemptions are warranted, including facilities that hold food 
as an incidental part of their businesses.
    FDA's December 2003 Compliance Policy Guide allows that, 
under limited circumstances, unregistered facilities will have 
the opportunity to come into compliance before enforcement 
action is taken. This worthwhile enforcement policy fosters 
industry awareness and compliance with the registration 
requirement and should be maintained until greater overall 
compliance is achieved.
    The major problem posed by FDA's interim final rules for 
prior notice of imported food shipments concerns the inability 
of industry to import research and development samples into the 
United States. Small quantities of food products are frequently 
purchased at retail and foreign countries to evaluate against 
comparable U.S. products or to determine the potential for 
producing a similar product in the United States. Under the 
rule, these research and development samples will not be 
allowed into the United States because the purchaser has no 
practical way of securing the registration number of the 
foreign manufacturing facility, which FDA requires in the prior 
notice. This is a requirement, by the way, that is not mandated 
in the Bioterrorism Act.
    This places U.S. companies at a competitive disadvantage 
and encourages the relocation of research and development 
activities to Canada, for example, where imported samples are 
not restricted. NFPA urges FDA to just require the name and 
address of the foreign manufacturer on the prior notice as in 
the case when individuals in foreign countries send purchased 
products to individuals, not companies, in the United States.
    Another issue is the fact that FDA and Customs' prior 
notice requirements differ. Full enforcement of FDA's prior 
notice requirements will begin in mid-August this year before 
FDA and Customs' requirements are harmonized. We have asked FDA 
and Customs to accelerate these harmonization efforts.
    While FDA's final rule on records has not been issued, I 
want to highlight some issues raised in our comments on the 
proposed rule. The proposed rule requires detailed information 
for each lot of production made at the company. FDA does not 
define a production lot. However, one definition is, all the 
products marked with the same unique code which may reflect the 
time and place of production and character of the food. The 
size and composition of production lots vary based on 
particular processes, operations and needs of each food 
company. While lot coding is widely used by the industry, it is 
not mandated for all products.
    Our concern is that FDA's proposed lot-level recordkeeping 
poses serious technical and operational problems for 
collecting, maintaining and tracking the detailed information 
FDA is seeking. For example, as products are distributed, it is 
not possible, in many instances, to keep track of exact lot 
codes of the products that go to an individual store or to 
customers. Once in the distribution system, it cannot be 
guaranteed that a given lot of production will stay together or 
even the shipments of like food products will be from the same 
production lot. Also, the ability to precisely identify the 
sources of each ingredient that go into a given lot cannot be 
guaranteed.
    It is our understanding that retail inventory and stocking 
records do not rely on production lot codes. Today, product 
recalls normally involve removal of all potential affected 
products rather than selective removal based on product lot 
codes. NFPA has urged FDA to abandon the requirement for lot-
level information and records.
    As FDA has acknowledged, the Agency understands that 
companies may only be able to identify a subset of all possible 
ingredient sources rather than a specific source. This FDA 
acknowledgment embodied in the proposed regulation should 
become a requirement and be applied to all ingredients and 
products. FDA's proposal would also require companies to 
produce documentation to identify the sources and recipients of 
food ingredients of products within 4 hours of an FDA request 
during a work week and within 8 hours of a request on weekends 
or holidays.
    NFPA has suggested that FDA's review and interpretation of 
documentation should not be the criteria for taking needed 
action to address a terrorism incident. We have suggested that 
24 hours is a more appropriate timeframe for producing 
documentation. Rather it is the immediate action by FDA on the 
incident that should occur. The paper review can come later.
    In conclusion, I want to acknowledge FDA's efforts in 
seeking the industry's input in developing these regulations 
and the Agency's willingness to incorporate suggestions to 
strengthen and improve the new requirements.
    However, as an industry, we do have the concerns that I 
have covered today. There is the need for FDA to address these 
issues in a timely way in order to achieve industry and FDA's 
common goal of reaching full compliance as soon as possible.
    Thank you, sir for the opportunity to comment on this 
important subject.
    [The prepared statement of John R. Cady follows:]

 Prepared Statement of John R. Cady, President and CEO, National Food 
                         Processors Association

    Mr. Chairman, my name is John Cady, and I am President and Chief 
Executive Officer of the National Food Processors Association. NFPA is 
the largest trade association representing the food and beverage 
industry in the United States and worldwide, serving as the industry's 
voice on scientific and public policy issues involving food safety, 
food security, nutrition, technical and regulatory matters and consumer 
affairs.
    NFPA supported the Public Health Security and Bioterrorism 
Preparedness and Response Act of 2002 (Bioterrorism Act) and has 
participated in the development of implementing regulations by 
providing comments to the Food and Drug Administration (FDA) on behalf 
of our member companies as well as by leading the food industry's 
coalition on the Bioterrorism Act regulations to assure broad industry 
input on FDA's regulatory proposals. FDA has responded to many of the 
recommendations from industry to make the implementing regulations more 
effective and workable for industry compliance. For example, in the 
interim final rule for prior notice of imported foods, FDA decreased 
the times during which a prior notice can be filed to better reflect 
current business practices and to better harmonize FDA requirements 
with those of U.S. Customs and Border Protection (CBP). FDA has also 
committed to determine if closer harmonization with CBP's prior notice 
requirements is possible. In the facility registration interim final 
rule, FDA reduced the amount of mandatory information that must be 
provided so that emphasis is placed on collecting information most 
relevant to meeting the provisions of the Bioterrorism Act and reducing 
the need for updating information that would be of minimal benefit.
    The remainder of my comments today focus on remaining industry 
concerns about FDA's implementation of the Bioterrorism Act's 
provisions for the registration of food facilities; prior notice of 
imported food shipments; and the establishment, maintenance and 
availability of records.

Registration of Food Facilities
    FDA estimates that there are approximately 400,000 domestic and 
foreign facilities subject to the registration requirement. FDA's 
latest compliance report on registration, however, indicates that only 
about 200,000 facilities have registered. While FDA may have over 
estimated the number of facilities that are subject to the registration 
requirement, a large number of facilities and companies may be unaware 
that they must register with FDA. More effort is needed to inform the 
regulated industry of the registration requirements, including 
additional guidance from FDA on what facilities do not need to 
register. FDA's current approach to clarifying facility registration 
requirements includes posting on their web site responses to questions 
raised by industry. NFPA has asked, for example, about the need to 
register facilities that hold food as an incidental part of their 
business, such as facilities that hold food for stocking on-site 
vending machines or facilities dedicated to consumer testing of food 
products. While FDA has provided guidance exempting certain facilities 
from registration, such as private residences that hold food for 
subsequent distribution to consumers, we believe additional exemptions 
are warranted. FDA's guidance and interpretation of the rule has been 
slow in coming and needs to be provided in a more timely manner to 
facilitate proper industry response.
    FDA issued a compliance policy guide for facility registration in 
December 2003 that under limited circumstances gives regulated 
facilities that have not registered the opportunity to come into 
compliance before enforcement action is taken. This enforcement 
approach fosters industry awareness of and compliance with the 
requirement to register. The existing enforcement policy should remain 
in effect until it is clear that the majority of the regulated 
facilities are in compliance.

Prior Notice of Imported Food Shipments
    The major problem posed by FDA's interim final rule for prior 
notice of imported food shipments concerns the inability of industry to 
import research and development samples.
    Our members have informed us that small quantities of food products 
are frequently purchased at retail in foreign countries to evaluate 
against comparable U.S. products or to determine the potential for 
producing a similar product in the United States. For these research 
and development samples, the U.S. manufacturer has no practical way of 
securing the registration number of the facility in which the products 
were produced. However, under FDA's rule the registration number of the 
facility at which a product is produced must be included in the prior 
notice to bring the product into the country, a requirement that is not 
mandated in the Bioterrorism Act. Without an alternative means of 
identifying the manufacturer of the foreign product, research and 
development samples will be denied entry to the United States, thus 
eliminating what our members indicate is a valuable tool for evaluating 
U.S. products and new product development. This places U.S. companies 
at a competitive disadvantage and encourages the relocation of research 
and development activities to Canada, for example, where import of 
samples is not restricted.
    Also, FDA and CBP prior notice requirements are not the same. As I 
noted previously, FDA did change the minimum time during which a prior 
notice must be filed and efforts are underway to determine if the FDA 
and CBP prior notice requirements can be more closely aligned. However, 
FDA and CBP have indicated that full enforcement of FDA's prior notice 
requirements will begin in mid-August of this year, before prior notice 
requirements are harmonized. Also, CBP programs, which allow approved 
low risk carriers and manufacturers facilitated entry into the United 
States, will not be available for shipments that consist of or include 
food. In other words, by mid-August, a single, harmonized federal 
system for providing prior notice for imports of food will not be in 
place. Any food imported into the United States will be held at the 
border until a prior notice is provided that meets FDA's requirements, 
even if CBP requirements have been satisfied. FDA and CBP are urged to 
accelerate harmonization efforts and to move as quickly as possible to 
a single prior notice system.

Establishment, Maintenance and Availability of Records
    While FDA's final rule for the establishment and maintenance of 
records has not been issued, I want to highlight key issues raised in 
NFPA's comments on the proposed rule. FDA proposed allowing existing 
documentation to be used to satisfy the records requirements, if the 
required information is provided. NFPA agrees with this approach, which 
takes advantage of existing record keeping systems.
    The proposed rule would require companies to have information 
describing products and identifying sources of ingredients and 
recipients of products available for each lot of product with the 
caveat that this level of detailed information would be required where 
feasible. FDA has indicated that its interpretation of ``where 
feasible'' will essentially mean that all packaged food processors 
would be required to have detailed information on ingredient sources 
and product recipients for each lot of production. While FDA does not 
define what it considers to be a lot of production, we assume this 
means each set of product that has the same identification code or was 
produced during a given time period. Due to the nature of product 
distribution, particularly direct store delivery, this requirement 
would be either impractical or extremely costly to meet. As products 
are distributed, it is not possible in many instances to keep track of 
the exact lot codes of the products that go to individual stores or 
customers using existing records. One NFPA member indicated that to 
keep lot level information would potentially cost millions of dollars 
for them alone. Equally significant is the fact that lot level 
information would likely be immaterial in the event product needed to 
be removed from the market. At retail, it is our understanding that 
inventory records are not kept based on the lot code of the products. 
Similarly, product recalls normally involve removal of all potentially 
affected products, rather than selected removal based on lot codes. 
NFPA has urged FDA to abandon the requirement that companies maintain 
all required information at the lot level and to require information to 
be available on the sources and recipients of ingredients or products 
at the most precise level practicable for the particular food 
production in question. For example, for certain ingredients or 
products, such as bulk flour or juice, FDA acknowledges that a company 
may only be able to identify a subset of all possible sources rather 
than the precise suppliers or sources. This degree of flexibility 
should be allowed for all ingredients and products.
    FDA's proposal would also require companies to produce 
documentation to identify the sources and recipients of food 
ingredients or products within four hours of an FDA request during the 
workweek and within eight hours of an FDA request on weekends or 
holidays. If the most significant need, as FDA indicates in its 
proposal, is access to information to identify the immediate previous 
sources and subsequent recipients of products and ingredients, then 
producing records under the deadlines specified should not be the 
priority. NFPA has suggested that FDA rely on the most readily 
available information from the companies involved, which may include 
information from knowledgeable company staff. FDA review and 
interpretation of documentation should not be a condition of taking 
needed action to address a terrorism incident. NFPA has suggested 24 
hours is a more appropriate time period for producing documentation.
Conclusion
    In conclusion, I want to acknowledge FDA's efforts in seeking 
industry's input in developing these regulations and the Agency's 
willingness to incorporate suggestions to strengthen and improve the 
new requirements and to ensure that they are both effective and 
achievable in meeting the objectives of the Bioterrorism Act. Thank you 
for the opportunity to comment on this very important issue.

    Mr. Bilirakis. Thank you, sir.
    Is someone in here from FDA taking notes? So you are being 
heard, Mr. Cady.
    Mr. Clarke.

                   STATEMENT OF ROGER CLARKE

    Mr. Clarke. Mr. Chairman, I would like to thank yourself 
and the committee for the opportunity to address this body.
    And I represent multiple associations, mainly the Customs 
Brokers Associations, both regional and national. The Customs 
Brokers, as a little bit of background, is probably the front 
line in the Bioterrorism Act as far as transmitting data into 
the systems. 80 percent of all data being transmitted will be 
done by Customs brokers at the Customs and Border Protection 
Automated Commercial System Automated Broker Interface.
    Basically, we are the ones who are dealing with the actual 
information and getting it into the Agency. The requirements 
under Section 307 of the Bioterrorism Act, prior notice, has 
been expanded by the Agency to include vast amounts of data to 
be transmitted far beyond the seven data elements that are 
required by the bill itself.
    Customs and Border Protection and Food and Drug have done 
outreach programs to the commerce and to the trade in the 
overall aspect of the bill itself, but they have been, we feel, 
a little bit negligent in the area of specific training in the 
details of the prior notice functions. As a good example, to 
give a timeframe of what amount of data is being transmitted on 
a simple shipment that I deal with, the requirements to 
transmit the data to Food and Drug required 934 separate 
transmissions for one imported shipment. And part of that is 
because of the convoluted amount of data that is required by 
Food and Drug.
    A good example: You have a shipment of tuna coming in. Food 
and Drug requires it broken out by specific size of tuna, even 
though that product is from the same manufacturer, the same 
product. Again, it requires separate transmissions based on the 
size of the container. We do not feel that as a security issue 
of protecting the public health on a prior notice basis would 
require that level of detail. Customs and Border Protection is 
reviewing every single shipment that is coming into the 
country.
    Under the Container Security Initiative, 24-hour prior to 
loading of any cargo coming into the United States, that data 
is transmitted into Customs and Border Protection. We feel Food 
and Drug could utilize that information in supplement to the 
prior notice.
    We also feel that prior notice could be linked to the entry 
process versus the arrival process. The Law Registry refers to 
importation into the United States. Many of the unique problems 
encountered in the operational side of the bill or the prior 
notice interim rules relates to the timing of the actual 
arrival. If it was shifted to the arrival of the cargo based on 
entry versus based on time of arrival, many of the operational 
problems would be resolved.
    As I mentioned before, there is a mass confusion, and we 
feel amongst not only the brokerage industry but against the 
importing industry on the fact of what exact details are 
actually needed in the transmission and the actual relief 
required. A good example would be, part of the transmission--
would be the flag of the vessel. A lot of time and resources 
are devoted to find that one piece of information when in fact 
it has no bearing on the admissibility of the cargo itself 
under the Bioterrorism Act.
    Just to briefly summarize some of the areas that we feel 
have some real serious concerns. There is no validation being 
done on the data that is being transmitted in. We have no 
feedback from either Agency whether that data is correct or 
not. We only get confirmation that the data has been 
transmitted.
    There is a mismatch between the data bases that are being 
used. The registration data base, which is confidential in the 
Food and Drug Administration, is compared to the data base that 
is being used in the Customs and Border Protection, which is an 
18-year-old data base and very corrupted. Industry has no way 
of altering that or changing that or amending it.
    Also the PNSI, that is the Prior Notice System Interface by 
Food and Drug, has some very serious concerns. In fact, it was 
designed for very limited use, not for the mass amount of 
commercial information being transmitted, and that is the main 
backup system for the initial ABI system or automated broker 
interface that we are using now to transmit data via Customs 
and Border Protection. We have had two major shutdowns. Both 
shut downs had demonstrated that the system is incapable of 
handling it properly, timely, in the present form.
    Again, as related earlier, the samples coming into the 
United States do not pose a serious health threat when they are 
going for laboratory analysis only, and that should be 
addressed. Again, vast amounts of duplicate information, we 
transmit not only the prior notice data, but the admissibility 
data through Food and Drug. That is two separate admissions 
with a large amount of duplicate information in addition to 
duplicated indicated information being transmitted to Customs 
and Border Protection.
    We feel some of these fixes need to be done prior to the 
August 12 implementation date. And we feel that consideration 
should be given to expand that. The final or not the final but 
the present comment period will end July 13, which only gives 
30 days for the Agencies to make adjustments to the system 
which we believe is flawed, and we have made comments to that 
fact. And then, in fact, it is going to take time for industry 
to make the same type of adjustments within their automated 
systems. Again, by pushing back the implementation date, we 
feel that will be a benefit for both the Agencies to do their 
job better and mostly for industry to adjust properly.
    I thank the committee for the time given to me to address 
some of these concerns, and I will be willing to answer any 
specific questions they may have. Thank you.
    [The prepared statement of Roger Clarke follows:]

      Prepared Statement of Roger Clarke, Williams and Clarke Co.

                            I. INTRODUCTION

    Good morning. My name is Roger Clarke and it is an honor to 
participate in this hearing today. I am here to represent a broad 
cross-section of the U.S. importing public. My own company is Williams 
Clarke Company, a licensed customs brokerage and OTI firm located in 
Los Angeles, California, that handles a large number of food import 
accounts. I am the Chair of the FDA Committee of the Pacific Coast 
Council of Customs Brokers and Freight Forwarders Associations. The 
Pacific Coast Council is the voice of the customs brokers, forwarders 
and NVOCCs in California, Oregon and Washington, the nation's largest 
international trade gateway.
    I am also speaking today on behalf of the National Customs Brokers 
and Forwarders Association of America, representing customs brokers and 
forwarders nationwide; the Agriculture Ocean Transportation Coalition, 
representing agriculture exporters and importers nationwide; the 
Coalition of New England Companies for Trade; and the New England 
Seafood Producers Association.
    What these groups have in common is this: they all deal in food 
imports covered by the Prior Notice provisions of the Bioterrorism Act, 
and they each have concerns regarding how these provisions are being 
implemented, and how they will impact legitimate food imports once full 
enforcement begins.

                             II. BACKGROUND

    To begin, allow me to say that the organizations I represent 
support the intent of the Bioterrorism Act of 2002, which was to 
protect our nation's food supply from the threat of bioterrorism. As 
those who import food and process such imports, we are ready to do what 
is necessary to achieve the objectives of the Act. Further, we 
recognize that FDA has been given an enormous task in implementing the 
food provisions of the Act, without significant additional resources. 
We are pleased that FDA had the foresight to invite CBP to assist in 
implementing and enforcing the Prior Notice provisions, and to utilize 
the ABI/ACS system for submission of Prior Notice.
    Despite the efforts of both FDA and CBP to develop and implement a 
workable Prior Notice system, there are significant flaws with the 
program that must be addressed before the final phase of enforcement 
begins on August 12. We are concerned that if these issues are not 
addressed, there is significant potential for legitimate food imports 
to be stopped at the docks--an expensive exercise for the food 
importer, and we believe a waste of precious FDA resources needed to 
prevent bioterrorism.

                      III. WHAT NEEDS TO BE FIXED

    Each of our industry associations has submitted comments to FDA 
detailing the issues which we believe need to be addressed prior to 
full enforcement. I will mention only a few of the major issues which 
impact the ability of the food importing public to comply with the 
objectives of the Act.
    A. The FDA Prior Notice System Interface, PNSI, needs to be ramped 
up to accommodate all Prior Notice submissions in case of ABI system 
failure. As the Committee likely knows, the majority of Prior Notice 
submissions are sent through the Customs ABI/ACS system. When this 
system is down the PNSI system must be capable of handling all of the 
overload. Currently PNSI is insufficiently robust to handle the volume 
processed in ABI/ACS, and has built-in inefficiencies that render it 
unsuitable for commercial use even when it is not under stress.
    B. We have advocated that the Customs ABI/ACS system be 
reprogrammed to accept 100% of all Prior Notice submissions so as to 
eliminate the need for filers to operate in both PNSI and ABI/ACS. 
Thus, we are very pleased that the new ``Independent Prior Notice'' 
program will allow filing of Prior Notice through ABI/ACS independent 
of the Customs entry filing. However, as this program has just recently 
unveiled, the importing public needs time to make the necessary 
programming changes in order to avail itself of the program. We 
encourage FDA to delay full enforcement until the new ``Independent 
Prior Notice'' system is fully operational.
    C. Safeguards are needed to protect the parties of interest from 
unauthorized filing of Prior Notice on their behalf. To this end, FDA 
could require those who submit Prior Notice to have power of attorney 
to act on behalf of the party of interest, or could license submitters. 
The current system does not protect against duplicate Prior Notice 
filings, and could lead to confusion in an emergency situation.
    D. The Prior Notice system should be revised to allow greater 
ability to correct errors after the Prior Notice has been submitted--
even if the change occurs after the Prior Notice is due. For example, 
often product changes hands on the water, or a sale falls through and 
another importer is identified after the product has arrived in the 
U.S. This is customary business practice. Under the current rule, it 
wouldn't be possible to make the change without risking significant 
penalties, or possibly even rejection of cargo. Again, we have a 
suggestion that would address this problem as well.
    E. Certain exemptions are needed for pre-purchase and trade samples 
used exclusively for research and development or laboratory analysis, 
and thus not for sale or distribution to the public; household goods 
(personal effects and property) shipped to the U.S.; and unadulterated 
U.S. exports that have been returned to the U.S.
    F. The reporting timeframes for Prior Notice and CBP's Advance 
Notice should be harmonized to mitigate the burden and expense on food 
importers of meeting both requirements.
    G. Congress should amend the Act to eliminate the requirement that 
Prior Notice be submitted no earlier than 5 days before arrival in the 
U.S. We cannot fathom the reasoning behind such a requirement. After 
all, CBP is screening cargo data 24 hours prior to vessel loading at 
the foreign port.
    H. The Prior Notice system absolutely must be revised to assure 
that the party who submits Prior Notice is notified immediately if the 
product is refused entry due to Prior Notice violations. Currently only 
the carrier, who has no ability nor incentive to resolve the refusal, 
is notified.
    I. We urge FDA to eliminate the existing requirement for separate 
Prior Notice based on packaging and quantity. We do not believe there 
is any security justification for imposing this costly and unnecessary 
burden on the importing public.
    J. Last, but certainly not least, FDA needs to provide further 
education and guidance to the food import community prior to full 
enforcement. FDA did a very effective job of providing training on the 
basic structure of the Prior Notice system. But food importers have 
questions related to practical application of the system to their 
import operations, and are having difficulty getting answers. We 
believe that it is clear that further clarification is needed. FDA must 
find a way to reach out to the regulated public to provide the 
education needed to assure greater compliance. This could be 
accomplished through additional guidance documents, educational 
seminars, web-based training, etc. FDA's own Compliance Policy Guide 
states that such outreach would continue throughout the eight months 
between implementation and full enforcement. Yet this has not occurred, 
and we feel it is needed.
    Again, these are just some of the revisions to the Prior Notice 
program that we feel are needed to make it workable for those of us 
involved in importing food into this country.

               IV. OUR RECOMMENDATION TO CONGRESS AND FDA

    As previously noted, we support the objective of safeguarding our 
nation's food supply. We believe that the current Prior Notice system 
could be modified in such a way that would maintain the safeguards 
currently in place under the Act, while alleviating some of the burden 
on the importing public, as well as on FDA and CBP.
    Instead of requiring Prior Notice before arrival of the cargo in 
the U.S., we believe that Prior Notice should be required prior to 
release of the cargo by CBP. This means that product would not be 
refused entry for lack of Prior Notice, but could never enter the 
stream of U.S. commerce until FDA had received--and reviewed--the Prior 
Notice submission. Since CBP already screens cargo manifest data to 
assure that its physical presence poses no hazard to the U.S., it seems 
that FDA's focus of assuring that food for consumption in the U.S. is 
safe for people (and animals) could just as well be achieved by 
assuring that no shipment is released for consumption until and unless 
the Prior Notice requirement have been met. Until such time as the 
cargo is released, it would (and, in fact, currently does) remain in 
the continuous custody of CBP, thereby posing no threat to the 
consuming public.
    Such a mechanism would address several of the key concerns I have 
already raised, such as problems where one cannot currently meet the 
Prior Notice requirements through the ABI/ACS system for live entry 
items, the need to harmonize FDA and CBP reporting timeframes, and the 
current inability to make critical revisions to the Prior Notice after 
cargo has arrived in the U.S. Under the system I have just described, 
cargo wouldn't be refused entry for an unavoidable error--one would 
simply re-file and await the requisite release by FDA (and CBP), with 
no penalty. In effect, the penalty on the importer would be that the 
cargo would be held until the proper Prior Notice were filed and 
approved by FDA. The system would also capture cargo entering Foreign 
Trade Zones, or moving under ``T&E''--if such cargo were subsequently 
destined for domestic consumption one would need to file a 
``Consumption Entry'' with Customs, and such entry would be contingent 
upon review and approval of Prior Notice by FDA.
    We highly encourage the Committee and the agencies to consider this 
revision to make a more workable--and equally effective--Prior Notice 
system. In fact, we believe this system would be significantly more 
effective, since it would assure that FDA and CBP do not waste valuable 
resources on enforcement actions against legitimate food imports that 
pose no threat to the public.

                             V. ENFORCEMENT

    I would like to make a few comments on the enforcement of the Prior 
Notice provisions. First, we have been urging FDA to postpone full 
enforcement until the final changes to the Prior Notice system are 
made, AND the food import community is given both the time and guidance 
needed to accommodate these changes. I think I can speak for the entire 
food import community when I say we want to be in compliance, and we 
don't want our cargo sitting on the docks, or in a General Order 
warehouse because what we thought was a proper Prior Notice filing 
turned out to be incorrect or inadequate. Until the program is 
finalized--presumably sometime after July 13--we cannot be certain what 
will be expected of us. What we do know is that we will need more than 
30 days to understand the most recent changes and make the programming 
revisions needed to accommodate the changes. Thus we are asking FDA to 
postpone the final enforcement phase until 60-90 days after FDA 
finalizes the Prior Notice System.
    Second, since there will likely be glitches that appear only after 
full enforcement, we encourage FDA not to finalize the Interim Final 
Rule without providing additional opportunity for public comment. We 
suggest that this final comment period begin 6 months after full 
enforcement takes effect, and that the public be given a minimum of 60-
90 days to make its final comments on the system. This way we can be 
sure to have a Prior Notice system that works for everyone.
    Finally, with regard to the FDA's most recent guidance on 
penalties, we have serious concerns that we hope the agency will 
address:

1. Despite the fact that all administration of the Bioterrorism 
        regulations has been centralized within FDA Headquarters, to 
        the purposeful exclusion of the field offices, FDA has 
        announced that penalties will be determined at the Port level. 
        We feel this will lead to inconsistencies and ``port 
        shopping,'' and that penalties are best handled by Headquarters 
        as well.
2. We disagree with FDA's decision to penalize both the submitter and 
        the transmitter for an untimely filing.
3. Since many entries/importations have numerous Prior Notice 
        transmissions, an error on one of the transmissions could 
        generate numerous violations.
4. The first violation, option 1 amount is set at $500.00 for 
        inaccurate PN and treats all inaccuracy the same (clerical 
        error vs. misstatement of fact.

                             VI. CONCLUSION

    I greatly appreciate the opportunity to provide input to the 
Committee on implementation of Title III of the Bioterrorism Act. I 
would like to close by emphasizing that we all are striving towards a 
common goal--that of ensuring the safety of our food supply. We believe 
this can be achieved without significant disruption to the trade if 
certain key elements are revised to reflect common business practices. 
We highly recommend that the Committee and the agencies consider our 
proposal to condition release of cargo by CBP on receipt and approval 
of Prior Notice by FDA. We strongly believe this would resolve many of 
the issues that continue to plague the current Prior Notice system. 
Finally, I would like to commend both FDA and CBP for their efforts to 
implement this new program within a very tight timeframe, and with very 
little additional resources. We recommend that the Committee, in 
recognition of both the importance and scope of this new security 
program, provide both agencies with the funding needed to meet the 
intent of the Bioterrorism Act.
    Thank you.

    Mr. Bilirakis. Thank you very much, Mr. Clarke.
    Mr. French.

                    STATEMENT OF DAVID FRENCH

    Mr. French. Mr. Chairman and Members of the subcommittee, I 
am David French, Senior Vice President of Government Relations 
for the International Foodservice Distributors Association, and 
I thank you for the opportunity to testify today on behalf of 
IFDA's 130 broadline and specialty food service distributors.
    IFDA strongly supports the purposes of the Bioterrorism 
Act, and our members are committed to safeguarding the quality, 
safety and integrity of the product that they distribute. IFDA 
members operate more than 550 facilities and sell more than $75 
billion worth of food and related products to restaurants and 
institutions in the food-away-from-home business. The average 
IFDA member has approximately $50 million in annual sales and 
handles slightly more than 2 million cases of foodservice 
product per year. Implementation of the food provisions of the 
2002 law seems to be going very well.
    But before I comment on what the FDA has done well, I want 
to spend a moment discussing the looming threat of FDA's 
recordkeeping rule, which we view as the most difficult and 
burdensome of the regulations required by the Bioterrorism Act. 
The interim final rule on record maintenance and inspection has 
been delayed for several months. IFDA is hopeful that FDA has 
been using this time to undertake a substantive rewrite of the 
proposed rule because our industry has expressed many serious 
reservations about the initial FDA proposal.
    I would like to mention a few of the problems we saw in the 
proposed rule. The Bioterrorism Act calls for firms to maintain 
records of their transactions and to make these records 
available to the FDA to assist in investigations. On its face, 
these seem to be reasonably simple requirements. After all, 
foodservice distributors typically retain records for at least 
2 years. Food firms also routinely conduct voluntary recalls of 
misbranded or adulterated food products, so all parts of the 
food distribution business have experience with conducting 
trace-back and trace-forward investigations. In fact, it is 
common for our companies to practice mock recalls at the 
request of their larger customers.
    Unfortunately, rather than building on the existing systems 
that food companies employ to keep track of product and conduct 
recalls, the FDA proposed a rigid bureaucratic and one-size-
fits-all rule. If key elements of the proposal find their way 
into the final rule, many of the companies in our industry will 
be facing multimillion dollar information system upgrades that 
will yield no significant improvement in the effectiveness of 
food investigations and recalls. I would add that compliance is 
a very serious matter insofar as failure to maintain the 
required records or failure to provide access to these records 
within the required timeframe subjects the company to civil and 
criminal liability.
    One element of the proposed rule that concerns us is the 
requirement that companies retain the lot number or other 
identifier for each article of food that they send or receive. 
The requirement to record lot numbers is problematic for 
foodservice distributors. Distributors handle food in pallets 
and cases. A single pallet may contain food from multiple lots. 
And the lot numbers often appear only on the individual food 
packages. There is no government or industry standard for 
location or presentation of lot numbers so they may appear on 
product packages or on cases, may be embedded in the UPC code 
or stand alone and may take a variety of forms. Most 
importantly, lot numbers are not generally included on 
invoices. In many cases, the requirement to record lot numbers 
would mean the distributors must break open cases and search 
for lot numbers to record. This is a key point and an issue 
that has people in charge of logistics and operations very 
worried.
    Therefore, we have requested the FDA give companies 
discretion to determine what is an appropriate identifier. Most 
distributors track food by purchase order number. All foods 
have a purchase order and a purchase order number. If a 
manufacturer recalls a product, it is an easy matter to 
determine a purchase order number, trace the product and remove 
it from commerce.
    Another significant concern involves the timeframe for 
production of records. The proposed rule sets very short 
timeframes within which companies are required to make records 
available to FDA. As little as 4 hours is permitted if the 
request is made during normal business hours. Moreover, it is 
not entirely clear from the proposed rule when the clock will 
begin to run.
    Section 306 of the Bioterrorism Act makes failure to 
produce records within this timeframe a prohibited act. Under 
the Federal Food Drug and Cosmetic Act, a prohibited act is 
criminal offense and company executives can be held personally 
criminally liable. Given the serious consequences of 
noncompliance, we view the imposition of a hard and fast 4-hour 
timeframe as unreasonable. While these records can be retrieved 
quickly in an emergency, a 4-hour deadline during normal 
business hours will not always be feasible. And we question 
whether imposition of criminal liability for a violation such 
as this is appropriate.
    We are also concerned that the FDA pay heed to the 
legislative history regarding when it may obtain access to 
records. Because the Bioterrorism Act gives FDA access to 
highly sensitive commercial information, it is important that 
the new records access authority be used appropriately. While 
the Bioterrorism Act requires the FDA to take appropriate 
measures to prevent unauthorized disclosure of trade secrets or 
confidential information, the proposed rule did not address 
this issue.
    The FDA is now three-fourths of the way through the 
rulemaking process. The interim final rules on registration and 
prior notice and the final rule on administrative detention 
have all been written. And the foodservice distribution 
industry is generally pleased with the significant cooperation 
and understanding that the FDA has shown in responding to the 
industry's concerns. FDA has done an impressive job of 
listening and responding to various workability issues raised 
by numerous comments on the rulemaking process, and the Agency 
should be commended for this.
    In the brief experience that our companies have had with 
these rules, they have reported very few supply disruptions or 
concerns. Smooth implementation of the first three regulations 
is due to several factors which have been summarized in my 
written submission.
    While we are generally pleased with the implementation of 
the first three rules under the Bioterrorism Act, there are 
some serious concerns with regard to the prior notice rule, 
FDA's phasing in enforcement of the rule through Agency 
discretion and educational outreach. As mentioned earlier, no 
real education seems to be happening. While FDA is keeping 
track of and posting data on a number of inadequate prior 
notices, FDA is not telling industry why these prior notices 
are deficient. We hope that FDA will step up its educational 
efforts before full enforcement of the prior notice rule begins 
on August 13.
    In addition, our members are reporting significant problems 
with FDA failing to make timely inspection decisions along the 
Canadian border. Whether the problems are related to the 
Bioterrorism Act or prior notice or simply a reflection of a 
sizable number of new inexperienced inspection personnel on the 
job, we have heard that many products imported from Canada are 
not receiving timely decisions from FDA. In some cases, FDA 
inspectors are taking an inordinate amount of time to decide 
whether or not to sample imported product. As the legislative 
history of the act makes clear, FDA review of prior notice 
should not delay or unnecessarily disrupt the flow of commerce.
    Mr. Bilirakis. Please summarize.
    Mr. French. I am close to concluding, Mr. Chairman.
    We understand that implementation involves a learning curve 
for FDA as well as industry, and we hope that these delays will 
disappear.
    Thank you for the opportunity to present this statement, 
and I am happy to answer any questions.
    [The prepared statement of David French follows:]

     Prepared Statement of David French, International Foodservice 
                        Distributors Association

    Mr. Chairman, Mr. Waxman, and members of the Committee, I am David 
French, senior vice president of government relations for the 
International Foodservice Distributors Association, and I thank you for 
the opportunity to testify today regarding the Food and Drug 
Administration's implementation of the food provisions of the 
Bioterrorism Act of 2002. IFDA strongly supports the purposes of the 
Bioterrorism Act, and our members are committed to safeguarding the 
quality, safety, and integrity of the products that they distribute.
    IFDA is a trade organization representing foodservice distributors 
throughout the U.S., Canada, and internationally. IFDA's 130 members 
include broadline and specialty foodservice distributors that supply 
food and related products to restaurants and institutions in the ``food 
away from home'' business. IFDA members operate more than 550 
facilities, and sell more than $75 billion in food and related 
products. The average IFDA member has approximately $50 million in 
annual sales and handles slightly more than two million cases of 
foodservice product per year. Formerly a division of Food Distributors 
International, IFDA was established as an independent trade association 
on January 1, 2003.
    In general, I can report that the implementation of the food 
provisions of the 2002 law has gone much more smoothly than expected. 
But before I comment on what the FDA has done well, I want to spend a 
moment discussing the looming threat of the FDA's recordkeeping rule. 
The recordkeeping rule is generally viewed as the most difficult and 
burdensome of the regulations required by the Bioterrorism Act.
    As you know, the interim final rule on record maintenance and 
record inspection has been delayed for several months. IFDA is hopeful 
that the FDA has been using this time to undertake a substantive 
rewrite of the proposed rule, because our industry has expressed many 
serious reservations about the initial FDA proposal. I'd like to 
briefly mention a few of the problems we saw in the proposed rule.
    The Bioterrorism Act calls for food firms to maintain records of 
their transactions for some length of time and to make these records 
available to FDA to assist in trace back and trace forward 
investigations. On its face, these seem to be reasonably simple 
requirements. After all, foodservice distributors typically retain 
records for at least two years. Food firms also routinely conduct 
voluntary recalls of misbranded or adulterated food products, so all 
parts of the food distribution business have experience with conducting 
trace back and trace forward investigations.
    Unfortunately, rather than building on the existing systems that 
food companies employ to keep track of product and to conduct recalls, 
the FDA proposed a rigidly bureaucratic and one-size-fits-all rule. If 
key elements of the proposal find their way into the final rule, many 
of the companies in our industry will be facing multi-million dollar 
information system upgrades that will yield no significant improvement 
in the effectiveness of food investigations and recalls. I would add 
that compliance is a very serious matter insofar as failure to maintain 
the required records, or failure to provide access to these records 
within the required time frame, subjects a company to civil and 
criminal liability.
    One element of the proposed rule that concerns us is the 
requirement that companies retain the lot number ``or other 
identifier'' for each article of food that they send or receive. A 
requirement to record lot numbers is problematic for foodservice 
distributors. Distributors handle food in pallets and cases. A single 
pallet may contain food from multiple lots, and the lot numbers often 
appear only on the individual food packages. There is no government or 
industry standard for location or presentation of lot numbers, so they 
may appear on product packages or on cases, may be embedded in the UPC 
code or stand alone, and may take a variety of forms. In many cases, a 
requirement to record lot numbers would mean that distributors must 
break open pallets and cases and search for the lot numbers to record. 
This is a key point, and an issue that has the people in charge of 
logistics and operations in IFDA member companies very worried.
    Therefore, we have requested that FDA give companies considerable 
discretion to determine what is an appropriate identifier. Most 
distributors track food by purchase order number. All foods have a 
purchase order and purchase order number. If a manufacturer recalls a 
product or if it is necessary to trace a food shipment for any other 
reason, it is an easy matter to determine a purchase order number, 
trace the product, and remove it from commerce.
    Another significant concern that the foodservice industry has 
raised regarding the proposed rule involves the time frames for 
production of required records. The proposed rule sets very short time 
frames within which companies are required to make records available to 
FDA in response to an official request--only four hours if the request 
is made during normal business hours. Moreover, it is not entirely 
clear from the proposed rule when the clock begins to run. Section 306 
of the Bioterrorism Act makes failure to produce records within this 
time frame a ``prohibited act.'' Under the Federal Food, Drug, and 
Cosmetic Act, a ``prohibited act'' is a criminal offense, and company 
executives can be held personally criminally liable.
    Given the serious consequences of non-compliance, we view the 
imposition of a hard-and-fast four-hour time frame as unreasonable. 
While these records can be retrieved quickly in an emergency, a 4-hour 
deadline during normal business hours (or an 8-hour deadline outside of 
normal business hours), as proposed by FDA, is not feasible. IFDA 
agrees that FDA must have quick access to records in the event of an 
emergency. Imposition of criminal liability for violation of such a 
short timeframe, however, is inappropriate. Instead, FDA should require 
that records be made available in a reasonable period of time. As the 
courts have been able to determine what constitutes reasonable times 
and places for FDA inspection under FD&C Act section 704, so too can 
the courts apply a reasonableness standard to the time frames for 
records access.
    A third concern we have deals with the circumstances of records 
access. We are concerned that FDA pay heed to the legislative history 
regarding when it may obtain access to records. According to one of the 
sponsors of the Bioterrorism Act, John Shimkus (R-IL), FDA ``shall 
ensure that adequate procedures are in place to ensure agency personnel 
will not have access to records without a specific reason and need for 
such access, and that possession of all copies of records will be 
strictly controlled . . .'' Cong. Rec. E2388 (Dec. 20, 2001). Because 
the Bioterrorism Act gives FDA access to highly sensitive commercial 
information, it is important that the new records access authority be 
used appropriately and not abused and that strong protection be put in 
place to prevent inappropriate release of sensitive information. While 
the Bioterrorism Act requires that FDA take appropriate measures to 
prevent unauthorized disclosure of trade secret or confidential 
information, the proposed rule did not address this issue.
    The FDA is three-fourths of the way through the rulemaking process. 
The interim final rules on registration and prior notice and the final 
rule on administrative detention have all been written, and the 
foodservice distribution industry is generally pleased with the 
significant cooperation and understanding that the FDA has shown in 
responding to the industry's concerns. FDA has done an impressive job 
of listening and responding to various workability issues raised by 
numerous comments during the rulemaking process, and the agency should 
be commended for this.
    In the brief experience that our companies have had with these 
rules, they have reported very few supply disruptions or concerns. 
Smooth implementation of the first three regulations is due to several 
factors. First, in the case of the prior notice rule in particular, FDA 
made a serious effort to address industry concerns raised during the 
rulemaking and the interim final rule was far less onerous than the 
proposed rule. Second, FDA has been phasing in enforcement of the prior 
notice and registration rules, so implementation problems may become 
more noticeable in the near future when full enforcement begins. Third, 
the prior notice rule has little direct impact on foodservice 
distributors, since with a few exceptions, foodservice firms do not 
import product directly. Instead, they work with importers and brokers 
who handle transactions with foreign suppliers. Importers may also be 
keeping their inventories larger than usual in order to minimize 
disruptions. Finally, firms in our industry, following FDA guidance, 
generally work with known suppliers. These suppliers are likely to be 
larger and more capable of working within the FDA rules.
    While we are generally pleased with implementation of the first 
three rules under the Bioterrorism Act, there are some serious 
concerns. With regard to the prior notice rule, as previously 
mentioned, FDA is phasing in enforcement of the rule. We are currently 
in a period of enforcement discretion and educational outreach. 
Unfortunately, no real education is happening. While FDA is keeping 
track of and posing data on the number of inadequate prior notices it 
receives, FDA is not telling industry why these prior notices are 
deficient. We hope that FDA will step up its educational efforts before 
full enforcement of the prior notice rule begins on August 13.
    In addition, our members are reporting significant problems with 
FDA failing to make timely inspection decisions along the Canadian 
border. It is not clear whether this problem is related to the 
Bioterrorism Act and prior notice or simply a reflection of a sizable 
number of new, inexperienced inspectional personnel on the job; but we 
have heard that many products imported from Canada are not receiving 
timely decisions from FDA. In some cases, FDA investigators are taking 
an inordinate amount of time to decide whether or not to sample 
imported product. As the legislative history of the Bioterrorism Act 
makes clear, FDA review of prior notice ``should not delay or 
unnecessarily disrupt the flow of commerce.'' Cong. Rec. E2389 (Dec. 
20, 2001). We understand that implementation involves a learning curve 
for FDA as well as industry, and we hope that these delays will 
disappear.
    Thank you for the opportunity to present this statement, and I am 
happy to take any questions.

    Mr. Bilirakis. Thank you very much for your statement.
    Ms. Stout.

                   STATEMENT OF SUSAN M. STOUT

    Ms. Stout. Good morning Mr. Chairman.
    I am Susan Stout. I am Vice President of Federal Affairs of 
the Grocery Manufacturers of America. We are led by a Board of 
42 chief executive officers, and GMA is the world's largest 
association of food, beverage and consumer product companies. 
With U.S. sales of more than $500 billion, GMA members employ 
more than 2.5 million workers in all 50 States.
    The subcommittee hearing today is timely and a useful 
review of where things stand 2 years following enactment of the 
Bioterrorism Act. Thus far, FDA, as you know, has issued final 
regulations on detention, interim final rules on registration 
and prior notice and a proposed rule on recordkeeping. The FDA 
has been accessible and open to suggestions to improve the 
workability of these regulations from those who have to make 
the regulations work, the food industry.
    No regulation is ever perfect, and I am not suggesting that 
the FDA's bioterrorism regulations are perfect. The food 
industry has been concerned about the provision for prior 
notice of imported foods from the beginning of this process. 
When FDA issued proposed regulations to implement prior notice 
in February 2003, our worst fears were realized. That proposal 
would have been costly, duplicative, unworkable and likely to 
have led to lines at the U.S. entry points that would have 
rivaled those at airport security checkpoints.
    GMA's comments on the proposed prior notice regulations 
discussed all of the problems with the FDA proposal and made 
suggestions for improvements. To its credit, the interim final 
regulation that FDA issued on October 10, 2003 did address most 
of the egregious workability problems, but we don't know 
whether the prior notice system will work.
    Let me explain what I mean by that. FDA has properly 
provided for a period of time after publication of the interim 
final rule for itself, Customs and Border Protection and the 
food industry to become educated about the requirements and to 
implement systems to enable compliance. This educational phase 
is scheduled to conclude in the middle of August, at which time 
full enforcement begins. We do not believe that anyone can 
confidently predict what will happen when full enforcement does 
begin.
    However, although companies have been submitting prior 
notices since last December, FDA has provided little if any 
feedback on deficiencies of specific notices. Companies can 
only guess what problems might have occurred. Additionally, 
FDA's own data show that more than one-third of prior notices 
submitted as recently as this April were deemed incomplete. If 
FDA were now fully enforcing the requirement, more than 50,000 
notices per week would be ineffective and the food covered by 
those notices denied entry into the United States.
    Another troubling issue with prior notice relates to the 
FDA imposed requirement that all prior notices contain the 
facility registration number where the food was produced. In 
some instances, it is not possible to satisfy this requirement, 
yet FDA has not provided a solution. This requirement is 
particularly problematic for trade and product samples.
    Congress intended prior notice to assist the FDA in 
allocating resources to examine and inspect potentially high-
risk shipments of food. FDA's limited resources should not be 
spent examining food product samples that are not for public 
consumption or retail sale and clearly do not present major 
food security issues. Easing this burden for product samples 
would have to ensure that food companies, in order to conduct 
their testing, do not have to relocate the product analysis 
facilities outside of the United States. FDA must provide some 
relief.
    The second rulemaking of particular concern is 
recordkeeping. Under the Bioterrorism Act, FDA is authorized to 
require the maintenance of records of food to show the 
immediate person from whom the food was received and the 
immediate person to whom the food was distributed. These 
records are intended to assist FDA in tracing the movement of 
food in the event of a serious problem involving that food.
    FDA has proposed to require food companies to maintain 
records that include lot or production codes for product 
delivered to the retail stores. GMA has vigorously objected to 
this proposed requirement as contributing nothing to food 
security while being incredibly time-consuming and burdensome. 
We have urged FDA to remove this requirement from the 
recordkeeping regulation. I have inserted a copy of our 
comments on this subject in my testimony.
    The delivery of food to retail stores occurs in various 
ways. A growing number of our food companies use so-called 
direct-store delivery. In direct-store delivery, the food 
manufacturer delivers product to the retailer, restocks the 
shelf, replacing older product with new, using company vehicles 
and company employees. I am sure you have seen the GMA company 
trucks at your local grocery stores. If there is a problem with 
the particular food, the manufacturer will move all of the 
potentially offending food, not just a specific lot or code 
amount from distribution until the magnitude and scope of the 
problem is determined. Retailers will do exactly the same 
thing.
    We very much hope that in the final recordkeeping 
regulation, FDA will remove this ill advised and unnecessary 
proposed requirement for lot and production codes.
    Thank you, Mr. Chairman.
    [The prepared statement of Susan M. Stout follows:]

Prepared Statement of Susan M. Stout, Vice President, Federal Affairs, 
                    Grocery Manufacturers of America

    Mr. Chairman and Members of the Subcommittee, I am grateful for the 
opportunity to participate this morning in this important hearing.
    GMA is the world's largest association of food, beverage and 
consumer product companies. Led by a board of 42 Chief Executive 
Officers, GMA applies legal, scientific, and political expertise from 
its more than 140 member companies to vital public policy issues 
affecting its membership. The association also leads efforts to 
increase productivity, efficiency and growth in the food, beverage and 
consumer products industry. With U.S. sales of more than $500 billion, 
GMA members employ more than 2.5 million workers in all 50 states.
    A little over two years ago, Congress passed the Public Health 
Security and Bioterrorism Preparedness and Response Act. GMA worked 
closely with the Members and staff of this Subcommittee and the full 
Energy & Commerce Committee to ensure that the additional authorities 
provided to Federal regulators were well considered and likely to 
contribute to increased food security, and not merely increased burdens 
on the food industry. The Subcommittee's hearing today is a timely and 
useful review of where things stand two years after enactment.
    Before turning to the Bioterrorism Act I want to briefly mention an 
important GMA program--Project Vigilance. Ensuring the security of the 
food supply is the responsibility of the food industry as well as the 
government. Project Vigilance encompasses our actions immediately 
following September 11th to help assure the security of food, beverages 
and consumer products. Included with my testimony is a description of 
the program.
    The Bioterrorism Act requires FDA to undertake numerous 
rulemakings. Specifically, FDA was required to develop regulations on 
food facility registration, administrative detention, prior notice of 
imported foods, and recordkeeping. I intend to spend the bulk of my 
testimony discussing issues related to prior notice and recordkeeping. 
Before turning to those two subjects, however, I want to share with the 
Subcommittee a general observation about the development of these 
regulations by FDA to implement the Bioterrorism Act.
    Thus far, FDA has issued final regulations on detention and interim 
final rules on registration and prior notice. The final regulation on 
recordkeeping is expected soon. Throughout all of these rulemaking 
proceedings, the FDA staff has been accessible, open to suggestions to 
improve the regulations, and willing to address issues in the 
regulations to improve workability. No regulation is ever perfect and I 
am not suggesting that FDA's bioterrorism regulations are perfect. But, 
FDA is certainly to be commended for the process that it has used to 
develop these regulations and for its willingness to modify proposed 
regulations based on comments from those who have to make the 
regulations work--the food industry.
    Throughout the development of the Bioterrorism Act, the food 
industry was most concerned about the provision for prior notice of 
imported foods. Our concerns were based on unease about the burden on 
importers, questions about integration of the FDA requirements with 
those of the U.S. Customs and Border Protection, and, ultimately, the 
effects on the cost and availability of food if the prior notice 
requirements impeded the importation of food. When FDA issued proposed 
regulations to implement the prior notice requirement in February of 
2003, our worst fears were realized. That proposal would have been 
costly, duplicative, unworkable, and quite likely to have led to lines 
at the various entry points through which food enters the United States 
that rivaled those at airport security check points.
    GMA's comments on the proposed prior notice regulations discussed 
all of the problems with the FDA proposal and made suggestions to 
improve the prior notice system. To its credit, the interim final 
regulation that FDA issued on October 10, 2003, addressed most of the 
most egregious problems with the proposal--the time frames for 
submission of the notice were shortened, coordination with Customs was 
enhanced, and numerous other ``workability'' issues were solved. But, 
we don't yet know whether the prior notice system will work. Let me 
explain.
    FDA has properly provided for a period of time after publication of 
the interim final rule for itself, Customs and Border Protection and 
the food industry (including food manufacturers, importers, and persons 
involved in the transportation and distribution of food) to become 
educated about the requirements and to implement systems to enable them 
to comply. Currently, this ``educational'' phase is scheduled to 
conclude in the middle of August; FDA and CBP will then commence full 
enforcement.
    We do not believe that anyone can confidently predict what will 
happen when full enforcement begins. First, although companies have 
been submitting prior notices since last December, FDA has provided 
little if any feedback on deficiencies in specific notices. Companies 
can only guess what problems might have occurred. Second, FDA's own 
data show that more than one-third of prior notices submitted as 
recently as April were deemed ``incomplete.'' (``Compliance Summary 
Information: Prior Notice,'' April 1, 2004; updated May 2004. U.S. Food 
and Drug Administration). If FDA were now fully enforcing the 
requirement, more than 50,000 notices per week would be ineffective and 
the food covered by those notices denied entry into the United States.
    One of the most troubling issues with prior notice relates to the 
FDA-imposed requirement that all prior notices contain the facility 
registration number of the facility where the food was produced. In 
some instances, it is not possible to satisfy this requirement, yet FDA 
has not provided a solution. The requirement to provide the 
registration number in a prior notice is a particular problem for trade 
and product samples. U.S. food companies routinely import samples for 
analysis and review. Some of these samples are products distributed by 
the company overseas, while others are samples of competitor's products 
or samples of food or food ingredients made by foreign companies who 
would like to do business with the U.S. company. When the samples are 
intra-company, the registration number can be obtained, but the burden 
to submit a prior notice, individually, for every one of these products 
is excessive. Further, when the sample is a competitor's product, 
access to the registration number is ordinarily not possible. In 
addition, if the sample is from a company not doing business in the 
United States, the company is not required to register its facilities 
and thus does not have a facility registration number.
    FDA must provide some relief for the importation of samples. The 
routine importation of small quantities of food product samples simply 
does not present major food security issues. Prior notice is intended 
to assist FDA in allocating resources to examine and inspect 
potentially high risk shipments of food. We do not believe that FDA 
should devote its limited resources to the routine examination of food 
product samples. Easing the prior notice burden for product samples 
would help to ensure that food companies do not have to relocate 
product analysis facilities outside the United States (to avoid the 
expense and hassle of filing notices for every sample or dealing with 
the problem of filing notices where registration numbers are not 
available). FDA should develop a category for which a registration 
number is not required such as sample products that will not be 
consumed by the general public or that are not intended for retail 
sale.
    The second rulemaking of particular concern is recordkeeping. Under 
the Bioterrorism Act, FDA is authorized to require the maintenance of 
records of food to show the immediate person from whom the food was 
received and the immediate person to whom the food was distributed. 
These records are intended to assist FDA in tracing the movement of 
food in the event of a serious problem involving that food. FDA issued 
proposed recordkeeping regulations on May 9, 2003. Final regulations 
are expected to be published soon.
    In the recordkeeping proposal, FDA proposed to require that food 
companies maintain records that included lot or production codes for 
product delivered to retail stores. GMA has vigorously objected to this 
proposed requirement as contributing nothing to food security while 
being incredibility time consuming and burdensome. We have urged FDA to 
remove this requirement from the recordkeeping regulation. A copy of 
GMA's comments is included with my testimony.
    The delivery of food to retail stores occurs in various ways. A 
growing number of food companies use so-called direct store delivery. 
In direct store delivery, the food manufacturer delivers product to the 
retailer using company vehicles and employees. You have all seen GMA's 
member company trucks at your local grocery store--these are direct 
store companies. The delivery employees not only deliver the food to 
the store, but restock the shelves--removing older product and 
replacing it with new. It would be virtually impossible for these 
employees to capture the lot or production code on each bottle or can 
of beverage or each container of snack foods as they stock the shelf.
    Importantly, this information is of little value to FDA. If there 
is a problem with a particular food, the manufacturer will remove all 
of the potentially offending food from distribution until the magnitude 
and scope of the problem is determined. Retailers will do the same. 
Thus, knowing that a particular product of concern with a particular 
lot number was delivered to a specific retailer is not only extremely 
difficult to obtain, but of little value.
    We very much hope that in the final recordkeeping regulation FDA 
will remove the ill-advised proposed requirement for lot and production 
codes.
    Mr. Chairman and Members of the Subcommittee, we welcome your 
oversight. With the consolidation of the USDA Animal Plant and 
Inspection Services and Customs from Treasury into the Department of 
Homeland Security, our companies have been experiencing delays, 
inconsistent enforcement of rules and confusion at the ports of entry. 
With the implementation of the bioterrorism regulations, we are 
concerned that these problems will increase. Additional resources may 
be needed at the borders and we encourage your continued oversight.
    I would be pleased to respond to any questions you may have. Again, 
GMA thanks the Subcommittee for convening these hearings.

    Mr. Bilirakis. Thank you very much, Ms. Stout.
    Mr. Saunders, please proceed.

                STATEMENT OF R. DOUGLAS SAUNDERS

    Mr. Saunders. Thank you, Mr. Chairman.
    Although I am an employee of the Virginia Department of 
Agriculture and Consumer Services, I am here today as a 
representative of the Board of Directors of the Association of 
Food and Drug Officials.
    For 108 years, AFDO has served as a major voice for food 
safety officials in the United States and Canada. AFDO proudly 
represents State and local government food safety officials at 
public meetings or briefings where consensus opinions or 
official comments are presented on a host of food safety and 
security issues.
    Today more than ever, there is a call for unity among 
health officials in government and all levels and the need to 
coordinate all available food safety and security resources, 
particularly those at the integral nodes of our detection 
system. From that perspective, we would like to offer the 
following comments relative to the Bioterrorism Act.
    AFDO fully supports the FDA as they implement regulations 
under the Bioterrorism Act. Prior notification of incoming 
shipments of imported foods and registration of food 
establishments are absolutely imperative if we are to have any 
ability at all to effectively control the movement or 
distribution of foods that are suspected of being compromised 
through acts of terrorism. We believe that such requirements 
provide the basis for having greater control of suspect foods 
and will enhance the capability to more quickly detect 
nonintentional or intentional adulteration and facilitate 
immediate removal of suspect food from the channels of 
commerce.
    Early detection and rapid response are essential elements 
to defend the integrity of our food supply. Prior notification 
and establishment of registration can only improve those 
elements. However, we also believe that these components of the 
Bioterrorism Act must be augmented by additional measures. With 
imported foods, FDA must do more. The concept of evaluating the 
safety of imported foods solely at one of the 400 border points 
is inadequate in our view. FDA needs to move back the borders 
to the manufacturing site and perform inspections of those food 
establishments to significantly enhance our ability to detect, 
detain and ultimately remove from commerce intentionally 
adulterated foods.
    Currently, such inspections only take place with respect to 
low-acid canned foods. This authority must be expanded to cover 
all food manufacturers located outside of our borders that ship 
the food products into the United States. In addition, FDA must 
work closer with State and local government agencies relative 
to imported foods that are distributed domestically.
    Some may suggest that imported foods are a regulatory 
concern for Federal Agencies alone. These individuals would be 
wrong. Once imported food gets through the scrutiny of our 
Federal partners, they become primarily the concern of State 
and local regulatory agencies. Many States report recalls of 
imported foods, and the food seizures and embargoes are 
commonplace for issues that include undeclared allergens, 
unapproved color additives, undeclared preservatives and 
pathogens. FDA must develop a means for obtaining this 
information and utilizing it where appropriate to institute 
import alerts.
    FDA must also consider how to best use State and local 
laboratory resources as well. The recordkeeping requirements 
provided by the Bioterrorism Act certainly improves the 
likelihood that effective trace-backs, trace-forwards or 
recalls will be facilitated in the event of a terrorist attack 
against our food supply. Improved trace-back, trace-forward or 
recall capabilities will significantly enhance the expeditious 
tracking and removal activities of the FDA when adulteration is 
detected. It must be noted, however, that, historically, trace-
back or trace-forward activities are usually performed by State 
food safety agencies. It is safe to assume that with the 
limited resources that are available to the FDA, most trace-
back and trace-forward activities will continue to be performed 
by the States in cooperation with FDA.
    Administrative detention is a tool that FDA has needed for 
many years and a tool that will provide immediate results when 
it becomes necessary to prevent further distribution of suspect 
food products. Prior to the granting of this authority by 
Congress, FDA had to request States to detain, seize or embargo 
food products when suspect food products were encountered. 
Through cooperative agreements, FDA has utilized the State's 
detention authority for many years.
    Because the Bioterrorism Act contains the specific 
requirements when FDA can utilize administrative detention, it 
will still be necessary for FDA to maintain these cooperative 
agreements with the States to ensure that suspect foods that do 
not meet the Federal definition but are still of considerable 
concern relative to adulteration continue to be legally 
restrained. Consequently, through the FDA's new detention 
authority and through continuing cooperative agreements between 
FDA and the States, the nationwide network of detention 
capabilities will be substantially strengthened.
    For as long as FDA has existed, the cooperative 
relationship between the FDA and State and local food safety 
agencies have worked very effectively in protecting our 
Nation's food supply. These coordinated activities have led to 
a maximized utilization of Federal, State and local food safety 
and security resources while eliminating the duplication of 
food protection activities.
    Through these cooperative efforts, State and local food 
safety agencies have been able to supplement the food safety 
and security activities of the FDA. In 2002, AFDO conducted a 
survey of State activities that showed that, during 2001, State 
programs performed more than 2.5 million inspections of food 
establishments, more than 3,000 food-borne illness 
investigations and investigation of over 46,000 consumer 
complaints, response to over 2,800 emergencies, more than 
128,000 enforcement actions, and collection and analysis of 
over 328,000 food samples.
    Based on these figures, more than 80 percent of the food 
safety and security activities in the United States are 
performed at the State or local levels. Consequently, it is 
clear that State and local food safety programs provide the 
major portion of the shields that must be in place to detect 
any sort of terrorist act. With the increasing threat of 
terrorist activities against the food supply, it is paramount 
that this cooperative and highly integrated State, local and 
Federal food safety and security system be maintained and 
strengthened for the deterrence, prevention and detection of 
terrorist activities.
    With that focus, AFDO would like to call attention to a 
piece of Federal legislation that threatens----
    Mr. Bilirakis. Summarize it though, please.
    Mr. Saunders. H.R. 2699, the National Uniformity For Food 
Act of 2003, as presently cast undermines our Nation's whole 
bio-surveillance system by preempting and invalidating many of 
the State and local food safety laws and regulations that 
provide the necessary authority for State and local agencies to 
operate food safety and security programs.
    We feel that you need to be aware of our concerns with 
respect to that legislation and that the cost to the FDA to 
replace the infrastructure and food safety and security 
activities currently accomplished at State and local levels is 
estimated to exceed $500 million.
    In conclusion, the Bioterrorism Preparedness and Response 
Act of 2002 is an immeasurably important and necessary law that 
further solidifies our Nation's food safety and security system 
by providing FDA with much needed and long overdue authorities. 
However, the new FDA authorities can only remain effective if 
these cooperative relationships between the FDA and State and 
local food and safety security programs can be maintained and 
improved. Consequently, for the effectiveness of the 
Bioterrorism Act to be fully realized, it is absolutely 
imperative that our current food safety and security programs 
at all levels remain fully functional and active.
    Once again, thank you very much for the opportunity to 
provide these comments.
    [The prepared statement of R. Douglas Saunders follows:]

 Prepared Statement of R. Douglas Saunders, Chair, Food Security Task 
 Force, and Betsy Woodward, Special Advisor to the Board of Directors, 
                 Association of Food and Drug Officials

    Mr. Chairman, and members of the Committee, I am here today as a 
representative of the Board of Directors and a past president of the 
Association of Food and Drug Officials (AFDO), to provide testimony on 
the importance of the Bioterrorism Preparedness and Response Act of 
2002 (hereinafter referred to as the Bioterrorism Act). I would like to 
thank you for this opportunity to share the perspective of AFDO on an 
issue that is so vital to the protection of the food and agriculture 
critical infrastructure of our nation.
    For 108 years, AFDO has served as a major voice for food safety 
officials in the United States and Canada. AFDO proudly represents 
state and local government food safety officials at public meetings or 
briefings where consensus opinions or official comments are presented 
on a host of food safety and security issues. Today, more than ever, 
there is a call for unity among health officials in government at all 
levels and the need to coordinate all available food safety and 
security resources, particularly those at the sentinel nodes of our 
detection system. From that perspective, we would like to offer the 
following comments relative to the Bioterrorism Act.
    With respect to the four major issues addressed by the Bioterrorism 
Act, AFDO fully supports the U.S. Food and Drug Administration (FDA) as 
they implement regulations to address those provisions. Specifically, 
those provisions include:

 Prior notification of imported foods coming into the United States;
 Registration of food establishments;
 Record keeping to ensure effectiveness of tracebacks, traceforwards 
        and recall activities; and
 Administrative detention of food products.
    Prior notification of incoming shipments of imported foods and 
registration of food establishments are absolutely imperative if we are 
to have any ability at all to effectively control the movement or 
distribution of foods that are suspected of being compromised through 
acts of terrorism. We believe that such requirements provide the basis 
for having greater control of suspect foods and will enhance the 
capability to more quickly detect non-intentional or intentional 
adulteration and facilitate immediate removal of suspect foods from the 
channels of commerce. Early detection and rapid response are essential 
elements to defend the integrity of our food supply. Prior notification 
and establishment registration can only improve those elements. 
However, we also believe that these components of the bioterrorism act 
must be augmented by additional measures. With imported foods, FDA must 
do more. The concept of evaluating the safety of imported foods solely 
at one of the 400 border points is inadequate, in our view. FDA needs 
to move back the borders to the manufacturing site and perform 
inspections of these food establishments to significantly enhance our 
ability to detect, detain, and ultimately remove from commerce 
intentionally adulterated foods. Currently, such inspections only take 
place with respect to low-acid canned foods. This authority must be 
expanded to cover all food manufacturers located outside of our borders 
that ship food products into the United States.
    In addition, FDA must work closer with State and Local government 
agencies relative to imported foods that are distributed domestically. 
Some may suggest that imported foods are a regulatory concern for 
federal agencies alone. These individuals would be wrong. Once imported 
foods get through the scrutiny of our federal partners, they become 
primarily the concern of State and Local regulatory agencies. Many 
states report recalls, and food seizures or embargoes are commonplace 
for issues that include undeclared allergens, unapproved color 
additives, undeclared preservatives, and pathogens. FDA must develop a 
means for obtaining this information and utilizing it, where 
appropriate, to institute import alerts. FDA must also consider how to 
best use State and Local laboratory resources, as well.
    The recordkeeping requirements provided by the Bioterrorism Act 
certainly improve the likelihood that effective tracebacks, 
traceforwards, or recalls will be facilitated in the event of a 
terrorist act against our food supply. Improved traceback, 
traceforward, or recall capabilities will significantly enhance the 
expeditious tracking and removal activities of the FDA when 
adulteration is detected. It must be noted, however, that historically, 
traceback or traceforward activities are usually performed by State 
food safety agencies. It is safe to assume that with the limited 
resources that are available to the FDA, most traceback and 
traceforward activities will continue to be performed by the States, in 
cooperation with the FDA.
    Administrative detention is a tool that FDA has needed for many 
years, and a tool that will provide immediate results when it becomes 
necessary to prevent further distribution of suspect food products. 
Prior to granting of this authority by Congress, FDA had to request 
States to detain, seize or embargo food products when suspect food 
products were encountered. Through cooperative agreements, FDA has 
utilized the States' detention authority for many years. Because the 
Bioterrorism Act contains specific requirements that define when FDA 
can utilize administrative detention, it will still be necessary for 
FDA to maintain these cooperative agreements with the States to ensure 
that suspect foods that do not meet the Federal definition but are 
still of considerable concern relative to adulteration, continue to be 
legally restrained. Consequently, through the FDA's new detention 
authority, and through continuing cooperative agreements between FDA 
and the States, the nationwide network of detention capabilities will 
be substantially strengthened.
    For as long as FDA has existed, the cooperative relationships 
between the FDA and State and Local food safety agencies have worked 
very effectively in protecting our nation's food supply. These 
coordinated activities have led to a maximized utilization of Federal, 
State and Local food safety and security resources, while eliminating 
the duplication of food protection activities. Through these 
cooperative efforts, State and Local food safety agencies have been 
able to supplement the food safety and security activities of the FDA. 
In 2002, AFDO conducted a survey of state activities which showed that 
during 2001, state programs performed:

 More than 2.5 million inspections of food establishments;
 More than 3,000 foodborne illness investigations;
 Investigation of over 46,000 consumer complaints;
 Response to over 2,800 emergencies or disasters involving food 
        products;
 More than 128,000 enforcement actions, including, but not limited to, 
        embargos, seizures and stop sales; injunctions; criminal 
        prosecutions; warning letters; informal hearings; and food 
        recalls; and,
 Collection and analyses of over 328,000 food samples, including more 
        than 252,000 microbiological samples.
    Based on these figures, more than 80% of the food safety and 
security activities in the United States are performed at the State or 
Local levels. Consequently, it is clear that State and Local food 
safety programs provide the major portion of the shields that must be 
in place to detect any sort of terrorist act. With the increasing 
threat of terrorist activities against our food supply, it is paramount 
that this cooperative and highly integrated Federal, State and Local 
food safety and security system be maintained and strengthened for the 
deterrence, prevention and detection of terrorist activities. With that 
focus in mind, AFDO would like to call attention to a piece of Federal 
legislation that threatens to eviscerate this system. The ramifications 
of this bill, intended or not, will dissolve our nation's biodefense 
capabilities.
    H.R. 2699, the National Uniformity for Food Act of 2003, as 
presently cast, undermines our nation's whole biosurveillance system by 
preempting and invalidating many of the State and Local food safety 
laws and regulations that provide the necessary authority for State and 
Local agencies to operate food safety and security programs. The pre-9/
11 concept embodied in this bill is very much out of line with current 
threats that confront our food safety and security system. Preempting 
and invalidating State and Local food safety and security activities 
will lead to serious ramifications that will be difficult, if not 
impossible, for our nation to recover from. Specifically, FDA's ability 
to detect, much less respond, to acts of terrorism will be severely 
hampered. The cost to the FDA to replace the infrastructure and food 
safety and security activities currently accomplished at the State and 
Local levels is estimated to exceed $500,000,000. Our current food 
safety and security system will be significantly disrupted for many 
years to come, and our inability to track suspected acts of intentional 
adulteration will be exploited by those who seek to do harm to our 
nation. Passage of H.R. 2699, in its current form, which would 
invalidate State and Local food safety laws and regulations, will 
effectively eliminate our nation's food biosecurity shields, and will 
undermine our whole, food safety and biosurveillance capability.
    In conclusion, the Bioterrorism Preparedness and Response Act of 
2002 is an immeasurably important and necessary law that further 
solidifies our nation's food safety and security system by providing 
FDA with much needed, and long overdue authorities, and it ensures the 
continuing, cooperative efforts of State and Local agencies. However, 
these new FDA authorities can only remain effective if these 
cooperative relationships between the FDA and State and Local food 
safety and security programs can be maintained and improved. 
Consequently, for the effectiveness of the Bioterrorism Act to be fully 
realized, it is absolutely imperative that our current food safety and 
security programs at all levels remain fully functional and active, and 
that we continue to seek ways in which we can strengthen this highly 
integrated and cooperative system.
    Once again, thank you for this opportunity to provide our comments.

    Mr. Bilirakis. Thank you Mr. Saunders.
    First, I would say, in 5-plus minutes, I know it is very 
difficult or impossible to present your point of views 
adequately. And so, you know, I truly invite you to complement 
your oral remarks and your written statement with any 
additional comments to us.
    We all want the same thing, I like to think, and that is 
concern for the health and safety of our fellow Americans. And 
if we are going to make any mistakes, if we are going to err, 
it should be on the side of health and safety, I would think.
    At the same time, we ought to be concerned about 
reasonableness and practicality and that sort of thing. What do 
you expect from the Congress? What do you expect from us? Mr. 
Cady?
    Mr. Cady. Well, I think legislation that was passed is now 
getting to the point where the rubber meets the road. And while 
we have worked very closely with FDA and I think we have made 
great progress in terms of looking at their regulations and 
they have been forthright in dealing with industry on this, but 
I think it is an opportunity for us to be able to inform you as 
to how this legislation is progressing in terms of 
implementation.
    And now, we are reaching some of the areas where 
practicality, in terms of doing commerce, are being affected, 
and I think each of us in our own way has explained what that 
is.
    Mr. Bilirakis. And you have all done a great job, 
particularly in a short period of time.
    Mr. Cady. We are dealing with the regulatory process, and 
we just want FDA to reconsider a lot of the areas that we 
raised today, I believe, and to see if there are workable ways 
to achieve what needs to be achieved without affecting commerce 
in a manner that is not only not economical, but is just 
unreasonable in some areas.
    Mr. Bilirakis. You would suggest, what, a delay in the full 
enforcement date?
    Mr. Cady. I think the enforcement date is going to be an 
interesting day. And we have talked about percents of 
inspections this morning. And I think we really--it hasn't 
happened yet. And if we are worried about it now, I am not sure 
what is going to happen on the 12th or the 13th. I am not sure 
we need a time postponement here, but as I talk with Secretary 
Thompson and FDA Commissioner McClellan at the time and I said, 
you know, on the 13th, we can't have all of the trucks in the 
world stopped at the border.
    The food industry has got to continue. And I think it is a 
matter of using common sense and practical approaches trying to 
get through the first months of this new process and procedure. 
It has got to start some time, Mr. Chairman.
    And I just think it behooves FDA to understand that a 
practical approach and common sense is going to be the way they 
enforce this in the beginning.
    Mr. Bilirakis. You said it well.
    Do you all have something very significant to add to it.
    Mr. Clarke. I would like to add that August 12, the penalty 
phase of the Bioterrorism Act is also being implemented. And I 
think the Agencies ought to devote more resources to protecting 
the citizens of the United States rather than being an 
enforcement Agency in penalty situations.
    There has been little feedback coming back to the 
industries on really how the system is working, what its flaws 
are, how to address it. We all have concerns that, come August 
12, there could be serious impact economically and physically 
on our infrastructure. Can we say categorically this will 
happen? No. But we are assuming, without some feedback from the 
Agencies on where our problems lie and how to address them, 
there is no way we can address those in an adequate time before 
August 12.
    We would ask the Congress to consider postponing the August 
12 penalty phase of it, at least until such time as industry 
can adjust to the proper requirements based on our hope of an 
advanced educational program.
    As far as brokers are concerned, being the front line, we 
are finding a lot of operational programs that are not being 
addressed properly.
    Mr. Bilirakis. Is there--forgive me for interrupting, is 
there a specific date? Might you not come back?
    Mr. Clarke. We would like to see the program put into 
effect so we have feedback for a 6-month period and then open 
it up again for another 60-to 90-day comment period by trade. 
We want to work with the Agencies as best as we can.
    The system itself right now is slightly flawed. It is not 
something that needs to be thrown out and started over. We need 
to make sure this isn't going to impede international trade and 
defeat the very purpose that it was put into.
    Mr. Bilirakis. As I understand it, the staffs, Mr. Ford 
from the other side and on down from our side and I am not even 
going to try to pronounce his name, have been working really 
earnestly on this together to have a meeting of the minds. I 
would hope that we are not talking here an either/or kind of a 
thing, as I said earlier to Mr. Brown, that there must be 
something in between that can be done, that can be helpful and, 
at the same time, be consistent with our concern, all of our 
concerns, regarding the health and safety of our consumers.
    Having said that, I yield to Mr. Brown.
    Mr. Brown. Thank you, Mr. Chairman.
    Testimony from a number of you mentioned concerns with the 
prior notice requirement. Couple of them certainly sounded like 
they could be addressed administratively.
    Mr. Clarke, if I could start with you. You mentioned, under 
current regulations, if a shipment is refused entry because of 
a problem with prior notice submission, FDA informs the carrier 
about the problem and not the person who submitted the prior 
notice. Looks to me like the law is silent on the question of 
whom should be informed. I don't know whether FDA has made the 
right call on that, but it sounds like that is an example of an 
issue that could be addressed administratively. Is it true that 
we could resolve that?
    Mr. Clarke. Yes, that is correct. Just the comment that I 
put in there of switching the date from arrival to entry would 
solve many of these operational problems, and it is something 
the committee may wish to consider. It does not jeopardize the 
security of the cargo. It is under Customs and Border 
Protection's full authority. Cargo cannot move forward, entry 
cannot be made.
    Again, it does alleviate some of the penalty situations and 
devote more resources to actually looking at the goods and 
determining what is admissible and not admissible, rather than 
trying to penalize legitimate food importers.
    Mr. Brown. Mr. Cady, give me your read, if you would. FDA 
requires that a prior notice submission include the 
registration number for the facility that produced the product. 
This goes beyond what the law requires. Would you give us your 
comments on that and the ability for the Agency?
    Mr. Cady. We are talking, I think, about registration 
numbers, companies registering obviously. If I could say about 
the 400,000 facility number that we have talked about at this 
point--I think that is a high number--and as FDA has gone 
through these regulations and exempted certain facilities, I 
think that number becomes lower.
    And so, not knowing what the final number is, I do believe 
though we need to obviously have more education and overt 
action on the part of the Agency relative to making sure that 
companies know they have to register, and that is going to take 
time, sir.
    Now, as far as the lot production number for traceability 
or whatever use we were talking about earlier, today, as I 
stated, you know, when we have a problem with a product, let us 
say it is, I don't know, a carrot product, as an example, you 
go in and remove all of those--all of the product itself. You 
don't look at lot numbers or purchase order numbers. You take 
it all off the shelf when there is a potential issue or a known 
issue. That is an easy way to do it and it is an awful lot 
more--it is a quicker way, I should say, to do it.
    And the statute does--the statute does give manufacturers 
flexibility relative to how to account for these products. Now, 
again, the lot product is not the way to do it, the way in 
which FDA has proposed because, as my friend down the road here 
said, the lots get mixed up--not mixed up, they are just--
yesterday's production is combined with tomorrow's production. 
It is all put on a truck that stops and drops off potato chips 
someplace. They are all commingled, and it is not an efficient 
way to pull something back. So I think that there are ways to 
do it, and we have a good system in effect right now for 
recalls, and I think FDA ought to be using that as the premise 
of their actions, sir.
    Mr. Brown. Thank you, Mr. Chairman.
    Mr. Bilirakis. Mr. Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman.
    I appreciate this hearing because it addresses, I think, a 
lot of the concerns that many of us had moving into this 
debate, homeland security and bioterrorism and food safety 
issues, and then how to expeditiously move product to 
processing to stores to tables and in a manner in which we know 
is safe and sound, but also still efficient.
    And what I am hearing, I think is that there is still an 
unknown, what is going to happen in August. Is it safe to say 
that--and, of course, when there is an unknown, that raises 
stress, because we might not have problems, but we could very 
well, because I am hearing there is a lack of communication as 
far as what is going to be expected and what are, from the FDA, 
especially with this and some of the things I mentioned in the 
opening statement. Am I on the right track here?
    Ms. Stout. If I could jump in here, I think the problem we 
are trying to get at the interim final rules on prior notice, 
the comment period closes July 13. The enforcement period 
starts mid-August. But if FDA is going to listen to any of the 
concerns that we have voiced in this, until they issue the 
final regulation, which isn't inspected until next year some 
time, we have no relief.
    And some of the things that they are doing--Mr. Brown asked 
the question here--the statute that was passed by Congress does 
not require that a registration number accompany a prior 
notice. That is a step beyond that the FDA has gone to and that 
is creating problems for us because, in many instances, that is 
not available.
    Mr. Clarke. Along those same lines, I would like to add, 
the way the regulations have been promulgated, it is based on 
individual transmission for each line item that is being 
transmitted into FDA. If you have a shipment coming in across 
the border with multiple line items, any one of those items 
could basically stop that shipment going forward. We do not 
have information coming back from the Agencies, either Food and 
Drug or Customs, in an adequate form for us to address if there 
is a problem or if there is not a problem. That has to be 
addressed before they can go into a final phase.
    Mr. Shimkus. Did anyone address the issue of the 
perishability of products and the time sensitiveness of going 
across the border?
    Mr. French. What we have experienced in some border 
crossings involves the FDA's indicating that they would like to 
sample product or taking their time to make a sampling 
decision. And when you are dealing with perishable product that 
has been slowing the process of crossing.
    Mr. Shimkus. I know, in homeland security aspects, I know 
what we are trying to do with immigration issues is push our 
perimeter out. If we can get a good certification and 
evaluation of the processing facility that is going to be 
imported from, then, in essence, label that product as safe 
once it leaves, then you should be able to expeditiously move 
it through the border crossing. Is that what I am hearing?
    Mr. French. I believe FDA guidance that predates 9/11 
suggested that companies that are purchasing product know their 
suppliers and that measure of assurance, knowing who you are 
buying from, is certainly one of those things.
    Ms. Stout. That is one of the things that GMA has done. We 
have sister trade associations around the world, and we have 
been telling them, from the beginning, ``Heads up, this is 
coming. This is what you are going to need to do to comply. You 
have to register. You can't get in the country.''
    You talked about the perishable. One of the things--and I 
think it has to do with the resource issue--is that there is a 
Customs inspector at the border at all times. There is not an 
FDA inspector. And what we are running into is, some of our 
products that are coming in--and an example is yeast, which 
doesn't stay a long time. If it arrives, you know, at 7 o'clock 
on a Friday night at the Canadian-American border and Customs 
allows it in because the prior notice is complete but he can't 
release it until an FDA inspector approves it and that may not 
be until noon on Monday, that truck of yeast is gone.
    Mr. Clarke. We are experiencing a situation, if you are 
using the Food and Drug prior notice system interface which has 
limited capacity, there is no direct link between that system 
and the custom system as far as the inspection arrival of the 
cargo. A hard copy piece of paper has to be presented by the 
carrier to the Customs inspector at that time, circumventing 
all automated systems that are in place. It is not a very 
effective system and needs to be revised and looked at.
    Mr. Cady. If I could add one thing, sir. In teaching the 
regulations as they stand today around the world, our 
organization has found--I mean if you go to Thailand and go to 
Singapore and Vietnam and a lot of people that bring food into 
this country, you have to understand what they are thinking and 
what they are trying to understand. They don't know if they 
have to register, and we are trying to explain it to them. They 
don't understand the border issues they are going to run into.
    And for fresh product that is coming in overnight, seafood, 
et cetera, it presents a huge problem not only from a 
communications perspective, but more of an understanding 
perspective. So the industry has taken on an awful lot of this 
in terms of going out and educating different suppliers and 
partners around the world so this commerce thing that we have 
is going to continue to flow when this all goes into effect. 
And I think that is something very important.
    One other thing that I could clarify, Mr. Brown's question 
if I could, just a second, on prior notice, is that the 
Bioterrorism Act doesn't require that. And more importantly, 
FDA needs to look at how do we make this system work 
efficiently and effectively right away. And the prior notice 
does not add to that. And in many cases, we can't find the 
registration numbers and the information needed to put on the 
prior notice certification, especially from countries outside 
of ours.
    Mr. Shimkus. I want to thank the chairman for holding this 
hearing.
    I hope the FDA kept their staffer here. And I would 
encourage them to get the stakeholders together, and let us 
resolve some of these conflicts, and I yield back.
    Mr. Bilirakis. Hopefully it can be solved among you. Let's 
see.
    Mr. Green.
    Mr. Green. Thank you, Mr. Chairman. And again, I appreciate 
you calling the hearing.
    Mr. Clarke, your testimony expressed concerns about the 
prior notice requirements and specifically the 5-day 
requirement. The law actually says that prior notice can occur 
more than 5 days and in advance, and the notice most be 
received within that 5-day window. Does that clarification in 
the law have any impact on the timing or your concerns about 
the timing?
    Mr. Clarke. The way the systems have been developed, 
though, it is impractical to do it 5 days prior because of the 
Customs and Borders protection requirements of transmission of 
entries. The only alternative you have to do that is to go 
through the interface system within the Food and Drug, which 
has been proven to be very ineffective and very time-consuming.
    Mr. Green. Well, do you think we need to change at all then 
to----
    Mr. Clarke. There is no risk of security that we can see by 
extending that date beyond the 5-day requirement. In fact, 
through the Customs Container Security Initiative, they are 
actually screening merchandise and gaining information 24 hours 
prior to the cargo being loaded on its conveyance to the United 
States, which in turn gives them an even more adequate chance 
to look at cargo and determine what is admissible and not 
admissible.
    Along the same line, there has to be some coordination and 
harmonization between the two Agencies. A lot of data that is 
being transmitted under that phase of security could also be 
utilized by Food and Drug and making a prior determination on 
spot checking, whatever needs to be done to protect the 
consumer.
    Mr. Green. Well, and I agree, and like I said, with an 
international port and air cargo, it is important we have as 
much coordination as we can. And that is why we might need to 
look at changing the statutory law that gives them that 
ability, along with other things that at our hearings and other 
hearings we will have.
    Mr. Saunders, your testimony indicates that more than 80 
percent of the food safety activities are formed at the State 
and local level, and we learned from our first panel that only 
about 2 percent of the food imports are actually inspected, and 
these inspections are based on the risk assessments. And from 
your perspective, representing both State and local officials, 
are you satisfied with the level of inspection at our borders? 
And other than increased Federal, State and local coordination, 
what can the Federal Government do to ensure that the food 
safety entering our harbors? And have you shared your views 
with the FDA and Customs? And I will just give a side line, 
being to the border--in Texas--a number of times with Mexico, I 
have found that our State border inspectors have a great deal 
of information to share. And I would hope there is only about a 
50-foot separation between them and Customs in some cases. I 
would hope that there would be that information-sharing between 
the local and State.
    Mr. Saunders. There is significant information-sharing 
between the local and States and the Federal partners. You 
know, as far as the 2 percent coverage that the Federal 
Government is able to provide with respect to imports now, AFDO 
has believed for some time that that is not adequate and that 
there are ways to deal with that.
    Some suggestions that have been made are for the FDA to 
focus more on import issues and rely on the States and 
localities to handle the domestic issues. There are things, 
such as memorandums of understanding with other countries, as I 
mentioned during my presentation, some foreign inspections of 
food establishments by FDA, and I think there are certainly 
other ways that those issues could be addressed so that there 
is a greater oversight of the products that are coming across 
our borders.
    Mr. Green. Okay. Now, I think, from the first panel and 
knowing what is happening in my own area, I think a lot of that 
is being done, but, again, hopefully, it could be systemic and 
not just in certain ports, or it would be all through the--all 
around the country.
    Mr. Saunders. Yes, sir.
    Mr. Green. Mr. Chairman, I appreciate the time.
    Mr. Bilirakis. Mrs. Capps.
    Mr. Clarke. Might I add to that just one brief comment to 
that also? We have a layered approach to the security in this 
United States. We have Customs and Border Protection, who are 
doing quite a good job of screening cargo coming in through 
risk analysis. Even though you may say 2 percent is only being 
looked at, technically every single piece of merchant cargo 
coming into the United States, whether it be food products or 
consumer products, is actually being screened by Customs and 
Border Protection under the risk-analysis procedures.
    Mr. Green. And Mr. Chairman, I know I have taken my time, 
but I know that is true with the container for general cargo, 
too, that you are using the law enforcement techniques. You 
know, we are doing it. But I think our goal is to increase 
those percentages.
    Mr. Cady. Mr. Chairman, Mr. Green, if I could just say one 
thing. We have--we talk about the borders and things come into 
the borders, but remember, we do a lot of food production 
within this country. And there are food safety systems in 
effect and food security systems in effect that compliment the 
border and the FDA and the AFDO and all the rest of the 
inspectors that we deal with.
    And these food safety and food security systems, we spend 
millions and millions of dollars on ourselves protecting our 
brands and our food so there is a lot being done by the 
industry itself in addition to what these regulations----
    Mr. Bilirakis. Can you share some of that information with 
us?
    Mr. Cady. I will be happy to, sir, and can I provide that 
for the record for you?
    Mr. Bilirakis. Yes. If you could provide that for the 
record for us we would appreciate that very much.
    Mr. Cady. Be happy to do so sir.
    Mr. Bilirakis. Thank you.
    Mrs. Capps.
    Mrs. Capps. I thank you, Mr. Chairman.
    And according to your testimony, Mr. Saunders, the H.R. 
7699--2699, sorry, whichever it is, 2699 would have quite an 
impact on State food and safety regulations and even on our 
Nation's efforts to secure our food supply. This is the 
National Uniformity For Food Act.
    In my home State of California, as you may well be aware, 
we have very vigorous food safety and labeling laws which leads 
me to be very concerned about this legislation, and from your 
testimony, it sounds like this bill, if enacted into law, would 
really gut California safety laws. Is that true? And would you 
comment briefly?
    Mr. Saunders. AFDO has been following that legislation for 
quite some time, and we have done an awful lot with respect to 
trying to educate States and localities about the language in 
that legislation. We have met with attorneys who have reviewed 
the legislation. We have had numerous States--and I believe the 
most recent count there were 12, are 12 States--that have had 
their attorneys look at that legislation. And they have all 
agreed that there are some very gray areas in that legislation 
that could have a very negative impact on these States and 
localities' abilities to operate effective food safety and 
security programs.
    Ms. Capps. Well, you also, to make it more national in 
scope, I would like you to expand on the kind of comments that 
you made around the fact that this would be a national--it 
would be costly to our Nation in effect because of the 
interconnection between the State and Federal regulations. I 
guess on how much--it simply said that the Federal Government 
kind of relies on the States' enforcement, and therefore, 
enacting this law would have--would affect our national budget 
as well.
    Mr. Saunders. Yes, we believe that it would. We--there is a 
very cooperative integrated food safety and security system in 
this country that involves Government Agencies at all levels. 
And that system has been in place for years. It has been 
improved upon for years, and if the States and localities lose 
their authority to enforce their laws and regulations, 
particularly with respect to adulteration--and when we are 
talking about terrorism that is what we are talking about--then 
the Federal Government is in a position to where they may have 
to pick that amount of work up.
    And based on the survey that we have done and the amount of 
work that the States and localities are able to perform, it has 
been estimated that it could cost the Federal Government $500 
million to replace the infrastructure that already exists among 
States and localities and to perform the number of inspections 
that they currently perform.
    Mr. Bilirakis. Would the gentlelady yield?
    Mrs. Capps. I will yield. But let me understand, that you 
see a direct connection to our terrorism readiness--I mean, 
this bill is about security. And if we enacted the law, this 
bill into law, and didn't make up for the cost, then we would 
be jeopardizing our national security in food safety.
    Mr. Saunders. Yes, ma'am.
    Ms. Capps. I am going yield to the chairman.
    Mr. Bilirakis. Let me just ask, Mr. Saunders, have you made 
an effort to communicate with the authors of that legislation?
    Mr. Saunders. Yes, sir.
    Mr. Bilirakis. You have?
    Mr. Saunders. Yes, sir.
    Mr. Bilirakis. And have you discussed this with them and 
your concerns?
    Mr. Saunders. Yes, sir.
    Mr. Bilirakis. AFDO's concerns? You have? So they are aware 
of them?
    Mr. Saunders. Yes, sir.
    Mr. Cady. Could I just add something, and then I would like 
to defer to my compatriot here, Ms. Stout?
    Ms. Capps. Surely.
    Mr. Cady. From the National Processors' perspective, we 
have reviewed that legislation pretty in depth. And we don't 
see the concerns that AFDO has expressed on that particular 
part of the issue, on that particular part of the bill.
    Mrs. Capps. Which part? Excuse me, because there are a few 
different standards.
    Mr. Cady. Well, I think there is a statement, ma'am, that 
talks about, if the uniformity bill were to pass, that it would 
destroy--or I am not sure the adjective being used--but it 
would essentially----
    Ms. Capps. Would impact.
    Mr. Cady. Adversely, the State authorities relative to 
their position.
    Mrs. Capps. Right. But if one set of regulations is more 
stringent and in depth or however you want to describe it and 
there is a laxness or a lowering of the standards, it is going 
to be----
    Mr. Cady. Well, I don't think the standards are lowered.
    Mrs. Capps. Well, then you disagree.
    Mr. Cady. We disagree. But I would like to have Susan talk 
about that.
    Ms. Stout. Yes, if I just may comment. I mean, this H.R. 
2699, if you read the legislation, it does not have any effect 
at all on any State food inspection programs. It does not have 
any effect on any enforcement authorities enjoyed by the 
Federal, State or local.
    The GMA has reached out since 1998, communicating with 
those who had concerns about the issue, including AFDO. We--
there are many changes that were made to the provision, at 
their request, to make sure that, once the bill is enacted, 
there is a nice seamless cohesion that takes place. There is no 
cost to the----
    Mrs. Capps. Excuse me?
    Mr. Bilirakis. The gentlelady's time is expired.
    But look. That is a separate piece of legislation. It will 
be subject to hearings. We will have the opportunity to go into 
the pros and cons and that sort of thing. I don't think we need 
to go any further.
    Mrs. Capps. Well, I just want to--I know I have used my 
time, but I did yield to you.
    Mr. Bilirakis. Well, I took about 20 seconds. But go ahead.
    Mrs. Capps. The Federal Government often looks at States 
differently than States do, and I think, in the House, we sort 
of try to juggle those sometimes competing, hopefully not 
competing, interests, and I would--I believe we need to have 
further discussion in this area.
    Mr. Bilirakis. And we don't--I don't think we should be 
predeciding on some of these things either. That is what 
hearings are all about.
    The gentlelady's time has expired.
    All time has expired.
    I want to thank you. I would ask, maybe, one final question 
if I may. As against delaying the enforcement date from August 
12 to a later date, is it--would it be reasonable--and I don't 
want to take 5 minutes on this--but would it be reasonable--and 
maybe you want to respond in writing--would it be reasonable 
to--so there are some areas where maybe enforcement, immediate 
enforcement, August 13 enforcement could or might take place, 
and other areas that possibly maybe should remain in the 
flexible enforcement category. Very, very quickly, though, 
because I don't want to take much time on that.
    Mr. Clarke. Yes, that is a possibility. But, again, the 
systems that are in place do not give us that luxury to have 
that. It requires, to be coming in on October 12, edits to be 
turned on, systems to be shopped, shipments to be stopped at 
that date, and I am not sure the Agencies have the capability 
of extending, on a partial basis, either all or nothing. But 
the Agencies themselves would have to address that.
    Ms. Stout. I also think, Mr. Chairman, it would be 
incredibly helpful if the Agencies could give us feedback on 
what the problem has been with the prior notices that have been 
submitted and have been----
    Mr. Bilirakis. The Agency is right behind you.
    Ms. Stout. They have been terrific.
    Mr. Cady. Mr. Chairman, I think the thing that would be 
most helpful would be to, perhaps, not implement the penalty 
phase. I think that is probably the most important thing at 
this point because of the need for understanding and, as I said 
earlier, the need for a practical implementation of this.
    The Agency and the Department of HHS have assured us, me, 
that they will have a practical commonsense implementation. It 
needs to start, but they need to be flexible until they, 
themselves, understand what the impact of these regulations are 
going to be on their workload as well as on commerce and the 
Agencies' ability to do something. So I think those two 
things--I don't think you win anything by pushing it down the 
road 6 months. But I do think flexibility, which the Agency 
does have, can be utilized and the penalty phase perhaps 
implemented at a later date.
    Mr. Bilirakis. Thank you, Mr. Cady.
    Mr. Brown, anything further?
    All right. This hearing--again, as I said earlier, any 
further ideas or suggestions or recommendations or whatever, we 
always will welcome them. It is important, the more information 
we have available, the better job that we can do if we do 
directly get involved as far as this area is concerned. Thank 
you. The hearing is adjourned.
    [Whereupon, at 12:03 p.m., the subcommittee was adjourned.]
    [Additional material submitted for the record follows:]

                       National Food Processors Association
                                                     August 9, 2004
VIA Email
      
The Honorable Michael Bilirakis
Chairman
Subcommittee on Health
Committee on Energy and Commerce
U.S. House of Representatives
Washington, DC 20515-6115
    Dear Chairman Bilirakis: I am writing to provide my responses to 
the questions you transmitted in your July 26, 2004 letter, which 
followed the June 25, 2004 hearing, ``Implementation of the Food 
Security Provisions of the Public Health Security and Bioterrorism 
Preparedness and Response Act.'' Please find my responses attached.
    I again thank you for the opportunity to testify before the 
Subcommittee. If you have any questions regarding the attached 
responses to the Subcommittee's questions, please contact me.
            Regards,
                                                       John R. Cady
Attachment

                    Response to Follow Up Questions

    Question 1) I would like to ask each member of the panel what steps 
their members have taken to help secure our food supply from 
terrorists.
    Response: The steps taken by members of the National Food 
Processors Association (NFPA) to protect the food supply against 
terrorist attack include renewed attention to existing food safety 
measures and systems, such as Hazard Analysis and Critical Control 
Point programs, Good Manufacturing Practices, product quality and 
safety assurance programs, and ingredient/ingredient supplier 
specifications and monitoring, that contribute to ensuring food 
security has not been compromised. While each food company and facility 
must tailor security measures to their unique situation, there are 
clear trends in the actions being taken by NFPA members. As information 
becomes available about possible threat agents, whether biological or 
chemical, companies are evaluating how these agents may respond during 
food processing and what measurement tools need to be developed for 
rapid detection. Many companies are using relevant guidance, including 
a manual prepared by NFPA and the Food Marketing Institute and general 
guidance from federal agencies, to evaluate security vulnerabilities 
with subsequent adoption of steps to mitigate or remove these 
vulnerabilities. The types of actions include stringent access controls 
to facilities, protocols for responding to suspected terrorist threats, 
background checks as permitted on potential employees, and security 
awareness training for employees. A growing number of companies are 
pursuing formal security plans. NFPA is committed to helping in this 
regard and is in a unique position among industry trade associations in 
that a security and emergency response expert has been added to the 
NFPA staff. The actions taken extend beyond security at company 
facilities to include working with suppliers to ensure appropriate 
security is in place throughout the supply chain. NFPA is facilitating 
and encouraging information exchange among our members as we move 
forward. However, specific plans and programs will continue to be kept 
confidential to ensure security is not compromised.
    In addition to the voluntary security initiatives taken by our 
members, compliance with FDA's Bioterrorism Act rules is also a 
priority. NFPA's members supported passage of the Act and continue to 
recognize the importance implementation of the rules will have as part 
of the needed industry/government partnership to enhance the security 
of the U.S. food supply.
    Question 2) I would like to ask the members of the panel about the 
prior notice requirement, and whether you believe the system can be 
fully operational by August, and what steps they would recommend to 
make the system more workable.
    Response: While NFPA believes functioning systems for receiving and 
electronically evaluating prior notices will be operational by August, 
concerns remain. The most recent FDA compliance summary released in May 
2004 indicates that, as of April 2004, ``very few'' entries had no 
prior notice. However, the FDA data shows there continues to be a large 
percentage of the total of approximately 150,000 prior notices received 
each month that would not be accepted under full enforcement of the 
prior notice rule. FDA notes specific data elements most frequently 
absent are carrier data and manufacturer's registration numbers. The 
lack of carrier identity is most notable for arrivals by road, which 
means shipments from Canada and Mexico. FDA's analysis concerns the 
completeness of prior notices and does not include assessment of the 
accuracy of the information provided, which makes it difficult to 
determine what other clerical or processing problems may be occurring. 
NFPA believes FDA's analysis indicates industry is making a good faith 
attempt to comply with prior notice requirements. However, there is a 
high likelihood of major disruptions at the Canadian and Mexican 
borders if full enforcement begins in August.
    NFPA's suggestions, which have been communicated in comments to 
FDA, for steps that should be taken to make the system more workable 
are:

1. The discretionary enforcement period should be extended to December 
        12, 2004 and targeted education programs should continue to 
        specifically address problems such as carrier data for cross 
        border trucks.
2. A solution must be identified to accommodate entry of samples for 
        research for which manufacturer's registration numbers cannot 
        be provided.
3. Time frames between Customs and Border Protection and FDA should be 
        integrated prior to the end of the discretionary enforcement 
        period.
4. The prior notice interface system should be simplified and better 
        technical assistance provided to submitters.
    Question 3) Do you have a sense of what the registration compliance 
rate is for your members?
    Response: NFPA believes that all member company facilities that 
clearly should be registered, such as processing facilities, have in 
fact registered with FDA. NFPA advised member companies to register 
facilities even if there was some uncertainty as to the applicability 
of the registration requirement. It appears our members have responded 
to this advice. NFPA continues to work with members to ensure 
compliance, as FDA further refines its interpretation of the 
registration rule, particularly with respect to facilities at which the 
holding of food is a minor and incidental activity.
    Question 4) What more can be done to educate industry on the need 
to comply with the registration requirement?
    Response: One of the most important steps FDA can and should take 
in continuing to inform the industry about the facility registration 
requirements is to respond in a timely way to questions that have been 
posed to the Agency regarding the application of the rule. The response 
needed from FDA is the timely update of the guidance provided in the 
question and answers page that is published on the Agency's website. 
This guidance helps companies directly as well as supports ongoing 
education and assistance efforts such as those conducted by NFPA. While 
FDA recently updated its facilities registration question and answer 
document, only four questions were addressed during the six months 
since the document was last updated. Many more questions remain.
    NFPA also supports FDA's ongoing use of its current enforcement 
policy, which emphasizes education, awareness, and allowing companies 
to come into compliance, except in those instances when full 
enforcement is needed. Under a flexible enforcement policy, FDA may be 
able to identify sectors or categories of facilities that merit 
targeted education efforts, either by the Agency or by industry. NFPA 
anticipates a need for ongoing education efforts, particularly for 
foreign facilities/companies.
    Question 5) In your opinion how could the Food and Drug 
Administration build upon companies' current record keeping regiments 
and still meet the intent of the record-keeping requirement?
    Response: The current record keeping regimens of food companies 
should for the most part satisfy the intent of having ``one step 
forward, one step back'' information available for the FDA under 
circumstances where there is a threat to the food supply. Food 
companies already have in place the ability to identify sources of food 
and food ingredients in the event of a product tampering or product 
recall. Within a company, business records (purchasing, sales and 
distribution) as well as the manufacturing and inventory records are 
sufficient to meet the requirements of the Act. We recommend that the 
role for FDA be limited to verifying that food companies have 
implemented such systems that reflect the nature of their businesses 
and that food companies validate that such systems are functional and 
effective. This verification and validation role for FDA will build 
upon the food companies records systems and provide assurance that FDA 
can obtain information quickly and efficiently to carry out 
investigations in the most timely and comprehensive manner possible.
    Question 6) Some have raised concerns that the lack of FDA 
inspectors at every port 24 hours a day, seven days a week will lead to 
shipments being unnecessarily delayed at the border. Do you believe the 
December 2003 Memorandum of Understanding between the FDA and Customs 
that allows Customs officials to inspect shipments when the FDA is not 
present will eliminate this potential problem or are more steps 
required?
    Response: The MOU between FDA and Customs and Border Protection 
(Customs) is critical to successful implementation of the prior notice 
provisions of the Bioterrorism Act; every port must have adequate 
coverage 24 hours a day, seven days a week. A larger concern is 
potential back up consequences to shipments that are in compliance, 
particularly to cross border truck traffic, when products are held or 
diverted to secured storage. Accommodations must be made to move non-
compliant or questionable shipments quickly from traffic lanes. Like 
Customs, FDA should facilitate trade for low-risk shippers.
    Question 7) Your organizations have both raised concern over the 
ability of companies to bring in competitive samples and how this 
impacts the ability of companies to perform research and development in 
the United States. Given that these products are usually bought at the 
retail level your companies would not have access to the manufacturer 
registration number. Have you voiced these concerns with the FDA, and 
if so what has been their reaction?
    Response: NFPA has shared industry concerns with FDA both through 
written comments and in discussions with FDA officials. NFPA has 
indicated that the statutory language allows FDA the authority to 
provide an alternative solution that would identify the manufacturer 
without the specific registration information. FDA has acknowledged 
these concerns and has conveyed the view that: (1) FDA does not have 
the statutory authority to provide an exception for samples; (2) FDA 
requires the registration numbers to implement other provisions of the 
Bioterrorism Act; and (3) samples could pose a ``risk.''
    Question 8) Has either of your organizations provided the FDA 
suggestions to address the problem of competitive sampling without 
compromising the integrity of the registration and inspection system of 
imported food products?
    Response: Through comments filed on July 13, 2004, NFPA made the 
following recommendation:
    ``Because the statute does not mandate a manufacturer's 
registration number, a prior notice for food samples would be deemed 
legally sufficient using any of the following alternative solutions:

 FDA could provide an alternative prior notice in a simplified version 
        (that does not require manufacturer registration numbers) for 
        products that are shipped to the United States and not intended 
        for public consumption or sale;
 The manufacturer's registration number could be replaced by other 
        identifying information such as the manufacturer's name and 
        address;
 The manufacturer's registration number could be replaced by the 
        registration number of the importing manufacturer who is 
        ultimately responsible for the shipment and final use of the 
        product;
 FDA could require registration numbers for either shipper or 
        manufacturer. This alternative would provide FDA with 
        information to enable enforcement of foreign facility 
        registration without imposing unnecessary and unobtainable 
        information burdens; it would also allow a U.S. manufacturer to 
        recall product to the United State when necessary without 
        unnecessarily registering a ``shipper'' or allow U.S. companies 
        to ship samples from sales offices abroad.
    ``At most, any of these alternatives would require only a simple 
technology adjustment to identify a specific shipment category: samples 
for research and development. The prior notice regulation could easily 
be amended to accommodate this change merely by addressing food samples 
as well as gifts in section 1.281(a)(6), to read as follows: If the 
article of food is sent by an individual as a personal gift (e.g., for 
non-business reasons) to an individual in the United States, or is 
imported as a sample for research and development purposes, you may 
provide the name and address of the firm that appears on the label 
under 21 C.F.R. 101.5 instead of the name, address, and registration 
number of the manufacturer.''
                                 ______
                                 
         International Foodservice Distributors Association
                                                     August 9, 2004
The Honorable Michael Bilirakis
Chairman
Subcommittee on Health
Washington, DC 20515
    Dear Mr.Chairman: Thank you for the opportunity to present 
testimony before your panel on June 25, 2004, at the hearing titled: 
``Implementation of the Food Security Provisions of the Public Health 
Security and Bioterrorism Preparedness and Response Act.''
    Attached you will find responses to your additional questions for 
the record. Please feel free to contact me if you have any further 
questions.
    Thank you again for your consideration during my appearance before 
the Subcommittee.
            Sincerely,
                                            David G. French
                        Senior Vice President, Government Relations
Attachment

                          Follow Up Questions

    Question 1) I would like to ask each member of the panel what steps 
their members have taken to help secure our food supply from 
terrorists.
    Answer: IFDA members consider the safety and security of their 
products their most important responsibility. Companies in our industry 
have taken a number of steps to safeguard facilities including (but not 
limited to) fences, surveillance cameras, perimeter lighting, motion 
detectors, card-controlled access points, background checks and photo 
identification cards for employees. In addition, our companies strive 
to purchase products from known suppliers.
    Question 2) I would like to ask the members of the panel about the 
prior notice requirement, and whether you believe the system can be 
fully operational by August, and what steps they would recommend to 
make the system more workable.
    Answer: Our member companies have reported very few problems with 
the prior notice requirement.
    Question 3) How are recalls conducted in the foodservice industry? 
How frequently do products need to be recalled?
    Answer: Foodservice firms typically conduct one or two recalls per 
month. A recall is conducted when a restaurant operator, a 
manufacturer, or a distributor detects a health or safety issue. 
Foodservice companies work with their supply chain partners to identify 
the products involved and the dates the products were received and 
shipped. Then, a distributor will manually check for lot numbers of 
individual pallets and cases to verify that the correct products are 
withdrawn from commerce. When there is any doubt regarding which 
products are involved, companies err on the side of caution by 
withdrawing more product than necessary.
    Question 4) If lot numbers are not used to identify products, how 
do operators and distributors know that they will remove the proper 
items from commerce?
    Answer: Distributors do not typically use lot numbers to track 
product, because there is no standard format for lot number coding or 
placement on products and cases. Also, many distributors receive 
products on pallets that may contain four or more different lot 
numbers. Instead, most distributors track products using purchase order 
numbers. Lot numbers, however, can be useful in identifying specific 
products to remove during a recall; but this process often requires 
manual verification of lot numbers.
    Question 5) Are UPC codes, or barcodes, used to track product?
    Answer: Adoption of UPC codes is not widespread by foodservice 
manufacturers. Recent product surveys have shown that less the eighty 
percent of the cases in most foodservice warehouses carry a UPC code. 
Barcodes are, however, very useful; and many distributors assign their 
own internal system to products upon receipt so that these products can 
be tracked and quickly located within the distributors' operations.
    Question 6) Wal-Mart and the Pentagon have announced ambitious 
plans to require their suppliers to use radio frequency identification 
(RFID) tags to improve efficiency within their distribution channels. 
What is the future of RFID in the foodservice distribution industry?
    Answer: RFID is most likely the future for efficient warehouse and 
logistics management, and the foodservice industry is enthusiastic 
about the technology's promise. There are many hurdles to cross, 
however, before RFID will be widely used within our industry. Cost of 
the technology is one of the challenges. The chips are expensive, 
costing roughly $0.55 each; so RFID presently offers the most promise 
for high-value, low-volume products. Foodservice industry products, 
however, are typically low-value and high-volume. The technology has 
not yet been perfected, either. Tests of the current generation of 
technology show a 95% ``read-rate.'' Since the cost of correcting 
errors can be quite high, the foodservice industry strives for accuracy 
rates that exceed 99.9%. As one example of the challenge of making RFID 
work for our industry, readers have problems tracking tags through 
metal and liquids, which are the packaging and contents of a large 
number of food products. Until these bugs have been ironed out, it is 
unlikely that most foodservice firms will experiment with the 
technology. Finally, it is important to point out that Wal-Mart's 
initiative will have little impact on foodservice distributors since 
foodservice distribution and retail grocery distribution are separate 
supply chains with few shared products.
    Question 7) Mr. French, you said that the current time frame given 
to companies to produce their records is too short. Why would companies 
not be able to comply with the current time restraints? What would be a 
more reasonable time frame?
    Answer: Most companies can and do retrieve their records promptly, 
but we remain concerned that the time is too short in view of the 
potential penalties. In foodservice industry contractual arrangements, 
for example, eight hours is the most common time allotted for record 
retrieval.
    Question 8) You mentioned your concerns with the Food and Drug 
Administration's educational efforts on explaining why prior notices 
are deficient. Do you have any suggestions on how FDA can improve in 
educating industry on the information required and format of prior 
notices?
    Answer: It would be useful for FDA to communicate with prior notice 
filers regarding what about their filed notices is deficient, and to do 
so before the period of full enforcement begins. It is certainly 
possible that prior notice filers, acting in good faith, but ignorance, 
are making errors in their notices. Better information from FDA now 
regarding deficiencies in filed prior notices will prevent needless and 
burdensome compliance problems later. Also, we suggest that FDA reopen 
the comment period on the prior notice rule after there has been a 
period of active FDA/CBP enforcement. In this way, if there are 
operational problems that arise once active enforcement begins, the 
food import community and FDA/Customs will have a channel of 
communication open to discuss and address these issues. This ``real 
life'' experience will allow for informed comments on the true 
workability of the prior notice rule. FDA would then issue a final 
prior notice rule thereafter.
    Question 9) Do you have a sense of what the registration compliance 
rate is for your members?
    Answer: We are not aware of any IFDA member that has failed to 
register, nor are we aware of significant numbers of unregistered 
companies among other foodservice industry firms. Since the 
registration requirement was enacted, we have worked to educate our 
members about the law. For example, IFDA staff members have presented 
educational briefings at industry conferences to reach an audience 
broader than our membership, and our association has invited senior FDA 
officials to address industry meetings. Our association, however, only 
represents the largest 130 companies of an industry that has been 
estimated to be as large as 2500 firms.
    Question 10) What more can be done to educate industry on the need 
to comply with the registration requirement?
    Answer: We have explored a variety of avenues to educate and inform 
our industry about registration. Reopening the comment period after a 
period of active enforcement might yield more information about non-
compliance and tools for reaching these firms.
    Question 11) In your opinion how could the FDA build upon 
companies' current record keeping regiments and still meet the intent 
of the record-keeping requirement?
    Answer: The goal of the record-keeping requirement is to enable the 
FDA to quickly and efficiently manage a product recall. The law does 
not require the FDA to reinvent the process, and there is no evidence 
that the current system of voluntary, cooperative recalls has failed.
    Question 12) Some have raised concerns that the lack of FDA 
inspectors at every port 24 hours a day, seven days a week will lead to 
shipments being unnecessarily delayed at the border. Do you believe the 
December 2003 Memorandum of Understanding between the FDA and Customs 
that allows Customs officials to inspected shipments when the FDA is 
not present will eliminate this potential problem or are more steps 
required?
    Answer: It is too early too tell what problems will be experienced 
when full and active enforcement is in effect. To date, our members 
have reported few problems with imports. As discussed above, the 
industry may benefit from an additional opportunity to submit comments 
once there is experience with full enforcement.
                                 ______
                                 
                           Grocery Manufacturers of America
                                                     August 9, 2004
The Honorable Michael Bilirakis
Chairman
Subcommittee on Health
Committee on Energy and Commerce
2125 Rayburn House Office Building
Washington, DC 20515
    Dear Chairman Bilirakis: Thank you again for the opportunity to 
appear before the Subcommittee on Health on June 25, 2004, at the 
hearing titled: ``Implementation of the Food Security Provisions of the 
Public Health Security and Bioterrorism Preparedness and Response 
Act.''
    My answers to the additional Subcommittee questions are attached. 
Please do not hesitate to contact me if you have additional questions 
or needs on this issue. As I stated during the hearing, food security 
is an all important issue to the Grocery Manufacturers of America and 
we stand ready to assist your further actions in this area.
    Thank you again.
            Sincerely,
                                             Susan M. Stout
                                    Vice President, Federal Affairs

    Grocery Manufacturers of America Response to Follow Up Questions

    Question 1) I would like to ask each member of the panel what steps 
their members have taken to help secure our food supply from 
terrorists.
    Response: With over 140 members, GMA is sure you appreciate that we 
can't provide an exhaustive list of all the steps our members have 
taken. In general, they have revisited their physical security programs 
for plants, warehouses and other facilities; reviewed and upgraded 
where necessary traditional food safety, GMP and HACCP programs, from 
receipt of raw materials through processing, packaging and 
distribution; and have reemphasized employee screening and relations 
with suppliers, distributors and customers. Our members have also 
worked through GMA in at least three areas. First, in November 2001 GMA 
established Project Vigilance which collected from and provided to 
members best practices in the area of food defense and security. 
Second, with FMI (Food Marketing Institute), GMA has established Food 
Elert, a password-protected web-based system with which security 
experts from food manufacturers and food retailers can better 
communicate with each other in emergencies, and which GMA uses to 
provide information from DHA, FDA and USDA in a restricted way to 
members' food security experts alone. Lastly, at our members' request, 
GMA has been actively engaged in the Food Industry ISAC since February 
2002, and more recently in the development of the Food and Agriculture 
Sector with DHA, FDA and USDA.
    Question 2) I would like to ask the members of the panel about the 
prior notice requirement, and whether you believe the system can be 
fully operational by August, and what steps they would recommend to 
make the system more workable.
    Response: GMA has grave concerns about results if the prior notice 
system becomes fully operational in August of 2004. Although FDA has 
operated the prior notice system since December in an ``educational'' 
mode, companies that submit prior notices have not received from FDA 
specific feedback on notices. Thus, it is difficult, if not 
impossible--even for a company that is most dedicated to compliance--to 
know whether the prior notices that it has submitted over the last 
eight months comply with FDA's requirements and expectations. We are 
concerned that if full compliance begins in August, companies will only 
then learn about problems with prior notice and products will be denied 
entry. We suggest that FDA extend the educational phase of prior notice 
compliance and create a mechanism to provide feedback to prior notice 
submitters that is specific individual notices.
    Question 3) Stout, what are the biggest problems you envision with 
the prior notice rule?
    Response: The biggest problems with the prior notice rule will flow 
from FDA's insistence, at least thus far, on requiring the facility 
registration number to be a part of prior notices. As I explained in my 
testimony, registration numbers are not always available to persons 
legitimately importing products. For example, many GMA member companies 
routinely import samples--competitor's products or potential new 
ingredients--produced in facilities where the registration number is 
either not available or where the facility is not required to register. 
Requiring the registration number as part of prior notice--something 
that the Congress did not specify--will impede importation of samples 
and create a powerful incentive for companies to relocate R&D 
facilities to locations outside the United States. FDA could easily 
solve this problem by eliminating the requirement for the registration 
number for shipments of samples and in other instances in which it is 
not reasonably available.
    Question 4) What are you most concerned about with regard to record 
keeping?
    Response: FDA has proposed to require that lot or production codes 
be included in records to be maintained under the recordkeeping 
regulation. It is neither practicable nor necessary for records to 
include lot or production code information. When foods are delivered to 
retailers, the delivery persons do not have the capability to capture 
the lot or production code information as store shelves are stocked and 
restocked. Moreover, this information is not reasonably needed by 
manufacturers or by FDA. If problems arise with a product that 
necessitates its removal from distribution, manufacturers and retailers 
will remove all products, not just the product with the offending lot 
or production codes. It is simply more efficient to remove all of a 
product from distribution than to laboriously review the lot or 
production code on each product and to remove only those at issue. FDA 
should eliminate the requirement for lot or production codes as part of 
the bioterrorism recordkeeping regulation.
    Question 5) Are FDA and Customs doing a good job of coordinating 
with one another?
    Response: Coordination between FDA and Customs is markedly 
improved. There is still ample room for improved coordination. In 
addition, there remain some instances in which FDA prior notice 
requirements and Customs notice requirements are not compatible. The 
agencies should work to eliminate those inconsistencies.
    Question 6) Do you have a sense of what the registration compliance 
rate is for your members?
    Response: GMA is confident that its members are fully aware of the 
registration requirement and in compliance with it. GMA has devoted 
considerable resources to providing educational materials and advice to 
its members on registration and other bioterrorism requirements.
    Question 7) What more can be done to educate industry on the need 
to comply with the registration requirement?
    Response: It is difficult to suggest specific educational 
initiatives that would be likely to increase the registration rate 
without the benefit of an analysis of the registration database as 
compared to what FDA expected. We understand that far fewer facilities 
have registered than was assumed would be the case, but we do not know 
whether that is because the initial assumptions were faulty or because 
there are large numbers of facilities that are subject to the 
registration requirement, but which remain unregistered.
    Question 8) In your opinion how could the FDA build upon companies' 
current record keeping regiments [sic] and still meet the intent of the 
record-keeping requirement?
    Response: Under the FDA recordkeeping proposal, companies would be 
able to continue to use existing recordkeeping systems so long as those 
systems capture the information required by FDA. If FDA were to 
eliminate the requirement for lot or production codes, we are confident 
that GMA member companies will be able to comply with the recordkeeping 
requirements without great difficulty.
    Question 9) Some have raised concerns that the lack of FDA 
inspectors at every port 24 hours a day, seven days a week will lead to 
shipments being unnecessarily delayed at the border. Do you believe the 
December 2003 Memorandum of Understanding between the FDA and Customs 
that allows Customs officials to inspected shipments when the FDA is 
not present will eliminate this potential problem or are more steps 
required?
    Response: If FDA is able to train adequately the Customs personnel 
who will inspect when an FDA inspector is not available, we believe 
that most problems will be eliminated. Absent considerable additional 
resources for FDA to hire and train more inspectors, we believe that 
the 2003 MOU is the only practical way to address the problem. It is 
important that both FDA and Customs understand that prompt review of 
products offered for importation is critical to the food industry and 
to consumers who rely on the availability of a wide variety of food.
    Question 10) Your organizations have both raised concern over the 
ability of companies to bring in competitive samples and how this 
impacts the ability of companies to perform research and development in 
the United States. Given that these products are usually bought at the 
retail level your companies would not have access to the manufacturer 
registration number. Have you voiced these concerns with the FDA, and 
if so what has been their reaction?
    Response: GMA has provided FDA with a detailed description of its 
concerns with the requirement for registration numbers for prior 
notices that cover competitive samples. We have also discussed the 
matter on several occasions with FDA representatives. As of yet, we 
have received no indication that FDA is favorably disposed.
    Question 11) Has either of your organizations provided the FDA 
suggestions to address the problem of competitive sampling without 
compromising the integrity of the registration and inspection system of 
imported food products?
    Response: GMA has provided FDA with a very specific suggestion to 
address the competitive sample problem, without compromising the 
integrity of the registration and inspection system for imported foods. 
We have suggested to FDA that they permit a prior notice to indicate 
that: (1) the product to be imported is a sample; (2) the registration 
number is not available; and, (3) the product is destined for an R&D 
facility. We have further suggested to FDA that it would be entirely 
appropriate for FDA to increase the likelihood of inspection and 
examination of products covered by a prior notice where the products 
are characterized as ``samples.'' Moreover, FDA could well impose a 
quantity limit on sample importations in order to further ensure that 
the characterization of a shipment as containing samples is not abused. 
More generally, we do not agree with FDA that requiring the 
registration number is always an important element of prior notice or 
that FDA can rely on the fact that a person who has a facility 
registration number is a legitimate importer. Some facility 
registration numbers will become known, either through carelessness or 
something more nefarious. FDA should no more assume that possession of 
a registration number indicates legitimacy than any law enforcement 
officer should assume that knowing a social security number is proof of 
one's identity.
Additional comments for the record:
    GMA would like to take the occasion of responding to the 
Committee's supplemental questions to take strong exception to the 
testimony from representatives of the Association of Food and Drug 
Officials (``AFDO'') concerning H.R. 2699, which would provide for 
national uniformity in food labeling and safety regulation. AFDO 
asserts, without any basis in fact, that the uniformity legislation 
would undermine efforts to ensure the security of the food supply. Not 
only were these comments outside the scope of the hearing, but also, 
they were blatantly false. To the extent that the uniformity 
legislation has any bearing on food security, it will help to enhance 
food security. One of the challenges of homeland security is to apply 
the available resources of government and the private sector in the 
most efficient fashion possible. Requiring that the states enforce the 
same requirements as those established by FDA--which is what the 
uniformity legislation would do--is consistent with that principle. It 
is wasteful and not consistent with food security to have inconsistent 
requirements at the federal and state levels. Food safety and food 
security require that all regulators enforce a consistent set of 
requirements.
                                 ______
                                 
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