[Federal Register Volume 62, Number 107 (Wednesday, June 4, 1997)]
[Notices]
[Pages 30593-30600]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14600]



[[Page 30593]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration
[Docket No. 97D-0202]


Draft Guidance on Equivalence Criteria for Food

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is publishing for 
public comment the criteria that the agency intends to use in 
evaluating whether the regulatory systems used by foreign countries to 
ensure the safety of foods exported to the United States for human 
consumption are equivalent to the regulatory system of the United 
States. Based on its evaluation, FDA will decide whether to institute 
the proceedings necessary to enter into an equivalence agreement with 
the foreign country.

DATES: Submit written comments by August 4, 1997.

ADDRESSES: Submit written comments to the Dockets Management Branch 
(HFA-305), Food and Drug Administration, 12420 Parklawn Dr., rm. 1-23, 
Rockville, MD 20857. Comments are to be identified with the docket 
number found in brackets in the heading of this document. Received 
comments are available for public examination in the Dockets Management 
Branch between 9 a.m. and 4 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Mary I. Snyder, Center for Food Safety 
and Applied Nutrition (HFS-415), Food and Drug Administration, 200 C 
St. SW., Washington, DC 20204, 202-418-3152.

SUPPLEMENTARY INFORMATION:

I. The SPS Agreement

    Under Article 4 of the World Trade Organization (WTO) Agreement on 
the Application of Sanitary and Phytosanitary Measures (SPS) (the SPS 
Agreement), each member nation of the WTO, including the United States, 
is obligated to accept as equivalent a food regulatory system of 
another country if it provides the same level of health protection as 
is provided to consumers by its own system.
    Equivalent regulatory systems need not be identical. Under the 
concept of equivalence, the ``sanitary or phytosanitary measures'' used 
by an exporting country may differ from the measures applied 
domestically by an importing country so long as these measures 
``achieve the importing Member's appropriate level of sanitary or 
phytosanitary protection.'' According to the SPS Agreement, ``sanitary 
or phytosanitary measures'' include all relevant laws, decrees, and 
regulations; as well as procedures relating to end-product criteria, 
processes and production methods, testing, and inspection. Essentially, 
SPS measures include virtually any measure to protect human health 
arising from risks in food.
    Under the SPS Agreement, the burden of demonstrating that 
equivalence exists rests with the exporting country. The importing 
country has the right to decide for itself whether the regulatory 
system of the exporting country is equivalent to its own or is 
inadequate to achieve ``the importing Member's appropriate level of 
sanitary or phytosanitary protection,'' or that inadequate evidence has 
been provided to demonstrate equivalence. The SPS Agreement specifies 
that exporting countries allow ``reasonable access'' to the importing 
country to inspect or carry out other procedures for evaluating 
equivalence. If the exporting country can demonstrate equivalence, the 
importing country ``shall accept'' the exporting country's system as 
equivalent.
    Additionally, each member country is obligated to ``enter into 
consultations'' with a requesting country ``with the aim of achieving 
bilateral and multilateral agreements on recognition of the equivalence 
of specified sanitary or phytosanitary measures.'' Although the SPS 
Agreement does not require that every finding of equivalence of a 
measure or system of measures between countries should result in a 
bilateral or multilateral agreement, the SPS Agreement does require 
that members consult, if requested, with that potential goal.
    A number of exporting nations have requested that the United States 
enter into consultations with them for the purpose of developing 
equivalence agreements for seafood. One reason for these requests is 
that FDA regulations for seafood (part 123 (21 CFR part 123)) mandate 
responsibilities for importers that are deemed to be met whenever an 
equivalence agreement exists that covers the seafood products being 
imported into the United States. These regulations become effective 
December 18, 1997 (60 FR 65096 to 65202, December 18, 1995).
    Equivalence for other types of products is being discussed with 
exporting countries at their request. Similarly, the United States is 
seeking equivalence determinations from certain countries to which it 
exports food products.
    It would be useful, therefore, for FDA to articulate how it intends 
to carry out equivalence determinations. FDA has decided that the best 
way to do so is by developing and publishing criteria that the agency 
intends to apply in determining whether equivalence exists between the 
U.S. food regulatory system and that of an international trading 
partner whose regulatory system is not essentially identical to the 
U.S. system.
    FDA intends these criteria as guidelines that represent the 
agency's current thinking on equivalence for the SPS Agreement. The 
guidelines do not create or confer any rights for or on any person and 
do not operate to bind FDA or the public.

II. Potential for Public Health and Other Benefits From Equivalence

    FDA takes the view that equivalence in food safety measures between 
the United States and its international trading partners can be 
beneficial and should be fostered for its own sake. As countries 
achieve equivalence with the U.S. advanced regulatory system, consumers 
in this country will have greater assurance that imported foods are as 
safe and wholesome as domestically produced foods.
    The situation with food imports into the United States provides an 
excellent example of the desirability of achieving equivalence between 
the United States and its trading partners. Food is imported into the 
United States from around the world and the number of formal customs 
entries every year is about 1.5 million.
    For the most part, FDA's inspections of food processing facilities 
in other countries can occur only on a limited basis. Foreign 
inspections are extremely costly and usually are not undertaken without 
an invitation from the foreign country. FDA does make a consistent 
effort to inspect the foreign processors of some types of products, 
such as infant formula, but the number of such processors--and thus the 
number of such inspections--is relatively low.
    FDA's traditional surveillance system for food imports has largely 
consisted of reviewing customs entries, engaging in field examinations 
and collecting samples for laboratory analysis, and placing products 
with a history of problems on detention without physical examination. 
While FDA performs either an electronic screening or a documentary 
review of virtually all customs entries with the help of automated 
systems, the agency can physically examine only a very small percentage 
of these entries. Huge sums of money would be needed to enable

[[Page 30594]]

FDA to increase its physical examination and sampling program.
    Where equivalence has been determined to exist, however, the work 
of the foreign regulatory authority should serve to help ensure the 
safety of imports for U.S. consumers. Since the foreign inspection 
system will have been found to be equivalent to FDA's inspection 
system, FDA will be able to rely on the results of the foreign 
inspection system.
    The possibility of equivalence agreements between and among 
international trading partners, with rights and benefits that accrue to 
the parties involved, provides an incentive for countries to improve 
their regulatory systems and the public health of their food exports as 
a means of achieving equivalence with more advanced regulatory systems. 
As equivalence is achieved, and agreements are reached recognizing the 
achievement of equivalence, trade is likely to flow more freely because 
of the reduced need by importing countries to engage in resource-
intensive sampling and examination of products being offered for entry 
from countries with equivalent systems. For the United States, 
equivalence agreements will also mean that FDA will be able to target 
the limited resources it has for imports toward products from countries 
that have not been determined to be equivalent. Thus, FDA will be able 
to use its resources more efficiently and effectively. U.S. industry 
can also benefit from these agreements because in those cases where the 
U.S. system is found to be equivalent to that of its trading partners, 
acceptance of U.S. products by those countries is assured. The purposes 
and types of equivalence agreements are described later in this notice.
    Finally, where equivalence exists and is acknowledged in an 
agreement, there will be no need under many circumstances for importing 
nations to continue to require certificates from the competent 
regulatory authority of the exporting country to accompany each 
shipment. (FDA does not generally require that imported products be 
accompanied by certificates; however, there is an increasing trend for 
foreign countries to require such certificates.) Where there is 
recognition that the exporting country's system provides an appropriate 
level of sanitary or phytosanitary protection, the issuance of 
certificates for specific products would represent a needless 
expenditure of public health resources with no obvious advantage to 
consumers or to industry. Adequate assurances may be achieved by 
providing lists of food processors that are in good standing with the 
regulatory authority of the exporting country or similar information.

III. Problem Solving Agreements vs. Equivalence Agreements

    FDA has experience developing and entering into bilateral 
agreements with trading partners for the purpose of providing assurance 
that food from those countries will be safe for U.S. consumers. 
However, these agreements have focused on assuring compliance with U.S. 
requirements by the foreign regulatory authority for foods that present 
high risks or that have had persistent compliance problems, rather than 
on whether the regulatory systems were equivalent. Such agreements 
involve the application of virtually identical measures by the 
exporting and importing country to the subject commodity or compliance 
with specific end-product criteria to address a food safety problem.
    For example, FDA has several longstanding Memoranda of 
Understanding (MOU's) with nations that export raw molluscan shellfish 
to the United States. Under these MOU's, each country has agreed to 
abide by the same detailed standards for regulating the growing and 
harvesting of raw molluscan shellfish that U.S. States have agreed to 
follow. These countries have entered into such MOU's in order to have 
access to the U.S. market. Under a Federal-State cooperative 
arrangement for raw molluscan shellfish, the National Shellfish 
Sanitation Program (NSSP), FDA lists the processors who have been found 
to be in compliance by States and countries that have a shellfish 
program that meets the NSSP standards. States decide what shipments of 
shellfish they will act against based on whether the processor of the 
shellfish is included on FDA's list. Recently, some of the countries 
with MOU's have expressed an interest in converting their MOU's from 
compliance-type agreements to equivalence agreements to permit some 
variations from the details of the U.S. program.
    FDA has also periodically entered into MOU's or other less formal 
agreements with countries that have a significant volume of trade with 
the United States in certain products but have developed chronic, 
safety-related problems with these products. In these cases, the 
agreement is intended to correct these problems. Examples include 
agreements aimed at the control of excessive levels of lead and cadmium 
leaching from ceramicware for food use, the control of pesticide 
residues in certain types of fruits, and the control of pathogenic 
microorganisms in soft ripened cheese and certain dried milk products.
    Traditionally, FDA has assigned a higher priority to agreements 
targeted toward solving specific problems than it has to recognizing 
foreign food control systems as providing the same level of protection 
as those in the United States. This policy of favoring problem solving 
agreements over others is set forth in FDA's Compliance Policy Guide 
(CPG) section 100.900, Attachment A, which contains the agency's 
criteria for how it will prioritize international MOU's.
    In December 1995, FDA entered into a compliance-based Cooperative 
Arrangement with the New Zealand Ministries of Agriculture and Health 
for the purpose of ensuring the safety of fish and fishery products 
traded between the two countries. Significantly, it was not a problem 
solving agreement. Rather, it recognized that the strong regulatory 
systems in the United States and New Zealand enhanced the likelihood 
that products from each country would comply with the regulatory 
requirements of the other. The participants agreed to take this 
recognition into account in determining the frequency of border checks 
for fish and fishery products traded between the United States and New 
Zealand. While this arrangement was not intended to be an equivalence 
agreement, it does reflect the principle that the employment of 
comparable, high-standard regulatory systems by international trading 
partners can enable each nation to enhance the public health protection 
of its consumers and shift inspectional resources to other, more risky, 
products.
    Although FDA continues to see merit in narrowly focused, problem 
solving MOU's, the agency also sees value in pursuing equivalence 
agreements. Therefore, FDA is considering revising CPG section 100.900, 
Attachment A, ``Food and Drug Administration Criteria for Memoranda of 
Understanding'' to add recognition of equivalence as a basis for 
entering into agreements with foreign governments. Should the agency 
choose to do so, it will issue a separate notice to that effect, with 
an opportunity for public comment.

IV. Possible Forms that Equivalence Agreements Could Take

    There are several possible forms that equivalence agreements could 
take, depending upon the relevant circumstances.

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A. ``One-Way'' Agreements vs. ``Two-Way'' Agreements

    Equivalence agreements can involve simultaneous determinations by 
two countries that their regulatory systems are equivalent to one 
another (``two-way'' agreements). This is the favored type of agreement 
from FDA's standpoint. A determination that a trading partner's 
regulatory system is equivalent to the U.S. system means that imports 
from that country have been produced under circumstances that provide 
U.S. consumers with the same level of protection as domestic products. 
A determination by the trading partner that the U.S. system is 
equivalent to its system helps ensure that exports from the United 
States will flow freely to the country in question. It will be FDA's 
policy to negotiate ``two-way'' agreements whenever practicable.
    FDA may, however, enter into ``one-way'' agreements as appropriate. 
A ``one-way'' agreement would involve a finding by only one country 
that the regulatory system of a foreign government was equivalent to 
its own. A ``one-way'' agreement would be appropriate where there 
existed, essentially, a one way flow of trade in the commodities that 
were subject to the agreement. A ``one-way'' agreement might also be 
entered into as a temporary measure when one country was prepared to 
find a trading partner's system equivalent to its own, but the other 
country was not yet able to make a similar determination. Instead of 
delaying the agreement until a ``two-way'' agreement could be 
completed, the two countries could decide to agree in ``one-way'' 
stages.

B. All Products or Processors vs. Some Products or Processors

    FDA may negotiate equivalence agreements that encompass some or all 
foods being exported to the United States from a foreign country, but 
will generally focus on agreements that cover one or two food 
categories with a high trade volume. As indicated earlier, FDA expects 
that many of the initial food-related equivalence evaluations will 
involve fish and fishery products. (The U.S. imports about 55 percent 
of the seafood it consumes.) Such evaluations will not consider whether 
the regulatory system of the foreign country is equivalent for other 
products.
    Even within the category of products being considered for an 
agreement (e.g., fish and fishery products), equivalence may exist for 
some of those products but not for others. In those cases, FDA would 
enter into equivalence agreements that cover only those products. An 
agreement of this nature would not preclude trade in the remaining 
products, but such trade would be outside the scope of the agreement 
and thus likely subject to more intense scrutiny at ports of entry. The 
two most predictable situations in which a limited equivalence 
determination is likely are: (1) Where the regulatory system of the 
foreign country is designed to achieve, or is only capable of 
achieving, equivalence for some products but not for others; and (2) 
where U.S. standards for certain products are more stringent than those 
of the foreign country so as to rule out equivalence for those 
products.
    The same principle should hold true for processors as well as for 
products. Some countries have a mix of modern, relatively advanced 
processing operations and other operations that are much less so, and a 
regulatory structure capable of achieving equivalence only with regard 
to the advanced processors. Other countries differentiate between food 
processors that are licensed to export, and processors that are not so 
licensed. In any case, it is important to remember that the agreement 
is between the United States and the government of the foreign country 
and not with individual processors or other private entities.

C. ``Piggy Back'' (``Triangular'') Agreements

    FDA is interested in exploring the concept of ``piggy back'' 
equivalence agreements (also referred to as ``triangular'' agreements). 
Under this concept, two countries that have established an equivalence 
agreement would agree that additional agreements between either of the 
countries and a third country would be recognized by both countries. 
Thus, if FDA had both an equivalence agreement with Country ``A'' and a 
``piggy back'' arrangement with Country ``A,'' and Country ``A'' had an 
equivalence agreement with Country ``B,'' FDA would recognize that 
Country ``B'' is equivalent to the United States in part on the basis 
of Country ``A's'' finding.
    For such a system to work, a basis must exist for FDA to have found 
on its own that Country ``B's'' system was equivalent to the U.S. 
system. Among other things, FDA would have to have a high level of 
confidence in Country ``A's'' ability to make an equivalence 
determination, based on a detailed knowledge of Country ``A's'' 
verification and audit capabilities. This knowledge and confidence 
could be acquired through a mutual undertaking of audit 
responsibilities and a sharing of the results of audits. There would 
always have to be some form of confirmation by FDA that equivalence 
exists along with an adequate administrative record to support a 
finding of equivalence.
    If such an arrangement could be established, it would provide 
enhanced incentives for countries to achieve equivalence with the most 
advanced regulatory systems because a finding of equivalence with one 
advanced country could hasten equivalence with other advanced 
countries. Obviously, a ``piggy back'' system would also permit a 
significant public health gains and resource savings for countries in 
negotiating equivalence agreements.
    Some experience with equivalence agreements will be needed before 
FDA could enter into ``piggy back'' agreements. The agency invites 
public comment on this issue.

V. The Equivalence Agreement Process

    FDA contemplates a process that will involve a paper review, an on-
site verification review, and public notice and comment in making a 
determination that a foreign country's regulatory system is equivalent. 
The paper review would compare the U.S. system of laws, regulations, 
standards, regulatory practices and procedures, and all other relevant 
matters with those of the foreign country based on information provided 
by the foreign government. The review, which would be carried out by 
FDA in the United States, is expected to consist in part of a side-by-
side comparison of the elements of the U.S. system and the elements of 
the foreign system to determine what similarities and differences exist 
between the two systems and to provide the basis for an assessment of 
the significance of the differences. This paper review will cover both 
the foreign country's requirements for industry and its inspection 
system.
    If the paper review shows that the two systems may be equivalent, 
the results of this paper review will form the basis for one or more 
on-site visits to verify the results of the paper review and to obtain 
whatever additional information may be necessary. The purpose of an on-
site visit would not be to inspect the processors in that country, 
although it is expected to include visits to some processors, but 
rather to verify that the foreign regulatory system, including its 
plant inspection system, is functioning as indicated in the paper 
review. The on-site visit is an audit of the system, not an audit of 
foreign processors.
    FDA would then make a preliminary determination of whether 
equivalence exists and would publish this preliminary determination in 
a notice

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for public comment in the Federal Register. FDA is under an obligation 
to do so in accordance with Pub. L. 103-465, the implementing 
legislation for U.S. participation in WTO agreements. This law states:
    If the Commissioner [of Food and Drugs] proposes to issue a 
determination of the equivalency of a sanitary or phytosanitary 
measure of a foreign country to a sanitary or phytosanitary measure 
of the Food and Drug Administration that is not required to be 
promulgated as a rule under the Federal Food, Drug, and Cosmetic Act 
or other statute administered by the Food and Drug Administration, 
the Commissioner shall publish a notice in the Federal Register that 
identifies the basis for the determination that the measure provides 
at least the same level of sanitary or phytosanitary protection as 
the comparable Federal sanitary or phytosanitary measure. The 
Commissioner shall provide opportunity for interested persons to 
comment on the notice. The Commissioner shall not issue a final 
determination on the issue of equivalency without taking into 
account the comments received.
    FDA is committed to this public process and intends that Federal 
Register notices published in accordance with this requirement will 
provide the public with a full explanation of why FDA has tentatively 
concluded that equivalence exists in a given situation. This 
explanation should cover, at a minimum, both the results of the paper 
review and a summary of the on-site visit. The final determination will 
take into account the comments received.

VI. Fundamental Principles

    In determining whether equivalence exists and in entering into any 
agreements on equivalence, FDA intends to be guided by several basic 
principles. These include the following:

A. Transparency of Process and Reasoning

    As indicated above, the factual basis for a determination of 
equivalence must be publicly available and clearly understood. To the 
extent that FDA is looking to foreign regulatory authorities to help to 
ensure the safety of food for U.S. consumers, the public has a right to 
review and understand the basis for FDA's action. Consumer confidence 
in food depends in large measure on the confidence it has in the 
regulatory safeguards that exist for that food.

B. No Loosening of Standards

    U.S. standards will not be relaxed to facilitate a finding of 
equivalence. For example, products that contain unapproved additives or 
that contain poisonous or deleterious substances in amounts sufficient 
to render them adulterated under Federal law will be adulterated even 
if an equivalence agreement exists. Unless the foreign country can 
provide reasonable assurance that its products will meet these 
standards (i.e., will not be adulterated), equivalence will not be 
possible, at least for those products.

C. Fundamental Fairness and Consistency

    Processing requirements that are essential for the production of 
safe food are germane to both domestic products and products that are 
imported into the United States, although, as discussed later, 
equivalence may permit appropriate latitude regarding the details.

D. Adequate Verification

    If FDA has entered into an equivalence agreement, the agency must 
engage in adequate ongoing verification, including appropriate checking 
of imports, to ensure that equivalence continues to exist. FDA cannot 
rely solely on foreign regulatory authorities to ensure that 
equivalence is maintained. Presumably this principle will hold true for 
the foreign regulatory authority as well.

VII. What Is Equivalence?

A. United States Levels of Protection

    As stated in section I of this document, according to the SPS 
Agreement, equivalence is achieved when an exporting country's measures 
meet an importing country's ``appropriate level of sanitary or 
phytosanitary protection,'' even though those measures are not the same 
as those of the importing country. A level of protection can be viewed 
in terms of the limitation on risk that a society requires relative to 
a particular hazard or hazards.
    In the United States, the appropriate levels of sanitary or 
phytosanitary protection for the foods regulated by FDA are governed by 
the very broad, qualitative provisions of the Federal Food, Drug, and 
Cosmetic Act (the act), and the regulations issued under it, which 
state the circumstances in which a product will be deemed to present an 
unacceptable risk to U.S. consumers, i.e., will be deemed to be 
``adulterated.'' For example, a food additive will be deemed to 
adulterate a food unless it is approved for use in that food (section 
402(a)(2)(C) of the act (21 U.S.C. 342(a)(2)(c))) based on a showing 
that there is a ``reasonable certainty'' that no harm will result from 
its becoming a component of the food (section 409(a) of the act (21 
U.S.C. 348(a)) and Sec. 170.3(i) (21 CFR 170.3(i))). Food is also 
adulterated if it is contaminated with an added poisonous or 
deleterious substance ``which may render it injurious to health'' 
(section 402(a)(1) of the act). The act has several other adulteration 
provisions, including provisions that apply in specific situations, 
such as in the preparation of infant formula and the use of color 
additives. Sometimes, as with food additives, the act (a food additive 
must be ``safe'' under section 409) and the regulations (definition of 
``safe'' in Sec. 170.3(i)) must be read together.
    These governing provisions express levels of protection in terms of 
overarching public health standards. However, in considering a 
particular risk or types of risks, these broadly stated standards need 
further elaboration to provide understanding of how they apply. For 
example, a determination of whether there is a reasonable certainty of 
no harm from the use of a food additive is dependant on an operational 
definition of that standard that facilitates its application to a 
specific food use of a substance. Operational definitions can be found 
in various places, ranging from the explanatory materials that are 
developed in rulemaking (i.e., preambles) to the codified text of a 
rule (see Secs. 170.3, 170.20, and 170.22 (21 CFR 170.20 and 170.22)), 
to guidance materials, and even to judicial decisions.
    For example, the operational definition for ``reasonable certainty 
of no harm'' from the use of a food additive involves determining the 
exposure to that additive that will not produce adverse effects in 
humans. This level is obtained through the application of an 
appropriate, scientifically based, safety factor (e.g., 100-fold, as 
provided in Sec. 170.22) to the lowest no-effect level observed in a 
toxicological study in animals. As can be seen from this example, the 
level of protection afforded by the law of the United States is the 
protection that emerges when a broad, statutory public health standard 
is applied, through an operational definition, to a particular risk.
    Operational definitions serve as a bridge between the underlying 
standard and the measures that are developed to achieve the desired 
level of protection. In the above example, the primary measure that the 
United States uses to achieve its level of protection for food 
additives is an approved level of the additive that is permissible in a 
particular food.
    Quantification is not the only way to provide a level of 
protection, and in many situations quantification is not practical. An 
excellent example of a

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level of protection that is qualitative rather than quantitative is 
that provided by the food safety processing system known as Hazard 
Analysis Critical Control Point (HACCP), which FDA has mandated for the 
processing of seafood. The statutory standard from which this 
protection derives states that food should not be prepared, packed, or 
held under conditions ``whereby it may have been rendered injurious to 
health'' (section 402(a)(4) of the act). Concerns about the conditions 
under which seafood is processed led FDA to conclude that to give this 
standard meaning in the circumstances under which seafood is processed, 
it would be necessary to impose a prevention-oriented system of food 
safety controls which would operate to define the statutory standard by 
ensuring that hazards are identified in advance and then prevented or 
reduced to an acceptable level through the application of several 
specific principles (see the preamble to FDA's seafood regulations (60 
FR 65096). The primary measure by which this level of protection is 
achieved is a regulation that requires that food processors establish 
and operate under such a system (21 CFR part 123).

B. Measures for Achieving U.S. Levels of Protection

    As the previous examples demonstrate, the United States provides 
protections both through outcome (whether the food contains an 
unapproved substance or an undesirable substance in sufficient quantity 
to adulterate it) and method of production (i.e., whether the 
conditions under which a food is prepared, packed, or held are 
conducive to producing a safe product). It is important to recognize 
that food is adulterated under U.S. law unless there is adherence to 
all applicable protections. A food might be free of contaminants, and 
thus be consistent with the protections extended by law in that 
respect, but still be adulterated under section 402(A)(4) of the act 
because it was processed under insanitary conditions whereby it may 
have become contaminated.
    Thus, the U.S. regulatory system for food addresses both outcome 
and processing. As a practical matter, therefore, FDA would expect that 
another country's SPS measures must also address both outcome and 
processing if those measures are to provide assurance that food offered 
for export to the United States meets the U.S. level of protection.
1. Outcome
    In establishing and enforcing tolerances, or maximum residue levels 
(MRL's), for food contaminants or residues of pesticides or veterinary 
drugs in foods as risk management measures, the United States ensures 
that its levels of protection are met. MRL's are based on assessments 
of the risks to human health and specifically to the health of U.S. 
consumers. These assessments take into account factors such as 
toxicity, expected residue levels based on labeled use of the product, 
and expected dietary exposures based on the U.S. diet.
    As these factors suggest, the U.S. MRL's are based in part on 
domestic circumstances. It is not clear how a less stringent MRL could, 
alone, address these factors in a way that achieves the same level of 
protection for U.S. consumers as the U.S. MRL. Further, food containing 
contaminants or residues in excess of U.S. MRL's are deemed to be 
adulterated under U.S. law. Therefore, as a practical matter, as part 
of evaluating whether a foreign regulatory system can be judged 
equivalent, the agency would expect adequate assurances that U.S. MRL's 
will not be exceeded in those foods being exported to the United 
States.
    It may be possible for a country with a less stringent MRL, or no 
MRL, to achieve equivalence, however, if it can demonstrate that the 
products that it exports to the U.S. will not contain contaminants in 
excess of the U.S. MRL. If, for example, the United States has 
established level ``L'' for a particular contaminant in a food, an 
exporting country could demonstrate that the food that it exports to 
the United States will not contain the contaminant because conditions 
do not exist there whereby the food would be exposed to the contaminant 
or contain levels in excess of the U.S. MRL.
    An exporting country could also seek to present scientific evidence 
to demonstrate that the United States could meet its own level of 
protection with a less stringent MRL. While importing countries may 
occasionally revise older MRL's on the basis of such demonstrations, 
FDA expects that these revisions will occur only in limited situations 
if the importing country already bases its SPS measures on science, as 
does the United States.
    In addition to tolerances, or MRL's, which are considered binding 
under U.S. law, FDA has provided ``action levels'' for contaminants as 
nonbinding guidance for FDA, industry, and the public about the level 
at which the contaminants in question may pose a health risk, based on 
available science. In providing nonbinding regulatory guidance, FDA may 
choose to take regulatory action when it finds that an action level has 
been exceeded or decide to exercise discretion based on the 
circumstances and risks posed by the particular case. Nevertheless, the 
manner in which the action level is applied to domestic products and to 
imports should be the same, and action levels should be taken into 
account when determining equivalence.
2. Conditions of Production
    How a product is prepared, packed, or held can be of great 
importance to the safety of the product. As with the issuance of 
tolerances or MRL's, FDA periodically issues regulations on how certain 
foods must be processed to ensure that the foods are safe, and that 
U.S. levels of protection are met. The agency engages in inspections of 
processing establishments to determine whether these processing 
requirements are being carried out.
    Attention to processing helps ensure that food is safe by 
preventing potential food safety problems and by ensuring that 
processors are aware of problems that may develop, and that they 
address those problems when they do occur. Sanitary and phytosanitary 
measures are credible to the extent that they decrease the likelihood 
that problems will occur, or increase the likelihood that problems will 
be discovered and corrected quickly, even when the regulatory inspector 
is not present.
    End-product testing, which measures outcome, cannot generally be 
relied upon exclusively to provide an adequate level of protection 
because it only tests for a specific risk or group of risks on a 
particular day. The results of end-product sampling may or may not be 
representative of the actual, continuing risk, depending upon product 
uniformity, the amount of sampling, and other factors. Processing 
controls coupled with adequate verification by a regulatory authority 
provide an essential assurance that food will not present unacceptable 
risks. Processing controls can assure that the level of protection is 
met in many circumstances where end-product testing alone realistically 
cannot.
    FDA, therefore, has issued several regulations that focus on how 
food is to be processed. The overall purpose of these regulations is to 
require that processing methods and equipment be appropriate to control 
potential risks. The regulations take into account available scientific 
evidence on food safety hazards and controls, relevant processes and 
production methods, and relevant economic factors, including costs and 
benefits. One of these regulations establishes basic sanitation 
principles and good manufacturing practices for all foods (``Current 
Good

[[Page 30598]]

Manufacturing Practice in Manufacturing, Packing, or Holding Food,'' 
(part 110 (21 CFR part 110)). Others require a specific processing 
regimen to control a particular problem or problems in certain types of 
foods. These regulations are key elements in FDA's regulatory system.
    For purposes of equivalence, therefore, FDA will be looking for SPS 
measures established by an exporting country that fully address the 
objectives and purposes of applicable FDA regulations. FDA's 
examination may occur on a provision-by-provision basis, or on some 
other basis, as the agency deems necessary. To the extent possible, for 
example, differences in requirements affecting the actual physical 
dimensions or components of equipment (e.g., hand washing equipment for 
employees) will generally be less important than whether the broader 
public health purposes or objectives to which the equipment relates 
(i.e., personnel hygiene) are being adequately addressed. In any event, 
FDA will be prepared to articulate the objectives or purposes of its 
regulatory provisions during consultations on equivalence with foreign 
governments.
3. Labeling and Other Special Considerations
    FDA notes that the SPS Agreement includes labeling within its 
definition of sanitary or phytosanitary measures. Not all labeling 
falls within this definition, however. Regarding labeling that does 
meet the definition, it is not clear to FDA how labeling that fails to 
meet U.S. requirements could be equivalent to these requirements. 
Therefore, the agency is not offering criteria at this time on how such 
labeling could be found to be equivalent and invites comment on whether 
differing SPS labeling requirements can be equivalent, and how 
determinations of equivalence should be made.
    Similar difficulties may be presented by particular types of foods 
(e.g., infant formula and medical foods), which are subject to special 
statutory requirements (see section 412 of the act (21 U.S.C. 350a)). 
Therefore, FDA also requests comment about how it should handle 
equivalence determinations for those types of products.
4. Elements of the U.S. Regulatory System
    As indicated previously, SPS measures include laws, decrees, 
regulations, and related matters. Clearly, the operations and functions 
of a country's regulatory system, which implements laws and issues 
decrees and regulations, constitute SPS measures. It is thus necessary 
to identify the elements of the U.S. regulatory system and the purposes 
that these elements serve in order that foreign regulatory systems can 
be compared against these measures and purposes.
    For foods regulated by FDA, there are essentially two layers of 
regulatory authority: Federal or national authority, represented 
primarily by FDA, with regulatory jurisdiction over food in interstate 
commerce, as broadly defined in relevant case law, and individual State 
and local regulatory systems, with regulatory jurisdiction over food 
within their boundaries. The State systems are germane for purposes of 
``two way'' equivalence primarily because States engage in regulatory 
inspections of food processors in addition to those conducted by FDA. 
Inspections, as discussed below, are a key element of the U.S. 
regulatory system.
    The elements of the U.S. regulatory system may be thought of as 
falling into two broad categories. The first is infrastructure, which 
includes applicable law and the government bodies charged with 
implementing the law. The second category is implementation, or 
performance, which relates to how the infrastructure actually operates 
to prevent and control food-related risks. It is worth pointing out 
that, under the U.S. system, private food producers are responsible for 
producing safe food, while government is essentially responsible for 
verifying that producers are meeting their obligations and for taking 
remedial action when they fail to do so.
    a. Infrastructure.
    1. Law. The United States has national law that includes the 
following purposes:
     To prohibit the introduction of adulterated or misbranded 
food into commerce;
     To broadly establish what constitutes adulteration and 
misbranding;
     To authorize national regulatory agencies with the power 
to establish standards for foods (including how it is prepared, packed, 
and held), to conduct mandatory inspections of food processors, to 
issue processing requirements for food, and to take enforcement action 
to prevent adulterated or misbranded food from entering commerce and to 
remove it from any stage of interstate commerce if found.
    In order for equivalence to be achieved, a foreign country needs to 
have laws applicable to food to be exported to the United States that 
achieve essentially the same objectives and will meet U.S. levels of 
protection. In addition, as discussed below, the foreign country must 
have the authority to implement the law in an appropriate way and must 
be, in fact, doing so.
    2. Regulatory authority. The United States has national regulatory 
agencies that implement Federal food safety law applicable to all food 
in interstate commerce in the United States, including food to be 
exported. Essential characteristics of these agencies include, but are 
not limited to, the following:
       A regulatory infrastructure capable of, and engaged in, 
identifying existing and potential public health problems associated 
with food and capable of establishing appropriate regulatory policy 
with regard to such problems, including, but not limited to, the 
establishment of scientifically-based regulatory standards, processing 
requirements, and guidelines. This capability includes the ability, 
either within the agency or through contact with other agencies, to 
determine the causes of illness from foods that may be consumed 
domestically or shipped for export.
      An inspection infrastructure capable of, through 
appropriate training and experience, and engaged in conducting 
mandatory inspections of commercial entities that prepare, pack, and 
handle food to determine whether these entities are meeting their 
responsibility to produce food that is not adulterated. Inspections 
should include both observation and the taking of product samples for 
laboratory or organoleptic examination.
      A laboratory infrastructure that is capable of, and 
engaged in, analyzing samples to determine the presence and quantity of 
adulterants that are reasonably likely to affect food, including but 
not limited to pathogens, chemicals, toxins, and parasites. The 
methodologies used should have, in most cases, been approved or 
validated by recognized entities that are competent to evaluate such 
methods. The competency of the laboratories to use these methods has 
been appropriately evaluated and maintained through extensive quality 
assurance programs.
      An enforcement infrastructure that is capable of, and 
engaged in, reviewing the findings from inspections and making rapid 
determinations as to whether regulatory action is necessary to resolve 
existing or potential public health problems. Where regulatory action 
is necessary, the enforcement infrastructure has available to it a 
range of actions designed to remove violative product from distribution 
and prevent a recurrence of the problem.
      An internal monitoring infrastructure to preserve the 
integrity and credibility of the agency's food

[[Page 30599]]

protection system. The infrastructure must be able to issue and enforce 
rules and procedures to promote ethical behavior, and to protect 
against conflict of interest, among its employees.
    In order to be equivalent to the United States, a foreign country 
should have a regulatory infrastructure with jurisdiction over food to 
be exported to the United States that, at a minimum, possesses these 
characteristics. It is not necessary that these characteristics reside 
solely within a single government agency. They may be performed by 
multiple agencies at a national level or, under a Federal-type system, 
by a combination of national and local government agencies, as long as 
there is adequate assurance that the functions are being carried out 
adequately and in a reasonably consistent and coordinated manner.
    Also, FDA does not rule out the possibility that nongovernment 
entities might be able to perform some regulatory functions under 
strictly controlled circumstances. When any function is performed by a 
nongovernment entity, such as a private inspection organization, there 
must be sufficient government oversight of the private organization to 
ensure that the relevant regulatory functions are being carried out 
adequately and in a manner that preserves the integrity and credibility 
of the functions. Ultimate regulatory responsibility must continue to 
rest with the government. In determining whether equivalence exists 
under such circumstances, FDA would expect the foreign government to be 
engaged in rigorous oversight over the nongovernment entity.
    b. Implementation.
    Equivalent implementation is achieved when the foreign regulatory 
infrastructure is carrying out its functions in a manner that provides 
a reasonable assurance that the products being offered for import into 
the United States meet our country's levels of protection and thus are 
not adulterated under U.S. law. While FDA will examine each function 
separately, the decision as to whether equivalence exists will be based 
on a consideration of whether the foreign country's system as a whole 
in some way provides the assurances that are provided by the U.S. 
system. As indicated previously, the whole system must be able to 
provide assurances beyond those that would be provided solely through 
end-product testing.
    This examination may also take into account relevant conditions in 
the foreign country. For example, in considering whether inspections 
occur with sufficient frequency, FDA may consider sanitary and other 
conditions in that country, and particularly in processing plants, that 
bear on how much on-site presence and intervention by regulatory 
authorities is necessary to provide adequate assurance that adulterated 
products are not being exported. Furthermore, the degree to which 
industry uses appropriate processing controls can influence the methods 
and procedures by which government verifies compliance.
    When considering the performance of the country's regulatory 
infrastructure, FDA intends to take into account experience already 
acquired with that country, including historical data from FDA 
monitoring of its products that are exported to the United States.

APPENDIX

Equivalence for Seafood

    Because FDA has already received requests for consultations on 
seafood from a number of countries, the agency is including in this 
Appendix specific guidance on determining equivalence with its seafood 
HACCP regulations and with other features of its regulatory program for 
seafood. FDA may choose to issue specific additional guidance for other 
types of food at a later date.

A. HACCP and the Prerequisites

    FDA's seafood HACCP regulations declare that fish and fishery 
products in interstate commerce are adulterated if they are not 
processed in accordance with the principles of HACCP and prerequisite 
requirements for sanitation provided for therein (Sec. 123.6(g)), 
regardless of whether the products may be otherwise adulterated. As 
with other regulations, the FDA seafood HACCP regulations have the 
force and effect of law. The regulations apply to imports into the 
United States as well as to products produced domestically.
    In the absence of a determination of equivalence, imports must be 
processed in compliance with the regulations. In any consultations 
relating to equivalence, an exporting nation will be given the 
opportunity to demonstrate that its own measures for the seafood that 
is being exported from it to the United States are adequate to ensure 
that the objectives and purposes of each provision of the U.S. 
regulations will be met.
    The seafood HACCP regulations require that fish and fishery 
products be processed under a system of preventive controls to ensure 
the safety of the food for human consumption. As part of this system, 
commercial processors must demonstrate the following: (1) A knowledge 
of safety hazards to which their products are subject; and (2) the 
ability to identify and apply controls that eliminate or minimize the 
likelihood of the occurrence of those hazards in the products. HACCP is 
essentially the opposite of end-product testing, which attempts to 
detect problems after they have occurred. As a scientifically-based 
processing control system, HACCP is able to achieve the level of 
protection deemed appropriate for the risks posed by seafood. End-
product testing or other types of process controls that do not involve 
systematic, daily monitoring in conjunction with hazard analysis, 
cannot achieve this level of protection.
    The preventive controls of HACCP are applied through the 
application of seven internationally recognized principles, all of 
which are required of seafood processors in the FDA regulations. These 
are:
    (1) Conduct a hazard analysis.
    (2) Identify the critical control points (CCP) in the process. A 
CCP is a point, step, or procedure in a food process at which control 
can be applied, and a food safety hazard can, as a result, be 
prevented, eliminated, or reduced to acceptable levels.
    (3) Establish critical limits for preventive measures associated 
with each identified CCP. A critical limit is the maximum or minimum 
value to which a physical, biological, or chemical parameter must be 
controlled at a CCP to prevent, eliminate, or reduce to an acceptable 
level the occurrence of the identified food safety hazard.
    (4) Establish CCP monitoring requirements.
    (5) Establish corrective action to be taken when monitoring 
indicates that there is a deviation from an established critical limit.
    (6) Establish effective recordkeeping procedures that document the 
HACCP system.
    (7) Establish procedures for verification that the HACCP system is 
working correctly.
    These principles have been recognized in a Codex Alimentarious Code 
of Practice for Food Hygiene guide. Countries seeking a determination 
of equivalence regarding seafood should have measures involving a 
system of preventive controls that honors these seven principles. There 
is latitude regarding how countries mandate and operate such a system. 
For example, FDA regulations contemplate a mix of processor and 
government activities to fulfill the seventh principle, verification. 
Hypothetically, however, a country electing to have its regulatory 
agency conduct all verification activities would be given the 
opportunity to

[[Page 30600]]

demonstrate that its verification procedures meet the purposes and 
objectives of the U.S. requirement. It is worth noting that the 
purposes and objectives of each provision of the seafood HACCP 
regulations are addressed in the preambles to the regulations when 
issued as a proposal (59 FR 4142, January 28, 1994) and as a final rule 
(December 18, 1995).
    FDA's seafood HACCP requirements do not replace or supersede the 
Good Manufacturing Practices regulations for all foods in part 110 (see 
section VII.B.2 of this document). These provisions provide basic good 
manufacturing practices for all foods. Countries seeking a 
determination of equivalence must always demonstrate SPS measures that 
meet the objectives and purposes of part 110, regardless of the types 
of food that are to be the subject of the equivalence determination.
    In addition to the seven principles cited above, FDA's seafood 
HACCP regulations require processors to engage in a sanitation program 
as a prerequisite to HACCP (Sec. 123.11). The importance of good 
sanitation as a prerequisite to HACCP is internationally recognized, as 
exemplified by the discussions on this subject at the most recent 
meeting of the Codex Alimentarious Committee on Fish and Fishery 
Products. The FDA prerequisite program requires processors to monitor 
and keep records of how, on a daily basis, they are meeting the 
conditions and practices specified in part 110 relating to eight 
fundamental areas of sanitation. Countries seeking equivalence should 
have in place measures that meet the purposes and objectives of the 
U.S. prerequisite requirements for sanitation.

B. FDA's Seafood HACCP Guidelines

    FDA's seafood HACCP regulations provide the basic ground rules and 
principles for establishing HACCP systems. For example, processors must 
conduct a hazard analysis to determine what hazards must be controlled 
through the seven principles of HACCP. The regulations themselves 
contain little detailed guidance, however, regarding what the result of 
that hazard analysis should be in a given situation.
    It would not be sufficient for a seafood processor to implement a 
HACCP system that failed to properly identify all specific hazards that 
should be identified during the hazard analysis process or that failed 
to establish appropriate controls for those hazards. Therefore, to 
provide guidance on what FDA would consider adequate in implementing 
the regulations, FDA has issued guidelines entitled the ``Fish and 
Fishery Products Hazards and Controls Guide.''
    A country seeking a determination of equivalence for seafood should 
be able to demonstrate that hazards identified by its system, and the 
controls applied to those hazards, are appropriate to the purposes and 
objectives of the seven principles of HACCP. When making the 
determination for seafood, FDA will use the ``Fish and Fishery Products 
Hazards and Controls Guide'' in evaluating the exporting country's 
measures relating to the identification of hazards and the 
implementation of controls for those hazards.
    As with a domestic processor, the exporting country has the 
opportunity to demonstrate that hazards are being adequately addressed 
through controls other than those described in the guidelines. 
Moreover, during consultations with that country, FDA would be willing 
to consider arguments that it is mistaken in its judgment regarding 
hazards and controls (just as FDA is willing to listen to arguments of 
this nature from domestic processors). In any event, there must 
ultimately be agreement between the two countries on the outcome of 
hazard analysis as well as on appropriateness of the other elements of 
the program (e.g., the adequacy of controls for the identified 
hazards).
    At the outset, FDA plans to conduct its reviews on a product-by-
product basis, until such time as the agency has sufficient confidence 
that it is no longer necessary to demonstrate adequate hazard analysis 
and controls for each product to be exported from a particular country.

C. Raw Molluscan Shellfish

    The safety of molluscan shellfish for human consumption raw or 
partially cooked involves special considerations that must be taken 
into account when determining equivalence. Because they are sedentary, 
filter-feeding animals, molluscan shellfish can accumulate pathogens 
and other types of contaminants that are harmful to humans. For 
example, the positive relationship between harvesting areas 
contaminated by sewage pollution and shellfish-borne enteric disease is 
well established. Consequently, the condition of the water from which 
they are harvested is critical to the safety of molluscan shellfish, 
especially those that are intended to be consumed raw or partially 
cooked.
    The U.S. program to ensure the safety of raw molluscan shellfish 
centers around a classification system for opening and closing 
molluscan shellfish harvesting waters. This aspect of the program is 
run by the governments of U.S. States that possess shellfish harvesting 
waters. FDA audits and evaluates these State programs. The procedures 
and standards for classifying waters, and for conducting other aspects 
of the program, are in a document known as the Manual of Operations of 
the National Shellfish Sanitation Program. From FDA's perspective, the 
Manual of Operations has the status of a guideline. Each State in the 
program, however, has agreed to strictly adhere to it. Moreover, each 
State in the program has agreed to reject shellfish that have not been 
grown, harvested, or otherwise processed in accordance with the Manual 
of Operations.
    Several countries have entered into MOU's with FDA for the export 
of raw molluscan shellfish to the United States. (See FDA, 
International Cooperative Agreements (November 1996); available from 
National Technical Information Service.) Under these MOU's, the 
exporting countries have agreed to comply with the Manual of 
Operations, as if each were a U.S. State. Some of these countries have 
expressed an interest in renegotiating these agreements as equivalence 
agreements rather than compliance agreements.
    The Manual of Operations is comprehensive and highly detailed. 
Where differences exist between an exporting country's program and 
details in the Manual of Operations, judgments must be made about the 
significance of the differences. Equivalence determinations should 
focus on matters of significance. A country seeking a determination of 
equivalence with the United States for raw molluscan shellfish needs to 
demonstrate that its program meets the purposes and objectives of the 
Manual of Operations wherever a significant difference exists between 
its program and the provisions of the Manual.

    Dated: May 27, 1997.
William B. Schultz,
Deputy Commissioner for Policy.
[FR Doc. 97-14600 Filed 6-3-97; 8:45 am]
BILLING CODE 4160-01-F