[Federal Register Volume 68, Number 22 (Monday, February 3, 2003)]
[Proposed Rules]
[Pages 5428-5468]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-2444]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 1

[Docket No. 02N-0278]
RIN 0910-AC41


Prior Notice of Imported Food Under the Public Health Security 
and Bioterrorism Preparedness and Response Act of 2002

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Food and Drug Administration (FDA) is proposing a 
regulation that would require U.S. purchasers or U.S. importers or 
their agents to submit to FDA prior notice of the importation of food. 
The proposed regulation implements the Public Health Security and 
Bioterrorism Preparedness and Response Act of 2002 (the Bioterrorism 
Act), which requires prior notification of imported food to begin by 
December 12, 2003. The Bioterrorism Act requires FDA to issue final 
regulations that specify the period of advance notice by this date or a 
statutory notice provision requiring not less than 8 hours prior notice 
and not more than 5 days prior notice will take effect until a final 
rule is issued.

DATES: Submit written or electronic comments by April 4, 2003. Submit 
written or electronic comments on the collection of information by 
March 5, 2003.

ADDRESSES: Submit written comments to the Dockets Management Branch 
(HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, 
Rockville, MD 20852. Submit electronic comments to http://www.fda.gov/dockets/ecomments. Submit written comments on the information 
collection provisions to the Office of Information and Regulatory 
Affairs, Office of Management and Budget (OMB), New Executive Office 
Bldg., 725 17th St. NW., rm. 10235, Washington, DC 20503, ATTN: Stuart 
Shapiro, Desk Officer for FDA.

FOR FURTHER INFORMATION CONTACT: Mary Ayling, Center for Food Safety 
and Applied Nutrition (HFS-32), Food and Drug Administration, 5100 
Paint Branch Pkwy., College Park, MD 20740, 301-436-2428.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background and Legal Authority
II. Preliminary Stakeholder Comments
III. The Proposed Regulation
    A. Highlights of This Rule
    B. General Provisions
    1. What Imported Food is Subject to This Subpart? (Proposed Sec.  
1.276)
    2. What Definitions Apply to This Subpart? (Proposed Sec.  1.277)
    3. What Are The Consequences of Failing to Submit Adequate Prior 
Notice or Otherwise Failing to Comply With This Subpart? (Proposed 
Sec.  1.278)
    C. Requirements to Submit Prior Notice of Imported Food
    1. Who is Authorized to Submit Prior Notice for an Article of Food 
That is Imported or Offered for Import Into the United States? 
(Proposed Sec.  1.285)
    2. When Must the Prior Notice be Submitted to FDA? (Proposed Sec.  
1.286)
    3. How Must You Submit the Prior Notice? (Proposed Sec.  1.287)
    4. What Information Must be Submitted in a Prior Notice? (Proposed 
Sec.  1.288)
    5. What Changes are Allowed to a Prior Notice After it Has Been 
Submitted to FDA? (Proposed Sec.  1.289)
    6. Under What Circumstances Must You Submit a Product Identity 
Amendment to Your Prior Notice After You Have Submitted it to FDA? 
(Proposed Sec.  1.290)
    7. What is the Deadline for Product Identity Amendments Under Sec.  
1.290? (Proposed Sec.  1.291)
    8. How Do You Submit a Product Identity Amendment or an Arrival 
Update to a Prior Notice? (Proposed Sec.  1.292)
    9. What Are the Consequences if You Do Not Submit a Product 
Identity Amendment to Your Prior Notice? (Proposed Sec.  1.293)
    10. What Must You Do if the Anticipated Arrival Information 
(Required Under Sec.  1.288(k)(1)) Submitted in Your Prior Notice 
Changes? (Proposed Sec.  1.294)
IV. Analysis of Economic Impacts
    A. Preliminary Regulatory Impact Analysis
    1. Need for Regulation
    2. The Reason for the Regulation
    3. Proposed Rule Coverage
    4. Regulatory Options Considered
    B. Small Entity Analysis (or Initial Regulatory Flexibility 
Analysis)
    1. Number of Establishments Affected
    2. Costs per Entity
    3. Additional Flexibility Considered
    C. Unfunded Mandates
V. Paperwork Reduction Act of 1995
VI. Analysis of Environmental Impact
VII. Federalism
VIII. Comments
IX. References

I. Background and Legal Authority

    The events of September 11, 2001, highlighted the need to enhance 
the security of the U.S. food supply. Congress responded by passing the 
Bioterrorism Act, which was signed into law on June 12, 2002. The 
Bioterrorism Act includes a provision in Title III (Protecting Safety 
and Security of Food and Drug Supply), Subtitle A--Protection of Food 
Supply, section 307, which amends the Federal Food, Drug, and Cosmetic 
Act (the act) by adding section 801(m) (21 U.S.C. 381(m)). This new 
provision changes when FDA will receive certain information about 
imported foods by requiring the Secretary of Health and Human Services 
(the Secretary), after consultation with the Secretary of the Treasury, 
to issue implementing regulations by December 12, 2003, mandating prior 
notification to FDA of food that is imported or offered for import into 
the United States. Functions of the U.S. Customs Service (U.S. Customs) 
will soon be a part of the Department of Homeland Security (DHS). 
Future consultations may be with DHS instead of, or in addition to, the 
Department of Treasury.
    Section 801(a) of the act sets out procedures for imports under 
FDA's jurisdiction. When an FDA-regulated product is imported or 
offered for import, generally brokers submit entry information to the 
U.S. Customs on behalf of the importers of record. U.S. Customs then 
provides entry information and may deliver samples to FDA to enable 
admissibility decisions to be made. Under U.S. Customs authorities, 
entry of the merchandise must be made within 15 days after importation.
    U.S. Customs regulations provide for different kinds of entries. 
Commonly, merchandise is the subject of an entry for consumption (i.e., 
unrestricted, general use) under a basic importation and entry bond at 
the first port of arrival, but U.S. Customs authorities also allow for 
the entry of merchandise for transportation under a custodial bond from 
the port of arrival to another port where the consumption entry will be 
made. If no entry of any kind is made within 15 days, the article 
cannot move and the carrier or other authorized party must notify U.S. 
Customs and a general order (i.e., bonded or secure) warehouse that the 
article remains unentered. Generally, at that point, the article is 
moved to the bonded warehouse (or

[[Page 5429]]

such other facility as the U.S. Customs port director might require) 
and held pending the filing of an entry or other action.
    Accordingly, under current laws and regulations, there are times 
when FDA does not receive complete information about the food imports 
it regulates until days after the food has arrived in the U.S. and been 
moved from the port it arrived in.
    FDA receives information about imported food through its 
Operational and Administrative System for Import Support (OASIS). Entry 
information is usually provided electronically to OASIS by U.S. Customs 
via its Automated Broker Interface (ABI) of the Automated Commercial 
System (ACS). The information that is currently supplied to FDA through 
this system includes: the entry type, the entry number (both ACS line 
number and FDA line identifier); the mode of transportation; the 
carrier code; the name and address of the manufacturer, shipper, 
importer, and ultimate consignee; the country of origin; the FDA 
product code; a written description of the product in common business 
terms; and the quantity. If neither FDA nor U.S. Customs wishes to 
examine or detain the entry, the product is allowed to proceed.
    By adding section 801(m) to the act, Congress changed when 
information about FDA-regulated food imports must be provided to FDA. 
The major components of new section 801(m) of the act are:
    [sbull] Requires prior notice of imported food shipments beginning 
on December 12, 2003;
    [sbull] Provides that, if adequate notice is not provided, the food 
shall be refused admission and held until adequate notice is given;
    [sbull] Amends section 301 of the act to make it a prohibited act 
to import or offer for import an article of food in violation of any 
requirements under section 801(m) of the act; and
    [sbull] Mandates that prior notice be submitted no less than 8 
hours and not more than 5 days before it is imported or offered for 
import, if final rules are not in effect on December 12, 2003, and 
until such rules become effective.
    In addition to section 307 of the Bioterrorism Act, which 
establishes the requirement for prior notice for food imported or 
offered for import into the U.S., FDA is relying on sections 701(a) and 
701(b) of the act (21 U.S.C. 371(a) and (b)) in issuing this proposed 
rule. Section 701(a) authorizes the agency to issue regulations for the 
efficient enforcement of the act, while section 701(b) of the act 
authorizes FDA and the Department of Treasury to jointly prescribe 
regulations for the efficient enforcement of section 801 of the act.

II. Preliminary Stakeholder Comments

    On July 17, 2002, FDA sent an open letter to the members of the 
public interested in food issues outlining the four provisions in Title 
III of the Bioterrorism Act that require FDA to issue regulations in an 
expedited time period, and FDA's plans for implementing them (see 
http://www.cfsan.fda.gov/[tilde]dms/sec-ltr.html). In the letter, FDA 
invited stakeholders to submit comments to FDA by August 30, 2002, for 
FDA's consideration as it developed this proposed rule. FDA also held 
meetings with representatives of industry, consumer groups, other 
Federal agencies, and foreign embassies after sending out the July 17, 
2002, letter, to solicit stakeholder comments. In response to these 
solicitations, FDA received 37 comments regarding section 307 of the 
Bioterrorism Act.
    FDA has considered all the comments received by August 30, 2002. 
FDA will consider all comments we have received so far with the 
comments we receive during the public comment period on this proposed 
rule in developing the final rule. Several broad themes emerged from 
the comments FDA received on or before August 30, 2002, including:
    [sbull] Maintaining flexibility when setting the minimum time 
required for prior notice and taking into account different modes of 
transportation, the nature of perishable food, and the needs of 
businesses which operate close to the U.S. border;
    [sbull] Permitting the prior notice to be amended;
    [sbull] Integrating with U.S. Customs and other agencies to avoid 
duplication of notification requirements;
    [sbull] Allowing a qualified agent to submit prior notices for 
authorized submitters;
    [sbull] Providing immediate acknowledgement of the submission, if 
prior notice is submitted electronically;
    [sbull] Defining ``food'' consistent with the act's definition;
    [sbull] Extending FDA's hours of operation;
    [sbull] Complying with international trade obligations; and
    [sbull] Including a model of the Prior Notice screen.

III. The Proposed Regulation

    This rule would enhance FDA's ability to inspect imported food when 
it arrives in the U.S. This in turn would result in a significant 
improvement in FDA's ability to deter, prepare for, and respond 
effectively to bioterrorism and other public health emergencies that 
might result from imported food. Additionally, should an outbreak or a 
bioterrorism event occur, prior notice would enhance FDA's ability to 
respond to the event by enhancing FDA's ability to prevent entry of 
shipments that appear related and to facilitate product tracking for 
containment. This proposed rule would facilitate product tracking 
because we would know, at the time of receipt of prior notice, the name 
and address of the actual importer and consignee in the United States. 
We could then use the U.S. importer and consignee information to 
follow-up and trace the location of the goods. FDA thus would be better 
able to ensure that consumers in the United States do not eat food that 
is contaminated (whether intentionally or otherwise). This information 
would also assist FDA and other authorities in determining the source 
and cause of problems and in communicating with affected firms. 
Finally, we believe that the information provided by prior notice would 
help us use our foreign inspection resources more effectively.
    In establishing and implementing this proposed rule, FDA will 
comply fully with its international trade obligations, including the 
applicable World Trade Organization (WTO) agreements and the North 
American Free Trade Agreement (``NAFTA''). For example, we believe this 
proposed rule is not more trade restrictive than necessary to meet the 
objectives of the Bioterrorism Act.

A. Highlights of This Rule

    The key features of this proposed rule are:
[bull] The purchaser or importer of an article of food (or their agent) 
who resides or maintains a place of business in the United States 
generally is responsible for submitting the notice.
[bull] The notice must be submitted by noon of the calendar day before 
the day of arrival.
    [sbull] Amendments relating to product identity information are 
allowed under specified circumstances.
    [sbull] Updates about arrival information are required if plans 
change.
[bull] The notice must be submitted electronically through the Prior 
Notice System unless the FDA system is not functioning. The FDA Prior 
Notice System will be designed to provide an automatic electronic 
acknowledgment of receipt of a complete prior notice submission, with a 
time and date ``stamp.'' The notice must contain information that 
identifies:
    [sbull] The individual and firm submitting the prior notice;
    [sbull] The entry type and U.S. Customs

[[Page 5430]]

 ACS entry number or other U.S. Customs identification number 
associated with the import;
    [sbull] If the article of food is under hold under proposed Sec.  
1.278, the location where it is being held;
    [sbull] The identity of the article of food being imported or 
offered for import:
    - The complete FDA product code;
    - The common or usual name or market name;
    - The trade or brand name, if different from the common or usual 
name or market name;
    - The quantity described from smallest package size to largest 
container; and
    - The lot or code numbers or other identifier of the food if 
applicable;
    [sbull] The manufacturer;
    [sbull] All growers, if known;
    [sbull] The country from which the article originates;
    [sbull] The shipper;
    [sbull] The country from which the article of food was shipped;
    [sbull] The anticipated arrival information;
    [sbull] Information related to U.S. Customs entry process;
    [sbull] The importer, owner, and consignee; and
    [sbull] The carrier.
[bull] Amendments relating to product identity are allowed if complete 
information about product identity does not exist by the deadline for 
prior notice for the planned shipment:
    [sbull] Information regarding identity of the article may be 
amended once;
    [sbull] Amendments may not be used to change the nature of the 
article of food;
    [sbull] Quantity may be amended; and
    [sbull] Any amendments must be submitted no later than 2 hours 
prior to arrival.
[bull] If a change occurs in the anticipated port of entry or 
anticipated time of arrival stated in the prior notice, the information 
must be updated.
[bull] The proposed rule does not apply to:
    [sbull] Food that is carried by an individual entering the United 
States in that individual's personal baggage for that individual's 
personal use; or
    [sbull] Meat food products, poultry products, and egg products that 
at the time of importation are subject to the exclusive jurisdiction of 
the U.S. Department of Agriculture (USDA).

B. General Provisions

1. What Imported Food is Subject to This Subpart? (Proposed Sec.  
1.276)
    Under new section 801(m)(1) of the act, prior notice is required 
for all food ``being imported or offered for import into the United 
States.'' Accordingly, prior notice requirements apply to all food that 
is brought across the U.S. border (with the following four exceptions) 
regardless of whether the food is intended for consumption in the 
United States. In other words, FDA believes that food that is brought 
into the United States to be put into foreign trade zones, or for 
transshipment or reexport immediate or otherwise, is ``imported or 
offered for import'' and thus must comply with the prior notice 
requirements.
    The proposed rule establishes four categories of imported food that 
are not subject to the prior notice requirements. In each of these 
cases, FDA believes that the statutory language requires this result.
    The first category is food that individual travelers carry in their 
personal baggage for their own personal enjoyment. Although we believe 
that this food is imported into the United States, the information that 
section 801(m)(1) of the act requires in a prior notice, in conjunction 
with the purpose of the provision, demonstrates that Congress did not 
intend prior notice to apply to food that travelers bring into the 
United States in their personal baggage for personal use (i.e., 
consumption by themselves, family or friends, not for sale to anyone). 
In particular, under section 801(m)(1) of the act, a prior notice must 
contain the identity of the shipper of the food. When travelers bring 
food back from their travels in their personal baggage for their own 
use, we do not believe that Congress intended for us to characterize 
such travelers as ``shippers'' for purposes of section 801(m) of the 
act. We seek comment on this reasoning. However, when travelers bring 
food into the United States in their personal baggage to sell or 
otherwise distribute in a broader fashion, the travelers would seem to 
be acting for or on behalf of other entities. Under these 
circumstances, these travelers would seem to be shippers and subject to 
the provisions of this proposed rule.
    The remaining three categories of imported food not subject to the 
prior notice requirement are those foods within the exclusive 
jurisdiction of USDA. In accordance with section 801(m)(3)(B) of the 
act, FDA is proposing to exempt from the requirements of this 
regulation imported foods that, at the time of importation, are subject 
to USDA's exclusive jurisdiction under the Federal Meat Inspection Act 
(21 U.S.C. 601 et seq.), the Poultry Products Inspection Act (21 U.S.C. 
451 et seq.), or the Egg Products Inspection Act (21 U.S.C. 1031 et 
seq.).
2. What Definitions Apply to This Subpart? (Proposed Sec.  1.277)
    The following definitions are used throughout the proposed rule:
    a. The act. The proposed rule defines ``the act'' as the Federal 
Food, Drug, and Cosmetic Act. The proposed rule applies the definitions 
of terms in section 201 of the act to such terms as used in the 
proposed rule.
    b. Calendar day. The proposed rule defines ``calendar day'' as 
``every day shown on the calendar.''
    c. Country from which the article of food was shipped. The proposed 
rule defines ``country from which the article of food was shipped'' as 
the country in which the article of food was loaded onto the conveyance 
that brings it to the United States. A conveyance is the means of 
transportation, e.g., ship, truck, car, van, plane, railcar, etc., not 
the shipping container that could be moved from a ship to a truck to a 
train bed.
    FDA is requesting comment on whether this term should include the 
countries of intermediate destination.
    d. Food. FDA is proposing to refer to the definition of ``food'' in 
section 201(f) of the act (21 U.S.C. 321(f)), which is: ``(1) articles 
used for food or drink for man or other animals, (2) chewing gum, and 
(3) articles used for components of any such article.'' FDA also is 
proposing to include examples of products that are considered food 
under section 201(f) of the act. Examples listed in the proposed rule 
include: fruits; vegetables; fish; dairy products; eggs; raw 
agricultural commodities for use as food or components of food; animal 
feed, including pet food; food and feed ingredients and additives, 
including substances that migrate into food from food packaging and 
other articles that contact food; dietary supplements and dietary 
ingredients; infant formula; beverages, including alcoholic beverages 
and bottled water; live food animals (such as hogs and elk); bakery 
goods; snack foods; candy; and canned foods. FDA already receives entry 
information on all these articles of food as defined in section 201(f) 
of the Act.
    With respect to articles that can be used for food and non-food 
uses, FDA believes that prior notice is required if the article is 
being imported for use as food.
    e. Originating country. The proposed rule defines ``originating 
country'' as ``the country from which the article of food originates.'' 
FDA is proposing this definition to be consistent with the language 
used in the Bioterrorism Act.

[[Page 5431]]

This proposed definition is also consistent with the definition that 
describes one of the critical data elements that brokers and other 
filers currently submit to FDA's OASIS via ACS when entry is made. The 
proposed definition refers to the country where the product that is 
shipped to the United States was grown or produced, depending on the 
kind of article. If the article is fresh produce, for example, the 
originating country is most likely to be the country where it is grown 
and harvested. If, on the other hand, the article is a processed food, 
e.g., canned vegetables, the originating country is likely to be the 
country in which the vegetables were canned. With respect to wild-
caught fish or seafood that is harvested in the waters of the United 
States or by a U.S. flagged vessel or that is processed aboard a U.S. 
flagged vessel, FDA is proposing that the originating country be the 
United States. Otherwise, the originating country is the country under 
which the vessel is flagged. FDA aligned this aspect of the proposed 
definition of ``originating country'' with the principles proposed by 
USDA's Agricultural Marketing Service guidance published in the Federal 
Register on October 11, 2002, in response to the Farm Security and 
Rural Investment Act of 2002 (commonly known as the 2002 Farm Bill).
    FDA recognizes that this proposed definition may not be identical 
in all respects to the meaning of the term ``country of origin'' 
traditionally used by U.S. Customs. However, FDA believes that using 
the U.S. Customs meaning would not serve the purpose of the 
Bioterrorism Act. The U.S. Customs term primarily serves tariff, quota, 
and other trade purposes; it does not provide information needed for 
the evaluations that Congress has directed FDA to make under the 
Bioterrorism Act and the act. We seek comment on this interpretation 
and our proposed definition of ``originating country''. FDA also seeks 
comment on whether its use of a different term will have any impact, 
and if so, what that impact will be.
    f. Port of entry. For purposes of the proposed rule, FDA is 
defining ``port of entry'' as ``the water, air, or land port at which 
the article of food is imported or offered for import into the United 
States, i.e., the port where food first arrives in the United States'' 
FDA is proposing this definition because the port where the food 
arrives in the United States may be different than the port where the 
entry of the article of food is processed for U.S. Customs purposes, 
i.e., where the article is ``entered.'' Under U.S. Customs statutes, 
products can be imported into one port and then transported to another 
port under a custodial bond before a consumption entry is filed. For 
example, food may be imported into the United States from Canada 
through Buffalo, NY, but not be entered for consumption with U.S. 
Customs until it reaches St. Louis, MO, several days later. In this 
example, under FDA's proposed definition, the port of entry is Buffalo, 
NY. If food is imported into the United States from Mexico through Otay 
Mesa, CA, for transport through the United States for exportation into 
Canada, the port of entry under FDA's proposed definition is Otay Mesa, 
CA.
    The prior notice authority in the Bioterrorism Act is intended to 
give FDA better tools to deter, prepare for, and respond to 
bioterrorism and other food related problems. Given this purpose, 
``port of entry'' must be defined as the port of arrival, that is, the 
location where the food first physically appeared in the United States. 
Allowing food that is presented for importation into the United States 
without prior notice to be shipped around the country and potentially 
lost to government oversight simply is not consistent with the 
Bioterrorism Act's stated purpose. FDA believes that its ability to 
protect U.S. consumers from terrorism or other food-related emergencies 
will be strongest if food can be examined, and if necessary, held at 
the point when it first arrives in the United States. FDA requests 
comments on the proposed definition of ``port of entry.''
    g. You. The proposed definition of ``you'' is the description of 
the party responsible for submitting the prior notice in proposed Sec.  
1.285. FDA is proposing to define ``you'' in proposed Sec.  1.277(f) as 
the ``purchaser or importer of an article of food who resides or 
maintains a place of business in the United States, or an agent who 
resides or maintains a place of business in the United States acting on 
the behalf of the U.S. purchaser or importer'' or, ``if the article of 
food is imported with the intention of in-bond movement through the 
United States for export, i.e., Transportation for Exportation or 
Immediate Export entries, the arriving carrier or, if known, the in-
bond carrier.''
3. What Are the Consequences of Failing to Submit Adequate Prior Notice 
or Otherwise Failing to Comply With This Subpart? (Proposed Sec.  
1.278)
    As set out in section 801(m)(1) of the act, proposed Sec.  1.278(a) 
provides that, if an article of food is imported or offered for import 
with no prior notice or inadequate prior notice, the food shall be 
refused admission under section 801(m) of the act. Examples of 
inadequacy are untimely, inaccurate, or incomplete prior notice.
    As set out in section 801(m)(2)(B)(i) of the act, proposed Sec.  
1.278(b) provides that if the food is refused admission under section 
801(m), it must be held at the port of entry unless FDA directs its 
removal to a secure facility.
    In accordance with section 801(m)(2)(B)(i), proposed Sec.  1.278(c) 
provides that FDA may require that an article of food be held in a 
secure facility as appropriate. FDA may determine such storage is 
appropriate because of the condition of the product, circumstances of 
importation, or other information available to the government, e.g., a 
concern with the safety or security of the article of food or space 
limitations in the port of entry.
    Examples of secure facilities include U.S. Customs Bonded 
Warehouses, Container Freight Stations, and Centralized Examinations 
Stations. Perishables, however, may not be stored in U.S. Customs 
Bonded Warehouses; thus, FDA may direct fresh produce or seafood that 
requires storage to another facility. FDA and U.S. Customs plan to 
issue guidance for their field offices that will identify locations of 
secure storage facilities that may be used for food required to be held 
for failure to provide adequate prior notice.
    In order to minimize confusion about who is responsible for making 
arrangements if food is refused admission under section 801(m) of the 
act, proposed Sec.  1.278(d) provides that if FDA requires the article 
of food to be held at the port of entry or in a secure facility, the 
carrier or the person who submitted the prior notice must arrange for 
the movement of the food under appropriate custodial bond and promptly 
notify FDA of the location. This provision also makes clear that the 
purchaser, owner, importer, or consignee is responsible for 
transportation and storage expenses. We note that when section 801(m) 
of the act requires that food be held, it does not appear to mandate 
that the government take actual physical custody of the goods; instead 
it limits both the movement of the goods and the potential storage 
locations, thereby making government oversight straightforward. As 
described previously, U.S. Customs has identified a well-established 
network of storage facilities that are secure. When these storage 
facilities are used, charges are borne by the private parties. We thus 
believe that although Congress intended strict controls over food 
refused admission under Sec.  801(m), it did not intend to require FDA 
or U.S. Customs

[[Page 5432]]

to take custody of or pay for the holding of such food. We seek comment 
on this issue.
    In accordance with section 801(m)(2)(B)(i) of the act, proposed 
Sec.  1.278(e)(1) provides that the article of food must be held at the 
port of entry or in the secure facility until prior notice is submitted 
to FDA in accordance with this subpart, FDA has examined the prior 
notice, FDA has determined that the prior notice is adequate, and FDA 
has notified the U.S. Customs Service and the person who submitted the 
prior notice that the article of food no longer is subject to refusal 
of admission under section 801(m)(1) of the act.
    FDA recognizes that food may be shipped in the same container or 
truck with non-food items. Since articles that are not food are not 
subject to this proposed rule, when mixed or consolidated imported 
freight contains articles of food that must be held at the port of 
entry or moved to a secure facility, those articles that have been 
refused must be dealt with before the rest of the shipment proceeds.
    In accordance with section 801(m)(2)(B)(i) of the act, proposed 
Sec.  1.278(e)(2) makes clear that food under a hold may not be 
delivered to the importer, owner, or consignee and that section 801(b) 
of the act does not apply. Therefore, delivery will not be allowed 
under a basic importation or entry bond. Even though delivery to them 
is not allowed, FDA believes that importers, owners, and consignees of 
food that has been refused under 801(m) of the act can make 
arrangements for food to be held: these arrangements can be made 
without taking possession of the food.
    The proposed rule (proposed Sec.  1.278(f)) differentiates between 
a refusal of admission under section 801(m)(1) of the act (prior 
notice) and refusal of admission under section 801(a) and other 
provisions of the act or other U.S. laws. The proposed rule makes clear 
that a determination that an article of food is no longer subject to 
refusal of admission under section 801(m)(1) of the act does not mean 
that it will be admitted to the United States. The other provisions of 
the act and other U.S. laws that currently apply to food imported or 
offered for import to the United States still apply and also govern 
admissibility.
    Although FDA believes that information in a prior notice will help 
facilitate admissibility decisions under section 801(a), FDA is not 
proposing to specify in the rule that it will make an 801(a) 
admissibility decision at the time it receives a prior notice. A prior 
notice is a pre-entry submission to comply with requirements under 
section 801(m). FDA will make the 801(a) decision when the complete 
entry information is submitted to U.S. Customs and transmitted to FDA. 
Normally (in about 98 percent of the cases), this is accomplished by 
electronically filing certified entry information with U.S. Customs 
ACS, which electronically transmits it to FDA's OASIS System. FDA's 
801(a) admissibility decisions are transmitted from OASIS to the filer.
    In accordance with section 301(ee) of the act, the proposed rule 
(Sec.  1.278(g)) provides that it is a prohibited act to import or 
offer for import an article of food without complying with the 
requirements of section 801(m) of the act or otherwise violate any 
requirement under section 801(m). The proposed rule explains that, 
under section 302 of the act, the United States can bring a civil 
action in federal court to enjoin persons who commit a prohibited act 
and, under section 303 of the act, can bring a criminal action in 
Federal court to prosecute persons who commit a prohibited act. The 
proposed rule also explains that, under section 305a of the act, FDA 
can seek debarment of any person who has been convicted of a felony 
relating to importation of food into the United States.
    FDA notes that there are several differences between refusal of 
admission under sections 801(a) and (b) of the act and refusal of 
admission under new section 801(m). First, in section 801(m) of the 
act, Congress did not provide for any kind of application, petition, or 
appeal of FDA's determination that an article shall be refused 
admission for failing to comply with prior notice requirements. 
Congress provided that an article that has been refused admission under 
section 801(m) of the act can be admitted only if the necessary 
information is subsequently submitted, examined by FDA, and found to be 
adequate. Second, food refused admission under section 801(m) cannot be 
delivered under bond pursuant to section 801(b) and, as we describe 
elsewhere, must be held at the U.S. port of entry. Finally, the 
Bioterrorism Act does not provide specific procedures for the 
disposition of food refused admission under section 801(m) when no 
subsequent adequate notice is submitted. Section 801(a) and (b) provide 
that food refused admission under section 801(a) must be destroyed or 
reexported. FDA thus believes that the general requirements of Title 19 
of the United States Code and the U.S. Customs implementing regulations 
that apply to imports for which entry has not been made apply in these 
circumstances.
    Under 19 U.S.C. 1448 and 1484, entry of merchandise must be made 
within the time period prescribed by regulation, which is 15 days after 
the food arrives in the United States. See 19 CFR Part 1422. If entry 
is not made within this timeframe, the carrier or other authorized 
party is required to notify U.S. Customs and a general order warehouse. 
Generally, at that point the warehouse must arrange to take and store 
the food at the expense of the consignee. The disposition of this 
merchandise is governed by 19 U.S.C. 1491 and the implementing 
regulations at 19 CFR Part 127. Typically, after 6 months, unentered 
merchandise is deemed unclaimed and abandoned and can be disposed of by 
the United States. Before this 6 month period runs, however, such 
merchandise can be reexported. FDA and U.S. Customs plan to develop 
additional guidance to explain how the agencies will handle food when 
it must be placed in general order warehouses due to refusal under 
section 801(m) of the act.

C. Requirements to Submit Prior Notice of Imported Food

1. Who is Authorized to Submit Prior Notice for an Article of Food That 
is Imported or Offered for Import Into the United States? (Proposed 
Sec.  1.285)
    FDA is proposing that a purchaser or importer of an article of food 
who resides or maintains a place of business in the United States is 
authorized to submit prior notice. FDA is also proposing that an agent 
who resides or maintains a place of business in the United States 
acting on the behalf of the U.S. purchaser or U.S. importer is 
authorized to submit prior notice. FDA believes that the customs 
broker/filer should be authorized to be a submitter if it is the U.S. 
agent of the U.S. importer or U.S. purchaser.
    FDA is proposing that, if the article of food is imported for in-
bond movement through the United States for export, the prior notice 
must be submitted by the arriving carrier or, if known, the in-bond 
carrier. The types of entries that cover these importations are known 
to FDA and U.S. Customs as Transportation for Exportation (T&E) and 
Immediate Export (IE).
    FDA believes that the proposed rule should specify which parties 
are responsible for submitting prior notice and that this specificity 
will minimize confusion about who should or will submit prior notice 
among the several parties who can be involved in importing food. Less 
confusion will lead

[[Page 5433]]

to greater compliance. Less confusion will also mean that fewer imports 
will be delayed for lack of prior notice.
    FDA chose the U.S. entities in proposed Sec.  1.285(a) for several 
reasons. First, we do not believe that there is importation of food to 
the United States that does not involve one of the U.S. entities 
identified, except in those instances where the food is imported with 
the intention of in-bond movement through the United States for export 
(where the proposed rule authorizes submission by the arriving carrier 
or, if known, the in-bond carrier). We also believe that it is the U.S. 
importer or U.S. purchaser who orders or buys the article of food, 
thereby initiating its importation into the United States. These 
persons thus should possess, or have the ability to obtain, the 
information required to be submitted in the prior notice within the 
time period in proposed Sec.  1.286. As U.S. businesses, these persons 
are also more likely to already have web access than some foreign 
businesses, which reduces potential costs and impacts on trade. 
Finally, placing responsibility on these U.S. entities will facilitate 
FDA's ability to conduct audits, investigations, and inspections, which 
will facilitate efficient enforcement of section 801(m).
    FDA notes that the submitter is the entity responsible for ensuring 
the adequacy and accuracy of the prior notice. For the reasons 
described above, FDA believes that these entities are in the best 
position to do so.
    FDA seeks comment on whether others should be authorized to provide 
prior notice and, if so, why.
2. When Must the Prior Notice be Submitted to FDA? (Proposed Sec.  
1.286)
    Based on consideration of the factors set out in the statute, FDA 
is proposing that the prior notice must be submitted to FDA no later 
than noon of the calendar day before the day the article of food will 
arrive at the border crossing in the port of entry.
    Section 801(m)(1) of the act makes clear that a primary purpose of 
prior notice is to enable inspections or other FDA action upon arrival 
of food in the United States to protect consumers in the United States 
from food imports that may be at risk of intentional adulteration or 
that may pose other risks. Section 801(m)(2)(A) of the act states that 
the deadline for prior notice ``shall be no less than the minimum 
amount of time necessary for [FDA] to receive, review, and 
appropriately respond to such notification.'' In addition, section 
801(m)(2)(A) provides that FDA may take other factors into 
consideration when deciding on the deadline for prior notice, 
specifically: its effect on commerce; the locations of various ports; 
various modes of transportation; types of food; and any other 
consideration. However, although the statute gives FDA some latitude in 
setting the deadline for prior notice, it nonetheless makes clear that 
we must establish a timeframe for prior notice that allows FDA to 
receive, review, and appropriately respond to all prior notices. 
Finally, section 801(m)(1) states, ``Nothing in this section may be 
construed as a limitation on the port of entry for an article of 
food.''
    Reading section 801(m) as a whole and in conjunction with other 
provisions in the Bioterrorism Act, FDA believes that Congress intended 
that FDA assess the information in the prior notice to determine if 
inspection upon arrival or other action is appropriate. For FDA to 
inspect, upon arrival, food imports that may be at risk of intentional 
adulteration or that may pose other risks to U.S. consumers, FDA must 
be able to effectively deploy its staff. Although FDA inspectors are 
located throughout the United States, FDA does not have staff located 
at or near all of the 250 ports where over 4.7 million entry lines of 
food were entered in fiscal year (FY) 2001. Port locations are 
established by U.S. Customs and, under the statute, FDA cannot limit 
ports at which food may be imported or offered for import. Thus, FDA 
must have enough time, on a daily basis, to process the information in 
the approximately 20,000 prior notices we expect to receive and to send 
inspectors to any port in the United States if necessary. FDA believes 
that the minimum amount of time necessary to ensure it can plan and 
that its staff can travel to the arrival point is noon of the calendar 
day before the day the article arrives at the border crossing. FDA 
believes that this timeframe will give it the minimum time it needs to 
conduct its assessments and provide the information to its field 
offices so they can allocate their inspectional resources on a daily 
basis and plan any necessary travel.
    Before proposing this deadline FDA also considered its potential 
effects on imported food. FDA believes that in most circumstances 
information regarding imports is generated when the article to be 
imported is ordered or purchased, not when it is shipped to the United 
States. FDA has examined a selection of imported food documents and 
compared dates of these documents with the dates of arrival in the 
United States and U.S. Customs entry. FDA asked several field offices 
to send entry documents with invoices covering imported foods. Sixty-
four packages of entry documents were received in response to this 
request. The dates of the invoices were compared to the dates of 
arrival and receipt in OASIS. In 48 cases (75 percent), the invoice 
date or date of sale preceded the arrival date by least 1 day. In 31 
cases (48 percent), the invoice or sale date preceded the arrival date 
by 2 or more days. In 16 cases (25 percent), the invoice date was the 
same as the arrival date. FDA invites comment on the representativeness 
of this sampling. Based on this examination, we believe that orders are 
normally placed a day or more prior to shipment. See the compilation of 
imported food documents that FDA has placed in the administrative 
record and the docket (Ref. 1). FDA believes that the information 
required for prior notice therefore generally does exist by noon of the 
calendar day before the day of arrival. FDA recognizes, however, that 
currently one person may not possess all of the information and that 
some practices regarding the flow of information about food imports 
will have to change to ensure that the submitter has all of the 
information needed to submit a prior notice for the food shipment by 
the deadline.
    FDA believes that this proposed deadline will have the most impact 
on those who import food by truck and rail over the land borders, with 
less effect at airports, and almost no effect at water ports. However, 
even on the land borders, FDA believes that the information required by 
prior notice will be, in most cases, sufficiently fixed by noon of the 
calendar day before arrival to allow the U.S. importer or U.S. 
purchaser, or their U.S. agents, to submit prior notice to FDA that 
meets the proposed requirements without slowing down the shipment.
    FDA is proposing to allow submitters to amend prior notices for 
that portion of the product identity information that cannot be 
completed, because it does not yet exist by noon of the calendar day 
prior to arrival. We believe this may be the case with product identity 
for fresh products imported from countries close to the United States 
(e.g., Canada or Mexico). For example, fresh seafood may be ordered as 
``catch-of-the-day'' from Canada or Mexico; the importer intends to 
import the fish the day after the order is placed, but cannot find out 
what exact species and quantity will arrive by the deadline for prior 
notice because the boat is not due back until late afternoon on the day 
prior notice is due. Another example is an importer who orders fresh 
lettuce for import the day after the order but cannot find out the 
exact variety and quantity of lettuce

[[Page 5434]]

that will be shipped by the deadline for prior notice because the field 
has not been harvested or the supplier has not yet received the day's 
harvest by the time prior notice of the planned shipment is due. In 
these instances, the importer knows generally what kind of product has 
been ordered, but not the exact type (species for fish and variety for 
lettuce). The proposed amendment process would allow submitters who 
cannot report complete product identity information to FDA by the prior 
notice deadline because it does not yet exist to maintain current 
business practices. However, it would provide FDA some of the 
information that it needs to begin the assessment of whether a 
particular shipment of food should be investigated and if so, to ensure 
that FDA personnel can be available when the food arrives at the port. 
FDA does not intend this amendment process to apply when a shipper 
``tops off a container'' by filling unused space in the container or 
truck bed with additional different food products.
    FDA also recognizes that information concerning the anticipated 
arrival may change after the article is ordered due to unforeseen 
traffic or weather issues and has accommodated those potential changes 
by requiring updates of that information.
    ``Noon'' means 12:00 p.m. in the time zone in which the FDA office 
with responsibility over the anticipated port of entry resides. For 
example, if the anticipated port of entry is the Peace Bridge in the 
Buffalo, NY, and the anticipated date of entry is January 9, 2004, the 
prior notice must be submitted to the FDA Prior Notice System before 
noon Eastern Standard Time (EST) on January 8, 2004.
    FDA is proposing that prior notice may not be submitted until all 
of the information required by Sec.  1.288 exists except as provided in 
Sec.  1.288(e)(2) and Sec.  1.290, both of which relate to product 
identity amendments. FDA is also proposing that the prior notice may 
not be submitted more than 5 days before the anticipated date of 
arrival of the food at the anticipated port of entry. For example, if 
the anticipated date of arrival is January 12, 2004, the prior notice 
may not be submitted before January 7, 2004. This 5 day limitation is 
consistent with the limitation set by Congress in section 307(a)(2)(A) 
of the Bioterrorism Act. Such limitations are necessary to ensure that 
FDA's Prior Notice System is not overburdened with premature 
information or submissions that may need to be cancelled and 
resubmitted.
    3. How Must You Submit the Prior Notice? (Proposed Sec.  1.287)
    FDA is proposing that the prior notice, amendments, and updates 
must be submitted electronically to FDA through FDA's Prior Notice 
System. The web-based FDA Prior Notice System is under development with 
an anticipated completion date of no later than October 12, 2003. A 
``mock-up'' of the Prior Notice Screen a submitter would see once he or 
she accessed this system is part of this proposed rule.
    FDA has consulted with the U.S. Customs Service of the Department 
of the Treasury about this proposed rule. FDA and U.S. Customs 
considered modifying ACS to accommodate the new prior notice 
requirement. However, during these consultations, U.S. Customs 
determined that ACS could not be modified to accommodate the data 
requirements of the prior notice regulation by the December 12, 2003, 
statutory deadline. Currently, U.S. Customs is focusing its resources 
on developing the Automated Commercial Environment (ACE) as a 
replacement for ACS, and integrating its other electronic systems, such 
as the Automated Manifest System (AMS). FDA is participating in the 
development of ACE through the International Trade Data System (ITDS) 
Board and directly through integration of FDA and U.S. Customs business 
practices, policies, and border cooperation. FDA intends to allow prior 
notice to be submitted through ACE when it is fully operational. 
However, implementation of ACE is not expected before 2005. Given these 
circumstances, FDA and U.S. Customs agreed that to meet the statutory 
deadline, an FDA stand-alone, web-based electronic system to execute 
receipt of prior notice would be necessary until ACE is fully 
operational.
    FDA seeks to minimize the submission of duplicative information. 
The Bioterrorism Act requires certain prior notice information to be 
submitted to FDA. FDA seeks comments on the extent to which these 
proposed prior notice requirements would result in persons submitting 
duplicative prior notice information to more than one federal agency. 
FDA also seeks comments on whether there is any way, consistent with 
the requirements and purpose of the Bioterrorism Act, to minimize the 
duplication of information required to be submitted to the federal 
government under these prior notice requirements. As discussed 
previously, FDA and U.S. Customs are working together on their systems 
to allow prior notice to be submitted to FDA through U.S. Customs 
System when ACE is fully operational.
    FDA is proposing to require electronic submission of prior notice 
because we believe an electronic system will be the least burdensome 
and most efficient way to implement and enforce the requirement of 
section 801(m) of the act. Nationwide, in FY 2001 FDA received over 4.7 
million food entry lines; therefore, we believe a paper system would be 
unmanageable for FDA, require a longer deadline, and could slow down 
imports for some food products. Moreover, we currently receive the 
majority of information we base admissibility decisions on 
electronically from U.S. Customs. Thus, we already have the electronic 
capability to process and screen the information. We also believe that 
an electronic system will mean fewer errors than a paper system. 
Another important benefit of electronic submission will be immediate 
and accurate communication between FDA offices and between FDA offices 
and U.S. Customs about arrivals and adequacy of the prior notice.
    An electronic prior notice system will have several key features 
that will benefit firms that export to the United States, U.S. 
importers, and FDA. First, the volume of submissions on a daily basis 
is expected to be such that electronic submission and processing are 
the only practical way for FDA to manage prior notice--FDA expects, 
upon average, 20,000 submissions per day. Second, an electronic system 
will be able to provide instantaneous confirmation of receipt of the 
prior notice. Third, an electronic system will be able to ensure that 
the form is filled out completely (though not accurately) by being set 
to reject submissions until all of the mandatory fields are completed. 
Finally, an electronic system will make it more likely that information 
in the submissions is ``legible'' to FDA.
    In contrast, prior notice by mail, fax, or e-mail would have 
several significant downsides for firms that export to the United 
States, U.S. importers, and FDA. All three of these methods would 
require FDA to input the data manually to process it, which means that 
FDA would need to set a longer deadline for submission or devote 
resources on data entry that are better spent on tasks like 
inspections. Those whose paper submissions were not legible or complete 
would not know until their shipments arrived at the port and were 
refused admission.
    Moreover, FDA believes that almost all proposed submitters have 
access to the Internet, either within their companies or through public 
libraries, copy centers, schools, or Internet cafes, as well as through 
agents or brokers. FDA requests comments on this assumption. Because 
most of the

[[Page 5435]]

persons responsible for submitting the prior notice must reside or 
maintain a place of business in the United States, the FDA Prior Notice 
System will be in English. This will also allow for the information to 
be placed in standard data elements that can then be maintained in a 
database, screened against standard criteria, and used for 
communication among field offices.
    In proposed Sec.  1.287(b), FDA is proposing that if its Prior 
Notice System is unable to receive prior notice electronically, the 
prior notice, amendments, and updates must be submitted using a printed 
version of the Prior Notice Screen delivered in person, by fax, or by 
e-mail to the FDA field office with responsibility over the 
geographical area in which the anticipated port of entry is located. If 
the submitter does not receive electronic acknowledgement from the FDA 
Prior Notice System then it should check to see if its system is 
working. If it is, then the submitter should assume that the FDA system 
might be down and attempt to contact the appropriate FDA field office 
to confirm.
    The Prior Notice System will not provide a response to the 
submitter of the agency's decision regarding the adequacy or timeliness 
of the prior notice as this assessment will turn on information that 
will not be available until the food arrives in the United States. FDA 
anticipates the system will date and time stamp an electronic 
confirmation of the system's receipt of each prior notice, amendment, 
and update, which the system will send to the submitter automatically.
    FDA believes that the prior notice process under section 801(m) 
precedes the review process under section 801(a). Thus, FDA's response 
to the prior notice will not constitute entry review. The section 
801(a) review process will be separate from, and subsequent to, the 
prior notice process. Therefore, the FDA Prior Notice System's 
electronic confirmation of a prior notice submission is not an 801(a) 
admissibility decision and should never be construed as an FDA 
``release'' or ``may proceed.''
    If a person wishing to submit prior notice to the FDA is unable to 
do so because his or her own system is not operating, FDA expects the 
submitter to use an alternative Internet system for submission (e.g., a 
local library or copy-center with Internet access). FDA is developing a 
web-based system to reduce the likelihood that intermittent system 
outages will impact prior notice submissions.
    Although the system may be developed in a way that will allow for 
establishment of a personal account, users will not have to be licensed 
or otherwise pre-approved or have specialized software. FDA also plans 
to develop and provide guidance and training to potential submitters 
and their agents that will further describe the data elements and the 
submission process before December 12, 2003, which is when the 
requirement to provide prior notice begins. The Prior Notice Screen of 
FDA's Prior Notice System also identifies the information that must be 
submitted.
4. What Information Must be Submitted in a Prior Notice? (Proposed 
Sec.  1.288)
    Proposed Sec.  1.288 lists the information or data elements that 
must be included in each prior notice. Much of this list is taken 
directly from section 801(m)(1) of the act. The remainder of the list, 
although not explicitly listed in section 801(m), is information that 
FDA believes is necessary for the efficient enforcement of section 
801(m) of the act and is thus authorized under section 701(b) of the 
act. We explain below why each of these items is necessary for the 
efficient enforcement of section 801(m). Accordingly, as set out in 
proposed Sec.  1.278(a), FDA is proposing that a prior notice that does 
not contain all of the information listed in proposed Sec.  1.288 will 
be considered inadequate. FDA solicits comments on this approach.
    Most of this information is already supplied by the filer to FDA 
through ACS as part of the U.S. Customs entry process, including the 
entry type; the entry number (both ACS line number and FDA line 
identifier); the FDA product code; a written description of the product 
in common business terms; brand name; the quantity; lot numbers; the 
manufacturer; country of origin; shipper; importer; ultimate consignee; 
and the carrier (the mode of transportation and the carrier code).
    Before discussing each data element in the context of prior notice, 
we want to emphasize that the prior notice requirement does not apply 
to a whole shipment; for the purpose of section 801(m) of the act, it 
applies to ``each article of food.'' FDA believes that in section 
801(m) ``each article of food'' means each article of food produced by 
each manufacturer. Thus, any food product identified by a specific FDA 
product code and quantity description produced by a single manufacturer 
(or grower, if fresh) associated with a single entry line number (U.S. 
Customs entry number plus ACS line number plus OASIS/FDA line number) 
must be covered by a prior notice. Therefore, each article of food that 
is represented by an FDA line must be covered by a prior notice.
    Thus, if a shipment consists of four different kinds of food 
products, e.g., 1,000 cases of 48/6 oz. cans each of Brand X tuna, 240 
cases of 24/15.25 oz. cans each of yellow corn, 300 cases of 24/12 oz 
cans each of Brand X tuna, and 1,500 cases of 48/6 oz. cans each of 
Brand P tuna, four prior notices are required. These four prior notices 
may be contained in one submission. If the shipment consists of only 
one product, e.g., 2,400 cases of 24/15.25 oz. cans each of yellow 
corn, one prior notice is required. If this corn came from two 
different manufacturers, however, two prior notices would be needed. In 
its Prior Notice System FDA will give the submitter the option of 
completing additional prior notices for other articles after each 
notice is completed. We are working with the developers of the Prior 
Notice System to accept ``header'' information that will permit 
repeated information to be automatically entered. This ``header'' would 
contain information consistent across several articles of food within 
the same submission, i.e., U.S. Customs entry. This will reduce the 
amount of data entry and potentially reduce typing and transcription 
errors. FDA plans to develop its Prior Notice System to allow 
submitters to automatically repeat information already entered in the 
submission where appropriate (e.g., all information is the same except 
for the identity of the article or the manufacturer).
    FDA is proposing to require the following information in the prior 
notice identifying the following details for each article of food:
    2. The submitter. FDA is proposing to require the identity of the 
submitter and the associated submitting firm. This information is 
needed so that FDA may communicate the adequacy or non-adequacy of the 
prior notice to the responsible party and to follow up when audits, 
inspections, or enforcement are necessary.
    Generally, for all firms that the proposed rule requires to be 
identified in a prior notice (submitter, importer, owner, consignee, 
manufacturer, growers (if known), shipper), FDA is proposing that the 
prior notice include the firm's name, address, phone number, fax 
number, and e-mail address, and if the firm is required to register a 
facility associated with the article of food, the facility's 
registration number. The registration requirement is contained in a 
separate provision of the Bioterrorism Act (section 305). FDA believes 
that it needs identifying information in addition to the

[[Page 5436]]

registration number (if one exists) to minimize the chance that 
typographical errors in registration numbers will lead to prior notices 
being considered incorrect and thus inadequate. We are considering 
designing the Prior Notice System to require at least one 
``confirmatory'' data element (firm name or city or country) in 
addition to the registration number to allow for validation edits 
before automatically filling in the remaining data fields.
    The phone and fax numbers and e-mail address are required (if they 
exist) so that FDA can communicate with the firm, if necessary. If the 
firm does not have a fax number or e-mail address, the prior notice 
submission should declare this. FDA plans to develop its Prior Notice 
System to allow submitters to repeat information already entered in the 
submission where appropriate (e.g., where the submitter is also the 
importer and consignee of the article).
    b. The U.S. Customs entry type. FDA is proposing to require the 
submission of the U.S. Customs entry type associated with the article 
of food being imported or offered for import (proposed Sec.  1.288(b)). 
Some examples of types of entries are Consumption entries, Warehouse 
entries, Temporary Importation Bond entries, Transportation for 
Exportation Bond entries, Trade Fair entries, mail entries, and baggage 
entries. Each of these types has a pre-designated U.S. Customs entry 
type code. That code must be submitted in the prior notice. This 
information will tell us if the article of food is intended for 
consumption in the U.S. or is intended for export or other uses. We 
need this information for proper screening of the information and 
identification of the appropriate articles for inspection. FDA also 
believes that submission of this information is critical for matching 
the prior notice to the corresponding U.S. Customs entry in order to 
assess the adequacy of the prior notice when shipments arrive and are 
presented for review.
    c. The U.S. Customs ACS entry line number or other U.S. Customs 
identification number. FDA is proposing to require the submission of 
the U.S. Customs ACS entry line number, consisting of the entry number, 
the U.S. Customs ACS line number, and the FDA entry line number, which 
will be associated with the entry of the food for U.S. Customs purposes 
(proposed Sec.  1.288(c)). For each entry number, there may be one or 
more U.S. Customs ACS lines and for each U.S. Customs ACS line there 
may be one or more FDA lines. For example, U.S. Customs entry number 
0123456789-0 may identify an entry of peppers; the U.S. Customs ACS 
line 123456789-0-001 may identify fresh peppers; and the FDA entry line 
0123456789-0-001-001 may identify fresh sweet peppers and FDA entry 
line 0123456789-0-001-002 may identify fresh hot peppers.
    If the article of food is not intended for consumption entry, FDA 
is proposing to require submission of the U.S. Customs identification 
number associated with that type of entry. Some examples of other types 
of entries are Warehouse entries, Temporary Importation Bond entries, 
Transportation for Exportation Bond entries, and Trade Fair entries.
    FDA believes that this information is necessary for proper 
screening of the information and identification of the appropriate 
articles for inspection. FDA also believes that submission of this 
information is critical for matching the prior notice to the 
corresponding U.S. Customs entry in order to assess the adequacy of the 
prior notice when shipments arrive and are presented for review. FDA 
believes that these numbers can be obtained by the proposed deadline 
for prior notice. We seek comment on this issue.
    d. The location where the food is being held under proposed Sec.  
1.278, if applicable. FDA is proposing to require that, if the article 
of food has been refused admission due to inadequate prior notice and 
thus is required to be held at the port of entry or in a secure 
facility, the submitter of the prior notice must inform FDA both that 
the article is under hold, and the location where the shipment is being 
held (proposed Sec.  1.288(d)). Additionally, FDA is proposing to 
require the date that the article will arrive at that location as well 
as the identification of a contact at that location. This information 
is necessary to ensure FDA can locate the food for inspection and to 
ensure that the hold requirement is being compiled with.
    e. The product identity. Section 801(m)(1) states that a prior 
notice must contain the identity of the article of food being imported 
or offered for import. FDA is proposing the following data elements to 
ensure that each prior notice adequately and completely identifies the 
food being imported or offered for import.
    i. The complete FDA product code. FDA is proposing to require the 
submission of the complete FDA product code as an element of the 
identity of the product (proposed Sec.  1.288(e)(1)(i)). The FDA 
product code is a unique code currently used for classification and 
analysis of merchandise. The FDA product code is currently available 
via the Internet at www.accessdata.fda.gov/scripts/ora/pcb/pcb.htm as a 
``buildable'' code which is used to describe the food by industry, 
industry class, subclass, container/packaging, process, and specific 
product. We will work with the developers of the FDA prior notice 
system to ensure that there is a link from that system to the product 
code builder. We are working with the developers to design the link to 
the product code builder which will allow the product code selected to 
be automatically pasted back to the Prior Notice Screen. We will also 
design the system so that if the submitter already knows the product 
code, it can be entered directly into the Prior Notice Screen.
    The FDA product code for canned tuna fish is 16AEE45, which 
translates as 16= fishery/seafood products, A= fish, E= subclass metal 
(cans), E= commercially sterile, 45= tuna. The filer currently submits 
the FDA product code to U.S. Custom's ACS when entry is made; it 
subsequently is transmitted to FDA's OASIS for each entry line.
    FDA is proposing that if all of the information concerning the 
product identity exists by noon of the calendar day before the article 
will arrive at the port of entry, it must be included in the prior 
notice and the prior notice may not be subsequently amended. (Proposed 
Sec.  1.288(e)(2)). If any of the product identity information does not 
exist by the deadline, the information that does exist must be provided 
to FDA, and the submitter must indicate that it will amend the prior 
notice. FDA identifies the conditions appropriate for amendments 
related to product identity in proposed Sec.  1.290. FDA notes that, in 
determining whether the information exists, the standard set out in the 
proposed rule is not whether the submitter knows the information when 
filing the prior notice, but whether the information could be known by 
the submitter by the noon deadline. In the discussion of proposed Sec.  
1.289, we describe under what circumstances we think complete product 
identity will not exist. FDA solicits comment on this standard and 
whether it is sufficiently flexible to achieve our goals.
    ii. The Common or usual or market name. FDA is proposing to require 
the submission of the common or usual or market name of the article of 
food as an element of the identity of the product (proposed Sec.  
1.288(e)(1)(ii)). This is a description, in common terms, detailed 
enough to allow the kind of product to be identified. (See 21 CFR Sec.  
102.5 for additional information about common or usual names.) The 
filer currently submits the common or usual or market name to U.S. 
Custom's ACS when entry

[[Page 5437]]

is made, and it subsequently is transmitted to FDA's OASIS for each 
entry line. This information is necessary to confirm the accuracy of 
the product code.
    iii. The trade or brand name. FDA is proposing to require the 
submission of the trade or brand name of the article of food, if it is 
different than the common or usual or market name, as an element of the 
identity of the product (proposed Sec.  1.288(e)(1)(iii)). For example, 
the brand name of canned tuna would be XYZ brand tuna. This information 
is necessary to ensure that FDA knows the brand identity of the 
product, which is often a critical piece of information when making 
inspection decisions. The filer currently submits the trade or brand 
name to U.S. Custom's ACS when entry is made, and it subsequently is 
transmitted to FDA's OASIS for each entry line.
    iv. The quantity. FDA is proposing to require the submission of the 
quantity of food described from smallest package size to largest 
container as an element of the identity of the product (proposed Sec.  
1.288(e)(1)(iv)). The number of container units and units of measure 
are to be submitted in decreasing size of packing unit (starting with 
the largest). Some examples of quantity descriptions are: 100 cartons 
of 48/6 oz. cans each of tuna; 100 pallets of 2/100 lb. totes each of 
frozen tuna loins for a total of 20,000 pounds; 100 pallets of 2/100 
lbs. cartons each of dehydrated pig ears for a total of 20,000 lbs.; 
and 100 cartons of 20 lbs. of fresh watermelons each for a total of 
2000 lbs. The filer currently submits the quantity of each line entry 
to U.S. Custom's ACS when entry is made, and it subsequently is 
transmitted to FDA's OASIS. FDA requests comment on whether changes in 
quantity will occur after the deadline for prior notice and, if so, how 
commonly changes occur and how significant the changes usually are.
    v. The lot or code numbers or other identifier. FDA is proposing to 
require the submission of the lot or code numbers or other identifiers 
that are specific to the article of food, if applicable, as an element 
of the identity of the product (proposed Sec.  1.288(f)(1)(v)). These 
numbers are the identification number or code of a production lot and 
are needed to more specifically identify a product. Currently, there 
may be more than one identifier represented in an entry line. The prior 
notice system will be developed to accept more than one lot identifier 
per article.
    f. The manufacturer. As provided for in section 801(m)(1), FDA is 
proposing to require the submission of the identity of the manufacturer 
of each article of food (proposed Sec.  1.288(f)). The filer currently 
submits the identity of the manufacturer to U.S. Custom's ACS when 
entry is made, and it subsequently is transmitted to FDA's OASIS.
    g. The growers, if known. As required by section 801(m)(1), FDA is 
proposing to require the submission of the identity of all growers of 
each article and the growing location if different from the grower's 
business address, if known at the time of submission of the prior 
notice (proposed Sec.  1.288(g)). If the submission is amended, the 
proposed rule provides that the identity of all growers must be 
provided if known at the time of the amendment (proposed Sec.  
1.290(d)). FDA wants to emphasize that section 801(m)(1) of the act 
states that grower information must be submitted if it is known. Thus, 
this information is not optional: if it is known, it must be submitted. 
If a product is sourced from more than one grower, the prior notice 
must provide the identification of all growers, if known. The FDA Prior 
Notice System will be developed to accommodate submission of up to 
three different growers.
    FDA solicits comments on two particular aspects of the statutory 
requirement that the grower be identified. First, does the act give FDA 
any flexibility to exempt or otherwise treat differently so-called 
processed foods produced with products from more than one grower? 
Second, does the term ``grower'' include a harvester or collector of 
wild products, e.g., some fish and botanicals?
    h. The originating country. As provided for in section 801(m)(1), 
FDA is proposing to require the submission of the identity of the 
originating country of the article of food (proposed Sec.  1.288(h)). 
This term is defined in proposed Sec.  1.277(c)(2).
    i. The shipper. As provided for in section 801(m)(1), FDA is 
proposing to require the submission of the identity of the shipper of 
the article of food (proposed Sec.  1.288(i)). FDA considers the 
shipper to be the person who arranges for a shipment to get to its 
first destination in the United States. The shipper typically is 
responsible for initiating the bill of lading or airbill covering the 
transportation of the article by the carrier. The shipper is usually a 
foreign firm that is located or maintains an address in the country 
from which the article was shipped. The shipper is typically not the 
carrier.
    j. The country of shipping. As provided for in section 801(m)(1), 
FDA is proposing to require the submission of the identity of the 
country from which the article of food was shipped (proposed Sec.  
1.288(j)). This term is defined in proposed Sec.  1.277(c)(3).
    k. Anticipated arrival information.
    i. The anticipated port of entry. As provided for in section 
801(m)(1), FDA is proposing to require the submission of the 
anticipated port of entry at which the article of food will arrive in 
the United States (proposed Sec.  1.288(k)(1)(i)). ``Port of entry'' is 
defined in proposed Sec.  1.277(c)(5).
    ii. The anticipated date of arrival. FDA is proposing to require 
the submission of the anticipated date when the article of food will 
arrive at the port of entry in the United States (proposed Sec.  
1.288(k)(1)(ii)). FDA believes that this information is necessary to 
plan inspections.
    iii. The anticipated time of arrival. FDA is proposing to require 
the submission of the anticipated time when the article of food will 
arrive at the port of entry in the United States (proposed Sec.  
1.288(k)(1)(iii)). FDA believes that this information is necessary to 
plan inspections.
    FDA is proposing to require the prior notice to be updated if any 
of the anticipated arrival information changes after the submission of 
the prior notice (proposed Sec.  1.288(k)(2)). Updates are necessary so 
FDA can change its plan when anticipated arrival information changes. 
The conditions appropriate for updates are provided in proposed Sec.  
1.294.
    l. The port where entry will be made for U.S. Customs purposes. FDA 
is proposing to require the submission of the identification of the 
port where entry will be made for U.S. Customs purposes (proposed Sec.  
1.288(l)). Often, this port will be different than the port where the 
article of food arrived in the United States. FDA believes that this 
information is necessary to facilitate communication with U.S. Customs 
and FDA field offices concerning the adequacy of the prior notice. It 
is also necessary to enable FDA to coordinate resources for 
inspections, examinations, or sampling.
    m. The anticipated date of U.S. Customs entry. FDA is proposing to 
require the submission of the anticipated date of entry for U.S. 
Customs purposes (subpart 1.288(m)). FDA believes that this information 
is critical to enable it to allocate resources for inspecting imported 
food shipments and efficient communication with and between U.S. 
Customs and FDA field offices.
    n. The importer, owner, and consignee. Under section 
801(m)(2)(B)(i) and proposed Sec.  1.278(e)(2), food that is offered 
for import with no or inadequate notice may not be delivered to the

[[Page 5438]]

importer, owner, or consignee. Thus, FDA is proposing to require their 
identities so that FDA knows who they are and can take steps to ensure 
that food refused admission under section 801(m) is not delivered to 
them illegally. FDA is proposing that only one importer, owner, and 
consignee can be identified for each prior notice. Under most 
circumstances, FDA believes the importer will be the importer of record 
for U.S. Customs Entry Summary purposes.
    o. The carrier. FDA is proposing to require the identity of each 
carrier or transporter firm that transports the article of food from 
the country from which the article was shipped into the United States. 
This identification includes the submission of the Standard Carrier 
Abbreviation Code. Identification of the carrier is necessary to enable 
FDA and U.S. Customs to identify the appropriate article of food for 
inspection or holding when the food arrives in the United States. FDA 
notes that a carrier typically is a different firm than the shipper. 
The filer currently submits carrier information to U.S. Custom's ACS 
when entry is made, and it subsequently is transmitted to FDA's OASIS.
5. What Changes are Allowed to a Prior Notice After it Has Been 
Submitted to FDA? (Proposed Sec.  1.289)
    FDA is allowing additional information to be supplied once a prior 
notice is submitted in two situations. FDA believes that under the 
standards in section 801(m)(2)(A) for establishing the timeframes for 
submission of prior notice, amendments are appropriate when complete 
product identity will not exist by the deadline for the submission of a 
prior notice. As described in more detail elsewhere, FDA believes that 
these situations largely involve fresh produce and fish harvested in 
countries close to the United States, e.g., Mexico and Canada. Second, 
FDA believes that it must have accurate arrival information in order to 
ensure it can inspect an article or take other appropriate action. In 
the event that other information in the prior notice must be changed, 
no amendment or update is permitted. The submitter must cancel the 
initial prior notice and submit a new one.
6. Under What Circumstances Must You Submit a Product Identity 
Amendment to Your Prior Notice After You Have Submitted It to FDA? 
(Proposed Sec.  1.290)
    FDA is proposing that the prior notice must be amended if all 
information about the identity of the food required by proposed Sec.  
1.288(e)(1) does not exist by noon of the calendar day before the day 
of arrival. The submitter must indicate his or her intention to amend 
the information at the time the initial prior notice is submitted. FDA 
is proposing that the prior notice may be amended only once. FDA is 
limiting the number of times a prior notice may be amended because FDA 
believes that it would be an inefficient use of its review and planning 
resources to address intermediate, still incomplete submissions. FDA 
wants to encourage submissions that are as complete as possible to 
allow FDA to deploy its resources effectively. FDA requests comment on 
our proposal to restrict the number of amendments to one.
    FDA is proposing that only the information required by proposed 
Sec.  1.288(e)(1) and indicated in the initial prior notice as being 
subject to amendment may thereafter be amended. FDA is proposing to 
limit the information that may be amended in a prior notice to the 
product identification information required in proposed Sec.  
1.288(e)(1). As we explain elsewhere in this preamble, we believe that 
in most situations, complete product identity will exist by noon of the 
calendar day before the day of arrival. However, we recognize that in 
certain limited circumstances, such as wild-caught fresh fish and fresh 
produce with many varieties that are caught or harvested close to the 
time of shipment in locations close to the U.S. border, this 
specificity may not be known by noon of the calendar day before the day 
of arrival. FDA is proposing that the last two digits of the FDA 
product code and other product identity information that provides the 
specific identity of the article may be amended when this information 
does not exist by the prior notice deadline.
    For example, there may be occasions when an entry of lettuce is 
ordered and prior notice is submitted by noon the calendar day prior to 
arrival, but the specific variety of lettuce that will be shipped does 
not exist because the growers that supply the shippers have not yet 
harvested their crops. At or before the time when the article is placed 
in the carrier for shipment, however, the complete identity of the 
article exists and the prior notice must be amended to identify the 
specific type of lettuce (e.g., romaine or leaf).
    A prior notice may not be amended to change completely the identity 
of the article, e.g., a prior notice identifying the food as lettuce 
may not be amended to identify the food as pears.
    If an article of food is not covered by a specific FDA product 
code, e.g., a root vegetable not more specifically described by 
numerical code in the FDA product code builder, then the last two 
numbers of the product code may be provided as ``99'' which means root 
vegetables, not elsewhere classified. However, this prior notice cannot 
be amended later to identify the product as carrots because, even 
though carrots are root vegetables, there is an FDA product code that 
is specific to carrots and thus it should have been used in the initial 
notice. We plan to design the prior notice system so that it will not 
acknowledge that a prior notice submission is completely filled out if 
it does not contain a seven-digit product code. The system will be 
designed to provide, where appropriate, a reminder about the need for 
amendment with the electronic message acknowledging receipt of the 
initial submission.
    The information that may be amended also includes the common or 
usual or trade name, brand name, lot or code or identification numbers, 
and quantity.
    FDA is proposing that, if the identity of the grower was not 
provided at the time the prior notice was submitted because it was not 
known at that time but the identity is known at the time of the 
amendment, the amendment must include information that identifies all 
known growers.
7. What is the Deadline for Product Identity Amendments Under Sec.  
1.290? (Proposed Sec.  1.291)
    FDA is proposing a 2 hour minimum deadline for amendments submitted 
under proposed Sec.  1.291, or updates submitted under proposed Sec.  
1.294.
    FDA believes that the deadline will allow submitters to provide FDA 
the information it needs in order to effectively assess whether a 
particular shipment of food needs to be investigated and if so, to 
ensure FDA personnel are present to do so when the food arrives at the 
port of entry, while allowing submitters to amend and/or update 
information that may not be known with exact certainty by noon of the 
prior calendar day. FDA considered the type of food in proposing the 
deadline for amendment to the product identity and updates to the 
anticipated arrival information.
    FDA believes that product identity amendments are most likely to be 
needed to accommodate articles imported by land or air rather than 
water arrivals. FDA also recognizes that this limitation on amendments 
may also affect the practice of ``topping off a container'' by filling 
unused space in the container or truck bed with last-minute shipments 
of other food products not covered by prior notice.

[[Page 5439]]

    FDA notes that under its amendment proposal ``topping off'' with 
the article of food that is already the subject of a prior notice would 
be allowed. To the extent ``topping off'' with non-food items occurs, 
this practice would not be affected. FDA believes, however, that this 
limitation is dictated by the Bioterrorism Act's requirements and 
moreover is necessary to ensure that FDA has adequate notice of all 
FDA-regulated food imports such that FDA can deploy its resources 
effectively. In this case, a separate prior notice would be required 
for these foods not already covered by a prior notice. FDA solicits 
comment how common ``topping off'' is and the quantities of food 
involved.
8. How Do You Submit a Product Identity Amendment or An Arrival Update 
to a Prior Notice? (Proposed Sec.  1.292)
    FDA is proposing to limit the way in which a prior notice may be 
amended or updated. FDA is proposing that a product identity amendment 
or an arrival update to a prior notice may be submitted only in the 
same manner as an initial prior notice; that is, electronically to FDA 
through FDA's Prior Notice System. Only the information concerning 
product identity and grower identity can be electronically amended 
under proposed Sec.  1.290. Only the information concerning the 
anticipated location, date, and time of arrival and grower identity can 
be electronically updated under proposed Sec.  1.294.
    FDA proposes to design its Prior Notice System to require 
identification of the type of submission (Initial, Amended, Updated) 
and to be capable of differentiating amongst them. If FDA's Prior 
Notice System is unable to receive submissions electronically, 
amendments or updates may be communicated directly to FDA using a 
printed version of the Prior Notice Screen, and delivered either in 
person, by fax, or by e-mail to the FDA field office with 
responsibility over the geographical area in which the port of entry is 
located, as provided by proposed Sec.  1.287(b). If the identification 
of the anticipated port of entry is being updated, and the FDA system 
is down, the updated printed version of the Prior Notice Screen should 
be delivered to the FDA field office with responsibility over the port 
covered by the initial submission. FDA intends to issue guidance for 
communication between the field office receiving the initial prior 
notice and the field office covering the updated port of entry.
9. What Are the Consequences If You Do Not Submit a Product Identity 
Amendment to Your Prior Notice? (Proposed Sec.  1.293)
    FDA is proposing that if a U.S. importer or U.S. purchaser, or 
their U.S. agent, informed FDA in a prior notice that the submission 
would be amended, but subsequently does not amend it appropriately and 
within the applicable timeframe, then the prior notice is inadequate 
for the purposes of proposed Sec.  1.278(a). By telling FDA that the 
prior notice will be amended they are telling us that it is incomplete. 
We therefore will be waiting for complete information upon which to 
make our inspection decision. Without complete product identity, FDA 
cannot complete the assessment of whether to inspect or take other 
action when the food arrives in the United States. The consequences of 
inadequate prior notice are the same as the consequences for failing to 
provide prior notice; the food shall be refused admission and held at 
the port of entry unless FDA directs its removal to a secure facility. 
The consequences are more fully described previously in the discussion 
of proposed Sec.  1.278.
10. What Must You Do If the Anticipated Arrival Information (Required 
Under Sec.  1.288(k)(1)) Submitted in Your Prior Notice Changes? 
(Proposed Sec.  1.294)
    FDA is proposing to require the submitter to update anticipated 
arrival information submitted in a prior notice, if the anticipated 
information changes after the submission. The types of information FDA 
expects may change between submission of prior notice and actual 
importation are the date, time, and location of arrival. Although the 
statute requires only anticipated port of entry, accurate, up-to-date 
arrival information (if different) is necessary for FDA field offices 
to reschedule inspections. FDA thus believes that it has the authority 
to require this information.
    If anticipated arrival information submitted in a prior notice 
changes, FDA is proposing that the submitter be required to provide the 
new port of entry (proposed Sec.  1.294(a)(1)), and the new time of 
arrival in an update electronically filed in the Prior Notice System 
(proposed Sec.  1.294(c)). FDA is proposing that if the time of arrival 
is expected to be more than 1 hour earlier (proposed Sec.  1.294(a)(2)) 
or more than 3 hours later (proposed Sec.  1.294(a)(3)) than the 
anticipated time of arrival, the time of arrival must be updated. FDA 
is proposing that, if the identity of the grower was not provided at 
the time the prior notice was submitted and that identity is known at 
the time of the update, the amendment must include information that 
identifies growers (proposed Sec.  1.294(b)).
    The FDA Prior Notice System will be designed to accommodate 
updates. As stated above, FDA is proposing to design its Prior Notice 
System to require identification of the type of submission (Initial, 
Amended, Updated) and to be capable of differentiating amongst them.
    FDA is proposing to limit the time within which a prior notice may 
be updated. The proposed regulation would require updated information 
to be submitted in accordance with the deadline for amendments under 
proposed Sec.  1.291, that is, an update to a prior notice must be 
submitted 2 hours prior to arrival.

IV. Analysis of Economic Impacts

A. Preliminary Regulatory Impact Analysis

    FDA has examined the economic implications of this proposed rule as 
required by Executive Order 12866. Executive Order 12866 directs 
agencies to assess all costs and benefits of available regulatory 
alternatives and, when regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health and safety, and other advantages; 
distributive impacts; and equity). Executive Order 12866 classifies a 
rule as significant if it meets any one of a number of specified 
conditions, including: having an annual effect on the economy of $100 
million, adversely affecting a sector of the economy in a material way, 
adversely affecting competition, or adversely affecting jobs. A 
regulation is also considered a significant regulatory action if it 
raises novel legal or policy issues. FDA has determined that this 
proposed rule is a significant regulatory action as defined by 
Executive Order 12866.
    The Small Business Regulatory Enforcement Fairness Act of 1996 
(Public Law 104-121) defines a major rule for the purpose of 
congressional review as having caused or being likely to cause one or 
more of the following: An annual effect on the economy of $100 million; 
a major increase in costs or prices; significant adverse effects on 
competition, employment, productivity, or innovation; or significant 
adverse effects on the ability of U.S.-based enterprises to compete 
with foreign-based enterprises in domestic or export markets. In 
accordance with the Small Business Regulatory Enforcement Fairness Act, 
OMB has determined that

[[Page 5440]]

this proposed rule, when final, will be a major rule for the purpose of 
congressional review.
1. Need for Regulation
    Section 307 of the Bioterrorism Act (Public Law 107-188), requires 
advance notice of all food imported or offered for import into the 
United States. If FDA fails to issue a final regulation by December 12, 
2003, section 307 of the Bioterrorism Act provides for a default 
minimum period of advance notice that is not fewer than 8 hours and not 
more than 5 days before an article of food is imported or offered for 
import into the United States. This regulation is needed to implement 
the statutory provisions.
2. The Reason for the Regulation
    Getting food from the farm or sea to the plate involves a complex 
system of production and distribution. The system works using local 
knowledge and information; each participant needs to know only as much 
about the overall system as is necessary for his or her business. 
Market prices convey most of the information necessary for the ordinary 
production and distribution of food. In the event of an actual or 
suspected contamination of the food supply, however, more complete 
information is needed where it can be centrally used. The suspect food 
must be traced backward and forward through the distribution chain, 
both to protect consumers and to find the source and cause of the 
event.
    No individual firm or organization has sufficient financial 
incentive to establish a central information system relating to food 
safety for the entire economy. The nation's food producers and 
importers as a whole would benefit from such a system because it would 
be easier to uncover and solve problems, but the private costs to 
create the system would probably be prohibitive for any single firm or 
third party organization.
    The events of September 11, 2001, led Congress to conclude that 
public creation and provision of an information system is necessary. 
The Bioterrorism Act and its implementing regulations would establish 
an information system that would allow FDA to have a more integrated 
picture of the food distribution system. This particular regulation 
addresses one important aspect of this information system: the need to 
know what imported foods are entering the United States, where they 
came from, and when they will arrive. FDA is proposing three 
regulations to address these needs so the costs and benefits of any one 
regulation will be closely associated with related provisions in other 
proposed rules. With the regulations in place, the agency would have 
the additional tools necessary to help deter and respond to deliberate 
threats to the nation's food supply as well as to other food safety 
problems.
3. Proposed Rule Coverage
    This proposed rule would apply to all FDA-regulated food for human 
and animal consumption imported or offered for import into the United 
States with the exception of food carried in a traveler's personal 
baggage for personal use. As required by the Bioterrorism Act, the 
notification must provide the identity of the article, the identity of 
importer, manufacturer, shipper, and grower (if known), the originating 
country, the country from which the article was shipped, and the 
anticipated port of entry. In addition, the notification must provide 
the identity of the person who submits the prior notice, the owner, the 
consignee, the carrier, the U.S. Customs entry number, anticipated time 
and date of arrival, and, if the food has already been refused 
admission and required to be held, the location where it is held.
    A growing percentage of food consumed in the United States is 
imported; the value of food imports is now close to $50 billion per 
year. (Ref. 2) In the aftermath of the terrorist attacks on the United 
States on September 11, 2001, Congress determined that the existing 
requirements for the importation of FDA-regulated food products were 
insufficient to protect the safety of the U.S. food supply.
    Before September 11, 2001, FDA had approximately 150 personnel in 
the field processing imported food entries based on FDA's programs and 
assignments, all using guidance documents, such as Import Alerts, 
Compliance Policy guides, and other manuals. After September 11, 2001, 
FDA hired three hundred additional counterterrorism Consumer Safety 
Officers primarily for food imports. This step alone is insufficient to 
ensure the safety of food imported or offered for import into the 
United States.
    When deciding which imported food shipments to physically inspect 
and sample, FDA inspectors consider, among other things, compliance 
programs, assignments, import alerts, and whether the product is a low-
risk or high-risk food. New requirements imposed by Section 307 of the 
Bioterrorism Act will require importers to give notice to FDA of 
incoming articles of food before the shipment reaches a U.S. border, 
rather than when the shipment arrives at the U.S. border or as part of 
the official U.S. Customs entry. Requiring prior notice of imported 
food shipments will allow FDA inspectors to have earlier information on 
foods that are coming into the United States, which will enable FDA to 
better deploy its inspection resources and to use this increased amount 
of information in cases where FDA action against the food is warranted, 
e.g., a credible threat to the food supply is suspected.

Number of Establishments Affected

    Using 2001 FY information from FDA's OASIS system (industry codes 
02 through 52, 54, and 70 through 72), FDA has determined that there 
are approximately 77,427 importers and consignees who receive imported 
food shipments. Under the proposed rule, the U.S. importers or U.S. 
purchasers (or their agents) of the products will be responsible for 
submitting a timely and accurate prior notice to FDA. Using information 
from the OASIS system, FDA was also able to determine that there are 
approximately 100,000 foreign manufacturers (of a finished product). 
Foreign manufacturers are not responsible for submitting prior notice, 
and therefore, while not unaffected by prior notice, foreign 
manufacturer costs associated with this proposed rule will be assumed 
to be spread across the supply chain and therefore are not directly 
addressed in this analysis.
    FDA requests information on the size of establishments likely to be 
affected by this rule, including the foreign manufacturers of food 
products and the importers and consignees receiving the imported food 
shipments.

New and closing importer establishments

    In addition to the U.S. importers currently in existence, in future 
years some new import businesses will open and some existing import 
businesses will close. According to the Small Business Administration 
Office of Advocacy, in 2001 about 10 percent of all businesses were new 
and 10 percent of all businesses closed. These new importers would have 
to become familiar with the FDA prior notice system, and some may need 
to obtain computer equipment and Internet access to comply with prior 
notice requirements.

Baseline

    FDA considers the baseline for this analysis the current state of 
the world, pre-statute, and we assume this baseline has zero costs and 
benefits.

[[Page 5441]]

Current State of The World

    The majority of the information that will be required by section 
307 of the Bioterrorism Act now is currently supplied at the time of 
entry by a U.S. Customs broker or self-filer, and usually is submitted 
electronically. Although importers already must notify U.S. Customs of 
entries, the Bioterrorism Act requires notification to FDA prior to the 
food shipment reaching the U.S. border or point of crossing. This 
requirement will change the current practice of notifying U.S. Customs 
and then subsequently FDA upon arrival (and as long as 15 days past 
arrival based on the time the Consumption Entry may be filed with U.S. 
Customs) at a U.S. port of entry.
    FDA's OASIS reporting system shows that approximately 2.5 million 
food entry lines were imported via sea and air transportation in FY 
2001. Information on food-importing practices indicates that U.S. 
Customs and FDA are notified of imported food products traveling to the 
United States by vessel before the products' arrival. Vessels can 
notify U.S. Customs months before the actual shipping date, but U.S. 
Customs will not certify the entry until 5 days before the ship is 
expected to dock at a U.S. port. FDA is notified of the shipment then, 
through U.S. Customs, as early as 5 days before the vessel's arrival at 
a U.S. port.
    Importers bringing food products in by airplane can notify U.S. 
Customs of their intent to import food into the United States no more 
than 24 hours before the scheduled flight departure time, but cannot 
certify their cargo manifests with U.S. Customs until the plane has 
taken off from the airport of the exporting country (``wheels-up''). 
FDA is then notified through U.S. Customs of the plane's scheduled 
arrival. U.S. Customs has informed FDA that they receive flight 
information for 87.6 percent of the flights at time of ``wheels up.''
    FDA's OASIS reporting system shows that around 2.2 million entry 
lines of food were imported into the United States via ground 
transportation in FY 2001. The usual practice today for food brought in 
by truck or train (mainly products coming directly from Canada or 
Mexico) is not to notify U.S. Customs and FDA until their actual 
arrival at a U.S. border or point of entry. (Filers can certify their 
entry data up to 24 hours before arrival at the border, but U.S. 
Customs does not give a ``screening response'' to the entry until 
actual arrival.) Even though these importers most likely have the 
invoices and orders for these products in advance, they do not 
currently notify U.S. Customs and FDA until their arrival at the 
border.
4. Regulatory Options Considered
    We analyzed five options for a prior notice regulation:
    1. Current state of the world, pre-statute (baseline).
    2. Prior notice time of 4 hours or less; electronic submission of 
information. This option would require the persons responsible for all 
food imported or offered for import into the United States to notify 
FDA of their intent to import articles of food through a United States 
based-importer or purchaser (or their U.S.-based agent). This option 
applies to all imported foods, except for food exclusively regulated by 
USDA and food imported with personal baggage for personal use, 
regardless of entry type or mode of transportation used for import. 
Submission of prior notice information (including addresses of all 
importers, owners, manufacturers, consignees, identity and quantity of 
food, originating country, country of shipping, date, expected time of 
arrival, expected port of entry, and grower if known) must be 
electronic.
    3. Require all components of option 2, but lengthen the minimum 
prior notice time to 8 hours (statutory self-executing provision).
    4. Require all components of option 2, but lengthen the prior 
notice time to noon of the calendar day prior to crossing the U.S. 
border.
    5. Require all components of option 4, but allow some prior notice 
information to be revised prior to arrival at a U.S. port (proposed 
option).
    Option one: Current state of the world, pre-statute.
    Having no prior notice requirements is option 1 in our analysis. 
The statute requires that FDA issue prior notice regulations, so this 
is not a legally viable option. However, OMB cost-benefit analysis 
guidelines recommend discussing statutory requirements that affect the 
selection of regulatory approaches. These guidelines also recommend 
analyzing the opportunity cost of legal constraints that prevent the 
selection of the regulatory action that best satisfies the philosophy 
and principles of Executive Order 12866. This option will serve as the 
baseline against which other options will be measured for assessing 
costs and benefits.
    Option two: Minimum prior notice timeframe of 4 hours or less; 
electronic submission of information; any change in information 
requires resubmission.
    Costs: The party responsible for transmitting prior notice to FDA 
will incur administrative and notification costs to comply with this 
proposed regulation. The responsible party likely will become aware of 
the prior notice requirement through normal business activities: 
reading the trade press, reading industry news, FDA outreach, trade 
outreach, or conversation with other business operators who also must 
comply with prior notice. Once the U.S. importer or U.S. purchaser of 
the food becomes aware of the regulation, he or she will need to learn 
the requirements of the regulation, which will require finding a copy 
of the prior notice requirements and reading and understanding them.
    To become familiar with the requirements for this rule, FDA 
estimates that it initially will take responsible parties with Internet 
access about 1 hour to research the prior notice requirements, and 
responsible parties without readily available Internet access about 2 
hours to research the requirements. Comments from both the Produce 
Marketing Association (PMA) and the National Food Processors 
Association (NFPA) indicate that about 96 percent of the industry has 
readily available Internet access.
    FDA used wage rates from the Bureau of Labor Statistics National 
Compensation Survey (Ref. 3), doubled to include overhead costs, to 
estimate the cost of the time to research the prior notice requirement. 
For an administrative worker, the cost per hour is $25.10: for a 
manager, $56.74. FDA assumes that only the administrative worker's time 
will be used to research the prior notice requirements. As shown in 
table 1, total costs of this research activity for firms with Internet 
access are $1,865,683; for firms without Internet access, the total 
research costs are $155,469.
    Given the 10 percent turnover in business reported by the Small 
Business Administration, FDA expects 10 percent of the total search 
costs to be incurred in each subsequent year after prior notice is in 
effect as new firms enter the industry. This cost and the present value 
of this cost, using a 7 percent discount rate, are also shown in table 
1.

                 Table 1.--Cost to Research Prior Notice
------------------------------------------------------------------------
   Cost to Research Prior
           Notice             With Internet Access   No Internet Access
------------------------------------------------------------------------
Number of Firms               74,330                3,097
------------------------------------------------------------------------
Administrative wage rate per  $25.10                 $25.10
 hour (including overhead)
------------------------------------------------------------------------

[[Page 5442]]

 
Total time to research        1 hour                 2 hours
 regulation
------------------------------------------------------------------------
First year one-time research  $1,865,683            $155,469
 costs
------------------------------------------------------------------------
Annual one time research      $186,568               $15,547
 costs for new firms
 entering industry in
 subsequent years
------------------------------------------------------------------------
Present value of cost of      $2,665,257             $222,100
 firms entering the industry
------------------------------------------------------------------------
Total research cost burden    $4,530,940            $377,569
------------------------------------------------------------------------

    All prior notices must be submitted electronically, so we will 
assume that the 3,097 responsible parties without Internet access will 
have to purchase a computer and gain Internet access to actually 
transmit the information via a prior notice screen. This one-time 
computer cost and a recurring Internet access cost for these facilities 
of $7,559,777 are shown in table 2.
    Again, given a 10 percent turnover rate for businesses in the 
import industry, we expect there to be new businesses in the future 
that may need to purchase electronic transmitting capabilities. 
However, it becomes more unlikely with the passage of time that persons 
will be purchasing this computer equipment solely to comply with prior 
notice. Therefore, a present value of this cost is not calculated.

  Table 2.--Facilities and Responsible Parties Without Initial Internet
                                 Access
Number of Facilities                            3,097
------------------------------------------------------------------------
Computer equipment cost per facility            $2,000
------------------------------------------------------------------------
Annual cost of Internet access ($20 per month   $240
 x 12)
------------------------------------------------------------------------
Search costs for equipment and access ($25.10   $201
 x 8 hours)
------------------------------------------------------------------------
Total first year one time cost of electronic    $7,559,777
 transmitting capacity
------------------------------------------------------------------------
Annual one time cost of electronic              $755,978
 transmitting capacity for firms entering
 industry in subsequent years
------------------------------------------------------------------------
Total electronic transmitting costs             $8,315,755
------------------------------------------------------------------------

    FDA used OASIS information to find out that 4.7 million entry lines 
for food were imported into the United States in FY 2001. An ``entry 
line'' is an FDA term used by the OASIS reporting system, which refers 
to a line on an invoice that reflects a certain article specific to 
manufacturer or packaging: e.g., 100 cases containing 48 six-ounce cans 
of tuna. This 4.7 million entry line total includes the 2.2 million 
entry lines for food that came into the United States in 2001 via 
ground transportation (trucks and trains) and the 2.5 million entry 
lines for food that came into the United States in 2001 via airplane 
and vessel.
    The entry line totals for FY 2001 do not include food brought into 
the United States as personal baggage with the food intended for sale 
or other distribution, not for personal use. Under the proposed rule, 
persons bringing food into the United States in this manner, however, 
are required to submit prior notice to the FDA. FDA does not know how 
common the practice is of importing food for non-personal use as part 
of personal baggage. For FY 2002, there were only 18 entry lines 
associated with food imported as U.S. mail and 486 food entry lines 
imported by courier. FDA believes that entries of food imported as part 
of personal baggage but not for personal use will fall somewhere 
between mail and courier entries. Since any number of entries in this 
range is minimal as compared with the 4.7 million total OASIS entries, 
FDA likewise believes the costs associated with prior notice for food 
in personal baggage entries will be minimal and thus these costs are 
not included in this analysis. FDA requests comment on this assumption.
    According to OASIS data, the average imported entry contains 2.6 
lines, which means that there are typically more than two different 
articles of food per import entry: e.g., 100 cases of tuna and 50 cases 
of canned peaches in the same shipment. A prior notice must be filed 
for each of the lines in an entry.
    U.S. Customs Form 3461, Entry and Immediate Delivery Application, 
OMB No. 1515-0069, is the entry document upon which information is 
provided to U.S. Customs by which it makes its decision to release the 
merchandise. The burden estimate on U.S. Customs Form 3461 for purposes 
of the Paperwork Reduction Act is 15.5 minutes. The FDA calculation of 
average time for completion of the prior notice includes verification 
of accuracy of the data and supervision time.
    FDA estimates that it will take, on average, 1 hour to prepare a 
prior notice each time an import entry of 2.6 lines is submitted, 
including the time it takes to update or amend information for each 
entry line as necessary. This time is an average; some prior notices 
will take longer than 1 hour to complete and other prior notices will 
take less than 1 hour to complete. FDA requests comment on the time it 
will take to complete a prior notice form, including the time it will 
take for amendments and updates to the information.
    This hour includes 45 minutes of an administrative worker's time to 
gather information to initially complete the screen and then update the 
information as necessary, and then 15 minutes of the manager's time to 
verify that the information is correct. Assuming that there is an 
average of 2.6 lines per entry, and each line requires a prior notice, 
then each line is estimated to take about 23 minutes to complete.
    Using the OASIS information that the average imported entry 
contains 2.6 lines; we can then divide the 4.7 million OASIS lines by 
2.6, which results in 1,807,692 expected import entries. Table 3 shows 
that the annual cost of prior notice submissions based on 1,807,692 
entries would be $59,689,990.

Table 3.--Cost to fill out Prior Notice screens by import entry (must be
                               electronic)
Administrative worker time at $25.10 wage       45 minutes
 rate
------------------------------------------------------------------------
Manager time at $56.74 wage rate               15 minutes
------------------------------------------------------------------------
Administrative worker costs per entry           $18.83
------------------------------------------------------------------------
Manager costs per entry                         $14.19
------------------------------------------------------------------------
Total Cost per import entry                     $33.02
------------------------------------------------------------------------
FY 2001 OASIS entry total based on 4.7         1,807,692
 million lines
------------------------------------------------------------------------
Total Annual Costs of all prior notice         $59,689,990
 screens based in lines, and including
 updates and amendments to the information
------------------------------------------------------------------------

    FDA Costs: We assume that FDA's information technology (IT) costs 
for

[[Page 5443]]

this option and each option hereafter are the costs of developing a 
stand-alone, web-based, electronic system to receive prior notice 
information and then to respond electronically with an acknowledgement 
of the transmission to the submitting party. The stand-alone prior 
notice system will be used until U.S. Customs new automated system, 
ACE, becomes operational. FDA will coordinate with U.S. Customs to 
develop ACE to accommodate the information required by prior notice. 
Once ACE is operational, it will simplify prior notice transmissions. 
For now, building a stand-alone IT system to handle prior notice 
submissions will require design, development, implementation, 
maintenance, modernization, and upgrades. These costs include the labor 
hours, hardware, and software costs needed to make the prior notice 
system operational. Table 4 shows that FDA estimates the costs to the 
agency for setting up the prior notice system to be about $4.4 million. 
This total cost includes FDA personnel, contractor development of the 
hardware and software needed, industry outreach and training, and a 
computer firewall.

                Table 4.--FDA Prior notice Systems costs
Hardware                                       $500,000
------------------------------------------------------------------------
Analysis, Design, Implementation               $3,000,000
------------------------------------------------------------------------
Software licenses and Security                  $500,000
------------------------------------------------------------------------
Network Interface                               $200,000
------------------------------------------------------------------------
FTEs                                            2
------------------------------------------------------------------------
Cost per FTE                                    $110,588
------------------------------------------------------------------------
Total FTE costs                                $221,176
------------------------------------------------------------------------
Total Systems Cost                              $4,421,176
------------------------------------------------------------------------

    Current operating practices affected: A 4-hour minimum prior notice 
requirement would be less likely to change current food importing 
practices than would a longer minimum time requirement for prior notice 
submission. Some comments received indicated that it would be 
preferable if the minimum prior notice time were set at 4 hours or 
less. Comments requested the shorter minimum prior notice time because 
the source of some food products often is close to the U.S. border, and 
some products are perishable. However, it is the U.S. importer or U.S. 
purchaser or their U.S. agent who is responsible for submitting the 
prior notice, and the information required in prior notice should be 
sufficiently fixed after the order is placed and will not depend on the 
location of the source of the food product.
    How many business practices will be affected by prior notice 
requirements largely depends on how early the orders for the food 
products are placed compared to the time by which prior notice must be 
submitted. Most orders for products, even for those of a perishable 
nature, are often placed days or weeks if not months before the actual 
delivery date. Therefore, if the order for the product was sent a week, 
or even 1 day, before the delivery date, a minimum prior notice time of 
4 hours should not cause any delay in the order. FDA requests comments 
on this assumption.
    Also important in determining how business practices will be 
affected by the prior notice requirements is when the prior notice was 
submitted compared with when the shipment corresponding to that prior 
notice was loaded onto a vehicle. For example, if the prior notice was 
submitted as soon as the order was received, or even a few hours before 
loading the vehicle, there is a possibility that unforeseen factors, 
including composition of the actual shipment, may cause the prior 
notice information submitted to not match the actual shipment on the 
vehicle. However, if the prior notice is not submitted until the 
vehicle is actually loaded, the probability of submitting an incomplete 
prior notice is greatly reduced. Thus, when the order for the shipment 
is received, when the prior notice is submitted, and when the vehicle 
is loaded play large roles in how much the requirement for prior notice 
will affect operating practices for those importing some perishable 
products from Mexico and Canada. FDA requests specific information 
about how business practices for all operations could change as a 
result of the prior notice requirement.
    If importers have orders for perishable products from Canada and 
Mexico filled more than 4 hours before scheduled arrival at a U.S. 
border point, then the only change in business practice that should 
occur is when they will submit their prior notice to FDA.
    There will be those shipments by vehicle, however, for which the 
order was not received in advance of the shipping time, those shipments 
for which the quantity and composition of the product has changed since 
the time when the prior notice was submitted, and those shipments for 
which other changes to the information on the prior notice must be 
made. Importers, whose shipments fall into this ``changed'' category, 
must resubmit the prior notice or risk that their products will be 
refused admission into the United States and held if the notice is 
deemed inadequate.
    FDA does not have information on the number of ground shipments 
that, under this option, would need to submit or resubmit prior notice 
information due to a late order or a change in the information provided 
on the original notice. We know that changes will occur for some 
percentage of all prior notices; until better information is available, 
we will assume that 20 percent of the fresh produce and seafood being 
imported to the United States from Canada and Mexico would have a 
reason for which their original prior notice submission must be changed 
and resubmitted less than 4 hours before entry.
    FDA chooses 20 percent as the percent of prior notices that need to 
be submitted based on information that most orders for products are 
placed well in advance of the actual shipping date, most orders are 
filled with the exact product and quantity the customer requests, and 
the 4 hour prior notice entry time is minimal when compared to when the 
order was actually received. Depending on the entry point, 40 to 100 
percent of shipments are loaded onto vehicles less than 4 hours before 
entry. We chose one-half of the lower percent as the percent of prior 
notices that would need to be resubmitted under this option.
    The following paragraphs and tables outline how FDA calculated a 
loss in product value to account for the time that fresh produce and 
seafood being brought by ground transportation into the United States 
might have to wait to cross the border due to prior notice 
resubmission. This wait at the border occurs if prior notice is 
resubmitted with revised information regarding the shipment when the 
shipment is closer to the border than the 4 hours required; the 
transporter of the shipment must wait for the minimum prior notice time 
to elapse before crossing the border or risk being refused entry.
    Table 5 of this document shows the volume of fresh, perishable 
produce imported into the United States from Mexico for the calendar 
year 2001 (Ref. 4). Produce was included in the count if it was 
considered `highly or very highly perishable' (Ref. 5) and if the 
produce was not regulated under section 8e of the Agricultural 
Marketing Agreement Act of 1937 (AMAA). Importers of products currently 
regulated by the Agricultural Marketing Agreement Act, e.g., tomatoes, 
avocados, oranges, are required to notify USDA at least 1 day prior to 
U.S. entry to make arrangements for inspection

[[Page 5444]]

and certification of the product they are importing. These products 
therefore are not included in the count because they already have 
business practices in place that would accommodate the prior notice 
period. FDA requests comments on the perishability of the produce that 
is used in this count.
    Multiplying the volume of Mexican produce that was imported into 
the United States in 2001 by the current U.S. border prices per pound 
(Ref. 6) for these products gives an estimate of wholesale revenue. 
Then we convert the wholesale revenue to retail revenue using the 
retail price mark-up on produce in the United States, which can range 
from 100 percent to 600 percent (Ref. 7). We will increase the 
wholesale revenue by 100 percent in these estimates to represent a 
reasonable retail price mark-up rate across produce commodities in the 
United States. We will reexamine our choice of the 100 percent mark-up 
rate in a sensitivity analysis presented later in the costs section.
    Assuming that perishable produce has an average life span of 7 
days, we can then estimate the value of the time lost (4 hours) for 20 
percent of the imports waiting to cross the border as a 2.4 percent 
loss (4 hours out of 168 hours) in the product's value. Applying this 
percent loss in value to one-quarter of the total retail revenue of 
imported Mexican fresh produce results in a $16,600,920 loss in produce 
value.

                                  Table 5.--Fresh Produce Imported From Mexico
----------------------------------------------------------------------------------------------------------------
                                                                        Current
                                                 Total Volume for   Wholesale Price
         Perishable produce from Mexico          2001 (100,000 lb   per lb. (Sept.     Total Revenues Wholesale
                                                      units)             2002)
----------------------------------------------------------------------------------------------------------------
Cucumbers                                            6491                 0.29            188,239,000
----------------------------------------------------------------------------------------------------------------
Peppers (all varieties)                              6088                 0.53            322,664,000
----------------------------------------------------------------------------------------------------------------
Squash                                               4158                 0.71            295,218,000
----------------------------------------------------------------------------------------------------------------
Mangoes                                              3461                 0.57            197,277,000
----------------------------------------------------------------------------------------------------------------
Papaya                                               1587                 0.45             71,415,000
----------------------------------------------------------------------------------------------------------------
Broccoli                                             1138                 0.65             73,970,000
----------------------------------------------------------------------------------------------------------------
Eggplant                                              887                 0.40             35,480,000
----------------------------------------------------------------------------------------------------------------
Asparagus                                             856                 1.29            110,424,000
----------------------------------------------------------------------------------------------------------------
Sweet Corn                                            828                 0.26             21,528,000
----------------------------------------------------------------------------------------------------------------
Strawberries                                          676                 0.96             64,896,000
----------------------------------------------------------------------------------------------------------------
Beans                                                 559                 0.58             32,422,000
----------------------------------------------------------------------------------------------------------------
Radishes                                              516                 0.31             15,996,000
----------------------------------------------------------------------------------------------------------------
Fruits-Other                                          426                 2.04             86,904,000
----------------------------------------------------------------------------------------------------------------
Vegetables-other                                      365                 2.80            102,200,000
----------------------------------------------------------------------------------------------------------------
Greens                                                298                 0.48             14,304,000
----------------------------------------------------------------------------------------------------------------
Spinach                                               197                 1.375            27,087,500
----------------------------------------------------------------------------------------------------------------
Green Peas                                            129                 2.20             28,380,000
----------------------------------------------------------------------------------------------------------------
Okra                                                  112                 0.80              8,960,000
----------------------------------------------------------------------------------------------------------------
Berries-misc.                                          78                 1.67             13,026,000
----------------------------------------------------------------------------------------------------------------
Raspberries                                            32                 4.40             14,080,000
----------------------------------------------------------------------------------------------------------------
Artichokes                                             23                 1.50              3,450,000
----------------------------------------------------------------------------------------------------------------
Mushrooms                                               7                 1.60              1,120,000
----------------------------------------------------------------------------------------------------------------
Endive                                                  4                 0.37                148,000
----------------------------------------------------------------------------------------------------------------
Escarole                                                2                 0.37                 74,000
----------------------------------------------------------------------------------------------------------------
Wholesale Value                                  ................  ................    $1,729,262,500
----------------------------------------------------------------------------------------------------------------
Retail Value                                     ................  ................    $3,458,525,000
----------------------------------------------------------------------------------------------------------------
2.4% reduction in value for 20% of the products  ................  ................       $16,600,920
----------------------------------------------------------------------------------------------------------------


[[Page 5445]]

    We repeat the exercise outlined above in table 5 for Canada, as 
shown in table 6. Again, until FDA acquires updated information, we 
will assume that Canadian produce growers use business practices that 
are similar to those used by Mexican growers. FDA solicits comments on 
this assumption. While FDA acknowledges that their business practices 
may be different in some ways, it is possible that Canadian produce 
growers will also have to adjust business practices so that submitters 
can comply with the prior notice requirement. We seek comment on this 
issue.
    As with the Mexican produce, only Canadian produce that is highly 
or very highly perishable and did not fall under the purview of the 
Agricultural Marketing Agreement Act is included in table 6.
    We again calculate the 2.4 percent loss in product value due to the 
importer having to resubmit prior notice for 20 percent of the Canadian 
imported fresh produce. This loss in product value due to the 4-hour 
wait time totals $1,928,765.

                                  Table 6.--Fresh Produce Imported From Canada
----------------------------------------------------------------------------------------------------------------
                                                                        Current
                                                 Total Volume for   Wholesale Price
         Perishable Produce from Canada          2001 (100,000 lb   per lb. (Sept.     Total Revenues Wholesale
                                                      units)             2002)
----------------------------------------------------------------------------------------------------------------
Peppers                                               753                 0.30             22,590,000
----------------------------------------------------------------------------------------------------------------
Cucumbers                                             627                 0.145             9,091,500
----------------------------------------------------------------------------------------------------------------
Blueberries                                           401                 1.42             56,942,000
----------------------------------------------------------------------------------------------------------------
Mushrooms                                             373                 1.55             57,815,000
----------------------------------------------------------------------------------------------------------------
Lettuce-Other                                         243                 0.50             12,150,000
----------------------------------------------------------------------------------------------------------------
Raspberries                                            89                 2.78             24,742,000
----------------------------------------------------------------------------------------------------------------
Broccoli                                               88                 0.72              6,336,000
----------------------------------------------------------------------------------------------------------------
Cherries                                               37                 1.30              4,810,000
----------------------------------------------------------------------------------------------------------------
Sweet Corn                                             36                 0.22                792,000
----------------------------------------------------------------------------------------------------------------
Squash                                                 27                 0.17                459,000
----------------------------------------------------------------------------------------------------------------
Spinach                                                24                 1.30              3,120,000
----------------------------------------------------------------------------------------------------------------
Radishes                                               11                 0.50                550,000
----------------------------------------------------------------------------------------------------------------
Endive                                                  9                 0.17                153,000
----------------------------------------------------------------------------------------------------------------
Beans                                                   7                 0.50                350,000
----------------------------------------------------------------------------------------------------------------
Strawberries                                            5                 0.575               287,500
----------------------------------------------------------------------------------------------------------------
Pears                                                   4                 0.39                156,000
----------------------------------------------------------------------------------------------------------------
Green Peas                                              3                 1.60                480,000
----------------------------------------------------------------------------------------------------------------
Greens                                                  2                 0.30                 60,000
----------------------------------------------------------------------------------------------------------------
Eggplant                                                1                 0.29                 29,000
----------------------------------------------------------------------------------------------------------------
Wholesale Value                                  ................  ................      $200,913,000
----------------------------------------------------------------------------------------------------------------
Retail Value                                     ................  ................      $401,826,000
----------------------------------------------------------------------------------------------------------------
2.4% reduction in value for 20% of the products  ................  ................        $1,928,765
----------------------------------------------------------------------------------------------------------------

    We used the same logic for seafood as we did for produce to account 
for the possibility of having to resubmit prior notice, i.e., a change 
in the quantity of seafood in the shipment made after the original 
notice was submitted, less than 4 hours before scheduled entry. We will 
use the reduction in the value of perishable imported seafood to 
account for the cost of a wait at the border while prior notice is 
resubmitted.
    We used information from the annual imported seafood statistics 
published by the National Marine Fisheries Service (Ref. 8) to estimate 
the weight and wholesale value in dollars of all fresh, perishable 
seafood products imported from Mexico and Canada. As we did for fresh 
produce, we mark-up the wholesale price of the fresh seafood by 100 
percent (Ref. 9) to represent the retail value of the products. Then, 
assuming that perishable seafood will keep for 2 days in a consumer's 
refrigerator, (Ref. 10) we find that an 4-hour delay in delivery time 
caused by the prior notice requirement for 20 percent of the products 
results in a 8.3 percent loss in that seafood's value (4 hours out of 
48 hours). Table 7 shows that the lost time results in a $1,863,805 
loss on the value of Mexican fresh seafood imports. FDA requests 
comment on the perishability of the seafood used in tables 7 and 8.

[[Page 5446]]



                                  Table 7.--Fresh Seafood Imported From Mexico
----------------------------------------------------------------------------------------------------------------
          2001 Fresh Mexican Seafood Products                     Pounds                      Dollars
----------------------------------------------------------------------------------------------------------------
Atka Mackerel, fresh                                                 1,995                          2,200
----------------------------------------------------------------------------------------------------------------
Bass, fresh                                                          1,362                          2,218
----------------------------------------------------------------------------------------------------------------
Clam live, fresh                                                   245,498                        274,942
----------------------------------------------------------------------------------------------------------------
Crab live, fresh                                                   405,621                        489,856
----------------------------------------------------------------------------------------------------------------
Crabmeat, fresh                                                    287,531                      1,540,130
----------------------------------------------------------------------------------------------------------------
Flatfish flounder, fresh                                             1,518                          2,199
----------------------------------------------------------------------------------------------------------------
Flatfish fillet, fresh                                               1,705                          3,100
----------------------------------------------------------------------------------------------------------------
Flatfish, fresh                                                    678,768                        781,883
----------------------------------------------------------------------------------------------------------------
Groundfish cod, fresh                                                4,000                          2,400
----------------------------------------------------------------------------------------------------------------
Grouper, fresh                                                   4,056,054                      7,399,434
----------------------------------------------------------------------------------------------------------------
Lobster, live                                                        8,584                         50,474
----------------------------------------------------------------------------------------------------------------
Rock lobster live, fresh                                           794,224                      5,859,260
----------------------------------------------------------------------------------------------------------------
Mackerel, fresh                                                    147,334                        127,873
----------------------------------------------------------------------------------------------------------------
Marine fish fillet, fresh                                        2,120,250                      7,395,902
----------------------------------------------------------------------------------------------------------------
Marine fish, fresh                                               5,448,771                      6,681,485
----------------------------------------------------------------------------------------------------------------
Marine fish scaled, fresh                                          162,105                        125,346
----------------------------------------------------------------------------------------------------------------
Mollusks live, fresh                                                 2,147                         15,272
----------------------------------------------------------------------------------------------------------------
Octopus live, fresh                                                 31,680                         24,214
----------------------------------------------------------------------------------------------------------------
Oysters live, fresh                                                 39,930                         25,040
----------------------------------------------------------------------------------------------------------------
Salmon Atlantic fillet farmed, fresh                                   405                          2,552
----------------------------------------------------------------------------------------------------------------
Sardine, sardinella, brisling, sprat, fresh                         71,163                          7,591
----------------------------------------------------------------------------------------------------------------
Scallops live, fresh                                               472,384                      1,418,302
----------------------------------------------------------------------------------------------------------------
Sea Urchin live, fresh                                              10,501                         67,331
----------------------------------------------------------------------------------------------------------------
Sea Urchin roe, fresh                                              464,946                      4,641,659
----------------------------------------------------------------------------------------------------------------
Shark, fresh                                                     1,500,877                        711,349
----------------------------------------------------------------------------------------------------------------
Shrimp, shell-on, fresh                                            452,714                        861,897
----------------------------------------------------------------------------------------------------------------
Snapper, fresh                                                   5,835,775                      9,254,300
----------------------------------------------------------------------------------------------------------------
Squid live, fresh                                                   88,042                         39,952
----------------------------------------------------------------------------------------------------------------
Swordfish, fresh                                                 1,615,546                      3,759,096
----------------------------------------------------------------------------------------------------------------
Trout, fresh                                                        82,958                        131,353
----------------------------------------------------------------------------------------------------------------
Rainbow trout farmed, fresh                                         80,384                        161,526
----------------------------------------------------------------------------------------------------------------
Bigeye tuna, fresh                                                   9,819                         12,200
----------------------------------------------------------------------------------------------------------------
Bluefin tuna, fresh                                                 82,471                        332,250
----------------------------------------------------------------------------------------------------------------
Tuna, fresh                                                         78,747                        155,069
----------------------------------------------------------------------------------------------------------------
Yellowfin tuna, fresh                                            2,012,848                      3,771,488
----------------------------------------------------------------------------------------------------------------
Whitefish fillet, fresh                                              3,590                          7,560
----------------------------------------------------------------------------------------------------------------
Total Wholesale Value                                           27,302,246                     56,138,703
----------------------------------------------------------------------------------------------------------------

[[Page 5447]]

 
Total Retail Value                                       .......................             $112,277,406
----------------------------------------------------------------------------------------------------------------
8.3% reduction in value for 20% of products              .......................               $1,863,805
----------------------------------------------------------------------------------------------------------------

    Table 8 shows the 4 hours of lost time due to prior notice 
resubmission for 20 percent of all imported Canadian fresh seafood 
causes a value loss of $30,929,417.

                                  Table 8.--Fresh Seafood Imported From Canada
----------------------------------------------------------------------------------------------------------------
          2001 Fresh Canadian Seafood Products                      Pounds                     Dollars
----------------------------------------------------------------------------------------------------------------
Bass, fresh                                                           727,830                    740,152
----------------------------------------------------------------------------------------------------------------
Caviar                                                                 20,189                    272,770
----------------------------------------------------------------------------------------------------------------
Clam geoduck live, fresh                                              155,927                  1,097,902
----------------------------------------------------------------------------------------------------------------
Clam live, fresh                                                    9,144,304                 22,064,683
----------------------------------------------------------------------------------------------------------------
Crab live, fresh                                                    9,479,765                 24,066,021
----------------------------------------------------------------------------------------------------------------
Crabmeat, fresh                                                        27,601                     80,431
----------------------------------------------------------------------------------------------------------------
Crustaceans live, fresh                                               148,925                    574,989
----------------------------------------------------------------------------------------------------------------
Fish liver and roe, fresh                                              51,154                    229,569
----------------------------------------------------------------------------------------------------------------
Flatfish flounder fillet, fresh                                       750,468                  1,238,031
----------------------------------------------------------------------------------------------------------------
Flatfish flounder, fresh                                            6,264,346                  4,367,780
----------------------------------------------------------------------------------------------------------------
Flatfish halibut Atlantic, fresh                                    1,948,791                  7,542,598
----------------------------------------------------------------------------------------------------------------
Flatfish halibut Pacific, fresh                                    12,553,266                 39,850,556
----------------------------------------------------------------------------------------------------------------
Flatfish fillet, fresh                                                853,224                  3,536,120
----------------------------------------------------------------------------------------------------------------
Flatfish, fresh                                                     1,693,516                    796,383
----------------------------------------------------------------------------------------------------------------
Flatfish sole fillet, fresh                                         1,099,430                  2,968,610
----------------------------------------------------------------------------------------------------------------
Flatfish sole, fresh                                                1,062,030                  1,096,079
----------------------------------------------------------------------------------------------------------------
Flatfish turbot Greenland fillet, fresh                               700,456                  2,069,006
----------------------------------------------------------------------------------------------------------------
Flatfish turbot Greenland, fresh                                      862,211                  3,146,300
----------------------------------------------------------------------------------------------------------------
Freshwater fish fillet, fresh                                       2,824,811                  4,970,127
----------------------------------------------------------------------------------------------------------------
Freshwater fish, fresh                                                549,956                  1,008,302
----------------------------------------------------------------------------------------------------------------
Groundfish cod Atlantic fillet, fresh                               1,646,363                  4,489,788
----------------------------------------------------------------------------------------------------------------
Groundfish cod Atlantic, fresh                                      4,904,368                  5,199,471
----------------------------------------------------------------------------------------------------------------
Groundfish cod fillet, fresh                                          107,994                    288,644
----------------------------------------------------------------------------------------------------------------
Groundfish cod, fresh                                                 239,987                    249,991
----------------------------------------------------------------------------------------------------------------
Groundfish cusk, fresh                                                  8,281                     22,060
----------------------------------------------------------------------------------------------------------------
Groundfish cusk, pollock fillet, fresh                                218,854                    362,293
----------------------------------------------------------------------------------------------------------------
Groundfish haddock fillet, fresh                                      708,261                  2,109,607
----------------------------------------------------------------------------------------------------------------
Groundfish haddock, fresh                                          17,391,202                 19,469,582
----------------------------------------------------------------------------------------------------------------
Groundfish hake fillet, fresh                                         160,972                     93,941
----------------------------------------------------------------------------------------------------------------
Groundfish hake, fresh                                             14,070,217                  9,182,974
----------------------------------------------------------------------------------------------------------------

[[Page 5448]]

 
Groundfish ocean perch fillet, fresh                                5,415,106                 10,029,520
----------------------------------------------------------------------------------------------------------------
Groundfish ocean perch, fresh                                         898,964                    518,431
----------------------------------------------------------------------------------------------------------------
Groundfish pollock Atlantic, fresh                                  2,362,637                  1,595,615
----------------------------------------------------------------------------------------------------------------
Groundfish pollock, fresh                                             161,121                    130,308
----------------------------------------------------------------------------------------------------------------
Herring, fresh                                                      4,009,469                    671,338
----------------------------------------------------------------------------------------------------------------
Lingcod, fresh                                                        612,093                    812,597
----------------------------------------------------------------------------------------------------------------
Lobster, fresh                                                          7,707                     60,030
----------------------------------------------------------------------------------------------------------------
Lobster, live                                                      49,200,925                244,567,173
----------------------------------------------------------------------------------------------------------------
Rock lobster live, fresh                                              196,858                  1,133,246
----------------------------------------------------------------------------------------------------------------
Mackerel, fresh                                                       943,155                    595,937
----------------------------------------------------------------------------------------------------------------
Marine fish fillet, fresh                                          10,272,946                 24,235,390
----------------------------------------------------------------------------------------------------------------
Marine fish, fresh                                                  9,084,029                  6,610,870
----------------------------------------------------------------------------------------------------------------
Mollusks live, fresh                                                  809,461                    907,048
----------------------------------------------------------------------------------------------------------------
Monkfish, fresh                                                        89,861                    154,267
----------------------------------------------------------------------------------------------------------------
Mussels live, fresh farmed                                         18,545,254                 13,693,263
----------------------------------------------------------------------------------------------------------------
Mussels live, fresh wild                                               98,842                    104,273
----------------------------------------------------------------------------------------------------------------
Oysters live, fresh farmed                                          2,918,098                  4,378,548
----------------------------------------------------------------------------------------------------------------
Oysters live, fresh wild                                              579,011                  1,236,868
----------------------------------------------------------------------------------------------------------------
Perch fillet, fresh                                                   529,366                  2,079,677
----------------------------------------------------------------------------------------------------------------
Perch, fresh                                                          337,273                    727,284
----------------------------------------------------------------------------------------------------------------
Pickerel fillet, fresh                                                850,256                  3,715,248
----------------------------------------------------------------------------------------------------------------
Pickerel, fresh                                                     1,682,743                  3,500,552
----------------------------------------------------------------------------------------------------------------
Pike, fresh                                                           214,390                    395,706
----------------------------------------------------------------------------------------------------------------
Pike perch, yellow pike, fresh                                        125,114                    197,396
----------------------------------------------------------------------------------------------------------------
Sablefish, fresh                                                       21,648                     48,845
----------------------------------------------------------------------------------------------------------------
Salmon Atlantic fillet, fresh farmed                               28,972,418                 97,270,694
----------------------------------------------------------------------------------------------------------------
Salmon Atlantic fillet, fresh wild                                    404,012                  1,281,582
----------------------------------------------------------------------------------------------------------------
Atlantic Salmon, fresh farmed                                     107,101,696                248,809,617
----------------------------------------------------------------------------------------------------------------
Atlantic Salmon, fresh wild                                            68,732                     84,035
----------------------------------------------------------------------------------------------------------------
Chinook Salmon, fresh farmed                                        5,752,197                 10,614,163
----------------------------------------------------------------------------------------------------------------
Chinook Salmon, fresh wild                                            225,509                    530,368
----------------------------------------------------------------------------------------------------------------
Salmon chum, fresh                                                  1,651,221                  1,133,029
----------------------------------------------------------------------------------------------------------------
Salmon coho, fresh farmed                                           1,382,572                  1,963,499
----------------------------------------------------------------------------------------------------------------
Salmon coho, fresh wild                                               183,427                    270,138
----------------------------------------------------------------------------------------------------------------
Salmon fillet, fresh                                                1,640,485                  4,361,707
----------------------------------------------------------------------------------------------------------------
Salmon, fresh                                                       2,820,957                  5,430,272
----------------------------------------------------------------------------------------------------------------
Pink Salmon, fresh                                                     79,981                     60,403
----------------------------------------------------------------------------------------------------------------

[[Page 5449]]

 
Sockeye salmon, fresh                                                 265,505                    457,427
----------------------------------------------------------------------------------------------------------------
Salmonidae, fresh                                                      57,787                    149,760
----------------------------------------------------------------------------------------------------------------
Scallops live, fresh                                                6,955,476                 31,688,064
----------------------------------------------------------------------------------------------------------------
Sea urchin live, fresh                                              5,053,710                  4,367,434
----------------------------------------------------------------------------------------------------------------
Sea urchin roe, fresh                                                  11,414                     94,706
----------------------------------------------------------------------------------------------------------------
Dogfish shark, fresh                                                3,300,398                  1,003,294
----------------------------------------------------------------------------------------------------------------
Shark, fresh                                                          223,788                    206,838
----------------------------------------------------------------------------------------------------------------
Shrimp peeled, fresh                                                    5,401                     27,934
----------------------------------------------------------------------------------------------------------------
Shrimp shell-on, fresh                                                479,483                  1,478,634
----------------------------------------------------------------------------------------------------------------
Smelts, fresh                                                         509,586                    606,463
----------------------------------------------------------------------------------------------------------------
Snail live, fresh                                                      46,174                    121,239
----------------------------------------------------------------------------------------------------------------
Snapper, fresh                                                         37,316                     94,366
----------------------------------------------------------------------------------------------------------------
Swordfish, fresh                                                    1,809,654                  6,488,992
----------------------------------------------------------------------------------------------------------------
Trout, fresh                                                        1,574,672                  2,891,806
----------------------------------------------------------------------------------------------------------------
Rainbow trout, fresh farmed                                   361,121 608,347
----------------------------------------------------------------------------------------------------------------
Albacore tuna, fresh                                                   25,859                     70,076
----------------------------------------------------------------------------------------------------------------
Bigeye tuna, fresh                                                    426,547                  1,448,778
----------------------------------------------------------------------------------------------------------------
Bluefin tuna, fresh                                                   288,361                  2,464,619
----------------------------------------------------------------------------------------------------------------
Tuna, fresh                                                            13,429                     50,299
----------------------------------------------------------------------------------------------------------------
Yellowfin tuna, fresh                                                 205,812                    666,809
----------------------------------------------------------------------------------------------------------------
Whitefish fillet, fresh                                               988,816                  1,864,542
----------------------------------------------------------------------------------------------------------------
Whitefish, fresh                                                    8,224,484                 11,262,979
----------------------------------------------------------------------------------------------------------------
Yellow perch fillet, fresh                                          1,174,798                  6,401,844
----------------------------------------------------------------------------------------------------------------
Total Wholesale Value                                             382,663,829                931,608,947
----------------------------------------------------------------------------------------------------------------
Total Retail Value                                        .........................       $1,863,217,894
----------------------------------------------------------------------------------------------------------------
16.7% reduction in value for 20% of products              .........................          $30,929,417
----------------------------------------------------------------------------------------------------------------

    Table 9 presents a summary of the costs associated with option 2. 
Also presented in table 9 is the present value of the costs associated 
with this option, calculated using the OMB-recommended discount rate of 
7 percent.

                 Table 9.--Summary of Costs for Option 2
Research costs                             $4,908,509
------------------------------------------------------------------------
Computer acquisition costs                 $8,315,755
------------------------------------------------------------------------
Annual costs to fill out prior notice      $59,689,990
 screens (including updates and
 amendments)
------------------------------------------------------------------------
FDA prior notice system cost               $4,421,176
------------------------------------------------------------------------
Lost value for Mexican produce             $16,600,920
------------------------------------------------------------------------
Lost value for Canadian produce            $1,928,765
------------------------------------------------------------------------
Lost value for Mexican seafood             $1,863,805
------------------------------------------------------------------------
Lost value for Canadian seafood            $30,929,417
------------------------------------------------------------------------
Total Costs for Option 2                   $128,658,337
------------------------------------------------------------------------
Present value of costs                     $1,603,543,969
------------------------------------------------------------------------


[[Page 5450]]

Option three: Minimum prior notice timeframe of 8 hours; electronic 
submission of information; any change in information requires 
resubmission.

    Option three is to allow the minimum timeframe for prior notices, 
as dictated by the statute, to take effect. Comments indicated that 
Canadian and Mexican produce growers and seafood processors are 
concerned that the longer the minimum time required for the prior 
notice, the less fresh their products will be when they reach 
customers. Less-than-optimal fresh (i.e., lower quality) products would 
result in a lower price paid for the imported produce or seafood 
shipments, or possibly even the loss of a customer's business to a 
domestic producer. For importers of perishable products such as seafood 
and produce, the 8-hour minimum time for prior notice might change 
business practices in the industry. These changes in business practices 
would be in addition to the costs of learning about the proposed 
regulation, submitting forms, and the FDA IT costs outlined in option 
two.
    How much importer, produce grower, and seafood processor business 
practices will be affected by prior notice requirements again will 
depend on how early the orders were received compared with how early 
prior notice must be submitted. If the order for the product was placed 
more than 8 hours before the truckload is scheduled to arrive at the 
border, then there should be no delay in the importation of the 
product.
    What is more likely to cause a wait before crossing the border is 
if the information on the prior notice changes after the prior notice 
was submitted. For example, if the prior notice is submitted just a few 
hours before loading the truck, unforeseen factors, including 
composition of the actual shipment, may cause the prior notice 
information submitted to not match the actual shipment on the truck. 
This is just one example of how information on a prior notice 
submission might change after the prior notice has already been 
submitted to FDA, thus requiring a cancellation of the prior notice and 
a resubmission of the corrected information.
    Having to resubmit a prior notice to FDA may not cause any delay of 
the shipment if the original submission was placed early enough. 
However, it is likely that the necessary corrected prior notice 
information will be resubmitted not long before the articles start 
heading for the border. Therefore it is likely that some shipments may 
have to wait several hours and possibly the full 8-hour minimum for the 
resubmitted prior notice to be accepted by FDA.
    If the prior notice time for submission is 8 hours instead of 4 
hours, the probability of having to adjust and resubmit prior notice 
information will be higher. Now, instead of 20 percent of the importers 
of perishable products from Canada and Mexico having to resubmit their 
notices, we will assume that the 8-hour submission timetable means that 
25 percent will have to resubmit their notices. We do not expect the 
number of resubmissions to increase greatly as the minimum timeframe 
for prior notice is still minimal and FDA expects most orders to be 
placed well in advance of the 8-hour timeframe. We assume that as the 
minimum notice time increases, the likelihood of a resubmission also 
increases, but less than proportionally to the change in minimum notice 
time.
    Carriers of these products may not be able to cross the border for 
8 hours instead of 4 hours, which affects 4.8 percent of the produce 
life span (8 hours out of 168 hours) and 16.7 percent of the seafood 
life span (8 hours out of 48 hours).
    Table 10 shows the loss in value caused by the resubmitted prior 
notice information for the 25 percent of imported Mexican and Canadian 
fresh seafood and produce affected.

Table 10.--Loss in Value Caused by Resubmitted Prior Notice Under Option
                                    3
Perishable Produce
------------------------------------------------------------------------
2001 Imported Mexican Produce Total            $3,458,525,000
 Retail Value
------------------------------------------------------------------------
4.8% reduction in value for 25% of                $41,502,300
 Mexican produce
------------------------------------------------------------------------
2001 Imported Canadian Produce Total             $401,826,000
 Retail Value
------------------------------------------------------------------------
4.8% reduction in value for 25% of                 $4,821,912
 Canadian produce
------------------------------------------------------------------------
Perishable Seafood
------------------------------------------------------------------------
2001 Imported Mexican Seafood Total              $112,277,406
 Retail Value
------------------------------------------------------------------------
16.7% reduction in value for 25% of                $4,687,582
 Mexican seafood
------------------------------------------------------------------------
2001 Imported Canadian Seafood Total           $1,863,217,894
 Retail Value
------------------------------------------------------------------------
16.7% reduction in value for 25% of               $77,789,347
 Canadian seafood
------------------------------------------------------------------------

    Table 11 presents a summary of the costs associated with option 3. 
Also presented in table 11 is the present value of the costs associated 
with this option using the OMB-recommended discount rate of 7 percent.

                Table 11.--Summary of Costs for Option 3
Research costs                            $4,908,509
------------------------------------------------------------------------
Computer acquisition costs                $8,315,755
------------------------------------------------------------------------
Annual costs to fill out prior notice     $59,689,990
 screens (including updates and
 amendments)
------------------------------------------------------------------------
FDA prior notice system cost              $4,421,176
------------------------------------------------------------------------
Lost value for Mexican produce            $41,502,300
------------------------------------------------------------------------
Lost value for Canadian produce           $4,821,912
------------------------------------------------------------------------

[[Page 5451]]

 
Lost value for Mexican seafood            $4,687,582
------------------------------------------------------------------------
Lost value for Canadian seafood           $77,789,347
------------------------------------------------------------------------
Total Costs for Option 3                  $206,136,571
------------------------------------------------------------------------
Present value of costs                    $2,710,375,883
------------------------------------------------------------------------

Option four: prior notice received by noon of the calendar day prior to 
the day of crossing; electronic submission of information; any change 
in information requires resubmission.

    This option requires that prior notification be submitted no later 
than noon of the calendar day prior to the expected day of crossing. 
Under this option, prior notice submitters will have to let FDA know of 
the incoming food shipment at least 12 hours before the shipment 
reaches a U.S. point of crossing. This fourth option would likely cause 
a change in importer business practices and the business practices of 
their clients in much the same way as option three, but the potential 
loss of product value is higher because the minimum prior notice time 
has increased.
    Again, how business practices will be affected by prior notice 
requirements depends on how early the invoice orders are received, the 
timeframe in which the truck was loaded, and when prior notice is 
submitted. FDA requests comments on any additional costs that might 
result from changes in business practices as a result of this proposed 
rule.
    As before, we assume that as the minimum notice time increases, the 
likelihood of a resubmission also increases, but less than 
proportionally to the change in minimum notice time. Thus, since the 
prior notice timeframe for submission is at least 12 hours instead of 8 
hours, the probability of having to adjust and resubmit prior notice 
information is higher. Instead of 25 percent of the importers of 
perishable products from Canada and Mexico having to resubmit their 
notices, we will assume that the 12-hour submission timetable means 
that 40 percent will have to resubmit their notices.
    We increase the percentage of resubmission this time by 15 percent 
because as the prior notice timeframe increases relative to the time of 
entry, it becomes more likely that the prior notice information will 
change after the notice is submitted to FDA, thus requiring 
resubmission. The transporters of products with resubmitted prior 
notices may then have to wait as long as 12 hours, which affects 7.1 
percent of the produce life span (12 hours out of 168 hours) and 25 
percent of the seafood life span (12 hours out of 48 hours).
    Table 12 shows the loss in value caused by the resubmitted prior 
notice information for the 40 percent of imported Mexican and Canadian 
fresh seafood and produce that might be affected. As a result of having 
to give prior notice by noon the calendar day prior to entry, the 
Mexican fresh produce industry would lose $98,222,110 and the Canadian 
fresh produce industry would lose $11,411,858. The Mexican fresh 
seafood industry would lose $11,227,741 and the Canadian fresh seafood 
industry would lose $186,321,789 in value.

Table 12.--Loss in Value Caused by Resubmitted Prior Notice Under Option
                                  Four
Perishable Produce
------------------------------------------------------------------------
2001 Imported Mexican Produce Total            $3,458,525,000
 Retail Value
------------------------------------------------------------------------
7.1% reduction in value for 40% of                $98,222,110
 Mexican produce
------------------------------------------------------------------------
2001 Imported Canadian Produce Total             $401,826,000
 Retail Value
------------------------------------------------------------------------
7.1% reduction in value for 40% of                $11,411,858
 Canadian produce
------------------------------------------------------------------------
Perishable Seafood
------------------------------------------------------------------------
2001 Imported Mexican Seafood Total              $112,277,406
 Retail Value
------------------------------------------------------------------------
25% reduction in value for 40% of                 $11,227,741
 Mexican seafood
------------------------------------------------------------------------
2001 Imported Canadian Seafood Total           $1,863,217,894
 Retail Value
------------------------------------------------------------------------
25% reduction in value for 40% of                $186,321,789
 Canadian seafood
------------------------------------------------------------------------

    Table 13 presents a summary of the costs associated with option 4. 
Also presented in table 13 is the present value of the costs associated 
with this option using the OMB-recommended discount rate of 7 percent.

                Table 13.--Summary of Costs for Option 4
Research costs                            $4,908,509
------------------------------------------------------------------------
Computer acquisition costs                $8,315,755
------------------------------------------------------------------------
Annual costs to fill out prior notice     $59,689,990
 screens (including updates and
 amendments)
------------------------------------------------------------------------
FDA prior notice system cost              $4,421,176
------------------------------------------------------------------------
Lost value for Mexican produce            $98,222,110
------------------------------------------------------------------------
Lost value for Canadian produce           $11,411,858
------------------------------------------------------------------------
Lost value for Mexican seafood            $11,227,741
------------------------------------------------------------------------
Lost value for Canadian seafood           $186,321,789
------------------------------------------------------------------------
Total Costs for Option 4                  $384,518,928
------------------------------------------------------------------------
Present value of costs                    $5,258,695,269
------------------------------------------------------------------------


[[Page 5452]]

Option five: prior notice received by noon of the calendar day prior to 
the day of crossing; electronic submission of information; allow 
changes to the prior notice submission up to two hours prior to entry 
(proposed option).

    We now take the estimates in option 4 and adjust them to account 
for the effects of allowing changes to the prior notice submission. 
Since prior notice must be submitted by noon on the calendar day prior 
to U.S. entry, it is reasonable to expect that not all the information 
required on a prior notice will be final. Allowing changes to the 
original submission, in the form of electronic product identity 
amendments and arrival updates, should improve the flow of import 
traffic by reducing the number of prior notice resubmissions and 
thereby reducing the loss of value for perishable foods, since they 
will not have to wait much extra time, if any at all, before crossing 
the U.S. border.
    The prior notice screen will have required fields for the addresses 
of the submitter, importer, owner, and consignee, as well as 
transporter, manufacturer, and grower if known. Required information 
would also include the identity of the article of food, its originating 
country, the country from which the food was shipped, its U.S. Customs 
entry number, and the date, time, and expected port of entry.
    Increasing the number of required fields that can be changed on the 
prior notice screen prior to entry reduces the likelihood that the 
information would have to be completely resubmitted by importers. This 
change would lessen the time burden, and therefore the cost, of having 
to submit prior notice. Allowing a 2 hour amendment and updates to 
prior notice would provide some flexibility for importers in industries 
where pieces of information, such as the quantity of the product being 
imported, time to port of arrival, and the anticipated port may change 
or is not known until just before shipping.
    Assuming that prior notice can be amended and updated would reduce 
the number of resubmissions that would normally occur. For this option 
then, with amendment and updates, we will assume that the number of 
prior notice resubmissions necessitated by changes in information on 
the notice will be reduced from 40 percent (as in option 4) to 5 
percent.
    This option lowers the prior notice costs to importers (as compared 
to option 4) and therefore to Mexican and Canadian fresh produce 
growers and seafood processors, because they will not have to resubmit 
their prior notices when importing food to the United States as 
frequently. Instead they can amend or update the notices. Option 5 
would save a minimum of 10 hours wait time per entry that can be 
amended or updated for the prior notice over the time used in option 4; 
the maximum time products would have to wait at the border would be 2 
hours, or 1.2 percent of the fresh produce life span (2 hours out of 
168 hours) and 4.2 percent of the fresh seafood life span (2 hours out 
of 48 hours). Table 14 shows the costs of submitting prior notice for a 
12-hour minimum time, with a 2-hour amendment and updates, for Canadian 
and Mexican fresh produce and seafood.

Table 14.--Loss in Value Caused by Resubmitted Prior Notice Under Option
                                  Five
Perishable Produce
------------------------------------------------------------------------
2001 Imported Mexican Produce Total            $3,458,525,000
 Retail Value
------------------------------------------------------------------------
1.2% reduction in value for 25% of                 $2,075,115
 Mexican produce
------------------------------------------------------------------------
2001 Imported Canadian Produce Total             $401,826,000
 Retail Value
------------------------------------------------------------------------
1.2% reduction in value for 25% of                   $241,096
 Canadian produce
------------------------------------------------------------------------
Perishable Seafood
------------------------------------------------------------------------
2001 Imported Mexican Seafood Total              $112,277,406
 Retail Value
------------------------------------------------------------------------
4.2% reduction in value for 25% of                   $235,783
 Mexican seafood
------------------------------------------------------------------------
2001 Imported Canadian Seafood Total           $1,863,217,894
 Retail Value
------------------------------------------------------------------------
4.2% reduction in value for 25% of                 $3,912,771
 Canadian seafood
------------------------------------------------------------------------

    Table 15 compares the reduction in the costs of this rule if an 
amendment and update to prior notice is allowed (option 5) as opposed 
to the no-amendment option 4.

          Table 15.--Comparison of Option Four With Option Five
Perishable Mexican Produce Value loss
------------------------------------------------------------------------
Option 4-12 hour minimum notice                   $98,222,110
------------------------------------------------------------------------
Option 5-12 hour notice with changes               $2,075,115
------------------------------------------------------------------------
Savings with amendment and update                 $96,146,995
------------------------------------------------------------------------
Perishable Canadian Produce Value loss
------------------------------------------------------------------------
Option 4-12 hour minimum notice                   $11,411,858
------------------------------------------------------------------------
Option 5-12 hour notice with changes                 $241,096
------------------------------------------------------------------------

[[Page 5453]]

 
Savings with amendment and update                 $11,170,762
------------------------------------------------------------------------
Perishable Mexican Seafood Value loss
------------------------------------------------------------------------
Option 4-12 hour minimum notice                   $11,227,741
------------------------------------------------------------------------
Option 5-12 hour notice with changes                 $235,783
------------------------------------------------------------------------
Savings with amendment and update                 $10,991,985
------------------------------------------------------------------------
Perishable Canadian Seafood Value Loss
------------------------------------------------------------------------
Option 4-12 hour minimum notice                  $186,321,789
------------------------------------------------------------------------
Option 5-12 hour notice with changes               $3,912,758
------------------------------------------------------------------------
Savings with amendment and update                $182,409,031
------------------------------------------------------------------------

    Table 16 presents a summary of the costs associated with option 5. 
Also presented in table 16 is the present value of the costs associated 
with this option using the OMB-recommended discount rate of 7 percent.

                Table 16.--Summary of Costs for Option 5
Research costs                            $4,908,509
------------------------------------------------------------------------
Computer acquisition costs                $8,315,755
------------------------------------------------------------------------
Annual costs to fill out prior notice     $59,689,990
 screens (including updates and
 amendments)
------------------------------------------------------------------------
FDA prior notice system cost              $4,421,176
------------------------------------------------------------------------
Lost value for Mexican produce            $2,075,115
------------------------------------------------------------------------
Lost value for Canadian produce           $241,096
------------------------------------------------------------------------
Lost value for Mexican seafood            $235,783
------------------------------------------------------------------------
Lost value for Canadian seafood           $3,912,758
------------------------------------------------------------------------
Total Costs for Option 5                  $83,800,182
------------------------------------------------------------------------
Present value of costs                    $962,713,183
------------------------------------------------------------------------

Summary of Options

    Table 17 gives a summary of the costs associated with the prior 
notice rule for each option presented.

                             Table 17.--Summary of Costs Associated With Each Option
----------------------------------------------------------------------------------------------------------------
            Costs               Option 1       Option 2          Option 3          Option 4          Option 5
----------------------------------------------------------------------------------------------------------------
Research Costs                        $0        $4,908,509        $4,908,509        $4,908,509        $4,908,509
----------------------------------------------------------------------------------------------------------------
Costs of acquiring electronic         $0        $8,315,755        $8,315,755        $8,315,755        $8,315,755
 capacity
----------------------------------------------------------------------------------------------------------------
FDA prior notice system cost          $0        $4,421,176        $4,421,176        $4,421,176        $4,421,176
----------------------------------------------------------------------------------------------------------------
Total annual cost to submit           $0       $59,689,990       $59,689,990       $59,689,990       $59,689,990
 prior notice forms
----------------------------------------------------------------------------------------------------------------
Lost value for perishable             $0       $51,322,907      $128,801,141      $307,183,498        $6,464,752
 foods
----------------------------------------------------------------------------------------------------------------
First year cost of each               $0      $128,658,000      $206,137,000      $384,519,000       $83,800,000
 option
----------------------------------------------------------------------------------------------------------------
Annual cost of each option            $0      $114,656,000      $192,134,000      $370,517,000       $69,798,000
----------------------------------------------------------------------------------------------------------------
Present value total cost of           $0    $1,603,544,000    $2,710,376,000    $5,258,695,000      $962,713,000
 each option
----------------------------------------------------------------------------------------------------------------

    Sensitivity Analysis
    We estimate that the social costs of the proposed rule (option 5) 
would be about $84 million in the first year and $70 million in later 
years. At a 7 percent discount rate, the present value of the costs of 
the proposed rule, discounted indefinitely into the future, would be 
about $963 million. These estimates rely on several important 
assumptions:
    [sbull] In option 4, forty percent of prior notices will need to be 
changed if the notice must be submitted by noon on the calendar day 
prior to entry. (Option 4 is the base for option 5 before amendment.)
    [sbull] Five percent of prior notices will still need to be changed 
even when the amendment option is available.
    [sbull] The amendment option will eliminate all but 1.2 percent of 
the lost value of imported fresh produce and all but 4.2 percent of the 
lost value of imported fresh seafood.
    [sbull] The amendment or update time is two hours before entry.
    [sbull] The retail value of imported fresh seafood and produce is 
100 percent higher than its wholesale value.

[[Page 5454]]

    [sbull] The number of import entries requiring prior notice will 
not increase over time.
    [sbull] The discount rate for calculating present value is 7 
percent.
    We now show how our estimates of costs for the proposed option 
change under different assumptions. We substitute the following 
assumptions for those used above:
    [sbull] In option 4, fifty percent of prior notices will need to be 
changed if the notice must be submitted by noon on the calendar day 
prior to entry. (Option 4 is the base for option 5 before amendment.)
    [sbull] 15 percent of prior notices will still need to be changed 
even when the amendment option is available.
    [sbull] The amendment option will eliminate all but 5 percent of 
the lost value of imported fresh produce and all but 12 percent of lost 
value of imported fresh seafood.
    [sbull] The amendment or update time is 4 hours before entry.
    [sbull] The retail value of imported fresh seafood and produce is 
200 percent higher than its wholesale value.
    [sbull] The number of import entries requiring prior notice will 
increase 3 percent per year over time.
    [sbull] The discount rate for calculating present value is 3 
percent.
    Tables 18 and 19 show the results of the sensitivity analysis. The 
tables show that the estimated cost of the proposed rule is most 
sensitive to the assumed fraction of prior notices that will need to be 
changed. The present value of the proposed rule is most sensitive to 
the rate of discount.

               Table 18.--Sensitivity Analysis for Assumptions Made for Option 5 (Proposed Option)
----------------------------------------------------------------------------------------------------------------
                                       Annual Cost Under  Annual Cost Under   Change in Annual   Percent Change
                 Test                   Base Assumption    Test Assumption    Cost (or Value)   in Present Value
----------------------------------------------------------------------------------------------------------------
50% prior notices changed                  $370,516,823       $447,312,699        $76,795,876         21
15% prior notices changed with              $69,798,077        $71,727,578         $1,929,501          3
 amendment
5% lost value for produce, 12% lost         $69,798,077        $84,837,174        $15,039,097         22
 value for seafood
Amendment time is 4 hours                   $69,789,077       $123,843,623        $54,045,546         77
Retail value is 200% of wholesale           $69,798,077        $73,030,451         $3,232,374          5
 value
Prior notice entries increase 3% in         $69,798,077        $71,588,777         $1,790,700          3
 second year
----------------------------------------------------------------------------------------------------------------


     Table 19.--Present Values for Sensitivity Analysis for Assumptions Made for Option 5 (Proposed Option)
----------------------------------------------------------------------------------------------------------------
                                                        Present Value of
                                   Present Value of      New Total Cost     Change in Present    Percent Change
              Test                 Base Total Cost         Under Test             Value         in Present Value
                                                           Assumption
----------------------------------------------------------------------------------------------------------------
50% prior notices changed            $5,258,695,269       $6,355,779,211       $1,097,083,942         21
15% prior notices changed with         $962,713,183       $1,042,325,126          $79,611,943          8
 amendment
5% lost value for produce, 12%         $962,713,183       $1,177,557,426         $214,844,243         22
 lost value for seafood
Amendment time is 4 hours              $962,713,183       $1,786,840,054         $824,126,871         86
Retail value is 200% of                $962,713,183       $1,008,889,954          $46,176,771          5
 wholesale value
Prior notice entries increase          $962,713,183         $988,294,611          $25,581,428          3
 3% in second year
3% Discount rate                       $962,713,183       $2,222,803,507       $1,260,090,324        131
----------------------------------------------------------------------------------------------------------------

Benefits: Requiring prior notice of imported food shipments and 
defining the required data elements should improve FDA's ability to 
detect accidental and deliberate contamination of food and deter 
deliberate contamination. Having notice of an imported food shipment 
before it reaches a U.S. border would allow FDA personnel to be ready 
to respond to shipments that appear to be adulterated, whether through 
intentional or accidental means, as well as when FDA receives credible 
evidence that an entry represents a serious threat to human or animal 
health.
    Historical evidence suggests that a terrorist or other intentional 
strike on the food supply is a low-probability, but potentially high-
cost event. FDA lacks data to estimate the likelihood and resulting 
costs of a strike occurring. Without knowing the likelihood or cost of 
an event, we cannot quantitatively measure the reduction in probability 
of an event occurring, or the possible reduction in cost of an event 
associated with each regulatory option. Further hindering any 
quantification of benefits are the complementary effects of the other 
regulations that are being developed to implement Title III of the 
Bioterrorism Act.
    To understand possible costs of an intentional strike on the food 
supply, FDA examined five outbreaks resulting from accidental and 
deliberate contamination, and from both domestic and imported foods. An 
intentional attack on the food supply that sought to disrupt the food 
supply and sicken many U.S. citizens could be much larger than the 
examples given.

             Table 20.--Summary of Five Foodborne Outbreaks
------------------------------------------------------------------------
                                      Confirmed    Estimated     Total
  Pathogen     Location    Vehicle   or reported   number of    illness
               and year                 cases        cases        cost
------------------------------------------------------------------------
Salmonella    Minnesota,   Ice       150 cases;    29,100 in    $3,187,7
 enteritidi   1994         cream      30           MN 224,00    44,000
 s                                    hospitaliz   Nationwide   to
                                      ations                    $5,629,7
                                                                92,000
------------------------------------------------------------------------
Shigella      Michigan,   Tofu        3,175        Not         $45,183,0
 sonnei       1988         salad      cases        available    00 to
                                                                $79,795,
                                                                000
------------------------------------------------------------------------

[[Page 5455]]

 
Outbreaks resulting from deliberate contamination
------------------------------------------------------------------------
Salmonella    Dalles,     Salad       751 cases;   Not         $10,687,0
 Typhimuriu   Oregon       bars       45           available    00 to
 m            1984                    hospitaliz                $18,875,
                                      ations                    000
------------------------------------------------------------------------
Shigella      Texas,       Muffins   12 cases; 4  All cases    $83,000
 dysentreri   1996         and        hospitaliz   identified
 ae type 2                 doughnut   ations
                           s
------------------------------------------------------------------------
Outbreaks resulting from imported foods
------------------------------------------------------------------------
Cyclospora    United      Raspberri   1465 cases  Not          $3,941,00
 cayaetanen   States and   es         identified   available    0
 sis          Canada,      (probabl   , less
              1996         y          than 20
                           imported   hospitaliz
                           from       ation
                           Guatemal
                           a)
------------------------------------------------------------------------

Salmonella enteritidis in ice cream

    In 1994, approximately 224,000 people were sickened by ice cream 
contaminated with Salmonella enteritidis. The source of the 
contamination appeared to be pasteurized pre-mix that had been 
contaminated during transport in tanker trailers that previously had 
carried non-pasteurized eggs. There were 150 confirmed cases of 
salmonellosis associated with the outbreak in Minnesota. However, ice 
cream produced during the contamination period was distributed to 48 
states. To calculate the total number of illnesses associated with the 
outbreak, researchers calculated an attack rate of 6.6 percent. This 
attack rate was extrapolated to the population that consumed the ice 
cream, giving a total number sickened of 224,000 (Ref. 11).
     Salmonellosis most commonly causes gastrointestinal symptoms. 
Almost 91 percent of cases are mild and cause one to three days of 
illness with symptoms including diarrhea, abdominal cramps, and fever. 
Moderate cases, defined as requiring a trip to a physician, account for 
8 percent of the cases. These cases typically have duration of two to 
12 days. Severe cases require hospitalization and last 11 to 21 days. 
In addition to causing gastroenteritis, salmonellosis also can cause 
reactive arthritis in a small percentage of cases. Reactive arthritis 
may be short or long term and is characterized by joint pain. Just over 
one percent of cases develop short-term reactive arthritis and two 
percent of cases develop chronic, reactive arthritis.
    In table 21, FDA estimated the costs associated with salmonellosis, 
including medical treatment costs and pain and suffering. Pain and 
suffering is measured by lost quality adjusted life days (QALDs). QALDs 
measure the loss of utility associated with an illness. A QALD is 
measured between zero and one, with one being a day in perfect health. 
The total loss of a Quality Adjusted Life Year (QALY), or the loss of a 
year of life is valued at $100,000, based on economic studies of how 
consumers value risks to life (Ref. 12). Thus, an entire lost QALD 
would be valued at $274 and fractions of QALDs are a fraction of the 
day's value. FDA presents two estimates of values of pain and suffering 
associated with arthritis, one based on physician estimates (Ref. 13) 
and another based on a regression analysis approach (Ref. 14). This 
gives a range of costs for the average case of salmonellosis between 
$14,231 and $25,133.

                             Table 21.--The Cost of an Average Case of salmonellosis
----------------------------------------------------------------------------------------------------------------
                                      Total QALDs                                                    Weighted
  Severity       Case Breakdown        Lost per      Health Loss per     Medical Costs per Case     Dollar Loss
                                        Illness     Case (Discounted)         (Discounted)           per Case
----------------------------------------------------------------------------------------------------------------
Illness
----------------------------------------------------------------------------------------------------------------
 Mild                    90.7%            1.05                $660                         $0            $599
 Moderate                 8.1%            3.68              $2,310                       $283            $209
 Severe                   1.2%            9.99              $6,266                     $9,250            $188
----------------------------------------------------------------------------------------------------------------
Arthritis
Regression
 Approach
-------------
Short-Term                1.26%           5.41              $3,391                       $100             $44
Long-Term                 2.40%       2,613.12            $452,554                     $7,322         $11,048
----------------------------------------------------------------------------------------------------------------
Direct Survey Approach
----------------------------------------------------------------------------------------------------------------
Short-Term                1.26%          10.81              $6,778                   $100 $87
Long-Term                 2.40%       5,223.15            $904,573                     $7,322         $21,906
Death                     0.04%     ..............      $5,000,000     .........................       $2,143
----------------------------------------------------------------------------------------------------------------
Total         ....................  ..............  .................     Regression Approach         $14,231
 Expected                                                              Direct Survey Approach         $25,133
 Loss per
 Case
----------------------------------------------------------------------------------------------------------------


[[Page 5456]]

    To estimate the economic cost due to illness associated with this 
outbreak, FDA used the range for the average cost per case. For 224,000 
people, this is a total cost of between $3,187,744,000 and 
$5,629,792,000 from this accidental food disaster.

Shigella sonnei in tofu salad

    In 1988, a tofu salad at an outdoor music festival was contaminated 
with Shigella sonnei and sickened an estimated 3,175 people. Over 2,000 
volunteer food handlers served communal meals at the festival. (Ref. 
15) Shigellosis causes similar symptoms and is of similar duration to 
salmonellosis. It also is associated with short term and chronic 
reactive arthritis; thus, FDA assumed the average case of shigellosis 
has the same cost as salmonellosis. This gives a total cost of 
$45,183,000 to $79,797,000.

Salmonella typhimirium in salad bars

    During September and October of 1984, two outbreaks of Salmonella 
typhimirium occurred in association with salad bars in restaurants in 
The Dalles, Oregon. At least 751 people were affected. Members of the 
local Rajneeshpuram commune intentionally caused the outbreak by 
spraying Salmonella typhimirium on the salad bars in local restaurants. 
Their apparent motivation was to influence a local election by 
decreasing voter turnout. Intentional contamination was not suspected 
immediately and no charges were brought until a year after the attacks 
(Ref. 16).
    The 751 people affected primarily were identified through passive 
surveillance: thus the true number of people actually sickened is 
undoubtedly much higher. The Dalles is located on Interstate 84 in 
Oregon and is a frequent stop for travelers who were unlikely to be 
identified by passive or active surveillance for salmonellosis. 
However, since we do not have any estimates of the true size of the 
outbreak, we estimated the costs associated with known cases, 
recognizing this is an underestimate of the true cost of the outbreak. 
We use the cost estimates for salmonellosis as ranging from $14,231 to 
$25,133. This gives an estimated cost of known cases for the outbreak 
of $10,687,000 to $18,875,000.

Shigella dysenteriae type 2 among laboratory workers

    Twelve people working in a laboratory who consumed muffins left in 
the laboratory break room contracted shigellosis in Texas in 1996. 
Affected workers had diarrhea, nausea, and abdominal discomfort. 
Investigators concluded that the outbreak likely was the result of 
deliberate contamination. All twelve affected workers were treated by, 
or consulted with, a physician. Nine affected workers went to the 
emergency room, four of whom were hospitalized (Ref. 17).
    To estimate the cost of this outbreak, FDA assumed that the eight 
cases that required consultation with a doctor, but did not require 
hospitalization, had the same cost as a moderate case of salmonellosis. 
The four cases requiring hospitalization were estimated to have the 
same cost as a severe case of gastroenteritis resulting from 
salmonellosis. This gives a cost of $82,808 for illnesses associated 
with the event.

       Table 22.--Summary of Costs for an Outbreak of Shigellosis
------------------------------------------------------------------------
                     Number of
    Severity           cases         Cost per case         Total cost
------------------------------------------------------------------------
Mild                    0                $0                  $0
Moderate                8            $2,593             $20,744
Severe                  4           $15,516             $62,064
------------------------------------------------------------------------
Total                  12         ..................    $82,808
------------------------------------------------------------------------

Cyclospora cayatanensis in imported raspberries

    In 1996, 1,465 cases of cyclosporiasis were linked to consumption 
of raspberries imported from Guatemala. Nine hundred and seventy eight 
of these cases were laboratory confirmed. No deaths were confirmed and 
less than 20 hospitalizations were reported (Ref. 18). Case control 
studies indicated that raspberries imported from Guatemala were the 
source of the illnesses. Fifty-five clusters of cases were reported in 
20 states, two Canadian provinces, and the District of Columbia (Ref. 
19).
    Cyclosporiasis typically causes watery diarrhea, loss of appetite, 
weight loss, and fatigue. Less common symptoms include fever, chills, 
nausea, and headache. The median duration of illness associated with 
the outbreak was more than 14 days and the median duration of diarrheal 
illness was 10 days (Ref. 20). We estimated the cost of a mild case of 
cyclosporiasis as two and one half times higher than the cost of a mild 
case of gastroenteritis from salmonellosis due to the longer duration. 
The reports of cyclosporiasis outbreaks did not include information on 
the number of physician visits. We assumed that the percentage of total 
cases that result in physician visits would be larger than the 
corresponding percentage for salmonellosis illnesses, due to the longer 
duration of illnesses. We assumed, therefore, that 40 percent of those 
infected with cyclosporiasis visited a physician. Less than 20 
hospitalizations were reported from the cyclosporiasis outbreak. No 
deaths were confirmed.

      Table 23.--Summary of Costs of an Outbreak of Cyclosporiasis
------------------------------------------------------------------------
                       Number of
     Severity            cases         Cost per case       Total cost
------------------------------------------------------------------------
Mild                    879                 $1,650         $1,450,000
Moderate                586                 $3,748         $2,196,000
Severe                   19                $15,516           $294,000
------------------------------------------------------------------------
Total                 1,465         .................      $3,941,000
------------------------------------------------------------------------


[[Page 5457]]

B. Small Entity Analysis (or Initial Regulatory Flexibility Analysis)

    FDA has examined the economic implications of this proposed rule as 
required by the Regulatory Flexibility Act (5 U.S.C. 601-612). If a 
rule has a significant economic impact on a substantial number of small 
entities, the Regulatory Flexibility Act requires agencies to analyze 
regulatory options that would lessen the economic effect of the rule on 
small entities consistent with statutory objectives. The analysis 
below, together with other relevant sections of this document, serves 
as the agency's initial regulatory flexibility analysis under the 
Regulatory Flexibility Act.

1. Number of Establishments Affected

    FDA finds that this proposed rule would affect the 77,427 U.S. 
importers. Most of these importers have fewer than 500 employees, thus 
making them small businesses according to the definitions of the Small 
Business Administration. Because most of the importers affected are 
small, all options considered in the Benefit-Cost Analysis in section 
IV.A above are regulatory relief options.

2. Costs Per Entity

    Small businesses will be affected by this proposed rule in a couple 
of ways. First, this proposed rule requires importers to notify FDA of 
incoming products electronically before the food arrives at the U.S. 
border. The annual cost of doing so is about $770 per importer (see 
tables 1, 2, and 17 of this document). As discussed above and shown in 
tables 1 and 2, about 3,100 U.S. importers do not have electronic 
transmitting capacity and will have to obtain computer equipment (at a 
cost of about $2,000 per importer) and Internet access (at a cost of 
about $240 annually) in order to comply with this proposed rule. FDA 
could not provide flexibility for those importers who do not have 
electronic transmitting capacity, as paper notices could not be 
submitted and processed in the proposed prior notice timeframe and 
would therefore actually be more burdensome to importers because paper 
notices would need to be submitted earlier.
     Second, this proposed rule will potentially cause some loss of 
product value if the prior notice requirement causes perishable 
products to have to wait any length of time before crossing the U.S. 
border. The costs of lost product value vary with the required notice 
timeframe. We discuss the various costs associated with this 
possibility in the options previously outlined. FDA requests comments 
on the effect of this proposed rule on small entities.

3. Additional Flexibility Considered

    Because of the requirements of the Bioterrorism Act, FDA is 
precluded from selecting some of the options that typically would be 
considered to lessen the economic effect of the rule on small entities, 
including granting an exemption to small entities. FDA tentatively 
concludes that it would be inconsistent with section 307 of the 
Bioterrorism Act to allow small entities a later effective date, since 
the Bioterrorism Act established a deadline for beginning prior notice 
that applies to all FDA-regulated imported food. Although the 
recordkeeping provision of the Bioterrorism Act directs FDA to take 
into account the size of a business when issuing implementing 
regulations, the prior notice provision contains no such language. 
Thus, it appears that Congress intended for all entities to be subject 
to the effective date established in the Bioterrorism Act. Nonetheless, 
the agency recognizes that the prior notice requirement will cause an 
economic burden on small businesses; therefore, we are seeking comment 
on whether it would be consistent with section 307 for the agency to 
set staggered effective dates that would give small businesses more 
time to comply. FDA also seeks comment on how FDA could effectively 
distinguish between large and small businesses if it considered 
staggered effective dates.

C. Unfunded Mandates

    Title II of the Unfunded Mandates Reform Act of 1995 (Public Law 
104-4) requires cost-benefit and other analyses before any rule making 
if the rule would include a ``Federal mandate that may result in the 
expenditure by State, local, and tribal governments, in the aggregate, 
or by the private sector, of $100,000,000 or more (adjusted annually 
for inflation) in any 1 year.'' The current inflation-adjusted 
statutory threshold is $112 million. FDA has determined that this 
proposed rule does not constitute a significant rule under the Unfunded 
Mandates Reform Act. See table 17 for the total costs.

V. Paperwork Reduction Act of 1995

    This proposed rule contains information collection provisions that 
are subject to review by the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). A 
description of these provisions is given below with an estimate of the 
annual reporting burden. Included in the estimate is the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing each 
collection of information.
    FDA invites comments on: (1) Whether the proposed collection of 
information is necessary for the proper performance of FDA's functions, 
including whether the information will have practical utility; (2) the 
accuracy of FDA's estimate of the burden of the proposed collection of 
information, including the validity of the methodology and assumptions 
used; (3) ways to enhance the quality, utility, and clarity of the 
information to be collected; and (4) ways to minimize the burden of the 
collection of information on respondents, including through the use of 
automated collection techniques, when appropriate, and other forms of 
information technology.

Title: Prior Notice of Imported Food

Description: Section 801(m) of the Federal Food, Drug, and Cosmetic Act 
(the Act) (21 U.S.C. 381(m)) requires prior notification to the 
Secretary of Health and Human Services of an article of food that is 
being imported or offered for import into the United States. The 
purpose of this notification is to enable the food to be inspected at 
ports of entry into the United States.
    Section 801(m) of the Act states that the Secretary shall by 
regulation identify the parties responsible for providing the notice 
and explain the information that the prior notice is required to 
contain, the method of submission of the notice, and the minimum and 
maximum period of advance notice required. Section 801(m)(1) of the Act 
states that the Secretary shall require submission of notice providing 
the identity of each of the following: the article of food; the 
manufacturer; the shipper; the grower, if known at the time of 
notification; the originating country; the shipping country; and the 
anticipated port of entry. Section 801(m)(2)(A) of the Act states that 
the Secretary shall by regulation prescribe the time of submission of 
the notification in advance of importation or the offering of the food 
for import, which period shall be no less than the minimum amount of 
time necessary for the Secretary to receive, review, and appropriately 
respond to such notification, but may not exceed five days. FDA's prior 
notification of imported food shipments proposed regulation would 
implement these statutory provisions.
    FDA estimates the burden for this information collection as 
follows:

[[Page 5458]]



                                  Table 24.--Estimated Annual Reporting Burden
----------------------------------------------------------------------------------------------------------------
                                                                                        Operating
 21 CFR Part     No. Of        Annual     Total Annual    Hours per    Total Capital       and
1, Subpart I   Respondents    Frequency     Responses     Response         Costs       Maintenance   Total Hours
                            per Response                                                  Costs
----------------------------------------------------------------------------------------------------------------
1.285-1.290,        77,427         23.3      1,807,692     1-2            $6,194,000      $743,280     1,888,216
 1.294\1\
----------------------------------------------------------------------------------------------------------------
1.278(d)\1\         90,385          1           90,385       0.5                  $0            $0        45,193
----------------------------------------------------------------------------------------------------------------
1.278(d),           77,427         23.8      1,844,116       0.5-1          $620,000      $817,680     1,833,822
 1.285-1.290
 , 1.294\2\
----------------------------------------------------------------------------------------------------------------
Total hours   ............  ............  ............  ............  ..............  ............     1,888,216
 for first
 year
----------------------------------------------------------------------------------------------------------------
Total         ............  ............  ............  ............  ..............  ............     1,833,822
 recurring
 hours
----------------------------------------------------------------------------------------------------------------
\1\ First year burden.
\2\ Recurring burden.

Burden Estimate

Number of Establishments Affected

    Using 2001 FY information from FDA's OASIS system (industry codes 
02 through 52, 54, and 70 through 72), FDA has determined that there 
are approximately 77,427 importers and consignees who receive shipments 
of food for human and animal consumption into the United States. It is 
these 77,427 U.S. importers or U.S. purchasers (or their agents) that 
will be primarily responsible for submitting the prior notice 
information.

New and Closing Importers

    In addition to the U.S. importers currently in existence, in future 
years, new import businesses will open and some existing import 
businesses will close. These new importers would have to become 
familiar with the FDA prior notice system and possibly obtain computer 
equipment and Internet access to comply with prior notice requirements.
    According to the Small Business Administration Office of Advocacy, 
in 2001, about 10 percent of all businesses were new and 10 percent of 
businesses closed. Using the 10 percent opening and closing business 
statistic, and given that there are currently 77,427 U.S. importers, 
FDA will assume, then, that on a yearly basis 7,743 importers will 
leave the market and 7,743 importers will enter the market.

Hour Burden Estimate Researching the Prior Notice Requirement

    To become familiar with the requirements for this rule, FDA 
estimates it will initially take responsible parties with Internet 
access (74,330 importers) about one hour to research the prior notice 
requirements and responsible parties without readily available Internet 
access (3,097 importers) about 2 hours to research the requirements. 
This one-time search burden for the existing importers is 80,524 hours.
    In the years that follow the start-up year for prior notice, it is 
reasonable to expect a certain percentage of importing firms to enter 
and leave the market. Thus, in addition to the first year burden to 
research prior notice, it is expected that 8,053 hours will be spent 
annually researching the prior notice requirement by the anticipated 
7,743 new importers entering the market annually that must learn about 
prior notice, 7,433 of whom are estimated to have Internet access and 
310 of whom do not.

Submitting Prior Notice

    To estimate the repetitive effort of submitting a prior notice, and 
updating and amending the information, as needed, FDA will assume the 
activity takes one hour each time an entry (based on an average of 2.6 
lines, and therefore notices, per entry) must be submitted. This 
includes 45 minutes of an administrative worker's time to fill out the 
screen, including updating, and then 15 minutes of the manager's time 
to verify the information. FDA does not have information on how many 
prior notices will come from each of the 77,427 importers. However, we 
assume that 1,807,692 prior notices will be submitted annually (based 
on FY 2001 OASIS information); we can take this number and divide by 
the 77,427 importers to get an average response frequency per importer 
of 23.3 notices.

Secure Storage and Notifying FDA

    If an article of food is imported or offered for import with no 
prior notice or inadequate (e.g. untimely, inaccurate, or incomplete) 
prior notice, the food must be held at the port of entry or in a secure 
facility. In these cases, the submitter or carrier must promptly notify 
FDA of the location where the goods are held.
    It is quite likely that more imported products will be held during 
the first year that the prior notice is required than in subsequent 
years as importers will learn from experience. Therefore, FDA estimates 
that imported products with insufficient prior notice will be held or 
sent to secure storage about 5 percent of the time during the first 
year and 2 percent of the time thereafter. This means that of the 
1,807,692 prior notice entries received annually, in the first year 
prior notice is in effect we would expect 90,385 of the entries to be 
held or sent to secure storage; 36,154 entries would be held or sent to 
secure storage in subsequent years.
    Most port storage facilities and secure storage facilities located 
at or near ports are probably familiar to submitters or carriers; 
therefore it should only take one-half hour per entry to notify FDA of 
the shipment's location. Thus, in the first year of the regulation, 
submitters or carriers will spend 45,193 hours notifying FDA of secure 
storage locations; 18,077 hours in subsequent years.

Capital Cost and Operating and Maintenance Cost Burden

    Since all prior notices must be submitted electronically, we will 
assume that the 3,097 responsible parties without Internet access will 
have to purchase the appropriate IT equipment and gain Internet access 
to actually transmit the information. Assuming computer equipment costs 
each firm $2,000 and yearly Internet access costs each firm $240 ($20 
per month for 12 months), this results in a one-time computer cost for 
these facilities of $6,194,000 and a recurring Internet access cost of 
$743,280. For the 7,743 new firms that enter the import market each 
year, we can expect 310 of them to need to purchase computer equipment 
and obtain Internet access. Thus, on an annual basis we can expect

[[Page 5459]]

new importers to spend $620,000 on computers and $74,400 on Internet 
access to be able to submit prior notice information.
    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), the agency has submitted the information collection 
provisions of this proposed rule to OMB for review. Interested persons 
are requested to send comments regarding information collection to the 
Office of Information and Regulatory Affairs, OMB, New Executive Office 
Bldg., 725 17th St. NW., rm. 10235, Washington, DC 20503, Attn: Stuart 
Shapiro, FDA Desk Officer.

VI. Analysis of Environmental Impact

    The agency has carefully considered the potential environmental 
effects of this action. FDA has concluded under 21 CFR 25.30(h) that 
this action is of a type that does not individually or cumulatively 
have a significant effect on the human environment. Therefore, neither 
an environmental assessment nor an environmental impact statement is 
required.

VII. Federalism

    FDA has analyzed this proposed rule in accordance with the 
principles set forth in Executive Order 13132. FDA has determined that 
the proposed rule does not contain policies that have substantial 
direct effects on the States, on the relationship between the National 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Accordingly, 
the agency tentatively concludes that the proposed rule does not 
contain policies that have federalism implications as defined in the 
Executive Order and, consequently, a federalism summary impact 
statement has not been prepared.

VIII. Comments

    Interested persons may submit to the Dockets Management Branch (see 
ADDRESSES) written or electronic comments regarding this document. 
Submit a single copy of electronic comments to http://www.fda.gov/dockets/ecomments or two hard copies of any written comments, except 
that individuals may submit one hard copy. Comments are to be 
identified with the docket number found in brackets in the heading of 
this document. FDA cannot be responsible for addressing comments 
submitted to the wrong docket or that do not contain a docket number. 
Received comments may be seen in the Dockets Management Branch between 
9 a.m. and 4 p.m., Monday through Friday.
    FDA notes that the comment period for this document is shorter than 
the 75-day period that the agency customarily provides for proposed 
rules that are technical or sanitary or phytosanitary (SPS) measures. 
FDA believes that a 60-day comment period is appropriate in this 
instance. Executive Order 12889, ``Implementation of the North American 
Free Trade Agreement'' (58 FR 69681, December 30, 1993), states that 
any agency subject to the Administrative Procedure Act must provide a 
75-day comment period for any proposed Federal technical regulation or 
any Federal SPS measure of general application. Executive Order 12889 
provides an exception to the 75-day comment period where the United 
States considers a technical regulation or SPS measure of general 
application necessary to address an urgent problem related to the 
protection of human, plant, or animal health or sanitary or 
phytosanitary protection. FDA has concluded that this proposed rule is 
subject to the exception in Executive Order 12889.
    The Bioterrorism Act states that it is intended ``[t]o improve the 
ability of the United States to prevent, prepare for, and respond to 
bioterrorism and other public health emergencies.'' In order to meet 
these objectives, section 307 of the Act requires the FDA to propose 
and issue final regulations requiring prior notice of food imported or 
offered for import into the United States within 18 months of the 
Bioterrorism Act's enactment, which is by December 12, 2003. Section 
307 also provides that if FDA does not issue final regulations by this 
date, FDA still must receive prior notice of food imported or offered 
for import into the United States by December 12, 2002, of no less than 
8 hours and no more than 5 days, subject to compliance with the final 
regulations when the final regulations are made effective. This 
expedited timeframe reflects the urgency of the United States 
government's need to prepare to respond to bioterrorism and other food-
related emergencies and FDA's need to have the final rule in place, 
tested, and fully operational by December 12, 2003. This means that the 
final rule must publish in early October 2003.
    FDA will not consider any comments submitted after the 60-day 
comment period closes and does not intend to grant any requests for 
extension of the comment period due to the Bioterrorism Act's 
requirement to have a final regulation in effect by December 12, 2003, 
which requires publication on or before October 12, 2003.

IX. References

    The following references have been placed on display in the Dockets 
Management Branch (see ADDRESSES) and may be seen by interested persons 
between 9 a.m. and 4 p.m., Monday through Friday. (FDA has verified the 
Web site address, but FDA is not responsible for any subsequent changes 
to the nonFDA Web sites after this document publishes in the Federal 
Register.)
    1. Compilation of food entry documents, with corresponding 
invoices and screens, taken from FDA's Operational and 
Administrative System for Import Support (OASIS).
    2. Bureau of Economic Analysis, http://www.bea.doc.gov
    3. United States Department of Labor, Bureau of Labor 
Statistics, National Compensation Survey: Occupation Wages in the 
United States, 2000, Summary 01-04. Available at http://www.bls.gov/ncs/ocs/sp/ncbl0354.pdf.
    4. USDA Agricultural Marketing Service (March 2002) Fresh Fruits 
and Vegetable Shipments. www.ams.usda.gov
    5. Kasmire, Dr. Robert F. Vegetable Marketing Specialist, 
www.thepacker.com/rbcs/handbookarticles/properis.htm Accessed on 
September 16, 2002.
    6. USDA Agricultural Marketing Service produce point price 
reports for various border crossings for the dates September 12, 
2002 and September 16, 2002. www.ams.usda.gov
    7. Florida Department of Agriculture and Consumer Services 
(FDACS) www.ffva.com/rps.htm.
    8. National Marine Fisheries Service, Fisheries Statistics and 
Economics Division, www.st.nmfs.gov accessed September 2002.
    9. Florida Department of Agriculture and Consumer Services, 
http://doacs.state.fl.us/press/1999/090999.html and www.ffva.com/rps.htm
    10. Center for Food Safety and Applied Nutrition, http://
www.cfsan.fda.gov/[tilde]dms/qa-sto8.html
    11. Hennessy T.W., C.W. Hedberg, L. Slutsker, K.E. White, J.M. 
Besser-Wiek, M.E. Moen, J. Feldman, W.W. Coleman, L.M. Edmonson, 
K.L. MacDonald, M.T. Osterholm, and the Investigation Team, ``A 
National Outbreak of Salmonella Enteritidis Infections From Ice 
Cream,'' The New England Journal of Medicine, May 16, 1996, pp. 
1281-1286.
    12. Cutler, D., E. Richardson, 1999, ``Your Money and Your Life: 
The Value of Health and What Affects It,'' Working Paper 6895, 
National Bureau of Economic Research.
    13. Zorn, D., K. Klontz, 1998, ``Appendix: The Value of Consumer 
Loss to Foodborne Reactive Arthritis,'' Federal Register, 63 FR 
24292-24299, May 1, 1998.
    14. Scharff, R., and A. Jessup, ``Valuing Chronic Disease for 
Heterogenous Populations: the Case of Arthritis,'' 2002, Mimeo.
    15. Lee, L.A., S.M. Ostroff, H.B. McGee, D.R. Johns, F.P. 
Downes, D.N. Cameron, N.H. Bean, and P.M. Griffin, ``An Outbreak of 
Shigellosis at an Outdoor Music Festival,''

[[Page 5460]]

American Journal of Epidemiology, 133:6:608-615.
    16. Trook, T.J., R.V. Tauxe, R.P. Wise, J.R. Livengood, R. 
Sokolow, S. Mauvais, K.A. Birkness, M.R. Skeels, J.M. Horan, and 
L.R. Foster, ``A Large Community Outbreak of Salmonellosis Caused by 
Intentional Contamination of Restaurant Salad Bars,'' The Journal of 
the American Medical Association, 278:5:389-397.
    17. Kolavic, S.A., A. Kimura, S.L. Simons, L. Slusker, S. Barth, 
and C.E. Haley, ``An Outbreak of Shigella Dysenteriae Type 2 Among 
Laboratory Workers Due to Intentional Food Contamination,'' The 
Journal of the American Medical Association, 278:5:396-403.
    18. Colley, D.G., Widespread Foodborne Cyclosporiasis Outbreaks 
Present Major Challenges (letter), Emerging Infectious Diseases, 
2:4:354-356.
    19. Herwaldt, B.L., M.L. Ackers, and Cyclospora Working Group, 
``An Outbreak in 1996 of Cyclosporiasis Associated with Imported 
Raspberries,'' New England Journal of Medicine, May 29, 1997, 1548-
1556.
    20. Small Business Administration Office of Advocacy, ``Small 
Business By the Numbers,'' May 2002, http://www.sba.gov/advo/.

List of Subjects in 21 CFR Part 1

    Cosmetics, Drugs, Exports, Food labeling, Imports, Labeling, 
Reporting and recordkeeping requirements.

    Therefore, under the Federal Food, Drug, and Cosmetic Act and under 
authority delegated to the Commissioner of Food and Drugs, it is 
proposed that 21 CFR part 1 be amended as follows:

PART 1--GENERAL ENFORCEMENT REGULATIONS

    1. The authority citation for 21 CFR part 1 continues to read as 
follows:

    Authority: 15 U.S.C. 1453, 1454, 1455; 21 U.S.C. 304, 321, 331, 
334, 343, 350c, 350d, 352, 355, 360b, 362, 371, 374, 381, 382, 393; 
42 U.S.C. 216, 241, 243, 262, 264.
    2. Subpart I is added to part 1 to read as follows:

Subpart I--PRIOR NOTICE OF IMPORTED FOOD

General Provisions

Sec.
1.276 What imported food is subject to this subpart?
1.277 What definitions apply to this subpart?
1.278 What are the consequences of failing to submit adequate prior 
notice or otherwise failing to comply with this subpart?

Requirements to Submit Prior Notice of Imported Food

Sec.
1.285 Who is authorized to submit prior notice for an article of food 
that is imported or offered for import into the United States?
1.286 When must the prior notice be submitted to FDA?
1.287 How must you submit the prior notice?
1.288 What information must be submitted in the prior notice?
1.289 What changes are allowed to a prior notice after it has been 
submitted to FDA?
1.290 Under what circumstances must you submit a product identity 
amendment to your prior notice after you have submitted it to FDA?
1.291 What is the deadline for product identity amendments under Sec.  
1.290?
1.292 How do you submit a product identity amendment to a prior notice?
1.293 What are the consequences if you do not submit a product identity 
amendment to your prior notice?
1.294 What must you do if the anticipated arrival information (required 
under Sec.  1.288(k)(1)) submitted in your prior notice changes?

General Provisions


Sec.  1.276   What imported food is subject to this subpart?

    (a) This subpart applies to food for humans and other animals that 
is imported or offered for import into the United States (U.S.), 
including U.S. foreign trade zones, for consumption, storage, immediate 
export from the port of entry, transshipment through the United States 
to another country, or import for export.
    (b) This subpart does not apply to:
    (1) Food that is carried by an individual entering the United 
States in that individual's personal baggage for that individual's 
personal use;
    (2) Meat food products that at the time of importation are subject 
to the exclusive jurisdiction of the U.S. Department of Agriculture 
(USDA) under the Federal Meat Inspection Act (21 U.S.C. 601 et seq.);
    (3) Poultry products that at the time of importation are subject to 
the exclusive jurisdiction of USDA under the Poultry Products 
Inspection Act (21 U.S.C. 451 et seq.); and
    (4) Egg products that at the time of importation are subject to the 
exclusive jurisdiction of USDA under the Egg Products Inspection Act 
(21 U.S.C. 1031 et seq.).


Sec.  1.277   What definitions apply to this subpart?

    (a) The act means the Federal Food, Drug, and Cosmetic Act.
    (b) The definitions of terms in section 201 of the act (21 U.S.C. 
321) apply when the terms are used in this subpart.
    (c) In addition, for the purposes of this subpart:
    (1) Calendar day means every day shown on the calendar.
    (2) Country from which the article of food was shipped means the 
country in which the article of food was loaded onto the conveyance 
that brings it to the United States.
    (3) Food has the meaning given in section 201(f) of the act. 
Examples of food include, but are not limited to, fruits, vegetables, 
fish, dairy products, eggs, raw agricultural commodities for use as 
food or components of food, animal feed, including pet food, food and 
feed ingredients and additives, including substances that migrate into 
food from food packaging and other articles that contact food, dietary 
supplements and dietary ingredients, infant formula, beverages, 
including alcoholic beverages and bottled water, live food animals, 
bakery goods, snack foods, candy, and canned foods.
    (4) Originating country means the country from which the article of 
food originates. If the article of food is fresh produce or fresh 
aquacultured fish or seafood, the originating country is the country in 
which it is grown and harvested. If the article of food is wild-caught 
fish or seafood and it is harvested in the waters of the United States 
or by a U.S. flagged vessel or processed aboard a U.S. flagged vessel, 
the originating country is the United States. Otherwise, the 
originating country is the country in which the article of food is 
produced.
    (5) Port of entry means the water, air, or land port at which the 
article of food is imported or offered for import into the United 
States, i.e., the port where food first arrives in the United States. 
This port may be different than the port where the article of food is 
entered for U.S. Customs Service purposes.
    (6) You means the purchaser or importer of an article of food who 
resides or maintains a place of business in the United States, or an 
agent who resides or maintains a place of business in the United States 
acting on the behalf of the U.S. purchaser or importer or, if the 
article of food is imported with the intention of in-bond movement 
through the United States for export, i.e., Transportation for 
Exportation or Immediate Export entries, the arriving carrier or, if 
known, the in-bond carrier.


Sec.  1.278   What are the consequences of failing to submit adequate 
prior notice or otherwise failing to comply with this subpart?

    (a) If an article of food is imported or offered for import with no 
prior notice or inadequate (e.g., untimely, inaccurate, or incomplete) 
prior notice, the food shall be refused admission

[[Page 5461]]

under section 801(m)(1) of the act (21 U.S.C. 381(m)(1)).
    (b) If an article of food is refused admission under section 
801(m)(1), it must be held at the port of entry unless FDA directs its 
removal to a secure facility in accordance with Sec.  1.278(c).
    (c) If FDA determines that removal to a secure facility is 
appropriate (e.g., due to a concern with the security of the article of 
food or due to space limitations in the port of entry), FDA may direct 
that the article of food be removed to a Bonded Warehouse, Container 
Freight Station, Centralized Examination Station, or another 
appropriate secure facility that has been approved by FDA.
    (d) The person submitting the prior notice or the carrier must 
arrange for movement of the article of food, under appropriate 
custodial bond, within the port of entry or to the secure facility and 
must promptly notify FDA of the location. Transportation and storage 
expenses shall be borne by the owner, purchaser, importer, or 
consignee.
    (e) (1) The article of food must be held at the port of entry or in 
the secure facility until prior notice is submitted to FDA in 
accordance with this subpart, FDA has examined the prior notice, FDA 
has determined that the prior notice is adequate, and FDA has notified 
the U.S. Customs Service and the person who submitted the prior notice 
that the article of food no longer is subject to refusal of admission 
under section 801(m)(1) of the act.
    (2) Notwithstanding section 801(b) of the act (21 U.S.C. 381(b)), 
while any article of food that has been refused admission under section 
801(m)(1) of the act is held at its port of entry or in a secure 
facility, it may not be delivered to any of its importers, owners, or 
consignees.
    (f) A determination that an article of food is no longer subject to 
refusal under section 801(m)(1) is different than, and may come before, 
determinations of admissibility under other provisions of the act or 
other U.S. laws. A determination that an article of food is no longer 
subject to refusal under section 801(m)(1) does not mean that it will 
be granted admission under other provisions of the act or other U.S. 
laws.
    (g) Any person who imports or offers for import an article of food 
without complying with the requirements of 21 U.S.C. 381(m) as set out 
in this subpart, or otherwise violates any requirement under 21 U.S.C. 
381(m), or any person who causes such an act, commits a prohibited act 
within the meaning of 21 U.S.C. 331 (ee). Under 21 U.S.C. section 332, 
the United States can bring a civil action in Federal court to enjoin 
persons who commit prohibited acts. Under 21 U.S.C. section 333, the 
United States can bring a criminal action in Federal court to prosecute 
persons who commit prohibited acts. Under 21 U.S.C. 335a, FDA can seek 
debarment of any person who has been convicted of a felony relating to 
importation of food into the United States.

Requirements to Submit Prior Notice of Imported Food


Sec.  1.285   Who is authorized to submit prior notice for an article 
of food that is imported or offered for import into the United States?

    (a) A purchaser or importer of an article of food who resides or 
maintains a place of business in the United States, or an agent who 
resides or maintains a place of business in the United States acting on 
the behalf of the U.S. purchaser or importer, is authorized to submit 
to FDA prior notice of the article of food being imported or offered 
for import into the United States, except as specified in paragraph (b) 
of this section.
    (b) If the article of food is imported for in-bond movement through 
the United States for export, i.e., Transportation for Exportation or 
Immediate Export entries, the arriving carrier or, if known, the in-
bond carrier is authorized to submit prior notice to FDA.


Sec.  1.286   When must the prior notice be submitted to FDA?

    (a) You must submit the prior notice to FDA no later than noon of 
the calendar day before the day the article of food will arrive at the 
border crossing in the port of entry.
    (b) You may not submit the prior notice until all of the 
information required by Sec.  1.288 exists, except as provided in Sec.  
Sec.  1.288(e)(2) and 1.290, which both relate to product identity 
amendments. You may not submit prior notice more than 5 days before the 
anticipated date of arrival of the food at the anticipated port of 
entry.


Sec.  1.287   How must you submit the prior notice?

    (a) You must submit prior notice, product identity amendments, and 
arrival updates electronically to FDA through FDA's Prior Notice System 
at [a Website that will be provided in the final rule], except as 
provided in paragraph (b) of this section.
    (b) If FDA's Prior Notice System is unable to receive prior notice 
electronically, you must submit prior notice, product identity 
amendments, and arrival updates using a printed version of the Prior 
Notice Screen from FDA's Prior Notice System delivered in person, by e-
mail, or fax to the FDA field office with responsibility over the 
geographical area in which the anticipated port of entry identified in 
your initial prior notice is located.


Sec.  1.288   What information must be submitted in the prior notice?

    For each article of food that is imported or offered for import 
into the United States, you must submit the information listed in this 
section. (The Prior Notice Screen of FDA's Prior Notice System also 
identifies the information that you must submit to FDA.)
    (a) The name of the individual submitting the prior notice, the 
submitting firm's name, address, phone number, fax number, and e-mail 
address, and, if the firm is required to register for a facility 
associated with the article of food under 21 CFR part 1, subpart H, the 
registration number assigned to that facility;
    (b) The entry type as designated by the U.S. Customs Service;
    (c) The U.S. Customs Service's Automated Commercial System (ACS) 
entry number, or if the article of food is an import that is not 
subject to ACS, the other U.S. Customs Service identification number 
associated with the importation;
    (d) If the article of food is under hold under Sec.  1.278, the 
location where it is being held, the date the article will arrive at 
that location, and identification of a contact at that location.
    (e)(1) The identity of the article of food being imported or 
offered for import, as follows:
    (i) The complete FDA product code;
    (ii) The common or usual name or market name;
    (iii) The trade or brand name, if different from the common or 
usual name or market name;
    (iv) The quantity of food described from smallest package size to 
largest container; and
    (v) The lot or code numbers or other identifier of the food if 
applicable.
    (2) If all of the information required by this subsection exists by 
noon of the calendar day before the day the article of food will arrive 
at the border crossing in the port of entry, you must include it in 
your prior notice and you may not amend the prior notice under Sec.  
1.290. If any of this information does not exist by noon of the 
calendar day before the day the article of food will arrive at the 
border crossing in the port of entry, you must give FDA as much 
information as does exist at that time and tell FDA that you will amend 
the prior notice as required under Sec.  1.290.
    (f) The name, address, phone number, fax number, and e-mail address 
of the

[[Page 5462]]

manufacturer, and if it is required to register for a facility 
associated with the article of food under 21 CFR part 1, subpart H, the 
registration number assigned to that facility;
    (g) The name, address, phone number, fax number, and e-mail of all 
growers, and the growing location if different from business address, 
if known at time of submission of your prior notice;
    (h) The originating country of the article of food;
    (i) The name, address, phone number, fax number, and e-mail address 
of the shipper and, if it is required to register under 21 CFR part 1, 
subpart H, for a facility associated with the article of food, the 
registration number assigned to that facility;
    (j) The country from which the article of food was shipped;
    (k) (1) Anticipated arrival information about the article of food 
being imported or offered for import, as follows:
    (i) The anticipated port of entry and, if the anticipated port of 
entry has more than one border crossing, the specific anticipated 
border crossing where the food will be brought into the United States;
    (ii) The anticipated date on which the article of food will arrive 
at the anticipated port of entry; and
    (iii) The anticipated time of that arrival;
    (2) If any of the anticipated arrival information required under 
this paragraph changes after you submit your prior notice, you must 
update your notice in accordance with Sec.  1.294.
    (l) The port where entry of the article of food will be made for 
purposes of the U.S. Customs Service;
    (m) The anticipated date of entry for purposes of the U.S. Customs 
Service; and
    (n) The name, address, phone number, fax number, and e-mail address 
of the importer, and, if the importer is required to register for a 
facility associated with the article of food under 21 CFR part 1, 
subpart H, the registration number assigned to that facility;
    (o) The name, address, phone number, fax number, and e-mail address 
of the owner, and if the owner is required to register for a facility 
associated with the article of food under 21 CFR part 1, subpart H, the 
registration number assigned to that facility;
    (p) The name, address, phone number, fax number, and e-mail address 
of the consignee, and if the consignee is required to register for a 
facility associated with the article of food under 21 CFR part 1, 
subpart H, the registration number assigned to that facility; and
    (q) The names, addresses, phone numbers, fax numbers and e-mail 
addresses of all the carriers which are or will be carrying the article 
of the food from the country from which the article of food was shipped 
to the United States, and the carriers' Standard Carrier Abbreviation 
Codes (SCAC) if appropriate.


Sec.  1.289   What changes are allowed to a prior notice after it has 
been submitted to FDA?

    After a prior notice has been submitted to FDA, it may only be 
changed as set out in Sec.  1.290 which relates to product identity 
amendments or Sec.  1.294 which relates to arrival updates. If other 
information provided in the prior notice changes, you must cancel the 
prior notice in the FDA Prior Notice System and submit a new prior 
notice to FDA.


Sec.  1.290   Under what circumstances must you submit a product 
identity amendment to your prior notice after you have submitted it to 
FDA?

    (a) If any of the information required by Sec.  1.288(e)(1) did not 
exist at the time you submitted your prior notice and the prior notice 
you submitted was therefore incomplete, you must amend your prior 
notice with complete product identity information by the deadline 
specified in Sec.  1.291.
    (b) You may only amend your prior notice once.
    (c) You may not change the general identity of the article of food 
that is the subject of the prior notice by amendment. However, if the 
article is fresh produce or fresh, wild-caught fish, you may amend the 
last two digits of the product code when you do not know the specific 
identity of the article at the time of initial prior notice. If your 
initial prior notice submission identifies the product by the FDA 
product code for ``fresh peppers, refrigerated,'' when you amend your 
submission, you must give the product code that identifies with 
specificity the type of pepper--``fresh green bell peppers, 
refrigerated.'' You may also include more than one article in your 
amendment if the industry and class and process (of the FDA product 
code) are the same. A prior notice for ``refrigerated fresh fish'' may 
be amended as ``refrigerated fresh cod'' and ``refrigerated fresh 
salmon,'' but not ``refrigerated fresh cod'' and ``canned shrimp.'' You 
may not amend the product identity to refer to another food, e.g., 
apples, or another process, e.g., canned.
    (d) If you did not provide grower identity at the time you 
submitted your prior notice under this subpart, but you know the 
identity of the grower when you submit a product identity amendment to 
your prior notice, you must include in your amendment: the name, 
address, phone number, fax number, and e-mail of all growers, and 
growing location if different from business address.


Sec.  1.291   What is the deadline for product identity amendments 
under Sec.  1.290?

    Your product identity amendment must be submitted no later than 2 
hours prior to the time of arrival.


Sec.  1.292   How do you submit a product identity amendment to a prior 
notice?

    You must submit product identity amendments in accordance with 
Sec.  1.287.


Sec.  1.293   What are the consequences if you do not submit a product 
identity amendment to your prior notice?

    (a) If you informed FDA in your prior notice that you would be 
submitting a product identity amendment but you do not amend your prior 
notice completely, the prior notice is inadequate for the purposes of 
Sec.  1.278(a).
    (b) If you informed FDA in your prior notice that you would be 
submitting a product identity amendment and you submit your amendment 
after the deadline provided in section 1.291, the prior notice is 
inadequate for the purpose of Sec.  1.278(a).


Sec.  1.294   What must you do if the anticipated arrival information 
(required under Sec.  1.288(k)(1)) submitted in your prior notice 
changes?

    (a) If any of the anticipated arrival information required under 
Sec.  1.288(k)(1) changes after you submit a prior notice to FDA, you 
must submit an arrival update updating the information in your prior 
notice in accordance with Sec.  1.287. Your arrival update must provide 
the following information:
    (1) If the anticipated port of entry changes, provide the updated 
port of entry;
    (2) If the time of arrival is expected to be more than 3 hours 
later than the anticipated time of arrival, provide the updated time of 
arrival;
    (3) If the time of arrival is expected to be more than 1 hour 
earlier than the anticipated time of arrival, provide the updated time 
of arrival.
    (b) If you did not provide grower identity at the time you 
submitted your prior notice under this subpart, but you know the 
identity of the grower when you update your prior notice, you must 
include in your update: the name, address, phone number, fax number, 
and e-mail of all growers, and growing location if different from 
business address.

[[Page 5463]]

    (c) You must update the information in accordance with the 
requirements of Sec.  Sec.  1.291 and 1.292.
    (d) If you do not submit an arrival update when one is required by 
paragraph (a) of this section, the prior notice is inadequate for the 
purposes of Sec.  1.278(a).

    Dated: January 27, 2003.
Tommy G. Thompson,
Secretary of Health and Human Services.

    Dated: January 27, 2003.
Kenneth W. Dam,
Acting Secretary of the Treasury.
    Note: The following form is an appendix that will not appear in the 
Code of Federal Regulations.
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