
[Federal Register Volume 76, Number 147 (Monday, August 1, 2011)]
[Notices]
[Pages 45820-45825]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19331]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2011-N-0528]


Food Safety Modernization Act Domestic and Foreign Facility 
Reinspections, Recall, and Importer Reinspection User Fee Rates for 
Fiscal Year 2012

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA) is announcing the 
fiscal year (FY) 2012 fee rates for certain domestic and foreign 
facility reinspections, failure to comply with a recall order, and 
importer reinspections that are mandated in the Federal Food, Drug, and 
Cosmetic Act (the FD&C Act), amended by the FDA Food Safety 
Modernization Act (FSMA). These fees are effective on October 1, 2011, 
and will remain in effect through September 30, 2012. Invoices for 
these fees for FY 2012 will be issued using the fee schedule 
established in this document. FDA is accepting comments to this 
document and intends to consider such comments in implementing these 
user fees in FY 2013.

DATES: Submit either electronic or written comments by October 31, 
2011.

ADDRESSES: Submit electronic comments to http://www.regulations.gov. 
Submit written comments to the Division of Dockets Management (HFA-
305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, 
Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Amy Waltrip, 12420 Parklawn Dr., Rm. 
2012, Rockville, MD 20857, 301-796-8811, email: 
Amy.Waltrip@fda.hhs.gov.

SUPPLEMENTARY INFORMATION:

I. Background

    FSMA (Pub. L. 111-353), section 743 of the FD&C Act (21 U.S.C. 
379j-31), establishes three different kinds of fees. The fees are 
assessed for the costs of the following activities: (1) Certain 
domestic and foreign facility reinspections (section 743(a)(1)(A)), (2) 
failure to comply with a recall order under section 423 or 412(f) of 
the FD&C Act (section 743(a)(1)(B)), and (3) certain importer 
reinspections (section 743(a)(1)(D)).
    Fees for each of these activities are to be established to capture 
100 percent of the costs of each activity for each year (sections 
743(b)(2)(A), (B), and (D) of the FD&C Act), and must be made available 
solely to pay for the costs of each activity for which the fee was 
incurred (section 743(b)(3) of the FD&C Act.
    These fees are effective on October 1, 2011, and will remain in 
effect through September 30, 2012. FDA is accepting comments to this 
document and intends to consider such comments, as well as experience 
and additional data gained in implementing these user fees in FY 2012, 
in implementing these user fees in FY 2013.

II. Estimating the Average Cost of a Supported Direct FDA Work Hour for 
FY 2012

    FDA is required to estimate 100 percent of its cost for each 
activity and assess fees for FY 2012. In each year, the costs of salary 
(or personnel compensation) and benefits for FDA employees account for 
between 50 and 60 percent of the funds available to, and used by, FDA. 
Almost all of the remaining funds (or the operating funds) available to 
FDA are used to support FDA employees for paying rent, travel, utility, 
information technology, and other operating costs.

A. Estimating the Full Cost Per Direct Work Hour in FY 2010

    In general, the starting point for estimating the full cost per 
direct work hour is to estimate the cost of a full-time-equivalent 
(FTE) or paid staff year for the relevant activity. This is most 
reasonably done by dividing the total funds allocated to the elements 
of FDA primarily responsible for carrying out the activities for which 
fees are being collected by the total FTEs allocated to those 
activities, using information from the most recent FY for which data 
are available. For the purposes of the FSMA fee provisions, primary 
responsibility for the activities for which fees will be collected 
rests with FDA's Office of Regulatory Affairs (ORA), which carries out 
inspection and other field-based activities on behalf of FDA's product 
centers, including the Center for Food Safety and Applied Nutrition 
(CFSAN) and the Center for Veterinary Medicine (CVM), which have FSMA 
implementation responsibilities. Thus, as the starting point for 
estimating the full cost per direct work hour, FDA will use the total 
funds allocated to ORA for CFSAN and CVM related field activities. The 
most recent FY with available data is FY 2010. In that year, FDA 
obligated a total of $626,095,116 for the Office of Regulatory Affairs 
(ORA) in carrying out work related to programs of the CFSAN and CVM, 
excluding the costs of foreign inspection travel. These are the staff 
primarily conducting the work related to the reinspection and recall 
activities

[[Page 45821]]

for which fees would be charged. The obligated total amount paid for 
salary, benefits, and operating costs of 2,701 FTEs or paid staff years 
utilized by ORA in FY 2010, but exclude the cost of foreign inspection 
travel. Dividing $626,095,116 by 2,701 FTEs, results in an average cost 
of $231,801 per paid staff year, excluding the costs of foreign 
inspection travel.
    Not all of the FTEs required to support the activities for which 
fees will be collected are conducting direct work such as inspecting or 
reinspecting facilities, examining imports, or monitoring recalls. Data 
collected over a number of years and used consistently in other FDA 
user fee programs (e.g., under the Prescription Drug User Fee Act 
(PDUFA) and the Medical Device User Fee and Modernization Act (MDUFMA)) 
show that every seven FTEs who perform direct FDA work require three 
indirect and supporting FTEs. These indirect and supporting FTEs 
function in budget, facility, human resource, information technology, 
planning, security, administrative support, legislative liaison, legal 
counsel, program management, and other essential program areas. On 
average, two of these indirect and supporting FTEs are located in ORA 
or the FDA center where the direct work is being conducted, and one of 
them is located in the Office of the Commissioner. To get the fully 
supported cost of an FTE, FDA needs to multiply the average cost of an 
FTE by 1.43, to take into account the indirect and supporting 
functions. The 1.43 factor is derived by dividing the 10 fully 
supported FTEs by 7 direct FTEs. In FY 2010, the average cost of an FTE 
was $231,801. Multiplying this amount by 1.43 results in an average 
fully supported cost of $331,476 per FTE, excluding the cost of foreign 
inspection travel.
    To calculate an hourly rate, FDA must divide the average fully 
supported cost of $331,476 per FTE by the average number of supported 
direct FDA work hours. See table 1.

      Table 1--Supported Direct FDA Work Hours in a Paid Staff Year
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Total number of hours in a paid staff year..............           2,080
Less:
  10 paid holidays......................................              80
  20 days of annual leave...............................             160
  10 days of sick leave.................................              80
  10 days of training...................................              80
  2 hours of meetings per week..........................              80
Net Supported Direct FDA Work Hours Available for                  1,600
 Assignments............................................
------------------------------------------------------------------------

    Dividing the average fully supported cost of an FTE in FY 2010 
($331,476) by the total number of supported direct work hours available 
for assignment (1,600) results in an average fully supported cost of 
$207 (rounded to the nearest dollar), excluding foreign inspection 
travel costs, per supported direct work hour in FY 2010--the last FY 
for which data are available.

B. Adjusting FY 2010 Costs for Inflation to Estimate FY 2012 Costs

    To adjust the hourly rate for FY 2012, FDA must estimate cost of 
inflation in each year for FY 2011 and FY 2012. FDA uses the method 
prescribed for estimating inflationary costs under the PDUFA provisions 
of the FD&C Act (section 736(c)(1) (21 U.S.C. 379h(c)(1))), the only 
provision the FD&C Act that provides a method for estimating future 
inflationary costs. The inflationary adjustment specified in these 
provisions, since FY 2008, is the greater of the following amounts: (1) 
The total percentage change that occurred in the Consumer Price Index 
(CPI) (all items; U.S. city average) during the 12-month period ending 
June 30 preceding the FY for which fees are being set; (2) the total 
percentage pay change for the previous FY for Federal employees 
stationed in the Washington, DC metropolitan area; or (3) the average 
annual change in cost, per FDA FTE, of all personnel compensation and 
benefits paid per FTE over the previous five of the most recent six 
FYs. PDUFA IV provides for this adjustment to be cumulative and 
compounded annually after FY 2008 (see section 736(c)(1)).
    For FY 2012, the first factor is the CPI increase for the 12-month 
period ending in June 2011. The CPI for June 2011 was 225.722 and the 
CPI for June 2010 was 217.965. (These CPI figures are available on the 
Bureau of Labor Statistics Web site at http://data.bls.gov/cgi-bin/surveymost?bls by checking the first box under ``Price Indexes'' and 
then clicking ``Retrieve Data'' at the bottom of the page. FDA has 
verified the Web site addresses throughout this document, but is not 
responsible for any subsequent changes to the Web sites after this 
document publishes in the Federal Register.) The CPI for June 2011 is 
3.559 percent higher than the CPI for the previous 12-month period.
    The second factor for the FY 2012 inflationary increase is the 
increase in pay for the previous FY (FY 2011 in this case) for Federal 
employees stationed in the Washington, DC metropolitan area. (This 
figure is published by the Office of Personnel Management, and can be 
found on the Web site at http://www.opm.gov/oca/11tables/html/dcb.asp 
above the salary table. For FY 2011, the inflationary increase was 0.00 
percent.
    For FY 2012, the third factor is the average change in FDA's cost 
for compensation and benefits per FTE over the previous five of the 
most recent six FYs (FY 2006 through FY 2010). The data on total 
compensation and benefits paid and numbers of FTEs paid, from which the 
average cost per FTE can be derived, are published in FDA's 
Justification of Estimates for Appropriations Committees. Table 2 of 
this document summarizes the actual costs and FTE data for the 
specified FYs, and provides the percent changes from the previous FYs 
and the average percent change over the previous five of the most 
recent six FYs, which is 3.72 percent.

                                  Table 2--FDA Personnel Compensation and Benefits (PC&B) Each Year and Percent Change
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                               Average
                                           FY 2005          FY 2006          FY 2007          FY 2008          FY 2009          FY 2010       for latest
                                                                                                                                               5 years
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total PC&B...........................   $1,077,604,000   $1,114,704,000   $1,144,369,000   $1,215,627,000   $1,464,445,000   $1,634,108,000  ...........
Total FTE............................            9,910            9,698            9,569            9,811           11,413           12,526  ...........
PC&B per FTE.........................         $108,739         $114,942         $119,591         $123,905         $128,314         $130,457  ...........
% Change from Previous Year..........            5.75%            5.70%            4.05%            3.61%            3.56%            1.67%        3.72%
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Taking all three factors into consideration, the inflationary 
increase for FY 2012 is 3.72 percent. The average percent change over 
the previous five of the most recent six FYs is 3.72 percent which is 
greater than the CPI change

[[Page 45822]]

during the 12-month period ending June 30 preceding the FY for which 
fees are being set (3.559 percent), and the increase in pay for the 
previous FY (FY 2011 in this case) for Federal employees stationed in 
the Washington, DC metropolitan area (0.00 percent). Therefore, the 
average percent change in PC&B cost per FTE (3.72 percent) becomes the 
inflation adjustment for the fee revenue for FY 2012.
    The inflationary adjustment for FY 2011 under the same provisions 
in section 736(c)(1) of the FD&C Act was 4.53 percent--the average 
percent change over the previous five of the most recent six FYs (FY 
2005 through FY 2009). This 4.53 percent is greater than the CPI 
increase during the 12-month period ending June 30 preceding the FY for 
which fees were being set on June 30, 2010 (1.053 percent), and the 
increase in pay for FY 2010 for Federal employees stationed in 
Washington, DC (2.42 percent).
    Section 736(c)(1) of the FD&C Act requires the inflationary 
adjustment to be cumulative and compounded. This factor for FY 2012 
(3.72 percent) is compounded by adding 1 and then multiplying by 1 plus 
the inflationary adjustment factor for FY 2011 (4.53 percent), to 
account for the 2 years of inflationary adjustments since FY 2010. The 
result of this multiplication (1.0372 times 1.0453) becomes the 
inflationary adjustment for FY 2012, which is 1.0842, or an increase of 
8.42 percent over FY 2010 costs.
    Increasing FY 2010 average fully supported cost per supported 
direct FDA work hour of $207 (excluding foreign inspection travel 
costs) by 8.42 percent yields an inflationary adjusted cost of $224 per 
a supported direct work hour in FY 2012, excluding foreign inspection 
travel costs. This is the unit cost that FDA will use in billing the 
reinspection and the recall activities for FY 2012 if no foreign travel 
is required for the activity.
    In FY 2010, ORA spent a total of $1,010,900 on a total of 91 
foreign inspection trips related to FDA's food and veterinary medicine 
programs, which averaged a total of $11,109 per foreign inspection 
trip. These trips averaged 3 weeks (or 120 paid hours) per trip. 
Dividing $11,109 per trip by 120 hours per trip results in a total and 
an additional cost of $93 per paid hour spent for foreign inspection 
travel costs in FY 2010. To adjust $93 for inflationary increases in FY 
2011 and FY 2012, FDA must multiply it by the same inflation factor 
mentioned previously in this document (1.0842) which results in an 
estimated cost of $101 dollars per paid hour in addition to $224 for a 
total of $335 per paid hour ($224 plus $101) for each direct hour of 
work requiring foreign inspection travel. These are the rates that FDA 
will use in charging fees in FY 2012 when foreign travel is required.

                 Table 3--FSMA Fee Schedule for FY 2012
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                                                              Fee rates
                        Fee category                         for FY 2012
------------------------------------------------------------------------
Hourly rate if no foreign travel is required...............         $224
Hourly rate if foreign travel is required..................          335
------------------------------------------------------------------------

    Congress directed FDA to publish, within 180 days of enactment of 
FSMA, a proposed set of guidelines in consideration of the burden of 
fee amounts on small business (section 743(b)(2)(B)(iii) of the FD&C 
Act). Such consideration may include reduced fee amounts for small 
businesses. FDA believes it is important to gather additional 
information before publishing such guidelines. Therefore, the Agency is 
publishing a separate document in this issue of the Federal Register 
requesting public input to help the Agency understand what factors 
should be taken into account when drafting the proposed guidelines. The 
Agency intends to consider the comments received and then publish for 
comment a proposed set of guidelines on the considerations of the 
burden of fee amounts on small business. Any adjustment to the fee 
schedule for small business must be done through notice and comment 
rulemaking (see section 743(b)(2)(B)(iii)). Thus, there will be no 
separate small business fees published for FY 2012 (table 3 of this 
document) and the published fees in this document will apply to all 
businesses in FY 2012.
    FDA recognizes, however, that for some small businesses the full 
cost recovery of FDA reinspection or recall oversight could impose 
severe economic hardship, and there may be unique circumstances in 
which some relief would be appropriate. Thus, during FY 2012, FDA will 
consider waiving in limited cases some or all of an invoiced fee based 
on a severe economic hardship, the nature and extent of the underlying 
violation, and other relevant factors.

III. Fees for Reinspections of Domestic or Foreign Facilities Under 
Section 743(a)(1)(A)

A. What will cause this fee to be assessed?

    The fee will be assessed for a reinspection conducted under section 
704 of the FD&C Act to determine whether corrective actions have been 
implemented and are effective and compliance has been achieved to the 
Secretary of Health and Human Services' (the Secretary) (and, by 
delegation, FDA's) satisfaction at a facility that manufactures, 
processes, packs or holds food \1\ for consumption necessitated as a 
result of a previous inspection (also conducted under section 704) of 
this facility which had a final classification of Official Action 
Indicated (OAI) conducted by or on behalf of FDA, when FDA determined 
the non-compliance was materially related to food safety requirements 
of the FD&C Act. FDA considers such non-compliance to include non-
compliance with a statutory or regulatory requirement under section 402 
of the FD&C Act (21 U.S.C. 342) and section 403(w) of the FD&C Act (21 
U.S.C. 343(w)). However, FDA does not consider non-compliance that is 
materially related to a food safety requirement to include 
circumstances where the non-compliance is of a technical nature and not 
food safety related (e.g., failure to comply with a food standard or 
incorrect font size on a food label). Determining when non-compliance, 
other than under section 402 and 403(w) of the FD&C Act, is materially 
related to food safety may depend on the facts of a particular 
situation. FDA may consider issuing guidance to provide additional 
information about the circumstances under which FDA would consider when 
non-compliance is materially related to a food safety requirement.
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    \1\ The term ``food'' for purposes of this document has the same 
meaning as such term in section 201(f) of the FD&C Act (21 U.S.C. 
321(f)).
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    Under section 743(a)(1)(A) of the FD&C Act, FDA shall assess and 
collect fees from ``the responsible party for each domestic facility 
(as defined in section 415(b) (21 U.S.C. 350d)) and the United States 
agent for each foreign facility subject to a reinspection'' to cover 
reinspection-related costs.
    Section 743(a)(2)(A)(i) of the FD&C Act defines the term 
``reinspection'' with respect to domestic facilities as ``1 or more 
inspections conducted under section 704 subsequent to an inspection 
conducted under such provision which identified non-compliance 
materially related to a food safety requirement of th[e] Act, 
specifically to determine whether compliance has been achieved to the 
Secretary's satisfaction.''
    The FD&C Act does not contain a definition of ``reinspection'' 
specific to foreign facilities. In order to give meaning to the 
language in section

[[Page 45823]]

743(a)(1)(A) of the FD&C Act to collect fees from the United States 
agent of a foreign facility subject to a reinspection, the Agency is 
using the following definition, of ``reinspection,'' for purposes of 
assessing and collecting fees under section 743(a)(1)(A) of the FD&C 
Act, with respect to a foreign facility: ``1 or more inspections 
conducted by officers or employees duly designated by the Secretary 
subsequent to such an inspection which identified non-compliance 
materially related to a food safety requirement of the FD&C Act, 
specifically to determine whether compliance has been achieved to the 
Secretary's (and, by delegation, FDA's) satisfaction.''
    This definition allows FDA to fulfill the mandate to assess and 
collect fees from the United States agent of a foreign facility in the 
event that an inspection reveals non-compliance materially-related to a 
food safety requirement causing one or more subsequent inspections to 
determine whether compliance has been achieved to the Secretary's (and, 
by delegation, FDA's) satisfaction. By requiring the initial inspection 
to be conducted by officers or employees duly designated by the 
Secretary, the definition ensures that a foreign facility would be 
subject to fees only in the event that FDA, or an entity designated to 
act on its behalf, has made the requisite identification at an initial 
inspection of non-compliance materially related to a food-safety 
requirement of the FD&C Act. The definition of ``reinspection-related 
costs,'' as defined in section 743(a)(2)(B) of the FD&C Act, relates to 
both a domestic facility reinspection and a foreign facility 
reinspection, as described in section 743(a)1)(A) of the FD&C Act.

B. Who will be responsible for paying this fee?

    The FD&C Act states that this fee is to be paid by the responsible 
party for each domestic facility (as defined in section 415(b) of the 
FD&C Act) and by the United States agent for each foreign facility 
(section 743(a)(1)(A) of the FD&C Act). This is the party to whom FDA 
will send the invoice for any fees that are assessed under this 
section.

C. How much will this fee be?

    The fee is based on the number of direct hours spent on such 
reinspections, including time spent conducting the physical 
surveillance and/or compliance reinspection at the facility, or 
whatever components of such an inspection are deemed necessary, making 
preparations and arrangements for the reinspection, traveling to and 
from the facility, preparing any reports, analyzing any samples or 
examining any labels if required, and performing other activities as 
part of the OAI reinspection until the facility is again determined to 
be in compliance. The direct hours spent on each such reinspection will 
be billed at the appropriate hourly rate shown in table 3 of this 
document.

IV. Fees for Non-Compliance With a Recall Order Under Section 
743(a)(1)(B)

A. What will cause this fee to be assessed?

    The fee will be assessed for not complying with a recall order 
under section 423(d) or 412(f) of the FD&C Act to cover food recall 
activities associated with such order performed by the Secretary (and 
by delegation, FDA) (section 743(a)(1)(B) of the FD&C Act). 
Noncompliance may include the following: (1) Not initiating a recall as 
ordered by FDA; (2) not conducting the recall in the manner specified 
by FDA in the recall order; or (3) not providing FDA with requested 
information regarding the recall, as ordered by FDA.

B. Who will be responsible for paying this fee?

    Section 743(a)(1)(B) of the FD&C Act states that the fee is to be 
paid by the responsible party for a domestic facility (as defined in 
section 415(b) of the FD&C Act and an importer who does not comply with 
a recall order under section 423 or under section 412(f) of the FD&C 
Act. In other words, the party paying the fee would be the party that 
received the recall order.

C. How much will this fee be?

    The fee is based on the number of direct hours spent on taking 
action in response to the firm's failure to comply with a recall order. 
Types of activities could include conducting recall audit checks, 
reviewing periodic status reports, analyzing the status reports and the 
results of the audit checks, conducting inspections, traveling to and 
from locations, and monitoring product disposition. The direct hours 
spent on each such recall will be billed at the appropriate hourly rate 
shown in table 3 of this document.

V. Fees for Import Reinspection/Reexamination Under Section 
743(a)(1)(D)

A. What will cause this fee to be assessed?

    Under section 743(a)(2)(A)(ii) of the FD&C Act, for a fee to be 
assessed, there must be two sets of examinations. First, there must be 
an examination conducted under section 801 of the FD&C Act (21 U.S.C. 
381), which must identify noncompliance materially related to a food 
safety requirement of the FD&C Act.
    Second, subsequent to the first examination, there must be 1 or 
more additional examinations conducted under section 801. These 
additional examinations must be conducted specifically to determine 
whether compliance has been achieved to the Secretary's (and, by 
delegation, FDA's) satisfaction. Moreover, per section 743(a)(1)(D) of 
the FD&C Act, an importer subject to a reinspection will be assessed a 
fee to cover reinspection-related costs.
    FDA has determined that at least the following four specific 
situations will cause a fee to be assessed:
1. Reconditioning of Imported Food
    FDA reviews food that is imported or offered for import to 
determine admissibility into the United States (see, e.g., section 
801(a) of the FD&C Act). Food is subject to refusal of admission if, 
among other reasons, (a) it appears to be adulterated or misbranded, or 
(b) if it is a dietary supplement subject to section 761 of the FD&C 
Act (21 U.S.C. 379aa-1), FDA has credible evidence or information 
indicating that the responsible person has not complied with a 
requirement of that section or has not allowed access to records 
described in that section. When FDA initiates a refusal of admission, 
often referred to as detaining the product, notice is given to the 
owner or consignee. If the detention is based on one of the reasons 
just described, the owner or consignee of the food may request 
permission to recondition the food under section 801(b) of the FD&C 
Act. When the basis is that the food appears to be adulterated or 
misbranded, the request can be to bring the food into compliance by 
relabeling or other action, such as heat treatment, or to render it 
other than a food, drug, device, or cosmetic. When the basis relates to 
section 761 (serious adverse event reporting for dietary supplements), 
the request can be for the responsible person, as defined in section 
761, to take action to ensure that the responsible person is in 
compliance with section 761.
    A request for reconditioning is made after FDA has determined that 
the food is subject to refusal of admission under section 801(a) of the 
FD&C Act. For the purpose of section 743 of the FD&C Act, FDA considers 
its review of information for the purpose of determining whether an 
article of food is admissible to be ``an examination conducted under 
section 801.'' If that review leads FDA to determine that the food is 
subject to

[[Page 45824]]

refusal of admission under section 801(a), FDA considers that to mean 
that its examination ``identified noncompliance'' for the purpose of 
section 743. This examination could involve, for example, a laboratory 
analysis of physical samples of the product or a review of the 
product's label. It could also involve reviewing other information FDA 
obtains, such as reviewing sample results from a reliable third party, 
relevant epidemiological evidence, or the results from an FDA or third 
party inspection of a facility where the food was processed. A 
detention without physical examination could also be based on 
information contained in an import alert.
    When food is on an import alert, it typically means that FDA has 
concluded there is sufficient evidence or other information to detain 
without physical examination of future shipments of the imported food 
(e.g., that future shipments appear to be adulterated or misbranded) 
and they are subject to refusal unless the owner or consignee shows the 
product is compliant (e.g., through third-party laboratory analysis). 
FDA considers situations where FDA's review of information leads it to 
conclude that food should be placed on an import alert for detention 
without physical examination to be ``an examination conducted under 
section 801 [that] identified noncompliance'' for the purposes of 
section 743. FDA's Regulatory Procedures Manual (RPM), Chap. 9, 
discusses the types of reviews FDA conducts, and the types of 
information it reviews, in determining whether to detain a product or 
to place a product on an import alert.
    For a fee to be assessed under section 743, FDA's determination 
that the food is subject to refusal of admission must be on a basis 
materially related to food safety requirements (see section III.A of 
this document for a discussion about ``materially related to food 
safety requirements'').
    If FDA authorizes a request for reconditioning, the reconditioning 
operations are carried out under the supervision of either FDA or U.S. 
Customs and Border Protection (CBP) (section 801(b) of the FD&C Act; 21 
CFR 1.96(a)). FDA considers the review and approval of the request, as 
well as this supervision to be ``1 or more examinations conducted under 
section 801 * * * specifically to determine whether compliance has been 
achieved'' to FDA's satisfaction.
2. Importer Seeking Admission of an Article That Has Been Detained
    If FDA has determined that an article of food is subject to refusal 
of admission under section 801(a) of the FD&C Act, FDA gives notice of 
this to the owner or consignee, who then has an opportunity to 
introduce evidence regarding the admissibility of the food (section 
801(a) of the FD&C Act; 21 CFR 1.94(a)). As discussed previously in 
this document, where FDA has reviewed information for the purpose of 
admissibility and determined that the food is subject to refusal of 
admission under section 801, FDA considers that it has conducted ``an 
examination conducted under section 801 [that] identified 
noncompliance.'' This includes situations where FDA's review determines 
that food should be placed on an import alert for detention without 
physical examination.
    If the owner or consignee chooses to submit evidence regarding 
admissibility, FDA reviews the information to determine whether--
despite the appearance that the product is adulterated, misbranded, or 
otherwise subject to refusal of admission--the food is compliant and 
admissible into the United States. The evidence the owner or consignee 
submits varies. Depending on the circumstances, it could include, for 
example, the results of laboratory analyses of samples conducted on the 
owner/consignee's behalf to show the product is not contaminated. FDA 
considers its review of the evidence submitted to be ``1 or more 
examinations conducted under section 801 * * * specifically to 
determine whether compliance has been achieved'' to FDA's satisfaction.
    Not all situations where the owner/consignee provides information 
or evidence to demonstrate compliance will result in the assessment of 
a fee. An example is if a food, not subject to an Import Alert, is 
detained based on an appearance of adulteration or misbranding, but 
information is presented that demonstrates that the food is not 
adulterated or misbranded. FDA considers such a situation to be one in 
which a fee is not assessed.
    A fee may or may not be assessed under certain circumstances 
related to food that is detained based on an import alert for detention 
without physical examination covering food from a particular geographic 
region or country. FDA may place a region or country on an import alert 
if there appears to be an ongoing problem or condition in that region 
or country such that it causes the appearance of a violation for future 
shipments of imported articles originating there. If food from a region 
or country is subject to an import alert and is subsequently detained 
based on the overarching import alert, the owner or consignee may seek 
admission by providing evidence that the problem or conditions 
regarding the food it is importing have been resolved. Alternatively, 
the owner or consignee may provide evidence that the problems or 
conditions that led to the alert, even if widespread in the region or 
country, did not apply to its food and, thus, it did not need to 
resolve any compliance-related issues. FDA considers the latter 
situation to be one in which a fee is not assessed. A fee may be 
assessed, however, when FDA reviews compliance information specific to 
the food being imported or specific to a particular processor in 
determining whether to issue a region- or country-wide import alert. An 
example is a situation where FDA analyzed samples of food from 
Processor A and found it to be contaminated, the food is later placed 
on a region- or country-wide import alert, and the owner or consignee 
is now importing or offering for import food from Processor A. If the 
owner or consignee seeks admission of the food by providing third party 
laboratory analyses to show the food is not contaminated, FDA's review 
of this information would be ``1 or more examinations conducted under 
section 801 * * * specifically to determine whether compliance has been 
achieved'' to FDA's satisfaction.
3. Entity Requesting Removal From an Import Alert for Detention Without 
Physical Examination
    Once placed on import alert, food imported from a particular firm, 
region, or country may remain in this status until FDA has sufficient 
evidence or other information, such as information that removes the 
appearance of the violation that led to the initial placement on import 
alert. Depending on the situation that led to the import alert, FDA's 
RPM Chapter 9 or the import alert itself may explain the types of 
information that should be provided.
    As discussed previously in this document, where FDA has reviewed 
information and determined that food should be placed on an import 
alert for detention without physical examination, it considers that it 
has conducted 1 or more examinations conducted under section 801 that 
identified noncompliance.
    Where an entity requests removal of food from an import alert and 
provides supporting information, FDA considers its review of this 
information, along with any other related examination it undertakes in 
considering the request, to be ``1 or more examinations conducted under 
section 801 * * * specifically to determine whether compliance has been 
achieved'' to FDA's satisfaction.

[[Page 45825]]

    As discussed in section V.A.2 of this document, some requests for 
removal from region- or country-wide import alerts will not lead to the 
assessment of a fee. Fees would only be assessed in situations where, 
in issuing the alert, FDA reviewed compliance information specific to a 
particular person or entity sufficiently related to the request for 
removal. An example of such a situation is where FDA analyzed samples 
of food from Processor A and found it to be contaminated, the food is 
then placed on a region- or country-wide import alert, and FDA receives 
a request to remove food from Processor A from the import alert.
4. Destruction of Food That Has Been Refused Admission
    If a product is refused admission under section 801(a) of the FD&C 
Act, it must be exported within 90 days of the document of refusal or 
it is subject to destruction by CBP (section 801(a) of the FD&C Act). 
In practice, when a product is destroyed, destruction is often 
conducted by the owner or consignee under the supervision of FDA or 
CBP. Where FDA conducts a review and/or approves a destruction proposal 
and such supervision of destruction occurs, FDA considers this to be 
``1 or more examinations conducted under section 801 * * * specifically 
to determine whether compliance has been achieved'' to FDA's 
satisfaction.

B. Who will be responsible for paying this fee?

    The importer that is subject to the additional examinations that 
are described in section V.A of this document is responsible for paying 
the fee, according to section 743(a)(1)(D) of the FD&C Act.
1. Reconditioning of Imported Food
    For reconditioning, the entity that is responsible for the 
reconditioning is responsible for paying the fee. The request for 
reconditioning can only be made by the owner or consignee of the food 
(21 CFR 1.95). If ownership changes, the new owner will be responsible 
for the reconditioning if that new owner executes a bond and obtains a 
new authorization (21 CFR 1.96(d)).
2. Importer Seeking Admission of an Article That Has Been Detained
    The entity that introduces evidence regarding admissibility is 
responsible for paying this fee. This is the owner or consignee of the 
food that is being imported or offered for import. (Section 801(a) of 
the FD&C Act; 21 CFR 1.83(b) and 1.94(a).)
3. Entity Requesting Removal From an Import Alert for Detention Without 
Physical Examination.
    FDA considers the entity that requests removal of the food from the 
import alert to be the importer subject to the examination and, thus, 
responsible for paying this fee.
4. Destruction of Food That Has Been Refused Admission
    FDA considers the entity that destroys the product under FDA or CBP 
supervision to be the importer subject to the examination and, thus, 
responsible for paying this fee.

C. How much will this fee be?

    The fee is to cover all expenses incurred in connection with 
arranging, conducting, and evaluating the results of the one or more 
additional examinations that are described in section V.A of this 
document.
    For reconditioning, section 801(c) of the FD&C Act directs the 
owner or consignee to pay all expenses in connection with the 
supervision of reconditioning with respect to food and certain other 
FDA-regulated products. Those parties have been paying these expenses, 
but FDA did not have authority to retain those fees. FDA considers the 
enactment of section 743 of the FD&C Act to mean that, for food, FDA is 
now authorized to assess and retain these fees, but only with respect 
to the reconditioning of food and only if the other conditions of 
section 743 are met. If a fee is authorized under section 743 for a 
particular article of food, FDA considers this to mean it cannot 
collect a fee related to reconditioning that article under section 
801(c).
    For destruction, section 801(c) of the FD&C Act also directs the 
owner or consignee to pay all expenses in connection with the 
destruction of food and certain other FDA-regulated products under 
section 801(a). However, neither FDA nor CBP have had the authority to 
retain those fees. FDA considers the enactment of section 743 of the 
FD&C Act to mean that, for food, FDA is now authorized to assess and 
retain these fees, but only with respect to the destruction of food and 
only if the other conditions of section 743 are met. If a fee is 
authorized under section 743 for a particular article of food, FDA 
considers this to mean it cannot collect a fee related to destruction 
of that article under section 801(c) of the FD&C Act.
    The direct hours spent on each such import reinspections will be 
billed at the appropriate hourly rate shown in table 3 of this 
document.

VI. How must the fees be paid?

    An invoice will be sent to the responsible party for paying the fee 
after FDA completes the work on which the invoice is based. Payment 
must be made within 30 days of the invoice date in U.S. currency by 
check, bank draft, or U.S. postal money order payable to the order of 
the Food and Drug Administration. Detailed payment information will be 
included with the invoice when it is issued.

VII. What are the consequences of not paying these user fees?

    Under section 743(e)(2) of the FD&C Act, any fee that is not paid 
within 30 days after it is due shall be treated as a claim of the 
United States Government subject to provisions of subchapter II of 
chapter 37 of title 31, United States Code.

VIII. Comments

    Interested persons may submit to the Division of Dockets Management 
(see ADDRESSES) either electronic or written comments regarding this 
document. It is only necessary to send one set of comments. It is no 
longer necessary to send two copies of mailed comments. Identify 
comments with the docket number found in brackets in the heading of 
this document. Received comments may be seen in the Division of Dockets 
Management between 9 a.m. and 4 p.m., Monday through Friday.

    Dated: July 26, 2011.
Leslie Kux,
Acting Assistant Commissioner for Policy.
[FR Doc. 2011-19331 Filed 7-29-11; 8:45 am]
BILLING CODE 4160-01-P


