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January 31 2013 Issue

Thursday, January 31, 2013
Sandler, Travis & Rosenberg Trade Report

Last Day to Renew Food Facility Registrations with FDA or Face Suspension

Jan. 31 is the deadline for all foreign and domestic companies and facilities that manufacture, pack or store food, alcoholic beverages, food ingredients, pet foods or dietary supplements to renew their food facility registrations with the Food and Drug Administration. Any facility that fails to renew risks having its registration suspended by the FDA, which would bar that facility from importing, distributing or selling food in the United States. All facilities covered by the law must re-register by the deadline.

Food facility registration is required under Section 102 of the Food Safety Modernization Act. This law also requires that each food facility designate a U.S. agent. The U.S. government has made it clear that it will enforce the re-registration requirement and that those acting as U.S. agent could be financially responsible for the cost of facility inspections.

To find out more about your company’s risk and how you can quickly and easily meet the new re-registration requirements, visit the FDA Solutions Group Web site, which offers information and registration services in English, Spanish, Italian, Japanese and Portuguese.

Brokers, forwarders and importers of record who are looking to avoid the potential financial liability associated with U.S. agent status are invited to direct their customers to designate FDA Solutions Group as U.S. agent when registering their facilities.

If you need additional assistance, please email FDA Solutions Group directly or call 305.702.3161.

FDA Solutions Group LLC is a company affiliated with the law firm of Sandler, Travis & Rosenberg, P.A. Its sole purpose is to offer cost-efficient regulatory compliance solutions for the food, beverage, dietary supplement, alcoholic beverage, medical device and cosmetic industries

Proposed Rules on Preventive Controls, Produce Safety to be Subject of FDA Meetings

The Food and Drug Administration plans to hold three public meetings to discuss proposed rules that would establish standards for (a) the growing, harvesting, packing and holding of produce for human consumption and (b) current good manufacturing practice and hazard analysis and risk-based preventive controls for human food. The purpose of this meeting is to solicit stakeholder and public comments on the proposed rules, to inform the public about the rulemaking process (including how to submit comments, data and other information), and to respond to questions about the proposed rules.

The produce safety proposed rule would establish science-based minimum standards for the safe growing, harvesting, packing and holding of fruits and vegetables grown for human consumption. This rule sets forth procedures, processes and practices that FDA expects would reduce foodborne illness associated with the consumption of produce. The preventive controls proposed rule would apply to human food and require domestic and foreign facilities that are required to register under the Federal Food, Drug and Cosmetic Act to have written plans that identify hazards, specify the steps that will be put in place to minimize or prevent those hazards, monitor results, and act to correct problems that arise. Both proposals and related fact sheets are available on FDA’s FSMA Web site.

The first meeting will be held at the Department of Agriculture in Washington, D.C., on Feb. 28 and March 1. Other meetings will be held in Chicago and Portland, Ore., with specific location, date and registration information to be published soon. Registration to attend the meetings will be on a first-come, first-served basis, and the FDA encourages interested persons to register in advance because seating will be limited. 

In the News: U.S.-China Trade, Cargo Airships, Russia Bans U.S. Beef and Pork, Container Line Mergers

Soured U.S.-China Relationship Approaches Inflection Point

High-tech lighter-than-air cargo airship being built in Southern California

Russia Bans Pork and Beef Imports From U.S. on Food Additive

Container Shipping Faces Merger Urge as Money Dries Up

Items Related to Missiles, Rockets, Etc. Proposed for Transfer to Commerce Control List

As part of President Obama’s Export Control Reform Initiative the Bureau of Industry and Security has issued a proposed rule describing how articles related to launch vehicles, missiles, rockets and military explosive devices that the president determines no longer warrant control under the U.S. Munitions List would be controlled under the Commerce Control List in new export control classification numbers 0A604, 0B604, 0D604, 0E604, 9A604, 9B604, 9D604 and 9E604. Concurrently, the State Department’s Directorate of Defense Trade Controls has issued a proposed rule that would revise USML category IV to describe more precisely those types of such articles that warrant continuing control on the USML. Comments on these proposed rules are due no later than March 18.

BIS states that the coverage of the new ECCNs would be as follows.

0A604 – commodities related to military explosive devices and charges

0B604 – test, inspection and production equipment and related commodities specially designed for commodities in ECCN 0A604 or related defense articles in USML Category IV

0D604 – software special designed for the development, production, operation or maintenance of commodities controlled by ECCN 0A604 or 0B604

0E604 – technology required for the development, production, operation, installation, maintenance, repair, overhaul or refurbishing of items controlled by ECCNs 0A604, 0B604 or 0D604

9A604 – commodities related to launch vehicles, missile, rockets, torpedoes, bombs and mines

9B604 – test, inspection and production equipment and related commodities specially designed for the development or production of commodities in ECCN 9A604 or related defense articles in USML Category IV

9D604 – software specially designed for the development, production, operation or maintenance of commodities controlled by ECCN 9A604 or 9B604

9E604 – technology required for the development, production, operation, installation, maintenance, repair, overhaul or refurbishing of commodities or software controlled by ECCN 9A604, 9B604 or 9D604

BIS believes that the principal effect of its rule will be to provide greater flexibility for exports and reexports of these items to NATO member countries and other multiple regime-member countries. This greater flexibility would be in the form of the application of the Export Administration Regulations’ de minimis threshold principle for items constituting less than a de minimis amount of controlled U.S.-origin content in foreign made items; the availability of license exceptions, particularly RPL (servicing and replacement of parts and equipment) and STA (strategic trade authorization); the elimination of the requirements for manufacturing license agreements and technical assistance agreements in connection with exports of technology; and a reduction in, or elimination of, exporter and manufacturer registration requirements and associated registration fees. 

Court Rules on Classification of Glass Articles Designed to Hold Candles

The Court of International Trade ruled Jan. 28 in The Pomeroy Collection Ltd. v. U.S. that certain glass plates, floor lighting articles and wall lighting articles are properly classified as decorative glass articles under HTSUS 7013.39.50, 7013.99.50, 7013.99.80 or 7013.99.90 (depending on the value of the merchandise) and subject to duties ranging from 4.3% to 22.8%. The court states that each of these articles is either wholly made of glass or is a composite good where the glass vessel is the component that imparts the essential character of the merchandise.

The plaintiff asserted that the items should be classified a lamps and light fittings under HTSUS 9405.50.40 (duty-free) or, alternatively, that the floor articles and wall articles are classifiable as other furniture and parts thereof under HTSUS 9403.80.60 or 9403.20.10 (duty-free). While the plaintiff argued that these goods are all designed to be candle holders, the court pointed out that at the time of importation they did not contain candles or have physical features that are specifically designed to hold a candle in place. The court also concluded that these items are not furniture because they are ornamental rather than utilitarian. 

IPR Enforcement: New Courtroom, Omega-3 Extracts, Mobile Handsets, Kinesiotherapy Devices

New Courtroom Expected to Help Ease Section 337 Hearing Bottlenecks. The International Trade Commission has completed the construction of a third courtroom for evidentiary hearings in section 337 investigations, which usually involve allegations of patent and other intellectual property rights infringement. An ITC press release notes that the new courtroom is equipped with computer screens for all participants to enable access to the visual presentations that are often crucial in IPR trials. The room also supports audio and video teleconferencing and has the capability to allow remote testimony and hearing/conference participation. The press release adds that the audio-visual system provides high-quality sound, enhanced capabilities for displaying and annotating documents, and sophisticated techniques to protect confidential business information when trials move to the confidential record.

The ITC notes that its section 337 caseload has risen significantly over the last decade and that cases increasingly involving complex technologies and large numbers of parties. Other steps the agency has taken in response to these challenges include expanding the number of administrative law judges from four to six, reallocating resources, and reviewing and revising its section 337 investigative processes and procedures.

New IPR Infringement Petition on Omega-3 Extracts. The International Trade Commission received Jan. 29 on behalf of Neptune Technologies and Bioresources Inc. and Acasti Pharma Inc. a petition requesting that it institute a Section 337 investigation regarding certain omega-3 extracts from marine or aquatic biomass and products containing the same. The proposed respondents are located in Norway, Israel, New Zealand and the U.S.

Section 337 investigations primarily involve claims regarding intellectual property rights violations by imported goods, including the infringement of patents, trademarks and copyrights. Other forms of unfair competition involving imported products, such as misappropriation of trade secrets or trade dress and false advertising, may also be asserted. The primary remedy available in Section 337 investigations is an exclusion order that directs U.S. Customs and Border Protection to stop infringing imports from entering the U.S. In addition, the ITC may issue cease and desist orders against named importers and other persons engaged in unfair acts that violate Section 337, including selling infringing imported articles out of U.S. inventory.

New IPR Infringement Investigation of Mobile Handsets. The International Trade Commission has instituted investigation 337-TA-864 to determine whether imports of certain mobile handset devices and related touch keyboard software are violating Section 337 of the 1930 Tariff Act by reason of patent infringement. Complainants Nuance Communications Inc., Swype Inc., Tegic Communications Inc. and ZI Corporation request that after this investigation the ITC issue an exclusion order, which would direct U.S. Customs and Border Protection to prohibit the entry of the infringing products into the U.S., and cease and desist orders, which would require the named respondents to cease actions that violate Section 337, including selling infringing imported articles out of U.S. inventory. The respondents in this investigation are located in China and the U.S.

Import Restrictions Considered on Kinesiotherapy Devices. In investigation 337-TA-823 the presiding administrative law judge has issued a final initial determination that the importation, sale for importation and sale within the U.S. after importation of certain kinesiotherapy devices and components thereof are not violating certain patents. Nevertheless, the ALJ has recommended the issuance of a general exclusion order should the International Trade Commission reverse that decision.

The ITC is therefore soliciting through Feb. 28 comments on any public interest issues raised by such relief. Comments should address whether issuance of an exclusion order would affect the public health and welfare in the U.S., competitive conditions in the U.S. economy, the production of like or directly competitive articles in the U.S., or U.S. consumers. In particular, the ITC is interested in comments that:

- explain how the articles potentially subject to the recommended order are used in the U.S.;

- identify any public health, safety or welfare concerns in the U.S. relating to the recommended order;

- identify like or directly competitive articles that the complainant, its licensees or third parties make in the U.S. that could replace the subject articles if they were to be excluded;

- indicate whether the complainant, its licensees and/or third party suppliers have the capacity to replace the volume of articles potentially subject to the recommended exclusion order within a commercially reasonable time; and

- explain how the exclusion order would impact consumers in the U.S. 

Food Labeling Standards to be Discussed at April 17 USDA Meeting

The Department of Agriculture’s Food Safety and Inspection Service will hold a public meeting April 17 at USDA headquarters in Washington, D.C., to provide information and receive public comments on agenda items and draft U.S. positions that will be discussed at the 41st session of the Codex Committee on Food Labeling, which will be held in Canada May 14-17. The following items on the agenda for the 41st session of the CCFL will be discussed during the public meeting, which interested parties can attend in person or via conference call.

- consideration of labeling provisions in draft Codex standards
- proposed draft revision of the Guidelines on Nutrition and Health Claims concerning Non-Addition of Sodium Salts
- the use of ethylene as a sprouting inhibitor for onions and potatoes
- organic aquaculture
- discussion paper on issues related to date marking
- discussion paper on labeling of food derived from crops biofortified by natural selection 

Foreign Regulatory Changes Could Affect Exports of Vehicles, Foods

According to the National Institute of Standards and Technology, the World Trade Organization has been notified of regulatory changes that may affect exports of specific products to the following countries. For information on how these restrictions may affect your business, contact ST&R.

Japan – partial amendment of safety regulations for road transport vehicles, including tractors, buses and vehicles for freight use

Mexico – amended official standards on processed meat products, milk, milk formula, combined dairy products, dairy byproducts, and non-alcoholic flavored beverages 

Trade Mission to Saudi Arabia and Kuwait to Focus on Infrastructure Protection, Cyber Security

The International Trade Administration is coordinating an executive-led critical infrastructure protection and cyber security trade mission to Saudi Arabia and Kuwait from Sept. 28 to Oct. 1. This mission will focus on the cyber security, critical infrastructure protection, and emergency management, ports of entry, aviation, and border security sectors and is designed for representatives from U.S. safety and security businesses and trade associations that have past experience exporting to the Middle East.

The mission will include a minimum of 15 and maximum of 20 qualified U.S. firms and trade associations. Those interested in participating must submit a completed and signed mission application and supplemental application materials, including adequate information on the company’s (or, in the case of a trade association, represented companies’) products and/or services, primary market objectives, and goals for participation. Each applicant must also certify that the products and services it seeks to export through the mission are either produced in the United States or, if not, are marketed under the name of a U.S. firm and have at least 51% U.S. content.

The deadline to apply to participate is June 30, but the ITA will begin reviewing applications and making selection decisions on a rolling basis beginning Feb. 1. 

Imports of Undenatured Inedible Meat and Egg Products are Subject of New USDA Form

The Department of Agriculture’s Food Safety and Inspection Service is proposing a new form regarding the importation of undenatured inedible meat and egg products into the United States. Comments on this form, including whether it is necessary and ways to enhance the quality, utility and clarity of the information to be collected, are due no later than April 1.

FSIS is responsible for verifying that meat and egg products are safe, wholesome, not adulterated and correctly labeled. Foreign governments are required to petition FSIS for approval to export undenatured inedible egg products to the U.S. Undenatured inedible meat and egg products may be imported if they meet the requirements in 9 CFR 325.11 (e) and 590.45 (d). Inedible poultry must be denatured regardless of the intended use, so undenatured inedible poultry product may not be imported into the U.S.

Firms will complete FSIS Form 9540-4, “Permit Holder – Importation of Undenatured Inedible Product,” for the undenatured inedible product they are importing into the U.S. FSIS will use the information on this form to keep track of the movement of imported undenatured inedible meat and egg products. 

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