Pre-planning and investing in regulatory compliance measures are key to success

The US is the most lucrative wellness market in the world – and for some small and medium-sized enterprises (SMEs) that produce supplements, the potential for growth and a bigger bottom line is difficult to ignore. 

And who would blame them? The US wellness sector is valued at US$2tn and is poised to continue growing, recording an average annual growth rate of 8.3% between 2019 and 2023, according to research by the Global Wellness Institute. 

In contrast, China’s market, ranked the second-largest in the world, trails at a more modest US$870bn, followed by Germany at $310bn.

However, rushing in without being fully compliant could result in products being blacklisted or seized at the border, says Jennifer Diaz, an attorney and founding partner at Miami-based Diaz Trade Law, which specializes in customs and US Food and Drug Administration (FDA) laws and compliance.

Here, Diaz offers her top five tips for new brands to stay compliant and off the FDA’s blacklist.

1. Know the regulators

One of the first steps for SMEs planning to import supplements into the US is to register with the FDA, as they are considered a food product, Diaz says.

Companies also need to designate a US agent to act on their behalf before shipments begin.

“Most entities also don’t realize that the US has 47 regulatory agencies that can regulate imports and exports, so you may be dealing with multiple federal regulatory agencies that regulate your product,” she adds.

For example, the FDA, Federal Trade Commission (FTC) and US Customs regulate the imported supplements market, she says.

2. Beware of being blacklisted

One underestimated risk for SMEs launching their supplements in the US is the FDA’s import alert system, which Diaz describes as a blacklist for companies that have failed to comply with regulations.

This could be anything from mislabeling products to not using English on labels, making false medical claims, or failing to register with the FDA, Diaz explains, adding that it is time-consuming and costly to be removed from the list.

“Many SMEs don’t have the ability to survive the enforcement because the full weight of the government on you when you’re non-compliant is big,” she says.

“The government does not have the resources to hold your hand and help you when it comes to compliance – the expectation is that the product is already compliant and you’re smart enough to pick the right business partners and agents before you launch.”

3. Be wary of influencers

Marketing claims, even those from third parties such as influencers, also fall under FDA and FTC regulations, according to Diaz.

“What many don’t realize is that the FDA can legally make your life miserable over your marketing claims, in addition to what’s on your product,” Diaz says.

For example, suppose a business sends a supplement to an influencer to promote it on social media and they claim that it cured their cancer. In this case, the company is deemed liable if they don’t “de-escalate” the claim, Diaz explains.

“The FDA has the legal ability to issue a company a warning letter for the claims that they make on their website or for the claims that influencers make on their behalf on social media.”

4. Set a budget for compliance

Not spending the time or money on pre-compliance preparation can also lead to costly errors, says Diaz.

“It could be hundreds of thousands of dollars if your goods are seized or you receive an FDA audit or warning letter,” she says.

Diaz recommends that SMEs conduct independent testing in a laboratory to verify ingredient claims, as well as taking out product liability insurance to protect against litigation and organizing a legal review of all labels, ingredients and marketing content.

5. Protect your brand

Diaz also recommends that SMEs protect their brands by registering them with the US Patent and Trademark Office.

“Once you register your trademark, you should also record it with US Customs and then teach them how to spot copies of your brand, such as unique packaging,” Diaz says. 

“Customs then logs it in its secret database and it goes to all customs officers – there are 60,000 customs officers in the country at 328 ports of entry – and they will fine the offender and alert you if they spot a fake.”

CBP 

• In Fiscal Year 2021, CBP at the LA/Long Beach Seaport seized More Than $760 Million in Counterfeit and Prohibited Products, a 652% increase over the previous year.
• CBP issues guidance regarding the extension of product exclusions from additional Section 301 China duties on certain medical-care products to address COVID-19.
• With changes to the HTSUS classification systems possibly coming as early as January 1, 2021, U.S. importers should review their classifications and ensure compliance with U.S. regulations

BIS

• The Bureau of Industry and Security (BIS) requests public comment regarding areas and priorities for U.S. and EU export control cooperation under the Trade and Technology Council.
  • Comments are due by January 14, 2022
• On November 26, 2021, the Department of Commerce’s Bureau of Industry and Security (BIS) published a final rule adding 27 foreign entities and individuals to the Entity List for engaging in activities that are contrary to the national security or foreign policy interests of the United States.

China

• In their most substantial talk since President Biden took office, Chinese President Xi Jinping has warned that encouraging Taiwanese independence would be “playing with fire”.
• On November 12, 2020, the President declared a national emergency to deal with the extraordinary threat to the national security, foreign policy, and economy of the United States constituted by certain companies of the People’s Republic of China.
• Airbnb subject to regulatory risk under U.S. law with more than a dozen homes available for rent in China’s Xinjiang region on land owned by an organization sanctioned by the U.S. government for complicity in genocide and forced labor.
• On December 6, 2021, President Biden announced a U.S. diplomatic boycott of the 2022 Beijing Winter Olympic Games over concerns about China’s human rights record.

Commerce Department

• The Department of Commerce invites the general public to comment on proposed, and continuing information collections to allow for submission of exclusions requests from the remedies adjusting imports of steel and aluminum into the United States.
• Comments are due by January 24, 2022.
• On December 1, 2021, the Department of Commerce announced the opportunity to request an annual administrative review for products that are currently subject to antidumping and countervailing duties.

FDA

• The FDA is sharing a grant opportunity to cover COVID-19-related expenses for eligible FDA-regulated food producers, processors and growers.
  • Applications are due November 22
    • How to Apply – USDA’s Pandemic Response and Safety Grant Program – YouTube
    • Eligibility – USDA’s Pandemic Response and Safety Grant Program – YouTube
    • DUNS Number Registration – USDA’s Pandemic Response and Safety Grant Program – YouTube

Export Controls/Sanctions

• On November 18, 2021, the U.S. Department of the Treasury’s Office of Foreign Assets Control sanctioned senior Houthi military officer Saleh Mesfer Alshaer, for the seizure of property in Yemen valued at greater than 100 million dollars, using a variety of unlawful tactics, including extortion.
• On November 18, 2021, the U.S. Department of the Treasury’s Office of Foreign Assets Control sanctioned six Iranian individuals and one Iranian entity for attempting to influence the 2020 U.S. presidential election.
• On November 24, 2021, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Syrian Sanctions Regulations to expand the authorizations for nongovernmental organizations (NGO) to engage in certain transactions and activities that ensure the continued provision of humanitarian assistance, including certain early-recovery activities, that benefit the Syrian people.
• On November 24, 2021, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela-related General License 8I, authorizing  limited transactions with Petróleos de Venezuela, S.A. or the wind down of operations in Venezuela for certain entities.
• On December 2, 2021, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced the expansion of sanctions against Belarus to include 35 new designations to the Specially Designated Nationals and Blocked Entities List and the issuance of a related wind-down license, General License 5.
• On November 8, 2021, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned 57 cryptocurrency addresses and one exchange for facilitating ransomware and money laundering

DST and Section 301 Investigations

• As part of the to address tax challenges arising from the digitalization of the world economy, the U.S. Trade Representative has determined to terminate the Section 301 Digital Services Tax Investigations of Austria, France, Italy, Spain, and the United Kingdom.
• U.S. and India reach agreement regarding the treatment of Digital Services Taxes prior to full implementation of Pillar 1 of the Organization for Economic Co-operation and Development (OECD) agreement.  As part of the agreement the United States will terminate the currently suspended additional duties on goods of India that had been adopted in the DST Section 301 investigation.
• On November 22, 2021, the U.S. Department of the Treasury (Treasury) issued a joint statement with Turkey regarding a transitional approach to Turkey’s Digital Service Tax (DST) prior to entry into force of Pillar 1. The joint statement reflects a political agreement in which the U.S. Trade Representative has determined to terminate the section 301 action taken in the investigation of Turkey’s DST.

USTR/Trade Policy

• On November 17, 2021, the United States and Japan announced the formation of the “U.S.-Japan Partnership on Trade” to deepen cooperation between the two countries and reaffirm their alliance through regular engagement on trade-related matters.
• United States Trade Representative Katherine Tai and United States Secretary of Commerce Gina Raimondo published an op-ed touting the agreement reached with the European Union that preserves the long-term viability of our steel and aluminum industries by tackling global excess capacity and creates a framework for reducing the carbon intensity of those sectors.

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Did you know in FY2020, U.S. Customs seized more than 26,000 shipments worth more than $1.3 BILLION due to alleged intellectual property rights (IPR) violations? Ensure you’re on the right side of CBP enforcement and register for Diaz Trade Law’s next webinar “Intellectual Property Rights (IPR) and Customs (Including an Update on the Amazon Registry) – Amazon Brand Registry“ taking place on December 15, 2021. This one-hour webinar will provide best practices and TOP tips on how one can protect their IPR using U.S. Customs and Border Protection (CBP) and effective methods to go after IPR infringers.

Register today to hear directly from DTL’s president, Jennifer Diaz, Associate Attorney, Denise Calle and Of Counsel and IPR Specialist, Augusto Perera, as they teach attendees about intellectual property rights and the best ways to protect them.

Why Should I Register for this Webinar?

In FY2019 and FY2020, U.S. Customs (CBP) seized more than 53,000 shipments worth more than $2.8 BILLION because of alleged IPR violations. The vast majority of goods seized have come from China and Hong Kong. During FY2020, CBP reported 18,757 active recordations – more than each of the previous two years.  Importers must be aware of how to import in compliance with IPR laws as well as how to protect their own intellectual property rights

In response to enforcement discussed above, Diaz Trade Law is hosting a NEI accredited webinar, “Intellectual Property Rights and Customs – Amazon Brand Registry” to train industry on top tips to avoid enforcement, and best practices to proactively protect their own brands.

In this webinar, you will learn the basics of intellectual property considerations for your business, how to use Amazon Brand Registry to build your brand, how protecting your brand is an ongoing commitment and the steps you need to take to ensure you do so proactively.

Importers, in-house legal counsel, owners, executives, marketing professionals, and others interested in intellectual property are encouraged to attend either live on December 15, 2021 at 12:00 PM, or on demand thereafter. Register HERE!

U.S. Commercial Wildlife Trade Enforcement & Licensing

The United States is a signatory to CITES and has ratified CITES into U.S. law via the Endangered Species Act (50 CFR Part 23). The U.S. Department of the Interior’s Fish & Wildlife Service (“FWS”) is responsible for enforcing and licensing U.S. commercial wildlife trade pursuant to the Endangered Species Act.

In order to engage in international trade in any specimen covered within the scope of CITES, you must have either a valid CITES document or qualify for an exemption. CITES documents are issued by national CITES management authorities. In the United States, the FWS issues CITES documents. CITES documents must contain certain standardized information and include either a purpose code or a written description of the purpose in addition to a source code indicating the source of the specimen. Current CITES exemptions are detailed on FWS’ website.

Below is an example of a CITES document looks. Standardized information generally required includes:

• Appendix – i.e. what species, subspecies, or population is listed
• Applicant’s signature
• Bill of lading, air waybill, or flight number
• Dates of issue and expiration
• Description of the specimen
• Document number (unique control number)
• Statement that live wildlife will be transported in a humane manner
• Name and address of the exporter and importer
• Purpose of the transaction
• Quantity
• Scientific name
• Source of the specimen

CITES documents must contain certain standardized information and include either a purpose code or a written description of the purpose in addition to a source code indicating the source of the specimen. You can search your specimen on the CITES appendix to determine whether a CITES permit is necessary.

Purpose codes are standard identifiers of the purpose of a transaction. A CITES document must comprise of one of the following codes:

• B – Breeding in captivity or artificial propagation
• E – Education
• G – Botanical garden
• H – Hunting trophy
• L – Law enforcement / judicial / forensic
• M – Medical research (including biomedical research)
• N – Reintroduction or introduction into the wild
• P – Person
• Q – Circus or traveling exhibition
• S – Scientific
• T – Commercial
• Z – Zoo

Similarly, a source code must be listed indicating the source of the specimen. Common source codes include:

• A – Artificially propagated plant
• C – Bred-in-captivity wildlife
• D – Bred-in-captivity or artificially propagated for commercial purposes
• F – Captive-bred wildlife
• I – Confiscated or seized specimen
• O – Pre-convention specimen
• R – Ranched wildlife
• U – Source unknown (must be justified on the face of the CITES document
• W – Specimen taken from the wild

Exemptions to a CITES document often require CITES exemption documents. Below is a listing of common exemptions and their corresponding CITES exemption document:

IMPORT/EXPORT LICENSES

Separate and apart from the CITES licensing described above, companies or individuals engaged in commercial importation or exportation of shipments containing certain wildlife (including products made from wildlife) must obtain an Import/Export License (“I/E License”) from FWS. IE Licenses are issued via FWS’ Office of Law Enforcement. I/E Licenses must be obtained before commercially importing or exporting covered wildlife.

It is important to note that while the CITES licensing mechanism is narrowly tailored to only certain endangered species covered by the CITES appendices, the scope of the I/E licensing requirement is much broader and covers “wildlife [or fish] shipments for commercial purposes” generally. Fish or wildlife, according to the Endangered Species Act, is defined as:

• “Any member of the animal kingdom, including without limitation any mammal, fish, bird (including any migratory, nonmigratory, or endangered bird for which protection is also afforded by treaty or other international agreement), amphibian, reptile, mollusk, crustacean, arthropod or other invertebrate, and includes any part, product, egg, or offspring thereof, or the dead body or parts thereof.”

Certain animals are exempt from I/E licensing requirements. These include:

• Certain domesticated animals listed on the table found in 50 CFR 14.4
• Shellfish and nonliving fishery products including certain products for human or animal consumption
• Live farm-raised fish and farm-raised fish eggs

If an I/E License is issued to you or your company, you will ensure that a copy of the I/E License is provided with each Declaration for Importation or Exportation of Fish or Wildlife (Form 3-177) document package submitted to FWS at the time of shipment.

What You Can Do

If you are importing or export wildlife or fish, or products made with wildlife or fish, you should:

• Understand your Supply Chain – Violations of the Endangered Species Act or Lacey Act for failing to obtain a CITES document or an I/E License if necessary or otherwise engaging in the illicit trade of endangered species carries heavy civil penalties and criminal sanctions. One reason that U.S. importers and exporters inadvertently get caught up in the illicit trade of endangered species is their failure to properly understand their supply chain. Diaz Trade Law works with a global team of due diligence investigators and supply chain transparency researchers. If you require assistance understanding your supply chain, contact us today.
• Vet Proposed Transactions – If you’re unsure whether a proposed import or export sale is subject to FWS enforcement or requires a CITES document or I/E License, reach out to us today. We can review and vet your proposed transaction to determine what actions you need to take.
• Developed a Wildlife Trade Compliance Plan – A key foundation of proactive and effective wildlife trade compliance requires the development of a wildlife trade compliance plan. A wildlife trade compliance plan establishes a set of procedures for your organization to ensure that everyone is on the same page about how standard processes work, who is responsible for what, how to identify violations, what to do when violations occur, etc. Diaz Trade Law can assist you in developing or enhancing your wildlife trade compliance plan.
• Train Your Employees – Violations of the Endangered Species Act carry heavy civil penalties and criminal sanctions. You can be proactive to ensure that your employees are aware of FWS licensing requirements by holding a training session. Diaz Trade Law has significant experience in training employees on a range of import and export compliance matters. If you would like to hold a wildlife trade compliance training, reach out to us today.
• Obtain a CITES document if necessary – If your import or export contains product that is listed on CITES’ appendices, a CITES document obtained from an issuing authority such as FWS is likely required.
• Obtain an Import-Export License if necessary – If your import or export contains commercial wildlife product, an I/E License may be necessary.

The duty to prevent the illicit trade in endangered species is everyone’s responsibility. As an importer or exporter of commercial wildlife or wildlife-derived product, you are on the forefront of the issue and may have the ability to identify parties engaged in illicit trade. If you would like to report a wildlife crime, you can do so at fws_tips@fws.gov. FWS is authorized to pay rewards for information or assistance that leads to an arrest, a criminal conviction, civil penalty, or forfeiture of seized property.

Contact Us

If you have questions about trade in wildlife and wildlife-derived product, including FWS enforcement and licensing, training, developing a compliance program, or vetting proposed transactions, contact Jennifer Diaz or Sharath Patil today at 305-456-3830 or info@diaztradelaw.com.

Register today to to hear directly from Senior Trade Advisor, Don Woods, DTL’s president, Jennifer Diaz, and Associate Attorney, Denise Calle as they discuss real life stories, current trends/risks associated with the import process, proactive ways to stay compliant, and the importance of training to avoid costly encounters with CBP.

Why Should I Register for this Webinar?

CBP is actively enforcing its laws and regulations against non-compliant importers, as seen by the 70,683 seizure letters issued to importers in FY2021.  Importers are required to develop, maintain, and follow a compliant import plan. Importers must be aware of CBP’s various enforcement mechanisms, and more importantly,  how to avoid  such actions. CBP’s most common enforcement activities include seizures, detentions, and criminal prosecution.

In response to the increase in enforcement discussed below, Diaz Trade Law is hosting a NEI accredited webinar, Building & Maintaining an Effective Import Compliance Plan to train industry on top compliance tips to avoid enforcement, and best practices to maintain and effective and compliant import plan.

Seizures in FY21:

• With Fy21 yet to finish, the CBP has already had more than 70,000 trade seizures
• With Fy21 yet to finish, CBP has already had $2.5 billion worth of IPR Seizures – More than it has seized in each of the past 5 years!

Other Trade Enforcement Activities:

• 1,942 Trade Penalties Issued
• 16,302 Total Trade Liquidated Damages
• $16 million collected in Trade-related penalties and liquidated damages

In this webinar, you will learn the common risks associated with the import process and how to build and maintain an effective Import Compliance Plan . Presenters will discuss… The objective of the webinar is to teach participants how to create an effective import plan that allows importers to avoid CBP altogether.

Importers, Customs Brokers, Regulatory Affairs Professionals, and others engaged in the importation of goods into the United States are encouraged to attend either live on October 6, 2021 at 12:00 PM, or on demand thereafter. Register Here

Why is FDA Taking New Steps to Enhance Sunscreen Safety?

The 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act reformed and modernized the way FDA regulates certain OTC monograph drugs, including sunscreen.

The CARES Act replaced the rulemaking process for OTC monograph drugs with an administrative order process for issuing, revising, and amending the OTC monographs.  The administrative order process gives FDA new tools to help revise the OTC monographs as science changes, innovation progresses, new data becomes available, or emerging safety signals arise.

For sunscreens specifically, in addition to establishing a deemed final order, the CARES Act requires FDA to issue a proposed order to amend and revise the deemed final order for sunscreens. The FDA believes that most sunscreens on the market will be in compliance with the deemed final order because the provisions are nearly identical to the pre-CARES Act marketing conditions for sunscreens.

As background, an OTC monograph establishes conditions, such as active ingredients, uses (indications), doses, labeling, and testing, under which an OTC drug is “generally recognized as safe and effective” (“GRASE”) and can be marketed without a new drug application and FDA pre-market approval.

FDA’s Newly Deemed Final Order

The deemed final order for sunscreens includes technical amendments to facilitate the combination of 21 CFR part 352 and 21 CFR 201.327 into one order, including updates to headings, numbering, and cross-references, and to use the current established names for active ingredients as set forth in the 1999 final monograph regulation for OTC sunscreen products, which never took effect, and the labeling and effectiveness requirements from a final 2011 labeling and effectiveness testing rule.

The deemed final order largely corresponds to the approach of an FDA sunscreen enforcement policy guidance, which had been in place before the CARES Act because the sunscreen monograph was not in effect.

The final order sets forth the following conditions:

• M020.1 Scope An over-the-counter (OTC) sunscreen drug product in a form suitable for topical administration is generally recognized as safe and effective and is not misbranded if it meets each condition in this OTC monograph and each general condition established in 21 CFR 330.1.
• M020.10 Sunscreen active ingredients The active ingredient of the product consists of any of the following, within the concentration specified for each ingredient, and the finished product provides a minimum sun protection factor (SPF) value of not less than 2 as measured by the testing procedures established in § M020.80 (the ingredients in bold are being questioned by FDA in the proposed order – discussed below):

(a) Aminobenzoic acid (PABA) up to 15 percent.

(b) Avobenzone up to 3 percent.

(c) Cinoxate up to 3 percent.

(d) Dioxybenzone up to 3 percent.

(e) Ensulizole8 up to 4 percent.

(f) Homosalate up to 15 percent.

(g) Meradimate9 up to 5 percent.

(h) Octinoxate10 up to 7.5 percent.

(i) Octisalate11 up to 5 percent.

(j) Octocrylene up to 10 percent.

(k) Oxybenzone up to 6 percent.

(l) Padimate O up to 8 percent.

(m) Sulisobenzone up to 10 percent.

(n) Titanium dioxide up to 25 percent.

(o) Trolamine salicylate up to 12 percent.

(p) Zinc oxide up to 25 percent

• M020.50 Labeling of sunscreen drug products
  • Principal display panel. Must have statement of identity (sunscreen), Effectiveness claim (broad spectrum test), and Water resistance statements.
  • Informational panel. Must have Active Ingredients, Indications (uses), Warnings, Directions, Other information.
  • False and misleading claims. There are claims that would be false and/or misleading on sunscreen products. These claims include but are not limited to the following: “Sunblock,” “sweatproof,” and “waterproof.” These or similar claims will cause the product to be misbranded under section 502 of the FD&C Act.
• M020.80 Sun Protection Factor (SPF) test procedure
  • Detailed testing procedures are included in the final order.

Importantly, sunscreens in all dosage forms other than oil, lotion, cream, gel, butter, paste, ointment, stick, spray, and powder currently require an application approved under section 505 of the FD&C Act in order to be marketed. Dosage forms that cannot currently be legally marketed without an approved application (or a final order issued under 505G) include sunscreen wipes, towelettes, body washes, and shampoos.

FDA’s Proposed Order For Sunscreens

The proposed order sets out changes to final 2011 labeling regulation requirements to bring them up to date with the current science. When finalized, the proposed order will fully replace the deemed final order with new requirements for sunscreens. We outlined the changes in our 2019 blog “Here are the Major Changes FDA is Proposing to Make to the Sunscreen Rule!” Since FDA has transitioned from proposed rulings to proposed orders under the CARES Act, FDA is now following the proposed order process – bottom line the 2019 proposed ruling and now the 2021 proposed order have the same substantive changes to the sunscreen monograph.

Difference Between Differences Between the Sunscreen Deemed Final Order and The Proposed Order.

Below are a few key examples and short explanations of the differences.

• Maximum SPF:
  • The deemed final order does not impose an upper limit on SPF values.
  • The proposed order, in contrast, proposes a maximum labeled SPF of 60+ and proposes a maximum on the formulated SPF value of a sunscreen.
• Active ingredients:
  • The deemed final order makes sunscreens containing 16 specified sunscreen active ingredients GRASE by incorporating the ingredients from the (not in effect) 1999 sunscreen monograph.
  • However, the proposed order proposes:
    • GRASE status for sunscreens containing: zinc oxide and titanium dioxide
    • NOT GRASE status for sunscreens containing:
      • aminobenzoic acid and trolamine salicylate because of data showing safety issues;
      • cinoxate, dioxybenzone, ensulizole, homosalate, meradimate, octinoxate, octisalate, octocrylene, padimate O, sulisobenzone, oxybenzone, and avobenzone because of inadequate data to support a safety finding.

• Broad spectrum requirements:
  • Consistent with the requirements in the labeling and effectiveness rule for sunscreens issued in 2011, the deemed final order does not require broad spectrum testing, but it creates an optional broad spectrum labeling claim and broad spectrum testing that is required to include this claim on labeling.
  • To address the growing evidence of significant harms associated with UVA exposure, the proposed order proposes a requirement that all sunscreens with SPF values of 15 and above satisfy broad spectrum requirements.

What Should Comments include:

FDA will consider the on-time comments received on the 2019 proposed rule as comments submitted on this proposed order. FDA is asking people not to resubmit the same comments, or rewrites of the same comments, to the proposed order if they submitted those comments timely during the comment period for the 2019 proposed rule. This will make things easier for both the commenters and for FDA and will help keep the process moving quickly. In addition, this proposed order gives the public an opportunity to submit new information that has become available since the comment period closed on the 2019 proposed rule.

Diaz Trade Law attorneys have vast experience in assisting companies in complying with FDA OTC monographs as well as submitting effective comments to federal agencies. Contact us at info@diaztradelaw today to assist in assessing the impacts of the proposed order on your sunscreen products and voicing your concerns to FDA.

Register today to to hear directly from Senior Trade Advisor, Domenic Veneziano, DTL’s president, Jennifer Diaz, and Associate Attorney, Denise Calle, on the pathway to legally import food and best practices for surviving a FSVP audit.

Why Should I Register for this Webinar?
The FDA is actively enforcing its laws and regulations against non-compliant food importers, as seen by the 92 warning letters issued to food importers.  Importers of food are required to develop, maintain, and follow an FSVP for each food brought into the United States and the foreign supplier of that food. If the importer obtains a certain food from a few different suppliers, a separate FSVP would be required for each of those suppliers. Food importers must be aware of FDA’s various enforcement mechanisms, and more importantly,  how to avoid and/or mitigate such actions as FSVP is a top priority for the agency.  FDA’s most common enforcement activities include notices of FDA action, warning letters, import alerts, seizures, voluntary recalls, injunctions, and criminal prosecution.

In response to the increase in enforcement discussed below, Diaz Trade Law is hosting a NEI accredited webinar, Importing Food in Compliance with U.S. FDA and Surviving A FSVP Audit to train industry on top compliance tips to avoid enforcement, best practices in responding to various FDA enforcement, and tools to survive a FSVP audit.

Warning Letters issued in FY21:

• With Fy21 yet to finish, the FDA is likely to continue issuing more warning letters for FSVP violations (currently 92) than it had issued in all of FY20 (50). Each firm that received a warning letter was under a Foreign Supplier Verification Programs (FSVP) audit when the violations were identified.

Recalled Food and Cosmetic Products in 2021:

• Since 2012 there have been a total of 21,451 food/cosmetic products recalled!  
• There are a total of 918 ongoing food/cosmetic product recalls being performed by 255 companies. Don’t be one of them!

In this webinar, you will receive an overview of the Food Safety Modernization Act (FSMA). Presenters will discuss the requirements of the FSMA FSVP rule and its implications on US food importers and foreign suppliers. The objective of the webinar is to teach participants how to navigate FDA’s regulatory framework as well as to provide top tips for how to develop a FSVP plan and how to pass a FSVP Audit.

Suppliers, importers, distributors, and others engaged in the production or sale of imported food are encouraged to attend either live on September 8, 2021 at 12:00 PM, or on demand thereafter. Register Here.

The NOP’s Compliance & Enforcement Division (“C&E”) is involved in enforcement organic standards. C&E enforces rules by working with independent certifying agencies. Independent certifying agencies accredited by the USDA conduct periodic inspections or audits.

What is Organic Equivalency?

Like the U.S., many countries have their own organic standards and certification programs. For organic businesses operating in multiple countries, this can mean they must maintain different organic certifications in each country where they operate.

Organic equivalency is when two countries recognize each other’s organic program as being equivalent. If two countries are equivalent, organic products can be sold in either country with just one organic certification.  For U.S. exporters, this reduces the number of certifications they must maintain.

The Agricultural Marketing Service (“AMS”) works with the Foreign Agricultural Service (“FAS”) and Office of the United States Trade Representative (“USTR”) to establish equivalency arrangements. Equivalence means that the U.S. has determined that a foreign government’s standards, organic control system oversight, and enforcement programs meet or exceed the requirements of the Organic Foods Production Act (“OFPA”) and the USDA organic regulations.

If USDA determines that the foreign government’s organic system is equivalent, the two governments exchange official letters and the terms of equivalency arrangement, including any product exception if the systems are not equivalent in specific areas.  Once this process is complete, AMS will publicly disclose on its website the terms of the determination and the final resolution of differences between the U.S. and foreign government’s system.

Currently, the NOP maintains equivalency arrangements with the following countries/international organizations:

• Canada
• European Union
• Taiwan
• Japan
• South Korea
• Switzerland
• United Kingdom

Additionally, the NOP has limited engagements with and specialized guidance for:

• India
• Israel
• New Zealand
• Mexico

The Impact of Equivalency Arrangements

The Organic Trade Association, a business association for organic agriculture and products in North America, has found that organic equivalency policies positively affect the level of trade, especially with U.S. organic exports. In fact, the Canada organic equivalency arrangement, the oldest of the equivalency arrangements, has the strongest effect on U.S. organic exports.

NOP Resources

The NOP offers helpful resources for the benefit of organic producers, distributors, and consumers. These resources help ensure that organic producers and distributors are proactive about their NOP compliance. These resources include:

• Organic Integrity Database
  • NOP’s Organic Integrity Databaselets interested parties and the public alike research the organic status of organic farms and businesses. These listings are provided to NOP from accredited certifying agents.
• Organic Integrity Learning Center
  • Through its Organic Integrity Learning Center, NOP provides a wide range of free training and outreach materials for organic farms, businesses, and organic certification agencies. The Learning Center supports the professional development and continuing education of professionals working to protect organic integrity including certifiers, inspectors, reviewers and compliance specialists in organic businesses.
• National Organic Program Handbook
  • NOP’s handbook provides those who own, manage, or certify organic operations with guidance and instructions that can assist them in complying with the USDA organic regulations. Although the handbook is non-binding guidance, it provides critical insight into NOP’s procedures and expectations of industry.

What You Should Do

Diaz Trade Law has significant experience on NOP matters. We recommend you consider the following actions to proactively strengthen your organic trade program:

• Develop an organic compliance program – A key foundation of proactive and effective organic compliance requires the development of an organic compliance plan. An organic compliance plan establishes a set of procedures for your organization to ensure that everyone is on the same page about how standard processes work, who is responsible for what, how to identify violations, what to do when violations occur, etc. An organic compliance plan helps build consciousness in your organization that compliance is critical – both to avoid costly penalties and preserve your certified status. Diaz Trade Law helps businesses create organic compliance manuals that help prove you have a process in place to ensure you can take compliance seriously. Additionally, Diaz Trade Law can assist your business in auditing and improving your current plan so that it is in its best shape.
• Ensure you have the proper certifications – NOP enforces rules by working with independent certifying agencies. Independent certifying agencies accredited by the USDA conduct periodic inspections or audits. It is important that you have an open and positive working relationship with your organic certifier, and that you have the appropriate certification for your business operations.
• Audit your operations and potentially disclose violations – If your business believes it may have violated the OFPA or the USDA organic regulations, contact us immediately. It may be in your business’ strategic interest to disclose the violations to NOP as part of a settlement discussion.
• Perform organic compliance training – A foundation of a strong organic compliance program is organic compliance training.
  • Training is important because it:
    • (1) ensures that all employees understand the OFPA and NOP organic standard requirements and reinforces internal policies and procedures,
    • (2) demonstrates to the USDA that your business is proactive about organic compliance, and
    • (3) potentially avoids your business from being subject to costly penalties and even criminal liability.
  • Fortunately, through its Organic Integrity Learning Center, NOP provides a wide range of free training and outreach materials for organic farms, businesses, and organic certification agencies. The Learning Center supports the professional development and continuing education of professionals working to protect organic integrity including certifiers, inspectors, reviewers and compliance specialists in organic businesses. Diaz Trade Law can assist you in determining what training programs are appropriate for you.
• Have a process in place for correction action when necessary – If your business has violated U.S. organic compliance laws, there is a lot you should do to get back into compliance, including ensuring you work to prevent future violations, training your employees, and updating your manuals. Diaz Trade Law has significant experience representing businesses in dealing with the USDA’s NOP program. Specifically, Diaz Trade Law has successfully assisted clients in
  • (1) disclosing violations,
  • (2) negotiating settlement agreements,
  • (3) building corrective action systems to help ensure that your business does not make the same violation again, and
  • (4) updating and enhancing your current organic compliance plan.

Contact Us

If you have questions or require assistance on organic trade matters, contact Diaz Trade Law today at info@diaztradelaw.com or 305-456-3830.

Co-Authored by Jen Diaz & Sharath Patil

Did you know FDA has issued 1,569 enforcement actions against  medical device companies? Now is the time to ensure your medical devices are in compliance with FDA laws and regulations prior to importation. If your business is manufacturing, repackaging, relabeling, and/or importing medical devices into the U.S., or wants to start, our one-hour webinar on “Importing Medical Devices in Compliance with U.S. FDA” is for you. We will provide TOP tips to avoid U.S. Food and Drug Administration (FDA) enforcement action, and best practices to navigate and mitigate FDA enforcement.

Register today to to hear directly from DTL’s president, Jennifer Diaz, and Associate Attorney, Denise Calle, on the pathway to legally market a medical device and best practices for avoiding and responding to enforcement actions.

Why Should I Register for this Webinar?

The FDA is actively enforcing its laws and regulations against non-compliant importers of medical devices. In FY21 alone the FDA has issued 53 warning letters  against medical devices companies.  Manufacturers, repackagers, relabelers, importers, and others engaged in the production or sale of medical devices must be aware of FDA’s various enforcement mechanisms, and more importantly,  how to avoid and/or mitigate such actions.  FDA’s most common enforcement activities include notices of FDA action, warning letters, import alerts, seizures, voluntary recalls, injunctions, and criminal prosecution.

In response to the increase in enforcement discussed below, Diaz Trade Law is hosting a NEI accredited webinar, FDA – Is it a Cosmetic, a Drug, or Both? Mitigating FDA Enforcement Actions to train industry on top compliance tips to avoid enforcement, and best practices in responding to various FDA enforcement.

Warning Letters issued in FY21:

• Of the 53 warning letters issued to medical device companies in FY2021, 50% of these warning letters were issued against firms that marketed their medical devices as devices that treat or mitigate Covid-19. FDA found these devices (including  “KN95 Face Mask” and “3-ply Surgical Mask Disposable Face Mask”) to be “Unapproved Drugs, Misbranded, and/or Adulterated Products Related to Coronavirus Disease 2019 (COVID-19)”.
• In FY21, FDA warning letters have been issued against firms for offering medical devices for sale in the United States without marketing approval, clearance, or authorization from the FDA as well as poor current Good Manufacturing Practices (cGMPs).
• Interestingly enough 40 of the 52 warning letters were against U.S. and Chinese companies.

Recalled Medical Devices in 2020 and 2021:

• In FY21, FDA has recalled a total of 2161 medical devices, including the recall of 132 Class I devices, 1986 Class II devices, and 43 Class III devices have been recalled in FY21! 
• In FY20 a total of 3042 medical devices were recalled. 
• There are a total of 304 firms currently performing medical device recalls. Don’t be one of them!

In this webinar, you will receive an overview of FDA regulations and requirements for importing medical devices. Presenters will discuss how FDA defines and regulates a medical device, as well as what requirements FDA imposes when importing a medical device. The objective of the webinar is to teach participants how to navigate FDA’s regulatory framework, provide TOP compliance tips to avoid FDA enforcement actions, and top strategies to implement when you are faced with an enforcement action.

Manufacturers, importers, distributors, and others engaged in the production or sale of medical devices are encouraged to attend either live on August 25, 2021 at 12:00 PM, or on demand thereafter. Register Here!

Join us IN PERSON in Baltimore, MD, July 26-27, 2021. NCBFAA NEI and hotel staff will be complying with all state and venue COVID-19 protocols so you can feel safe attending the event! Virtual attendance is available, so you can gain knowledge from anywhere!

REGISTER TODAY!

All trade professionals, regardless of membership or affiliation, are invited to join to:

• Learn from industry subject matter experts on today’s pressing matters
• Get an opportunity to voice your questions to federal, state and industry experts about the latest issues affecting your business
• Acquire fresh ideas by networking with business colleagues while meeting new people

Diaz Trade Law is enthusiastic to announce that our President, Jennifer Diaz will be a featured speaker alongside Adrienne Braumiller on the topic “Update on CBP Enforcement Efforts: IPR, Section 301, 232, AD/CVD” taking place on July 27th from 9:00 am to 10:30 am EST.

As we all know, Intellectual Property Rights, AD/CVD, Section 301 and 232 are all things on CBP’s priority list for enforcement. What do you have in place to make sure you are complying with the regulations? What have you done to assure yourself that your imports are not affected by the rules, and if they are, how you are managing the additional complexity of these movements?

Learn More About Jen Diaz!

President and Founder of Diaz Trade Law, Jennifer (Jen) Diaz is a Chambers ranked, Board Certified International Attorney specializing in customs and international trade. For more than 15 years, Jen has provided legal advice and customized training on import and export compliance to industry, with a strong record of success in mitigating federal administrative enforcement actions.

Jen has received many accolades from the legal community, including being recognized by “Super Lawyers” as a Top International Attorney, having an AV rating of “Superb,” and serving as President of the Organization of Women in International Trade (2018-2019).

A frequent media commentator, Jen has authored book chapters, journal articles, and other articles for The Florida Bar, the American Bar Association, Bloomberg Law, and others. Jen is Editor of “Customs & International Trade Law,” a blog recognized by the U.S. Library of Congress as being an important part of the legal historical record.

REGISTER TODAY!