During a time of worldwide recession, U.S. food importers, most of them small businesses, will soon find themselves unexpectedly impacted by additional costs caused by FDAs new fees for re-examining imported foods. According to Benjamin England at FDAImports.com, starting October 1, 2011, FDA will charge food importers $ 224 per hour to re-examine imported food shipments suspected of a food safety violation potentially costing importers thousands of dollars per entry. As per its Federal Register notice, this new fee will create a tax-like burden on food importers, most of whom are small businesses, according to FDA.
American consumers will certainly feel the effect of these new fees as well. Food importing and distribution has a small price margin, especially compared to other commodities, such as cosmetics or dietary supplements. Thus, the importers are likely to pass these new expenses onto their purchaser, who will ultimately pass it on to consumers. According to Benjamin L. England, Founder and CEO of FDAImports.com, these fees amount to a hidden food tax on American consumers. This is no small thing as roughly 20% of the U.S. food supply is imported, including 70% of seafood and 35% of fresh produce.
According to the Food Safety Modernization Act, FDA can adjust the imported food re-examination fees, but it must issue regulations to do so. FDA in its August 1 Federal Register notice requested comments on the issue whether to grant waivers or fee reductions to small businesses. FDA opened the comment period until October 31 thirty days after the new examination fees go into effect.
In the meantime, according to FDA, small businesses can expect to receive invoices from FDA starting on October 1st for the full fee amount. An importer can attempt to appeal the fee and plead for a waiver or reduction however, no mechanism exists for that appeal. According to Mr. England, the appeal will likely fall on deaf ears considering FDA will have done the work already, created the invoice and mailed it to the importer or foreign manufacturer, and will be expecting (even salivating over) collection of the fee.
Mr. England is currently organizing a coalition of food manufacturers and importers to oppose these fees and to speak as a unified voice against the new fee tax. Mr. England reminds small businesses that, making yourself heard on the impact of these fees is critical and time sensitive. For more on the steps small business can take to be heard on this issue, visit the FDAImports.com coalition and comments page.
Benjamin L. England is a former 17-year veteran of the FDA and served as the Regulatory Counsel to the Associate Commissioner for Regulatory Affairs. Currently he is founder and CEO of FDAImports.com, LLC, a firm of consultants and affiliated attorneys practicing at the intersections of complex administrative law and regulations that impact international traders in highly regulated commodities.
SOURCES
1. Hamburg, Margaret, Testimony before the U.S. House of Representatives, Committee on Energy and Commerce, Subcommittee on Oversight and Investigations, (April 13, 2011), available at http://www.fda.gov/NewsEvents/Testimony/ucm250710.htm
2. Small Business Administration, How Important are Small Businesses to the U.S. Economy http://www.sba.gov/advocacy/7495/8420
For more information contact Benjamin L. England and the FDAImports.com team at http://www.fdaimports.com, call (410) 740-3403 or contact Jon Barnes at jrbarnes@fdaimports.com.
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