Under the Food Safety Modernization Act (FMSA), all domestic and foreign facilities that manufacture, pack or store food, food ingredients, pet foods or dietary supplements are required to renew their registration with the U.S. Food and Drug Administration (FDA) before the end of 2014 and to re-register every two years thereafter.
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Food importers must provide the Food Facility Registration Number of any foreign manufacturer, processor, packer or holder of imported foods or beverages to the FDA and U.S. Customs and Border Protection (CBP) prior to the arrival of the imported food or beverage to the United States, through the FDA Prior Notice filing. Any imported foods or imported beverages not in compliance with FDA’s food facility registration requirements may be refused by FDA or CBP.

Foreign food facilities must also designate a U.S. Agent when registering their food facility with the FDA. The U.S. Agent is a person or entity located within, or that maintains an office, in the United States. The U.S. Agent plays the role of the domestic representative for the foreign facility through which all communication with the FDA takes place.

The FDA provides the following guidance documents to assist companies with the registration process, including information on biennial registration renewal:

Additional information on the Registration of Food Facilities can be found here.

 

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A recent report published by eBay Canada, Commerce 3.0: How Technology is Empowering Canadian Entrepreneurs to Grow Globally, says the Canadian government can help drive export activity among a rapidly growing cohort of technology-enabled small businesses by removing barriers to the free flow of goods across the country’s borders.

In the past, the sole participants in, and beneficiaries of, international trade have been large businesses. Now that technology is enabling businesses of all sizes to enjoy the benefits of trade, trade policy could come to play an important role also for smaller businesses across Canada. Global trade has often been painted in the public sentiment as an arena dominated by large businesses, technology could help to change the prism through which global trade is analyzed and discussed.

One recommendation made is that the import duty exemption threshold – a measurement that determines the maximum value of goods that can be shipped without duties often referred to as the personal exemption limit (PEL) or de minimis level – be raised from $20 to $200. The suggestion is based on an internal research study showing technology-enabled businesses, such as those led by eBay sellers, are dramatically more export-oriented than their brick-and-mortar counterparts and that the current PEL impedes their business-growth potential.

In addition to raising the PEL, the eBay report makes a series of other policy recommendations aimed at simplifying customs processes for small, technology-enabled businesses, including a call to facilitate small business participation in trusted trader programs, such as the Partnership in Protection (PIP) program, which allows trusted shippers to expedite the transport of goods across the Canada-U.S. border. The document notes that a 2011 OECD evaluation report concluded that Canada’s trusted-trader program has room for expansion and calls on the government to revisit its risk-assessment protocols for micro-businesses.

 

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This week, U.S. Agriculture Secretary Tom Vilsack said the administration won’t likely appeal the World Trade Organization (WTO) ruling against U.S. Country of Origin Labeling (COOL) until sometime in January. That possible delay is because the WTO is currently backlogged with other pending appeal cases.
Trade Dispute
National Farmers Union President Roger Johnson whose group wants the decision appealed says delaying it until early next year really doesn’t hurt. In fact, Johnson believes that delaying the appeal actually helps the U.S. build their case for achieving compliance with WTO rules.

While the administration continues to weigh its options, lobby groups on both sides of the issue remain intractably divided over how best to resolve the long-running trade dispute.

The American Meat Institute (AMI), which has unsuccessfully sued the government to stop the labelling measures, has called the USDA’s mandatory COOL rule “onerous and burdensome on livestock producers and meatpackers and processors.” A statement issued by the institute warns that “being out of compliance, the U.S. is subject to retaliation from Canada and Mexico that could cost the U.S. economy billions of dollars.”

Multinational food processor and AMI member Cargill has also called for repeal of COOL to “ensure marketplace efficiencies” and avoid a potential trade war should Canada and Mexico follow through on their threats to launch retaliatory tariffs on a broad range of U.S. exports. “We are hopeful the three governments can work this out,” said Cargill spokesman Mike Martin. “It is costing all three countries, and there are no winners.”

COOL supporters are also working to get their voices heard. In an editorial circulated to the press earlier this week, Minnesota Farmers Union president Doug Peterson called for an appeal. “The U.S. needs to appeal the WTO’s ruling in defense of rights of American citizens,” Peterson wrote. “And MFU looks forward to working with the USDA and other key stakeholders on a conclusion that is positive both for farmers and for consumers.”

 

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One of the most compelling arguments of groups opposed to free trade concerns the lack of public transparency and perceived secrecy associated with the closed-door trade negotiation process.  As Democratic Senator Elizabeth Warren has stressed, “If transparency would lead to widespread public opposition to a trade agreement, then that trade agreement should not be the policy of the U.S.”
Transparency
In Europe, where mounting opposition to the Transatlantic Trade and Investment Partnership (TTIP) has been increasingly outspoken of late, EU officials have responded by making what can best be described as token efforts to foster the pretense of “transparency” and public involvement in the trade talks. One example of such a gesture is the upcoming “Outreach” event scheduled for November 4 at the Charlemagne Building in Brussels to update the public on the latest TTIP developments.

The two-hour meeting will consist of the EU’s Deputy Chief Negotiator talking “first-hand about progress made during the seventh round of negotiations and plans for the months ahead.”  The event’s agenda indicates this will be followed by an “open discussion with stakeholders” – which in this case involves a growing list of registrants representing an incredibly diverse range of civil society organizations, small business associations and special interest lobby groups.

Adequately addressing the various concerns of all those in attendance within the limited time allotted for “discussion” about the specific terms and potential ramifications of an unseen trade policy document would appear to be a highly unlikely outcome.  Meanwhile, though, hundreds of “trade advisors” – almost exclusively representing the interests of transnational corporations – already have access to pertinent draft texts of the TTIP and, presumably, are actively influencing how the trade pact will ultimately be shaped. Little wonder that TTIP critics and concerned citizens left impotently watching from the sidelines are so deeply vexed by this seemingly egregious double-standard when it comes to the matter of transparency.

 

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On Monday, the Securities and Exchange Commission (SEC) announced that Layne Christensen Co., a global water management, construction, and drilling company headquartered in Texas, has agreed to pay more than $5 million to settle charges of violating the Foreign Corrupt Practices Act (FCPA) by bribing government officials in Africa in exchange for favourable tax treatment, customs clearance and other improper benefits.
No Bribery
After Layne self-reported its misconduct in 2010, an SEC investigation determined that the company received approximately $3.9 million in unlawful benefits during a five-year period and in the process had violated the anti-bribery, books and records, and internal controls provisions of the Securities Exchange Act of 1934. Although the company neither admitted nor denied wrongdoing, it agreed to pay $3,893,472.42 in disgorgement plus $858,720 in prejudgment interest as well as a $375,000 penalty.

Though still a fairly significant amount, the settlement was actually less than half what the Layne had anticipated paying, as a result of a decision by the U.S. Department of Justice (DOJ) to close its investigation into the matter without bringing charges. Despite recognizing the existence of “pervasive criminal conduct,” according to the company’s legal team, the DOJ chose not to prosecute owing to Layne’s “self-disclosure, exemplary cooperation and significant remediation.”

In addition to self-reporting the misconduct, Layne cooperated fully with the SEC’s investigation by providing real-time reports of its investigative findings, producing English-language translations of documents, and making foreign witnesses available.  “Those measures were credited in determining the appropriate remedy,” said Kara Brockmeyer, chief of the SEC Enforcement Division’s FCPA Unit.

As part of the settlement, the company is required to report to the SEC for a period of two years on the status of its remediation and implementation of measures to comply with the FCPA. To that end, the company has since hired a chief compliance officer and set up a compliance office, among other remedial efforts.

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An article by Mary E. Shacklett, president of Transworld Data, published today on the supply chain news website EBN, outlines some of the customs compliance challenges faced in particular by electronics companies operating globally “in an era of heightened security and trade risk” and explains how “new cloud-based automation can reduce the cost and complexity of international customs management.”
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One example cited by Shacklett of an organization benefiting from an effective global trade management (GTM) strategy for its supply chain is Fairchild Semiconductor. The San Jose, California based manufacturer of high-tech electrical components has acquired almost a dozen companies around the world in the last several years in locations from China to Sweden and today moves 17 billion units across 45 different country boundaries on an annual basis. According to a testimonial by the company, its GTM solution has allowed Fairchild to “achieve global logistics processes that are 100 percent standardized worldwide, establishing a process that is easily repeatable and scalable to meet any new business need.”

When compliance is not managed effectively, the risks posed by customs problems are illustrated by a quote from the logistics manager of Atlanta based Superior Essex, a leading manufacturer of advanced wire and cable products: “If a border shuts down, we immediately lose part of our production capacity, since we have manufacturing facilities in the US, Mexico and Canada. This can impact the volume of goods we are able to ship to our customers – and it makes our capital assets, such as factories from which we can’t ship goods across borders, useless. Consequently, it is very essential that we efficiently process our goods through customs and that we comply with all regulations and documentation needs.”

“To the degree that cloud-based and other technology solutions can address customs issues, companies in rapidly paced industries like electronics will find their supply chain optimization easier,” Shacklett says.

Click here to read the complete article.

 

A group of leading CEOs, labour leaders, and university presidents yesterday delivered the Advanced Manufacturing Partnership 2.0 report to the Obama Administration. The report includes policy recommendations to increase U.S. competitiveness for advanced manufacturing and new strategic initiatives aimed at securing a national competitive advantage in transformative emerging technologies.
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First launched in 2011, the Advanced Manufacturing Partnership (AMP) is co-chaired by MIT president Rafael Reif and Dow Chemical Chairman and CEO Andrew Liveris. Other members of the group’s steering committee include Northrop Grumman Corp. CEO Wes Bush, Siemens Corp. President and CEO Eric Spiegel, and United Steelworkers International President Leo Gerard.

Based on the AMP’s recommendations, on Monday, the White House announced several new executive actions to strengthen U.S. manufacturing focused on three key areas: enabling innovation, securing the talent pipeline and improving the business climate.

To enable innovation, the Departments of Defense, Energy and Agriculture, as well as NASA, will make investments totaling more than $300 million. These investments will concentrate on three technologies – advanced materials, advanced sensors for manufacturing and digital manufacturing.

In terms of fostering skills, the White House announced that the Department of Labor will launch a $100 million American Apprenticeships Grant Competition based on apprenticeship models already piloted by AMP members such as Dow, Alcoa and Siemens.

To improve the business climate, the Department of Commerce’s Manufacturing Extension Partnership will be tasked with building new capabilities at state centers. The partnership will also pilot a $130 million, five-year competition to assist small manufacturers in leveraging advanced technologies and getting new products to market.

 

According to a leaked document, trade ministers from 14 EU member states wrote last week to incoming European Commission President Jean-Claude Juncker, urging him not to jettison “difficult issues” like the investor-state dispute settlement (ISDS) mechanism from the Transatlantic Trade and Investment Partnership (TTIP) in the face of public opposition – “tempting as it may be” – and reminding him that he has a mandate from EU member states to include some form of ISDS in the trade negotiations with Washington.
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The ministers include UK’s Lord Livingston, together with trade ministers from the Czech Republic, Cyprus, Estonia, Denmark, Finland, Croatia, Malta, Lithuania, Ireland, Sweden, Spain, Portugal, and Latvia.

They wrote: “One of the issues that has attracted criticism is investment protection. The Commission is currently analysing the results of a public consultation on this issue and we look forward to the Commission’s response. The consultation was an important step in ensuring that we strike the correct balance to ensure that governments retain their full freedom to regulate, but not in a way that discriminates against foreign firms… The Council mandate is clear in its inclusion of investor protection mechanisms in the TTIP negotiations; we need to work together on how best to do so.”

However, in an address before the European Parliament on October 22, Juncker expressed a far more ambiguous view of the EU trade negotiating mandate concerning ISDS to that of the 14 ministers, reiterating his belief that there is “no obligation in this regard: the mandate leaves it open and serves as a guide.”

In the same speech, the president-elect said he had given oversight of the contentious ISDS issue to new Commission First Vice President Frans Timmermans, a Dutch Social Democrat. “There will be no investor-to-state dispute clause in TTIP if Frans does not agree with it too,” Juncker told the parliament.

 

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Wrapping up three days of talks in Sydney, ministers in the 12-nation Trans-Pacific Partnership Agreement negotiations issued a joint statement today announcing the progress made on component parts of the trade deal “which will define, shape and integrate the TPP region once the agreement comes into force.”
TPP Roundabout
The final shape of the ambitious trade initiative is “crystallizing,” the ministers said, adding they will meet again in the coming weeks. While the statement largely emphasizes advances in the talks, ministers also indicated they will “work intensely with each other to resolve outstanding issues.”

Key trade policy differences continue to exist between the U.S. and Japan – the two largest countries involved in the talks – over access to each other’s markets in sectors such as agriculture and automobiles.

U.S. Trade Representative Michael Froman is cited by Reuters as saying that by definition the issues left at the end of any negotiation are those that are the most difficult to solve.

“We certainly have outstanding issues with Japan on market access – on agriculture, on autos and we are not done yet,” he said. “And while we are making progress, we are not at a satisfactory resolution yet and that’s why the work is going to continue.”

 

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The UAE Minister of Economy, Sultan Al Mansouri, today launched Global Trade Development Week in Dubai. The three-day “mega event” which aims to support the growth of international trade across all borders brings together 600 business and government leaders from more than 90 countries to discuss how to tackle trade and development issues.
Global Trade Development
Government representatives at the summit include officials from the EU Commission, WTO, Interpol, the United Nations Office for Project Services (UNOPS), and the International Islamic Trade Finance Corporation (ITFC). The list of speakers comprises representatives from some of the world’s largest corporations, such as IBM, Huawei, Nokia and Nestle.

Summit organizers describe the event as “an interactive platform for government, business, academic and industry thought leaders to collaborate discuss and share best practice.” Delegates are challenged to return their own countries and companies with a set of actions that will contribute to the growth of international trade across all borders.

In his keynote address speaking about the future of the global trading system, Al Mansouri called for the removal of barriers to trade.

“We need to remove barriers to trade that hamper economic growth whilst at the same time facilitate trade at borders, which needs both domestic reform and international cooperation, and the world is looking forward to [moving] ahead in the implementation of the new Trade Facilitation Agreement in WTO,” the minister said.

The event opened with a Ministers and Trade Leaders VIP plenary, followed by four concurrent summits that cover ‘Global Free Trade and Special Economic Zones’, ‘Trade Finance and Industrial Development’, ‘Corporate Real Estate Leaders’ and ‘Global Customs and Trade Facilitation’.

 

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A report in a German paper this week citing an internal document from the European Commission’s Directorate General for Trade (DG Trade) to the newly appointed EU Trade Commissioner Cecilia Malmström has fueled speculation that the EU may be considering jettisoning the controversial Investor State Dispute Settlement (ISDS) provision from the free trade deal currently being negotiated with the U.S.
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The letter from DG Trade outlining the most significant challenges facing the incoming Trade Commissioner is quoted by the German paper Handelsblatt, as stating that regulation of the ISDS, “is one of the most important decisions to be taken in the near future.”  Dropping the ISDS from its negotiating mandate would, the letter suggests, “be the strongest measure to confront the anti-TTIP campaign, to start a new kind of communication and to show that the Commission will respond to the public.”

However, the letter also says that “there is no easy way out of the existing situation” and warns that if the EU was to take investor protection off the table, “The United States could make us pay for it in the negotiations.”  Such a move would also be detrimental in the long-term to future trade negotiations involving foreign investment and ISDS with other countries such as China, the letter goes on to note.

Proponents of the ISDS, such as Kurt Lauk, president of the Economic Council, a business-based advisory group to Angela Merkel’s conservative Christian Democratic Party, reacted sharply to the news that investor protections might possibly be omitted from TTIP, peremptorily blasting Malmström for “capitulating” to the “unfounded hysteria of the anti-TTIP campaign” rather than “explaining to citizens why a good investment protection agreement is necessary.”

 

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While the World Trade Organization’s landmark Trade Facilitation Agreement (TFA) agreed to at the Bali conference in 2013 struggles to be finalized amid disputes over global trade rules pertaining to food security, the United Nations Conference on Trade Development (UNCTAD) is aiming to launch a new Trade Facilitation web portal to provide companies with easy access to trade procedures in all parts of the world.
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The UN body that works on development issues related to international trade is looking to build on its existing Global Enterprise Registration (GER) index to promote best practices in simplifying procedures in registering a business, a crucial factor for economic prosperity.

“New firm formation is the primary driver of long-term economic growth – as well as innovation and wealth creation in all types of economies,” says Jonathan Ortmans, a trade policy advisor and Senior Fellow at the Kauffman Foundation. “As entrepreneurial ecosystems develop around the world, it will be those that simplify the process for entrepreneurs to start and scale their enterprises that are the most successful.”

The new trade facilitation portal “would probably significantly accelerate the simplification of trade procedures and the application of the WTO Bali agreement on Trade Facilitation,” Frank Grozel, Coordinator, Business Facilitation Programme, UNCTAD, told The Dollar Business, a trade publication based in India. “The peer pressure might bring governments to radically simplify their business registration procedures. They will be able to see on the GER site what the best practices are and then replicate those easily.”

“Once demonstrated that simplifying is not difficult, and that it mainly depends on the political will, traders will have a much better case in asking governments to simplify administrative procedures relating to import and export,” Grozel says. “First by detailing them clearly online (through information portals, such as those listed in the second index on the GER site); and hopefully by creating single windows allowing traders to apply simultaneously for all the necessary certificates and permits (previous licences, Customs clearance, port/airport authorities, technical controls, etc).”

 

A new report from Dublin based market research firm Markets and Research forecasts that the Global Customs Audit market will grow at a compound annual growth rate of 4.7 percent over the period 2013-2018.
Market Research
The report presents an in-depth analysis of the Global Customs Audit market by segmenting it by type, end-users, and geography. The report also presents the vendor landscape and a corresponding detailed analysis of the top four vendors in the Global Customs Audit market: Deloitte Touche Tohmatsu, Ernst & Young, KPMG and PricewaterhouseCoopers.

“Customs is changing the old, transactional model of implementation and the emphasis is on an all-inclusive on-site audit of importers,” states a company press release. “In addition to these audits, countries have placed additional responsibilities on importers and exporters.”

According to the report, one of the key growth stimulators in the Global Customs Audit market is the imposed severe penalties for trade-related transgressions. As smuggling and security concerns are increasing, customs professionals are making regulations stringent, thus propelling the growth of the market.

Further, the report states that increasing trade volumes across regions and the use of just-in-time production technologies have increased the importance of timely and effective administration of customs requirements, leading to high work pressure on customs administration.

Click here to obtain more information about the report and to order online (Note: prices start at £1,613 for a single-user).

 

The Food and Drug Administration (FDA) has announced that it will be holding a public meeting to discuss the proposed changes to four rules of the FDA Food Safety Modernization Act (FSMA), on November 13, 2014 at the Center for Food Safety and Applied Nutrition in Washington.

CBP initially published the FSMA proposed rules in 2013 and, in response to comments received by the trade, issued proposed revisions to four of the rules in September 2014.
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According to an agency press release, “The purpose of the meeting is to solicit oral stakeholder and public comments on the new content of the supplemental proposed rules and to inform the public about the rulemaking process (including how to submit comments, data, and other information to the rulemaking dockets), and to respond to questions about the revised proposed rules.”

The proposed changes include the following topics:

  • Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Human Food (Preventive Controls of Human Food)
  • Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption (Produce Safety)
  • Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Food for Animals (Preventive Controls for Animal Food)
  • Foreign Supplier Verification Programs for Importers of Food for Humans and Animals (Foreign Supplier Verification Programs)

Attendees are encouraged to register on-line to attend the meeting in person and via, live Webcast.

Click here for more details about this event.

 

Many leading economies are failing to stop their companies from spreading corruption around the world, anti-corruption group Transparency International warned today in its annual progress report on enforcement of the OECD anti-bribery convention.

Fifteen years after the entry into force of the convention, only four of 41 countries signed up –  the U.S., Germany, U.K., and Switzerland – are actively investigating and prosecuting companies that cheat taxpayers when they bribe foreign officials to get or inflate contracts, or obtain licences and concessions. Five countries, including Canada and Australia, were classified as having moderate enforcement, while another eight had limited enforcement.

OECD-Corruption Map-2014-2

OECD-Corruption Map-2014-1

“For the anti-bribery convention to achieve a fundamental change in the way companies operate, we need a majority of leading exporters to be actively enforcing it, so that the other countries will be pressured to follow suit,” said Transparency International chair José Ugaz. “Unfortunately, we are a long way from that tipping point, and that means the vision of corruption-free global trade remains far away.”

Canada is the only country to show measurable improvement since last year’s report, having significantly improved its foreign bribery law and started several investigations. In contrast, 22 of the countries party to the OECD Convention, representing 27 percent of world exports, are doing little or nothing by way of enforcement.

Transparency International said enforcement is low because investigators lack political backing to go after big companies, especially where the considerations of national economic interest trump anti-corruption commitments. Investigators also often lack the resources to investigate complex white-collar crime.

Click here to download the report.