These shipments must report to an inspection establishment for reinspection and release by the FSIS prior to entry of the product into the commerce of the U.S. According to the newly proposed rules, the importer of record will ultimately be held responsible for the disposition of merchandise which is subjected to an intensified exam and test sampling. The FSIS will only allow these shipments to be removed from the inspection establishment upon receipt of assurances that the “importer has controls in place that will ensure that product does not enter commerce until the importer of record receives notification of acceptable test results.” The notice goes on to further state, “Importers of record are to maintain the integrity of the lot and may use any effective mechanism to control the product, including the use of company seals.”
The FSIS is especially concerned regarding the disposition of the goods once they are allowed to leave the inspection facility. To that end, the importer must retain legal title to the merchandise to ensure that the goods are under its control. Failure to do so could result in further action by the FSIS.
“If the movement of product results in a change of ownership from the importer of record that presented the product for FSIS reinspection at the official import inspection establishment to any other entity prior to receipt of laboratory results, or if the importer of record relinquishes ownership of the product before receiving the laboratory results, then the product is considered to have entered commerce. Both of these actions are violations of the test and hold provision. Therefore, the product may be subject to redelivery by Customs and Border Protection (CBP) or local Customs authority and to any fines or penalties imposed by such authority, as well as to enforcement actions by FSIS.”
Importers of record are advised to review the structure of their sales to identify when transfer of ownership occurs during the import process. If the U.S. party takes legal ownership of merchandise subjected to these conditions, the goods are automatically in violation regardless of the eventual results of testing. This could lead to redelivery and liquidated damages (fines) to be imposed by U.S. Customs and Border Protection.
The new guidelines go into effect on February 8, 2013, although a 60-day period has been allowed for further comment.
Keywords: international trade, supply chain risk management, supply chain management, value chain, import restrictions, government food safety compliance