The U.S. Food and Drug Administration (FDA) is in full enforcement mode issuing 260 warning letters in 2021 alone! Now is the time to ensure your products are in compliance with the Federal Food, Drug, and Cosmetic Act (the Act) prior to importation. Manufacturers, importers, distributors, and others engaged in the production or sale of over the counter (OTC) drugs or cosmetic products 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, seizures, voluntary recalls, injunctions, and criminal prosecution.
Background on Food Facility Registration
The Federal Food, Drug, and Cosmetic Act (“FD&C”) requires domestic and foreign facilities that manufacture, process, pack, or hold food for human or animal consumption in the United States to register with the U.S. Food and Drug Administration (“FDA”). Additionally, the FDA Food Safety Modernization Act (“FSMA”) amended the food facility registration requirements in the FD&C to require domestic and foreign facilities to submit certain additional new information to the FDA and renew their registrations every other year during the period beginning on October 1 and ending on December 31 of each even-numbered year.
On March 1, 2021, the Court of International Trade (CIT) denied Meyer Corporation’s claim for duty-free treatment under its attempted use of the first sale valuation and the Generalized System of Preferences (GSP), in Meyer Corporation, U.S. v. United States, Court No. 13-00154 (Meyer). This case sent a ripple through the trade-community as many speculate whether the decision signals an end of first sale for non-market countries.
Co-Authored by Sharath Patil
COVID-19’s Impact on the Global Economy
The COVID-19 pandemic has had systemic implications for nearly every facet of our lives and society. The world of international trade is certainly no exception. Businesses and governments alike have had to figure out how to continue import and export operations while accounting for the risks present in the current trading climate. Challenges that importers and exporters have faced include: 1) dramatic demand spikes for certain goods, 2) equally dramatic crashes in demand for other goods, 3) significant back-ups of inflowing shipments at key ports, 4) an increase in trade restrictions and other barriers to trade, and 5) contractions in trade volumes, just to name a few.
Co-Authored by Sharath Patil
Biden Signs Executive Order Strengthening Buy American Laws
Buy American laws are a set of statutes, regulations, rules, and Executive Orders that require that the U.S. federal government require or provide preferences for purchasing goods produced in the United States. Buy American laws were created and continue to be amended with the intention of promoting economic and national security, stimulating economic growth, creating good jobs at decent wages, and supporting the U.S. manufacturing and defense industrial bases.
The United States has been increasing its efforts to combat forced labor around the world. During the Trump Administration’s final weeks, the United States not only banned the importation of Chinese Cotton, Tomatoes, among other products, but also explicitly recognized the situation in Xinjiang as a Genocide.
Importers not adequately auditing their supply chains for use of forced labor are at risk of administrative and criminal enforcement. Imported merchandise produced with forced labor is subject to the Department of Homeland Security (DHS) enforcement. Such enforcement includes U.S. Customs and Border Protection’s (CBP) right to detain, exclude, and/or seize imported goods and Homeland Security Investigation’s potential criminal investigation. China is not only the United States’ number one trading partner but also happens to be the world’s biggest forced labor violator.
For the first time in history, the United States Food and Drug Administration (FDA) has issued a countrywide import alert for any category of drug product. Specifically, on January 26, 2021, the FDA announced that it will Take Action to Place All Alcohol-Based Hand Sanitizers from Mexico on Import Alert to Help Prevent Entry of Violative and Potentially Dangerous Products into U.S., Protect U.S. Consumers. FDA singled out importations of hand sanitizers from Mexico due to the frequent use of methanol.
Co-Authored by Denise Calle
Chemence Inc., a glue maker, is once again in a sticky situation with The Federal Trade Commission (FTC) for allegedly making deceptive claims that its products are made in the United States. In a proposed Consent Order, Chemence agreed to pay $1.2 million for its violation of the FTC Act for violating a 2016 federal court order to cease deceptive marketing tactics, as well as mandated an annual compliance report. The FTC now seeks Public Comment on the proposed consent agreement. The comment period closes on February 8, 2021. Thereafter, FTC will decide whether it should withdraw from the agreement or make it final and force Chemence to pay the $1.2 million penalty.
2020 has been a difficult year filled with immense challenge and change (to say the least). From all of us at Diaz Trade Law, we are incredibly thankful and grateful for your support. Despite a pandemic, Diaz Trade Law still managed to save our clients MILLIONS of dollars in 2020. It is with great joy that we finish off 2020 filled with numerous achievements and accomplishments. We look forward to assisting you in what we envision will be a better and brighter 2021!