regulation that requires the establishment and maintenance of records by persons who manufacture, process, pack, transport, distribute, receive, hold, or import food in the United States. Such records are to allow for the identification of the immediate previous sources and immediate subsequent recipients of food. The final rule implements the Public Health Security and

Bioterrorism Preparedness and Response Act of 2002 (the Bioterrorism Act), and is necessary to help address credible threats of serious adverse health consequences or death to humans or animals. The requirement to establish and maintain records is one of several tools that will help improve FDAs ability to respond to, and further contain, threats of serious adverse health

consequences or death to humans or animals from accidental or deliberate contamination of food. In the event of an outbreak of foodborne illness, such information will help FDA and other authorities determine the source and cause of the event. In addition, the information will improve FDAs ability to cf 0357 1002 p - 0237

quickly notify the consumers and/or facilities that might be affected by the outbreak.

DATES: Effective Date: This final rule is effective [insert date 60 days after

publication in the Federal Register].

Compliance Dates: The compliance date is [insert date 12 months after date of publication in the Federal Register]; except that for small businesses employing fewer than 500, but more than 10 full-time equivalent employees, the compliance date is [insert date 18 months after date of publication in the Federal Register]; and except that for very small businesses that employ 10 or fewer full-time equivalent employees, the compliance date is [insert date 24 months after date of publication in the Federal Register].

FOR FURTHER INFORMATION CONTACT: Nega Beru, Center for Food Safety and Applied Nutrition (HFS305), Food and Drug Administration, 5100 Paint Branch Pkwy., College Park, MD 20740, 3014361400.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background and Legal Authority

II. Highlights of the Final Rule and Summary of the Significant Changes Made to the Proposed Rule

A. Highlights of This Final Rule

B. Significant Changes FDA Made to the Proposed Rule

III. Comments on the Proposed Rule

A. General Comments

B. Foreign Trade Issues

C. Comments on Who is Subject to This Subpart? (Proposed § 1.326)

D. Comments on Who is Excluded From All or Part of the Regulations

in this Subpart? (Proposed § 1.327)

E. Comments on What Definitions Apply to this Subpart? (Proposed

§ 1.328)

F. Comments on Do Other Statutory Provisions and Regulations Apply?

(Proposed § 1.329)

G. Comments on Can Existing Records Satisfy the Requirements of this Subpart? (Proposed § 1.330)

H. Comments on What Information is Required in the Records You Must Establish and Maintain to Identify the Nontransporter and Transporter Immediate Previous Source and Immediate Subsequent Recipients? (Proposed §§ 1.337 and 1.345)

I. Comments on Who is Required to Establish and Maintain Records for Tracing the Transportation of All Food? (Proposed § 1.351)

J. Comments on What Information is Required in the Transportation Records? (Proposed § 1.352)

K. Comments on What Are the Record Retention Requirements? (Proposed § 1.360)

L. Comments on What Are the Record Availability Requirements?

(Proposed § 1.361)

M. Comments on What Records Are Excluded From this Subpart?

(Proposed § 1.362)

N. Comments on What Are the Consequences of Failing to Establish and Maintain Records or Make Them Available to FDA as Required By This Subpart? (Proposed § 1.363)

O. Comments on What Are the Compliance Dates for This Subpart? (Proposed § 1.368)

IV. Analysis of Economic ImpactsFinal Regulatory Impact Analysis

A. Summary of the Costs and Benefits of the Final Rule

B. Description of Proposed Rule

C. General Comments

D. The Tradeoff Between Costs and Risk Reduction

E. Estimating the Benefits

F. Costs

G. Summary of the Costs and Benefits of the Final Rule and Policy

V. Final Regulatory Flexibility Analysis

VI. Unfunded Mandates

VII. SBREFA

VIII. Paperwork Reduction Act of 1995

IX. Analysis of Environmental Impact

X. Federalism

XI. References

I. Background and Legal Authority

The events of September 11, 2001, have highlighted the need to enhance the security of the infrastructure of the United States, including the food supply. Congress responded by enacting the Bioterrorism Act (Public Law 107188), which was signed into law on June 12, 2002. The Bioterrorism Act includes a provision in title III (Protecting Safety and Security of Food and Drug Supply), subtitle AProtection of Food Supply, section 306, which

amends the Federal Food, Drug, and Cosmetic Act (the FD&C Act) by adding section 414, Maintenance and Inspection of Records (21 U.S.C. 350c). (In the regulation itself, which is codified in title 21 of the Code of Federal Regulations, the Federal Food, Drug, and Cosmetic Act is referred to as the act. Thus, when the regulation is quoted in this preamble, the term the act

will be used to refer to the Federal Food, Drug, and Cosmetic Act. However,

in this preamble, we refer to the Federal Food, Drug, and Cosmetic Act as the FD&C Act to distinguish it from the Bioterrorism Act.) Section 414(b) of the FD&C Act provides, in part, that the Secretary of Health and Human Services (the Secretary), may by regulation establish requirements regarding the establishment and maintenance, for not longer than 2 years, of records by persons (excluding farms and restaurants) who manufacture, process, pack, transport, distribute, receive, hold, or import food. The records that are required to be kept by these regulations are those needed by the Secretary for inspection to allow the Secretary to identify the immediate previous sources

and immediate subsequent recipients of food, including its packaging, to address credible threats of serious adverse health consequences or death to humans or animals. Section 306(d) of the Bioterrorism Act provides that the Secretary shall issue regulations establishing recordkeeping requirements under section 414(b) of the FD&C Act no later than 18 months after enactment

of the Bioterrorism Act, that is, by December 12, 2003.

In addition, the Bioterrorism Act adds a new section 414(a) to the FD&C Act that provides records inspection authority to FDA. Section 414(a) of the FD&C Act provides that, if the Secretary has a reasonable belief that an article of food is adulterated and presents a threat of serious adverse health consequences or death to humans or animals, persons who manufacture,

process, pack, distribute, receive, hold, or import food must provide access to records related to the food that are needed to assist the Secretary in determining whether the food is adulterated and presents a threat of serious adverse health consequences or death to humans or animals.

Section 306 of the Bioterrorism Act also amends section 704(a) of the FD&C Act (21 U.S.C. 374(a)) to authorize FDA inspections of all records and

other information described in section 414 of the FD&C Act, when the Secretary has a reasonable belief that an article of food is adulterated and presents a threat of serious adverse health consequences or death to humans or animals.

In addition, section 306(c) of the Bioterrorism Act amends section 301 of the FD&C Act (21 U.S.C. 331) to make it a prohibited act to refuse to permit access to, or copying of, any record as required by section 414 or 704(a) of the FD&C Act; or to fail to establish or maintain any record as required by section 414(b) of the FD&C Act; or to refuse to permit access to, or verification or copying of, any such required record; or for any person to use to his own

advantage, or to reveal, other than to the Secretary or officers or employees of the Department of Health and Human Services, or to the courts when relevant in any judicial proceeding under the FD&C Act, any information acquired under authority of section 414 of the FD&C Act.

To implement these provisions, on May 9, 2003 (68 FR 25188), FDA issued a proposed rule to require the establishment and maintenance of records to identify the immediate previous sources and immediate subsequent recipients of food. In addition to section 306 of the Bioterrorism Act, which amends the

FD&C Act as described previously, FDA is relying on section 701(a) of the FD&C Act (21 U.S.C. 371(a)) in issuing this final rule. Section 701(a) authorizes the agency to issue regulations for the efficient enforcement of the FD&C Act.

II. Highlights of the Final Rule and Summary of the Significant Changes Made to the Proposed Rule

A. Highlights of this Final Rule

The highlights of this final rule are described briefly in the following paragraphs, and are discussed in more detail later in the preamble of this document:

Persons who manufacture, process, pack, transport, distribute, receive,

hold, or import food in the United States are subject to the regulations in par

1 (21 CFR part 1) subpart J of this final rule (i.e., recordkeeping and access requirements);

The following persons or facilities are excluded from all of the

regulations in subpart J of this final rule: Farms; restaurants; those performing covered activities when the food is subject to the exclusive jurisdiction of the U.S. Department of Agriculture (USDA) under the Federal Meat Inspection Act (FMIA) (21 U.S.C. 601 et seq.), the Poultry Products Inspection Act (PPIA) (21

U.S.C. 451 et seq.), or the Egg Products Inspection Act (EPIA) (21 U.S.C. 1031 et seq.); and foreign persons, except foreign persons who transport food in the United States.

The following persons or facilities are excluded from the requirement to establish and maintain records in §§ 1.337 and 1.345 of subpart J of this final rule, but are subject to the record availability requirements in §§ 1.361 and 1.363 for existing records: (1) Fishing vessels not engaged in processing

as defined in § 123.3(k) (21 CFR part 123.3(k)); (2) retail food establishments that employ 10 or fewer full-time equivalent employees; (3) nonprofit food establishments that prepare or serve food directly to the consumer or otherwise

provide food or meals for consumption by humans or animals in the United States; and (4) persons who manufacture, process, pack, transport, distribute, receive, hold, or import food contact substances other than the finished container that directly contacts the food.

Persons who manufacture, process, pack, transport, distribute, receive, hold, or import food are subject to §§ 1.361 and 1.363 with respect to its packaging (the outer packaging of food that bears the label and does not contact the food). All other persons who manufacture, process, pack, transport, distribute, receive, hold, or import packaging are excluded from all of the

requirements of this subpart J of this final rule.

Persons who place food directly in contact with its finished container are subject to all of the requirements of subpart J of this final rule as to the finished container that directly contacts that food. All other persons who manufacture, process, pack, transport, distribute, receive, hold, or import the

finished container that directly contacts the food are excluded from the requirements of subpart J of this final rule as to the finished container, except §§ 1.361 and 1.363.

Persons who distribute food directly to consumers are excluded from the requirement in § 1.345 to establish and maintain records to identify the immediate subsequent recipients as to those transactions. The term consumers does not include businesses.

Persons who operate retail food establishments that distribute food to persons who are not consumers are subject to all of the requirements in subpart J of this final rule. However, the requirements in § 1.345 to establish and maintain records to identify the nontransporter and transporter immediate

subsequent recipients that are not consumers applies as to those transactions only to the extent the information is reasonably available.

Persons who manufacture, process, pack, transport, distribute, receive, hold, or import food for personal consumption are excluded from all of the requirements of subpart J of this final rule.

Persons who receive or hold food on behalf of specific individual

consumers and who are not also parties to the transaction and who are not in the business of distributing food are excluded from all of the requirements of subpart J of this final rule.

The regulations in subpart J of this final rule do not require duplication of existing records if those records contain all of the information required by the subpart. Furthermore, persons can supplement existing records with any new information required by this final rule instead of creating an entirely new record containing both existing and new information.

Persons who manufacture, process, pack, distribute, receive, hold, or import food in the United States must establish and maintain the following records to identify the immediate previous sources and immediate subsequent recipients for all food they receive and release, unless otherwise excluded from the requirements of subpart J of this final rule:

Name, address, telephone number and, if available, fax number, and email address of the immediate previous source and subsequent recipient;

Adequate description;

Date received or released;

For persons who manufacturer, process, or pack food, the lot or code number or other identifier;

Quantity and how the food is packaged; and

Name, address, telephone number and, if available, fax number, and email address of the transporter who transported the food to and from you.

Persons who have possession, custody, or control of food in the United States for the sole purpose of transporting the food, or foreign persons who transport food in the United States, regardless of whether they have possession, custody, or control of the food for the sole purpose of transporting that food

(transporters), can meet the requirements of subpart J of this final rule by:

(1) Establishing and maintaining the records listed in § 1.352(a); or

(2) Establishing and maintaining specified information that is in the records required of roadway interstate transporters by the Department of Transportations (DOTs) Federal Motor Carrier Safety Administration (FMCSA) contained in 49 CFR 373.101 and 373.103 as of the date of publication of this final rule; or

(3) Establishing and maintaining specified information that is in the records required of rail and water interstate transporters by the DOTs Surface Transportation Board (STB) contained in 49 CFR 1035.1 and 1035.2 as of the date of publication of this rule; or

(4) Establishing and maintaining specified information that is in the records required of international air transporters on air waybills by the Warsaw Convention as Amended at the Hague, 1995 and by Protocol No. 4 of Montreal, 1975 (Warsaw Convention); or

(5) Entering into an agreement with a nontransporter immediate previous source (if located in the United States) or immediate subsequent recipient (if located in the United States) to establish, maintain, or establish and maintain, the required records in options 1 or 2 of the previous paragraphs. The agreement must contain certain elements specified in § 1.352(e).

If you are a nontransporter, you must retain for 6 months after the dates you receive and release the food all required records for any food for which a significant risk of spoilage, loss of value, or loss of palatability occurs within

60 days after the date you receive or release the food.

If you are a nontransporter, you must retain for 1 year after the dates you receive and release the food all required records for any food for which a significant risk of spoilage, loss of value, or loss of palatability occurs only after a minimum of 60 days, but within 6 months, after the date you receive

or release the food.

If you are a nontransporter, you must retain for 2 years after the dates you receive and release the food all required records for any food for which a significant risk of spoilage, loss of value, or loss of palatability does not occur sooner than 6 months after the date you receive or release the food, including foods preserved by freezing, dehydrating, or being placed in a hermetically

sealed container.

If you are a nontransporter, you must retain for 1 year after the dates you receive and release the food all required records for animal food, including pet food.

Transporters of food (or specified persons who agree to establish and maintain required records under agreements with transporters) in the United States must retain records for 6 months for any food having a significant risk of spoilage, loss of value, or loss of palatability within 60 days after the date

the transporter receives or releases the food.

Transporters of food (or specified persons who agree to establish and maintain required records under agreements with

transporters) in the United States must retain records for 1 year for any food having a significant risk of spoilage, loss of value, or loss of palatability only after a minimum of 60 days after the date the transporter receives or releases the food.

Records must be made available as soon as possible, not to exceed 24 hours from the time of receipt of the official request.

Failure to establish or maintain records or refusal to permit access to or verification or copying of any record is a prohibited act under section 301 of the FD&C Act.

The compliance date for the records establishment and maintenance requirements is [insert date 12 months after date of publication in the Federal Register], except that the compliance date for small businesses employing fewer that 500, but more than 10 full-time equivalent employees is [insert date

18 months after date of publication in the Federal Register], and the compliance date for very small businesses that employ 10 or fewer full-time equivalent employees is [insert date 24 months after date of publication in the Federal Register].

B. Significant Changes FDA Made to the Proposed Rule

FDA made the following significant changes to the proposed rule:

All foreign persons, except foreign persons who transport food in the United States, are excluded from all of the requirements in subpart J of this final rule. A foreign person transporting food in the United States is subject

to the requirements for transporters in the subpart.

requirements of subpart J of this final rule. Persons who manufacture, process, pack, transport, distribute, receive, hold, or import food contact substances other than the finished container that directly contacts the food are excluded from all of the requirements of subpart J, except §§ 1.361 and 1.363.

requirements of subpart J as to the finished container, except §§ 1.361 and 1.363.

Persons who receive or hold food on behalf of specific individual

consumers and who are not also parties to the transaction and who are not in the business of distributing food are excluded from all of the requirements of subpart J.

Transporters can meet their obligation to establish and maintain records in the following ways: (1) Keeping the records listed in § 1.352(a); (2) keeping the records listed in § 1.352(b), which contain information also currently required of roadway interstate transporters under the FMCSA regulations as of the date of publication of this final rule; (3) keeping the records listed in

§ 1.352(c), which contain information also currently required of rail and water interstate transporters under the STB regulations as of the date of publication of this final rule; (4) keeping the records listed in § 1.352(d), which contain information also currently required of international air transporters on air waybills under the Warsaw Convention; or (5) entering into an agreement with

a nontransporter immediate previous source in the United States or a nontransporter immediate subsequent recipient in the United States to keep records for them. The agreement must contain certain elements specified in § 1.352(c). Intrastate transporters must also establish and maintain records

under this final rule and can meet this obligation by complying with either § 1.352(a), (b), (c), (d), or (e).

Foreign persons who transport food in the United States, whether or not they have possession, custody, or control of the food for the sole purpose of transporting, must comply with § 1.352 of subpart J of this final rule.

The exclusion for pet food not subject to the recordkeeping provisions of the animal proteins prohibited in ruminant feed regulation (BSE rule) (62 FR 30935, June 5, 1997) has been deleted.

The definition of farm now states that washing, trimming of outer leaves, and cooling produce are part of harvesting.

The definition of farm now includes facilities that pack or hold food, provided that all food used in such activities is grown, raised, or consumed on that farm or another farm under the same ownership.

Holding has been defined and means storage of food. Holding facilities include warehouses, cold storage facilities, storage silos, grain elevators, and liquid storage tanks.

Packaging has been defined and means the outer packaging of food that bears the label and does not contact the food. Packaging does not include food contact substances as they are defined in section 409(h)(6) of the FD&C Act (21 U.S.C. 348(h)(6)).

Recipe has been defined to mean the formula, including ingredients,quantities, and instructions, necessary to manufacture a food product. Because a recipe must have all three elements, a list of the ingredients used to manufacture a product without quantity information and manufacturing instructions is not a recipe.

The partial exclusion for retail food establishments has been replaced with a partial exclusion for persons who distribute food directly to consumers.

Persons who distribute food directly to consumers are excluded fromestablishing and maintaining records required by § 1.345 to identify the nontransporter and transporter immediate subsequent recipients as to those transactions. Persons who distribute food to businesses must establish and maintain records to identify the nontransporter and transporter immediate subsequent recipients to the extent that information is reasonably available,

for example when the purchaser has an established commercial account.

The exclusion for retail facilities that are located in the same general physical location as a farm has been replaced with an exclusion for all retail food establishments that employ 10 or fewer full-time equivalent employees.

An exclusion has been added for nonprofit food establishments.

Nonprofit food establishment has been defined and means:

* * * a charitable entity that prepares or serves food directly to the consumer or otherwise provides food or meals for consumption by humans or animals in the United States. The term includes central food banks, soup kitchens, and nonprofit

food delivery services. To be considered a nonprofit food establishment, the establishment must meet the terms of section 501(c)(3) of the U.S. Internal Revenue

Code (26 U.S.C. 501(c)(3)).

The requirement to record a responsible individual when identifying the immediate previous source, immediate subsequent recipient, and transporters has been deleted.

The requirement to record lot or code number or other identifier has been deleted for all covered entities, except persons who manufacture, process, or pack food.

The definition of perishable food has been deleted.

The record retention periods for nontransporters have been changed to:

(1) 6 months for food for which a significant risk or spoilage, loss of value,or loss of palatability occurs within 60 days after the date you receive or releasethe food;

(2) 1 year for food for which a significant risk of spoilage, loss of

value, or loss of palatability occurs only after a minimum of 60 days, but within 6 months, after the date you receive or release the food; and

(3) 2 years for food for which a significant risk of spoilage, loss of value, or loss of palatability does not occur sooner than 6 months after the date you receive or release the food, including foods preserved by freezing, dehydrating, or being placed in a hermetically sealed container.

The record retention periods for transporters (or specified persons who

agree to establish and maintain required records under agreements with

transporters) have been changed to 6 months for any food having a significant

risk or spoilage, loss of value, or loss of palatability within 60 days after the

date the food is received or released and 1 year for any food having a

significant risk or spoilage, loss of value, or loss of palatability only after a

minimum of 60 days after the date the food is received or released.

The record availability requirements have been changed from 4 hours/

8 hours to as soon as possible, not to exceed 24 hours from the time of receipt

of the official request.

The compliance date for these regulations has changed to [insert date

12 months after date of publication in the Federal Register]. Small businesses

have [insert date 18 months after date of publication in the Federal Register]

of this final rule to come into compliance with these regulations, and very

small businesses have [insert date 24 months after date of publication in the

Federal Register] of this final rule to come into compliance with these

regulations.

The qualifying language food intended for consumption in the United

States has been removed from this final rule to ensure that all persons that

manufacture, process, pack, transport, distribute, receive, hold, or import food

in the United States that is intended for consumption are subject to this final

rule unless otherwise exempt.

III. Comments on the Proposed Rule

FDA received approximately 212 timely submissions in response to the

proposed rule, which raised approximately 220 major issues. To make it easier

to identify comments and FDAs responses to the comments, the word

Comment will appear in parentheses before the description of the comment,

and the word Response will appear in parentheses before FDAs response.

FDA has also numbered each comment to make it easier to identify a particular

comment. The number assigned to each comment is purely for organizational

purposes and does not signify the comments value or importance or the order

in which it was submitted.

A. General Comments

(Comment 1) Some comments state that it would be beneficial for the

agency to provide the food industry with a model form that could be used

to record all the required information, with the option for the industry to use

this form or established recordkeeping systems. One comment requests that

the agency develop and provide respective freeware that could be available

as a compact disc (CD) or downloaded from the FDA Web site well in advance

of the compliance date of the final rule. A few comments request that the

regulations make clear that the model form is guidance and is not mandatory.

One comment suggests that as a way to show that the model form is guidance,

the agency should place the model form in an appendix to the regulations.

Several comments object to the inclusion of a model form in the

regulations. The comments oppose using any one-size fits all generic form

as an example or requirement. The comments suggest that affected businesses

should decide the format in which the required records should be kept as

dictated by specific business practices. The comments express concern that

example forms might become informal requirements out in the field even

though originally only meant as guidance.

One comment recommends that the agency provide further examples of

scenarios, rather than model forms, where records would be in compliance and

noncompliance with the final regulations.

In addition, several comments state that most food companies currently

maintain the chain-of-distribution information that is required by these

regulations. However, the diversity and complexity of the food industry means

that the information is maintained in many different ways and formats, ranging

from computerized records systems to file folders of paper records. The

recordkeeping systems are designed to provide the necessary information to

remove food from the market and prevent more food presenting the same risk

from entering the market. The comments state that the regulations should not

prescribe any specific manner or form of maintaining the information.

(Response) The provisions describe the specific information a covered

entity must keep, but do not specify the form or type of system in which those

records must be maintained. As stated in both the proposed and final § 1.330,

these provisions do not require duplication of existing records if those records

contain all of the information required by subpart J of this final rule. If a person

subject to these provisions keeps records of all of the information as required

by subpart J in compliance with other Federal, State, or local regulations, or

for any other reason, e.g., as a result of its own business practices, then those

records may be used to meet these requirements. Such records may include,

but are not limited to, purchase orders, bills of lading, invoices, and shipping

documents. Moreover, entities do not have to keep all of the information

required by this final rule in one set of records. If they have records containing

some of the required information, they may keep those existing records and

keep, either separately or in a combined form, any new data required by this

final rule. There is no obligation to create an entirely new record or

compilation of records containing both existing and new information, even if

the records containing some of the required information were not created at

the time the food was received or released.

Our intent is to have as little impact as possible on current recordkeeping

practices if those records can meet the requirements of these regulations. FDA

received numerous comments, as discussed further in section III.G of this

document on Can existing records satisfy the requirements of this subpart?

that agreed with this approach to not specify the type and format of the records

and to allow flexibility to use existing recordkeeping systems. In addition,

comments state that individual companies are in a better position to decide

in what format records are needed based on knowledge of applicable business

practices and cost structures. For these reasons, FDA has not included a model

form in this final rule.

(Comment 2) Several comments state that the food industry has repeatedly

demonstrated the ability to identify and remove product from grocery store

shelves very quickly. The comments suggest that the diversion of substantial

resources that would be necessary to implement the agencys proposed

regulations would not further food security, but instead would diminish the

overall efficiency of the food distribution system, which is necessary to serve

food safety and security needs and commercial purposes.

Further, some comments assert that the regulations are directed toward

enabling the Government to trace a product, rather than ensuring that

companies are able to trace the product through all the links in the chain of

custody of a food ingredient or product. The comments state that the intent

of the Bioterrorism Act was to ensure the existence of a system that fully

engages the institutional knowledge and logical procedures that already enable

the companies responsible for the production and distribution of food to

maintain an orderly and efficient nationwide supply chain and that also

currently make it possible to effect rapid recalls when necessary. The

comments state that the proposed regulations fail to capitalize on the

efficiencies of time and resources available through effective public/private

coordination, exemplified by the efforts that currently support effective recalls.

(Response) FDA recognizes that some of the food industry currently has

existing records that may satisfy all or part of these regulations; however, not

all of the food industry is currently able to conduct such traceback

investigations. Notwithstanding the ability of some of the food industry to

conduct such investigations, Congress authorized FDA through the

Bioterrorism Act to issue regulations requiring the establishment and

maintenance of records by persons who manufacture, process, pack, transport,

distribute, receive, hold or import food to enable FDA to identify the

immediate previous sources and immediate subsequent recipients of food,

including its packaging, to address credible threats of serious adverse health

consequences or death to humans or animals. FDA believes the information

required to be established and maintained in records in these regulations is

necessary to enable FDA to conduct an efficient and effective tracing

investigation, independent of what the food industry may be able to do. FDA

reiterates that it is not dictating the form or type of system to be used to satisfy

these requirements in these regulations. If the food industry already keeps all

of the information required by this final rule, then existing records can be used

to comply with this final rule. Further, FDA anticipates working closely with

the food industry in any tracing investigation.

In addition, recently FDA was significantly hampered in identifying the

source of contaminated food during a trace back investigation following a

Hepatitis A outbreak due to contaminated green onions. This outbreak

involved a distributor who purchased green onions from a variety of firms in

no predictable pattern and distributed them without recording brand and lot

information. The distributor did not keep records of the previous sources of

the green onions, which might have indicated a particular supplier of green

onions during the specified exposure time period. It was impossible for

investigators to determine, from the distributor, the identity of the supplier

of the green onions that were sent to the implicated restaurant, and therefore

FDA had to spend time investigating all potential suppliers of the green onions

to identify the one supplier that supplied the restaurant. Speedy trace back

would have enabled FDA to prevent further distribution of contaminated

products sooner, thereby preventing more illnesses.

Further, 20 percent of all tracing investigations are prematurely terminated

due to deficiencies in recordkeeping. A reduction of just one premature

termination could prevent at least 53 people from becoming ill. Requiring

adequate records to complete a tracing investigation reduces trace-back times

by 8 days. This increased efficiency facilitates preventive action in 15 to 18

percent of outbreaks. The speed with which a tracing investigation can be

conducted is of vital importance in reducing the number of people who could

potentially become ill. Access to records that do not exist or that do not contain

sufficient information (with no requirement to retain them or make them

available in a timely fashion) is not an efficient and effective way to conduct

a tracing investigation during a public health emergency involving serious

adverse health consequences or death to humans or animals.

(Comment 3) One comment states that established industry practice with

regard to investigating product defects and conducting product recalls is

consistent with the terms of the Bioterrorism Act allowing for the rapid

identification of the immediate previous source and immediate subsequent

recipient of foods. The comment asserts that the industrys response to the

events of September 11, 2001, has strengthened these existing practices. The

comment explains that as an inevitable result of industrys commitment to

Responsible Care Security Code No. 7 and increased requests from customers,

emphasis is now shifting from security at fixed plant sites and major

distribution centers to security of products throughout the value chain. This

shift in emphasis enhances industrys existing traceback capabilities. The

comment asserts that the controls needed to effectively trace the source and

recipient of foods are already in place.

(Response) As explained in the response to comment 2, these provisions

are intended to help ensure that FDA has the information it needs to identify

the immediate previous sources and immediate subsequent recipients of food

to address credible threats of serious adverse health consequences or death

to humans or animals.

(Comment 4) One comment asserts that when food presents a risk of

serious adverse health consequences or death to humans or animals, a class

I recall is used and can quickly eliminate problems, whereas recordkeeping,

at best, will get a message to the retail locations where products were placed

on sale to consumers. The comment questions the benefit of the copious

amounts of information and possible implementation of an intricate new

product tracking system required by the regulations. The comment asserts that

class I recalls will continue to be the appropriate means by which a potential

hazard is handled and that requiring the expenditure of significant resources

to develop a new system in the absence of a Congressional mandate or a

genuine need is questionable. The comment recommends that FDA continue

to rely upon the proven capabilities of class I recalls and cooperation with

the food industry. The comment suggests that FDA should develop a system

to contact the appropriate companies to engage their assistance in addressing

threats to the food supply, rather than requiring the onerous recordkeeping

specified in the regulations.

(Response) This comment assumes that the contaminated food and its

whereabouts are known completely, which may not always be the case. As

such, the need exists for records to be able to trace forward fully to all locations

where the food was shipped, as well as trace backwards to locate any similarly

contaminated food shipped to all other locations. Moreover, class I recalls are

voluntary measures only. In the Bioterrorism Act, Congress has given FDA the

means both to establish requirements for establishment and maintenance of

records, and to administratively detain, on its own initiative, food for which

FDA has credible evidence or information that the food presents a threat of

serious adverse health consequences or death to humans or animals (section

303 of the Bioterrorism Act). In addition, the records are needed not only to

help remove contaminated food from the market place, but also to help identify

the source of the contamination.

(Comment 5) A few comments state that, in the event of a serious product

issue or life-threatening situation, the only responsible action to take is to warn

the public through the media to prevent further use or distribution of the

product. The communication vehicle used to disseminate the warning should

be based on the severity of potential harm or health consequences. Use of the

media also is necessary to influence facilities to check their store stock and

for consumers to check their refrigerators and pantries for the affected product.

(Response) FDA agrees that the use of warnings to the public about specific

products is important. Indeed, FDA has used this approach many times.

Nonetheless, records will ensure that FDA can perform trace forward to remove

the problem food from the market and traceback to identify the source of the

problem. These recordkeeping requirements will also enable FDA to identify

the problem food more specifically and, thus, FDA can target its public

warnings on the specific problematic food.

(Comment 6) A few comments request that the agency add a pipeline

provision that allows the use of NA (not available) in place of information

where ingredient records were not maintained. The comments state that many

ongoing processing operations will have some ingredients on site that have

been purchased and housed in facilities for some time prior to the

implementation of these regulations. In these cases, it would be a significant

manpower burden (or perhaps not possible at all) to obtain or attempt to

recreate all the required information on the source of those ingredients. The

comments note that these ingredients have been used in food production

without incident and it would be unlikely they would be involved in an act

of terrorism.

(Response) There is no requirement to establish and maintain records for

food ingredients you received before the compliance date of these regulations.

Under that scenario, however, you must establish and maintain records of that

food when you release it after the compliance date of the regulations. For

example, if a commercial bread bakery receives flour, eggs, and salt before the

compliance date of this final rule, it does not need to keep records of the

immediate previous source of when it received that food. Once the bakery uses

these ingredients to bake the bread and releases the bread to nonconsumers

after the compliance date of the rule, the bakery must keep the records required

by § 1.345 of this final rule regarding the immediate subsequent recipients of

the bread.

(Comment 7) One comment recommends the use of United Code Council

standards, a system of globally recognized and implemented standards that

enables traceability of products and identification of trading parties/recipients,

through all locations of the supply chain.

(Response) FDA does not agree. The agency has determined that the least

burdensome way of issuing the recordkeeping requirements is to specify the

information that must be contained in the records, but not the format in which

the records are kept. Indeed, the agency received numerous comments that

argued that covered entities should be allowed to use existing records and

systems.

(Comment 8) One comment requests that source labeling, including

country-of-origin labeling, be required as a component of an effective traceback

program in the event of a food emergency. The comment states that some

industries have already developed technologies such as barcodes, stamps,

stickers, or tags to identify the source of produce as well as software to assist

in more accurate traceback to the grower/packer level.

(Response) FDA does not agree. At this time, FDA does not believe this

information is necessary to enable a traceback. FDA believes the requirements

of the final regulations for the establishment and maintenance of records to

identify the immediate previous sources and immediate subsequent recipients

of food in order to address credible threats of serious adverse health

consequences or death to humans or animals are sufficient.

(Comment 9) Some comments ask that the agency generate more publicity

on the regulations and provide the industry with educational materials and

training. One comment states that because food wholesale distributors have

no significant contact with FDA personnel and procedures, they have a limited

understanding of the requirements. One comment asks that the agency help

promote and educate the industry abroad on the recordkeeping regulations.

Another comment asks that FDA provide materials in other languages. One

comment asks that the agency develop a strong communications program to

disseminate the new regulations once they become final because the fresh

produce industry and its transportation partners are highly diverse and

fragmented. The comment states that independent truckers in particular need

to be made aware of the regulations because the fresh produce industry in the

United States relies heavily on independent truckers to move fresh fruits and

vegetables to market quickly.

(Response) FDA conducted extensive outreach on the proposed

recordkeeping rule, including having relevant FDA staff attend 6 international

meetings and more than 100 domestic meetings to ensure that affected parties

were aware of the Bioterrorism Act requirements. On May 7, 2003, FDA held

a public meeting (via satellite downlink) to discuss the recordkeeping and

administrative detention proposed rules. See 68 FR 16998 (April 8, 2003) or

http://www.cfsan.fda.gov/~dms/fsbttraz.html. Nearly 1,000 participants in

North and South America and the Caribbean viewed that live broadcast. The

meeting was later rebroadcast to Europe, Asia, Africa, and the Pacific (areas

in different time zones). FDA has also provided transcripts of the broadcast

in English, French, and Spanish (the three official World Trade Organization

languages) on the agencys Web site. In addition to this outreach to the affected

industry, FDA has conducted outreach on the proposed rule to States.

FDA plans similar outreach directed to stakeholders following publication

of the final rule implementing the recordkeeping provisions of the Bioterrorism

Act. Our outreach will include the following:

Materials and events for the media;

Domestic outreach meetings to States and industry;

International outreach to U.S. trading partners;

Presentations by FDA officials and exhibits at professional and trade

conferences and meetings to inform industry and State and local government

representatives of the new regulations and their requirements; and

Cooperative arrangements with other Federal agencies to ensure that

information on the final regulations and their requirements is disseminated

to affected companies and individuals.

More specifics regarding each of these will be included on FDAs Web

site at http://www.fda.gov/oc/bioterrorism/bioact.html.

(Comment 10) Several comments suggest that, to lessen the burden to the

food industry, FDA needs to coordinate with other local, Federal, and State

government security programs in establishing the final recordkeeping

regulations.

(Response) In issuing these recordkeeping regulations, FDA has stated that

records established and maintained as a result of local, State, or other Federal

regulations, or as a matter of routine business practice, need not be duplicated

if the records contain all the information required by these regulations. Further,

if existing records contain some, but not all, of the required information,

persons may supplement existing records with the additional information

required under this final rule.

(Comment 11) One comment asks that the final rule require that upstream

entities provide all the required information to downstream entities in the food

distribution system. The comment states that distribution centers that receive

and store food and retail outlets that hold and sell food do not know and

should not be required to determine many of the information items required

under the proposed regulation. The comment states that requiring that any

information be passed through the system from the first point of distribution,

preferably through electronic means, would alleviate some of the burden of

the recordkeeping requirements on downstream entities.

(Response) The agency does not agree completely that distribution centers

and retail outlets do not know many of the information items. The agency

agrees, however, that including information pertaining to lot or code numbers

of foods in the required records is not practical for distribution centers and

retail outlets, given current business practices. FDA has, therefore, deleted this

requirement. Instead, the final regulation now only requires that persons who

manufacture, process, or pack food keep records on the lot or code number

or other identifier of the food, and only to the extent this information exists.

Moreover, to minimize the burden this regulation may have on affected parties,

FDA is not specifying the form or format of the records that must be established

and maintained and is not requiring electronic records.

(Comment 12) Several comments applaud the agencys efforts in proposing

a rule that appears to be designed to work with the food industry as efficiently

and effectively as possible to address credible threats without imposing undue

burdens. One comment urges the agency to issue the final regulations as

expeditiously as possible to enhance compliance with the provisions of the

Bioterrorism Act. The comment states that, by finalizing the regulations in

conjunction with the interim final rules entitled Registration of Food

Facilities Under the Public Health Security and Bioterrorism Preparedness and

Response Act of 2002 (the registration interim final rule) (68 FR 58894,

October 10, 2003) and Prior Notice of Imported Food Under the Public Health

Security and Bioterrorism Preparedness and Response Act of 2002 (the prior

notice interim final rule) (68 FR 58974, October 10, 2003), the education and

training that will be necessary for compliance with the regulations can be done

together and the internal policy and procedures for companies can be designed

to meet all of the obligations under the final rule. The comment further states

that this is the reason that Congress intended regulations to be issued within

18 months of the effective date of the Bioterrorism Act.

(Response) The agency has acted expeditiously in issuing all of the

regulations under the Bioterrorism Act and has developed and published final

regulations as quickly as possible. With respect to education and training, as

stated previously, the agency intends to conduct extensive outreach to

stakeholders for this final rule that is similar to outreach the agency conducted

for the registration and prior notice interim final rules.

(Comment 13) One comment requests clarification regarding the level of

recordkeeping that will be expected at each facility maintained by a vertically

integrated company. The comment explains that a vertically integrated

company has various facilities involved in the growing and processing of bulk

ingredients as well as the manufacturing and marketing of finished products.

Some of the requirements for recordkeeping could result in duplication of

effort if each facility within the company is required to maintain separate

records, even though the overall records are available at company headquarters

or some central location. One comment requests that the final rule clarify what

is meant by the term released and the relationship of this term to holding

legal title, or ownership of the food. Another comment suggests that FDA

clarify that only at such time as the food leaves the possession and control

of one firm and enters into the possession and control of another firm, whether

or not via a transporter, would the recordkeeping requirement apply. The

comment maintains that any other interpretation of the statute would impose

a crushing burden of internal tracking systems and paperwork that would

detract from most firms abilities to do business and is well beyond the intent

of the Bioterrorism Act.

(Response) The records required by these regulations are those that FDA

needs for inspection to identify the immediate previous sources and the

immediate subsequent recipients of food. Immediate previous source has

been defined in § 1.328 of the final rule to mean a person who owns food

or who holds, processes, packs, imports, receives, or distributes food or food

packaging, and that last had an article of food before transferring it to another

person. Unless otherwise exempt (i.e., a farm), a vertically integrated

company would be required to identify the sources of all food received from

its immediate previous sources. Once the vertically integrated company

receives the food and keeps information on its immediate previous sources,

that vertically integrated company does not need to keep additional records

until it releases the food to another person. Unless otherwise exempt, at the

time the vertically integrated company releases the food, it is required to

identify the immediate subsequent recipients of that food.

As an example, if a company buys food from its immediate previous

source (company A), then the company further processes the food, holds the

food, transports the food, and distributes the food to a grocery store, then the

vertically integrated company would only have to keep records on its

immediate previous source (company A) and its immediate subsequent

recipient (grocery store). The vertically integrated company need not keep

records of all the covered activities (manufacturing, processing, packing,

transporting, etc.) conducted by that company while it has the food.

Of course, when the integrator has any records or other information

available to FDA under sections 414 and 704(a) of the FD&C Act, then FDA

would have access to those records if FDA has a reasonable belief that the

food is adulterated and presents a threat of serious adverse health

consequences or death to humans or animals.

B. Foreign Trade Issues

(Comment 14) Several comments representing foreign governments and

international associations agree in principle to the recordkeeping requirements

provided the requirements are based on a sound risk assessment and do not

restrict trade more than necessary to effectively address potential risks. Some

comments note that there is no risk assessment provided to justify the

proposed measures required by the World Trade Organization Agreement on

the Application of Sanitary and Phytosanitary Measures (SPS agreement).

Several comments representing foreign governments and businesses request

that FDA work with foreign governments to develop common standards and

requirements and to facilitate trade flow. Some foreign comments argue that

the result of the onerous recordkeeping burden in the regulations will be the

elimination of many legitimate and safe food distribution businesses and a

serious reduction in global food trade. One comment suggests that the

regulations will adversely impact trade, as they are likely to increase

uncertainty and costs for foreign exporters. Small and medium sized foreign

companies in particular may be prevented from continuing to export to the

United States for these reasons. One comment is concerned that the regulations

may lead to the unintended consequence of foreign countries imposing the

same requirements of U.S. goods in foreign trade.

(Response) FDA considers that these foreign trade comments are now

moot, given the scope of these final regulations. These final regulations do not

apply to foreign persons, except foreign persons transporting food in the

United States, who are treated no differently than domestic food transporters

under these final regulations. FDA does not believe that foreign persons who

transport food in the United States will incur additional costs as a result of

these regulations, because FDA assumes that they will choose to comply with

§ 1.352 of this final rule by establishing and maintaining the records already

required by FMCSA. See the response to comment 82, later in this document.

C. Comments on Who is Subject to This Subpart? (Proposed § 1.326)

1. General

(Comment 15) Several comments seek clarification on who is covered by

the proposed regulation. Comments ask if the provisions of the regulations

apply to port facilities, such as warehouses, or storage and inspection facilities

in land, sea, or airports that belong to private companies and government

bodies for food control in the country of shipping and/or origin.

(Response) Persons who manufacture, process, pack, transport, distribute,

receive, hold, or import food in the United States are subject to these

regulations. Person is defined in section 201(e) of the FD&C Act (21 U.S.C.

321 (e)) and includes any individual, partnership, corporation, and

association. Therefore, any person located in any State or Territory of the

United States, the District of Columbia, or the Commonwealth of Puerto Rico

who manufactures, processes, packs, transports, distributes, receives, holds, or

imports food is included within the term person. Holding has been

defined in § 1.328 of the final rule to mean storage of food. Holding facilities

include warehouses, cold storage facilities, storage silos, grain elevators, and

liquid storage tanks. Accordingly, port facilities, such as warehouses, or

storage facilities that are located in any State or Territory of the United States,

the District of Columbia, or the Commonwealth of Puerto Rico are subject to

these regulations as they are persons who are holding food.

(Comment 16) One comment seeks clarification on whether the proposed

regulation applies to a carriers freight brokers. The comment states that,

although these brokers never have actual physical possession of freight, they

act as the middleman for carriers and shippers and have knowledge of where

the freight came from and where it went. A few comments ask that FDA clarify

that customs brokers are excluded from the regulations. The comment indicates

that because § 1.326 of the proposed regulations applies to, inter alia, persons

that import food, it could be interpreted to include customs brokers, who

act only as agents for the importer. A comment notes that customs brokers

have only the information needed to file an entry on behalf of the actual

importer and to obtain release of the food from U.S. Customs and Border

Protection (CBP). However, according to the comment, customs brokers do not

own food or hold, process, pack, import, receive, or distribute food for

purposes other than transportation. The comment notes that applying the

recordkeeping requirements to customs brokers would cause redundant and

burdensome recordkeeping requirements for them.

(Response) FDA clarifies that the recordkeeping requirements do not apply

to brokers who act only to facilitate distribution, sale, or transportation of food

by processing information or paperwork associated with these functions.

Brokers who do not directly manufacture, process, pack, transport, distribute,

receive, hold, or import food are not subject to the requirements of the

regulation.

(Comment 17) One comment asks that FDA specify whether the regulation

applies to the importer of record or to the initial U.S. recipient when the

merchandise enters the country. The comment notes that this clarification

could affect who is responsible for the establishment and maintenance of

records.

(Response) The final rule applies to persons who manufacture, process,

pack, transport, distribute, receive, hold, or import food in the United States,

unless the person qualifies for an exclusion in § 1.327 of the final rule. An

importer of record or an initial U.S. recipient that is involved in one or more

of the identified activities must establish and maintain the required records.

(Comment 18) Several comments express concern because the proposed

regulation applies only to domestic, for-hire transporters, and foreign

transporters that enter the United States, as well as domestic private

transporters, are not covered. Comments state that the regulation should apply

uniformly to all transporters, foreign and domestic, for-hire and private, to

ensure that no group has an unfair competitive advantage.

(Response) All persons transporting food in the United States must meet

the requirements of subpart J of this final rule, regardless of whether they are

for hire or private. FDA notes, however, that if a manufacturer located

in the United States transports the food in its own company trucks, then it

must comply with the recordkeeping requirements for nontransporters as

opposed to those applicable to transporters because FDA does not need the

facility to keep duplicative records of the food while it is in that facilitys

control. However, if a foreign person, such as a person who manufactures food,

transports food in the United States, it must comply with the requirements

for transporters, even if it transports the food in the United States itself. This

ensures that FDA will have the ability to traceback the food that is transported

in the United States, even if the facility from which the food originates is an

exempt foreign facility under subpart J.

(Comment 19) One comment notes that CBPs current requirements apply

to trucking companies that transport imported food into the United States. The

comment suggests that FDA coordinate with CBP to get data from them in the

event of a threat to the nations food supply, rather than develop its own

distinct recordkeeping regulations.

(Response) The records required to be kept by these regulations are those

FDA needs to help identify the immediate previous sources and immediate

subsequent recipients of food. Section 1.361 of the final rule allows FDA access

to transporters existing records when FDA has a reasonable belief that an

article of food is adulterated and presents a threat of serious adverse health

consequences or death to humans or animals. When conducting a traceback,

FDA needs access to the required records at each point in the distribution

chain for the implicated food. Thus, FDA will expect to obtain applicable

records from transportation companies in the distribution chain. Although

FDA may contact, and coordinate tracebacks with, other Federal agencies,

including CBP, the agency expects transportation companies to comply with

the recordkeeping and access provisions of these regulations. FDA notes that

entities keeping records to satisfy CBPs regulations may use those same

records to satisfy some or all of the requirements of this final rule if those

records contain some or all of the information required by subpart J of this

final rule. Entities also can supplement existing records with any new data

required by this regulation, instead of creating an entirely new record

containing both existing and new information.

(Comment 20) A few comments ask FDA to clarify what constitutes

holding food, who FDA considers to be holders of food, and under what

circumstances food is being held in transport. The comment notes that the lack

of clarity leaves a carriers terminal operating facility, gas stations, truck stops,

and even trucks themselves vulnerable to being considered as holders of

food and thereby subject to burdensome reporting requirements. Comments

also ask FDA to exclude trucks, truck terminals, and facilities from the

definition of holding, stating that this would be consistent with the intent

of the law and the realities of the trucking industrys business practices. One

comment asks whether food held for short periods of time in a trucking

terminal during cross-dock operations meets the definition of holding. One

comment states that there are certain areas in the supply chain that provide

temporary space for food during transit and that these areas should not be

considered to be holding or storing food and subject to the recordkeeping

requirements. The comment notes that some sites serve as transitory staging

areas where produce is momentarily held before transportation and that,

because of the perishable nature of the product and the desire to transport the

fresh commodity rapidly, produce moves from these staging areas as quickly

as possible.

(Response) Holding means storage of food. Holding facilities include

warehouses, cold storage facilities, storage silos, grain elevators, and liquid

storage tanks. The recordkeeping requirements in §§ 1.337 and 1.345 of this

final rule apply to persons who hold food for purposes other than

transportation. As defined in § 1.328 of this final rule, a transporter is:

* * * a person who has possession, custody, or control of an article of food in

the United States for the sole purpose of transporting the food, whether by road, rail,

water, or air. Transporter also includes a foreign person that transports food in the

United States, regardless of whether that person has possession, custody, or control

of that food for the sole purpose of transporting the food.* * *

Truck terminals or similar facilities that are part of the transportation

process and merely provide a location for trucks to transfer possession,

custody, or control to another entity are not subject to the requirements in

§§ 1.337 and 1.345 of the final rule, unless possession, custody, or control is

transferred to that terminal or facility.

(Comment 21) One comment seeks clarification on whether a customer,

such as an office complex, would be required to maintain records if it receives

and stores a food, such as bottled water, in the customers own storage area

for subsequent distribution to the various offices within the complex. The

comment also asks whether, for bottled water, such a customer would also be

the immediate previous source for bottles that are returned to the bottler for

reuse.

(Response) FDA has added an exclusion to the final rule for persons who

receive or hold food on behalf of specific individual consumers and who are

not also parties to the transaction and who are not in the business of

distributing food. This exclusion covers person such as a hotel concierge, the

reception desk in an apartment building, and an office complex that receives

bottled water as described by the comment. FDA has added this exclusion

because such persons are not parties to the transaction and records from such

person are not necessary to identify the immediate previous sources and

immediate subsequent recipients of food to address credible threats of serious

adverse health consequences or death.

The comment also asks whether, for bottled water, such a customer would

also be the immediate previous source for bottles that are returned to the

bottler for reuse. A customer who returns bottles to the bottler would be the

nontransporter immediate previous source of the bottles (§ 1.328 of the final

rule). As with other sources of its bottles (e.g., a bottle manufacturer), the

bottler would be required to keep records of bottles received from customers

for reuse.

(Comment 22) One comment asks that FDA clarify in the regulation that

domestic grain-handling, feed manufacturing/ingredient or processing facilities

dedicated solely to exporting bulk or processed agricultural commodities to

other countries are exempt from the recordkeeping requirement unless the

commodities, products, or byproducts they handle are introduced into U.S.

commerce. The comment states that this clarification would be consistent with

the statutory language and FDAs proposed regulations.

(Response) The proposed rule applied to persons who manufacture,

process, pack, transport, distribute, receive, hold, or import food intended for

consumption in the United States, unless the person qualifies for an exclusion

in § 1.327. This provision has been changed in the final rule. The Bioterrorism

Act does not limit the recordkeeping authority to food that is consumed in

the United States. FDAs intent in the proposed rule was to apply the

recordkeeping provisions to the full reach of section 306 of the Bioterrorism

Act with respect to domestic persons. In contrast, the registration interim final

rule that FDA issued under section 305 of the Bioterrorism Act only requires

those facilities that manufacture, process, pack, or hold food for consumption

in the United States to register. The proposed recordkeeping rule inadvertently

added the same qualifier as is in the registration interim final rule: That is,

it only applied to food that was intended for consumption in the United

States. FDA is removing this qualifying language from the final rule to ensure

that all persons that manufacture, process, pack, transport, distribute, receive,

hold, or import food in the United States are subject to this final rule unless

otherwise exempt. FDA believes this coverage is necessary because foods

intended for export could easily be diverted into domestic commerce. In

addition, not everyone in the food supply chain may know if the food is

intended for consumption in the U.S. or intended solely for export. Therefore,

such a limitation in this rulemaking could create holes in a tracing

investigation. Further, FDA is concerned that exempting foods intended for

export from the recordkeeping regulations could lead to such foods being

targeted for tampering and reintroduction into domestic commerce because

they would prove more intractable to tracing investigations.

(Comment 23) One comment asks whether small growers who provide a

raw agricultural commodity to a cooperative must keep records and whether

the cooperative must list all of the growers.

(Response) Growers of raw agricultural commodities that meet the

definition of farm in § 1.328 are excluded from the requirements of subpart

J of this final rule. A cooperative that accumulates raw agricultural

commodities from growers, and does not meet the exemption for retail food

establishments that employ 10 or fewer full-time equivalent employees in

§ 1.327(f) of the final rule, is subject to the requirements in § 1.337 of the final

rule regarding the immediate previous sources of food. Distribution of food

from the cooperative directly to consumers is excluded from the requirements

of § 1.345 of the final rule regarding the immediate subsequent recipients of

food.

2. Intrastate

(Comment 24) One comment agrees that the requirement for U.S. domestic

firms, whether shipping interstate or intrastate, to establish and maintain

records as provided in the proposed regulation will maximize FDAs capability

to implement traceback procedures within the borders of the United States.

Another comment states that a finding that a certain food is intentionally

contaminatedeven if only distributed or sold locallycould have

widespread, nationwide, even international, economic implications. The

comment states that the recent mad cow episode in Canada demonstrates

that restrictions might be imposed on the distribution and sale of implicated

products, or consumers across the country may decide not to buy the products

thus impacting the economy as a whole. As a result, the comment states that

FDA is correct in concluding that all persons who manufacture, process, pack,

transport, distribute, receive, hold, or import food should be subject to the

recordkeeping requirements whether or not they directly engage in interstate

activities involving food.

However, another comment states that FDAs intent to assert jurisdiction

over food, whether or not it enters interstate commerce, may be

unconstitutional. The comment notes that this assertion of power to regulate

food in intrastate commerce is inconsistent with limitations imposed by the

Commerce Clause of the U.S. Constitution, which generally authorizes

Congress to regulate purely interstate commerce only. The comment further

states that FDA should have assumed that Congress did not intend to violate

the Constitution, and should revise the proposed rule accordingly. Another

comment states that the FDA is proposing that domestic persons must maintain

appropriate records as stipulated by the proposed regulations regardless of

whether their food enters interstate commerce. The comment adds that

appropriate State, local, and municipal regulatory bodies have authority to

regulate domestic persons who manufacture, process, pack, transport,

distribute, receive, or hold food intended for human or animal consumption,

when intended solely for intrastate commerce in the United States. The

comment argues that the proposed regulations regarding recordkeeping should

not be expanded beyond what has been set forth in the Bioterrorism Act.

Another comment states that the FMCSA has guidelines for determining

whether carriers and drivers are engaged in interstate commerce and provides

the following definition in 49 CFR part 390.5:

Interstate commerce means trade, traffic, or transportation in the United States

(1) Between a place in a State and a place outside of such State (including a place

outside of the United States);

(2) Between two places in a State through another State or a place outside of

the United States; or

(3) Between two places in a State as part of trade, traffic, or transportation

originating or terminating outside the State or the United States.

(Response) In the preamble to the proposed rule, FDA sought comments

on its tentative conclusion that it has authority to require recordkeeping by

persons engaged only in intrastate commerce. FDA also sought comments on

how many intrastate persons would not be covered by one of the exclusions

from the recordkeeping requirements (e.g., the farm or restaurant exemption).

Based on consideration of the received comments and further review of the

provision of the Bioterrorism Act that provides FDA with the authority to

require the establishment and maintenance of records by all persons who

engage in specified activities involving food, FDA has concluded that the

Bioterrorism Act gives FDA authority to require persons to establish and

maintain records, whether or not they engage in interstate commerce, as long

as they fall within Congresss power to legislate in this area.

FDA is mindful that its interpretation of the Bioterrorism Act should not

cast doubt on the constitutionality of the statute. (See Solid Waste Agency of

Northern Cook County v. U.S., 531 U.S. 159 (2001).) The agency has considered

the relevant provisions of the Bioterrorism Act, the comments submitted on

this issue, FDAs responsibilities in implementing the Bioterrorism Act, and

the law interpreting the Commerce Clause of the Constitution (Article I, section

8). Based on these considerations, FDA is retaining § 1.326(b) as proposed, with

the result that all persons that manufacture, process, pack, transport, distribute,

receive, hold, or import food in the United States (unless otherwise exempt)

must establish and maintain records, even if food from the facility does not

enter interstate commerce.

The plain language of new section 414 of the FD&C Act does not exclude

a facility from recordkeeping because food from such facility does not enter

interstate commerce. Notably, sections 301 and 304 (21 U.S.C. 331 and 334)

of the FD&C Act demonstrate that Congress has included a specific interstate

commerce nexus (e.g., has explicitly required interstate commerce) in the

provisions of the FD&C Act when that is its intent. Accordingly, it is reasonable

to interpret the Bioterrorism Act as not limiting recordkeeping only to those

persons with a direct connection to interstate commerce. Congresss power to

legislate under the Commerce Clause is very broad. We acknowledge that such

power is not without limits, see United States v. Lopez, 514 U.S. 549, 567

(1995); U.S. v. Morrison, 529 U.S. 598, 618 (2000), but these limits have to

be construed in light of relevant and enduring precedents.

In particular, in Lopez, supra, the Supreme Court acknowledged the

continuing vitality of Wickard v. Filburn, 317 U.S. 111 (1942), noting that:

* * * although Filburns own contribution to the demand for wheat may have

been trivial by itself, that was not enough to remove him from the scope of federal

regulation where, as here, his contribution, taken together with that of many others

similarly situated, is far from trivial.* * *

(Lopez, 514 U.S. at 556.) This principle applies squarely to the recordkeeping

provision of the Bioterrorism Act. Accordingly, given the collective impact on

commerce of intrastate manufacturing, processing, packing, transporting,

distributing, receiving, or holding of food in the United States, FDA has

concluded that the requirement to establish and maintain records should apply

regardless of whether the food enters interstate commerce. Thus, FDA is

retaining § 1.326(b) as proposed. See also response to comment 82 below for

an expanded discussion of the collective impact on commerce of intrastate

transportation of food.

This is consistent with section 709 of the FD&C Act (21 U.S.C. 379a),

which states that, in any action to enforce the FD&C Acts requirements

respecting foods, drugs, devices, and cosmetics, any necessary connection with

interstate commerce is presumed. Likewise, this outcome is consistent with

Congresss goal in enacting the Bioterrorism Act, because the potential harm

from bioterrorist attacks or other food-related emergencies can be great,

whether or not the food moves from one State to another. The usefulness of

recordkeeping also can be significant in food emergencies where interstate

shipment has not occurred.

3. Foreign Facilities

(Comment 25) Several comments assert that FDA lacks the statutory

authority to apply the recordkeeping and records inspection provisions of the

Bioterrorism Act to foreign facilities. According to the comments, section 306

of the Bioterrorism Act does not indicate, expressly or by inference, that

Congress intended the provisions of that section to apply to overseas persons

or facilities. They also contend that nothing in the legislative history of the

Bioterrorism Act indicates Congress intended that section 306 of the

Bioterrorism Act should apply to foreign facilities. The comments point out

that there is a longstanding presumption in the law that legislation does not

apply outside the borders of the United States, unless Congress clearly and

expressly states such an intent. The comments state that, under governing case

law, FDA may not infer legislative intent to give a statute extraterritorial reach.

A few comments indicated that FDA failed to provide legal justification

for applying the regulation to foreign facilities. The comments pointed out that

FDAs stated belief that this was the most efficient and effective strategy for

obtaining needed information on food from foreign countries cannot overcome

the clear indications that Congress did not intend section 306 of the

Bioterrorism Act to apply to foreign entities.

One comment suggests that FDA clarify that the recordkeeping

requirements do not apply outside of the United States, but serve only as a

guideline to facilitate a rapid response through cooperation at intergovernment

and international industry levels. One comment states that it has been

acknowledged in the context of recent CBP initiatives that CBP has no

jurisdiction in foreign countries. The comment notes that, consequently,

mutual agreements on cooperation between CBP and some foreign governments

have been reached to address together their shared security objectives.

Comments suggested that FDA pursue a similar approach for safety and

security of foods.

One comment asks what action FDA can take against foreign companies

that do not establish and maintain the records required under section 306 of

the Bioterrorism Act. A few comments state that the fact that section 306 of

the Bioterrorism Act does not provide any mechanisms for enforcement of the

recordkeeping and records access requirements against foreign persons

supports the position that Congress did not intend that section to apply to

foreign entities.

(Response) Because FDA has decided, for policy reasons, to exempt foreign

facilities that do not manufacture, process, pack, distribute, hold, or import

food in the United States from the requirements of the rule, FDA does not

need to decide this jurisdictional issue. FDA is exempting all foreign persons

(except for foreign persons who transport food in the United States) from the

final regulation because FDA does not believe such records would be needed.

Much of this information is available to the Secretary from facilities required

to provide prior notice under part 1, subpart I. FDA intends to work with the

competent authorities in foreign countries to access records during public

health emergencies to obtain additional information, if necessary. However, the

final rule explicitly provides that persons who transport food in the United

States are subject to subpart J of this final rule.

(Comment 26) One comment questions FDAs determination that it can

perform its Bioterrorism Act mission of tracking shipments by exempting

Mexican and Canadian motor carriers from the recordkeeping requirements

while requiring U.S. motor carriers to comply with the recordkeeping

requirements. The comment notes that, based on CBP figures for Mexicodomiciled

carriers, referenced in the Economic Impact Estimates section of

the proposed rule, 63,000 out of 80,000 carriers operating across the southern

border are Mexico-domiciled. The comment points out that, therefore, the

majority of cross-border FDA-regulated shipments at the southern border may

be exempt from the requirements of the regulation.

(Response) FDA agrees. The final rule provides that foreign persons who

transport food in the United States are subject to this final rule. A transporter

is now defined as:

* * * a person who has possession, custody, or control of an article of food in

the United States for the sole purpose of transporting the food, whether by road, trail,

water, or air. Transporter also includes a foreign person that transports food in the

United States, regardless of whether the foreign person has possession, custody, or

control of that food for the sole purpose of transporting that food.* * *

Thus, even if a foreign manufacturing facility transports its own

manufactured food into the United States, it is considered a transporter

under subpart J of this final rule and must comply with the requirements

applicable to transporters.

(Comment 27) One comment seeks clarification regarding application of

the recordkeeping requirements to certain ownership-partnership relationships

involving a U.S. trucking company and a Canadian or Mexican trucking

company. The comment asks, for example, whether a Canadian subsidiary of

a U.S. trucking company is subject to the recordkeeping requirements. The

comment states that a Canadian trucking company may be in partnership with

a U.S. company, and the percentage of U.S. ownership is established in each

partnership. Another example provided by the comment is that a Mexican

motor carrier may have a contractual or interline relationship with a U.S.

company. The comment asks whether the recordkeeping requirements apply

to the foreign transporters with these U.S. relationships.

(Response) The final rule applies to persons who manufacture, process,

pack, transport, distribute, receive, hold, or import food in the United States.

Thus, any person who transports food in the United States is subject to these

recordkeeping requirements with respect to that food that enters the United

States. The partnership or contractual status with a U.S. company does not

affect the application of these requirements to a foreign person if they are

transporting food in the United States, because such persons are already

covered by this final rule by virtue of transporting food in the United States.

(Comment 28) One comment seeks clarification on whether residency in

a territory of the United States affects applicability of the regulation. One

comment questions FDAs authority to apply the proposed regulation to the

Caribbean jurisdictions of the U.S. Virgin Islands and the Commonwealth of

Puerto Rico. The comment contends that the regulations would be burdensome

to grocery operators or other retailers in the Caribbean jurisdictions who do

not export to the Continental United States, but would not deter bioterrorism

acts in the Continental United States or in the Caribbean jurisdictions. The

comment asserts that the proposed regulation will jeopardize the island

economies of the Caribbean jurisdictions by increasing unnecessary expenses

to the food retailing activity, which is already more expensive than in the

Continental United States, by adding, among other expenses, the maritime

transportation cost to the goods.

(Response) The final rule applies to persons that manufacture, process,

pack, hold, transport, distribute, receive, or import food in the United States.

Section 201(a)(1) of the FD&C Act defines the term State as, any State or

Territory of the United States, the District of Columbia, and the Commonwealth

of Puerto Rico, and section 201(a)(2) of the FD&C Act defines the term

Territory as, any Territory or possession of the United States, including the

District of Columbia, and excluding the Commonwealth of Puerto Rico and

the Canal Zone). Accordingly, any person in the 50 States of the United

States, or in any Commonwealth or Territory of the United States, that

performs a covered activity is subject to the requirements of this final rule.

This includes both Puerto Rico (because, for purposes of the FD&C Act, it is

considered a State) and the U.S. Virgin Islands (because, as a U.S. territory,

it is considered a State for purposes of the FD&C Act).

D. Comments on Who is Excluded From All or Part of the Regulations in This

Subpart? (Proposed § 1.327)

1. General

(Comment 29) Several comments argue that because the Bioterrorism Act

specifically excludes those foods under the jurisdiction of USDA, alcoholic

beverages should also be excluded, as they are already regulated by the

Department of Treasurys Alcohol and Tobacco Tax and Trade Bureau (TTB)

as well as by CBP. One comment requests that FDA secure a legislative

amendment to the Bioterrorism Act that exempts wines and spirits and other

alcoholic beverages from its application, in the same way meat, poultry, and

egg products under the jurisdiction of the USDA are excluded from its scope.

Another comment states that the importers records enable a product to

be traced from the point of importation to its destination, as well as back to

the producer/supplier. The comment states that substantial information about

a product imported legally into the United States is already held in the TTB

database.

(Response) Unlike products regulated under the exclusive jurisdiction of

USDA under the FMIA, the PPIA, or the EPIA, Congress did not exempt

alcoholic beverages from the scope of the recordkeeping requirements. FDA

has not excluded alcoholic beverages from the scope of this final rule because

FDA believes that these records are needed to help the Secretary to identify

the immediate previous sources and the immediate subsequent recipients of

food to address credible threats of serious adverse health consequences or

death to humans or animals. Further, FDA reiterates that, to the extent that

you already keep the information required by this final rule to comply with

TTB requirements, or for any other reason, you do not need to establish and

maintain duplicative records.

In addition, securing a legislative amendment to the Bioterrorism Act,

as the comment suggests, is beyond the scope of this rulemaking.

(Comment 30) One comment suggests that FDA add an exclusion that

covers persons who transport food for the U.S. military and U.S. Government

agencies with respect to that food. Those entities are sophisticated and able

to establish their own requirements. Transporters of food for those entities

should not be subject to potentially duplicative FDA standards.

(Response) Congress did not provide for an exemption for food that is

transported for the U.S. military or any other U.S. Government agency from

the scope of the recordkeeping requirements. FDA believes that these records

are needed to help the Secretary identify the immediate previous sources and

the immediate subsequent recipients of food to address credible threats of

serious adverse health consequences or death to humans or animals. Again,

with respect to the comments assertion that transporters of food for those

entities should not be subject to potentially duplicative FDA standards, FDA

agrees. There is no requirement to keep duplicative records. FDA reiterates

that to the extent that you already keep the information required by this final

rule, you do not need to establish and maintain duplicative records.

(Comment 31) One comment questions whether there are provisions for

the exemption of beekeepers who bottle and sell small amounts of honey and

other beehive products, even if they keep their hives on the property of others,

as is frequently done for pollination purposes or the production of honey from

sites other than the beekeepers own property.

(Response) Congress did not provide for an exemption for beekeepers who

bottle and sell small amounts of honey and other beehive products. FDA

believes that these records are needed to help the Secretary identify the

immediate previous sources and the immediate subsequent recipients of food

to address credible threats of serious adverse health consequences or death

to humans or animals. Unless these entities fall within a specified exemption,

they are subject to the requirements of this final rule. For example, some of

the beekeepers may fall within the exemption for farms or retail food

establishments that employ 10 or fewer full-time equivalent employees. In

addition, beekeepers are not required to keep records of sales directly to

consumers.

(Comment 32) One comment requests clarification on how imported food

samples that do not enter commerce will be handled based on the regulations.

These food samples have the intended end use of analysis, experimentation,

and/or subsequent destruction within approved company premises. The

samples may be carried into the United States as personal baggage of company

representatives or sent unaccompanied. The comment points out that food

carried in personal baggage is exempt from the registration interim final rule

only if the food is for personal enjoyment/use. Another foreign comment states

that the recordkeeping requirement should not apply to commercial samples.

The comment states that new exporters cannot be expected to engage in

recordkeeping requirements concerning exports before testing marketing

opportunities.

(Response) Persons who manufacture, process, pack, transport, distribute,

receive, hold, or import food in the United States that is intended for

consumption by humans or animals are subject to these regulations. The

recordkeeping requirements would not apply to food samples that are used

for quality assurance, research or analysis purposes, as long as the food

samples are not consumed by humans or animals. Samples of food are

considered to be for quality assurance, research or analysis purposes, rather

than human consumption, when they are in small quantities (i.e., quantities

consistent with the quality assurance, research, or analysis purposes) and the

entire sample is used up by the analysis, destroyed after analysis, or destroyed

following a reasonable retention period after analysis. The analysis may

include sensory examination, such as organoleptic examination for

determining tea quality or detecting the presence of histamines. Evidence that

an article of food is for quality assurance, research, or analysis purposes only

might include, among other evidence, markings on the food and shipping

documents. Food samples intended for consumption via test marketing, such

as tasting at trade shows or product promotional tasting events, are subject

to this subpart.

The recordkeeping rule, however, exempts all foreign persons, except

foreign persons who transport food in the United States. Therefore, the foreign

exporter of the samples mentioned by the comments is not required to

establish and maintain records under this final rule. With respect to the

comments assertion that the registration interim final rule exempts food carried

in personal baggage for personal use, FDA notes that it is the prior notice

interim final rule (part 1, subpart I) that exempts these products, not the

registration interim final rule (part 1, subpart H). The registration interim final

rule applies to all domestic and foreign facilities that manufacture, process,

pack, or hold food that will be consumed in the United States, unless otherwise

exempted. This includes facilities performing covered activities with respect

to commercial samples if those samples will be consumed in the United States.

See response to comment 67 at 68 FR 58911 through 58912 (October 10, 2003).

As detailed in the response to comment 22, this final rule does not distinguish

between food consumed in the United States and food that is exported.

(Comment 33) One comment indicates that the proposal is silent as to

whether firms producing finished food products or food additives and

ingredients intended solely for export must comply with the recordkeeping

requirements. The comment argues that because this regulation applies to

foods for consumption in the United States, producers of such products should

be exempt from the recordkeeping requirements.

(Response) Persons who manufacture, process, pack, transport, distribute,

receive, hold, or import food in the United States are subject to these

regulations. If the food is intended solely for export, the person producing that

food in the United States would still be subject to these regulations with

respect to that food.

2. Farms

(Comment 34) Several comments ask if foreign farms, including fish farms

(aquaculture) fall under the regulations farm exemption.

(Response) Section 306 of the Bioterrorism Act specifically exempts farms

from these regulations. The definition of a farm includes aquaculture facilities.

In addition, foreign persons (except for foreign persons who transport food in

the United States), including foreign farms, are excluded from all of these

regulations.

(Comment 35) One comment states that FDA has not clarified whether

producers who ship live food animals to the United States will be required

to keep records on their farm operations, as their products will be finished

in another country, may have been raised on more than one farm, and may

not be considered as going directly to the consumer for consumption. The

comment strongly urges the FDA not to require farmers shipping live animals

to the United States to incur the additional cost, time, and work involved in

maintaining records, beyond those which are currently being maintained for

their operations, solely for the purpose of this regulation.

(Response) Farms are excluded from these regulations, as are foreign

persons, except for foreign persons who transport food in the United States.

Therefore, foreign farmers who ship live food animals to the United States are

exempt from this final rule (unless they transport the animals into the United

States themselves). FDA notes, however, that although foreign exporters of food

into the United States are exempt from these recordkeeping requirements, they

must comply with the prior notice regulations issued under the Bioterrorism

Act (part 1, subpart I). FDA also notes that an importer of live food animals

into the United States would be required to establish and maintain records

under these regulations given that importers are not exempt from this final

rule.

(Comment 36) One comment states that, although the proposed rule

exempts farms, it may still result in a recordkeeping burden for them. The

comment states that, in practice, the farmer will be expected to generate

paperwork so that those delivering and dropping products off at the farm will

be able to comply with the final rule. Although farms may be exempt on the

face of the rule, the comment states that, in reality, farmers will have to

generate large amounts of paperwork for their suppliers, truckers, and buyers.

The comment states that the final rule needs to make clear that farmers will

not be responsible, or expected to generate, paperwork for those complying

with this rule.

(Response) Farms are specifically exempted from the requirements of these

regulations. Only those persons subject to these regulations must establish and

maintain records of the immediate previous sources and immediate subsequent

recipients of food that they manufacture, process, pack, transport, distribute,

receive, hold, or import. This final rule does not require a farm to establish

or maintain records for those who are subject to this regulation.

3. Restaurants

(Comment 37) Several comments state that retail food stores offer a variety

of services and conveniences to consumers, including foods that are prepared

in-store and ready for immediate consumption, and that the restaurant-type

facilities in the retail store should be excluded from the recordkeeping

requirements.

One comment notes that the proposed rule includes an exemption for

restaurants, which are defined as facilities that sell food directly to consumers

for immediate consumption. The comment asserts that many convenience

stores make such sales of prepared foods, but convenience stores are included

in the proposed rules definitions as an example of retail facilities. In the

comments view, convenience stores that sell food for immediate consumption

should be exempt from the proposed rule. There is no reason why convenience

stores that sell prepared foods should have greater regulatory burdens than any

other type of entity that sells prepared foods. The comment further states that

the restaurant exemption as currently proposed leads to results that are

difficult to justify. The comment asks why, for example, should a convenience

store that sells lunchmeat be required to comply with a costly system of

recordkeeping, while a delicatessen that sells precisely the same product to

the same consumer is exempt? The comment states that the only sensible

answer to these unjustifiable inconsistencies is to exempt retailers that sell

food to consumers for immediate consumption from the requirements of the

regulation.

(Response) FDA agrees with these comments. Section 306 of the

Bioterrorism Act exempts restaurants from recordkeeping requirements. There

is no similar exemption in section 306 for retail facilities. In the proposed rule,

FDA exercised the agencys discretion and proposed excluding retail facilities

from the requirement to establish and maintain records of the immediate

subsequent recipients of food when the food is sold directly to consumers (68

FR 25188 at 25192). As explained therein, the Bioterrorism Act expressly states

that the Secretary may require the establishment and maintenance of records

by persons who distribute food, and therefore retail facilities could be

subject to all of the provisions in subpart J of this final rule if FDA thought

it was necessary to address credible threats of serious adverse health

consequences or death to humans or animals.

FDA recognizes that some facilities that are predominantly retail distribute

some food to businesses (that then may further distribute the food before it

is consumed) and that some facilities that are predominantly nonretail

distribute some food to consumers. FDA concludes that to require such

facilities to keep records of each individual recipient consumer would be too

burdensome, and not necessary to help address credible threats of serious

adverse health consequences or death to humans or animals. If a traceback or

trace forward is necessary, FDA can learn from sickened consumers the sources

of the food they purchased, or notify consumers generally about food that

presents a threat. Therefore, FDA is changing the final rule from the proposal

so that it does not require records of subsequent recipients for sales directly

to consumers, regardless of whether the seller is a retailer or another type of

entity. The final rule excludes persons who distribute food directly to

consumers from keeping records of those transactions. Moreover, if a person

prepares and sells food directly to consumers for immediate consumption, then

those sales qualify for the restaurant exemption.

However, persons who operate retail food establishments that distribute

food to persons who are not consumers are subject to all of the requirements

in subpart J of this final rule. However, the requirements in § 1.345 of the final

rule to establish and maintain records to identify the nontransporter and

transporter immediate subsequent recipients that are not consumers applies

as to those transactions only to the extent the information is reasonably

available.

Furthermore, retail food establishments that employ 10 or fewer full-time

equivalent employees are excluded from all of the requirements of subpart J

of this final rule, except the record access provisions for existing records under

§§ 1.361 and 1.363.

4. Fishing Vessels

FDA received no comments on this issue and has made no changes to the

definition for fishing vessels or to the exemption in the final rule.

5. Retail Facilities

(Comment 38) One comment states that it operates a business that is

essentially the same as any other retailer (although they sell to restaurants).

Sales to its customers are recorded using a checkout register, and thus, it

should not be required to keep records of individual items purchased by

customers. Requiring such records from it, but not requiring retailers to keep

such records, would be unfair and would be extremely burdensome.

(Response) The business described in the comment is not treated

differently than other retailers. Persons who distribute food to businesses do

not qualify for the exclusion for sales to consumers in § 1.327(d) of the final

rule. Thus, sales of food to restaurants require the establishment and

maintenance of records of the immediate subsequent recipient, as codified in

§ 1.345 of the final rule, to the extent that information is reasonably available

to you. Information is reasonably available to you if you have a system in place

to capture the information. FDA does not intend to require the reconfiguration

of business operations. Thus, for example, information is reasonably available

to you when the purchaser has an established commercial account to which

the food purchases are charged in an identifiable manner. Accordingly,

§ 1.327(e) of the final rule provides that persons who operate retail food

establishments that distribute food to persons who are not consumers are

subject to all of the requirements in subpart J of this final rule. However, the

requirements in § 1.345 of the final rule to establish and maintain records to

identify the nontransporter and transporter immediate subsequent recipients

that are not consumers applies as to those transactions only to the extent the

information is reasonably available. For purposes of this section, retail food

establishment is defined to mean an establishment that sells food products

directly to consumers as its primary function. The term consumers does not

include businesses. A retail food establishment may manufacture/process,

pack, or hold food if the establishments primary function is to sell from that

establishment food, including food that it manufactures/processes, packs, or

holds, directly to consumers. A retail food establishments primary function

is to sell food directly to consumers if the annual monetary value of sales of

food products directly to consumers exceeds the annual monetary value of

sales of food products to all other buyers. A retail food establishment

includes grocery stores, convenience stores, and vending machine locations.

In addition, a retail food establishment that employs 10 or fewer full-time

equivalent employees is excluded from all of the requirements of this subpart,

except the records access provisions for existing records under §§ 1.361 and

1.363. Given the large number of establishments that would be excluded and

the significant cost reduction, FDA has analyzed the impact on its ability to

efficiently and effectively conduct a tracing investigation to address credible

threats of serious adverse health consequences or death. FDA believes the

information as to the source of the food of concern sold at these establishments

may be obtainable from a larger retail food establishment that is covered by

the regulations and sold the same food. Specifically, many of the foods sold

at very small retail food establishments are nationally distributed and are also

sold at covered retail establishments. If there is an outbreak and product could

also be traced to a covered retailer, then FDA could use that retailers records

to identify the source of the food.

Moreover, given the relatively small size of the exempted establishments,

the exempted establishments are likely to have fewer products and suppliers

than other retail establishments and are therefore more likely to be able to

provide FDA with source information even if they are exempted from records

establishment requirements. With larger retailers, the records of immediate

previous sources are more critical to isolating quickly potential sources of food

that poses a threat of serious adverse health consequences or death to humans

or animals. The exclusion is based on the number of employees at each retail

food establishment and not the entire company, which may own numerous

retail stores.

(Comment 39) One comment argues that distributors for direct selling

companies should be exempt from the requirement to maintain records

concerning immediate subsequent recipients. The proposed regulation would

have a significant impact on the direct selling industry. Independent

distributors sell product not only to consumers, but also to other independent

distributors in their network to support each others businesses and enable

them to fulfill customer orders.

In addition, FDA should acknowledge the unique, closed distribution

model of the direct selling business and exempt independent distributors in

a direct selling organization from the requirement to maintain records

concerning the immediate previous source. In the closed distribution model

of direct selling, the direct selling company is the source of all products sold

by its distributors. Distributors typically obtain the products they redistribute

directly from the direct selling company with which they are associated. Under

the proposed regulations, the direct selling company will maintain records that

identify the carriers and the distributors who are the immediate subsequent

recipients of the product. Any records maintained by the distributor regarding

the immediate previous source for such shipments would be wholly

duplicative of the records held by the direct selling company.

(Response) Whether these independent distributors are subject to the

requirement to establish and maintain records to identify the immediate

subsequent recipients depends on the nature of their customers. Section

1.327(d) of this final rule excludes persons who distribute food directly to

consumers from the requirement in § 1.345 of this final rule to establish and

maintain records of the nontransporter and transporter immediate subsequent

recipients. As discussed in response to comment 37, FDA concluded that to

require such records would be too burdensome and not necessary to help

address credible threats of serious adverse health consequences or death to

humans or animals. Thus, independent distributors are not required to

maintain records of subsequent recipients who are consumers. Independent

distributors, however, are required to keep records of subsequent recipients

who are not consumers. However, an independent distributor who qualifies

as a retail food establishment under § 1.327(e) of the final rule that also

distributes food to persons who are not consumers is required to identify the

nontransporter and transporter immediate subsequent recipients as to those

transactions only to the extent the information is reasonably available. FDA

needs such records to quickly and effectively traceback and trace forward in

the event of a food-related emergency. However, an independent distributor

who qualifies as a retail food establishment that employs 10 or fewer full-time

equivalent employees is excluded from all of the requirements in this subpart,

except the record access provisions for existing records under §§ 1.361 and

1.363.

(Comment 40) One comment asserts that there is no added public health

protection from requiring retailers to establish and maintain records of the

immediate previous holder of a food product. The proposed rule ensures that

all information desired by FDA (e.g., the product and lot number going to a

particular retail store) is already recorded by both the distributor of the product

and by the transporter of the product. Therefore, traceability of a product will

exist without requiring the retailer to also keep that information. The comment

believes that the added burden of requiring retailers to establish and maintain

records on immediate previous sources of the food it receives is not necessary

based on the limited public health and safety benefit that would result.

(Response) As discussed in response to comment 37 of this document, the

Bioterrorism Act did not exempt retail food establishments from recordkeeping

requirements. FDA decided to exclude persons who distribute food directly

to consumers from the requirement to establish and maintain records of

subsequent recipients because sick consumers can provide information as to

where they obtained food in a traceback, and FDA can notify consumers of

a food threat in a trace forward. In the case of a traceback from a retailer, the

retailers records of the immediate previous sources are needed by FDA to

address credible threats of serious adverse health consequences or death to

humans or animals. In a traceback, it is unlikely that a retailers source for

certain foods would be apparent. Accordingly, in order for FDA to be able to

identify the retailers immediate previous nontransporter and transporter

sources, to gain access to those sources records and identify its sources or other

recipients of the food, the retailer has to have records identifying those sources.

Therefore, the final rule requires retailers to establish and maintain records

containing this information. However, retail food establishments that employ

10 or fewer full-time equivalent employees are excluded from all of the

requirements in subpart J of the final rule, except §§ 1.361 and 1.363. (See

response to comment 38 of this document for a further discussion of FDAs

rationale underlying this exclusion.)

(Comment 41) One comment states that a retail facility is defined as

a facility that sells food directly to consumers only. Thus, a warehouse store

or cash and carry store that sells food both to consumers and to commercial

accounts would not qualify for this exemption. As the name implies, a cash

and carry store sells food products to anyone who wishes to buy bulk

quantities in cash transactions (e.g., from an individual consumer planning a

party or providing for a large family to intermittent supply to restaurants). Such

stores typically do not retain detailed records of cash sales. For cash and carry

stores that do engage in regular commercial transactions, or which provide

credit to commercial customers, ordinary business practices should normally

generate records that could be tailored to serve the requirements of the

proposed rule. FDA should clarify that, if an entity conducts both exempt and

nonexempt activities at the same location, it would be required to retain

records only with respect to its nonexempt activities. Under such a

clarification, a cash and carry store that sells food to individual consumers

would not be required to maintain records regarding its retail sales to

consumers. The comment requests that the agency adopt and confirm this

interpretation.

(Response) FDA agrees. Section 1.327(d) of the final rule excludes persons

who distribute food directly to consumers from the requirement to establish

and maintain records of the immediate subsequent recipients of food.

Therefore, a cash and carry store is not required to maintain records

regarding its sales to consumers. However, under § 1.327(e) of the final rule,

persons who operate retail food establishments that distribute food to persons

who are not consumers are subject to all of the requirements in subpart J of

this final rule. However, for retail food establishments, the requirements in

§ 1.345 of the final rule to establish and maintain records to identify the

nontransporter and transporter immediate subsequent recipients that are not

consumers applies as to only those transactions involving nonconsumers and

only to the extent the information is reasonably available. For purposes of this

section of this document, retail food establishment is defined to mean an

establishment that sells food products directly to consumers as its primary

function. The term consumers does not include businesses. A retail food

establishment may manufacture/process, pack, or hold food if the

establishments primary function is to sell from that establishment food,

including food that it manufactures/processes, packs, or holds, directly to

consumers. A retail food establishments primary function is to sell food

directly to consumers if the annual monetary value of sales of food products

directly to consumers exceeds the annual monetary value of sales of food

products to all other buyers. A retail food establishment includes grocery

stores, convenience stores, and vending machine locations. In addition, retail

food establishments that employ 10 or fewer full-time equivalent employees

are excluded from all of the requirements in subpart J of this final rule, except

record access provisions for existing records under §§ 1.361 and 1.363.

(Comment 42) One comment states that, in the case of control state retail

operations, keeping detailed information on the immediate subsequent

recipients would impose an administrative burden. Although retailers are

generally exempt from keeping records pertaining to their customers, the

exemption is lost when, as is the case with control states, retail stores sell

to other retailers, in this case restaurants, taverns, and bars who subsequently

resell the alcoholic beverages being purchased to end-use customers. The retail

store transactions are essentially the same type of over the counter

transactions that take place between the stores and individual consumers.

Some information is usually and customarily maintained (e.g., the information

pertaining to the licensed purchaser and what is being purchased), although

in some cases such information is not generally secured and retained. The

comment further notes that some of the information sought (e.g., lot and other

product identifiers) is neither generally secured, nor is it maintained.

(Response) Section 1.327(d) of the final rule excludes persons who

distribute food directly to consumers from the requirement to establish and

maintain records of the immediate subsequent recipients of food. As discussed

in response to comment 37 of this document, such sales are excluded because

FDA can learn from sickened consumers about the sources of food they

purchased or notify consumers generally about food that presents a threat.

However, this rationale is not applicable when, as described in the comment,

retail stores sell to other retail stores. Under § 1.327(e) of the final rule, persons

who operate retail food establishments that distribute food to persons who are

not consumers are subject to all of the requirements in subpart J of this final

rule. However, for retail food establishments, the requirements in § 1.345 of

this final rule to establish and maintain records to identify the nontransporter

and transporter immediate subsequent recipients that are not consumers

applies as to only those transactions and only to the extent the information

is reasonably available. In addition, a retail food establishment that employs

10 or fewer full-time equivalent employees is excluded from all of the

requirements in subpart J of this final rule, except §§ 1.361 and 1.363. (See

response to comment 38 of this document for a further discussion of FDAs

rationale underlying this exclusion.)

In regard to lot identification numbers, retailers are not required to

maintain this information. The final rule only requires that persons who

manufacture, process, or pack food record lot or code numbers or other

identifiers of that food (and only to the extent this information exists)

(§§ 1.337(a)(4) and 1.345(a)(4) of the final rule).

(Comment 43) One comment argues that the proposed retail exemption

(§ 1.327(d)) must be a complete exemption, including an exemption from

recordkeeping regarding suppliers, identical to the exemption given to

restaurants. The comment states that today retailers and restaurants compete

in the burgeoning take home and carryout market. FDAs proposal gives an

unfair and unnecessary advantage to restaurants, which are expanding out of

in-restaurant dining into areas formerly served by retailers and carryout

establishments. A full exemption for retailers presents no lessening of food

safety safeguards.

(Response) Restaurant is defined to mean a facility that prepares and

sells food directly to consumers for immediate consumption. This means that

an establishment that prepares and sells food that is capable of being eaten

immediately, with no further preparation, is considered a restaurant. This

definition and the corresponding exemption for restaurants in § 1.327(b) of the

final rule includes activities such as a restaurant preparing and selling food

to a consumer to be consumed at a later time, as long as the food is capable

of being immediately consumed without further preparation or processing. For

example, a restaurant may prepare and sell pies from a counter that consumers

purchase and take home for later consumption. This activity qualifies for the

restaurant exemption as long as the food is prepared and sold directly to a

consumer for immediate consumption.

In addition, a restaurant/retail facility is excluded from all of the

requirements in subpart J of this final rule if its sales of food it prepares and

sells to consumers for immediate consumption are more than 90 percent of

its total food sales. FDA notes that many facilities that otherwise would be

excluded as restaurants under the final rule sell a small amount of food that

they do not prepare for immediate consumption. For example, some restaurant/

retail facilities have small packaged goods gift shop areas that sell food. The

entire facility is excluded from all of the requirements in subpart J if its sales

of food it prepares and sells to consumers for immediate consumption are more

than 90 percent of its total food sales. FDA exercised its discretion and

excluded restaurant/retail facilities whose nonrestaurant food sales are less

than 10 percent of their total food sales because many facilities that would

otherwise qualify as restaurants make such sales as an incidental activity (Ref.

14). FDA believes that, were it not to provide such an exclusion, the exemption

for restaurants would be undermined because many facilities that prepare and

sell a high percentage of their food for immediate consumption also sell a small

amount of packaged goods that they do not prepare themselves for sale to

consumers (e.g., beverages, chips, candy, condiments, and sweeteners) and

otherwise would be subject to the rule as to those sales.

Conversely, if a restaurant/retail facilitys sales of food it does not prepare

and sell for immediate consumption are 10 percent or more of its total food

sales, FDA believes that such sales are a significant portion of the facilitys

activities. Such a facilitys retail food sales are exempt only from the

requirement to establish and maintain records of sales to consumers. The

restaurant/retail facilitys sales of food it prepares and sells for immediate

consumption remain exempt from all of the requirements of subpart J of this

final rule. As noted earlier, retail facilities are required to keep records of sales

to nonconsumers only to the extent that information is reasonably available.

Section 306 of the Bioterrorism Act specifically exempts restaurants, but

not retailers. FDA believes persons, including retailers, must establish and

maintain records of immediate previous sources to ensure that FDA can

quickly and effectively conduct a traceback in a food-related emergency.

However, a retail food establishment that employs 10 or fewer full-time

equivalent employees is excluded from all of the requirements of this final

rule, except §§ 1.361 and 1.363. (See response to comment 38 of this document

for a further discussion of FDAs rationale underlying this exclusion.)

(Comment 44) Several comments state that, although they make every

effort to provide food to their customers in a timely and efficient manner, a

small percentage of the food that is in a grocery store is sent to a reclamation

center from which it is either returned to the manufacturer or sent to food

banks. Reclamation centers are currently the largest single source of food

donations for food banks. Food may be sent to reclamation centers if its

packaging is damaged or if it is past the best if used by date. The system

for sending food to reclamation centers is simple: The unsaleable products are

collected in banana cartons and then shipped to the center where the food

is sorted and either donated to charitable organizations, such as food banks,

or returned to the manufacturers. No records are kept by the store of the foods

shipped to the reclamation center.

The comment states that FDAs regulations should consider reclamation

centers and food banks to be consumers for purposes of the recordkeeping

regulations. Specifically, food retailers do not currently track the foods that

are sent to reclamation centers, nor is there a mechanism available to do so.

The requirement to develop and implement new recordkeeping systems would

be a serious disincentive to corporate food donations and, again, would serve

no purpose with respect to food security. If it is not necessary to track product

to individual consumers to enhance food security, no purpose is served by

monitoring those products that are sent through reclamation centers to

consumers. Any products that are returned to the manufacturer are removed

from the food distribution system so they will not reach consumers and their

whereabouts need not be accounted for. Accordingly, FDA should broaden the

exclusion for retailers to include food products that are routed to consumers

through reclamation centers.

(Response) FDA agrees. FDA is exempting nonprofit food establishments

that prepare or serve food directly to the consumer or otherwise provide food

or meals for consumption by humans or animals in the United States.

Nonprofit food establishment has been defined to mean:

* * *a charitable entity that prepares or serves food directly to the consumer

or otherwise provides food or meals for consumption by humans or animals in the

United States. The term includes central food banks, soup kitchens, and nonprofit

food delivery services. To be considered a nonprofit food establishment, the

establishment must meet the terms of section 501(c)(3) of the U.S. Internal Revenue

Code (26 U.S.C. 501(c)(3)).* * *

Congress gave FDA the discretion to issue regulations regarding the

establishment and maintenance of records under section 306 of the

Bioterrorism Act. Charitable food establishments, such as food banks, stand

in place of the consumer and FDA will treat them as consumers for purposes

of this final rule. Therefore, grocery stores, catering facilities, and others giving

a charitable donation of food to a food bank, soup kitchen, or other similar

charitable entity are not required to keep records of the immediate subsequent

recipients of the food, and the charitable food establishment does not need

to keep records of the immediate previous sources of that food or the

immediate subsequent recipients of that food. FDA has determined that it does

not need records of food donated to food banks to address credible threats of

serious adverse health consequences or death to humans or animals. In the

event of a traceback investigation, FDA believes that it is likely to have the

ability to trace the immediate previous source of contaminated food by other

means. Unless the source of the contamination is at the food bank itself, other

consumers of that same food obtained from a grocery store are likely to identify

that grocery store as a link in the chain-of-distribution of the contaminated

product. In the case of a trace forward investigation, records will likely exist

from the donor of the food to the charitable food establishment. FDA believes

that the likelihood of the existence of such records is great given the tax

benefits available to the persons donating goods to establishments that are

501(c)(3) establishments under the Internal Revenue Code. Therefore, FDA

does not believe that exempting such charitable entities from these

requirements would interfere with the goals of the Bioterrorism Act or subpart

J of this final rule.

With respect to the reclamation centers mentioned by the comment,

FDA understands that most reclamation centers are actually owned by the

grocery store or grocery chain. Such reclamation centers will be treated as if

they are part of the grocery store and must keep the records that must be kept

by the grocery store. For instance, if food from the reclamation center is

donated to a food bank, the exclusion described previously applies. If food

is sold to consumers, the exclusion for foods sold directly to consumers

applies. If food is returned to the manufacturer, or sold to another

nonconsumer, the reclamation center must keep records of the immediate

subsequent recipients of food, to the extent this information is reasonably

available.

(Comment 45) Several comments state that, although retailers will not be

required to keep track of foods sold to consumers, retailers will be required

to keep records on those immediate subsequent recipients who are wholesalers

or other retailers. The comments add that, unless the recordkeeping exclusion

applies to all foods that are sold from the store, it is essentially meaningless.

Food retailers do not know whether a person who comes into a store and buys

food will be using the food for personal consumption or for a business purpose.

To cover the possibility that a purchase was intended for business purposes

would essentially require a retailer to record all consumer transactions. The

comments state that this would not increase food security or consumer

confidence. The comments also state that the trust of consumers is of

tantamount importance and requiring documentation of all consumer

transactions will diminish that trust without furthering the goal of food

security.

(Response) Although retailers must keep records of immediate subsequent

recipients of food who are not consumers, retailers are not required to do so

unless that information is reasonably available, for example, when the

purchaser has an existing commercial account. (See response to comment 38

of this document.) Retailers need not ask the status of each purchaser, and

retailers will not be required to record every consumer transaction. Under

§ 1.327(e) of this final rule, persons who operate retail food establishments that

distribute food to persons who are not consumers are subject to all of the

requirements in subpart J of this final rule. However, the requirements in

§ 1.345 of this final rule to establish and maintain records to identify the

nontransporter and transporter immediate subsequent recipients that are not

consumers applies as to those transactions only, and only to the extent the

information is reasonably available.

FDA notes that there is an exclusion with respect to food that is

manufactured, processed, packed, held, received, or transported for personal

consumption. Such activities are excluded from the rule because if a traceback

or trace forward investigation is necessary, FDA can learn from sickened

consumers the sources of the food they purchased, or notify consumers

generally about food that presents a threat. Whether food is for personal

consumption depends on many factors, but FDA would consider food prepared

in a private home and transported for other than business purposes to qualify

for this exclusion. An example of food covered by this exclusion includes food

prepared for pot luck suppers.

(Comment 46) One comment believes that direct marketing facilities

should be explicitly exempted from maintaining records of immediate

subsequent recipients. The comment believes that direct marketers that sell

their food directly to consumers are functionally no different than brick-andmortar

retail establishments. Moreover, FDAs proposal already explicitly

exempts other entities that sell food directly to consumers (farms, some

roadside stands, and restaurants). Direct marketers thus should be exempt from

another and different mandated recordkeeping protocol. Direct marketers

already must meet the recordkeeping requirements of taxing authorities.

Adding another enormous, needless recordkeeping requirement for consumers

who purchase their food directly would do nothing to achieve the aims of the

Bioterrorism Act at the expense of increased costs to marketers and, thus, their

customers. The comment urges FDA to revise the exclusion for retail facilities

by explicitly stating that direct marketing facilities are likewise exempt from

the one-down requirements of § 1.345.

(Response) Neither the proposed nor final rule distinguishes between

persons that sell to consumers as direct marketers, including those selling

products over the Internet, and other persons selling to consumers from

establishments. Therefore, if a direct marketer sells food directly to a

consumer, he or she is exempt from establishing and maintaining records of

the immediate subsequent recipients of that food. Under § 1.327(e) of this final

rule, persons who operate retail food establishments that distribute food to

persons who are not consumers are subject to all of the requirements in subpart

J of this final rule. However, for retail food establishments, the requirements

in § 1.345 to establish and maintain records to identify the nontransporter and

transporter immediate subsequent recipients that are not consumers applies

as to those transactions only, and only to the extent the information is

reasonably available. In addition, retail food establishments that employ 10 or

fewer full-time equivalent employees are excluded from all of the requirements

of subpart J of this final rule, except the record access provisions for existing

records under §§ 1.361 and 1.363. (See response to comment 38 of this

document for a further discussion of FDAs rationale underlying this

exclusion.) For a further discussion of direct sellers responsibilities under

this rulemaking, see response to comment 50 in the following paragraphs.

(Comment 47) One comment states it is not clear in the proposed

regulations whether retail bakeries and delicatessens are subject to these

regulations. Although the registration requirements exempt them entirely, the

recordkeeping rule only contains an exemption from establishing and

maintaining records with the names of immediate subsequent recipients of

foods sold directly to consumers. This implies that they still need to keep

track of ingredient lots used in each production. In such operations, production

usually consists of a wide variety of products made daily and in very small

quantities. Keeping track of ingredients used in each and every product made

daily is virtually impossible, and if required, would financially break every

retail bakery or delicatessen, most of which are already struggling to compete

in the dwindling market being taken over by supermarket chains. The comment

requests that FDA look seriously at totally exempting any retail food operation

with 10 or less employees from any of the requirements of the proposed

regulations, particularly recordkeeping. If this is not possible, the comment

proposes that FDA consider an alternative choice if they do not keep records

of ingredients used in products, that if any contaminated ingredient is found,

or brought to their attention, that they agree to destroy all manufactured

products currently in stock (made from this ingredient or not). This alternative

would have the same safety effect, but would be a lot less costly than keeping

records.

(Response) A bakery or delicatessen is excluded from all of the

requirements in subpart J of this final rule if its sales of food it prepares and

sells to consumers for immediate consumption are more than 90 percent of

its total food sales. Food is for immediate consumption when the food is

capable of being eaten immediately with no further preparation. However, if

the bakery or delicatessen does not qualify for the restaurant/retail facility

exclusion in § 1.327(b) of this final rule, there is also an exclusion for retail

food establishments that may apply. Under § 1.327(f) of this final rule, retail

food establishments that employ 10 or fewer full-time equivalent employees

are excluded from all of the requirements in this subpart, except the record

access requirements for existing records. The exclusion is based on the number

of full-time equivalent employees at each retail food establishment and not the

entire business, which may own numerous retail stores.

(Comment 48) One comment states it appears that rather than exempting

convenience stores that sell food for immediate consumption, FDA has

proposed a partial exemption such that records need be kept only for the

nonexempt activities, but that is not clear in the proposed rule. FDA should

either take a functional approach that allows facilities that sell food to

consumers for immediate consumption to have a full exemption, or FDA

should clarify that convenience stores and other facilities that make sales for

immediate consumption need not maintain records for that part of their

operation.

(Response) Convenience stores and other covered facilities that sell to

consumers are an example of a mixed-type facility. Food that the convenience

store prepares and sells directly to consumers for immediate consumption (i.e.,

hot dogs, hot pretzels), is exempt from subpart J of this final rule under the

restaurant exemption. Under § 1.337 of this final rule, the facility is required

to keep records of the nontransporter and transporter immediate previous

sources for all other food. The facility is not required to establish and maintain

records to identify the nontransporter and transporter immediate subsequent

recipients for sales of food to consumers, but must establish and maintain

records to identify immediate subsequent recipients of food who are not

consumers, as required by § 1.345 of this final rule, when such information

is reasonably available, as discussed in response to comment 38. In addition,

retail food establishments that employ 10 or fewer full-time equivalent

employees are excluded from all of the requirements of subpart J in this final

rule, except the record access provisions for existing records under §§ 1.361

and 1.363. (See response to comment 38 of this document for a further

discussion of FDAs rationale underlying this exclusion.)

(Comment 49) Some comments state they are engaged in marketing

products directly to the consumer through direct sales, mail order, Internet

sales, and/or retail sales and urge FDA to clarify the scope of retail facilities

to include independent distributors in direct sales forces, mail order

companies, or Internet sales operations, because it is apparent that neither

Congress nor FDA intended for the recordkeeping requirement to encompass

records of individual sales to consumers.

(Response) As described in response to comment 37, persons are not

required to establish and maintain records to identify the nontransporter and

transporter subsequent recipients of food distributed directly to consumers

(§ 1.327(d) of this final rule). Further, as described in response to comment

50, these regulations do not distinguish between direct marketers and others

selling food from a retail establishment. In addition, retail food establishments

that employ 10 or fewer full-time equivalent employees are excluded from all

of the requirements of subpart J of this final rule, except §§ 1.361 and 1.363.

(See response to comment 38 of this document for a further discussion of

FDAs rationale underlying this exclusion.)

(Comment 50) One comment states that because direct sellers might also

sell to other direct sellers either for consumption or for resale to other

consumers, it is possible that the proposed recordkeeping requirements of the

regulation might be construed to apply to them. The comment strongly suggests

that were the requirements to apply to their businesses, many individuals

would be discouraged from entering into direct sales. Individuals who are

attracted to direct selling because of the ease of entry into the business would

surely not welcome the additional paperwork and bureaucratic requirements

necessitated by the proposal. Although perhaps appropriate for larger

businesses, these requirements would provide a severe disincentive to their

way of doing business. Additionally, given the sheer numbers of salespeople

potentially involved, and the generally small size of the sales transactions

consummated by direct sellers, the massive paperwork generated by direct

sellers under the recordkeeping requirements could actually be

counterproductive to efforts to enhance bioterrorism preparedness. The

comment states that, given the unique, micro-entrepreneurial nature of

operations of individual direct sellers and the questionable (at best) benefit

to national security that might be achieved by applying this regulation to them,

direct sellers should be exempt from the extensive recordkeeping requirements

with respect to both immediate previous sources and immediate subsequent

recipients. The comment also notes that other retailing operations are exempt

(at least in part) from the proposed regulation, and believes that an exemption

for direct sellers is consistent with the retailing exemption and the

Bioterrorism Act.

(Response) Direct sellers are not required to establish and maintain

records to identify the nontransporter and transporter immediate subsequent

recipients for sales directly to consumers. Direct sellers that qualify as a retail

food establishment under § 1.327(e) are required to establish and maintain

records for sales to other direct sellers, when such information is reasonably

available. FDA explains the rationale for distinguishing between sales to

consumers and businesses in response to comment 40. Direct sellers, like other

covered persons, are required to establish and maintain records to identify the

nontransporter and transporter immediate previous sources of food, as required

by § 1.337 of this final rule. However, retail food establishments that employ

10 or fewer full-time equivalent employees are excluded from all of the

requirements of subpart J in this final rule, except the record access provisions

for existing records under §§ 1.361 and 1.363. (See response to comment 38

of this document for a further discussion of FDAs rationale underlying this

exclusion.) Thus, if a direct seller qualifies as a retail food establishment and

employs 10 or fewer full-time equivalent employees, it is exempt from all

recordkeeping requirements under this rule, except for the record access

provisions for existing records.

(Comment 51) One comment states the Secretary has the full discretion

to determine who shall be required to maintain records and what records shall

be kept. Congress has clearly communicated its intention to protect small

businesses by stating: The Secretary shall take into account the size of the

business in promulgating regulations under this section. The comment states

that individual direct sellers who distribute nutritional or related products

should be exempt from the requirement to maintain records under the

proposed rule.

(Response) As stated in the proposed rule, FDA carefully considered the

size of a business when developing these regulations. FDA found that most

products and ingredients pass through at least one very small business when

moving through the distribution process. If FDA were to exempt all very small

businesses with 10 or fewer employees, not just those in the retail sector, this

would create a Swiss Cheese approach to trace back, as there would be a

potential failure of entities to keep records throughout the distribution chain.

The number of very small entities account for a large fraction of the total

number of food establishments. We used U.S. Census data to estimate the

percentage of the total number of food establishments that are very small, as

well as their revenues, by sector and report them in table A of this document.

The fraction of the total number of facilities that are very small ranges from

an estimated 73 percent of convenience outlets to 90 percent of transporters.

TABLE A.ESTIMATED TOTAL NUMBER OF VERY SMALL FOOD ESTABLISHMENTS

Sector % of establishments That Are Very Small % of Food Industry Revenue From Very

Small Establishments

Manufacturers 77 15

Wholesalers 81 14

Transporters 90 16

Grocery outlets 88 18

Convenience outlets 73 18

Importers 82 14

Mixed-type facilities 82 15

Moreover, many of our failures in a typical trace back investigation (i.e.,

unclassified scenarios) have been at the wholesaler (distributor) level. As noted

in the table A of this document, 81 percent of the wholesalers are considered

very small. We also would have significant concerns if 90 percent of the

transporters (as very small entities) were excluded from the requirements to

establish and maintain records.

In light of the previous information, FDA does not believe we would have

an effective recordkeeping system if we were to exempt all very small entities

from the rule. Unlike the very small retailers who are at the end of the

distribution chain only, a full exemption by size would create holes throughout

the distribution chain and would not provide FDA adequate assurances that,

in the event of a threat of serious adverse health consequences or death, FDA

would be able to conduct an efficient and effective tracing investigation.

However, individual direct sellers as described in the comment who

qualify as retail food establishments that employ 10 or fewer full-time

equivalent employees are excluded from all of the requirements of subpart J

in this final rule, except the record access provisions for existing records under

§§ 1.361 and 1.363. (See response to comment 38 of this document for a further

discussion of FDAs rationale underlying this exclusion.)

In addition, FDA has considered the size of a business in establishing

compliance dates for this final rule. Further, the final rule exempts direct

sellers who are otherwise subject to the recordkeeping requirements of this rule

and who sell food products directly to consumers from keeping records of the

immediate subsequent recipients of that food.

(Comment 52) Several comments state FDA should interpret the exemption

from maintaining records for immediate subsequent recipients of food to

expressly include retail farm supply and feed stores that sell finished product

directly to consumers and final purchasers. For instance, the comments note

that many small rural feed manufacturers also have a retail outlet in their

facilities that sell bagged feed, pet food, and feed ingredients/additives overthe-

counter directly to consumers and to final purchasers for their own

animals. These products are not resold by the purchaser-customer. Maintaining

records of these sales is not common practice today, would represent a costly

burden to such enterprises, many of which are small businesses, and would

not demonstrably enhance human or animal protection from bioterrorismrelated

threats.

(Response) The exclusion in § 1.327(d) of this final rule from establishing

and maintaining records of immediate subsequent recipients for food

distributed directly to consumers applies to sales of bagged feed, pet food, and

feed ingredients/additives over-the-counter directly to consumers and final

purchasers for their own animals, unless the feed is to be used in animals that

will be sold as food. If the feed is to be fed to food-producing animals, then

the purchasers are not considered consumers since they are purchasing the

food for a business (i.e., for the food-producing operation). The feed will

remain in the food distribution system, and FDA needs records to help address

credible threats of serious adverse health consequences or death to humans

or animals. Therefore, under § 1.327(e), persons who operate retail food

establishments that distribute food to persons who are not consumers are

subject to all of the requirements in subpart J of this final rule. However, for

retail food establishments, the requirements in § 1.345 of this final rule to

establish and maintain records to identify the nontransporter and transporter

immediate subsequent recipients that are not consumers applies as to those

transactions only to the extent the information is reasonably available.

In addition, retail food establishments that employ 10 or fewer full-time

equivalent employees are excluded from all of the requirements of subpart J

in this final rule, except the record access provisions for existing records under

§§ 1.361 and 1.363. (See response to comment 38 of this document for a further

discussion of FDAs rationale underlying this exclusion.)

6. Retail Facility/Roadside Stands

(Comment 53) One comment is concerned that the retail exemption only

applies to facilities, such as roadside stands that employ 10 or fewer full-time

employees, and that are located in the same general physical location as farms

that sell unprocessed food grown or raised on those farms. The comments note

that the exclusion does not apply to processed foods, even if they are sold

directly to the consumers from the retail facility in the same general location

as the farm, unless all the ingredients in that processed food were grown or

raised on that farm. Consequently, persons handling processed foods, such as

baked goods, jams, jellies, maple syrup, and processed items such as hams

and sausages from animals grown and processed into meat products on the

farm would fall under the provisions of the final rule. Also, any persons

handling products that were imported from off the farm would be subject

to the final rule. The processed food provision is a burden for those involved

in roadside stands that operate outside of the normal seasonal harvest period

or sell processed foods. They could not purchase goods from neighbors or bring

in goods from other areas under the exemption or include ingredients from

a nonfarm source. The comment asks that this limitation affecting farm markets

be removed from the final rule.

(Response) FDA has changed the exclusion in proposed § 1.327(d)(2) and

has now provided an exclusion for all retail food establishments that employ

10 or fewer full-time equivalent employees from all of the regulations in this

final rule, except the record access provisions for existing records under

§§ 1.361 and 1.363, regardless of whether the food being sold is processed or

unprocessed. (See response to comment 38 of this document for a further

discussion of FDAs rationale underlying this exclusion.)

7. Persons Under the Exclusive Jurisdiction of USDA

(Comment 54) One comment states that proposed §§ 1.327 and 1.328

distinguish between those foods that will be subject to the requirements of the

final rule, and those foods that will be exempt. In doing so, the proposed rule

refers to other federal statutes (e.g., the Federal Meat Inspection Act, the

Poultry Products Inspection Act, and the Egg Products Inspection Act), as a

means to provide the regulated community with the relevant details as to

whether and when their conduct will come within the scope of the regulations

being proposed. Although statutory references such as these may suffice to

inform farms, food manufacturers, restaurants, and other food-related facilities

that deal with these statutes on a daily basis whether and when they will be

subject to FDAs final rule, that is clearly not the case with motor carriers.

Therefore, the comment states that FDA should explain what food is subject

to the final rule in laymans language to avoid any confusion. The comment

further recommends that FDA attach a list of the applicable or the exempted

foods as an appendix to the final rule.

In addition, a foreign comment states that meat, poultry, and eggs are

exempt under the proposed rule because the United States deems current risk

management systems associated with these products to be sufficiently

stringent. The comment states that, in Australia, these products are subject to

strict regulatory and certification requirements as prescribed goods under

Australian legislation (the Export Control Act 1982), which the USDA audits.

A range of other Australian products, such as milk and fish, are also prescribed

goods and are subject to the same certification process. The comment,

therefore, argues that all prescribed goods should qualify for an exemption on

these grounds.

(Response) The rule does not impose any requirements with regard to food

to the extent it is within USDAs exclusive jurisdiction under FMIA, PPIA,

or EPIA. Under the FMIA, USDA regulates cattle, sheep, swine, equines, goats,

and meat food products. Under the PPIA, USDA regulates poultry and

poultry products. Under the Egg Products Inspection Act, USDA regulates

some eggs and egg products.

Any person that manufactures, processes, packs, transports, distributes,

receives, holds, or imports some foods subject to exclusive USDA jurisdiction

is exempt from these regulations with respect to that food while it is under

USDAs exclusive jurisdiction.

FDA has decided not to attach an appendix to the final rules highlighting

which foods are within the scope of this final rule. If questions remain, FDA

will determine whether it needs to issue additional guidance on this subject.

With respect to the comment regarding Australian meat, poultry, eggs,

milk, and fish, FDA notes that all foreign persons, except for foreign persons

who transport food in the United States, are excluded from all of the

requirements of the final rule under § 1.327(h). However, domestic persons

who import these foreign products are required to comply with these

recordkeeping regulations to the extent that they are FDA-regulated food

products.

(Comment 55) One foreign comment requests that FDA identify the list

of persons that are excluded from all or part of the regulation in accordance

with § 1.327.

(Response) Foreign persons, except for foreign persons who transport food

in the United States, are excluded from all of the requirements of this final

rule under § 1.327(h). The term person includes an individual, partnership,

corporation, and association (section 201 of the FD&C Act (21 U.S.C. 321(e))).

8. Foreign Facilities if Food Undergoes Further Manufacturing/Processing

There were no comments received on this issue. However, FDA has

decided to exempt foreign persons, except foreign persons who transport food

in the United States, from this rulemaking. This is discussed in detail under

section III.C of this document entitled Comments on Who is Subject to This

Subpart? (Proposed § 1.326).

9. Pet Food

(Comment 56) Two comments requested clarification on whether the

exemption from the recordkeeping requirements for non-BSE regulated pet

food manufacturers applies to foreign manufacturing facilities.

(Response) All foreign persons, except foreign persons who transport food

in the United States, are excluded from all of these regulations under § 1.327(h)

of this final rule. In addition, the final rule deletes the proposed exclusion

for non-BSE regulated pet food. Accordingly, all persons who manufacture,

process, pack, transport, distribute, receive, hold, or import animal feed in the

United States, including pet food, are subject to the requirements of this final

rule, unless otherwise exempted.

(Comment 57) FDA received three comments from four national animal

feed trade associations. One disagrees with the proposal to exempt pet food

entities that are not subject to the BSE rule. It comments that it was an error

to attempt to combine provisions of the BSE rule with a Bioterrorism rule.

Because the BSE rule was solely designed to prevent the introduction and amplification of BSE, the comment is concerned that the recordkeeping requirements of the BSE rule do not fully address the recordkeeping provisions of the Bioterrorism Act. In addition, it comments that the health and safety of pets should not be compromised and, therefore, all animal food should be

treated equally under the final rule and pet food companies should be required to maintain the same level of records as other animal feed companies. The comment also notes that creating an exempt category of food products (i.e., certain pet foods) could result in a gap in the recordkeeping system established

by the Bioterrorism Act.

Two additional animal feed associations submitted a combined comment that for simplicity FDA should adopt the same recordkeeping requirements for all animal food, pet food, and food intended for food-producing animals. One comments that entities already complying with the BSE rule should comply

but all other animal feed and pet foods should be exempt from the recordkeeping requirement because of the low risk of serious adverse health consequence. Two comments state that they agree with FDAs risk assessments that animal feed and pet food have a lower risk and therefore needs fewer requirements than human food.

One other comment supports the proposed provision stipulating that BSEregulated pet food entities should comply with the recordkeeping regulations.

A foreign comment questions the need for the inclusion of any animal feed or pet food in the rule. Several comments, foreign and domestic, request clarification on which foreign establishments are subject to the recordkeeping

requirements under the proposed non-BSE rule exclusion.

(Response) In the final rule, FDA has deleted the non-BSE pet food

exclusions, and the final rule now requires all animal feed and pet food entities

to establish and maintain records for 1 year. Therefore, the definition of pet

food in the proposed rule is no longer needed and has been deleted. FDA was

persuaded by the comments from three national trade organizations that: (1)

Using the scope of the BSE rule as the criterion for exempting certain pet foods

is inappropriate and would result in insufficient recordkeeping coverage to

protect the public from bioterrorism; (2) creating an exclusion for certain pet

foods could create a gap in the recordkeeping system; and (3) for simplicity,

FDA should adopt the same recordkeeping requirements for all animal food,

including pet food. FDA believes that contaminated animal food can be a link

to human foodborne illness. People could be at risk through direct contact with

animal food or through unintentional cross-contamination of cooking surfaces

or utensils. Animals may also become infected and serve as a reservoir for

exposing other animals and humans to disease. In 2002, dog chew treats were

contaminated with Salmonella enteritidis (Salmonella) and became a vehicle

to transmit Salmonella into homes. As a consequence, many pet owners

became ill, and one person died (Ref. 15). Although FDA continues to believe

that the consequences of a potential terrorist attack or food-related emergency

are greater for food for food-producing animals than for pet food, compelling

arguments have been raised against the proposal to create exclusions for certain

pet food entities. Therefore, FDA believes that applying the recordkeeping

requirements uniformly to all animal foods is most consistent with the intent

of the Bioterrorism Act.

The final rule requires records for all animal food, including pet food, to

be retained for 1 year after the dates you receive and release the food. FDA

believes that a 1-year period of records retention is appropriate because food

for food producing animals tends to have a faster turnover rate than many

kinds of human food. In addition, since pet foods are typically the sole source

of food for pets, such foods tend not to be stored as long as many human foods.

(Comment 58) One comment states that the recordkeeping requirements

for animal food foreign establishments should be limited to the final

establishment handling the product prior to export to the United States.

(Response) Section 1.327(h) of this final rule excludes all foreign persons,

except foreign person who transport food in the United States, from all

requirements in this final rule.

(Comment 59) One comment asks FDA to officially recognize its countrys

BSE regulations as equivalent to the U.S. BSE regulations.

(Response) FDA declines to respond to this request because it is outside

the scope of this rulemaking.

(Comment 60) One comment asks that suppliers and transporters of animal

food not be required to retain any additional information other than what is

contained in their current records.

(Response) FDA agrees in part with this comment. This rule only requires

additional records to be established and maintained to the extent the

information does not already exist.

10. Food Contact Materials

(Comment 61) Several comments state that, although they agree with

FDAs decision not to apply the proposed regulations to outer packaging, the

same logic that supports that exclusion applies equally to food contact

materials. One comment states that applying the recordkeeping requirements

to food contact substances would create an unreasonable and unjustified

burden on the industry and its suppliers. One comment states that, under

FDAs proposed approach, there is no limit to the suppliers of components

and precursor substances who would be required to establish and maintain

records. Removing food contact facilities from the ambit of the recordkeeping

regulations is consistent with the clear intent of the Bioterrorism Act and

FDAs mandate to ensure the safety of the U.S. food supply in the least

burdensome means possible.

Several comments state it is unrealistic to believe that a terrorist attack

on the food supply will be carried out through food contact substances. As

a technical matter, it would be virtually impossible to insert a poison in contact

materials with a sustained release mechanism to contaminate food, without

the full cooperation of the materials manufacturer. Even putting aside the

technical and logistical complexities that would be involved, such an indirect

approach would have virtually no impact before discovery. Food contact

manufacturers and food processors have routine procedures in place to ensure

that their contact materials are suitable for use with food. Any possible threat

to the food supply from packaging would be uncovered at this stage.

Accordingly, there is no reason to believe that applying the recordkeeping

requirements to food contact substances would further the purpose of the

Bioterrorism Act or FDAs stated goal of the proposed regulations.

Another comment states that excluding outer food packaging from the

requirements has little practical meaning because nearly all packaging

companies handle both outer packaging and food contact substances. The

comment further states that FDAs assumption that half of the manufacturers

and distributors of packaging handle only outer packaging materials (68 FR

25188 at 25212) may be true for suppliers in other packaging segments, but

is simply incorrect when it comes to the cartonboard segment of the industry.

The comment states that packaging companies in that segment will find it more

expedient to keep records on all materialsboth outer packaging and contact

substancesrather than to document only the food contact materials, because

many of the same materials can be used for both purposes, and it would be

prohibitively expensive to segregate these uses. The comment notes that this

would result in a recordkeeping requirement for nearly all facilities that

manufacture packaging and packaging components, and all of their suppliers,

if FDA retains the proposed approach.

One comment states the inclusion of immediate food packaging and

food contact substances in the definition of food creates a difficult and

unnecessary compliance effort throughout the supply chain. The comment

suggests that FDA remove the requirement to establish and maintain records

on immediate food packaging and food contact substances after such

materials are either accompanying or affixed to the food, thus eliminating

duplicative tracking and burdensome paperwork. If records are kept on the

food, the comment states that those same records could be used to trace the

packaging and labeling materials to the farm and point of initial contact with

the food. From there, the materials original manufacturing/processing facility

can be identified, where detailed records on the immediate subsequent

transporter and recipient (likely the farm) will be maintained according to the

regulations.

(Response) FDA agrees with these comments in part. FDA is finalizing the

definition of food as proposed and is not excluding food contact substances

from the definition. As discussed in the following paragraphs and provided

in §§ 1.327(i) and (j) of this final rule, however, FDA is using our discretion

to exclude specified persons and activities from recordkeeping requirements

for packaging and food contact substances.

These comments raise the question of what Congress intended food to

mean for purposes of recordkeeping and access. In construing the

recordkeeping and access provisions of the Bioterrorism Act, FDA is

confronted with two questions. First, has Congress directly spoken to the

precise question presented (Chevron step one)? Chevron, U.S.A., Inc. v. NRDC,

Inc., 467 U.S. 837, 842 (1984). To find no ambiguity, Congress must have

focused directly on the question presented and have articulated clearly its

intention. Young v. Community Nutrition Institute, 476 U.S. 974, 980 (1986).

If Congress has spoken directly and plainly, the agency must implement

Congresss unambiguously expressed intent. Chevron, 467 U.S. at 842843. If,

however, the Bioterrorism Act is silent or ambiguous as to the meaning of

food, FDA may define food in a reasonable fashion (Chevron step two).

Chevron, 467 U.S. at 842843; FDA v. Brown & Williamson Tobacco Corp.,

529 U.S. 120, 132 (2000).

The agency has determined that, in enacting section 306 of the

Bioterrorism Act, Congress did not speak directly and precisely to the meaning

of food. The FD&C Act has a definition of food in section 201(f). It is

a reasonable assumption that, when the term food is used in the Bioterrorism

Act, section 201(f) applies. However, although there may be a natural

presumption that identical words used in different parts of the same Act are

intended to have the same meaning [citation omitted], * * * the presumption

is not rigid* * *. Atlantic Cleaners & Dyers, Inc. v. U.S., 286 U.S. 427, 433

(1932). Accord: U.S. v. Cleveland Indians Baseball Co., 532 U.S. 200, 213

(2000). Thus, the same word may be given different meanings, even in the same

statute, if different interpretations are what Congress intended. Atlantic

Cleaners & Dryers, Inc., supra.

Even before the Bioterrorism Act amendments, the term food was not

given an identical meaning throughout the FD&C Act. For example, in

construing the parenthetical (other than food) in section 201(g)(1)(C) of the

FD&C Act, the Seventh Circuit noted that Congress meant to exclude only

articles used by people in the ordinary way that most people use food

primarily for taste, aroma, or nutritive value and not all substances defined

as food by section 201(f) of the FD&C Act. Nutrilab, Inc. v. Schweiker, 713

1 FDAs long-standing interpretation of the FD&C Acts definition of color additive,

section 201(t), is an additional example of where food is used more narrowly than as

defined in section 201(f) of the FD&C Act. A color additive is defined in section 201(t) as

a substance that when applied to a food is capable of imparting color thereto * * *. The

agencys food additive regulations distinguish between color additives and colorants, the

latter being used to impart color to a food contact material (21 CFR 178.3297(a)). See also

21 CFR 70.3(f). Thus, food as it appears in the statutory definition of color additive,

necessarily excludes food contact materials.

F.2d 335, 338 (7th Cir. 1983). Similarly, section 409(h)(6) of the FD&C Act

defines a food contact substance as any substance intended for use as a

component of materials used in manufacturing, packing, packaging,

transporting, or holding food if such use is not intended to have any technical

effect in such food (emphasis added). This definition makes sense only if

food is interpreted to exclude materials that contact food because

components of food contact materials are plainly intended to have a technical

effect in such materials.1

Thus, it is in this larger statutory context, that FDA has evaluated section

306 of the Bioterrorism Act to determine whether the meaning of the word

food is ambiguous. In conducting this Chevron step one analysis, all of the

traditional tools of statutory interpretation are available to determine whether

Congresss intent is ambiguous. Pharmaceutical Research & Manufacturers of

America v. Thompson, 251 F. 3d 219, 224 (D.C. Cir. 2001). Section 306 of the

Bioterrorism Act amends the FD&C Act by adding section 414 to the FD&C

Act. In section 414, food is used in conjunction with other words to describe

which FDA-regulated articles are subject to recordkeeping and access

requirements. In describing the conditions for record access by FDA, section

414(a) of the FD&C Act requires a reasonable belief as to an article of food.

In describing the purpose for which recordkeeping may be required, section

414(b) of the FD&C Act refers to food, including its packaging. Elsewhere

in the recordkeeping provisions, section 414 of the FD&C Act refers to food,

food safety, a food to the extent it is within the exclusive jurisdiction of

[USDA], and recipes for food.

The Bioterrorism Act is silent as to the meaning of food. Congress did

not specify whether it intended the definition in section 201(f) of the FD&C

Act to apply, one of the other possibilities noted in the previous paragraph,

or another meaning. Where, as here, the statutory language on its face does

not clearly establish Congressional intent, it is appropriate to consider not only

the particular statutory language at issue, but also the language and design of

the statute as a whole. Martini v. Federal Natl Mortgage Association, 178 F.

3d 1336, 1345 (D.C. Cir. 1999), citing K Mart Corp. v. Cartier, Inc., 486 U.S.

281 (1988). Indeed, the analysis should not be confined to the specific

provision in isolation because the meaning or ambiguity of a term may be

evident only when considered in a larger context. FDA v. Brown & Williamson

Tobacco Corp., supra at 132 (2000).

FDA has considered other sections of the Bioterrorism Act and has

concluded that the meaning of food in the Bioterrorism Act is ambiguous.

FDA previously considered the meaning of food in section 305 of the

Bioterrorism Act, governing registration of food facilities, and concluded that

it is ambiguous (68 FR 58894). Section 305 of the Bioterrorism Act amends

the FD&C Act by adding section 415 to the FD&C Act (21 U.S.C. 350d). In

section 415(a)(1) of the FD&C Act, the word food is modified by the phrase

for consumption in the United States. It is not clear whether this modifying

phrase limits the definition of food to food that is ingested, a narrower

definition of food than that in section 201(f) of the FD&C Act. In addition,

the definition of facility in section 415(b)(1) of the FD&C Act exempts

farms; restaurants; other retail establishments. It is not clear whether the

phrase other retail establishments includes retailers of food contact

materials; the legislative history indicates that it does not, thereby giving rise

to additional ambiguity about which definition of food applies to section

415.

FDA also considered the meaning of food in section 307 of the

Bioterrorism Act, governing prior notice of imported food shipments, and

concluded that it is ambiguous (68 FR 58974). Section 307 of the Bioterrorism

Act amends the FD&C Act by adding section 801(m) to the FD&C Act. Section

801(m) of the FD&C Act refers to an article of food. However, the legislative

history of section 307 of the Bioterrorism Act indicates that packaging

materials are not subject to section 307, and can be read to imply that Congress

was not relying on the definition of food in section 201(f) of the FD&C Act,

thereby giving rise to ambiguity about which definition of food applies to

section 307 of the Bioterrorism Act.

FDA also considered the meaning of food in section 303 of the

Bioterrorism Act, governing administrative detention, and concluded that it is

ambiguous. FDA determined that use of the definition of food in section

201(f) of the FD&C Act is consistent with the language of section 303 of the

Bioterrorism Act. Section 303 repeatedly uses the term food without

adjectives, except for a reference to perishable foods, which is not used to

limit the reach of the section. FDA also determined that use of the definition

of food in section 201(f) of the FD&C Act is consistent with the use of the

term in judicial enforcement actions (e.g., seizures and injunctions) that may

be instituted under administrative detention.

The ambiguity surrounding Congresss use of food in sections 303, 305,

306, and 307 of the Bioterrorism Act, coupled with the lack of a definition

of the term in the Bioterrorism Act, support a conclusion that the meaning

of food in the Bioterrorism Act is ambiguous. Having concluded that the

meaning of food in the Bioterrorism Act and in section 306 of the

Bioterrorism Act in particular is ambiguous, FDA has considered how to define

the term to achieve a permissible construction of the records establishment

and maintenance provisions. Chevron, USA, Inc. v. NRDC, Inc., supra at 843.

In conducting this Chevron step two analysis, the agency has considered the

same information it evaluated at step one of the analysis. Bell Atlantic

Telephone Co. v. FCC, 131 F. 3d 1044, 1049 (D.C. Cir. 1997); Chevron U.S.A.,

Inc. v. FERC, 193 F. Supp. 2d 54, 68 (D.D.C. 2002). FDA has determined that

it is permissible, for purposes of the records establishment and maintenance

provisions, to use the definition of food in section 201(f) of the FD&C Act.

Use of the definition of food in section 201(f) of the FD&C Act is

consistent with the language of section 306 of the Bioterrorism Act. Section

306 does not contain language qualifying the meaning of food. Furthermore,

section 414(b) of the FD&C Act authorizes the Secretary to require certain

records to identify the immediate previous sources and recipients of food,

including its packaging. In addition, section 306(b) of the Bioterrorism Act

amended section 704(a) of the FD&C Act, governing factory inspections, to

provide that in the case of persons engaging in covered activities with regard

to foods, the inspection shall extend to all records and other information

described in section 414* * *. The inspection referenced in section 306(b)

of the Bioterrorism Act is one of any factory, warehouse or establishment in

which [food] is manufactured, processed, packed or held* * *. FDAs

longstanding interpretation is that food in section 704 of the FD&C Act has

the same meaning as in section 201(f) of the FD&C Act.

Use of the definition of food in section 201(f) of the FD&C Act is also

consistent with other sections of the Bioterrorism Act. Section 414(a) of the

FD&C Act refers to an article of food that is adulterated. Adulterated is

defined in section 402 of the FD&C Act (21 U.S.C. 342), and food in that

section has the meaning provided in section 201(f) of the FD&C Act. See, e.g.,

Natick Paperboard Corp. v. Weinberger, 525 F.2d 1103 (1st Cir. 1975).

Furthermore, using the definition of food in section 201(f) of the FD&C Act

for section 306 is consistent with the interpretation of food in section 303

of the Bioterrorism Act, providing for administrative detention. When the

Secretary has a reasonable belief that an article of food is adulterated and

presents a threat of serious adverse health consequences or death to humans

or animals, FDA may need to administratively detain the food under section

303 of the Bioterrorism Act and access relevant records under section 306 of

the Bioterrorism Act. FDA is therefore retaining its interpretation of food

in section 306 of the Bioterrorism Act to mean food as defined in section

201(f) of the FD&C Act. Food subject to section 306 of the Bioterrorism Act

thus includes, but is not limited to, fruits, vegetables, fish, dairy products, eggs,

raw agricultural commodities for use as food or components of food, animal

feed (including pet food), food and feed ingredients and additives (including

substances that migrate into food from food packaging and other articles that

contact food, dietary supplements and dietary ingredients), infant formula,

beverages (including alcoholic beverages and bottled water), live food animals

(such as hogs and elk), bakery goods, snack foods, candy, and canned foods.

Although food for purposes of section 306 of the Bioterrorism Act means

the same as in section 201(f) of the FD&C Act, FDA is using its discretion to

exclude some food from the record establishment and maintenance provisions.

Persons who manufacture, process, pack, transport, distribute, receive, hold,

or import food contact substances other than the finished container that

directly contacts the food are excluded from all the requirements of subpart

J of this final rule, except §§ 1.361 and 1.363. Persons who place food directly

in contact with its finished container are subject to all of the requirements

of subpart J as to the finished container that directly contacts that food. All

other persons who manufacture, process, pack, transport, distribute, receive,

hold, or import the finished container that directly contacts the food are

excluded from the requirements of subpart J as to the finished container, except

the record access provisions for existing records under §§ 1.361 and 1.363. FDA

determined that requiring such persons to establish and maintain records is

not necessary in order to address credible threats of serious adverse health

consequences or death to humans and animals.

(Comment 62) One comment states that food packaging other than

immediate food-contact packaging defined as food in the FD&C Act should

not be included within the scope of this final rule. This appears to be

consistent with FDAs intent in that the term packaging is neither defined

nor used in the proposed rules.

One comment states that the inner packaging that is in direct contact with

the food provides a barrier to contamination from outer packaging components.

Therefore, the comment agrees with FDAs conclusion that shipping containers

and outer packaging not in direct contact with food poses only a small risk

from contamination and should be omitted from recordkeeping requirements.

One comment believes strongly that packaging is not food for

purposes of the Bioterrorism Act. Even if FDA disagrees, the agency is urged

to exclude from the recordkeeping obligation all materials that are separated

from edible food by a functional barrier. In other words, at a minimum, any

materials that are separated from edible food by a functional barrier should

be regarded as a type of outer packaging for which recordkeeping is not

required. The comment states that FDA has long recognized the use of a

functional barrier in determining what types of materials can be used in a

packaging product. If a functional barrier (such as aluminum foil) is present

in a packaging laminate, there is no expectation of migration of any material

through the functional barrier. Therefore, the comment strongly requests that

any materials on the exterior side of a functional barrier be excluded from the

recordkeeping regulation. Because there is no expectation of migration of any

material through a functional barrier, the likelihood that such materials could

be used to adulterate food is extremely remote.

One comment states the reference to packaging does not mandate

recordkeeping by packaging suppliers or transporters. Indeed, the reference to

packaging, in addition to food, indicates a distinction between the two

terms in the view of the drafters. The law and Congressional intent would be

satisfied by a food processor maintaining records identifying the source of the

finished packaging for the food product. In the unlikely event that food

packaging is the target of terrorists, records in the hands of food processors

regarding their packaging suppliers will allow FDA to follow the history of

the packaging and its components. The regulation as proposed by FDA extends

far beyond what was intended by Congress. To follow Congressional intent,

the comment states FDA needs to revise the proposed regulation to provide

only that food processors have records identifying the suppliers of their

packaging.

(Response) FDA agrees with the comments in part. Persons who

manufacture, process, pack, transport, distribute, receive, hold, or import food

are subject to §§ 1.361 and 1.363 of this final rule (records access for existing

records) with respect to its packaging (the outer packaging of food that bears

the label and does not contact the food). All other persons who manufacture,

process, pack, transport, distribute, receive, hold, or import packaging are

excluded from all of the requirements of subpart J of this final rule. In addition,

persons who place food directly in contact with its finished container are

subject to all of the requirements of subpart J as to the finished container that

directly contacts that food. All other persons who manufacture, process, pack,

transport, distribute, receive, hold, or import the finished container that

directly contacts the food are excluded from the requirements of subpart J as

to the finished container, except §§ 1.361 and 1.363 of this final rule. For

example, a manufacturer and transporter of candy bar wrappers are not

required to establish and maintain records as to the wrappers because they

do not place food (candy bars) directly in contact with its finished container

(wrappers). A manufacturer of candy bars, who places the candy bars in the

wrappers, is required to keep records as to the sources of the wrappers and

the recipients of the candy bars as a whole (not the candy bar and wrapper

separately). Once the candy bar is placed in the wrapper, all persons who

manufacture, process, pack, transport, distribute, receive, hold, or import the

wrapped candy bar are required to keep records of the wrapped candy bar,

but not to keep separate records with respect to the wrapper. FDA notes that

the food in contact with the finished container refers to articles used by

people in the ordinary way that most people use food primarily for taste,

aroma, or nutritive value and not all substances defined as food by section

100

201(f) of the FD&C Act. The requirements for packaging and food contact

substances are reflected in the following table.

TABLE B.PACKAGING AND FOOD CONTACT SUBSTANCES

SUBSTANCE ACTIVITY COVERAGE

Packaging (Defined as the outer packaging of food

that bears the label and does not contact the food.

Packaging does not include food contact substances

(§ 1.328).

Manufacture, process, pack, transport, distribute, receive,

hold, or import

Excluded from all provisions of the rule unless person

also engages in covered activity with respect

to food, in which case subject to §§ 1.361

and1.363 (record access) (See § 1.327(i))

Food contact substance, other than the finished container

that directly contacts food

Manufacture, process, pack, transport, distribute, receive,

hold, or import

Excluded from all provisions of the rule, except

§§ 1.361 and 1.363 (record access) (See

§ 1.327(j))

Finished container that contacts food Place food directly in contact with its finished container

No exclusions, subject to record establishment,

maintenance, and access (See § 1.327(k))

Finished container that contacts food All other activities with respect to finished container Excluded from all provisions of the rule, except

§§ 1.361 and 1.363 (record access) (See

§ 1.329(k))

E. Comments on What Definitions Apply to This Subpart? (Proposed § 1.328)

1. General Comments

(Comment 63) One comment states that FDA should clarify the meaning

of responsible individual. The meaning of the term responsible individual

is the same as other terms mentioned in other sections, such as emergency

contact. Moreover, it is not clear what responsibilities are included in this

term.

(Response) FDA agrees with the comment that there is little utility for the

record of each commercial transaction involving the distribution of food to

contain the name of a responsible individual given that individuals change

jobs within and among companies very often, making it unlikely that the

person in the record will have responsibility for the food at issue when FDA

seeks to effect a traceback. Therefore, FDA deleted the requirement that a name

of a responsible individual be included in each record. To the extent this

information is available, FDA will use the registration contact information for

facilities subject to registration requirements under § 1.232. FDA believes that,

for facilities not subject to the registration interim final rule, an independent

101

requirement to provide this emergency contact information with the records

being kept will not be useful. The stated purpose of having such a contact

name is to obtain help in accessing the records. However, to find that

information, FDA would have already obtained the records without this

emergency contact information.

(Comment 64) One comment states that FDA should clarify the meaning

of Adequate description. FDA must establish and publish the minimum

parameters of the products description.

(Response) An adequate description of the food would include the brand

name and specific variety (e.g., brand x cheddar cheese, not just cheese; or

romaine lettuce, not just lettuce). This type of description saves time and

resources during a tracing investigation because it allows FDA to narrow its

focus to the appropriate product during the investigation.

(Comment 65) One comment requests that FDA clarify the meaning of

Holding.

(Response) FDA has defined holding in § 1.328 of this final rule to mean

storage of food. Holding facilities include warehouses, cold storage facilities,

storage silos, grain elevators, and liquid storage tanks.

(Comment 66) One comment states that FDA uses the word Importer

but does not define it.

(Response) The word importer does not appear in the final regulation.

FDA will not define it for purposes of this regulation.

2. The FD&C Act

There were no comments on this issue.

102

3. Domestic Person

There were no comments on this issue; however, FDA has deleted the

word domestic and instead defines the word person consistent with its

definition in section 201(e) of the FD&C Act. FDA believes that the term

domestic person is no longer needed because it is exempting foreign persons,

except for foreign persons who transport food in the United States, from the

requirements of subpart J of this final rule.

4. Farm

(Comment 67) Several comments assert that FDAs proposed definition of

farm is too narrow and would require recordkeeping by farms that minimally

process their produce for further marketing. The comments claim that many

fresh produce farms incorporate packing and holding activities, and that minor

manufacturing/processing activities should be considered incidental to the

packing and storage activities. Accordingly, to give effect to the legislative

intent to exclude farms, the comments argue that the definition of farm

should include typical fresh produce post-harvest farming operations such as

packing/packaging, washing, grading, waxing, sizing, cooling, application of

inventory control items (e.g., price lookup stickers (PLUs) or universal product

codes (UPCs)), conventional storage, controlled-atmosphere storage,

transportation from the fields, transportation to storage or processing facilities,

and transportation from the farm. According to the comments, these activities

should be included in the definition of farm whether they are conducted

in the field or in a packinghouse.

Some comments believe that the proposed definition of farm should be

modified to include certain of the activities defined as manufacturing/

processing, regardless of whether the foods that are the focus of these activities

103

are consumed on that farm or one with common ownership or are offered for

sale elsewhere, at least insofar as these activities relate to raw agricultural

commodities. The comments state that the specific manufacturing/processing

activities that should be included within the definition of farm are at least

the following activities: Cutting, at least when this activity is applied to harvest

of a farm crop; trimming; washing; labeling, at least when this activity is

applied to containers that are not intended for direct consumer purchase; and

packaging, at least when this activity is applied to containers that are not

intended for direct consumer purchase. The comments also suggest that FDA

should consider allowing farms to engage in milling and grinding without

voiding the statutory exemption to section 306 of the Bioterrorism Act granted

to farms, insofar as these activities are common farm activities.

(Response) In response to these comments and to ensure that FDA is

fulfilling Congresss intent to exempt farms, FDA has revised the definition

of farm in the final rule to state that a farm means a facility in one general

physical location devoted to the growing and harvesting of crops, the raising

of animals (including seafood), or both, and that [w]ashing, trimming of

outer leaves, and cooling produce are considered part of harvesting.

FDA considers several of the activities identified in the comments to be

packing or holding, including sorting, grading, wrapping, and boxing

harvested food for the sole purpose of transporting this food off the farm. FDA

also considers placing stickers on produce grown or consumed on a farm to

be part of packing. FDA notes that the definition of farm includes facilities

that pack or hold food, provided all food used in such activities is grown,

raised, or consumed on that farm or another farm under the same ownership.

Thus, a farm that performs these packing and holding activities will not

104

necessarily cease to be a farm and therefore cease to be exempt from these

regulations. Similarly, FDA considers several of the activities identified in the

comment (waxing, milling, and grinding) to be manufacturing/processing. A

farm that performs these activities will not necessarily cease to be a farm

because the definition of farm includes facilities that manufacture/process

food, provided that all food used in these activities is consumed on that farm

or another farm under the same ownership.

FDA is aware that a number of other activities may affect an

establishments status as a farm under this final rule. Thus, the agency is

providing the following additional clarification. First, FDA considers

application of a pesticide to a crop to be an integral part of growing and

harvesting crops and therefore considers the activity to be covered by the

farm definition. Therefore, an establishment devoted to the growing and

harvesting of crops that applies a pesticide to its crops is a farm as defined

in this final rule.

In addition, FDA recognizes that an activity such as placing a raw

agricultural commodity directly into consumer-ready packages is likely to

provide better protection to fragile produce, such as berries, than placing the

produce into a larger bin or box for transport off the farm, with consumer

packaging of the produce further down the distribution chain. Manufacturing/

processing as defined in § 1.328 means making food from one or more

ingredients, or synthesizing, preparing, treating, modifying or manipulating

food, including food crops or ingredients. Thus, simply placing produce into

containers (such as clamshells, baskets, mesh bags, or plastic bags) is more

akin to packing, even if the containers are ultimately received by the consumer.

Under § 1.328 of this final rule, a farm may engage in this packing activity

105

so long as all of the involved produce is grown or consumed on the farm or

a farm under the same ownership. Accordingly, a farm that simply places a

raw agricultural commodity into containers, such as placing berries in

clamshells, is not manufacturing/processing.

Finally, a farm that transports its products from the field does not cease

to be a farm because such transportation is considered incidental to

traditional farming activities.

(Comment 68) One comment states that FDAs definition of farm should

be size-neutral, and apply equally to integrated livestock and poultry facilities,

as long as the activities engaged in at such locations are limited to growing

or raising farm animals for human food, but do not extend to further

processing of food-producing animals into meat, milk, or eggs (such as occurs

at food processing and packing plants and rendering facilities) for subsequent

commercial sale for humans or animals.

(Response) The proposed rules definition of farm had no size limitation,

and neither does the final rules definition. FDA agrees that integrated livestock

and poultry facilities are farms, to the extent that these operations are

devoted to raising animals for food, the growing of crops, or both, and

otherwise engage in only those activities included in the farm definition. FDA

considers milking cows and collecting eggs from chickens to be harvesting

when applied to animals, because these activities are akin to harvesting crops.

5. Food

FDA received a number of comments regarding using the definition of

food in section 201(f) of the FD&C Act, which includes food contact

substances within its scope. These comments are addressed in section III.D.10,

entitled Food Contact Materials. For the reasons stated therein, FDA has

106

decided to retain the definition of food as proposed; however, the final rule

exempts persons who manufacture, pack, transport, distribute, receive, hold,

or import food contact substances, other than the finished container that

directly contacts the food, from all requirements of subpart J of this final rule,

except §§ 1.361 and 1.363. Further, persons who place food directly in contact

with its finished container are subject to all of the requirements of subpart

J as to the finished container that directly contacts that food. All other persons

who manufacture, process, pack, transport, distribute, receive, hold, or import

the finished container that directly contacts the food are excluded from the

requirements of subpart J as to the finished container, except §§ 1.361 and

1.363 (regarding access to existing records).

6. Foreign Facility

(Comment 69) One comment asks whether foreign facility includes

warehouses in ports belonging to shipping companies, land transport or air

lines, sealed container deposits, public organization facilities of the foreign

government and of other federal agency representatives (such as FDA or USDA)

in the country of origin and/or shipment. Another comment states that FDAs

definition of foreign facility is too inclusive. The comments suggest that only

foreign manufacturers and exporters should be required to keep records of their

partners, such as packing facilities and holding facilities.

(Response) FDA has deleted the definition of foreign facility in the final

rule. FDA notes that foreign persons, except foreign persons who transport food

in the United States, are excluded from all of these regulations in subpart J

of this final rule.

7. Manufacturing/Processing

There were no comments on this issue.

107

8. Nontransporter

(Comment 70) Two comments state that many nontransporters own trucks

or other vehicles and transport food as an incidental part of their operations.

For example, many food distributors deliver food by truck to their customers

and also may transport food returns. These entities should not be classified

as transporters for their distribution practices that are incidental to the

nontransporters holding, processing, packing, importing, or receiving of food.

The comments ask that the final rule clarify that an entity is either a transporter

or a nontransporter, and that FDA will not consider the same entity a

transporter for some purposes and a nontransporter for other purposes. The

final rule should confirm that a food distributor is a nontransporter. A food

distributor should not automatically be considered a transporter simply

because it delivers food using its own truck fleet. If FDA were to consider the

same company a transporter for some purposes and a nontransporter for other

purposes, this would create tremendous confusion regarding what records are

required to be retained.

(Response) Both the proposed and final rule define a transporter as a

person who has possession, custody, or control of an article of food for the

sole purpose of transporting the food. A person who owns food, or who holds,

processes, packs, imports, receives, or distributes food for purposes other than

transportation is not a transporter, even if the person also transports food. In

the example presented in the comment, a manufacturer that owned its own

trucks to deliver food would not be considered a transporter. However, because

FDA has exempted all foreign persons except those who transport food in the

United States from this rule, foreign persons who transport food in the United

States are subject to the requirements applicable to transporters regardless of

108

whether that person has possession, custody, or control of the food for the

sole purpose of transporting that food.

(Comment 71) One comment states that the proposed definition of

nontransporter reads as follows: Nontransporter means a person who owns

food or who holds, processes, packs * * * The same reference to a person

is included in the definitions of nontransporter immediate previous source

and nontransporter immediate subsequent recipient. The comment asks

whether the proposed rules apply to firms and other legal entities and/or

physical persons. Any other solution would, in the comments view, neither

be appropriate nor practicable.

(Response) The maintenance and inspection of records provisions in

section 306 of the Bioterrorism Act apply to persons (excluding farms and

restaurants) who manufacture, process, pack, transport, distribute, receive,

hold, or import food. The term person has the same meaning as in section

201(e) of the FD&C Act and includes individuals, partnerships, corporations,

and associations.

In addition, as explained further in response to comment 13, intracompany

transfers of food are not subject to additional recordkeeping

requirements. Once a covered person (including individuals, partnerships,

corporations, and associations) receives food and keeps information on its

immediate previous sources, that person or company does not need to keep

additional records until it releases the food to another person or company.

Unless otherwise exempt, at the time that person or company releases the food,

it is required to identify the immediate subsequent recipients of that food.

9. Nontransporter Immediate Previous Source

There were no comments on this issue.

109

10. Nontransporter Immediate Subsequent Recipient

There were no comments on this issue.

11. Perishable Food

(Comment 72) Several comments propose that FDA use existing National

Institute of Standards and Technology (NIST) Handbook 130 Regulations for

Uniform Open Dating Definition for Perishable; Semi-Perishable and Long

Term Shelf Life to define perishable food. One comment states that the

definition of perishable food proposed by FDA is inconsistent with

prevailing regulatory definitions of that term. The NIST Handbook defines

perishable food as any food for which a significant risk of spoilage, loss

of value, or loss of palatability occurs within 60 days of the date of packaging.

Semi-Perishable food means any food for which a significant risk for

spoilage, loss of value, or loss of palatability occurs only after a minimum of

60 days, but within 6 months, after the date of packaging. Long Shelf-Life

food is defined as any food for which a significant risk of spoilage, loss of

value, or loss of palatability does not occur sooner than six months after the

date of packaging, including foods preserved by freezing, dehydrating, or being

placed in a hermetically sealed container. These definitions have a history

of use and acceptance by industry and government, and were developed 30

years ago by the National Conference of Weights and Measures, working in

conjunction with state agencies responsible for the regulation of foods. The

comments note that the National Conference undertook this task to assist in

the establishment of a uniform method for presenting open code date labeling

for foods. The definitions have since been adopted by numerous states and

local jurisdictions with open date code regulations.

110

Several comments also question why records should be maintained for an

additional 22 months after a product has been consumed. The comments state

that 6 months is sufficient time to maintain records necessary for any traceback

investigation related to food safety or security risks in the produce industry.

One comment estimates that few, if any foods, would qualify as perishable

as defined by FDA. The comment has identified only a few foods sold at retail

that are not heat-treated, not frozen and not otherwise preserved in a manner

so as to prevent the quality of the food from being adversely affected if held

longer than 7 days under normal shipping and storage conditions, namely

bread, fish, and store prepared food.

One comment supports the following revised definition of the term

perishable food. Perishable food means food that may have been thermally

processed or otherwise preserved in a manner so as to prevent the quality of

the foods from being adversely affected if held for 90 days or less under normal

shipping and storage conditions. The comment agrees with FDAs decision to

divide the food products subject to the record maintenance requirement into

perishable and nonperishable groupings, but disagrees with the 7-day aspect

of the proposed rules definition of perishable. In addition, the comment does

not believe that whether a food has been subjected to heat treatment or thermal

processing should be a factor in differentiating between perishable and

nonperishable food. The comments members consider as perishable those

juice products that have a shelflife of 90 days or less. If 90 days was substituted

for 7 days in the definition of perishable, this would result in retention of

records for perishable products for at least 4 times their shelflife.

One comment states that FDA should harmonize the Bioterrorism

regulations with the other current regulatory provisions such as the Perishable

111

Agricultural Commodities Act, where available. The definition for perishable

food should include all fresh fruits and vegetables where the original kind

or character has not been changed. The comment states that the effects of the

following operations should not be considered as changing a commodity into

a food of a different kind or character: Water, steam, or oil blanching;

chopping; color adding; curing; cutting; dicing; drying for the removal of

surface moisture; fumigating; gassing; heating for insect control; ripening and

coloring; removal of seed, pits, stems, calyx, husk, pods, rind, skin, peel, etc.;

polishing; precooling; refrigerating; shredding; slicing; trimming; washing with

or without chemicals; waxing; adding sugar or other sweetening agents; adding

ascorbic acid or other agents used to retard oxidation; mixing several kinds

of sliced, chopped, or diced fruits or vegetables for packaging in any type of

containers; or comparable methods of preparation. (For example, fresh iceberg

lettuce, romaine and carrots would be included, as well as fresh-cut and

packaged salads; fresh green beans would be included; frozen or canned green

beans would not; fresh oranges would be included; frozen concentrated orange

juice would not.)

One comment states that the proposed definition of perishable food

excludes many products (including milk, which sometimes has a shelflife of

up to 15 days) that are handled and treated as perishable in the food

distribution system. The comment states that FDA should amend the definition

so that perishable foods are those that are refrigerated or those that will be

adversely affected if held longer than 20 days. The comment asserts that such

a change would make the regulation more consistent with industry practice.

One comment states that the perishable food definition is confusing

because the definition begins by stating that perishable foods are foods that

112

are not heat-treated, not frozen and not otherwise preserved * * *

Confusion arises because pasteurized milk is heat treated, and FDAs

qualification of the three criteria is somewhat awkward and combined with

an extensive use of negatives.

(Response) FDA agrees in part with the comments, but has decided not

to define perishable food in this final rule. FDA defined perishable food in

the proposal for the purpose of establishing a shorter record retention time

for those foods as opposed to nonperishable foods. FDA has concluded that

this objective can be achieved by inserting language directly in § 1.360(b) of

this final rule using similar criteria as the NIST definitions for perishable,

semi-perishable and long shelf-life food. FDA agrees that the proposed

definition is too restrictive for purposes of these final regulations. Therefore,

FDA has changed the record retention requirements in § 1.360(b) of this final

rule to require record retention for: (1) 6 months for food for which a

significant risk of spoilage, loss of value, or loss of palatability occurs within

60 days after the date you receive or release the food; (2) 1 year for food for

which a significant risk of spoilage, loss of value, or loss of palatability occurs

only after a minimum of 60 days, but within 6 months, after the date you

receive or release the food; and (3) 2 years for food for which a significant

risk of spoilage, loss of value, or loss of palatability does not occur sooner

than 6 months after the date you receive or release the food, including foods

preserved by freezing, dehydrating, or being placed in a hermetically sealed

container. However, transporters, or nontransporters retaining records on

behalf of transporters, are required to retain for 6 months records for any food

having a significant risk of spoilage, loss of value, or loss of palatability within

60 days after the date the food is received or released and 1 year for any food

113

having a significant risk of spoilage, loss of value, or loss of palatability only

after a minimum of 60 days after the date the food is received or released.

FDA chose this approach because: (1) The food industry already is familiar

with classification of foods into these three categories due to existing

regulations and practices and (2) it will mitigate the problem raised by some

comments of inadequate infrastructure for long term storage of records for the

shorter shelf life foods. FDA believes that a tracing investigation involving

perishable food will not be compromised by providing for the reduced

record retention of 6 months because most of these tracebacks are initiated

within 6 months of the outbreak.

(Comment 73) FDA requested comments on whether persons subject to

the proposed rule always or usually know at the time a perishable food is

released whether or not it is intended to be processed into nonperishable food.

Two comments state that distributors have no way of knowing whether a

perishable food will be processed into a nonperishable food by other parties.

Buyers do not always disclose how the product will be used and may utilize

it in more than one way. Therefore, producers of perishable food will have

to retain records for the longer period, if they are held accountable for the

further distribution and use of their products as nonperishable food.

(Response) FDA agrees with the comments that covered persons may not

know at the time they release food if it is intended to be processed into a

food that meets the 2-year record retention requirement. FDA clarifies that the

retention period depends upon the status of the food at the time you release

a food to your immediate subsequent recipient, regardless of whether it is

intended or not to be processed into nonperishable food in the future.

114

12. Pet Food

There were no comments on the definition of pet food, however, FDA has

decided to include all animal feeds, including pet food, under these

regulations. Therefore, there is no longer a need to define the term pet food

and FDA has deleted this definition from the final rule.

13. Recipe

(Comment 74) Three comments state that the proposed definition of recipe

is internally inconsistent and ambiguous, and request clarification of its precise

meaning. One comment characterizes the proposed definition as confusing and

nearly nonsensical. The comment suggests that this definition be removed and

that instead § 1.362 of this final rule be modified to add, for example,

Notwithstanding the exclusion of recipes for food from this subpart, all of

the ingredients in a food are subject to this subpart.

Four comments state that the provisions in the proposed rule are

inconsistent with the protection of recipes required by the Bioterrorism Act.

The Bioterrorism Act and accompanying legislative history make it clear that

the records authority does not apply to recipes. The comments urge FDA to

further clarify that information on both the quantitative and qualitative

ingredients in a proprietary formula are not covered by the proposed

recordkeeping requirements or by the records access authority. According to

the comments, in its ordinary meaning, a recipe includes three elements:

The ingredients, the quantities, and the procedure. However, the fundamental

element, and the one which in most cases is the most commercially sensitive,

is the ingredient list. The comments state that it is not reasonable to define

recipe to exclude the list of ingredients to obtain access to the list. The

115

comments state that FDA is exceeding its statutory authority under the

Bioterrorism Act.

Other comments are concerned about trade secret, sensitive, and/or

proprietary information regarding recipe ingredients. One comment notes that

food manufacturers are explicitly exempted from disclosing the specific

contents of their flavor mixtures by section 403(i)(2) of the FD&C Act (21 U.S.C.

343(i)(2)) and 21 CFR 101.4(b)(1) and 101.22(h)(1). The comment states that

the purpose of this exemption is to protect a food manufacturers trade secrets

and excluding the identity of the individual ingredients of the food from the

definition of recipe negates trade secret protection. The comment states that

the complete lists of ingredients used in flavor formulas and seasoning blends

are considered closely held trade secrets and should be considered part of the

meaning of recipe. Flavors and spices are highly proprietary and, in many

products, distinguish one manufacturers product from anothers. Disclosure

on the label, or disclosure through the exercise of FDAs record access

authority would be highly damaging to the food manufacturer whose secret

formula entered the public domain. The comment states that it is unlikely

that a product specific formulation would be relevant to an investigation.

Therefore, the comment believes persons subject to the final rule should only

have to establish and maintain records on nutrition facts.

Another comment similarly states that many products will be affected by

the proposed definition, and ingredients and quantities must be protected.

Many products are unique and were expensive to develop. Reverse engineering

as well as trial and error can lead to duplication of products that can have

very serious consequences for companies. FDA must find a solution to this

116

challenge so as to not impede its investigations and at the same time protect

the recipes of the involved companies.

(Response) FDA is changing the definition of recipe to clarify that a

recipe consists of all three elements necessary to make a food: (1) A list of

ingredients, (2) ingredient quantity information, and (3) instructions for

combining the ingredients. Therefore, FDA is defining recipe to mean the

formula, including ingredients, quantities, and instructions, necessary to

manufacture a food product. Because a recipe must have all three elements,

a list of the ingredients used to manufacture a product without quantity

information and manufacturing instructions is not a recipe.

To address credible threats of serious adverse health consequences or

death to humans or animals and to conduct tracing investigations, it is critical

that FDA have access to the ingredients and the sources of the ingredients of

food.

Some comments express concern about the disclosure of ingredients to the

public. FDA understands the comments concerns about protecting the

confidentiality of nonpublic information. Several statutes and the agencys

information disclosure regulations at parts 20 and 21 (21 CFR parts 20 and

21) govern the agencys ability to disclose information to the public. For

example, section 301 of the FD&C Act prohibits any person from using to his

own advantage or revealing, other than to the Secretary or other officers or

employees of the Department, or to the courts, any information acquired under

authority of section 414 and 704 concerning any method or process which as

a trade secret is entitled to protection. Furthermore, the records provisions in

the Bioterrorism Act recognize that FDA may obtain trade secret or confidential

information and direct the Secretary to take appropriate measures to ensure

117

that there are in effect effective procedures to prevent the unauthorized

disclosure of [such information] (21 U.S.C. 414(c)). FDA is planning to

reemphasize in instructions to FDA personnel the importance of current

protections and legal requirements against the unauthorized disclosure of any

trade secret or confidential information that is obtained. Therefore, FDA

disagrees that a manufacturer would be harmed by disclosing ingredient

information to FDA.

Moreover, the FD&C Act currently requires manufacturers to disclose the

ingredients they use to the public on food labels. One comment notes that

section 403(i)(2) of the FD&C Act excludes spices, flavorings, and some colors

from the label requirement. The exemption in section 403(i)(2) of the FD&C

Act from disclosing specific spices, flavorings, and colors to the public on the

label does not prohibit FDA from obtaining this information under the

Bioterrorism Act. As previously discussed, if this information is legally

protected from public disclosure, FDA will not release it to the public.

(Comment 75) A comment states that FDAs procedures for the exercise

of its records access authority should embody recognition of the special status

of confidential ingredients, as follows: First, FDA should provide that it will

not routinely seek access to records that would require the disclosure of

confidential ingredient information; second, if FDA concludes that it needs

access to information about ingredients, it should present a written explanation

to the custodian of the records that sets forth the basis for the agencys

conclusion; and third, FDA should seek records access in an orderly manner,

beginning with ingredients other than flavors and spices. The comment states

that it will not be possible for FDA to assess simultaneously each ingredient

in a product as the potential source of the problem that is being investigated.

118

Given that flavor and spice information is highly confidential and that the low

levels of use of those ingredients make it unlikely that one of them will be

the source of the problem investigated, it is reasonable to provide that

requesting information on flavors and spices will occur only as a last resort.

Finally, FDA should provide for special procedures to ensure that, when flavor

and spice information is obtained, it is properly protected from disclosure,

whether advertently or otherwise. The comment urges FDA to implement a

system to adequately safeguard against the inadvertent release of proprietary

and confidential information. Among other things, such information should

be shared within FDA only to the limited extent necessary to conduct the

particular investigation that resulted in the disclosure. The comment asserts

that highly proprietary information about product formulas should not be

widely distributed within the agency, and all persons who are made privy to

the information should be reminded explicitly of the confidential nature of

the information. Moreover, the comment states that FDA should amend its

public information regulations to provide expressly that information obtained

under the records access authority is exempt from disclosure under one or

more of the exemptions under the Freedom of Information Act (FOIA) (5 U.S.C.

552).

(Response) FDAs procedure for accessing records is outside the scope of

this final rule. FDA will consider these comments when it develops guidance

for its investigations outlining how FDA intends to implement its access

authority in section 414(a) of the FD&C Act. Such guidance will be subject

to public comment under FDAs good guidance practice regulations (CGPs)

§ 10.115 (21 CFR 10.115).

119

14. Restaurant

(Comment 76) Many comments suggest that caterers supplying interstate

conveyances are preparing meals for direct consumption by the consumer and

should be excluded as restaurants. Some comments state that the

manufacturer/processor of a sandwich should be treated the same, whether the

sandwich is served in a restaurant, offered for sale in a vending machine,

delivered as carryout, served on a hospital patients tray, or served on a train

or airplane. The comments note that, in the past, FDA has referred to level

playing fields. In this case, exempting of conveyance caterers is the only way

to regulate even-handedly. If restaurants and retailers are to be exempt, these

comments believe that caterers should also be exempt.

The comments further state that just because FDA has historically

inspected the facilities providing food to interstate conveyances under the

Public Health Service Act does not mean that these facilities should be

considered processors under this security regulation. The comments view the

proposed distinction between a snack bar on the train selling sandwiches to

consumers for immediate consumption (considered an exempted restaurant)

and a facility that provides the sandwiches to an airplane or train for later

consumption (considered a covered processing establishment) as an arbitrary

and illogical distinction, because they view the risk associated with that

sandwich as the same between the two facilities.

The comments view their industry as similar to a large restaurant or hotel

kitchen, which produces a wide variety of meals within a matter of hours. The

comments state that inflight catering is not regulated under the same rules as

a food processing plant because the same rules would not fit the inflight

catering industry. Food in a processing plant may be prepared weeks to a year

120

before consumption. The comments state that the only difference between the

catering and the restaurant service is that the catering meals are generally

consumed 1 to 4 hours after departing from the kitchen rather than

immediately consumed, as in the restaurant industry.

(Response) FDA continues to believe that facilities that provide food to

interstate conveyances should not be covered by the restaurant exclusion

because they do not provide food directly to the consumer for immediate

consumption. In fact, the food is prepared and provided to several possible

intermediaries before reaching the consumer, such as the packer, transporter,

and/or distributor, before reaching the interstate conveyance (e.g., airplanes,

passenger trains, and cruise ships) that actually provides the food directly to

the consumer for immediate consumption. FDA believes the risk is

substantially higher when the food is not prepared and served directly to

consumers for immediate consumption, but rather goes through a number of

intermediaries before it reaches the consumer. In a traceback investigation, it

is critical for FDA to be able to identify each entity that handled the suspect

food. FDA would lose this ability if interstate conveyance caterers were

exempted. In addition, this requirement is consistent with the registration

interim final rule, which requires interstate conveyance caterers to register as

manufacturers/processors.

(Comment 77) Several comments urge FDA to reconsider the proposed

regulations for airline caterers. The comments state that these proposed

requirements are onerous, unnecessary, and are being unfairly applied to that

industry and would bury the industry in volumes of information. The

comments note that the same rationale FDA used for partially exempting retail

facilities should apply to airline caterers as well.

121

The comments further state that the airline catering industry currently

must be in compliance with many Government regulatory agencies (FDA,

Federal Aviation Administration (FAA), USDA, Environmental Protection

Agency, Transportation Security Administration (TSA)), and that they have

strict specifications for products and vendors, whereas most food service

operations do not. The comments also note that they currently employ security

companies to monitor their staff, the food processes in which they prepare

meals, the equipment the food items are loaded into, and the process of how

it gets on board the aircraft. They also state that their customers have always

expected traceability of all products used on their flights as part of their food

safety and hygiene audits to resolve flight passenger complaints, food

poisoning reports, and for other purposes, but not to the extent that is required

by the proposed rule.

One comment states that it is a member of the International Flight Catering

Association and International Inflight Food Service Association and adheres

to practices of the World Food Safety Guideline as set forth by the two

associations of inflight food services. Another comment states that all

employees have been certified by the FAA through fingerprinting and 10-year

background checks, and inhouse security personnel are responsible for

checking what is placed on aircraft. Another comment maintains control of

all inputs and outputs of production and states that documentation is in place

for all items received and for all items produced.

(Response) For the reasons stated in response to comment 76 of this

document, FDA continues to believe that facilities that provide food to

interstate conveyances should not be covered by the restaurant exclusion

because they do not provide food directly to consumers for immediate

122

consumption. However, these final regulations state that duplication of existing

records is not required if those records contain all of the information required

by subpart J of this final rule. Therefore, if a covered person keeps records

of all of the information as required by subpart J in order to comply with other

Federal, State, or local regulations, or for any other reason, then those records

may be used to meet these requirements. As the comment notes, the airline

catering industry currently has the capability to trace all food products on their

flights. These regulations do not dictate the format or system in which the

required records are maintained. The airline catering industry can use existing

tracing mechanisms to comply with these regulations to the extent those

mechanisms contain the required information.

(Comment 78) Some comments state that these proposed regulations

would require a substantial and costly change in the way meals are delivered

and processed. The comments urge FDA to consider whether the air and rail

industries can bear the additional expense of these proposed regulations, as

numerous ingredients are included in each meal that is prepared and boarded.

The comments state that compliance with the traceability regulations depicted

in the rule would require so many revamped processes and additional

personnel that their organizations would likely not recover from the fiscal

implications. The comments further state that they would have to completely

change the way they produce and package meals for their customers, going

to unprecedented lengths to ensure strict batch preparation. As an example,

the comments note that with their current processes, they can determine

shipment origin and location of the entire meal; however, it would be

impossible to trace each individual ingredient going into the package. For

example, meat from one lot number of ham could be put into sandwiches along

123

with other ingredients from different sources and fruit or chips, and then

loaded onto numerous flights. This level of batch control would make the

production of these sandwiches and meals cost prohibitive.

The comments further state that the impact on the airline industry from

September 11, 2001, has been tremendous. The airline industry is facing

unprecedented challenges, and the way business is conducted has been altered

forever. The comments note that reductions and bankruptcy filings by the

various airlines have been extreme and have resulted in immense reductions

in the airline catering business. The airlines decisions to significantly cut

back, eliminate food service, and reduce the load capacity on airplanes and

number of flights continue to impact the interstate conveyance catering

business. The comments urge FDA to consider these conditions because it will

be difficult for the airline catering business to absorb the costs of proposed

regulations into its current pricing structure. The comments conclude that they

would be forced to pass these costs onto the already struggling airline industry.

(Response) For the reasons stated in the previous paragraphs, FDA

continues to believe that facilities that provide food to interstate conveyances

should not be covered by the restaurant exclusion because they do not prepare

and sell food directly to the consumer for immediate consumption. However,

the comments concern about having to go to unprecedented lengths to ensure

strict batch preparation misconstrues the proposed requirement. In the final

rule, FDA deleted the requirement in § 1.337(a) for a nontransporter to provide

information reasonably available to identify the specific source of each

ingredient used to make every lot of finished product, and instead put that

requirement in § 1.345(b) of this final rule because it is unlikely that a person

124

would have that information reasonably available at the time records are

created to identify the immediate previous sources of the food.

FDA acknowledges that certain business practices are not amenable to

linking incoming ingredients with outgoing product and that it may not always

be possible to identify the specific source of an ingredient that was used to

make a lot of finished product. It is not FDAs intent to mandate reengineering

of long-standing existing processes. Accordingly, the final rule requires linking

incoming with outgoing product only when this information is reasonably

available.

Although the definition of restaurant has not changed from the proposed

definition, FDA exercised its discretion and added language to the restaurant

exclusion in § 1.327(b) of this final rule to account for incidental sales of food

that a restaurant/retail facility does not prepare itself (e.g., food it purchases

from a manufacturer for sale to consumers). See the discussion earlier in

section III.E.14 of this document.

15. Retail Facility

As explained in response to comment 40 of this document, for purposes

of § 1.327(e) of this final rule, retail food establishment is defined to mean

an establishment that sells food products directly to consumers as its primary

function. The term consumers does not include businesses. A retail food

establishment may manufacture/process, pack, or hold food if the

establishments primary function is to sell from that establishment food,

including food that it manufactures/processes, packs, or holds, directly to

consumers. A retail food establishments primary function is to sell food

directly to consumers if the annual monetary value of sales of food products

directly to consumers exceeds the annual monetary value of sales of food

125

products to all other buyers. A retail food establishment includes grocery

stores, convenience stores, and vending machine locations. In addition, retail

food establishments that employ 10 or fewer full-time equivalent employees

are excluded from the requirements in subpart J of this final rule, except

§§ 1.361 and 1.363. (See response to comment 38 of the document for a further

discussion of FDAs rationale underlying this exclusion.)

16. Transporter

There were no comments on this definition. However, FDA is changing

the definition to make clear that foreign persons that transport food in the

United States are subject to these requirements regardless of whether they have

possession, custody, or control of that food for the sole purpose of transporting

that food.

17. Transporters Immediate Previous Source

There were no comments on this definition.

18. Transporters Immediate Subsequent Recipient

There were no comments on this definition.

19. You

There were no comments on this definition.

F. Comments on Do Other Statutory Provisions and Regulations Apply?

(Proposed § 1.329)

There were no comments on this issue.

126

G. Comments on Can Existing Records Satisfy the Requirements of This

Subpart? (Proposed § 1.330)

(Comment 79) Several comments state that the final rule requires

additional or more detailed data than what is already maintained and

recommend that the FDA and CBP work together with industry to avoid any

unnecessary burdens. A few comments requested that we also work closely

with TSA and FAA as those agencies consider modifications of their own rules.

The comments urge close coordination between the FDA and those other

agencies to avoid inconsistent or redundant regulations.

Several comments state that the proposed regulations do not strike a

proper balance in that some of the data elements requested are unnecessary

(redundant) and too burdensome on an industry already highly regulated by

several agencies requiring the same or similar information. For example, the

air cargo industry currently establishes and maintains industry air waybills,

bills of lading and commercial invoices, which are required by CBP to be

maintained for a period of 5 years. Moreover, CBP will be proposing a new

set of mandatory advanced notice information, including other data elements,

that could satisfy FDA in its effort to establish a complete tracing of activities.

(Response) FDA based the requirements of the final rule on what records

are needed by the Secretary for inspection to help the Secretary identify the

immediate previous sources and the immediate subsequent recipients of food,

including its packaging, to address credible threats of serious adverse health

consequences or death to humans or animals. Section 1.330 of subpart J of

this final rule states that duplication of existing records is not required if those

records contain all of the information required by subpart J. If a person keeps

records of all of the information as required by subpart J to comply with other

127

Federal, State, or local regulations (including those of TSA or FAA), or for

any other reason, then those records may be used to meet these requirements.

In addition, where a person currently has existing records that contain some,

but not all, of the required information, only records for the nonexisting

information needs to be created.

(Comment 80) One comment notes that CBPs current requirements would

apply to a trucking company transporting imported food into the United States

and manifest data would be maintained. The comment states that FDA could

easily coordinate with CBP to get the data from them in the event a threat

to the nations food supply is discovered, rather than develop its own distinct

recordkeeping regulations.

(Response) The Bioterrorism Act authorizes the Secretary (and, by

delegation, FDA) to require the establishment and maintenance of records to

address credible threats of serious adverse health consequences or death to

humans or animals. As discussed in response to comment 79, subpart J of this

final rule does not require duplication of existing records if those records

contain all of the information required by subpart J. Therefore, to the extent

information you keep for purposes of complying with CBP satisfies the

provisions of subpart J, you do not need to keep duplicate records.

(Comment 81) One comment states that past situations have demonstrated

that FDA already has a policy and good track record for finding and refusing

adulterated products and products that could pose a problem to the American

public. The comment questions how the final rule is going to improve upon

existing recordkeeping.

(Response) As explained in the proposed rule (68 FR 25188), FDA has been

involved in traceback investigations where not all necessary records were

128

established and maintained to enable FDA to conduct a complete tracing

investigation. By issuing these regulations, FDA believes that the likelihood

of such a situation recurring will be reduced. As discussed in response to

comment 93 of this document, for those covered persons already establishing

and maintaining records that contain all of the required information in subpart

J of this final rule, duplication of those existing records is not necessary. (See

response to comment 2 of this document for further discussion on FDAs past

experiences with traceback failures.)

(Comment 82) Several comments recommend that, for accuracy and

regulatory consistency, the final rule should recognize that compliance with

the bill of lading regulations of DOTs FMCSA will constitute compliance with

the transporters obligations under proposed § 1.352. The comments note that

bills of lading and freight/expense bills for motor carriers are legal documents

and contain sufficient information for the agency to be able to fulfill its

Bioterrorism Act responsibilities. The information to be included on the bill

of lading and freight/expense bills is prescribed by the United States

Department of Treasury at 49 CFR 373.101 and 373.103.

(Response) FDA agrees in part with the comments. The final rule has been

revised from the proposal. The final rule provides five alternatives for

transporters to meet their obligation to establish and maintain records. First,

transporters can meet the requirements of this final rule by keeping the records

listed in § 1.352(a) of this final rule. Second, transporters can meet the

requirements of this final rule by keeping the records listed in § 1.352(b) of

this final rule, which are included within the current requirements for roadway

interstate transporters under FMCSA regulations as of the date of publication

of this final rule (49 CFR 373.101 and 373.103). Third, transporters can meet

129

the requirements of this final rule by keeping the records listed in § 1.352(c)

of this final rule, which are included within the current requirements for rail

and water interstate transporters under STB regulations as of the date of

publication of this final rule (49 CFR 1035.1 and 1035.2). Fourth, transporters

can meet the requirements of this final rule by keeping the records listed in

§ 1.352(d) of this final rule, which are included with the current requirements

for international air transporters under the Warsaw Convention. Fifth,

transporters can meet the requirements of this final rule by entering into an

agreement with a nontransporter immediate previous source in the United

States or a nontransporter immediate subsequent recipient in the United States

to keep records for them. Such agreements must contain the elements specified

in § 1.352(e) of this final rule. Failure by the immediate previous source or

immediate subsequent recipient who enters into an agreement under § 1.352(c)

of this final rule to keep such records is a prohibited act under § 1.363 of this

final rule.

FDA notes that the FMCSA and STB regulations only apply to interstate

transporters, and this final rule applies to both interstate and intrastate

transporters. Intrastate transporters will be subject to the requirements of this

final rule because FDA has determined that imposing such requirements on

intrastate transporters comports with the Constitution, and these requirements

are necessary to allow FDA to identify the immediate previous sources and

immediate subsequent recipients of food in order to address credible threats

of serious adverse health consequences or death. Intrastate transporters can

meet this obligation by complying with either § 1.352(a), (b), (c), (d), or (e) of

this final rule.

130

As a practical matter, because the final rules requirements for interstate

shipments can be satisfied by existing records relating to interstate shipments,

the final rule only establishes new requirements for (1) intrastate transporters;

and (2) intrastate shipments conveyed by interstate transporters. FDA

estimates that there are approximately 115,000 intrastate carriers, and based

on DOT data, almost one million commercial drivers report intrastate travel.

In reviewing the truck tonnage by commodity, approximately 12 percent of

the intrastate shipments are of FDA-regulated food products. The average

distance these products are shipped is 231 miles, which means many

shipments are intrastate, especially in the larger western states.

For some foods, distribution may be limited primarily to intrastate

transportation, depending on the time of year and state. Many businesses have

their own delivery trucks that are used intrastate, several use employee

vehicles for deliveries, and many rent vehicles to deliver product. These

vehicles are used to deliver all types of food productsrefrigerated, cooked,

as well as fresh food and produce, and grocery items. Some local firms pick

up their own merchandise from warehouse facilities to stock their own

locations. Many of these warehouses (commonly referred to as bin

warehouses) may receive product via interstate transporter and subsequently

deliver to a variety of intrastate retail customers via many different intrastate

means.

Data on the volume of foods that move in intrastate commerce are

maintained by individual state Departments of Agriculture and by DOT. For

example, from CA, LA, TX alone, DOT reports over 12 percent of intrastate

truck tonnage is FDA-regulated products. Past traceback investigations provide

examples of the need to regulate intrastate transport. For example, in 2003,

131

there were two produce-associated outbreaks that occurred in CA from

intrastate shipments. There were also two Salmonella enteritidis outbreaks in

WI associated with intrastate shipments of eggs. Other foods, such as

pasteurized milk, nearly all raw products, seafood, and sprouts, may be

shipped either intrastate or interstate depending on the production or

processing site.

Most seafood consumed in FL is transported only intrastate, but in OK,

most seafood is transported interstate. In 2002, there was an outbreak in NJ

and FL linked to seafood. Intrastate records assisted us in pinpointing the

portion of the Indian River, FL that was causing the problem. In reviewing

egg tracebacks from 1996 to 2003, 35 percent of the tracebacks that resulted

in farm investigations were intrastate. This past summer, the state of Oregon

(OR) was able to stop a sprout-associated outbreak from becoming a serious

one by tracing back to a WA sprouter just over the border from OR after some

initial cases but before the Salmonella serotype had been identified. The

sprouts were recalled. If the sprouter had been located in OR so that the

sprouts were not transported interstate, it would have been problematic to a

traceback investigation for FDA to be limited to records only from interstate

transporters.

The NC green onion traceback investigation in 2003, which was part of

the largest Hepatitis A outbreak that has ever occurred in the United States,

is another example of the importance of intrastate records. There, the amount

of time spent on the traceback within that State was twice as long as the other

three tracebacks done in other states because the distributor in NC did not

have records. Traceback from the TN outbreak took over a month, the GA

traceback took a month, and Pennsylvania (PA) traceback took a week. Because

132

we had no intrastate records in the NC outbreak, the traceback was determined

to be inconclusive after two months, which meant that we would not have

been able to identify the farms involved if it had not been for the other

outbreaks.

This year, there was an Escherichia coli (E. coli) O157:H7 outbreak

associated with bagged lettuce product in CA that was only in intrastate

commerce. That traceback might have been lost had records not have been

available. Exempting intrastate transporters could significantly impede FDAs

ability rapidly and effectively to respond to a public health emergency

involving a food transported within a state, particularly if the adulteration

occurred during transport and the food was delivered to multiple sources

within the State. In scenarios where time is of the essence to prevent serious

injuries or death on a large scale, having records available becomes even more

critical. In addition, not only must FDA be able to rapidly obtain records, it

is imperative that FDA be assured that those records contain certain essential

information to allow FDA to prevent further harm in an efficient and effective

manner.

Additional examples of circumstances involving food products that have

significant intrastate manufacturing/processing or distribution are provided in

the following paragraphs:

An intrastate sandwich/snack food company that sells to retail outlets

for consumption had an outbreak of Listeriosis or Salmonellosis that was traced

back to the sandwiches. The product was completely distributed using the

company trucks within the state. FDA was unable to determine which

sandwiches caused the outbreak. The sandwiches were delivered to retail

customers, and it was impossible to track which sandwiches went to which

133

retailer. The transporter did not track which product was delivered to which

location. In this case, the firm had to recall all of its products.

Retail stores regularly purchase food, especially locally grown produce,

from truck farmers. These farm trucks travel from store to store within a

state, sometimes selling an entire truckload to a store, other times a portion.

There is no manifest or record other than a bill of salee.g., 200 cantaloupes

from Farmer Brown. If the contamination occurred on the truck, FDA would

not have a record from the truck of all other delivery sites.

Several days into the investigation of a Hepatitis A outbreak from

chicken salad in one city, FDA learned that the chicken was cubed at

another facility in another city within the state, and transported to the

manufacturing facility. The source of the outbreak was the site where the

chicken was cubed by an ill employee; however, there were no records to

indicate when the cubed product was shipped or received by the salad

manufacturing facility.

(Comment 83) One comment suggests that the final regulation should

clarify that transportation record includes the various documents that may

be developed by a company that contain the information specified in the

regulation. They do not believe that it would be necessary to include all of

this information in one shipping document. The comment notes that industry

currently collects much of the data that would be requested by FDA but these

data are not found in one document, and in some instances, may be found

at various locations within the manufacturing facility. Significant time and

expense could be involved in making the modifications to the companys

computer and recordkeeping systems to have a system that develops a

transportation record that contains all of this information on one form. Such

134

a requirement would be unreasonably onerous, particularly if the companys

system is designed to make certain that the company can provide all of this

information to the agency within the specified time. The respondent asks the

agency to clarify in the final rule that it is not necessary to develop one

transportation record that contains all of the information in a single form.

(Response) FDA confirms that it is not necessary to develop one record

that contains all of the information. FDAs intent is to have as little impact

as possible on current recordkeeping practices if those records can meet the

requirements of these regulations. The final regulation has been clarified to

explicitly provide in § 1.360 that you must create the required records when

you receive and release food, except to the extent that the information is

contained in existing records. FDA is requiring that specific information be

kept by a covered person, but is not specifying the form or type of system

in which those records must be maintained. The required information may be

contained entirely in one record or spread among many different records. The

person subject to these regulations is responsible for ensuring that it keeps all

applicable records and that those records are available to FDA under the record

availability requirements in § 1.361 of this final rule.

(Comment 84) A few comments note that the recordkeeping requirements

under existing FDA regulations, such as Substances Prohibited From Use in

Animal Food or Feed (21 CFR part 589), Current Good Manufacturing Practice

for Medicated Feeds (21 CFR part 225), and Fish and Fishery Products (seafood

Hazard Analysis Critical Control Point (HACCP)) (21 CFR part 123) should be

sufficient and deemed adequate to meet the requirements under the

Bioterrorism Act and that FDA should not introduce additional, stand alone,

recordkeeping systems.

135

(Response) As discussed in response to comment 79, § 1.330 of the final

regulation states that duplication of existing records is not required if those

records contain all of the information required by subpart J of this final rule.

That includes records kept under the regulations identified in the comment.

(Comment 85) One comment states that it would be beneficial if FDA

announced the suitability of records kept under existing requirements well

ahead of the implementation deadline under the Bioterrorism Act.

(Response) FDA is not able to determine what records currently exist

throughout the entire food industry that satisfy these regulations due to the

diversity and complexity of the food industry and the various existing Federal,

State, and local regulations that require recordkeeping, as well as varying

business practices. The person subject to these regulations is responsible for

ensuring that it keeps all applicable records and that those records are available

to FDA under the record availability requirements in § 1.361 of this final rule.

FDA points out that the earliest compliance date of this final rule is [insert

date 12 months after date of publication in the Federal Register], and that

many persons are not required to comply with this final rule for up to 2 years

after publication. Therefore, FDA believes that it has provided sufficient time

for persons to determine what, if any, additional information must be kept to

comply with these provisions well ahead of the compliance date of this final

rule.

(Comment 86) A few comments note that most food companies currently

maintain the chain of distribution information that FDA proposed, but the

diversity and complexity of the food industry means that the information is

maintained in many different ways and formats, ranging from computerized

records systems to file folders of paper records. The comments state that it

136

should be of no concern to FDA and, therefore, not the subject of the

regulations to prescribe any specific manner or form of maintaining the

information.

(Response) As discussed in response to comments 1 and 83 of this

document and in the proposed rule, FDAs intent is to have as little impact

as possible on current recordkeeping practices if those records can meet the

requirements of these regulations. FDA is requiring specific information be

kept by a covered person, but not specifying the form or type of system in

which those records must be maintained. The person subject to these

regulations is responsible for ensuring that it keeps all applicable records and

that those records be made available to FDA under the record availability

requirements in § 1.361 of this final rule. To satisfy the requirements in this

final rule, paper or electronic records or a combination of the two may be used.

H. Comments on What Information is Required in the Records You Must

Establish and Maintain to Identify the Nontransporter and Transporter

Immediate Previous Sources and Immediate Subsequent Recipients? (Proposed

§§ 1.337 and 1.345)

1. General Comments

(Comment 87) Several comments state that the information required by

the recordkeeping regulations exceeds the information required by the

Bioterrorism Act, thereby exceeding FDAs statutory authority. Some of these

comments state that according to the Bioterrorism Act, the regulations need

to provide that those persons subject to the recordkeeping requirement

maintain the one-up and one-back information in a records maintenance

system in which the information is reasonably accessible to FDA upon request.

The comments ask that FDA consider the diversity and complexity of the food

137

industry and allow for more flexibility. They contend that the name and

address of the person from whom an article of food was received or to whom

it was shipped and a description of the article of food should be sufficient.

The comments further suggest that not all companies require or need the same

type of identification as other members in the food chain, e.g., lot numbers

and identity preserved ingredients. They request that, because of this diversity

in the supply chain, the agency not define rigid identification requirements.

The comments contend that this flexibility is in keeping with the intent of

the Bioterrorism Act and will avoid dramatic changes to what are currently

efficient and effective business practices.

(Response) FDA disagrees that the information required by the rule

exceeds FDAs authority under the Bioterrorism Act. The Bioterrorism Act

authorizes FDA to require records needed to allow the Secretary to identify

the immediate previous sources and immediate subsequent recipients of food,

including its packaging, in order to address credible threats of serious adverse

health consequences or death in humans or animals. FDA believes the

information it is requiring to be established and maintained meets this

standard.

Information such as the specific name of the food will allow FDA to limit

its investigation to the implicated food. For example, if FDA has a reasonable

belief that a shipment of cheddar cheese is contaminated, traceback or trace

forward would be better facilitated if the records contained the identifier

cheddar. This would help FDA narrow its investigation and increase the

speed of the trace. The information would also help the involved firm limit

the scope of any recall, should it be necessary. However, FDA does recognize

the diversity of the food chain and has allowed for flexibility in the final rule.

138

For example, the requirement to record lot/code number or other identifier

applies only to persons who manufacture, process, or pack food and only to

the extent that information exists. Also, the final rule allows covered persons

to use existing abbreviations or codes currently used to identify the food.

However, if these abbreviations and/or codes are used, they must be readily

deciphered for FDA upon request so that an adequate description of the food

is recorded.

(Comment 88) One comment questions the need for the extensive

recordkeeping requirements in the regulations and suggests that much of the

facility information required in the recordkeeping rule is already required in

the registration interim final rule. The comment gives as an example the

duplicate requirements that the nontransporter must maintain a record of the

responsible individual, fax number, and e-mail address for: (1) The facility that

shipped product to your facility, (2) the transportation company that delivered

the product, (3) the transportation company that picked up product from your

facility, and (4) the facility where your product is being shipped.

(Response) FDA does not agree that much of the information required

under this recordkeeping rule is already required under the registration interim

final rule. Information required under the registration interim final rule

pertains to the facility itself, including information about the general food

product categories that the facility manufactures/processes, packs, or holds.

Information that this final rule mandates be established and maintained in

records is information pertaining to food that will assist FDA in identifying

the immediate previous sources and the immediate subsequent recipients of

all food that is received and released by a person. In addition, to complete

the tracing investigation, the identity of the transporters who transported the

139

food to and from the sources and recipients is required, which is not covered

by the facility registration. Moreover, the scope of section 305 of the

Bioterrorism Act (registration) is not as broad as section 306 of the Bioterrorism

Act (establishment and maintenance of records). Specifically, registration

applies only to facilities that manufacture, process, pack, or hold food for

consumption for humans or animals in the United States. Recordkeeping

applies to these facilities, as well as those who transport, distribute, receive,

or import food. Recordkeeping also applies to all food regardless of whether

it will be consumed in the United States or exported.

However, FDA has deleted the requirement that persons subject to subpart

J of this final rule identify a responsible individual in the records. Instead,

for those facilities required to register under part 1, subpart H, FDA will use

the emergency contact telephone number provided by those facilities. For other

facilities, FDA does not believe requiring such facilities to provide an

emergency contact telephone number is needed to assist the Secretary to

identify the immediate previous sources and immediate subsequent recipients

of food, since that telephone number would be contained in the very records

FDA would be seeking assistance in locating.

(Comment 89) One comment states that it is unreasonable to require

nontransporters to have a record of the intermediate transporters, i.e.,

transporters who do not have direct contact with the nontransporters.

(Response) Neither the proposed rule nor the final rule requires

nontransporters to establish and maintain records identifying intermediate

transporters. With respect to transportation records, § 1.337(a)(6) of this final

rule only requires nontransporters to establish and maintain records of the

transporter that brought the food to them. Similarly, § 1.345(a)(6) of this final

140

rule only requires nontransporters to establish and maintain records of the

transporter that took the food from them. The transporters are required to keep

records that identify intermediate transporters.

(Comment 90) One comment states that some firms use carriers such as

United Parcel Service, Federal Express, and the United States Postal Service

to deliver their products and conduct all their transactions with these carriers

via the Internet. The address and fax numbers of these carriers are not relevant.

The comment requests that FDA revise the section on identifying information

of the transporter to require only sufficient identifying information.

(Response) FDA disagrees with this comment. In the event that FDA has

a reasonable belief that an article of food is adulterated and presents a threat

of serious adverse health consequences or death to humans or animals, FDA

would need to determine from the source and recipient records who

transported the subject food to complete the tracing investigation. Although

the transportation may be arranged over the Internet, companies such as those

mentioned in the comment have fixed addresses, such as a corporate

headquarters, that would need to be included in the record so that if FDA had

to access their existing records under section § 1.361 of this final rule, FDA

would know where to go.

(Comment 91) One comment states that wines produced in France are sold

by someone other than the producer and that the producer never knows the

destination of the wine. The comment states that the recordkeeping

requirement is an unnecessary burden on the producer because much of the

producers wine may be sent to destinations other than the United States.

(Response) There is no requirement for a person that manufactures or

processes food to know the ultimate destination of its product. A person

141

subject to subpart J of this final rule is only required to establish and maintain

records to identify the transporter and nontransporter immediate previous

sources and transporter and nontransporter immediate subsequent recipients

of food. Further, FDA notes that it has excluded all foreign persons, except

foreign persons who transport food in the United States, from all of the

regulations in subpart J.

(Comment 92) One comment requests clarification on the records

requirements for products produced before the regulations take effect.

(Response) Covered persons are required to establish and maintain records

to identify the immediate previous sources and the immediate subsequent

recipients of all food as of the compliance date of this final rule, keeping in

mind the staggered compliance dates provided in § 1.368 of this final rule. If

a food was received before the compliance date of this final rule, then there

is no obligation to keep records of the immediate previous sources of that food.

If a food is released on or after the compliance date of this final rule, you

must establish and maintain records of the immediate subsequent recipients

of the food, regardless of when that food was produced or received.

2. Information Reasonably Available to Identify the Specific Source of

Each Ingredient

(Comment 93) A few comments state that the requirement to keep records

that identify the specific source of each ingredient to a lot of finished product

exceeds the intent of the Bioterrorism Act. One comment adds that the

language in the Bioterrorism Act clearly authorizes a regulation to require the

maintenance of records that show the person from whom a product is received

and the person to whom a product is sent. The comment states that there is

nothing in the language of the Bioterrorism Act or in its legislative history that

142

would support including a requirement that products received be directly

associated with products that are shipped.

(Response) FDA does not agree with these comments. Section 306(b) of

the Bioterrorism Act expressly states that the Secretary

* * * may by regulation establish requirements regarding the establishment and

maintenance, for not longer than two years, of records by persons (excluding farms

and restaurants) who manufacture, process, pack, transport, distribute, receive, hold,

or import food, which records are needed by the Secretary for inspection to allow

the Secretary to identify the immediate previous sources and the immediate

subsequent recipients of food, including its packaging, in order to address credible

threats of serious adverse health consequences or death to humans or animals

(emphasis added).* * *

Thus, the Bioterrorism Act clearly gives FDA the authority to determine what records are needed to achieve this objective.

The final rule contains those requirements that FDA has determined are necessary to help FDA identify the immediate previous sources and immediate subsequent recipients of food to address credible threats of serious adverse

health consequences or death to humans or animals. If FDA cannot immediately narrow its tracing to a specific source, tracing becomes much more difficult and time-consuming, there is an increased risk to consumers, and some food sources may be unfairly implicated. FDA notes, however, that

the final rule (§ 1.345(b)) only requires nontransporters to identify the specific

source of each ingredient that was used to make every lot of finished product

to the extent such information is reasonably available.

(Comment 94) A few comments state that they are not able to provide

information that ties the specific source of each ingredient to a lot of the

finished product. Several comments agreed with FDAs decision to require

143

identification of the specific source of an ingredient in a finished product only

when the information is reasonably available. Some comments request that

the agency make clear in the final rule that, in many instances, it will be

impossible to identify the specific source of a material that is held in bulk

and that multiple sourcing information in recordkeeping is to be anticipated

for raw materials that are held in bulk form.

Several other comments state that, because their ingredients are

commingled, they are unable to provide FDA with information that ties the

specific source of each ingredient to a lot of the finished product. Certain bulk

products such as flour, shortening, vegetable oil, fructose syrup, and milk

cannot be identified as ingredient lots. Other comments state that the ability

to identify specific sources of ingredients will vary based on many factors. One

comment states that produce is often commingled to meet marketplace needs.

A few comments state that some processors commingle ingredients in their

processing operations, which makes it impossible to trace the specific source

of ingredients to a lot of finished product. One comment states that most

companies would only be able to produce possible sources of ingredients in

batches of final products. The comment asserts that companies should only

be required to do so in a crisis.

(Response) FDA acknowledges that certain business practices are not

amenable to linking incoming ingredients with outgoing product and that it

may not always be possible to identify the specific source of an ingredient

that was used to make a lot of finished product. It is not FDAs intent to

mandate reengineering of long-standing existing processes. For this reason, the

final rule requires the identification of the specific source of each ingredient

that was used to make every lot of finished product only when the food is

144

released and only if this information is reasonably available. With respect to

the comment that companies should only be required to produce records

during a crisis, the agency notes that FDA will request access to the records

under section 306 of the Bioterrorism Act only when it has reasonable belief

that an article of food is adulterated and presents a threat of serious adverse

health consequences or death to humans or animals.

(Comment 95) One comment requests that the agency accept testing of

each delivery of incoming product as a substitute for the requirement to tie

the specific source of each ingredient to a lot of the finished product. The

comment asserts that this testing provides the needed safeguards and would

ensure that the ingredient is not contaminated chemically, physically, or

biologically.

(Response) The agency does not agree with this comment. The comment

fails to specify the nature of the chemical, physical, or biological tests being

proposed, or what sampling scheme would be conducted to ascertain that the

incoming ingredient is not contaminated. Moreover, only nontransporters are

required to identify the specific source of each ingredient that was used to

make every lot of finished product, and they are required to do so only if this

information is reasonably available. FDA also notes that it has deleted this

provision from § 1.337(a) of this final rule and instead inserted it in § 1.345(b)

of this final rule. The agency believes records are more likely to be reasonably

available to persons when they release food made from the ingredients than

when the persons receive the ingredients under § 1.337 of this final rule.

(Comment 96) A few comments request that the agency treat processing

aids and incidental additives as it does commingled ingredients. The

comments state that they are able to identify the source(s) in use in a facility

145

when specific food products were produced, but are not able to identify the

source of the processing aid or incidental additive used to produce a specific

lot of food.

(Response) The recordkeeping requirements in these regulations apply to

all food unless specifically exempted. Processing aids may be food additives

or a generally recognized as safe ingredient. In either case, they fall within

the definition of food and are subject to these regulations. If the manufacturing

process is such that a processing aid was used to make a specific lot of a

finished food product, then the specific source of each processing aid should

be identified in the records to the extent that information is reasonably

available.

(Comment 97) Several comments ask that the agency clarify the term

reasonably available and provide guidance on what the agency considers is

reasonably available. One comment suggests that the agency use

hypothetical case studies as guidance.

(Response) What is reasonably available is going to depend on the

particular circumstances. To illustrate this point in the proposed rule, FDA

used a hypothetical case of a cookie maker. (See 68 FR 25188 at 25197.) A

company that bakes cookies may source flour from five different companies

rather than depend on a single company as its supplier. The flour from the

five companies may be stored in one common silo before being used in the

manufacture of the cookies. In this scenario, the manufacturer could identify,

depending on the date the flour was received from each company and placed

in the silo and when the silo was emptied, the various companies that were

the sources of the flour. Under this situation, the information is not reasonably

available to determine a single source of the flour used in a particular lot of

146

cookies. The information reasonably available to the manufacturer would be

the identity of all of the potential sources of the flour for each finished lot

of cookies. However, if the manufacturer had dedicated silos for each supplier

of flour, then the information would be reasonably available to the

manufacturer to specify the specific source of the flour for each finished

product. If we determine that additional guidance is needed, FDA will consider

issuing guidance in the future to explain this requirement further. Again, FDA

notes that this requirement now appears in § 1.345(b) of this final rule and

has been deleted from § 1.337(a) of this final rule.

(Comment 98) One comment states that manufacturers of packaging face

the same issues as processors who deal with commingled ingredients. The

comment explains that, during the manufacture of multiple-layer packaging

products, it is common to use multiple lots of raw material within a master

roll of semifinished or finished product. An example of this condition would

be a paper/foil lamination where one roll of foil and three to four rolls of paper

are used in the same production run. In this situation, the lot numbers of the

raw materials and the lot numbers of the finished products may be known,

but it cannot be determined with precision which lot of the input materials

is in an individual roll of finished product.

(Response) Manufacturers of packaging (the outer packaging of food that

bears the label and does not contact the food) are excluded from all

requirements of subpart J of this final rule unless such persons also

manufacture, process, pack, transport, distribute, receive, hold or import food

in the United States, in which case they are subject to §§ 1.361 and 1.363 of

this final rule as to the foods packaging. Manufacturers of food contact

substances, whether or not the substances are the finished container that

147

directly contacts the food, are excluded from all of the requirements of subpart

J, except §§ 1.361 and 1.363 of this final rule. Therefore, such manufacturers

are not required to know which lot of the input materials is in an individual

roll of finished product.

(Comment 99) Several comments request that the agency clarify the term

ingredient with respect to distilled spirits that have innumerable sources of

ingredients dependent upon the category and particular brand. The comments

state that there is a question of interpretation as to what is meant by

ingredients, given that the distilling process changes substantially the character

and chemical composition of the raw materials and some of them may even

be absent from the final product.

(Response) Alcoholic beverages are within the definition of food in

§ 1.328 of this final rule. A manufacturer of alcoholic beverages is required

under § 1.337 of this final rule to identify the source of each ingredient that

was received to make the alcoholic beverage, regardless of whether it later

changes character and chemical composition.

(Comment 100) One comment suggests that the agency reconsider the

requirement for immediate previous sources of bottled water. The comment

asserts that the detail of records required under the regulations will not exist

in many cases because the bottled water source will be directly out of the

ground and that the bottler will capture any potential concerns of a serious

threat of adverse health consequences. The comment suggests that water be

viewed as other primary agricultural food ingredients.

(Response) Bottled water is within the definition of food as defined in

§ 1.328 of this final rule. If water is obtained from a public water system, then

148

the public water system is the immediate previous source. If ground water is

used, then the location where the water was extracted should be provided.

(Comment 101) One comment recommends that, in requiring a record of

the raw material of a product, the agency should limit its requirement to that

of major ingredients of the product.

(Response) FDA does not agree with the comment. The comment neither

explains what distinguishes a major ingredient from a minor one, nor why the

agency should limit its requirement to major ingredients only. Even if an

ingredient is present only in small quantities, it may pose a risk and could

be the focus of an intentional attack (e.g., the deliberate addition of a chemical

toxin or pathogens), which would further contaminate food products to which

they are added.

3. Requirement to Record Responsible Individual

(Comment 102) Several comments object to the requirement to name a

responsible individual as duplicative of a requirement in the registration

interim final rule. The majority of these comments ask that FDA use the

emergency contact information required in the registration interim final rule

in place of the responsible individual. The comments suggest that using the

emergency contact information would give the agency rapid access to the

information and provide the industry with flexibility. The comments state that

there is no demonstrated need for the record of each commercial transaction

involving the distribution of food to contain the name of a responsible

individual, and that the requirement for a responsible individual is too rigid,

as there is a high turnover of employees in many companies and the naming

of a specific person as the responsible individual would require frequent

updating.

149

(Response) FDA agrees with the comments that there is little utility from

requiring that the record of each commercial transaction involving the

distribution of food contain the name of a responsible individual, due to the

fact that individuals change jobs within and among companies very often,

making it unlikely that the person named in the record will have responsibility

for the food at issue when FDA seeks to effect a traceback. FDA further notes

that, for those facilities required to register under part 1, subpart H, FDA

already has the emergency contact designated in the registration under

§§ 1.232(d) and (e) and 1.233(d) or § 1.233(e). As explained previously, FDA

does not believe this information is necessary for those facilities not required

to register under 21 CFR part 1, subpart H, because including an emergency

contact telephone number in records being kept will not assist the Secretary

in locating the records because FDA would not have the emergency number

until it had already accessed the records.

(Comment 103) Some comments suggest that, rather than requiring a

specific individual, the agency require a department such as a quality

assurance department.

(Response) As explained in response to comment 63 of this document,

FDA has deleted the proposed requirement that a responsible individual be

listed in each record.

4. Adequate Description of Type of Food

(Comment 104) One comment notes that specific variety is not

appropriate for many food ingredients and should be changed to common

name.

(Response) FDA is requiring an adequate description of the type of food

received or released to include brand name where applicable and specific

150

variety where applicable (e.g., brand x cheddar cheese, not just cheese; or

romaine lettuce, not just lettuce). FDA agrees that specific variety may not

apply in all cases, but should be provided where it applies because it will

help narrow the investigation and help FDA identify the immediate previous

sources and immediate subsequent recipients of food to address credible

threats of serious adverse health consequences or death to humans or animals.

(Comment 105) Some comments recommend that the agency allow the use

of company specific codes or an existing abbreviation system. One comment

states that commercial documents often incorporate code numbers and

abbreviations that identify the food products very specifically. The comments

add that, as long as these codes and abbreviations can be deciphered readily

for FDA in the event of an agency request for records, the product descriptions

should be considered sufficient in their present form.

(Response) As discussed in response to comment 103 of this document,

in keeping with FDAs intention to ensure these regulations are not

unnecessarily burdensome, FDA agrees that covered persons may use existing

abbreviation or code systems that identify the food very specifically, provided

the abbreviations or codes can be readily deciphered at the time the records

are made available to FDA following an agency request.

(Comment 106) Some comments who represent warehouses state that they

rely on the customers description of the product as the food comes to them

in shrink-wrapped pallets and cartons and the warehouse is not permitted to

open the packaging.

(Response) It is not clear from the comment what the customers

description entails; however, FDA is requiring an adequate description of the

type of food to be able to narrow the scope of the implicated food in the event

151

of a public health emergency. For this reason, each entity within the chain

of distribution of the food must establish and maintain records that adequately

describe the type of food received and released so that FDA can identify the

immediate previous sources and immediate subsequent recipients of food to

address credible threats of serious adverse consequences or death to humans

or animals. It is the responsibility of the covered entity to revise its

recordkeeping system so that it establishes and maintains records containing

all required information. In the previous example, the warehouse may need

to require its customers to provide it with a more detailed description when

food is delivered or released than it currently receives.

5. Date Food Received or Released

(Comment 107) One comment agrees with the proposed requirement.

Another stated that the term released is ambiguous in a commercial

environment and asked for clarification.

(Response) Under §§ 1.337 and 1.345 of this final rule, if you are a

nontransporter, you must establish and maintain records to identify the date

you received and released food. Food is released when it moves from one

covered activity to another covered activity (unless both activities are

conducted by the same person). For example, an article of food is released

from the manufacturer when it is given to the transporter. The food is released

again when the transporter delivers the food to a grocery store. Where the

manufacturer transports its own food to the grocery store, however, the food

is not released when the manufacturer loads his trucks, but rather when the

manufacturer delivers the food to the grocery store.

152

6. Lot or Code Number/Other Identifier

(Comment 108) Several comments state that some products do not have

lot numbers (e.g., bulk produ