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Statement of Need: In 1998, the General Accounting Office issued a report titled, "Food Safety: Federal Efforts to Ensure the Safety of Imported Foods Are Inconsistent and Unreliable." The report stated that some food importers evade import controls and are able to introduce contaminated, adulterated, or unsafe food into the United States even after FDA refused to admit the food and the Customs Service ordered the food to be reexported or destroyed. Additionally, in 1998, the Senate Permanent Subcommittee on Investigations conducted hearings on the safety of food imports. The subcommittee heard testimony about reimporting refused foods through another port (a practice known as "port shopping"). On July 3, 1999, then-President Clinton issued a memorandum to the Secretary of Health and Human Services and the Secretary of the Treasury directing them, in part, to take all actions available to "prohibit the reimportation of food that has been previously refused admission and has not been brought into compliance with United States laws and regulations" by requiring the marking of shipping containers and/or papers of imported food that is refused admission for safety reasons. Consequently, on January 22, 2001, FDA and the Department of the Treasury jointly issued a proposed rule (66 FR 6502) that would have required that imported food that has been refused admission for safety reasons be marked as "UNITED STATES: REFUSED ENTRY." The mark would make it easier to detect previously refused food and reduce, if not eliminate, "port shopping." However, on June 12, 2002, before FDA and Treasury could prescribe a final rule, the Bioterrorism Act became law. Section 308(a) of the Bioterrorism Act created a new section 801(n) of the Federal Food, Drug, and Cosmetic Act (the act) to clarify FDA’s authority to require the owner or consignee of a food that had been refused admission into the United States to "affix to the container of the food a label that clearly and conspicuously bears the statement: 'UNITED STATES: REFUSED ENTRY'." Although section 308(c) of the Bioterrorism Act stated that "nothing in this section shall be construed to limit the authority of the Secretary of Health and Human Services or the Secretary of the Treasury to require the marking of refused articles of food under any other provision of law," the new statutory provision differed from the January 22, 2001, proposed rule and prompted FDA to withdraw the proposal on August 21, 2002 (67 FR 54138). The new proposal would describe the label requirements for imported food that has been refused admission into the United States.

Summary of the Legal Basis: Section 801(a) of the act authorizes FDA to refuse to admit imported food if the food has been manufactured, processed, or packed under insanitary conditions, is forbidden or restricted in sale in the country in which it was produced, or is adulterated or misbranded. Additionally, as explained earlier, section 801(n) of the act gives FDA express authority to require the owner or consignee of a food that had been refused admission into the United States to "affix to the container of the food a label that clearly and conspicuously bears the statement: 'UNITED STATES: REFUSED ENTRY'." Sections 402 and 403 of the act describe when a food is adulterated or misbranded, respectively. Section 701(a) of the act authorizes FDA to issue regulations for the efficient enforcement of the Act, while section 701(b) of the act authorizes FDA and the Department of the Treasury to jointly prescribe regulations for the efficient enforcement of section 801 of the act. The proposed rule is within FDA’s authority at sections 402, 403, 701, and 801 of the act. In general, unsafe food is often adulterated under section 402 of the act and may also be misbranded under section 403 of the act. Requiring a label on refused foods that have been so refused will make it easier for FDA to refuse to admit previously refused, adulterated, or misbranded food imports into the United States. Additionally, section 301 of the Public Health Service Act (PHS act) authorizes FDA to “render assistance” to appropriate health authorities in the conduct of or to promote coordination of research, investigations, experiments, demonstrations, and studies relating to the causes, diagnosis, treatment, control, and prevention of disease. Section 361 of the PHS act authorizes FDA to issue regulations to prevent the introduction, transmission, or spread of communicable diseases into the United States. Affixing a label would alert foreign officials to previously refused food and help prevent the introduction, transmission, or spread of communicable diseases into the United States by making it more difficult for unsafe food to reenter the United States.

Alternatives: FDA considered exempting small businesses from the rule, but, because most importers and consignees would qualify as small businesses, this would negate the rule’s purpose. The agency also considered ordering the destruction of all refused food imports, but this would not be feasible because it would divert Federal resources to supervising or otherwise ensuring that the refused food imports are stored until they can be destroyed and that they are destroyed. FDA also rejected affixing the label on some, but not all, imported food refused entry for safety reasons. While this alternative would be less costly, it would also be less efficient because some refused food imports would be able to reenter the United States and because a previously refused, but unlabeled, food would be difficult to detect compared to a previously refused and labeled food. This alternative would also result in arguments as to the criteria to be applied and whether a particular food should be labeled.

Anticipated Costs and Benefits: Importers and consignees would bear the costs associated with affixing the label to refused food imports. The rule’s costs would, therefore, consist of labor costs (to affix the label) and equipment costs (the label equipment used). FDA will estimate these costs in the proposed rule. The rule's principal benefit would be a reduction in the number of illnesses and injuries caused by unsafe imported food. The Agency is unable to quantify the amount of illegal importation of previously refused foods, so it cannot accurately predict the value of reduced illnesses and injury.

Risks: There is a possible risk previously refused, unpackaged food (such as loose grain in a railroad car) would be able to enter the United States because the food itself cannot be labeled, although the proposed rule would require the importer or consignee to affix a label on papers accompanying the product.