Saturday, June 06, 2009

Lots of Legislation

See the update below on the Food Safety Enhancement Act and the FDA Globalization Act.

There are a few things making their way through Congress that might be of interest.

H.R. 2355 MOVEMENT Act

First of all, how hard does Congress work to come up with these catchy acronyms? This one is the Making Opportunities Via Efficient and More Effective National Transportation Act of 2009. Seriously, even if this is the best law ever, we should use it as an example to stamp out bad bill names and tortured acronyms.

The bill is intended to provide funding for projects to improve the movement of goods nationally, mitigate associated environmental damage, and provide supply chain security. The bill seeks to create the National Movement of Goods Improvement Fund. The funds for the fund come from moving about 71% of the presently collected Harbor Maintenance Taxes into the fund. That money can then be allocated to the Department of Transportation for certain projects to improve the transportation infrastructure.

Of more immediate interest to importers is section 202, which increases the Harbor Maintenance Tax to 0.4375 percent of value. That's up from 0.125 percent. For merchandise entering via a foreign port, the new HMT will apply at a rate of 0.3125 percent. I'm lookin' at you, Montreal. HMT will not apply to goods originating (in a technical sense) in Mexico or Canada.

H.R. 875 Food Safety Modernization Act of 2009

At least it does not have a silly name.

This bill would establish a Food Safety Administration within the Department of Health and Human Services. For food importers, note that the Bill creates the requirement that foreign food establishments register with the new agency annually. Registration will require the identification of the name, address, contact name, primary business activity, types of foods processed, and a 24-hour contact in the U.S. The bill gives the agency authority to inspect food facilities in the U.S. and in foreign countries and sets up recordkeeping requirements.

Section 208 covers imports. The bill attempts to create (in two years) a process for certification that food complies with U.S. standards by the foreign governments or independent certifying agents. For high-risk imports (like meat), the agency will be able to designate limited ports for entry. In five years, less risky categories that are not certified will only be able to enter through metropolitan ports with an accredited food safety lab. The agency will have authority to deny entry to food entered without the proper certification or from countries that do not cooperate with the proposed audit process.

UPDATE: This bill is not to be confused with the Food Safety Enhancement Act of 2009.  As it happens, it appears that this latter bill has more momentum behind it.  This bill is more comprehensive in that if covers food, drugs, and devices.  Like the Modernization bill, the Enhancement Act would create a registry of food facilities in the U.S. and importing to the U.S.  There would be an annual registration fee of $1,000.  Food facilities would need to implement safety plans to ensure safe production coupled with increased inspections.  The bill also includes certification by the exporting country government or authorized third parties.  

Importantly, the Enhancement Act includes more provisions relating to customhouse brokers. Brokers will need be registered with the FDA as a food facility.  The fee has not yet been set. If problems occur, the broker's registration may be suspended or cancelled.  Broker facilities will become subject to inspection by FDA personnel.  

Unfortunately, there is also the Food and Drug Administration Globalization Act of 2009 (H.R. 759), which seeks to accomplish many of the same goals but seems to go more lightly on brokers.  These bills all seem to be in Committee.  Hopefully, something reasonable and unified will come out.

And, finally, S.730 The Affordable Footwear Act of 2009

This one is aptly named. The objective is to remove the tariffs on footwear. The drafters appear to have made an effort to carve out types of shoes not made in the U.S. That should help avoid domestic opposition.

The bill includes these interesting findings:

Congress finds the following:
(1) Average collected duties on imported footwear are among the highest of any product sector, totaling approximately $1,900,000,000 during 2006.

(2) Duty rates on imported footwear are among the highest imposed by the United States Government, with some as high as the equivalent of 67.5 percent ad valorem.

(3) The duties currently imposed by the United States were set in an era during which high rates of duty were intended to protect production of footwear in the United States.

(4) Footwear produced in the United States supplies only about 1 percent of the total United States market for footwear. This production is concentrated in distinct product groupings, which are not impacted by the provisions of this Act.

(5) Low- and moderate-income families spend a larger share of their disposable income on footwear than higher-income families.

(6) Footwear duties, which are higher on lower-price footwear, serve no purpose and are a hidden, regressive tax on those people in the United States least able to pay.

No comments: