The Quest
Inside this issue:

Help us with our Hurricane Sandy relief efforts; Risk management tips to help your business

What you need to know about the 2012 Transportation Bill

NVOCC China rider increase effective Nov. 23

New provisions regarding legal disputes for freight forwarders in China

New Jersey seeks to ban companies classifying truck drivers as independent contractors

Customs brokers face increased liability risks under food safety act

CARB Update: Clarification of regulations applicability to customs brokers, freight forwarders and NVOCCs nationwide; new SmartWay regulations

CBP updates ACEopedia
(click here to access)


Customs brokers face increased liability risks under food safety act

Enacted in January 2011, the Food Safety Modernization Act (FSMA) was the most sweeping reform of U.S. food safety laws in more than 70 years. While its goal was to keep the U.S. food supply safe, customs brokers who act as U.S. agents for food importers are now faced with increased liability.

Since 2003, companies that manufacture, process, pack or hold food for consumption in the United States must register with the FDA. While registration has been in effect since this time, FSMA provisions now require all companies to renew their registrations biennially. Renewals for this year must be completed by Dec. 31 and can be submitted online at www.fda.gov/furls

When foreign facilities submit their registration, they have been required to designate a U.S. agent, who would traditionally serve as a point of contact for the FDA. Now, however, under the FSMA, the U.S. agent is exposed to the increased liability of being held responsible to pay any applicable FDA re-inspection fees.

Re-inspection fees are charged when FDA inspectors have to return to a facility after finding non-compliance with food safety requirements during an initial inspection. The FDA charges $289 per hour for all activities related to re-inspection of a foreign facility, including traveling, writing reports and any components deemed necessary.

Invoices are then sent to the U.S. agent. Payment must be made within 90 days of the invoice date in U.S. currency by check, bank draft, or U.S. postal money order payable to the order of the Food and Drug Administration. Under section 743(e)(2) of the FD&C Act, invoices that are not paid within 30 days after it is due shall be treated as a claim of the U.S. government, subject to provisions of subchapter II of chapter 37 of title 31, United States Code.

The NCBFAA has already called on the FDA to revise the process for designating a U.S. agent. Now that registrations for this year are underway, companies should contact the FDA to determine if they are designated as a foreign food company’s U.S. agent or if they would like their name removed as an entity’s U.S. agent. To contact the FDA, companies can email FURLS@FDA.gov

We understand the increased liability that customs brokers can face as a result of being designated a U.S. agent. We remain committed to providing the highest level of service to our clients. Avalon works to keep you apprised of governmental changes affecting your business. We are the leading provider of insurance and surety products for logistics providers.

For more information, please contact your local Avalon office or Andriana Davis at (847) 700-8087 or at adavis@avalonrisk.com. A list of our offices may be found at www.avalonrisk.com/contact.html

Avalon Risk Management


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