These Regulatory Updates are brought to you by Michael Best & Friedrich. 

This Regulatory Update includes information from May 18 through May 27, 2020. Please contact Paul Benson, Taylor Fritsch, or Leah Ziemba for additional information on regulatory issues that may affect your business.

For access to articles and resources from our Premium Member law firm, Michael Best & Friedrich, to help navigate this challenging time, please follow these hyperlinks to Michael Best’s COVID-19 Resource Center and CARES Act Relief Resource Center.

 

COVID-19 DEVELOPMENTS

  • USDA to Provide $1 Billion in Loan Guarantees for Rural Businesses and Agricultural Producers  MUST READ
  • USDA Announces Coronavirus Food Assistance Program Details  MUST READ
  • FDA and USDA Issue MOU to Coordinate Use of USDA Defense Production Act Authorities   MUST READ
  • FDA Extends Application Period for Voluntary Qualified Importer Program  MUST READ
  • Doctors Petition USDA to Require Slaughterhouse Testing for SARS-CoV-2

COVID-19 INDUSTRY GUIDANCE

  • FDA Releases Guidance on Reporting Temporary Food Facility Closures and Requesting FDA Assistance   MUST READ
  • FDA Releases Guidance on Temporary Policy Regarding Qualified Exemption from FSMA Produce Safety Rule   MUST READ
  • FDA Releases Guidance on Temporary Policy Regarding Food Labeling Requirements for Manufacturers and Vending Machine Operators   MUST READ
  • FDA and USDA Issue Recommendations on Addressing PPE and Sanitation Supply Shortages

OTHER DEVELOPMENTS OF INTEREST

  • FDA Publishes Report with Findings from 2019 Leafy Greens E. coli Outbreaks  MUST READ
  • FDA Extends Comment Period for Draft Guidance on Protecting Food Against Intentional Adulteration

COVID-19 DEVELOPMENTS

USDA to Provide $1 Billion in Loan Guarantees for Rural Businesses and Agricultural Producers
May 22:USDA announced the availability of up to $1 billion in loan guarantees for rural businesses during the COVID-19 pandemic. It also announced that agricultural producers ineligible for USDA Farm Service Agency loans could potentially receive funding under USDA Business & Industry (B&I) CARES Act Program provisions.

According to USDA’s press release, “B&I CARES Act Program loans must be used as working capital to prevent, prepare for or respond to the effects of the coronavirus pandemic. The loans may be used only to support rural businesses, including agricultural producers, that were in operation on Feb. 15, 2020.” The agency is developing B&I CARES Act Program application guides for borrowers and lenders.

USDA began accepting applications for B&I loan guarantees on May 22, 2020 and will continue to accept them until midnight Eastern Daylight Time on September 15, 2021, or until funds are expended.

Read USDA’s press release here.

 

USDA Announces Coronavirus Food Assistance Program Details
May 19: U.S. Secretary of Agriculture Sonny Perdue announced details of the Coronavirus Food Assistance Program (CFAP), which “provides vital financial assistance to producers of agricultural commodities who have suffered a five-percent-or-greater price decline due to COVID-19 and face additional significant marketing costs as a result of lower demand, surplus production, and disruptions to shipping patterns and the orderly marketing of commodities,” according to USDA’s press release.

Direct support will come from two funding sources: $9.5 billion in appropriated funding from the Coronavirus Aid, Relief, and Economic Stability (CARES) Act, and $6.5 billion from the Commodity Credit Corporation Charter Act. Additionally, USDA’s Farmers to Families Food Box program “is partnering with regional and local distributors…to purchase $3 billion in fresh produce, dairy, and meat and deliver boxes to Americans in need.”

USDA’s press release lists the non-specialty crops and livestock eligible for CFAP payments, as well as payment calculation methods for dairy and eligible specialty crops. USDA began accepting applications for financial assistance through the Farm Service Agency (FSA) on May 26, 2020.

Read USDA’s press release here. Read an introduction to CFAP in our April 2020 (Part 2) Regulatory Update here.

 

FDA and USDA Issue MOU to Coordinate Use of USDA Defense Production Act Authorities
May 18:FDA and USDA announced a Memorandum of Understanding (MOU) “Regarding the Potential Use of the Defense Production Act with Regard to FDA-Regulated Food During the COVID-19 Pandemic” (MOU 225-20-011). President Trump’s Executive Order 13917, “Delegating Authority Under the Defense Production Act with Respect to the Food Supply Chain Resources During the National Emergency Caused by the Outbreak of COVID-19” (April 28, 2020), delegated the powers of the President under the DPA to the U.S. Secretary of Agriculture.

Broadly, the MOU lays out FDA and USDA’s approach regarding “the oversight of food resource facilities and farms that are not subject to USDA’s exclusive jurisdiction” and their strategy for the “possible use of the [Defense Production Act (DPA)] with regard to such entities during the COVID-19 public health emergency.” More specifically, the MOU “establishes a process in which FDA and USDA will communicate and make determinations about circumstances in which USDA could exercise its authority under the DPA with regard to certain domestic food resource facilities that manufacture, process, pack, or hold foods, as well as to those that grow or harvest food.”

Read the MOU here and USDA’s press release here.

 

FDA Extends Application Period for Voluntary Qualified Importer Program
May 22: With COVID-19 travel restrictions and advisories limiting accredited Certification Bodies’ (CBs) ability to “conduct onsite regulatory audits and issue certifications to foreign entities,” FDA decided to extend the application period for the Voluntary Qualified Importer Program (VQIP) for the Fiscal Year 2021 benefits period until July 31, 2020.

The VQIP, a voluntary fee-based program established by FSMA, “provides expedited review and importation of human and animal foods into the United States for approved applicants who achieve and maintain a high level of control over the safety and security of their supply chains,” according to FDA’s Constituent Update. To be eligible to participate, importers must ensure that “the facilities of their foreign supplier are certified by a CB that has been accredited through the FDA’s Accredited Third-Party Certification Program.”

Read FDA’s Constituent Update here and read about the Voluntary Qualified Importer Program here.

 

Doctors Petition USDA to Require Slaughterhouse Testing for SARS-CoV-2
May 20:The Physicians Committee for Responsible Medicine, a non-profit organization with over 12,000 doctor members, filed an Emergency Petition with USDA-FSIS to require that slaughterhouses test meat and poultry for SARS-CoV-2 prior to sale and that groceries warn consumers of the possible presence of SARS-CoV-2 on their meat and poultry products.

“Because these workers, who may be asymptomatic viral carriers, directly handle meat and poultry products, and because SARS-CoV-2 is easily airborne, remaining detectable for 30 minutes or more in air samples, transmission of the virus to the products they handle is likely,” Mark Kennedy, vice president for Legal Affairs at the Physicians Committee, wrote in the petition.

The Washington, D.C.-based Physicians Committee advocates for animal rights and plant-based food, and its members recently marched to demand meat processing plant closures. Despite the concerns expressed in the organization’s emergency petition, FDA and the World Health Organization (WHO) claim that testing meat and poultry is unnecessary, as food has not been implicated in COVID-19 transmission.


COVID-19 INDUSTRY GUIDANCE

FDA Releases Guidance on Reporting Temporary Food Facility Closures and Requesting FDA Assistance
May 27: FDA released a final guidance allowing FDA-regulated human food facilities and farms “to voluntarily notify the agency of temporary closures and significant reductions in operations, or to request assistance from FDA on issues that might affect continuity of their operations during the pandemic,” according to FDA’s Constituent Update.

Because FDA may not know when firms close because of the pandemic, “[m]ore rapid and specific notification” of their statuses will enhance the agency’s knowledge of the food supply and help it address food producers’ current challenges. FDA will give firms that notify the agency of their status “information and guidance on worker safety, protective equipment for personnel, and facility sanitation, among others.”

Read FDA’s Constituent Update here and access the final guidance here.

 

FDA Releases Guidance on Temporary Policy Regarding Qualified Exemption from FSMA Produce Safety Rule
May 22:FDA released a final guidance on its “Temporary Policy During the COVID-19 Public Health Emergency Regarding the Qualified Exemption from the Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption.”

Due to the public health emergency, many restaurants and retail food establishments have closed or limited their operations, “leaving many farmers without their usual buyers.” As such, FDA enacted temporary flexibility towards the eligibility criteria for farms seeking a qualified exemption from the Standards for the Growing, Harvesting, Packing, and Holding of Produce for Human Consumption (the FSMA Produce Safety Rule) (21 CFR Part 112). The policy “is intended to allow affected farmers to shift their sales away from qualified end-users while still being considered eligible for the qualified exemption,” according to FDA’s Constituent Update.  

Under the temporary policy, “farms that are currently eligible for the qualified exemption and associated modified requirements will still be considered eligible, even if they shift sales away from qualified end-users, so long as they continue to meet the requirement that their average food sales during the previous three years total less than $500,000 (adjusted for inflation).” The policy will remain in effect for the duration of the COVID-19 public health emergency declared by the Secretary of Health and Human Services (HHS) on January 31, 2020.

Read FDA’s Constituent Update here and access the final guidance here.  

 

FDA Releases Guidance on Temporary Policy Regarding Food Labeling Requirements for Manufacturers and Vending Machine Operators
May 22:FDA released a final guidance on its “Temporary Policy Regarding Certain Food Labeling Requirements During the COVID-19 Public Health Emergency: Minor Formulation Changes and Vending Machines.” Addressing supply chain disruptions due to the COVID-19 pandemic, FDA’s temporary policy grants flexibility to manufacturers making minor formulation changes and to the vending machine industry.

First, FDA will provide flexibility to manufacturers that make minor formulation changes without making conforming label changes, such as “making a change to product ingredients…without updating the ingredient list on the packaged food when such a minor change is made,” according to the agency’s Constituent Update, which lists the general factors with which minor formulation changes should be consistent. The final guidance offers specific examples, including “[s]ubstitution of certain oils…without a label change” and “the substitution of unbleached flour for bleached flour without a corresponding label change while there continue to be bleached flour shortages.”

Second, FDA will provide flexibility to the vending machine industry. The agency will not object “if covered operators do not meet vending machine labeling requirements to provide calorie information for foods sold in the vending machines at this time.” Responding to this temporary flexibility, FARE (Food Allergy Research & Education) sent the Director of FDA’s Center for Food Safety and Applied Nutrition a letter expressing concern “[o]n behalf of the 32 million Americans who suffer from life-threatening food allergies.” FARE’s letter asked FDA “to require food manufacturers to inform consumers of any changes via their website and social media channels,” “to require labeling alternatives like stickers…[and] alerts within online shopping sites or signage at retail,” and to require food manufacturers  “to alert consumers to ingredient changes at point of purchase.”

Read FDA’s Constituent Update here and access the final guidance here.

 

FDA and USDA Issue Recommendations on Addressing PPE and Sanitation Supply Shortages
May 22:Responding to shortages of “personal protective equipment (PPE), cloth face coverings, disinfectants, and sanitation supplies in the food and agriculture industry,” FDA and USDA shared a document containing PPE and sanitation supplies “prioritization recommendations” and sourcing suggestions.

The agencies’ recommendations “call for the prioritization of supplies, first to the Healthcare and Public Health as well as the Emergency Services sectors, and then to the Food and Agriculture sector (as well as other Critical Infrastructures),” according to FDA’s Constituent Update. Furthermore, the document lists considerations that sector entities should apply when sourcing PPE and sanitation supplies, as well as instructions on making resupply requests to state or federal agencies.

Read FDA’s Constituent Update here and access the advisory document here.


OTHER DEVELOPMENTS OF INTEREST

FDA Publishes Report with Findings from 2019 Leafy Greens E. coli Outbreaks
May 21:FDA published the findings of an investigation into the contamination of romaine lettuce from the Salinas Valley area of California with various strains of E. coli O157:H7, which led to three foodborne illness outbreaks between September and December 2019.

According to FDA’s Constituent Update, the most likely contributing factor behind the three outbreaks was “adjacent or nearby land use for cattle grazing,” since the proximity of cattle “to the produce fields identified in traceback investigations” is “a persistent source of E. coli O157:H7 and other STEC.” The report traced the illness sub-clusters and supply chain information to a common grower.

In the agency’s Executive Summary of the report, it noted that “[t]hese findings reinforce our concern about the possible impacts of nearby and adjacent land use on the safety of leafy green crops and further underscore the importance of implementing appropriate risk mitigation strategies.”

Read FDA’s Constituent Update here. Read the Executive Summary of the report and access the full report here.

 

FDA Extends Comment Period for Draft Guidance on Protecting Food Against Intentional Adulteration
May 27:FDA extended the comment period for the third installment of its draft guidance supporting compliance with the “Mitigation Strategies to Protect Food Against Intentional Adulteration” (IA) rule under FSMA.

According to FDA’s Constituent Update, “This last installment of the IA rule draft guidance adds to the previously published revised draft guidance. Chapters in the last installment cover topics focusing on food defense corrective actions, food defense verification, reanalysis of food defense plans, and recordkeeping.” When finalized, the multi-chapter supplemental draft guidance document “will help food facilities that manufacture, process, pack, or hold food, and that are required to register under the Federal Food, Drug, and Cosmetic Act,” comply with FDA’s regulation, according to FDA’s Federal Register Notice.

To ensure consideration by the agency, comments on the draft guidance now must be submitted by August 14, 2020.

Read FDA’s Notice on the comment period extension here, its Constituent Update here, and its February Notice of Availability of the draft guidance here.

 

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