Legal Blog

Not Knowing Your Suppliers Can Get You in Hot Water

I had the pleasure of serving as general counsel to a food additive company following the enactment of the Food Safety Modernization Act (FSMA) but prior to the deadline for bringing our outfit into compliance with its implementing regulations (luckily, we were a small business concern). One of the things we used to speculate on is when the U.S. Food & Drug Administration (FDA) would begin enforcing its regulations under FSMA. Of particular interest to us at that time was the Foreign Supplier Verification Program (FSVP) requirements under FSMA. Well, now that I’m here in private practice, I have my answer, as on August 13th the FDA issued its first warning letter under FSMA for failure to comply with the FSVP regulations after tahini imported from an Israel-based manufacturer was implicated in an outbreak of salmonella.

What’s interesting is the timeline we speculated for enforcement was about six months after our compliance deadline, which was March 19, 2018. The compliance deadline for Qualified Facilities – essentially “very small” businesses – was March 18, 2019. Interestingly this first warning letter comes just shy of six months after the compliance date for Qualified Facilities (the caveat being that I don’t know the size of the business that received the warning letter). However, what I’ll now note is the FDA is enforcing its FSVP regulations without question.

As such, it is important for any food business, regardless of level of distribution, that imports products or materials incorporated into products to be sold here in the United States to understand the FSVP requirements and have procedures in place to meet them.

Some of the key FSVP requirements are as follows:

  • All foreign supplier facilities must register with FDA (this is a more general FSMA requirement) and supply a unique facility identifier (UFI) as part of export documentation
  • Imports cannot be adulterated or misbranded with respect to allergens
  • Foreign suppliers need to have preventive controls in place to assure food safety, including the practice of current Good Manufacturing Practices (cGMPs)

We were in the practice of sending our own personnel abroad or hiring trusted contractors to audit foreign facilities as part of our process for FSVP compliance. However, this met with some resistance, and while we were able to leverage our unique market position with success most of the time, this wasn’t always the case. When we couldn’t audit, we would ask for copies of a supplier’s Hazard Analysis and Critical Control Points (HACCP) plans associated with their various lines, but even then, we met some resistance, as these documents may reveal proprietary technical information. In some cases we got redacted documents. In my view, if you can’t audit, you have to step into the shoes of your foreign supplier and assume the risk of inadvertently releasing something into the marketplace that is adulterated or misbranded. Such a reportable event can be crippling for small businesses in particular, so I don’t recommend it, at least not without recall and excess insurance policies that far exceed the expected coverage needs.

In any event, the warning letter issued a few days ago highlights the importance of FSVP compliance.

For more information on to schedule an FVSP audit, feel free to contact me at or 301.575.0357.

ABOUT SCOTT LLOYD | 301.575.0357

Scott Lloyd is a registered patent attorney who specializes in intellectual property counseling and commercialization work. He has served as a technology commercialization specialist and advisor to companies in a diverse array of markets, including biotechnology, pharmaceuticals, medical devices, food and beverage, specialty chemicals, technology, and engineering. In addition, Mr. Lloyd spent ten years as in-house general counsel to small and mid-sized companies, where he managed corporate matters and resolved commercial disputes in addition to intellectual property strategy, and now serves in the same capacity for entrepreneurial clients. He serves as counsel to small and mid-sized business owners seeking to implement growth strategies and succession plans.

While in house, Mr. Lloyd has also contributed to the successful formation of international affiliates of domestic businesses as well as a $400,000,000 business acquisition.




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