Company Barred from Importing Food for Using False Manifest to Cover Up Adulteration

The Food and Drug Administration has issued an order debarring a company from importing or offering for import articles of food for five years, effective March 1, 2018. This order follows the company’s conviction for (a) submitting a false Automated Commercial Environment manifest listing a fictitious importer and (b) causing the introduction of an adulterated drug into interstate commerce with the intent to defraud and mislead. The FDA notes that the company’s lack of a prior conviction is a factor weighing against debarment but is “substantially outweighed” by the nature and seriousness of the offenses, the nature and extent of management’s participation in the offenses, and the nature and extent of voluntary steps to mitigate the impact of the offenses on the public.

The company asked for a hearing on this matter but the FDA rejected that request on several grounds. While the company said it has made operational changes that would prevent it from shipping adulterated animal feed again in the future, the FDA said the company pointed to no other changes in ownership, management, or operations that would address the causes of the offenses and provided no other reasonable assurance that the criminal conduct underlying the offenses will not recur.

The company also argued that there was no evidence that specific members of the public were harmed such that mitigation of that harm was possible and that it pleaded guilty as the only possible mitigation step. The FDA responded that while the government exposed the company’s offenses in progress and thereby prevented harm to any specific victims, the company could have taken other voluntary mitigation efforts beyond simply pleading guilty when apprehended. In fact, the FDA said, rather than admit that it had shipped an adulterated product, the company devised the sham shipment and fictitious documents to cover it up.

Lastly, the company claimed that debarment is inappropriate as a matter of policy because it would harm the company’s business and force its customers to consider other suppliers. The FDA said “the remedial purpose of the debarment statute is designed to accomplish exactly [this] result … by protecting the public from food from importers whose criminal conduct demonstrates, based on the applicable considerations, that they warrant debarment.”

This article was originally published in the Sandler, Travis & Rosenberg Trade Report on March 20, 2018

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