Foreign Supplier Verification Program | JGS Insurance 

Foreign Supplier Verification Program

By Gwenyth Luu, Director – Commercial Lines

Americans want assurances the food they’re consuming is safe. It’s estimated that 15 percent of the country’s food supply, including half of fresh fruit, 20 percent of vegetables, and up to 80 percent of seafood that’s consumed in this country is imported. Until the recent passage of the Food Safety Modernization Act (FSMA) — which was designed to overhaul the safety of the US food supply — there were few assurances that the food products being imported from foreign suppliers were safe. In addition to creating new standards for foreign suppliers, FSMA imposes new requirements on all domestic food companies as well.

FSMA was first enacted in January 2011 in response to the estimated 48 million Americans, or 1 in 6, who are struck with foodborne illnesses each year. This leads to approximately 128,000 hospital stays and 3,000 deaths, according to data from the Centers for Disease Control and Prevention. That’s why strict food import requirements have been implemented by the Food and Drug Administration (FDA) to ensure significant food safety improvement on both domestic and imported food products.

FSMA has led to huge changes to the nation’s food security and safety. The FDA has shifted its focus from addressing foodborne illnesses from reaction to prevention.

One of the new requirements under FSMA is that, beginning on May 30, 2017 (with only some exceptions), domestic importers of human and animal foods are required to develop and implement a Foreign Supplier Verification Program (FSVP), designed to verify that all food products entering the United States satisfy US safety standards.

Companies purchasing food from overseas must identify and evaluate known or foreseeable hazards for the foods they import to ensure that their suppliers are controlling for any biological, chemical and physical hazards which are reasonably likely to occur. Biological hazards include such things as parasites and disease-causing bacteria; chemical hazards include things such as pesticides, drug residues, toxins, illegal food dyes or additives; and physical hazards include things such as plastics, metal shavings or glass shards.

Any food processor or importer bringing food into the United States from overseas must follow specific processes to import these food products. In all cases, importers will be required to review and assess their suppliers’ food safety programs to ensure that their suppliers are adequately controlling for known hazards. Depending upon the risk of the product at issue, these efforts might also involve doing third-party audits on the foreign supplier.

Such audits might include a walk-through of a food processing site, reviews of good manufacturing practices, an assessment of a supplier’s quality control programs, the foreign company’s recall plan and other things to ensure the foods that are reaching the United States are safe for consumers.
Although there isn’t an insurance product available to ensure that your FSVP will be compliant with the regulatory requirements, there are insurance products available to protect you in the event that you or a supplier is forced to conduct a recall for product contamination or other reasons. JGS Insurance can help you assess your company’s relative food safety risk and design the product recall insurance policy that is right for your situation.

With that said, there are other ways to manage risk as well. The risk of any potential recall decreases dramatically if a company can achieve and also maintain compliance with the new FSVP regulations. JGS Insurance has partnered with industry experts, such as Food Industry Counsel LLC, the only legal and consulting firm in the world which advises the food industry exclusively. In addition to obtaining or enhancing your recall insurance coverage, take advantage of this opportunity to let the experts help you develop and implement a FSVP program that will withstand regulatory scrutiny. Adopting this strategy can help you reduce and then control your risk substantially.


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