One Year After the Green Light for Export of Italian Cold Cuts to the Us: Is it Real Economic Growth?

Summer 2014 Article

ONE YEAR AFTER THE GREEN LIGHT FOR EXPORT OF ITALIAN COLD CUTS TO THE US: IS IT REAL ECONOMIC GROWTH?

Dear reader,

I return to the subject of the export of food products from Italy to the United States. For those of you who missed my previous newsletter, you may find it by following this link: http://vallalaw.com/va-articles/2015/7/24/fall-2011-newsletter. This current newsletter focuses on (i) exporting cold cuts from Italy to the US after last year's removal of the ban by the Food Safety and Inspection Service and the United States Department of Agriculture, and (ii) the real advantages brought to the Italian manufacturers by the opening up of borders.

Removal of the Export Ban

Beginning May 28th 2013, the US extended the allowed imports to include salami, pancetta[2], coppa[3], speck[4], and cotechino[5] coming from the following Italian regions, which the Animal and Plant Health Inspection Service (APHIS) consider low-risk areas for swine vesicular disease: Lombardia, Emilia-Romagna, Veneto, Piemonte, and the autonomous provinces of Trento and Bolzano.

Companies wishing to export cold cuts to the US must be approved in advance by US authorities, and their facilities must be provided with specific health certificates and veterinary certification. In addition to the above, to start the export process, companies must provide the US authorities with the following bureaucratic documentation in English:

  • Registration with the Food and Drug Administration (FDA): all food establishments that produce, process, package, and preserve food products for the U.S. market are obliged to register with the FDA[6];
  • Notification to the FDA: each time the exporter is ready to send food products they must notify the FDA. Specifically:
    • Electronic notification (Prior Notice System Interface) which was introduced in 2003 after the events of September 11th in order to strengthen and improve US security. The document should contain at least the following data:
      • Name and address of the person submitting the notification, and the name and address of the company;
      • Port of entry and identification number of Customs and Border Protection (CBP), if available;
      • Name and address of the manufacturer;
      • Country of production;
      • Country of shipment;
      • Name and address of the shipper and of the consignee;
      • Name and address of the importer;
      • Name and address of the carrier and transport means.
    • US authorities reserve the right to inspect the goods upon arrival and to analyze samples. If the results of the analysis show that the samples do not conform to the standards, the FDA, or the authority which ordered the inspection, may impose penalties, confiscate the goods, and in cases where the violation is serious, request an injunction from the Court. Later in this newsletter we will discuss the re-inspection issue, in force as of September 2013, raised by ASSICA.[7]
  • Manufacturer's Identification Code (MID): this code identifies the foreign manufacturer pursuant to the CBP regulations, and must include up to 15 characters with no spaces[8]:
    • The two character ISO country code;
    • First three characters of the manufacturer's name;
    • First four numbers in the largest number on the manufacturer's street address line;
    • First three letters of the city name;
  • Health Certificate for Animal Products, issued by ASL[9], in English, which certifies that the products of animal origin for export are not infected. Such certification should be presented at the time of customs clearance.
  • Product labeling regulated by the US Code 21 C.F.R Part 101- Food Labeling Title 21- Food and Drugs. The labeling should be issued in English and should indicate:
    • Name of product;
    • Country of origin;
    • Manufacturer's name and address;
    • Net weight;
    • Physical condition of the product, for instance, whether it is whole, diced or in portions;
    • List of the ingredients;
    • Nutritional values (calories, total fat, saturated fats, hydrogenated fats, total carbohydrates, fiber, protein) and whether potential allergens are present (next to the list of ingredients, write the word "Contains" followed by the name of the allergen.)

Until a few months ago the above-mentioned documentation was still under development. The relevant forms are now available on the website of the Department of Health or of the United States Department of Agriculture - Food Safety and Inspection Service (USDA-FISF).

Advantages

There is no doubt that the opening of US borders to Italian cold cuts initially brought hope to Italian manufacturers, as after so many years the ban on export of real Italian products to the US had finally been removed. Nevertheless, what at the beginning appeared to be a ray of hope in the end resulted to be a false hope which then became a real headache. In November 2013, in fact, ASSICA sounded an alarm regarding the export of the Italian cold cuts to the US. ASSICA warned of an escalation of the technical barriers, stemming from the different health regulations, which have greatly increased the costs of export and effectively preventing the formal opening of recent months from becoming a reality. In fact, US authorities, in view of the increased import of cold cuts, put in place systematic controls for microbiological analysis of all consignments of meat products from Italy. This, of course, results in an increase in the expenses for the manufacturers, as goods must be stored in warehouses which charge high daily rates. Additional costs such as these transform what could be an economic advantage into a disadvantage.

In reality, the ability to export cold cuts to the US has led to an increase of exports in 2013 even while, as ASSICA stressed, Italian manufacturers have had to deal with bureaucratic barriers as they expand outside of the European Union market.

Setting up a Company in the US

Despite the obstacles mentioned above, manufacturers remain positive and continue to look toward the US with optimism, viewing the market as prosperous and full of economic opportunities. So, what is to be done? First of all, it is necessary to obtain the above-mentioned permits. Furthermore, the company importing into the US cannot conduct its activity from the country of origin, but should have business offices with personnel in the US and must obtain an Employer Identification Number (similar to VAT number) from the US fiscal agency, the Internal Revenue Service. The foreign company unable to be directly present in this country must find a local importer, generally a distributor, with a permit.

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As can be seen from this article, the applicable procedure to follow and the various permits and certifications required are rather complex. Our firm can assist you with the necessary paperwork for registration and notification to the FDA or with labeling. Further, we can assist with the establishment of an American company, generally alimited liability company or corporation, and in the drafting and negotiation of contracts with distributors. Questions or requests for further information may be sent to daniela.morrison@vallalaw.com.

This article has been professionally translated into English from its original text in Italian. The original Italian version can be downloaded at http://vallalaw.com/va-articles/2015/7/24/fall-2011-newsletter

This newsletter is of general character and for information purposes only. It does not constitute legal advice.



[1] Daniela Morrison, Esq. (daniela.morrison@vallalaw.com) admitted to practice in New York is Associate Counsel at Valla & Associates Inc., P.C. (www.vallalaw.com). This article has been professionally translated into English from its original text in Italian.

[2] cured neck of pork

[3] cured neck of pork

[4] deboned, salted and smoked ham

[5] kind of large spiced pork sausage for boiling

[6] The FDA registration does not mean that the imported food is in line with the FDA regulations. FDA reserves the right to inspect the goods when arriving at the port of entry.

[7] Meat and Cold Cut Industry Association.

[8] For products attributable to more than one manufacturer, it is necessary to indicate the MIB for each manufacturer.

[9] Local Health Authority