Compliance Resources to Help you Stay Current

Defined by the FDA, the Process Analytical Technology or PAT is “a system for designing and controlling manufacturing through timely measurements (i.e. during processing) of critical quality and performance attributes for raw and in-process materials and also processes with the goal of ensuring final product quality". PAT can better be understood as an initiative to enhance quality of products and manufacturing process and as an unremitting process of improvement.

For new and remodeled Denny’s restaurants in the US, Cree Inc has become the preferred manufacturer of energy efficient LED lighting. The Durham, NC-based lighting maker cites the experiences of two Denny’s franchisees that have seven restaurants and use Cree LR6, 6-inch downlights.

On Jan 5 and 6, U.S. Marshals seized all dental devices from Rite-Dent Manufacturing Corporation, Hialeah, Fla. They acted under a court order sought by the US Food & Drug Administration (FDA). The seizure took place as the FDA, during inspection, found serious deficiencies in the company’s manufacturing processes. The deficiencies could affect the safety and effectiveness of the products.

Seized Products

Alginate Impression Material, Ultra Impression Material, Enamel Bonding System, Pit and Fissure Chemical Curing Sealant, Tooth Shade Resin Material, Cavity Varnish, Polycarboxylate (PCA) Cement, and Zinc Phosphate Cement, all used in the practice of dentistry, are amongst the seized products.

Latest Inspection

During its Nov 2010 inspection, the FDA noticed that the company was not adhering to the current good manufacturing practice requirements. Strict adherence to good manufacturing practice requirements ensures the safety and effectiveness of medical devices. Also, the company had not obtained marketing approval from FDA for its Ultra Impression System. Incidentally, the FDA warned the company in 2005, March 2010 and May-June 2010 about these violations. It issued a Warning Letter to the company in 2005.

Regulations

The FDA is likely to revive a law that has been dormant since the 1980's, to send a strong signal to companies. The FDA gets its authority from the Park Doctrine, which allows it to seek criminal convictions for violations of the federal Food, Drug and Cosmetic Act against executives, even if they are unaware of specific manufacturing violations but are in a position of authority to prevent or correct the problems. Although the FDA is yet to bring any criminal charges against high-ranking executives, experts believe there are a lot of sleepless nights right now in the industry.

Sources:

http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm237894.htm

http://money.cnn.com/2010/08/23/news/companies/fda_recall_prosecutions/index.htm

At the request of the US Food & Drug Administration (FDA), the US Department of Justice filed a com-plaint on Jan 13, 2011 against Mystical One LLC, Jamaica, NY, a beverage company.  The complaint sought a permanent injunction to prevent the company from processing and distributing juice and other products.  

According to the department, Hank J. Hagen and Milton S. Reid and their company violated the Federal Food, Drug, and Cosmetic Act by not putting in place a Hazard Analysis and Critical Control Point (HACCP) plan for some juice products like carrot juice.  The company also failed to comply with current Good Manufacturing Practice (cGMP).

FDA requires juice processors to implement HACCP plans so they can identify and control food hazards associated with the juices.  Towards this end, all food manufacturers are required to comply with cGMP.  The FDA has not come across any instance of illness arising from the consumption of Mystical One’s juice products though.  Important amongst the violations cited by the FDA are the company’s failure to:
 

• adequately heat low-acid vegetable juices.  As a result, dangerous micro organisms are neither destroyed nor prevented from growing
• properly clean food-contact surfaces
• ensure perfect sanitation conditions at the facility to prevent sources of possible food and water contamination

Such failures could lead to the formation of clostridium botulinum bacteria that can germinate in the carrot juice manufactured. When consumed even in very small quantities, paralysis, difficulty in breathing and death from asphyxiation could result. In 2006, six cases of botulism were linked to refrigerated carrot juice in the US and Canada.

Regulations

cGMP provisions apply to making, packing, or holding human food.  When manufactured in contraven-tion of HACCP or GMP provisions, the law defines these beverage products as adulterated products.  

Sources:

http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm239965.htm

The Federal Aviation Administration (FAA) is recommending a civil penalty of USD 330,000 against Heli-Dudes of Salt Lake City. Heli-Dudes allegedly operated sightseeing helicopter rides for hire, thereby violating Federal Aviation Regulations. Such sightseeing helicopter rides for hire were therefore unauthorized. In this connection, the FAA has issued a Press Release dated January 6, 2011.

According to FAA, Heli-Dudes does not have an FAA-issued operating certificate or letter of authoriza-tion. All the same, it conducted thirty sightseeing flights for hire between Feb 6, 2010 and Feb 14, 2010. It used a Robinson R-22, a two-seat, piston engine-powered helicopter.

Gasco Energy, Inc., the erstwhile operator of the Riverbend Compressor Station on the Uinta and Ouray Indian Reservation near Vernal, Utah, has agreed to pay $350,000 as penalty and provide for air pollution controls at its facilities in the Uinta Basin to resolve the allegations of having violated the Clean Air Act at the facility.

The Securities and Exchange Commission (SEC) has charged Paris-based telecommunications company Alcatel-Lucent, S.A. with violating the Foreign Corrupt Practices Act (FCPA) by paying bribes to foreign government officials to illicitly win business in Latin America and Asia. The company is to pay over $137 million to settle these charges levelled by SEC and the US Department of Justice (DOJ).

SEC ALLEGATIONS

The SEC has alleged that Alcatel’s subsidiaries bribed $8 million to government officials through consultants who did little or no legitimate work, in order to obtain or retain extremely lucrative telecommunications and other types of contracts. Alcatel has to pay $45 million to settle SEC’s charges and another $92 million to settle the criminal charges against it levelled by DOJ.

Robert Khuzami, Director of the SEC’s Division of Enforcement said, “Alcatel’s bribery scheme was the product of a lax corporate control environment at the company,” and added, ““Alcatel and its subsidiaries failed to detect or investigate numerous red flags suggesting their employees were directing sham consultants to provide gifts and payments to foreign government officials to illegally win business.”

According to the complaint lodged by the SEC in the Southern District of Florida, Alcatel had bribed government officials in Costa Rica, Honduras, Malaysia and Taiwan between December 2001 and June 2006. A subsidiary of Alcatel had provided at least $14.5 million to consulting firms in Costa Rica through sham consulting agreements for being used in the bribery ply. Various high-level government officials in Costa Rica received at least $7 million to ensure that Alcatel obtains or retains three contracts to provide telephone services in Costa Rica. Government officials were also bribed in Honduras to obtain or retain five telecommunication contracts. An Alcatel also bribed Taiwanese government officials for winning a contract for supplying railway axle counters to the Taiwan Railway Administration.

THE VIOLATION

The SEC has primarily accused Alcatel-Lucent of violating Section 30A of the Securities Exchange Act of 1934 which prohibits from making illicit payments to foreign government officials, through subsidiaries and agents, in order to obtain or retain business. Besides, it has also violated Section 13(b)(2)(B), Section 13(b)(2)(A) and Section 13(b)(5)of the Exchange Act.

Alcatel has received an injunction to pay $45.372 million to disgorge the wrongfully obtained profits and has been ordered to comply with certain undertakings, including an independent monitor for a three-year term. However, this settlement is subject to court approval.

ON ALCATEL-LUCENT

With operations in more than 130 countries, Alcatel-Lucent is a transformation partner of service providers, enterprises and strategic industries such as defense, energy, healthcare, transportation and governments all over the world, providing solutions to end-users. It leverages the technical and scientific expertise of Bell Labs, one of the leading names in the communications industry. The company combined two entities — Alcatel and Lucent Technologies — in 1986.
 

Source:

http://www.sec.gov/news/press/2010/2010-258.htm

Registration of municipal advisors is now being made mandatory by the Securities and Exchange Commission in line with the Dodd-Frank Wall Street Reform and Consumer Protection Act. In addition, registration with the Municipal Securities Rulemaking Board (MSRB) will also be made necessary.

The definition of a municipal advisor includes financial advisors, guaranteed investment contract brokers, third-party marketers, placement agents, solicitors, finders, and certain swap advisors that provide municipal advisory services.

The proposed rule would require the following forms to be submitted for various proceedings:

• Form MA to register a municipal advisory firm
• Form MA-I to register an individual municipal advisor.
• Form MA-W if the said firm or individual wants to withdraw registration.
• A non-resident municipal advisory firm (and any non-resident general partner or managing agent of a municipal advisory firm) to submit Form MA-NR in order to appoint an agent for service of process.                                                                                                                             

(Municipal advisors would also be required to provide disciplinary history information and update it regularly.)

In recent times, the SEC has been engaged in significant rulemaking with emphasis on the following aspects:

• Strengthening oversight of investment advisers
• Security-based swap reporting and dissemination
• Security-based swap data repositories
• Security-based swap fraud
• Security-based swap conflict
• Reporting of pre-enactment security-based swaps
• Asset-backed securities
• Whistleblower (constitutes a program and a set of rules aimed at encouraging individuals to provide the SEC with high-quality tips that lead to successful enforcement actions.)
• Pay-on-Pay (includes a set of rules that would enable shareholders to cast advisory votes on executive compensation and "golden parachute" arrangements.)
• Specialized disclosures (covers rules requiring new disclosures about mine safety, conflict minerals from the Congo, and payments to governments by the extractive industry.)

Source:

http://sec.gov/news/press/2010/2010-253.htm

The U.S. Environmental Protection Agency (EPA) and the European Chemicals Agency (ECHA) have joined hands to promote technical cooperation on chemical management activities. ECHA is the agency that implements the European Union’s chemical management program known as REACH (Registration, Evaluation, Authorization, and Restriction of Chemicals). In line with their shared commitment to improve chemical safety, ECHA and the EPA have signed a statement of intent to cooperate at the Transatlantic Economic Council (TEC) meeting in Washington, D.C. In practice, the cooperation will take place between ECHA and the EPA’s Office of Pollution Prevention and Toxics and the National Centre for Computational Toxicology.

Tropical Nut & Fruit of Charlotte, NC, has issued a nationwide recall of all its products containing walnuts supplied by Atlas Walnuts, LLC after November 16, 2010.  Possible salmonella contamination prompted the action. The voluntary recall was initiated when Atlas Walnuts, LLC recalled its product after learning that one of its customers tested positive for salmonella. Atlas conducted additional Salmonella tests on the same product lot and the results were negative.

Tropical Nut & Fruit of Charlotte, NC has not received any consumer illness complaints from the consumption of the products. The nationwide recall was initiated by way of abundant caution. Consequently, it is withdrawing the affected products from retail store shelves and the entire distribution system. Consumers should return the products to the store concerned for a full refund.

Salmonella can cause serious and sometimes fatal infections in young children, frail or elderly people, and others with weakened immune systems. Healthy persons infected with Salmonella often experience fever, diarrhea (which may be bloody), nausea, vomiting and abdominal pain. Occasionally, infection with Salmonella can result in the organism getting into the bloodstream and producing more severe illnesses such as arterial infections (i.e., infected aneurysms), endocarditis and arthritis. 

Regulations

Manufacturers of defective products voluntarily carry out most recalls. Alternatively, the FDA may identify a defective product and instruct the company concerned to recall the product. If the company does not recall the product, the FDA can seek legal action under the FD&C Act.  These include seizure of the available stock of the product, and/or injunction of the firm, including a court-directed recall of the product. FDA guidelines that companies should follow while recalling defective products are published in Title 21 of the Code of Federal Regulations, Part 7.

Source:

http://www.fda.gov/Safety/Recalls/ucm236656.htm

http://www.fda.gov/Safety/Recalls/ucm165546.htm

The Telecommunications Industry Association (TIA) issued a news release officially filing its 2011 1377 Report to the United States Trade Representative (USTR). The USTR is required to report in detail on the compliance, effectiveness, and implementation of U.S. telecommunications trade agreements. This detail requirement comes under Section 1377 of the Omnibus Trade and Competitiveness Act of 1988.

Tessalon (benzonatate) is an FDA-approved symptomatic cough relief drug for patients older than 10 years. However, this drug may attract younger children because of its candy-like appearance (round, liquid-filled gelatin capsule). The safety and effectiveness of benzonatate in children younger than 10 years has not been established. The FDA has therefore warned that accidental ingestion of Tessalon by children younger than 10 years can lead to serious side effects or even death.

The Securities & Exchange Commission (SEC) decided today to suggest rules, as desired by the Dodd-Frank Act, to require resource extraction issuers to disclose payments made to the U.S or foreign gov-ernments.

Requirements of the Suggested Rules

The suggested rules require a resource extraction issuer to disclose certain payments made to a foreign government, including sub-national governments, or the US federal government. Additionally, the resource extraction issuer should disclose payments made by a subsidiary or another entity controlled by it.  The resource extraction issuer will be subject to disclosure if it is otherwise required to provide consolidated financial information for the subsidiary or other entity in its financial statements included in its Exchange Act reports. 

The resource extraction issuer has to disclose payments that are made to promote the commercial development of oil, natural gas, or minerals and that are not de minimis.  Exploration, extraction, processing and export, or the acquisition of a license for any such activity also fall under the purview of the definition of commercial development of oil, natural gas, or minerals. 

The types of payments related to commercial development activities that must be disclosed include:

• Taxes
• Royalties
• Fees (including license fees)
• Production Entitlements
• Bonuses

The Extractive Industries Transparency Initiative (referenced in the statutory definition of payment) suggests the payments to be disclosed.  The types of payments furnished above are generally consistent with what EITI has suggested. 

The resource extraction issuer should furnish the information annually in its Exchange Act annual report through two exhibits – one exhibit in investor-friendly text format and the other in eXtensile Business Reporting Language (XBRL).

SEC will consider public comments on the suggested rules until Jan 31, 2011 before deciding whether to adopt the suggested rules.
 

Source:

http://www.sec.gov/news/press/2010/2010-247.htm

Renewable energy replaces itself naturally. Alternatively, it can be easily replaced because there is a large supply of it. Wind energy for instance, is a source of energy which can power up turbines to generate electricity and continues to renew itself.  With the current estimates indicating that mankind can access fossil fuels only for 40 more years, scientists have started researching on renewable energy sources.

The Renewable Energy and Energy Efficiency Export Initiative is a new program launched by a team of eight U.S. government agencies. This initiative aims at increasing exports connected to renewables and efficiency over the next five years, by providing new funding, easy access to resources and other support. Government export resources can be accessed by renewable energy companies from a dedicated website. The Commerce Department has pledged to contribute to this program by improving trade and policy missions related to renewables. The Overseas Private Investment Corporation (OPIC) has also offered to provide USD 300 million to renewable projects in emerging markets. The provisions made by OPIC and the Export-Import Bank of the United States, will make it easier to seek financing for renewable projects. An advisory committee comprised of 29 companies and groups like GE Energy, the U.S. Green Building Council, Verdant Power and American Superconductor, has been created by the Commerce Department. The committee is to advise the Commerce Department on programs and policies that would support renewable and energy efficiency companies in the U.S. The prospects for U.S. technology exports focusing on this industry are bright. More than 100 countries have formulated policies to encourage deployment of renewable energy and energy efficiency technologies. Many of these countries have substantial deployment targets that will drive demand for renewable energy and energy efficiency in the years to come.
 

Source:

http://www.greenbiz.com/news/2010/12/10/us-government-launches-clean-energy-export-push?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Greenbuzz+%28GreenBiz+Feed%29

http://www.caddet.org/

http://apps1.eere.energy.gov/news/daily.cfm/hp_news_id=276

Zonegran is an FDA approved anti-epileptic drug, manufactured by the Irish company, Elan Corporation PLC. However, Elan and its U.S subsidiary promoted Zonegran for a variety of improper uses, including mood stabilization, migraine headaches, eating disorders and weight loss. It amounted to illegal promotion of the drug.  The Justice Department slapped a fine of USD 203 million plus on Elan Corporation PLC and its U.S. subsidiary under the False Claims Act. The Japanese drug marketer Eisai Inc., which bought the drug from Elan, will pay USD 11 million for off-label marketing of Zonegran.

Elan has consented to plead guilty and pay a criminal fine of USD 97 million and an additional USD 102.3 million to resolve civil allegations. It will forfeit assets worth USD 3.6 million too. The settlement demonstrates the government's determination to curb health care frauds by invoking the False Claims Act. The Justice Department claims to have recovered USD 5 billion plus since January 2009 in cases involving fraud against federal health care programs alone.

Regulations

The False Claims Act (31 U.S.C. § 3729–3733, also called the "Lincoln Law") is an American federal law that allows civilians to file complaints against federal contractors for filing fraudulent claims against the government. The act of filing such complaints is informally called "whistleblowing." Individuals filing under the Act stand to receive a portion (usually 15 to 25%) of any recovered damages. The Act provides a legal tool to counteract fraudulent billings turned in to the federal government. Claims under the law have been filed by persons with insider knowledge of false claims involving health care, military, or other government spending programs. The government has recovered nearly USD 22 billion under the False Claims Act between 1987 and 2008.

Source:  

http://www.pharmpro.com/news/2010/12/business-Elan-to-Pay-203M-Off-Label-Marketing-Fine/

http://en.wikipedia.org/wiki/False_Claims_Act

McNeil Consumer Healthcare, Division of McNEIL-PPC, Inc., has voluntarily recalled all lots of ROLAIDS® Extra Strength Softchews, ROLAIDS® Extra Strength plus Gas Softchews, and ROLAIDS® Multi-Symptom plus Anti-Gas Softchews distributed in the United States. The recall was issued after the presence of foreign materials in the product, including metal and wood particles, was reported. The company’s investigations have led it to conclude that the materials possibly found their way into the product during its manufacture at a third party facility. The FDA has since suspended production of ROLAIDS® Extra Strength Softchews, ROLAIDS® Extra Strength plus Gas Softchews, and ROLAIDS® Multi-Symptom plus Anti-Gas Softchews even as its own investigations into the matter continue. Production will resume once corrective actions are implemented. This recall was conducted with the knowledge of the U.S. Food and Drug Administration (FDA).

Although the risk of serious adverse health consequences is remote, McNeil Consumer Healthcare has advised consumers not to use the product by way of abundant caution. In particular, consumers who have medical concerns or questions should contact their healthcare provider.

Regulations

The Prescription Drug Marketing Act (PDMA) of 1987 (P.L. 100-293, 102 Stat. 95) is a law of the United States federal government. The U.S. Food and Drug Administration (FDA) issued regulations implementing the PDMA in 1990 (21 C.F.R. Part 205) and 1999 (21 C.F.R. Part 203). It establishes legal safeguards for prescription drug distribution to ensure safe and effective pharmaceuticals. It is designed to discourage the sale of counterfeit, adulterated, misbranded, sub-potent, and expired prescription drugs. The agency can pursue action through the Department of Justice in the federal court system to remove adulterated and misbranded drugs from the market.

Source:  

http://www.fda.gov/Safety/Recalls/ucm236715.htm

http://en.wikipedia.org/wiki/Food_and_Drug_Administration

The U.S. Environmental Protection Agency (EPA) levied a fine of USD 82,400 on Monterey Park, Calif.- based Kinetic Solutions Inc., for allegedly selling unregistered and misbranded pesticides. The company made illegal public health claims for its air purifier branded “Nano Silver Pre filter” and the filter’s ability to control over 650 types of bacteria. It also claimed that its filter incorporated a substance called "nano silver" or "silver nano ions,” which prevent, destroy, repel or mitigate bacteria and mold. Law defines products that kill or repel bacteria or germs as pesticides, and hence they must be registered with the EPA before distribution or sale. EPA does not register a pesticide until it has been tested to demonstrate that it will not pose an unreasonable risk when used according to the directions. According to EPA, the Nano Silver Pre Filter was marketed as a pesticide although it was not registered as such. Thus, the company’s false claim and failure to comply with the federal law violated the Federal Insecticide, Fungicide, and Rodenticide Act. The violations were discovered through an online search and subsequent inspection by the California Department of Pesticide Regulation.

A new Canadian law came into effect after receiving the Royal Assent - the Canada Consumer Product Safety Act (CCPSA). The federal Minister of Health, Honorable Leona Aglukkaq stated, "I am delighted our Government's Consumer Product Safety Act is now the law of the land," said Minister Aglukkaq. "This will give the Harper Government important new tools to deliver stronger, more effective protection for Canadian consumers and their families."

The U.S Consumer Products Safety Commission (CPSC) unanimously voted the ban of the sale, resale, and manufacture of all drop-side cribs that have a side rail that moves up and down, allowing parents to easily lift their child from the crib. This follows years of deaths and injuries to the scale of around 32 infant deaths and several injuries in addition to the recall of more than 9 million cribs, all relating to the gap between the mattress and rail in such cribs. The gap poses potential danger to babies/toddlers who could get stuck, fall out, or suffocate. Users are required to replace defective cribs by the end of 2011. The new standard comes into effect in June, requiring cribs to have fixed sides.

Public accommodations such as hotels and childcare facilities are expected to comply to the ban within 12 months. The mandate of the ban is to stop drop-side cribs’ sale by June 2011.

The traditional crib that cradled millions of babies for generations has finally ended.

The new standard

The ban has received the approval of ASTM International, a globally recognized leader in the development and delivery of international voluntary consensus standards. ASTM standards are used around the world to improve product quality, enhance safety, facilitate market access and trade, and build consumer confidence.

The Consumer Product Safety Improvement Act (CPSIA), signed into law in August of 2008, requires the agency to issue mandatory standards for infant durable products. The CPSIA requires mandatory standards and testing for durable infant and toddler products, product registration cards and a ban on the sale or lease of unsafe cribs. Cribs are among the first products for which mandatory standards were promulgated under this provision.

The mandate of the new standard expects compliance through tougher safety testing for cribs, using child mimicking in the crib. As the child gets older, more force can be applied to the crib through shaking it, running around it, or jumping up and down. The new tests’ goal is to ensure that cribs can withstand the different kinds of pressure.

Additional requirements include better labeling to reduce the instances of wrong assembly, a problem that a few have encountered.

Source

http://www.foxbusiness.com/markets/2010/12/16/cpsc-bans-drop-cribs/

http://www.msnbc.msn.com/id/40678788/ns/health-kids_and_parenting/

http://www.astm.org/ABOUT/aboutASTM.html

http://www.consumeraffairs.com/news04/2010/12/world-s-toughest-crib-standards-adopted.html

The surprise of the decade comes with the Food Safety Bill possibly becoming a law as the Senate recently passed the bill.

Consumer groups and businesses are largely supporting this measure, which has come into play with alarming statistical reports claiming that 1 in 6 people are affected by food poisoning, and 3,000 die. In view of the recent contamination of produce, eggs, and peanuts, this sweeping bill aims to make food safer although it also comes under severe flak from various directions questioning control of food rather than safety of food.

The new bill puts the onus on businesses to develop measures and strategies to prevent contamination, and create new tests as opposed to relying on government inspections to determine food contamination at factories. Exempt from this will be some egg and meat products as they fall under the purview of the U.S. Department of Agriculture (USDA).