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USDA’s Bioengineered Food Disclosure Final Rule

January 3, 2019

Bioengineered (BE) foods, commonly referred to as genetically engineered or “GMO” by consumers, have garnered significant popular press coverage in recent years. Notwithstanding the proven safety of BE foods, Americans’ increasing appetite for transparency in labeling and the right-to-know led to a patch work of state labeling requirements and culminated in the 2016 National Bioengineered Food Disclosure Standard which amended the Agricultural Marketing Act (7 U.S.C. § 1621 et seq.) to provide for a federal labeling standard for BE foods, effectively preempting analogous state and local labeling requirements. 

On December 21, 2018, the U.S. Department of Agriculture (USDA) published its long-awaited final rule to establish the National Bioengineered Food Disclosure Standard. The final rule requires bioengineered (BE) foods to bear a disclosure indicating that the food is a BE food or contains a BE food ingredient. Noncompliance is considered to be a prohibited act and could lead to USDA enforcement action.

Importantly, the final rule provides a mechanism for consumers, competitors, state regulators and other interested parties to notify USDA of any perceived noncompliance which could trigger an investigation by USDA’s Agricultural Marketing Service (AMS). Liability for food manufacturers and retailers marketing BE foods may be compounded by the ongoing uptick in false advertising and labeling challenges under state consumer laws. It is therefore critical that companies producing BE foods carefully review the final rule to develop compliant marketing materials. Doing so will not only help entities avoid enforcement under the new rule, but also provide potential defenses to claims under state consumer laws. Indeed, some state courts have stayed “non-GMO” claim challenges pending the release of the recent final rule.

This alert provides a brief review of the key provisions and requirements of the final rule including: the definition of BE food, the foods subject to BE disclosure, the required BE disclosures, the recordkeeping requirements, the final rule’s implementation and compliance dates, and enforcement.

Definition of “Bioengineering” and “Bioengineered Food”

USDA’s final rule defines “BE food” as “food that contains genetic material that has been modified through in vitro recombinant deoxyribonucleic acid (rDNA) techniques and for which the modification could not otherwise be obtained through conventional breed found in nature; provided that such a food does not contain modified genetic material if the genetic material is not detectable pursuant to § 66.9.” This definition generally tracks the statutory definition of “bioengineering” (noted in the Agricultural Marketing Act, the key statute at issue) but carves out from the disclosure requirement any foods in which the genetic material is not detectable.

During USDA’s rulemaking, a major issue was whether BE food should be defined to exclude highly refined foods and ingredients such as oil and sugar, if the refining process eliminated genetic material from such foods. The final rule defines “BE food” to exclude such highly refined ingredients, if modified genetic material cannot be detected by way of a validated testing process. The final rule explains how regulated entities can use records to demonstrate that modified genetic material is not detectable, effectively removing those foods from the BE disclosure requirement. Of note, USDA’s final rule does not prohibit voluntary disclosure of a highly refined BE ingredient, in cases where an entity would like to make a BE disclosure for a given food made with ingredients derived from a BE source.

Finally, “incidental additives” -- substances present at insignificant levels in food that do not serve a technical or functional effect in the food (as described in 21 C.F.R. 101.100(a)(3)) -- are expressly excluded from the BE disclosure requirements.

USDA’s List of BE Foods 

Although USDA’s proposed rule contained two separate BE food lists, the final rule consolidates these lists for simplicity. The final rule adopts a single List of BE Foods (List), under 7 C.F.R. § 66.6, to identify the foods that are both (1) authorized for commercial production somewhere in the world and (2) reported to be in legal commercial production for human food somewhere in the world. USDA’s Agricultural Marketing Service (AMS), the entity responsible for implementing the rule, will conduct an annual process to consider revisions to the List through a public process announced in the Federal Register. 

The List, which is not exhaustive, has been designed to serve as a tool to assess whether a given food must bear a BE disclosure. If an entity uses a food or ingredient noted on the List, or its ingredient utilizes or is sourced from a food/crop on the List, that entity must maintain records regarding that food or ingredient. 

Meat, Poultry, and Egg Products 

BE disclosure requirements for meat, poultry, and egg products are complex. The final rule requires BE disclosure for meat, poultry, and egg products (which are regulated by USDA’s Food Safety & Inspection Service (FSIS)) if:

  1. The most predominant ingredient of the food would independently be subject to labeling requirements under the Federal Food Drug and Cosmetic Act (FFDCA) or
  2. The most predominant ingredient of the food is broth, stock, water, or a similar solution AND the second-most predominant ingredient of the food would independently be subject to the labeling requirements under FFDCA. 

In practice this means that a product such as a canned stew with chicken as its primary ingredient would not be subject to BE disclosure, but a soup, containing broth, carrots and beef (in descending order of predominance) would be subject to BE disclosure. 

Yeast, Enzymes, and Other Organisms 

USDA did not provide a categorical exclusion for yeasts or enzymes. In cases where BE yeasts, enzymes, or other organisms do not qualify as incidental additives, they may require disclosure as BE foods unless they meet the requirements of another provision exempting them from disclosure. In practice this means that if a BE enzyme or yeast does not qualify as an incidental additive, but at the same time does not have detectable modified genetic material, that BE enzyme or yeast would not be subject to BE disclosure. 

Disclosure Methods 

Consistent with the proposed rule, the BE status of a food, may be disclosed via text on the product label (i.e., “bioengineered food” or “contains a bioengineered food ingredient”), electronic disclosure, text message or symbol. Should the symbol option be chosen, the required symbols are illustrated below (and may be used in either color or black and white):

With regard to the electronic disclosure option, the rule requires that this disclosure must be a link accompanied by: (1) a label statement that reads, “Scan here for more food information” or equivalent language; and (2) a telephone number that provides the BE disclosure to the consumer at all times; this must be accompanied by the statement “Call [number] for more food information.” 

Who is Responsible for Disclosure? 

The responsibility for the BE disclosure falls on the entity packaging the food. For foods packaged prior to receipt by a retailer, BE disclosure responsibility falls to the food manufacturers or importers who package the product. On the other hand, for foods packaged or sold in bulk by retailers, BE disclosure responsibility falls to the retailer. 

Recordkeeping 

The final rule’s recordkeeping requirements apply to: (1) foods that are on the rule’s list of BE foods; and (2) foods that have a BE disclosure because the responsible entity has actual knowledge that the food is BE (or contains a BE ingredient). In cases where a given food is noted on the BE food list, or contains an ingredient on the list, but does not bear a BE disclosure, the final rule requires the responsible entity to maintain records demonstrating that the food is not, or does not contain, a BE food. USDA may request access to records to evaluate compliance. 

Implementation and Compliance Dates 

The final rule sets out two “implementation dates” by which subject entities should begin implementing the rule’s requirements by identifying the foods that must bear a BE disclosure. For companies with $10 million or more in annual receipts, the implementation date is January 1, 2020. For companies with less than $10 million in annual receipts, the implementation date is January 1, 2021. The mandatory compliance date for all regulated entities is January 1, 2022. The final rule also provides for a voluntary compliance period under which entities can use labels compliant with preempted State labeling laws; that period ends on December 31, 2021. 

Enforcement 

Failure to disclose the BE status of a food is considered to be a prohibited Act under the Disclosure Standard. Violators are not subject to civil penalties or other remedial or punitive measures. However, USDA is authorized to implement an enforcement process that includes a complaint process, investigations, audits, and hearings of limited scope. Of note, interested parties (which include consumers, competitors, state regulators and others) may file a complaint with USDA concerning potential violations of the disclosure requirements. Such a complaint could ultimately trigger record review by USDA. The final rule provides that the outcome of USDA’s enforcement process will be made publicly available.

Questions on the Final Rule?

Should you have any questions concerning the final rule, please feel free to contact Brian P. Sylvester, a former USDA lawyer. Brian is particularly well-positioned to assist stakeholders with analyzing the nuances of the final rule’s impact on industry and to develop compliance strategies. He may be reached at: bsylvester@wileyrein.com or 202-719-4548.