(Response 407) We disagree with the comment, which appears to
suggest that the only information shippers should be required to
provide to their customers is a lot code or GTIN for the food. As
discussed above, we believe that providing all of the information
required under Sec.  1.1340(b) is necessary to ensure adequate
traceability.
    (Comment 408) One comment requests additional clarification
regarding how traceability lot codes travel with a food through the
supply chain. The comment asserts that proposed Sec.  1.1350(b) directs
shippers to send electronic or written records to the immediate
subsequent recipient but does not state when this information must be
provided, relative to the physical shipment of the product (e.g.,
concurrently with each transaction, or batched with other transactions
and sent daily or weekly).
    (Response 408) The final rule does not prescribe the manner in
which a shipper must provide traceability lot codes and other KDEs to
immediate subsequent recipients. A shipper could provide this
information in one or more records, which could include product
labeling or packaging as well as commonly used reference documents such
as BOLs and ASNs. The information could also be sent in other ways,
such as in a separate email or by embedding the information in a quick
response (QR) code that appears on the packaging of the food or on a
related document. The information would not have to physically
accompany the food sent to the recipient but must be provided in a way
that permits the receiver of the food to keep the records it is
required to maintain under subpart S.

    (Comment 409) One comment recommends that we require packers or
processors to print their business name and product lot code
information on packaging. The comments suggest that for private label
products, in addition to the packer or processor, the brand owner
should be added to the packaging. The comment maintains that this
approach would establish a linkage between the physical product and
supporting records.
    (Response 409) We decline to require this approach. The final rule
does not specify the manner in which required KDEs must be provided to
the subsequent recipient of the food. In light of the wide range of
different business practices, and the comments we received expressing
different preferences for how to transmit the required information, we
conclude that a flexible approach is warranted.
    (Comment 410) One comment maintains that less than half of the
fresh produce cases they purchase include the packer's lot code in the
form of a PTI label. The comment requests that the final rule require
firms to place the traceability lot code on commercial documents such
as BOLs for companies selling fresh produce.
    (Response 410) As previously stated, although the final rule does
not require firms that ship FTL foods, including packers, to put the
traceability lot code for the food on a reference document such as a
BOL, shippers must by some means link the traceability lot code to the
other information that must be provided to the recipient, and we
anticipate that most shippers will do so by placing the traceability
lot code on a reference document for the shipment. Firms that follow
labeling standards outlined by traceability programs, such as the PTI,
may use those standards in meeting their subpart S requirements as long
as they include the information required under the rule.
    (Comment 411) One comment maintains that requiring the shipper to
send the location identifier, location description, and point of
contact for the traceability lot code generator will allow FDA to move
quickly up the food chain during traceback investigations, thereby
preventing illnesses, reducing death, and minimizing business impact.
    (Response 411) As discussed in Section V.F of this document, we
have replaced the term ``traceability lot code generator'' with
``traceability lot code source,'' and the final rule permits entities
to provide to their customers a traceability lot code source reference
instead of the location description for the traceability lot code
source. We agree that providing recipients with information on the
traceability lot code source will greatly assist firms and the Agency
in conducting effective tracking and tracing of FTL foods.
    (Comment 412) Many comments maintain that a company's supply base
represents significant investment and competitive advantage for some
food businesses. Some comments express concern that this competitive
advantage might be compromised by the proposed requirements to pass
forward original, unchanged traceability lot codes and contact and
location information for the traceability lot code generator (the
supplier). The comments maintain that the requirements in the proposed
rule would result in the disclosure of confidential information to
supply chain partners, expose processing and/or manufacturing logistics
information, reveal recipes to customers and third parties, and expose
confidential supplier/buyer relationships as well as the identities of
contract manufacturers for large branded and private labeled products.
Many comments assert that having to pass confidential commercial
information forward would adversely affect many supply chains and
result in loss of business for some entities by revealing proprietary
relationships. As examples, the comments state that first receivers
would need to collect harvesting, cooling, and packing data from farm
entities, and receivers would be required to keep location data of the
shipping entity and a point of contact for the originator of the food.
The comments express concern about what might happen when a first
receiver or other receiving entity experiences a data breach and
information is compromised, or a theft of information results in a
major financial loss to the firm that supplied the information because
the information is used to sabotage the business of an upstream entity.
    Some comments maintain that requiring businesses to share sensitive
information violates section 204(d)(3) of FSMA, which directs FDA to
take appropriate measures to ensure that there are effective procedures
to prevent the unauthorized disclosure of any trade secret or
confidential information obtained by FDA under the rule. One comment
recommends that we consult with European Union (EU) stakeholders to
ensure that data capture regulated by this rule does not conflict with
the EU's General Data Protection Regulation (GDPR). Some comments
suggest that the requirement to pass KDEs related to the traceability
lot code generator be deleted, while other comments suggest that we
permit the use of alternatives methods, such as encoding data into the
traceability lot code or use of the GTIN to identify the brand owner.
One comment suggests that requiring only the firm identity and the
identity of the records to be linked to the lot code, rather than the
critical information from the record itself or the names and contact
information for knowledgeable individuals, would provide a less
satisfying target for cybercrime. One comment suggests making the
location identifier for the traceability lot code generator an optional
KDE.
    (Response 412) The traceability lot code for a food and the
location and contact information for its source are fundamental to
effective traceability under this rule. However, we understand the
concerns regarding the confidentiality of supplier data expressed in
the comments. We are therefore deleting the proposed requirements for
shippers to maintain and provide the location identifier, location
description, and point of contact for the traceability lot code
generator, and replacing them with requirements to keep and provide
either the location description for the traceability lot code source or
the traceability lot code source reference (see Sec.  1.1340(a)(7) and
(b)). A traceability lot code source reference is a method for giving
FDA access to the traceability lot code source location description
required under subpart S without providing the traceability lot code
source location information directly to subsequent recipients (Sec.
1.1310). Examples of traceability lot code source reference types
include, but are not limited to, the FDA Food Facility Registration
Number assigned to the traceability lot code source or a web address
that provides FDA with the location description for the traceability
lot code source (Sec.  1.1310). To protect the confidentiality of
business information, a shipper could choose to provide its customers
with the traceability lot code source reference, instead of directly
identifying the location description of the traceability lot code
source of an FTL food they handle. If the firm uses a website as the
traceability lot code source reference, the website may employ
reasonable security measures, such as only being accessible to a
government email address, provided the Agency has access to the
information at no cost and without delay. We believe that the option to
use a traceability lot code source reference is an appropriate measure
for those entities concerned with sharing the traceability lot code
source information through the supply chain.
    (Comment 413) One comment states that many food distribution
centers are

well equipped to trace food without a lot code-based system by using
inbound receiving reference records (e.g., BOLs, invoices, POs) in
conjunction with pallet license plate numbers and location identifiers
(pick slots) within a warehouse to connect to outbound shipping
reference records.
    (Response 413) The tracing method described in the comment is not
as efficient as the method set forth in subpart S. Traceability lot
codes are critical to the subpart S traceability framework because they
are the piece of information to which the other KDEs for a traceability
event are linked, including the traceability lot code source. The
traceability lot code (along with other linked KDEs) explicitly
connects the food received by a distribution center with the food that
is then shipped by the distribution center and received at an RFE or
other establishment. Importantly, the traceability lot code also
connects this food to the traceability lot code source (the place where
the traceability lot code was assigned to the food), thus allowing FDA
to identify that source at the first location we investigate (often an
RFE or restaurant). During outbreak situations, this will allow us to
more quickly identify the traceability lot code source location and
prioritize where we need to collect tracing data, which in turn will
help us more quickly identify the origin of potentially contaminated
foods. Reference documents such as BOLs, POs, and invoices are
primarily designed to describe a business transaction between two
parties and may not include the lot code and contact information for
the entity that assigned the lot code to the product. While existing
business records may be used to satisfy subpart S, the information
required under final Sec.  1.1340, including the traceability lot code
and source, must be included within those documents or provided to the
immediate subsequent recipient in some other manner. Communication of
this information between supply chain partners is essential to ensuring
adequate traceability.
3. Shipment of a Food That Occurs Before the Food Is Initially Packed
    (Comment 414) One comment requests clarification on whether
movement of raw product from an orchard or field to a packinghouse
constitutes shipping, when the grower maintains ownership.
    (Response 414) We conclude that it is not necessary or appropriate
to apply the shipping recordkeeping requirements in Sec.  1.1340 to the
movement of RACs before they are initially packed, including the
movement of raw product from an orchard or field to a packinghouse.
Therefore, Sec.  1.1340(c) specifies that the shipping CTE requirements
do not apply to the shipment of a food that occurs before the food is
initially packed (if the food is a RAC not obtained from a fishing
vessel). As a result, any movement of RACs by farms, harvesters,
coolers, or other entities that occurs before the food is initially
packed is not subject to the requirements in Sec.  1.1340.
    (Comment 415) One comment requests that phone numbers be removed as
a requirement for the lot code generator point of contact. The comment
raises privacy concerns that some small farms may only have a home
phone number, which would then be shared with other entities in a
supply chain. The comment also notes that individuals may change
positions and that the privacy of a named individual could be
compromised in the event of a data breach at an operation later in the
supply chain.
    (Response 415) Although the final rule deletes the proposed
requirement (in proposed Sec.  1.1350(a)(4)) for shippers to provide
immediate subsequent recipients with the point of contact for the
traceability lot code generator (which would have included that
individual's name and telephone number under the proposed definition of
``point of contact''), the final rule includes a requirement to provide
the immediate subsequent recipient with the phone number for the
traceability lot code source. This is because shippers must provide the
location description for the traceability lot code source (or else
provide that information through a traceability lot code source
reference), and the definition of ``location description'' includes,
among other things, a phone number. We believe that having a phone
number is essential to being able to contact the traceability lot code
source when necessary for tracing purposes. However, as discussed in
Section V.L.2 of this document, in response to comments expressing
concern about privacy associated with sharing information on the
traceability lot code generator (now the traceability lot code source),
the final rule also allows firms to instead provide the recipient with
a traceability lot code source reference, which is an alternative
method for providing FDA with access to the location description for
the traceability lot code source.
    We have removed the requirement for shippers to provide the
recipient with a point of contact for the traceability lot code source.
We believe that the phone number and other location description
information is adequate for traceability purposes, and that once we
contact the firm using that information, the firm will be able to
provide us with the traceability point of contact listed in their
traceability plan. Also, as discussed in Section V.F of this document,
we have revised the definition of ``point of contact'' so that it no
longer requires a specific individual's name.
    (Comment 416) Some comments suggest that it would be difficult for
growers to access and verify for accuracy the shipping information
required in proposed Sec.  1.1350(b)(2)(iii) through (v), which the
comments characterize as the business name, point of contact, and phone
number of the harvester, cooler, and packer of the food (if not the
farm), and the date(s) and time(s) of harvesting, cooling, and packing,
due to a lack of supply chain visibility.
    (Response 416) We have made modifications in the final rule in
response to comments. In the final rule, shipping and receiving
information is not required to be kept and shared until FTL foods from
farms have been initially packed (see Sec. Sec.  1.1340(c) and
1.1345(c)). Therefore, harvesters and coolers do not need to provide
shipping and receiving information. Though we have changed the
requirements in the final rule, we note that the proposed shipping
provision referenced in the comment would not have required the grower
to send information on harvesters, coolers, and packers unless they
also performed those activities. However, the proposed rule would have
required some farms (ones that were not growers) to pass along certain
information about activities that they did not perform, e.g., a cooler
that met the definition of a farm might have been required to pass
along information about the harvester of the food. In the final rule,
we have provided flexibility for information about harvesting and
cooling to be sent either directly to the initial packer or passed
through the supply chain (Sec.  1.1325(a)(2) and (b)(2)) (see Response
350). We think this flexibility will help address concerns about the
proposed rule's requirements regarding this information.

N. Records of Receiving (Sec.  1.1345)

    We proposed that for each food on the FTL received, the receiver
must establish and maintain records containing and linking the
traceability lot code of the food to the following information: the
location identifier and location description for the immediate previous
source (other than a

transporter) of the food; the entry number(s) assigned to the food (if
the food is imported); the location identifier and location description
of where the food was received, and the date and time the food was
received; the quantity and unit of measure of the food (e.g., 6 cases,
25 returnable plastic containers, 100 tanks, 200 pounds); the
traceability product identifier and traceability product description
for the food; the location identifier, location description, and point
of contact for the traceability lot code generator; the reference
record type(s) and reference record number(s) (e.g., ``Invoice 750A,''
``BOL 042520 XYZ'') for the document(s) containing the previously
stated information; and the name of the transporter who transported the
food to the receiver (proposed Sec.  1.1335(a) through (h)). In
response to comments and on our own initiative to align the
requirements for receiving with other changes we are making in the
final rule, we have deleted several of the proposed receiving KDEs and
revised others.
    In addition to these changes to the proposed receiving
requirements, we have added requirements for circumstances in which an
entity receives an FTL food from a person to whom subpart S does not
apply. Final Sec.  1.1345(b) states that for each traceability lot of a
food on the FTL an entity receives from a person to whom this subpart
does not apply (i.e., a person who is exempt from the rule), the entity
must maintain records containing the following information and linking
this information to the traceability lot: the traceability lot code for
the food, which the entity must assign if one has not already been
assigned (except that this requirement does not apply to RFEs and
restaurants); the quantity and unit of measure of the food (e.g., 6
cases, 25 reusable plastic containers, 100 tanks, 200 pounds); the
product description for the food; the location description for the
immediate previous source (other than a transporter) for the food; the
location description for where the food was received (i.e., the
traceability lot code source) and (if applicable) the traceability lot
code source reference; the date the food was received; and the
reference document type and reference document number. We also have
added a provision (Sec.  1.1345(c)) specifying that the receiving
requirements do not apply to the receipt of a food that occurs before
the food is initially packed (if the food is a RAC not obtained from a
fishing vessel) or to the receipt of a food by the first land-based
receiver (if the food is obtained from a fishing vessel).
    We received several comments on the proposed requirements for
receiving, to which we respond in the following paragraphs.
1. Records of Receiving of Foods
    (Comment 417) Some comments assert that it is effective for
distribution centers to inform RFEs which traceability lot codes are
supplied to which locations as well as which are subject to a recall.
One comment requests that distributors and RFEs be required to keep
traceability lot codes for purchased foods.
    (Response 417) We agree that distributors and RFEs should be
required to keep traceability lot codes, and that it is effective for
distribution centers to provide RFEs with the traceability lot codes of
the foods they ship to those RFEs. As we had proposed, the final rule
requires receivers of FTL foods, including distributors and RFEs, to
keep a record of the traceability lot code for the received food. (We
have moved the requirement to record the traceability lot code from the
``introductory'' paragraph of proposed Sec.  1.1335 to the listing of
required KDEs, specifically Sec.  1.1345(a)(1).) A receiver of an FTL
food may not change the traceability lot code unless they transform the
food (see Sec.  1.1320). Therefore, records maintained and provided by
distributors and maintained by RFEs should include the same
traceability lot code that was assigned by the initial packer of a RAC
(other than food obtained from a fishing vessel), by the first land-
based receiver of a food obtained by a fishing vessel, or by an entity
that transformed the food. However, as stated in Sec.  1.1345(b)(1), if
a receiver (such as a distributor) receives the FTL food from an entity
that is exempt from subpart S, the receiver must assign a traceability
lot code if one has not already been assigned (except that this
requirement does not apply to RFEs and restaurants).
    (Comment 418) One comment asks that we finalize the requirements
for receivers of FTL foods as proposed. On the other hand, one comment
states that the proposed list of receiving KDEs is too prescriptive and
beyond what is necessary for traceability. The comment recommends that
receivers should only be required to keep the traceability lot code,
the GTIN, the location identifier (e.g., GLN) of the immediate previous
source, the traceability lot code generator contact information, the
quantity and unit of measure, and the name of the transporter. Some
comments suggest that to simplify production of an electronic sortable
spreadsheet (in accordance with proposed Sec.  1.1455(b)(3)) and reduce
recordkeeping burden, the required receiving KDEs should be reduced to
only those that are truly necessary for traceability. Therefore, the
comments suggest deletion of the following KDEs: entry number, location
identifier, point of contact for a traceability lot code generator,
traceability lot code generator, location where the CTE occurred, name
of the transporter, and time the event occurred. Another comment
recommends that location identifier, import entry number, and time of
receipt be optional, and suggests that the traceability lot code
generator location identifier, description, and point of contact be
required only if provided by the shipper.
    (Response 418) We agree that some of the proposed receiving KDEs
are not absolutely necessary for tracing, and we agree that reducing
the required KDEs will reduce the recordkeeping burden and simplify the
production of the electronic sortable spreadsheet under Sec.
1.1455(c)(3)(ii). Therefore, as requested by these comments (as well as
comments that made similar points about these KDEs as they appeared in
other proposed CTEs, as discussed elsewhere in this document), the
final rule deletes the following proposed KDEs for receiving an FTL
food: the entry number of the food (if imported); location identifiers;
the traceability product identifier of the food; the time the food was
received; the point of contact for the traceability lot code generator
(under the final rule, the traceability lot code source); and the name
of the transporter. In addition, as previously discussed, we have
replaced the requirement to record location information about the
traceability lot code generator with a requirement to record the
location description for the traceability lot code source or the
traceability lot code source reference.
    As a result of these changes, Sec.  1.1345(a) of the final rule
specifies that, except as specified in Sec.  1.1345(b) and (c)
(discussed below), for each traceability lot of a food on the FTL that
an entity receives, the receiving entity must maintain records
containing the following information and linking this information to
the traceability lot:
     The traceability lot code for the food (Sec.
1.1345(a)(1));
     The quantity and unit of measure of the food (e.g., 6
cases, 25 reusable plastic containers, 100 tanks, 200 pounds) (Sec.
1.1345(a)(2));
     The product description for the food (Sec.  1.1345(a)(3));
     The location description for the immediate previous source
(other than a transporter) for the food (Sec.  1.1345(a)(4));

     The location description for where the food was received
(Sec.  1.1345(a)(5));
     The date the food was received (Sec.  1.1345(a)(6));
     The location description for the traceability lot code
source or the traceability lot code source reference (Sec.
1.1345(a)(7)); and
     The reference document type and reference document number
(Sec.  1.1345(a)(8)).
    (Comment 419) Some comments suggest that we eliminate the proposed
requirement for persons who receive FTL foods to establish and maintain
records containing and linking the traceability lot code for the food
to the entry number assigned to the food if the food is imported. Some
comments contend that maintaining import entry numbers would make
recordkeeping requirements overly burdensome, would provide no
additional meaningful traceability information, and would be
duplicative and unnecessary given the maintenance of other KDEs.
    (Response 419) We agree and as stated in Response 396, we have
deleted all proposed requirements to record the entry number for an
imported FTL food.
    (Comment 420) One comment questions the value of requiring
receivers to maintain records that identify the location where they
received a food. The comment maintains that this information is not
necessary because other information would be more relevant for
traceability.
    (Response 420) We do not agree. Knowing the physical locations
where a food on the FTL has been, including where a food has been
received by an entity such as a distributor, RFE, or other firm subject
to the receiving CTE requirements, is critical for traceability. If a
food is contaminated, we need to be able to identify the source of that
food and trace its movements accurately and efficiently.
    (Comment 421) One comment requests clarification on whether the
date and time refers to the start or finish of the receiving process
for an FTL food.
    (Response 421) As previously stated, we have deleted the proposed
requirement to record the time of receipt, but we have retained the
requirement to record the date of receipt. If the receiving process
spans multiple days (e.g., if it starts shortly before midnight and
ends after midnight), we recommend recording the date when the
receiving process began.
    (Comment 422) One comment maintains that proposed Sec.  1.1335
clearly outlines the required receiving records and is consistent with
the 2012 IFT Final Report (Ref. 1), which recommends that any
traceability regulations that FDA adopts should ensure the
communication of needed information to promote accuracy.
    (Response 422) We agree with the comment that the requirements in
proposed Sec.  1.1335 align with the 2012 IFT Final Report's
recommendation to ensure the communication of needed information, and
we believe the revisions to this section (final Sec.  1.1345) also
remain in alignment with this recommendation. We believe that the
requirements we are establishing for receivers of FTL foods as well as
for others who manufacture, process, pack, or hold such foods should
help to ensure the effective and accurate communication of needed
traceability information throughout the supply chain and to the Agency.
    (Comment 423) Some comments express concern that the rule will
prohibit a food industry practice of linking internal traceability
identifiers to supplier-provided traceability lot codes, such as the
GS1-128 barcode and associated human readable text.
    (Response 423) The rule does not prohibit covered entities from
using internal identifiers to facilitate the internal storage and
management of FTL foods they handle, provided that the traceability lot
code and traceability lot code source information received is kept in
accordance with the receiving CTE requirements and provided to the
subsequent recipient in accordance with the shipping CTE requirements,
and provided that new traceability lot codes are only assigned under
the circumstances described in Sec.  1.1320. Considering the example in
the comment, a covered entity that receives FTL foods may use a
warehouse management system that links internal identifiers to
supplier-provided traceability lot codes, such as the GS1-128 barcode
and associated human readable text, provided that the entity maintains
all of the KDEs required under subpart S, and the KDEs to be provided
as required under Sec.  1.1340 are available to the next receiver of
the FTL food.
    (Comment 424) Several comments request clarification on the
applicable subpart S requirements when food is provided to a retailer
through direct store delivery (DSD). The comments state that under the
DSD system, a food vendor delivers food directly to a retail store
location and stocks the retail shelves with the food. The comments
further state that these products are not included in the retailer's
inventory; the retailer only facilitates the sale of the products to
the consumer, with the vendor's invoices being reconciled against the
retailer's scanned sales data. The comments maintain that the retailer
does not receive the food and therefore would not have access to
traceability data for the food.
    (Response 424) We do not agree with the statement that a retailer
of an FTL food obtained through DSD does not ``receive'' the food as
that term is used in subpart S. The retailer of a food obtained through
DSD is the receiver of the food, and is therefore responsible for the
receiving KDEs in Sec.  1.1345. However, the DSD vendor could maintain
the receiving records on behalf of the retailer. As discussed in
Section V.R of this document, Sec.  1.1455(b) of the final rule
specifies that a person may have another entity establish and maintain
records required under subpart S on the person's behalf, but the person
is responsible for ensuring that such records can be retrieved and
provided onsite to FDA within 24 hours of our request. Therefore, a
vendor and a retailer participating in a DSD system could make an
arrangement under which the DSD vendor establishes and maintains the
relevant receiving records on the retailer's behalf. However, the
retailer would still be the entity that is subject to the receiving
requirements of Sec.  1.1345, and as stated in Sec.  1.1455(b), the
retailer would be responsible for ensuring that the records can be
retrieved and provided onsite within 24 hours of request for official
review.
2. Records of Receipt of Foods From Persons Not Subject to Subpart S
    (Comment 425) One comment asks that FDA clarify a receiver's
recordkeeping responsibilities for FTL foods shipped by exempt and non-
compliant entities. The comment describes the potential challenges to
meeting the receiving requirements if FTL foods are received from
exempt entities that are not required to notify receivers that they are
exempt, as in the case of foodservice distributors sourcing food from
local entities that will not be subject to the rule. The comment asks
that receivers be permitted to assume that suppliers who fail to
provide the records required from shippers are subject to an exemption,
and that FDA not hold downstream actors accountable for non-compliance
if they rely in good faith on upstream actors providing the records
required by the rule.
    (Response 425) We agree that the receiving requirements must take
into account those situations in which an entity receives an FTL food
from a person who is not subject to the rule, such as because they are
exempt from subpart S under one of the exemptions set forth in Sec.
1.1305. Therefore, we have added to the final rule Sec.  1.1345(b),

which specifies that for each traceability lot of a food on the FTL
that is received from a person to whom subpart S does not apply, the
receiver must maintain records containing the following information and
linking this information to the traceability lot:
     The traceability lot code for the food, which the receiver
must assign if one has not already been assigned (except that this
requirement does not apply to RFEs and restaurants) (Sec.
1.1345(b)(1));
     The quantity and unit of measure of the food (e.g., 6
cases, 25 reusable plastic containers, 100 tanks, 200 pounds) (Sec.
1.1345(b)(2));
     The product description for the food (Sec.  1.1345(b)(3));
     The location description for the immediate previous source
(other than a transporter) for the food (Sec.  1.1345(b)(4));
     The location description for where the food was received
(i.e., the traceability lot code source), and (if applicable) the
traceability lot code source reference (Sec.  1.1345(b)(5));
     The date the food was received (Sec.  1.1345(b)(6)); and
     The reference document type and reference document number
(Sec.  1.1345(b)(7)).
    Under Sec.  1.1345(b)(1), if the received FTL food does not already
have a traceability lot code assigned, the receiver must assign one
(unless the receiver is an RFE or restaurant; we conclude that it is
not necessary to require assignment of a traceability lot code to food
that has already reached the end of the supply chain). Section
1.1345(b)(5) makes clear that the receiver (i.e., the place where the
food is received) will also become the traceability lot code source for
the food. (However, this is not the case if the receiver is an RFE or
restaurant; such an entity would still record the location description
for where the food was received, in accordance with Sec.  1.1345(b)(5).
But because RFEs and restaurants that receive food from exempt entities
are not required to assign a traceability lot code under Sec.
1.1345(b)(1), that location description would not be the traceability
lot code source.) It is important for the traceability lot code
source--which serves a crucial function as discussed in Sections V.F
and V.M of this document--to be an entity that is covered by subpart S.
    The rule does not allow receivers to assume that any received food
for which the shipper did not provide the information required under
Sec.  1.1340(b) was from an exempt entity. Instead, we expect receivers
of FTL foods to work with their suppliers to be familiar with whether
the suppliers are subject to the rule and, if so, to know what records
they must provide to enable the receivers to meet their requirements
under Sec.  1.1345.
    (Comment 426) One comment asks that we clarify the requirements for
FTL foods received when traceability records provided by distributors
are incomplete or inaccurate. The comment offers the example of a GS1-
128 barcode label that has been damaged, was not printed well
initially, or was torn off the food packaging in transit. The comment
asks if we will require suppliers to label multiple sides of food
cases, and if retailers and restaurants will be required to verify
received data, correct errors, and otherwise ``police'' distributors.
Another comment maintains that there may be unavoidable errors during
shipment or receiving due to human error or misprinted or damaged
barcode labels.
    (Response 426) We expect persons who manufacture, process, pack, or
hold any food covered by the final rule to be in compliance with these
regulations (unless an exemption applies). If the immediate previous
source of an FTL food is subject to the rule and provides the receiver
with illegible or incomplete records, the receiver should ask the
source to provide, in legible/readable form, the complete information
required of the shipper under Sec.  1.1340(b). We note that the rule
does not specify the manner in which shippers must provide the required
information to their recipients, nor does it specify the manner in
which shippers must label the FTL foods they ship.
    (Comment 427) Several comments ask that we clarify the
responsibilities of a receiving entity whose supplier fails to comply
with the requirements of subpart S or does not provide the receiving
entity with accurate data. The comments request that we clarify how we
will enforce the regulation against receiving entities in such
circumstances. Specifically, some comments assert that RFEs are not
able to verify the accuracy of data received from distributors and ask
whether RFEs that provide supplier-generated data to FDA will be
responsible for its accuracy. These comments maintain that entities
upstream of RFEs have the logistical expertise and infrastructure (such
as barcode scanners and management systems) required to implement
traceability recordkeeping, and that to require RFEs to verify data
from those firms would be complicated and inefficient.
    Some comments urge FDA to clarify that a receiving entity may
continue to supply a food without being in violation of the regulation
even if their supplier does not provide them with the information
required under subpart S. These comments maintain that prohibiting a
receiving entity from supplying food in such circumstances could lead
to supply chain disruptions or food waste. Some comments suggest that
even if a supplier does not provide the receiving entity with the
necessary information, it does not mean that the food is adulterated or
unsafe. Some comments request that we create a ``safe harbor'' that
would allow a receiving entity to assume that the subpart S
requirements do not apply if their supplier does not provide them with
traceability information, the receiving entity has no knowledge that
the food is covered by the regulation, or the receiving entity relies
on a one-time, ongoing guarantee from the supplier that the supplier
will provide traceability information when required. Some comments
assert that because a receiving entity's ability to comply with subpart
S depends on whether its supplier provides the required records, the
receiver should not be held liable for its supplier's non-compliance.
    (Response 427) Receivers of FTL foods must maintain records of KDEs
as specified in Sec.  1.1345, including records of certain information
that shippers are required to provide to them under Sec.  1.1340(b). As
discussed in Response 425, recognizing that a receiving entity's
supplier might be exempt from subpart S, we have added to the final
rule Sec.  1.1345(b), which specifies the information a receiver must
maintain if they receive an FTL food from a person to whom subpart S
does not apply. In circumstances where a receiver's supplier is subject
to the rule, if the receiving entity has reason to believe that
required information from the shipper is inaccurate or incomplete, the
receiver should work with their supplier to ensure that appropriate and
accurate records are provided. We expect firms will use the years
leading up to the compliance date for the rule to work with their
suppliers to ensure that all entities are ready to comply with the rule
and to provide the necessary information to others within their supply
chain, as required under the rule. Because of such efforts, we do not
believe that adoption of these recordkeeping requirements will result
in significant supply chain disruptions or food waste.
    We do not agree that the rule should provide a ``safe harbor'' that
would allow a receiving entity to assume that subpart S requirements do
not apply when their supplier does not provide them with traceability
information, the

receiver has no knowledge that the food is covered by the rule, or the
receiver relies on a one-time, ongoing guarantee from the supplier that
the supplier will provide traceability information when required. As
stated above, receivers are responsible for maintaining the records
required under Sec.  1.1345. The requested ``safe harbor'' would
relieve firms of that responsibility and encourage a head-in-the-sand
approach that would seriously undermine the ability of the requirements
to facilitate swift and effective traceability throughout the supply
chain. Furthermore, with respect to the receiver's knowledge of whether
a food is covered by the rule, we note that entities subject to the
rule must have a traceability plan in place that includes a description
of the procedures the entity uses to identify foods on the FTL that it
manufactures, processes, packs, or holds (Sec.  1.1315(a)(2)).
Consequently, receivers of FTL foods must have a procedure for knowing
whether a particular food they receive is on the FTL.
3. Receipt of a Food That Occurs Before the Food Is Initially Packed
    As discussed in Sections V.M and V.N of this document, we have
added provisions to the shipping and receiving CTE requirements to make
clear that those requirements do not apply to the movement of food that
occurs before the food is initially packed (for example, movement of a
RAC from the harvester to a cooler, or from the cooler to the initial
packer). While we noted that such language was not needed under the
shipping CTE with respect to food obtained from a fishing vessel (due
to the partial exemption for fishing vessels), we have added a
provision to the receiving CTE to make clear that the first land-based
receiver of food obtained from a fishing vessel does not need to keep
the receiving records required under Sec.  1.1345. This is because the
records required under Sec.  1.1335 already set forth the information
we think is necessary for the first land-based receiver of a food
obtained from a fishing vessel to maintain with respect to their
receipt of that food. Therefore, Sec.  1.1345(c) specifies that the
receiving requirements do not apply to receipt of a food that occurs
before the food is initially packed (if the food is a RAC not obtained
from a fishing vessel) or to the receipt of a food by the first land-
based receiver (if the food is obtained from a fishing vessel).

O. Records of Transformation (Sec.  1.1350)

    We proposed in Sec.  1.1340(a) that, except as specified in
proposed Sec.  1.1340(b), for each new traceability lot of food
produced through transformation, the person who transforms the food
must establish and maintain records containing and linking the new
traceability lot code of the food produced through transformed to
certain information regarding the food on the FTL used in
transformation and the food produced through transformation. For the
food(s) on the FTL used in transformation, we proposed that the
transformer would have to establish and maintain records containing the
following information: the traceability lot code(s) for the food; the
traceability product identifier and traceability product description
for the food to which the traceability lot code applied; and the
quantity of each traceability lot of the food (proposed Sec.
1.1340(a)(1)(i) through (iii)). For the food produced through
transformation, we proposed that records containing the following
information would have to be established and maintained: the location
identifier and location information for where the food was transformed
(e.g., by a manufacturing/processing step), and the date transformation
was completed; the new traceability product identifier and traceability
product description for the food to which the new traceability lot code
applied; and the quantity and unit of measure of the food for each new
traceability lot code (e.g., 6 cases, 25 returnable plastic containers,
100 tanks, 200 pounds) (proposed Sec.  1.1340(a)(2)(i) through (iii)).
The final required KDE we proposed was the reference record type(s) and
reference record number(s) (e.g., ``Production Log 123,'' ``Batch Log
01202021'') for the document(s) containing the information in proposed
Sec.  1.1340(a)(1) and (2) (proposed Sec.  1.1340(a)(3)). We further
proposed that these transformation KDEs would not apply to RFEs with
respect to foods they do not ship (e.g., foods they sell or send
directly to consumers) (proposed Sec.  1.1340(b)).
    We also proposed to establish recordkeeping requirements for the
creation of an FTL food. Because we proposed to define ``creating'' as
making or producing a food on the FTL (e.g., through manufacturing or
processing) using only ingredients that are not on the FTL, the creator
of a listed food would not be required to maintain tracing records on
the ingredients used to create the FTL food. Instead, we proposed that
for each food on the FTL that was created, the creator of the food
would have to establish and maintain records containing and linking the
traceability lot code of the created food to the following information:
the location identifier and location description for where the food was
created (e.g., by a manufacturing/processing step), and the date
creation was completed; the traceability product identifier and
traceability product description for the food; the quantity and unit of
measure of the food (e.g., 6 cases, 25 returnable plastic containers,
100 tanks, 200 pounds); and the reference record type(s) and number(s)
(e.g., ``Production Log 123,'' ``Batch Log 01202021'') for the
document(s) containing the previously listed information (proposed
Sec.  1.1345(a)(1) through (4)). As with the proposed requirements for
transformation, we specified that proposed Sec.  1.1345(a) would not
apply to RFEs with respect to foods they do not ship (e.g., foods they
sell or send directly to consumers).
    In the final rule, we are combining the proposed requirements for
transformation and creation of FTL foods into the requirements for
transformation in Sec.  1.1350 and making minor changes to the proposed
KDEs for transformation. We are retaining the concept that records only
need to be kept regarding incoming ingredients if those incoming foods
are on the FTL; thus, for foods that were ``created'' under the
proposed rule, it is still the case that the required records will only
relate to the finished product, not the incoming ingredients. We also
are adding clarifying language (Sec.  1.1350(b)) specifying that the
transformation KDEs do not apply when a RAC (other than a food obtained
from a fishing vessel) is transformed before it is initially packed;
instead, only the initial packing KDEs will apply. In addition, we are
finalizing our proposed exclusion from the transformation requirements
for RFEs and restaurants with respect to foods they do not ship. We
respond to the comments on the proposed requirements for transformation
and creation of FTL foods in the following paragraphs.
1. Records of Transformation (Sec.  1.1350(a))
    (Comment 428) Several comments support transformation as a CTE and
maintain that the proposed requirements for transformation are well
defined, including the requirement to include lot codes for inputs.
    (Response 428) We agree with the comments, and the final rule
includes requirements for transformation, with certain changes to the
proposed requirements discussed below.
    (Comment 429) A comment supports the ``creation'' CTE regarding the
production of foods on the FTL from foods that are not on the FTL. The
comment asks for clarification on which

KDEs would be required for the processing of whole apples, which are
not on the FTL, into sliced apples, which are listed on the FTL as
``Fruits and Vegetables (fresh-cut).'' One comment appreciates the
clarification provided by FDA after the publication of the proposed
rule that ingredient suppliers for FTL foods that are ``created'' would
not be subject to subpart S because those ingredients are not on the
FTL, and encourages the Agency to finalize this approach in the final
rule.
    (Response 429) In the final rule, we have merged the CTE for
creation of an FTL food into the CTE for transformation of an FTL food,
so there is no longer a separate creation CTE. We believe that it is
appropriate to use the term ``transformation'' to cover both the
activities of ``creation'' and ``transformation'' (see Response 247).
Given that the output of both the creation and the transformation CTEs
is an FTL food and both CTEs are manufacturing events, we decided to
simplify the number of CTEs and merge ``creation'' into
``transformation.'' The revised definition of ``transformation'' more
closely aligns with current industry practices as ``transformation'' is
already a term used by industry while ``creation'' is not. As part of
this change, Sec.  1.1350(a)(1) of the final rule, which relates to the
incoming FTL foods that are used in transformation, has been revised to
include the phrase ``if applicable.'' Consequently, Sec.  1.1350(a)(1)
records are not required for foods that do not have any incoming FTL
ingredients (i.e., foods regarded as ``created'' under the proposed
rule).
    Regarding the transformation of whole apples into sliced apples,
the apple farm, apple harvester, apple cooler, and initial packer of
the whole apples would not be covered by the rule because whole apples
are not on the FTL. Deliveries (shipping and receiving) from the apple
packer to the fresh-cut processor would also not be subject to the
rule. However, the fresh-cut processor who transforms the whole apples
into apple slices (which are included on the FTL under ``Fruits and
Vegetables (fresh-cut)'') and packages the sliced apples would be
required to keep the transformation records specified under final Sec.
1.1350(a)(2), as well as the shipping records (for shipment of the
sliced apples) specified under final Sec.  1.1340. If the apples are
sliced before initial packing, then, as specified under Sec.
1.1350(b), the entity who transforms the whole apples into sliced
apples would be required to keep the initial packing records specified
under Sec.  1.1330(a) or (c), and would not be required to keep
transformation records under Sec.  1.1350(a) (see Response 444 (434
(creation CTE requirements would not apply to the creation of an FTL
food solely for the purpose of being transformed into another food in
continuous processing)).
    In addition to merging the proposed creation CTE requirements into
the transformation CTE requirements, we are also making the following
changes:
     We deleted requirements concerning product identifiers and
location identifiers (as discussed in Sections V.F.46 and V.F.18 of
this document);
     We added unit of measure to the requirement to specify the
quantity of food used from each traceability lot of an FTL food used in
transformation;
     Regarding the food produced through transformation, we
moved the reference to the new traceability lot code from the
``introductory'' paragraph (Sec.  1.1340(a)) to the listing of required
KDEs;
     We clarified that the location description for where the
food was transformed is the traceability lot code source, and we added
that the traceability lot code source reference must also be recorded
``if applicable''; and
     We changed ``returnable plastic containers'' to ``reusable
plastic containers'' (as discussed in Section V.K.1 of this document).
    As a result of these changes, Sec.  1.1350(a)(1) and (2) of the
final rule states that, except as specified in Sec.  1.1350(b) and (c),
for each new traceability lot of food produced through transformation,
the transformer of the food must maintain records containing the
following information and linking this information to the new
traceability lot:
     For the food on the FTL used in transformation (if
applicable), the following information:
    [cir] The traceability lot code for the food;
    [cir] The product description for the food to which the
traceability lot code applies; and
    [cir] For each traceability lot used, the quantity and unit of
measure of the food used from that lot.
     For the food produced through transformation, the
following information:
    [cir] The new traceability lot code for the food;
    [cir] The location description for where the food was transformed
(i.e., the traceability lot code source), and (if applicable) the
traceability lot code source reference;
    [cir] The date transformation was completed;
    [cir] The product description for the food;
    [cir] The quantity and unit of measure of the food (e.g., 6 cases,
25 reusable plastic containers, 100 tanks, 200 pounds); and
    [cir] The reference document type and reference document number for
the transformation event.
    (Comment 430) One comment requests that firms be required to link
production input traceability lot codes to output traceability lot
codes.
    (Response 430) We agree. As stated above, Sec.  1.1350(a) requires
firms to document, among other KDEs, the traceability lot code for the
FTL food used in transformation (if any) and the new traceability lot
code for the food produced through transformation, and to link that
information to the new traceability lot.
    (Comment 431) One comment asks that we clarify what is meant by the
quantity used in transformation or the quantity of each traceability
lot code.
    (Response 431) We recognize that the language used in proposed
Sec.  1.1340(a)(1)(iii) (``[t]he quantity of each traceability lot of
the food'') caused some confusion. Therefore, in response to comments,
we have revised the language to be clearer. Final Sec.
1.1350(a)(1)(iii) states that for each traceability lot used, the
quantity and unit of measure of the food used from that lot must be
maintained as part of the required transformation records. For example,
if a person used multiple traceability lots of whole green peppers
(which are on the FTL) to manufacture a single traceability lot of
fresh-cut green peppers (which are also on the FTL), their records
might indicate that the incoming ingredients consisted of 10 pounds of
whole green peppers from traceability lot 1111, 10 pounds of whole
green peppers from traceability lot 1112, and 5 pounds of whole green
peppers from traceability lot 1113. (This might represent only half of
traceability lot 1113, a fact that would be clear from the person's
receiving records for that traceability lot.) If the manufactured
product were a fresh-cut mixture of green and red peppers, the person's
records might also indicate an incoming ingredient consisting of 10
pounds of red peppers from traceability lot 2222.
    (Comment 432) One comment questions the value of requiring
transformers and creators of FTL foods to maintain records identifying
the location where the food was transformed/created. The comment
maintains that this information is not necessary because other
information is

more relevant for traceability, and asserts that deleting this
requirement would also mean less information to compile for the
electronic sortable spreadsheet.
    (Response 432) We disagree with the comment. If a food is
contaminated, we need to be able to identify all of the locations where
the food was handled (see Response 420). The location where the food
was transformed is particularly important because contamination can be
introduced during transformation. Furthermore, because a traceability
lot code must be assigned whenever a food is transformed (see Sec.
1.1320(a)), the place of transformation takes on additional
significance as the traceability lot code source (see Sec.
1.1350(a)(2)(ii)). Transformation records are crucial to traceability
because they provide a connection between the incoming traceability
lots of FTL foods (when applicable) and the outgoing traceability lots
of the transformed FTL food. For all of these reasons, it is important
for FDA to be able to quickly identify the location where
transformation occurred.
    (Comment 433) One comment requests that location identifier be an
optional KDE for the transformation CTE and that it not be required for
creation events.
    (Response 433) We agree that location identifier is not necessary
and have deleted it from the final rule (see Response 267). However,
Sec.  1.1350(a)(2)(ii) requires transformers to keep a record of the
location description for where the food was transformed. Under the
definition of location description in Sec.  1.1310, this must include
the business name, phone number, physical location address (or
geographic coordinates), and city, state, and zip code for domestic
locations and comparable information for foreign locations, including
country.
2. Transformation of RACs Not Initially Packed Before Transformation
(Sec.  1.1350(b))
    (Comment 434) Several comments ask that we clarify that the
creation CTE requirements would not apply to the creation of an FTL
food solely for the purpose of being transformed into another food in a
continuous processing protocol. As examples of such continuous
processing, the comments suggest a nut butter created by a confectioner
solely for the purpose of being turned into confections, and cream
cheese created solely to be further processed into dips or spreads. The
comments maintain that FTL foods created solely for the purpose of
being turned into another FTL food generally are not given separate
identifiers or lot codes before transformation into the final FTL food.
The comments contend that requiring creation CTE records for such
continuous processing would serve no purpose and add unnecessary
burden. Some comments request clarification on how traceability lot
codes would apply to bulk and commingled ingredients used in continuous
processing operations. The comments state that commodity ingredients
often are received in bulk form and multiple lots of the same
ingredient are stored together before being used in food production,
often commingled with other lots of the same ingredient.
    (Response 434) As previously stated, we are combining the proposed
CTEs for transformation and creation into one CTE for transformation.
We recognize that continuous processing operations may present unique
circumstances when transforming a food. In some continuous processing
operations, a RAC is processed before it is initially packed. (For
example, whole heads of lettuce are harvested, chopped, and then
initially packed as chopped lettuce.) We conclude that in such
situations, where a RAC (other than a food obtained from a fishing
vessel) is transformed before it is initially packed, the KDEs relating
to initial packing are more appropriate than the KDEs relating to
transformation, in part because the incoming RAC has not yet been
packed and will not yet have a traceability lot code. Therefore, Sec.
1.1350(b) specifies that for each traceability lot produced through
transformation of a RAC (other than a food obtained from a fishing
vessel) on the FTL that was not initially packed prior to the
transformation of the food, the person performing this transformation
(which we assume will include packing of the finished product) must
maintain records containing the information specified in Sec.
1.1330(a) or (c) (the requirements for initial packers), and if the RAC
is sprouts, the information specified in Sec.  1.1330(b).
    We are aware that there are other types of continuous processing
operations that differ from this scenario. To address an example from
the comments, if a food that is not on the FTL (e.g., nuts) is
processed into an intermediate food that is on the FTL (e.g., nut
butter) and is very soon thereafter fully processed at the same
location into a finished food containing an FTL food that has not been
subjected to a kill step (e.g., a confection with nut butter), we would
consider this to be one processing event. The food produced through
transformation would be the confection, which would be on the FTL
because it contains nut butter. The incoming ingredients would include
nuts, which are not on the FTL. Nut butter would not be considered an
incoming ingredient because the manufacturing of the nut butter was
incidental to the overall process of manufacturing the confection.
Records under Sec.  1.1350(a)(1) would therefore not be required
(assuming none of the other incoming ingredients are on the FTL), and
the only records of the transformation event would be those required
under Sec.  1.1350(a)(2). We think this approach is appropriate because
as described in the comments, the nut butter that is manufactured as an
intermediate step (as part of the process of manufacturing the
confection) would generally not be given a separate identifier or lot
code. We agree with the comments that requiring two sets of records in
this situation--one for the manufacturing of the nut butter, and a
second for the manufacturing of the confection--would add unnecessary
burden.
    However, there are some situations where an ingredient such as nut
butter is manufactured as a stand-alone product, and then later--not as
part of a continuous processing operation--the nut butter is used as an
ingredient in a confection. In such situations, the nut butter would
have been packed in some way, and possibly stored before its
incorporation into the confection. Factors such as these indicate that
it was not a continuous processing operation, and that instead there
were two separate manufacturing events (one for the nut butter, one for
the confection). In that situation, transformation records would be
kept for each manufacturing event, including the assigning of a
traceability lot code to the nut butter and then assigning of a
different traceability lot code to the confection containing the nut
butter.
    In response to the request for clarification on how the
transformation requirements would apply to bulk and commingled
ingredients used in continuous processing operations, we note that the
concerns expressed in the comment do not seem to be specific to
continuous processing operations. In general, if bulk or commingled FTL
foods are used as ingredients in another FTL food, the requirements of
this subpart would apply. (However, note that some non-produce
commingled RACs are partially exempt under Sec.  1.1305(h), and as
discussed above there is a specific provision governing RACs (not
obtained from a fishing vessel) that are transformed before they are
initially packed.) The traceability lot codes for those FTL ingredients
would

need to be maintained when received from the shipper as specified in
Sec.  1.1345. During transformation, for each traceability lot of the
ingredient that is used, the quantity and unit of measure of the food
used from that lot would need to be maintained (see Sec.
1.1350(a)(1)(iii) and Response 431). If multiple lots of the same FTL
ingredient are stored together before being transformed, entities will
need to employ practices to ensure that the different traceability lot
codes associated with the FTL ingredient are able to be identified and
recorded as required under Sec.  1.1350.
    (Comment 435) One comment suggests that the owner of the food being
repacked should be required to establish the traceability lot code,
rather than a firm, such as a third-party logistics provider, who is
under contract to repack or relabel the food.
    (Response 435) Subpart S applies to persons who manufacture,
process, pack, or hold FTL foods (see Sec.  1.1300); this is true
regardless of whether such person owns the food (see Response 155).
Similarly, the requirement in Sec.  1.1320(a) to assign a traceability
lot code when a food is transformed does not depend on ownership. Thus,
in the example given in the comment, it is the entity that repacks the
food (i.e., the third-party logistics provider) who is responsible for
assigning the traceability lot code (and for maintaining the
transformation KDEs under Sec.  1.1350). The third-party logistics
provider could enter into an agreement with the owner of the food,
under which the owner maintains the relevant KDEs and makes decisions
relating to traceability lot codes. However, the third-party logistics
provider would still retain the ultimate responsibility for compliance
with the relevant portions of the rule. Also, as discussed in Response
296, the traceability lot code source for the food would be the place
where the food was transformed (e.g., the third-party logistics
provider's repacking facility).
    (Comment 436) Several comments request that foods repacked on a
farm within the same lot retain the same lot code. For example, a farm
may repack 30 boxes of tomatoes from the same lot, sort them by size or
quality, and retain the original lot code to maintain traceability to
the grower.
    (Response 436) We agree that repacked product (regardless of
whether it was repacked on a farm) could retain the traceability lot
code from the original traceability lot as long as the food is repacked
within the same traceability lot (repacking ``like into like''). An
example is a single lot of tomatoes repacked so that it is still a
single lot, but the individual tomatoes have been sorted into packages
within that lot based on their size. In this situation, Sec.  1.1320 is
being complied with because the person who transforms the food (i.e.,
the repacker) is assigning the traceability lot code (even though they
are deciding to assign the same traceability lot code that had
previously been assigned to the food). Furthermore, the definition of
traceability lot code is being complied with, because the code uniquely
identifies a single traceability lot within the firm's records. In this
situation, the repacker would keep the required transformation records
under Sec.  1.1350, with the lot codes in Sec.  1.1350(a)(1)(i) and
(2)(i) being the same. Because the repacker in this scenario is
required under Sec.  1.1320 to assign a traceability lot code to the
food (even if it is the same code that was used previously), under the
definition of traceability lot code source in Sec.  1.1310, the
traceability lot code source would be changed to reflect the place
where the repacking occurred. We think this approach is responsive to
the concerns expressed in the comments while still allowing for
effective and efficient traceability. Identifying the repacking
facility as the traceability lot code source would make us aware that
the repacking took place and allow us to contact the repacker in the
event of an outbreak investigation. However, if a repacker combines or
commingles lots, they cannot use the same traceability lot code,
because it would no longer uniquely identify the lot. The repacker in
this situation would be required to keep the transformation records
under Sec.  1.1350, with the lot codes from the incoming product being
identified in Sec.  1.1350(a)(1)(i) and the newly assigned lot code in
Sec.  1.1350(a)(2)(i).
    (Comment 437) One comment expresses concern that traceability
information will not be maintained if produce is repacked further down
the supply chain.
    (Response 437) Unless they are exempt from subpart S, entities that
engage in activities defined as transformation, including repacking,
would be required to maintain records of receiving as specified in
final Sec.  1.1345, to assign a new traceability lot code as specified
in Sec.  1.1320, and to maintain records of transformation in
accordance with Sec.  1.1350. In addition, shipping KDEs for the food
produced through transformation would need to be maintained and
provided to the immediate subsequent recipient of the food in
accordance with Sec.  1.1340. We believe that compliance with these
requirements will ensure that adequate traceability information on
repacked produce will be available later in the supply chain.
    (Comment 438) Several comments ask that we provide further
definitions and specific requirements for distributors, retailers, and
food service operations regarding transformation.
    (Response 438) The terms ``distributor,'' ``retailer,'' and ``food
service operation'' are not used in subpart S, and we therefore do not
see a need to define them. We note that, as discussed in Section V.F of
this document, the final rule defines the terms ``retail food
establishment'' and ``restaurant.''
    In most cases, we do not anticipate that entities who identify as
distributors would perform transformation. However, if they were to do
so, they would need to keep the transformation records specified in
Sec.  1.1350. As discussed in Section V.O.3 of this document, Sec.
1.1350(c) states that the transformation KDEs do not apply to RFEs and
restaurants with respect to foods they do not ship (e.g., foods they
sell or send directly to consumers). However, if an RFE or restaurant
transforms an FTL food which it then ships to an entity other than a
consumer, it would be subject to the transformation requirements in
Sec.  1.1350.
    (Comment 439) One comment asks whether RFEs will be held
responsible for maintaining traceability information for foods they
receive that are not identified with barcodes and other traceability
lot code information. The comment states that produce vendors may
divide up and repackage cases of produce for restaurants because they
cannot always use the whole case, and those repackaged cases might not
include barcodes or other traceability lot code information.
    (Response 439) In the situation described in the comment, the
produce vendor would need to keep transformation records under Sec.
1.1350 because they divided up the cases and repacked them. (As
discussed in Response 436, the vendor might be able to retain the
traceability lot code from the original traceability lot if they
repacked ``like into like,'' but this would still be a transformation
event.) When the vendor then ships the FTL food to the RFEs or
restaurants, the vendor would need to comply with the requirements for
shipping under Sec.  1.1340, including the requirement to provide the
traceability lot code and other required information to the receiving
RFE or restaurant (see Sec.  1.1340(b)). Shippers may use barcodes to
provide the required information to RFEs and restaurants (or to any
immediate subsequent recipient), but

the rule does not require them to do so. RFEs and restaurants should
work with their suppliers if they believe they are not receiving the
information required to be provided under Sec.  1.1340(b).
    (Comment 440) Some comments assert that the proposed rule would
require seafood processors to keep individual shipments separate once
processing begins, so that the traceability lot code for the
transformed product would not correspond to a significant amount of
product from a variety of sources. The comments maintain that if there
is a public health issue with an individual shipment, the entire
transformed lot would be implicated.
    (Response 440) Processing of seafood would be considered a
transformation event. Therefore, unless an exemption applies, the
seafood processor would be required to maintain records that link the
traceability lot code (and the other KDEs listed in Sec.  1.1350(a)(1))
of the food being used in transformation (the input) to the new
traceability lot code for the food produced through transformation.
There is no requirement to limit the number of incoming lots in a
transformation event. As noted in the comments, if a processor creates
one traceability lot of product using input from a large number of
different incoming traceability lots, it is possible that one
contaminated incoming traceability lot could lead to contamination in
the entire outgoing traceability lot. However, this risk of
contaminating a large traceability lot of product exists regardless of
whether traceability records are maintained. The maintenance of
traceability records--and especially records of transformation such as
those set forth in Sec.  1.1350--can help identify which traceability
lots have been exposed to contamination in a situation such as the one
described in the comments.
    We note that Sec.  1.1305(h) provides a partial exemption for
certain commingled non-produce RACs (see Section V.E.9 of this
document). See Response 208 for a description of when and how this
partial exemption applies to seafood obtained from a fishing vessel,
and to seafood that is raised in aquaculture operations. Processors of
seafood who are subject to this partial exemption may nonetheless
choose to maintain some form of transformation records (in addition to
the one-up, one-back records that they may be required to maintain
under Sec.  1.1305(h)(3)), for example if they are concerned that a
lack of such records would lead to uncertainty about whether a product
had been exposed to contamination.
3. Inapplicability of Transformation Requirements to RFEs and
Restaurants With Respect to Foods They Do Not Ship (Sec.  1.1350(c))
    We proposed that the transformation and creation requirements would
not apply to RFEs with respect to foods they do not ship (e.g., foods
they sell or send directly to consumers). We stated in the preamble to
the proposed rule (85 FR 59984 at 60011) that, as with records of sales
of FTL foods by RFEs to consumers, we did not believe it was reasonable
to require RFEs to keep records of transformation for foods they then
sell directly to consumers (or that they donate or dispose of).
    (Comment 441) Some comments express support for exempting from the
transformation requirements RFEs that transform food sold directly to
consumers.
    (Response 441) We received no comments opposing the proposed
exemption, and we are finalizing it essentially as proposed. Thus,
Sec.  1.1350(c) specifies that Sec.  1.1350(a) and (b) do not apply to
RFEs and restaurants with respect to foods they do not ship (e.g.,
foods they sell or send directly to consumers).
    (Comment 442) One comment asks whether restaurants, grocery stores,
or other commercial kitchens would be considered to be ``transforming''
foods. The comment suggests that tracking FTL foods that are being
transformed or used as an ingredient in another food would not be
feasible in these locations because they can be ``wet areas'' where it
is challenging to keep records. Other comments request clarification on
whether the exemption from the transformation requirements for RFEs
that sell food directly to consumers would apply to restaurants or
retailers that operate ``central kitchens'' or commissaries, often
under common ownership, that prepare food in a larger workspace for
transfer (by sale or internal transfer) to nearby stores for sale to
consumers or that provide prepared food to entities such as schools or
corporate cafeterias for resale to consumers.
    (Response 442) As discussed above, under Sec.  1.1350(c) the
transformation CTE requirements in Sec.  1.1350(a) and (b) do not apply
to RFEs and restaurants with respect to food they do not ship. Shipping
is defined in Sec.  1.1310 as an event in a food's supply chain in
which a food is arranged for transport (e.g., by truck or ship) from
one location to another location. The definition goes on to state that
shipping does not include the sale or shipment of a food directly to a
consumer or the donation of surplus food; and that shipping does
include sending an intracompany shipment of food from one location at a
particular street address of a firm to another location at a different
street address of the firm. Thus, when an RFE or restaurant sells food
directly to a consumer, the food is not ``shipped,'' and therefore
under Sec.  1.1350(c) the transformation CTE requirements in Sec.
1.1350(a) and (b) do not apply. However, when an entity such as a
central kitchen prepares food and then ships the food to a restaurant
or RFE, the exclusion in Sec.  1.1350(c) would not apply. Therefore, if
the preparation of the food meets the definition of transformation, the
required KDEs under Sec.  1.1350(a) or (b) would need to be maintained.
    We think this approach appropriately balances feasibility concerns
with the need for robust traceability records. As previously stated, we
do not believe it is reasonable to expect RFEs and restaurants to keep
records on foods they transform and then sell directly to consumers
(e.g., a salad prepared in a restaurant kitchen and then sold to a
restaurant customer). However, an entity such as a central kitchen that
transforms a food and ships it to a business is functioning as a
manufacturer/processor, and should be well-positioned to keep the
required records.
    (Comment 443) Some comments request that FDA explicitly state in
the final rule that repackaging, such as into multipacks or variety
packs, constitutes transformation and would require the establishment
of a new traceability lot code. One comment asks whether repacking and
repackaging are considered transformation events; the comment expresses
concern that for firms that frequently divide and label lots into
smaller groups, printing new tags each time could create opportunities
for error.
    (Response 443) As previously stated, transformation includes
changing a food (such as by commingling, repacking, or relabeling) or
its packaging or packing when the output is a food on the FTL. Thus,
repacking and repackaging are both considered transformation events.
However, there are some situations (when repacking ``like into like'')
where the incoming traceability lot code can be maintained (see
Response 436).

P. Procedures for Modified Requirements and Exemptions (Sec. Sec.
1.1360 to 1.1400)

    In accordance with section 204(d)(6)(E) and (F) of FSMA, we
proposed to codify provisions allowing the Agency to modify the subpart
S

recordkeeping requirements applicable to certain foods or types of
entities, or to exempt foods or types of entities from the
requirements, under certain circumstances. In the following paragraphs,
we clarify certain aspects of the proposed provisions in response to
comments we received, but we have made no changes to the provisions and
are finalizing them as proposed.
1. Circumstances Under Which FDA Will Modify Requirements or Grant
Exemptions (Sec.  1.1360)
a. General
    We proposed to codify the circumstances under which we would modify
the requirements in subpart S that apply to a food or type of entity or
exempt a food or type of entity from the requirements of subpart S.
Under proposed Sec.  1.1360(a), except as stated in proposed Sec.
1.1360(b) (discussed below), we would modify the requirements of
subpart S applicable to a food or type of entity, or exempt a food or
type of entity from subpart S, when we determine that application of
the requirements that would otherwise apply to the food or type of
entity is not necessary to protect the public health.
    We have made no changes to the provisions and are finalizing them
as proposed.
    (Comment 444) One comment requests that FDA provide examples of how
the modification and exemption provisions might be applied.
    (Response 444) The standards and procedures surrounding modified
provisions and exemptions are set forth in Sec. Sec.  1.1360 through
1.1400. As prescribed by Congress and as stated in Sec.  1.1360(a) of
the final rule, we will provide modifications and exemptions for
specific foods or types of entities if we determine that application of
the relevant requirements is not necessary to protect the public
health. It is difficult to anticipate all of the various circumstances
that might lead to such a conclusion.
    (Comment 445) Some comments support the proposed procedures under
which entities may request exemptions or modified requirements based on
grounds that application of the requirements that would otherwise apply
is ``not necessary to protect the public health.'' However, one comment
maintains that modifications and exemptions based on these grounds
would be problematic because it would result in inconsistent nationwide
application and enforcement of the rule. Another comment asserts that
modified requirements or exemptions in one part of the supply chain
will affect other parts of the supply chain and may require additional
modifications and exemptions. The comment requests that FDA consider in
the preamble the impact on others in the supply chain relative to
maintaining and sending traceability records/information when it grants
requests for modified requirements and exemptions. Other comments
request that we consider the financial impacts to the industry when
modifying requirements.
    (Response 445) We agree that consistent application and enforcement
of the rule is important, especially because subpart S depends on the
sharing of traceability information through the supply chain. As
provided in Sec.  1.1360(a), we will only grant a modification or
exemption if we determine that the relevant requirements are not
necessary to protect the public health. In making this determination,
we will consider the effect that the modification or exemption would
have on the entire supply chain, and thus on the traceability of the
affected foods. A modification or exemption that could impair our
ability to conduct timely and efficient traceback investigations could
adversely affect our ability to protect public health, and thus likely
would not be granted.
    Subpart S already contains several full and partial exemptions, in
addition to allowing interested parties to petition for modified
requirements and exemptions. As discussed in Section V.E, the final
rule contains provisions to address the potential impact of these
exemptions on other entities in the supply chain, and to clarify the
responsibilities of entities that receive food from suppliers to whom
subpart S does not apply. For example, recognizing that some firms
might not be provided with certain traceability information they are
required to keep because their suppliers are exempt from the rule, the
final rule includes special requirements for initial packers (in Sec.
1.1330(c)) and receivers (in Sec.  1.1345(b)) who receive food from
persons not subject to subpart S. Under these provisions, we do not
believe that industry members would be negatively impacted financially
if we were to grant an exemption or modified requirements to a member
of their supply chain.
    (Comment 446) One comment asks if retail chains with in-store food
production will be able to petition for an exemption from
transformation records.
    (Response 446) Any interested party may submit a citizen petition
requesting modified requirements or an exemption from the subpart S
requirements for a food or type of entity, as described in Sec. Sec.
1.1365 and 1.1370. This may include a request for an exemption from the
requirements for a particular CTE, such as transformation, as is
described in the comment. However, we note that under Sec.  1.1350(c)
of the final rule, RFEs and restaurants are not required to keep
transformation records related to in-store processing of foods they do
not ship (e.g., foods they sell or send directly to consumers) (see
Response 441).
    (Comment 447) One comment suggests that the provisions allowing
exemptions, modifications, and waivers be used broadly as we collect
more data on small farms with short supply chains, and asks that these
provisions of the rule be used to allow modifications and to ensure
flexibility and appropriateness of scale.
    (Response 447) A specific type of entity, such as farms of a
specific size that participate in a specific type of supply chain, can
request an exemption/modified requirements or a waiver, using the
procedures in Sec.  1.1370 or Sec.  1.1425, respectively, if they think
they meet the relevant requirements. We agree that these procedures can
help provide flexibility and appropriateness of scale, for example if a
petitioner is able to demonstrate that some of the subpart S
requirements are not necessary (or could be modified) for a certain
type of entity, in light of the particular circumstances that apply to
that type of entity. However, we note that these procedures are not
meant to substitute for the decisions that were made regarding
exemptions for small entities, as reflected in Sec.  1.1305(a) and (i),
and Sec.  1.1455(b)(3)(iii).
b. Registered Facilities
    In accordance with section 204(d)(6)(E) and (F) of FSMA, we
proposed that if a person to whom modified requirements or an exemption
applied under Sec.  1.1360(a) (including a person who manufactures,
processes, packs, or holds a food to which modified requirements or an
exemption applies under Sec.  1.1360(a)) is required to register with
FDA under section 415 of the FD&C Act (and in accordance with subpart
H) with respect to the manufacturing, processing, packing, or holding
of the applicable food, such person would be required to maintain
records identifying the immediate previous source of such food and the
immediate subsequent recipient of such food in accordance with
Sec. Sec.  1.337 and 1.345 (in the subpart J requirements). Proposed
Sec.  1.1360(b) further stated that such records would have to be

maintained for 2 years. We are finalizing Sec.  1.1360(b) as proposed.
    (Comment 448) Some comments ask that we clarify in these provisions
that entities with exemptions, modifications, or waivers still must
register with FDA as a food facility under the Bioterrorism Act (and
part 1, subpart H) and follow a ``one-up, one-back'' traceability
standard.
    (Response 448) Section 1.1360(b), which we proposed in accordance
with section 204(d)(6)(E) and (F) of FSMA, essentially requires that
even if a person is subject to modified requirements or an exemption
from subpart S under Sec.  1.1360(a), the person must keep ``one-up,
one-back'' traceability records for the FTL foods it handles in
accordance with Sec. Sec.  1.337 and 1.345 if it is required to
register as a food facility with respect to the manufacturing,
processing, packing, or holding of that food. In many cases this will
not constitute a new requirement, because many entities that are
required to register as food facilities under subpart H are also
subject to subpart J, in which case they are already required to keep
``one-up, one-back'' records under Sec. Sec.  1.337 and 1.345. However,
under Sec.  1.1360(b), if a person to whom modified requirements or an
exemption applies under Sec.  1.1360(a) is required to register as a
food facility under subpart H and is not already subject to subpart J,
such an entity would have a new obligation, as a result of Sec.
1.1360(b), to keep ``one-up, one-back'' records in the manner that is
specified in Sec. Sec.  1.337 and 1.345. Similar provisions in Sec.
1.1305(h)(3) and (m)(2) operate in the same manner.
    Congress did not specify a similar requirement with respect to the
waivers of the subpart S requirements that it authorized us to issue
(see Section V.Q of this document), nor did we choose to create such a
provision. If FDA waives one or more of the subpart S requirements in
accordance with Sec.  1.1405, there is no requirement for the entity
that received the waiver to begin keeping ``one-up, one-back'' records
if it is not already required to do so. However, a waiver of subpart S
requirements has no effect on the applicability of subpart J.
Therefore, if the entity that receives the waiver is subject to subpart
J, it must continue to comply with that regulation, including (if
applicable) by keeping ``one-up, one-back'' records under Sec. Sec.
1.337 and 1.345.
2. Means by Which FDA Will Consider Whether To Adopt Modified
Requirements or Grant Exemptions (Sec.  1.1365)
    We proposed that we will consider modifying subpart S requirements
applicable to a food or type of entity, or exempting a food or type of
entity from these requirements, on our own initiative or in response to
a citizen petition submitted under Sec.  10.30 (21 CFR 10.30) by any
interested party (proposed Sec.  1.1365). As stated in the preamble to
the proposed rule (85 FR 59984 at 60013 and 60014), the citizen
petition regulations in Sec.  10.30 provide standardized procedures for
asking the Agency to take (or refrain from taking) an administrative
action. We received no comments on this provision and are finalizing it
as proposed.
3. Requirements for Citizen Petitions Requesting Modified Requirements
or an Exemption (Sec.  1.1370)
    Proposed Sec.  1.1370 specified that, in addition to meeting the
requirements on the content and format of a citizen petition in Sec.
10.30, a petition requesting modified requirements or an exemption from
the subpart S requirements must:
     Specify the food or type of entity to which the modified
requirements or exemption would apply (proposed Sec.  1.1370(a));
     If the petition requests modified requirements, specify
the proposed modifications to the subpart S requirements (proposed
Sec.  1.1370(b)); and
     Present information demonstrating why application of the
requirements requested to be modified or from which exemption is
requested is not necessary to protect the public health (proposed Sec.
1.1370(c)).
    We received no comments on this section and are finalizing it as
proposed.
4. Public Availability of Information in a Citizen Petition (Sec.
1.1375)
    We proposed that we would presume that information submitted in a
petition requesting modified requirements or an exemption, as well as
information in comments submitted on such a petition, does not contain
information exempt from public disclosure under 21 CFR part 20 (part
20) (FDA's regulations on public information) and will be made public
as part of the docket associated with the petition (proposed Sec.
1.1375).
    We received no comments on this provision and are finalizing it as
proposed.
5. Process for Citizen Petitions Requesting Modified Requirements or an
Exemption (Sec.  1.1380)
    We proposed (in Sec.  1.1380) to establish a process for our
handling of citizen petitions requesting modified requirements or an
exemption from subpart S. Proposed Sec.  1.1380(a) provided that, in
general, the procedures in Sec.  10.30 would govern our response to
such a petition, and an interested person could submit comments on such
a petition in accordance with Sec.  10.30(d). Proposed Sec.  1.1380(b)
specified that, under Sec.  10.30(h)(3), we would publish a
notification in the Federal Register requesting information and views
on a submitted petition, including information and views from persons
who could be affected by the modified requirements or exemption if we
granted the petition. Proposed Sec.  1.1380(c) provided that, under
Sec.  10.30(e)(3), we would respond to a petitioner in writing. If we
granted the petition either in whole or in part, we would publish a
notification in the Federal Register setting forth any modified
requirements or exemptions and the reasons for them (proposed Sec.
1.1380(c)(1)). If we denied the petition (including a partial denial),
our written response to the petitioner would explain the reasons for
the denial (proposed Sec.  1.1380(c)(2)). Finally, proposed Sec.
1.1380(d) specified that we would make readily accessible to the
public, and periodically update, a list of petitions requesting
modified requirements or exemptions, including the status of each
petition (for example, pending, granted, or denied).
    We received two comments requesting changes to this section. As
discussed in the following paragraphs, we are declining these requests
and finalizing the provisions as proposed, with one minor change. The
only change is that the proposed rule used the word ``notification'' in
places where the final rule uses the word ``notice'' to refer to a type
of document published in the Federal Register. This revision, which we
have made throughout the document on our own initiative, was made to
align subpart S with the current terminology regarding Federal Register
documents, and does not change the meaning of these provisions.
    (Comment 449) One comment recommends that we provide timeframes for
review of petitions for modified requirements, exemptions, and waivers.
    (Response 449) As stated in Sec.  1.1380(a), in general the
procedures set forth in Sec.  10.30 govern FDA's response to a petition
requesting modified requirements or an exemption. (The same is true for
petitions requesting a waiver for a type of entity under Sec.
1.1435(a).) This includes the timeframes set forth in Sec.  10.30(e).
We decline to codify different or more specific timeframes for review
of petitions for modified requirements or exemptions, or for petitions
requesting a

waiver for a type of entity. We also decline to codify specific
timeframes for review of waiver requests for individual entities (see
Sec. Sec.  1.1415 and 1.1420).
    We anticipate that the circumstances for each petition or waiver
request will be unique and will likely result in wide variation in the
time needed to thoroughly review and consider the petition or request.
We will complete our review of such petitions and requests and issue
responses as soon as possible given available Agency resources.
    (Comment 450) One comment requests that we announce denials of
petitions to the public through a Federal Register notice with a
justification for the denial. The comment asserts that it is not
sufficient to identify a petition as denied on a list on a website
without including the justification for the denial, and that providing
a rationale for denial would allow stakeholders to gain insight into
FDA's decision-making process and potentially improve subsequent
petitions.
    (Response 450) We agree that stakeholders have a legitimate
interest in understanding the rationale for a petition denial. In
accordance with Sec.  10.30(e)(3), we will place our response to the
petitioner (which will include the rationale for the denial) in the
public docket file for the citizen petition. We think that this
procedure, combined with periodically updating the status of each
petition in accordance with Sec.  1.1380(d), will provide sufficient
transparency regarding petition denials. Announcing all denials of
petitions through a Federal Register notice would require additional
resources that would not be justified in every case. That said, in
keeping with Sec.  10.30(e)(3), we may decide in certain cases that it
is appropriate to announce a denial of a petition through issuance of a
Federal Register notice.
6. Adopting Modified Requirements or Granting an Exemption on FDA's Own
Initiative (Sec.  1.1385)
    In proposed Sec.  1.1385 we specified the procedures we would
follow if, on our own initiative, we adopted modified requirements or
granted an exemption from the traceability recordkeeping requirements.
Proposed Sec.  1.1385(a) provided that if we, on our own initiative,
determine that adopting modified requirements or granting an exemption
from the requirements for a food or type of entity is appropriate, we
will publish a notification in the Federal Register setting forth the
proposed modified requirements or exemption and the reasons for the
proposal; the notification would establish a public docket so that
interested persons may submit written comments on the proposal.
Proposed Sec.  1.1385(b) provided that, after considering any comments
timely submitted, we will publish a notification in the Federal
Register stating whether we are adopting modified requirements or
granting an exemption, and the reasons for our decision.
    We received no comments on this section and are finalizing it as
proposed.
7. When Modified Requirements and Exemptions Become Effective (Sec.
1.1390)
    Proposed Sec.  1.1390 specified that any modified requirements that
we adopt or any exemption that we grant will become effective on the
date that notice of the modified requirements or exemption is published
in the Federal Register, unless otherwise stated in the notification.
We received no comments on this section and are finalizing it as
proposed.
8. Circumstances Under Which FDA Might Revise or Revoke Modified
Requirements or an Exemption (Sec.  1.1395)
    Proposed Sec.  1.1395 specified that we may revise or revoke
modified requirements or an exemption if we determine that such
revision or revocation is necessary to protect the public health. We
received no comments on this section and are finalizing it as proposed.
9. Procedures for Revision or Revocation of Modified Requirements or an
Exemption (Sec.  1.1400)
    We proposed (in Sec.  1.1400(a)) that if we tentatively determine
that modified requirements or an exemption should be revised or
revoked, we will provide the following notifications:
     We will notify the person that originally requested the
modified requirements or exemption (if we adopted modified requirements
or granted an exemption in response to a petition) in writing at the
address identified in the petition (proposed Sec.  1.1400(a)(1)); and
     We will publish in the Federal Register a notification of
our tentative determination that the modified requirements or exemption
should be revised or revoked and the reasons for our tentative
decision. The notification will establish a public docket so that
interested persons may submit written comments on our tentative
determination (proposed Sec.  1.1400(a)(2)).
    Proposed Sec.  1.1400(b) specified that after considering any
comments timely submitted, we will publish notification in the Federal
Register of our decision whether to revise or revoke the modified
requirements or exemption and the reasons for the decision. Proposed
Sec.  1.1400(b) further stated that if we do revise or revoke the
modified requirements or exemption, the effective date of the decision
will be 1 year after the date of publication of the notification,
unless otherwise stated in the notification.
    We received no comments on these provisions and are finalizing them
as proposed.

Q. Waiver Procedures (Sec. Sec.  1.1405 to 1.1450)

    In accordance with section 204(d)(1)(I) of FSMA, we proposed to
establish a process for the issuance of a waiver of the subpart S
requirements if we determine that application of the requirements would
result in an economic hardship for an individual entity or a type of
entity. We received comments seeking clarifications of and
modifications to these provisions, to which we respond in the following
paragraphs.
1. Circumstances Under Which FDA Will Waive Requirements (Sec.  1.1405)
    Proposed Sec.  1.1405 specified that we will waive one or more of
the subpart S requirements when we determine that all of the following
conditions are met:
     Application of the requirements would result in an
economic hardship for an individual entity or a type of entity, due to
the unique circumstances of the individual entity or type of entity
(proposed Sec.  1.1405(a));
     The waiver will not significantly impair our ability to
rapidly and effectively identify recipients of a food to prevent or
mitigate a foodborne illness outbreak or to address credible threats of
serious adverse health consequences or death to humans or animals as a
result of such food being adulterated under section 402 of the FD&C Act
or misbranded under section 403(w) of the FD&C Act (proposed Sec.
1.1405(b)); and
     The waiver will not otherwise be contrary to the public
interest (proposed Sec.  1.1405(c)).
    We are finalizing this provision as proposed.
    (Comment 451) One comment requests that we define ``significantly
impair'' as used in the waiver provisions and provide examples of what
might constitute significant impairment of our ability to rapidly and
effectively identify recipients of a food under the specified
circumstances.
    (Response 451) We decline to formally define ``significantly
impair.''

We anticipate a wide variety of circumstances that could lead to a
request for a waiver, and we think it will be necessary to apply the
three criteria set forth in Sec.  1.1405 on a case-by-case basis. The
use of the phrase ``significantly impair'' in Sec.  1.1405(b) conveys
that it is not necessary to demonstrate that the proposed waiver would
have no effect at all on FDA's ability to trace any impacted foods.
However, if the impact is significant, it would be grounds for denying
the waiver request.
    (Comment 452) One comment asks that we define ``economic hardship''
for purposes of the waiver provisions.
    (Response 452) We decline to formally define ``economic hardship''
because the unique circumstances leading to a petition for a waiver on
grounds of economic hardship may vary widely, and there are likely
relevant circumstances that may arise that we cannot predict at the
time of rulemaking. Under Sec.  1.1405(a), the economic hardship for
the individual entity or type of entity must be due to its unique
circumstances. In the preamble to the proposed rule (85 FR 59984 at
60015), we stated that such circumstances might include, but are not
limited to, issues related to unique business operations or
geographical factors. We also stated that merely having relatively low
revenue or relatively few employees would not ordinarily constitute an
economic hardship sufficient to qualify for a waiver from the subpart S
requirements. This is because the waiver process in Sec.  1.1405 is not
meant to substitute for the decisions we made regarding the exemptions
for small entities, as reflected in Sec.  1.1305(a) and (i), and Sec.
1.1455(b)(3)(iii). In addition, we anticipate that we will typically
grant waivers only for sustained or long-term circumstances, rather
than short-term circumstances such as those some firms may experience
during an economic downturn.
    (Comment 453) One comment requests that we address in the preamble
how we will consider the impact of waivers of requirements on entities
in other parts of the supply chain.
    (Response 453) Under Sec.  1.1405(b), we will only grant a waiver
if doing so would not significantly impair our ability to rapidly and
effectively identify recipients of a food to prevent or mitigate a
foodborne illness outbreak or to address credible threats of serious
adverse health consequences or death to humans or animals as a result
of such food being adulterated or misbranded (with respect to allergen
labeling). In making this determination, we will consider the effect
that the waiver would have on the entire supply chain, and thus on the
traceability of the affected foods. We also note that, as discussed in
Response 445, the final rule contains provisions to clarify the
responsibilities of entities that receive food from suppliers to whom
subpart S does not apply (which could include suppliers who are subject
to a waiver).
    (Comment 454) One comment suggests that in the current economic
circumstances and pandemic we might receive widespread waiver requests
based on economic hardship. The comment also maintains that at the same
time, people recovering from COVID-19 might face increased sensitivity
to foodborne illness.
    (Response 454) We agree that we may receive a higher number of
requests for waivers during an economic downturn, including,
potentially, the circumstances brought on by the COVID-19 pandemic.
(Though we note that, by the time entities must come into compliance
with subpart S traceability requirements, the economic conditions
brought on by the pandemic may have normalized.) In general, as stated
in Response 452, we anticipate that we will typically grant waivers
only for sustained or long-term circumstances, rather than short-term
circumstances such as those some firms may experience during an
economic downturn. Furthermore, under Sec.  1.1405(b) we will only
grant a waiver if doing so would not significantly impair our ability
to rapidly and effectively identify recipients of a food to prevent or
mitigate a foodborne illness outbreak or to address credible threats of
serious adverse health consequences or death to humans or animals as a
result of such food being adulterated or misbranded with respect to
allergen labeling; and under Sec.  1.1405(c) we will only grant a
waiver request if the waiver will not otherwise be contrary to the
public interest. In evaluating the impact of waivers on the public
interest, we are cognizant of the fact that certain populations are
particularly vulnerable to foodborne illness.
2. Mechanisms for Requesting a Waiver (Sec.  1.1410)
    We proposed in Sec.  1.1410 that we will consider whether to waive
a requirement of subpart S on our own initiative or in response to the
following:
     A written request for a waiver for an individual entity
(proposed Sec.  1.1410(a)); or
     A citizen petition requesting a waiver for a type of
entity submitted under Sec.  10.30 by any person subject to the
requirements of subpart S (proposed Sec.  1.1410(b)).
    We are finalizing this provision as proposed.
    (Comment 455) One comment asks that we define ``individual entity''
as to its meaning in the waiver provisions.
    (Response 455) We decline to formally define ``individual entity.''
Individual entities requesting a waiver will be able to self-identify
as an individual entity. Examples of individual entities include, but
are not limited to, a single farm, packer, distributor, or RFE.
    (Comment 456) One comment asks that we define ``type of entity.''
    (Response 456) We decline to formally define ``type of entity.''
Entities of a particular type requesting a waiver will be able to self-
identify as a ``type of entity.'' We note that, under Sec.  1.1425(a),
a petition requesting a waiver for a type of entity must specify the
type of entity to which the waiver would apply. In order for a waiver
to be evaluated and (if granted) carried out, the type of entity must
be sufficiently delineated so that FDA can clearly identify the
entities to which the waiver applies.
    (Comment 457) One comment asserts that there should be public
notice and comment for all waiver requests, regardless of how the
waiver is sought. The comment maintains that establishing a process for
consideration of waiver requests that does not allow for public comment
is inconsistent with the FD&C Act and the APA. The comment asserts that
section 416(d)(2) of the FD&C Act (21 U.S.C. 350e(d)(2)) requires the
Secretary to publish waivers and any reasons for the waivers in the
Federal Register. The comment maintains that by providing one process
that requires public notice and comment and another that does not, we
would receive requests that were not subject to public comment and
would shield waiver decisions from public scrutiny.
    (Response 457) Although Sec.  1.1435 of the final rule provides for
public notice and comment for waiver requests for a type of entity
through publication of a Federal Register notice, we decline the
request to provide for public notice and comment for waiver requests
for individual entities. We note that section 416(d)(2) of the FD&C Act
(cited by the comment) applies to requests for waiver from the
requirements of FDA's regulation on sanitary transportation of foods;
there is no comparable requirement (in either the FD&C Act or section
204(d) of FSMA) to publish in

the Federal Register waiver requests from the food traceability
recordkeeping requirements in subpart S. We do not believe it is
necessary or appropriate for information on an individual entity
seeking a waiver based on economic hardship to be publicized through
submission of a citizen petition and subsequent publication of a
Federal Register notice, as individual entity waiver requests will
focus on the unique economic circumstances of the individual entity
seeking a waiver, which could necessitate the submission of
confidential commercial or financial information. We also do not
believe public comment is necessary for our review of such waiver
requests. On the other hand, as stated in the preamble to the proposed
rule (85 FR 59984 at 60015), for waiver requests that concern a type of
entity, the fact that the waiver could apply to multiple parties,
including persons unaware that the waiver request had been submitted,
makes it appropriate to require that the request be submitted in a
citizen petition and a notification of the request be published in the
Federal Register.
3. Requesting a Waiver for an Individual Entity (Sec.  1.1415)
    We proposed in Sec.  1.1415 to specify that a person may request a
waiver of one or more requirements of subpart S for an individual
entity by submitting a written request to FDA that includes the
following:
     The name, address, and point of contact of the individual
entity to which the waiver would apply (proposed Sec.  1.1415(a));
     The requirements of subpart S to which the waiver would
apply (proposed Sec.  1.1415(b));
     Information demonstrating why application of the
requirements requested to be waived would result in an economic
hardship for the entity, including information about the unique
circumstances faced by the entity that result in unusual economic
hardship from the application of these requirements (proposed Sec.
1.1415(c));
     Information demonstrating why the waiver will not
significantly impair FDA's ability to rapidly and effectively identify
recipients of a food to prevent or mitigate a foodborne illness
outbreak or to address credible threats of serious adverse health
consequences or death to humans or animals as a result of such food
being adulterated under section 402 of the FD&C Act or misbranded under
section 403(w) of the FD&C Act (proposed Sec.  1.1415(d)); and
     Information demonstrating why the waiver would not
otherwise be contrary to the public interest (proposed Sec.
1.1415(e)).
    On our own initiative, we have revised this provision to specify
that a written request for a waiver for an individual entity must be
submitted to FDA as described at www.fda.gov. Otherwise, we are
finalizing this provision as proposed.
    (Comment 458) One comment asks that we provide a clear process for
what information and documentation an entity will be required to
provide to have their waiver request approved. The comment maintains
that the process should be flexible and not cumbersome because
applicants are likely already facing economic hardship.
    (Response 458) We agree that the process for requesting a waiver
for an individual entity should be flexible and not cumbersome. We
believe that Sec.  1.1415 of the final rule, which adopts the waiver
submission requirements set forth in proposed Sec.  1.1415, adequately
describes the information that persons seeking a waiver for an
individual entity must submit to the Agency without prescribing the
submission of particular documents or particular facts that may or may
not be relevant to an individual entity's situation. As stated in the
preamble to the proposed rule (85 FR 59984 at 60016), we anticipate
that after we publish the final rule, we will establish an electronic
mailbox to receive requests for waivers for individual entities. In
addition, we expect to publish on our website information about how to
submit materials to this electronic mailbox, as well as provide a
physical FDA address to which waiver requests could be mailed.
4. Process for Request for a Waiver for Individual Entity (Sec.
1.1420)
    We proposed in Sec.  1.1420(a) that, after considering the
information submitted in a request for a waiver for an individual
entity, we will respond in writing to the person that submitted the
waiver request stating whether we are granting the waiver (in whole or
in part) and the reasons for the decision. In proposed Sec.  1.1420(b)
we specified that any waiver for an individual entity that we grant
will become effective on the date we issue our response to the waiver
request, unless otherwise stated in the response. We received no
comments on these provisions and are finalizing them as proposed.
5. Citizen Petition for Waiver for Type of Entity (Sec.  1.1425)
    We proposed in Sec.  1.1425 to specify that, in addition to meeting
the requirements on the content and format of a citizen petition in
Sec.  10.30, a petition requesting a waiver for a type of entity must:
     Specify the type of entity to which the waiver would apply
and the requirements of subpart S to which the waiver would apply
(proposed Sec.  1.1425(a));
     Present information demonstrating why application of the
requirements requested to be waived would result in an economic
hardship for the type of entity, including information about the unique
circumstances faced by the type of entity that result in unusual
economic hardship from the application of these requirements (proposed
Sec.  1.1425(b));
     Present information demonstrating why the waiver will not
significantly impair FDA's ability to rapidly and effectively identify
recipients of a food to prevent or mitigate a foodborne illness
outbreak or to address credible threats of serious adverse health
consequences or death to humans or animals as a result of such food
being adulterated under section 402 of the FD&C Act or misbranded under
section 403(w) of the FD&C Act (proposed Sec.  1.1425(c)); and
     Present information demonstrating why the waiver would not
otherwise be contrary to the public interest (proposed Sec.
1.1425(d)).
    We received no comments on these provisions and are finalizing them
as proposed.
6. Public Availability of Information in Citizen Petition Requesting
Waiver (Sec.  1.1430)
    We proposed in Sec.  1.1430 to specify that we will presume that
information submitted in a petition requesting a waiver for a type of
entity, as well as information in comments submitted on such a
petition, does not contain information exempt from public disclosure
under part 20 and would be made public as part of the docket associated
with the petition. We received no comments on this provision and are
finalizing it as proposed.
7. Process for Citizen Petition Requesting a Waiver (Sec.  1.1435)
    We proposed in Sec.  1.1435(a) to specify that, in general, the
procedures in Sec.  10.30 govern FDA's response to a petition
requesting a waiver, and that an interested person may submit comments
on a petition requesting a waiver in accordance with Sec.  10.30(d).
Proposed Sec.  1.1435(b) would provide that, under Sec.  10.30(h)(3),
we will publish a notification in the Federal Register requesting
information and views on a submitted petition requesting a waiver

for a type of entity, including information and views from persons who
could be affected by the waiver if the petition were to be granted.
    Proposed Sec.  1.1435(c) stated that we would respond to a
petitioner in writing under Sec.  10.30(e)(3), as follows:
     If we grant a petition either in whole or in part, we will
publish a notification in the Federal Register setting forth any
requirements we have waived and the reasons for the waiver (proposed
Sec.  1.1435(c)(1)); and
     If we deny the petition (including a partial denial), our
written response to the petitioner will explain the reasons for the
denial (proposed Sec.  1.1435(c)(2)).
    Finally, proposed Sec.  1.1435(d) specified that we will make
readily accessible to the public, and periodically update, a list of
petitions requesting waivers for types of entities, including the
status of each petition (for example, pending, granted, or denied).
    We received two comments that relate both to these provisions and
to the similar provisions in Sec.  1.1380 regarding the process for a
petition requesting modified requirements or an exemption. Those
comments are addressed above (see Section V.P.5 of this document). We
are finalizing Sec.  1.1435 as proposed.
8. Process for Granting Waivers on FDA's Own Initiative (Sec.  1.1440)
    We proposed in Sec.  1.1440(a) that if FDA, on its own initiative,
determines that a waiver of one or more requirements for an individual
entity or type of entity is appropriate, we will publish a notification
in the Federal Register setting forth the proposed waiver and the
reasons for such waiver. The notification would establish a public
docket so that interested persons may submit written comments on the
proposal. Proposed Sec.  1.1440(b) specified that after considering any
comments timely submitted, we will publish a notification in the
Federal Register stating whether we are granting the waiver (in whole
or in part) and the reasons for our decision. Under proposed Sec.
1.1440(c), any waiver for a type of entity that we grant will become
effective on the date that notice of the waiver is published in the
Federal Register, unless otherwise stated in the notification.
    We received no comments on these provisions and are finalizing them
as proposed.
9. Circumstances Under Which FDA May Modify or Revoke a Waiver (Sec.
1.1445)
    We proposed in Sec.  1.1445 to specify that we may modify or revoke
a waiver if we determine that:
     Compliance with the waived requirements would no longer
impose a unique economic hardship on the individual entity or type of
entity to which the waiver applies (proposed Sec.  1.1445(a));
     The waiver could significantly impair our ability to
rapidly and effectively identify recipients of a food to prevent or
mitigate a foodborne illness outbreak or to address credible threats of
serious adverse health consequences or death to humans or animals as a
result of such food being adulterated under section 402 of the FD&C Act
or misbranded under section 403(w) of the FD&C Act (proposed Sec.
1.1445(b)); or
     The waiver is otherwise contrary to the public interest
(proposed Sec.  1.1445(c)).
    As discussed in the paragraphs below, we received one comment on
this provision. We are finalizing this provision as proposed.
    (Comment 459) One comment states that FDA should provide a citizen
petition process for modifying and revoking waivers that allows
presentation of data to the Agency for reconsidering waivers.
    (Response 459) FDA's citizen petition regulation in Sec.  10.30
provides standardized procedures for requesting that we take (or
refrain from taking) an administrative action. While we expect that
under most circumstances we would initiate any effort to modify or
revoke a waiver, a person could submit a citizen petition in accordance
with Sec.  10.30(b) asking that we modify or revoke a waiver, and could
include any data they wish to share with the Agency. Under Sec.
10.30(d), any interested person could submit comments (including data)
to the docket established for any such petition.
10. Procedures for Modification or Revocation of a Waiver (Sec.
1.1450)
    As with procedures for requests for waivers, we proposed to
establish different procedures for modifications and revocations of
waivers for (1) individual entities and (2) types of entities. We
proposed in Sec.  1.1450(a)(1) to specify that if we tentatively
determine that we should modify or revoke a waiver for an individual
entity, we will notify the person that had received the waiver in
writing of our tentative determination that the waiver should be
modified or revoked. We further proposed that the notice will provide
the waiver recipient 60 days in which to submit information stating why
the waiver should not be modified or revoked. Under proposed Sec.
1.1450(a)(2), upon consideration of any information submitted by the
waiver recipient, we will respond in writing stating our decision
whether to modify or revoke the waiver and the reasons for the
decision. The provision further stated that if we modify or revoke the
waiver, the effective date of the decision will be 1 year after the
date of our response to the waiver recipient, unless otherwise stated
in the response.
    Proposed Sec.  1.1450(b)(1)(i) specified that if we tentatively
determine that we should modify or revoke a waiver for a type of
entity, we will notify the person that originally requested the waiver
(if we granted the waiver in response to a petition) in writing at the
address identified in the petition. Proposed Sec.  1.1450(b)(1)(ii)
specified that we will also publish notification in the Federal
Register of our tentative determination that the waiver should be
modified or revoked and the reasons for our tentative decision. The
provision further stated that the notification will establish a public
docket so that interested persons may submit written comments on our
tentative determination.
    Proposed Sec.  1.1450(b)(2) provided that, after considering any
comments timely submitted, we will publish notification in the Federal
Register of our decision whether to modify or revoke the waiver and the
reasons for the decision. Proposed Sec.  1.1450(b)(2) further stated
that if we modify or revoke the waiver, the effective date of the
decision will be 1 year after the date of publication of the
notification, unless otherwise stated in that notification.
    We received no comments on these provisions and are finalizing them
as proposed.

R. Records Maintenance and Availability (Sec.  1.1455)

    We proposed to adopt several requirements concerning the
maintenance and availability of records required under subpart S. In
response to comments received and on our own initiative, we have made
changes to some of these provisions, primarily those concerning records
availability.
1. General Requirements for Records
    We proposed to require that records be kept as original paper or
electronic records or true copies (such as photocopies, pictures,
scanned copies, or other accurate reproductions of the original records
(proposed Sec.  1.1455(a)(1)). We also proposed to require that all
records be legible and stored to prevent deterioration or loss
(proposed Sec.  1.1455(a)(2)).
    On our own initiative, we have added to Sec.  1.1455(a)(1) a
statement that electronic records may include valid,

working electronic links to the information required to be maintained
under subpart S, to make clear that entities may use electronic links
(e.g., to databases or websites) to meet their recordkeeping
requirements under the rule.
    We respond to the comments we received on proposed Sec.  1.1455(a)
in the following paragraphs.
    (Comment 460) Many comments assert that the proposed rule creates a
de facto requirement for firms to maintain their records
electronically, which the comments assert is contrary to section
204(d)(1)(C) of FSMA. One comment maintains that retailers in
particular would be unable to comply with the electronic sortable
spreadsheet requirement (in proposed Sec.  1.1455(b)(3)) unless their
suppliers keep electronic records and the retailer has a system to
accept and store that electronic data. Another comment maintains that
Congress intended for this rule to require only paper records in order
to protect farmers who may lack access to computers and other
technology. One comment points to the volume of information required in
the KDEs and the preamble discussion of a master data plan as evidence
that paper records would be inadequate and that electronic records are
therefore a de facto requirement of the rule. Some comments reference
the quantity of traceability information required to be gathered and
stored by firms of all sizes and maintains that the estimates for one-
time capital investment in the Preliminary Regulatory Impact Analysis
(PRIA) for the rule seems to imply that FDA assumes a firm will need to
invest in technology. The comments note that section 204(d)(1)(G) of
FSMA states that the recordkeeping requirements we adopt must, to the
extent practicable, not require a facility to change business systems
to comply with the requirements.
    (Response 460) We do not agree that the proposed rule creates a de
facto requirement for firms to maintain their records electronically,
nor do we think that the rule violates section 204(d)(1)(C) of FSMA,
which states that the rule shall not prescribe specific technologies
for the maintenance of records. Under Sec.  1.1455(a)(1) of the final
rule, subpart S records may be maintained on paper, electronically, or
as true copies. In certain circumstances when the public health is
threatened, we may request that information about specific foods and
specific date ranges (or traceability lot code ranges) be provided to
us in an electronic sortable spreadsheet in accordance with Sec.
1.1455(c)(3)(ii); but we believe that firms that maintain their records
on paper will be able to create such a spreadsheet, using the
information contained in their paper records, under those limited
circumstances. Moreover, we note that Sec.  1.1455(c)(3)(ii) does not
prescribe a specific technology for creating the sortable spreadsheet.
    Regarding FSMA section 204(d)(1)(G), although we recognize that
there may be incentives or in some cases market pressures for entities
to adopt electronic recordkeeping for traceability, and some entities
may find it beneficial to invest in new technology to keep traceability
records, the rule itself does not require entities to replace their
paper-based systems with electronic records. Estimates of capital
investment costs in section II.F of the FRIA assume that some (but not
all) entities will choose to adopt new technologies or update their
existing ones in light of the rule (Ref. 16). In particular, the
capital investment cost estimates in the FRIA reflect a prediction that
adoption of technologies for traceability will depend on a firm's size,
industry, position in the supply chain, products, and existing
traceability systems, as well as whether the firm decides to adopt an
electronic recordkeeping system as a result of this rule.
    (Comment 461) One comment refers to FDA's statements in the
preamble to the proposed rule encouraging the use of electronic records
for traceability and maintains that regulators take preambles seriously
(as the comment contends has occurred with the produce safety
regulation), which the comment asserts is problematic due to an
unconstitutional lack of notice and arbitrary enforcement of
requirements. The comment maintains that a rule or statute is
unconstitutional when it fails to provide the regulated entity or
person with fair notice of the compliance requirements and/or allows
for arbitrary and discriminatory enforcement. The comment asks that we
include paper recordkeeping options especially for farms that may not
have access to electronic recordkeeping technology. The comment also
recommends that we delete the electronic spreadsheet requirement and