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Memoranda of Understanding / Mutual Recognition Agreements - Philippines

MEMORANDUM OF UNDERSTANDING REGARDING THE INSPECTION OF FISH PRODUCTS BETWEEN THE DEPARTMENT OF HEALTH, BUREAU OF FOOD AND DRUGS, OF THE GOVERNMENT OF THE OF THE REPUBLIC OF THE PHILIPPINES AND THE DEPARTMENT OF FISHERIES AND OCEANS OF THE GOVERNMENT OF CANADA

I. PURPOSE

The mutual goals of the Bureau of Food and Drugs (BFAD) and the Department of Fisheries and Oceans of Canada (DFO) in entering into this Memorandum of Understanding are to:

1. Provide reasonable assurance that canned or frozen fish products from "Preferred Status" producers in the Philippines will not be tainted, decomposed or unwholesome and will otherwise meet the requirements of Canada.

2. Minimize the need for extensive sampling in Canada of products produced by "Preferred Status" processors from the Philippines.

II.    DEFINITIONS

For the purposes of this memorandum:

Canned Fish - means any fish or fish flesh which is in an hermetically sealed glass or metal container and has been commercially sterilized.

Cannery - means an establishment where canned fish is produced for human consumption.

Chemical Evaluation - denotes the analyses, tests or observations, or series thereof, performed on a sample (consisting of a number of sample units) taken to represent a lot to determine the presence of additives or contaminants listed in ANNEX to this document.

Code - A "code" is a quantity of a specific product type and form produced and handled under uniform conditions within a limited time period normally identified by means of a production code.

Container Integrity Evaluation - denotes the analyses, tests or observations, or series thereof, performed on a sample (consisting of a number of sample units) taken to represent a lot, to determine the metal or glass container acceptability as set out in ANNEX to this document.

Frozen Fish - are fish which have been subjected to a freezing process sufficient to reduce the temperature of the whole product to a level low enough to preserve the inherent quality of the fish and which have been maintained at this low temperature during transportation, storage and distribution, up to and including the time of final sale.

Good Manufacturing Practices (GMP's) - means those processing requirements which, if applied in the production process, should result in products which are safe, wholesome and of good quality.

Inspection - An "inspection" with respect to fish, is an evaluation, analysis, test or activity, or a series thereof, based on a recognized sampling plan, which leads to a decision on the acceptability of a lot.

Label Evaluation - denotes the inspection of a sample label carried out to determine compliance of the label with the criteria set out in ANNEX to this document.

Lot - means a quantity of a specific product type and form which may be comprised of several production codes.

Sensory Evaluation - denotes the sensory analysis done on a sample (consisting of a number of sample units) taken to represent a lot to determine the acceptability to a recognised standard.

Shipment - is an import of the same product type, arriving to the same location on the same vessel or vehicle at the same time and imported from the same producer by the same importer.

III. SUBSTANCE OF MEMORANDUM OF UNDERSTANDING (MOU)

A. PRINCIPLES

1. The Bureau of Food and Drugs (BFAD) of the Department of Health is the Philippine Government agency responsible for monitoring compliance to the requirements of this document.

2. The Inspection Services Directorate (ISD) of the Department of Fisheries and Oceans is the Canadian government agency responsible for the inspection of fish products imported into Canada.

3. Philippine fish processors who wish to have "Preferred Status" pursuant to this Memorandum of Understanding (as included in the Annex to this Memorandum) must:

- adhere to Canadian GMP's, as described in the Annex for those products being processed for export to Canada;

- have in place a DFO approved quality control program;

- maintain a minimum "B" plant rating as determined by the plant rating system to determine compliance with Schedules I and II of the Canadian Fish Inspection Regulations; and

- submit to periodic audits by DFO or BFAD to ensure that the above conditions are being met.

4. Those Philippine fish processors who maintain the conditions set out in Section 3 above and who meet the requirements of Section B(2) will be given "Preferred Status" and will be listed on Attachment A of this MOU.

5. Imports of products from processors on "Preferred Status" will be eligible for reduced monitoring by the Inspection Services Directorate.

B. APPROVAL PROCEDURE AND COMPLIANCE MONITORING

1. Processors who wish to obtain "Preferred Status" must make application in writing to the Bureau of Food and Drugs (BFAD), who will in turn inform the Department of Fisheries and Oceans of Canada of such applications.

2. Applicants will be subject to a joint DFO/BFAD evaluation to verify that:

- the fish processor has a proven record of compliance (as described in the Annex to this Memorandum) with all Canadian regulations, standards and guidelines;

- a satisfactory DFO approved quality control program is in place and is functioning to the satisfaction of the Inspection Services Directorate;

- the company maintains adequate records confirming processor compliance to GMP's; and

- the plant facility is inspected and rated by DFO and receives a minimum "B" rating as determined by compliance with Schedules I and II of the Canadian Fish Inspection Regulations.

3. Processors on "Preferred Status" will be monitored periodically by the Philippine Bureau of Food and Drugs and may be subject to a joint DFO/BFAD audit to confirm compliance to GMP's. The Philippine Bureau of Food and Drugs will notify DFO of all instances of non-compliance and actions taken to correct all deficiencies identified.

4. Subject to Section 4 of the Fish Inspection Regulations, DFO will generally monitor imports from "Preferred Status" producers on a reduced inspection basis. A rejection for any reason by DFO Inspection Services of a monitoring sample may constitute non-compliance and may be grounds for suspension from "Preferred Status". Such rejected products will be placed on the Mandatory Inspection List. Processors who have an unacceptable record of performance, as outlined in the administrative procedures, will be removed from "Preferred Status" after consultation between DFO and BFAD.

5. Processors who have been removed from "Preferred Status" may re-apply for "Preferred Status".

6. Processors re-applying for "Preferred Status" may be subject to a joint DFO/BFAD inspection, at the processors expense, to reconfirm compliance with Section A-3 and Section B-2 of this memorandum.

7. It will be the responsibility of the appropriate Association (as listed in the Annex) to ensure repayment of DFO expenses incurred under Section 6 of this memorandum.

8. The Inspection Services Directorate will provide summary results of inspections for "Preferred Status" plants to the Bureau of Food and Drugs upon request.

9. The Inspection Services Directorate will notify the Bureau of Food and Drugs of any detention of fish products produced by plants with "Preferred Status" which are covered by this memorandum.

10. The Inspection Services Directorate will provide to BFAD, upon request, a copy of the Fish Inspection Act and Fish Inspection Regulations and relevant information from other acts, regulations and standards as well as any modifications or amendments to the acts and regulations.

11. The Inspection Services Directorate will, upon request by BFAD, consider the holding of workshops or seminars with respect to process and product standards.

C. PLANT, PROCESS, AND PRODUCT INSPECTION PROCEDURE

Plant, process and product compliance will be determined as follows:

1. The plant compliance (minimum "B" rating) will be determined in accordance with the Plant Rating System outlined in the Annex to this MOU.

2. Process compliance will be determined in accordance with the criteria outlined in the Annex to this MOU.

3. Product compliance will be determined in accordance with the criteria for product standards as detailed in the Annex to this MOU.

4. Product sampling will be determined in accordance with the criteria as detailed in the Annex to this MOU.

5. Packaging, labelling and marking requirements will be determined in accordance with the Packaging, Labelling and Marking Requirements as indicated in the Annex to this MOU.

IV. PARTICIPATING PARTIES

A. The Bureau of Food and Drugs of the Department of Health, Alabang, Muntinlupa, Metro Manila, Philippines.

B. Inspection Services Directorate of the Department of Fisheries and Oceans Canada, 200 Kent Street, Ottawa, Ontario, Canada, K1A 0E6.

V. LIAISON OFFICERS

A. For the Bureau of Food and Drugs, Department of Health, Philippines - Director, BFAD (currently Cecille Gonzales), Alabang, Muntinglupa, Metro Manila, Philippines, Telephone (632) 842-56-35.

B. For the Inspection Services Directorate, Department of Fisheries and Oceans Canada - Director General,
Inspection Services Directorate (currently B. J. Emberley),
200 Kent Street,
Ottawa, Ontario, Canada
K1A OE6.

Telephone: (613) 990-0144
Telex: 053-4228
Facsimile: (613) 990-4668

VI. ADMINISTRATIVE PROCEDURES

The parties shall mutually agree on the ways and means of giving instructions and guidance for the implementation of this memorandum through the administrative procedures.

The administrative procedures may be amended on mutual agreement, confirmed by an exchange of letters, specifying the contents and the effective date for such amendments, subject to the requirement that such amendments shall be consistent with the purpose of this Memorandum of Understanding.

This Memorandum of Understanding is limited to fish products covered by Annexes to this Memorandum and may be extended to include other products through the establishment of additional Annexes (by the mutual agreement of both participating parties).

VII. PERIOD OF MEMORANDUM OF UNDERSTANDING

This memorandum will become effective upon signature by both parties and will continue indefinitely. It may be reviewed or revised by mutual consent or terminated by either party upon written notice. Inspection Services Directorate reserves the right to change the criteria outlined in the attachments to the Annexes to this document in consultation with the Bureau of Food and Drugs, Philippines.

Either party may, upon written notice, review the policies and procedures in effect in the facilities or installations used to monitor, inspect or produce products covered by the terms of this memorandum.

SIGNED AT OTTAWA this 7^TH day of November , 1989.

signed by J. Clark
________________________

FOR THE DEPARTMENT OF FISHERIES AND OCEANS OF THE GOVERNMENT OF CANADA

signed by par Philippine government/gouvernement des Philippines
____________________________________________________________

FOR THE DEPARTMENT OF HEALTH BUREAU OF FOOD AND DRUGS OF THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES

ANNEX A TO THE MEMORANDUM OF UNDERSTANDING REGARDING THE INSPECTION OF CANNED TUNA

I. PURPOSE

The mutual goals of the Bureau of Food and Drugs (BFAD), the Department of Fisheries and Oceans (DFO) and the Tuna Canners Association are outlined in this Annex to the Memorandum of Understanding:

1. Provide reasonable assurance that canned tuna products from "Preferred Status" producers will not be tainted, decomposed or unwholesome, and will otherwise meet the requirements of Canada.

2. Minimize the need for extensive sampling in Canada of canned tuna products produced by "Preferred Status" processors from the Philippines.

II. DEFINITIONS

For the purposes of this Annex to the memorandum, it is agreed that the following definitions would apply in addition to those included in the MOU.

"Canned Tuna" - means any fish or fish flesh prepared from any of the species set out in Attachment E, and which is in an hermetically sealed glass or metal container and has been commercially sterilized.

Good Manufacturing Practices - with respect to canned tuna, means those processing requirements developed by a joint Canadian Industry/Government/University Committee, and which if applied in the production of canned tuna should result in products which are safe, wholesome and of good quality (Attachment F).

III. SUBSTANCE OF AGREEMENT

1. Philippine tuna processors who maintain the conditions set out in the corresponding Section III of the Memorandum of Understanding will be given "Preferred Status" and will be listed in Attachment A of this Annex.

2. Imports of canned tuna products from Philippine tuna processors on "Preferred Status" will be eligible for reduced inspection and monitoring by the Inspection Services Directorate as outlined in the corresponding Section III of the MOU.

3. In accordance with the MOU, those processors who have been removed from "Preferred Status" may re-apply and may be subject to a joint DFO/BFAD inspection at the processor's expense. It will be the responsibility of the Tuna Canners Association of the Philippines to ensure repayment of DFO expenses (for airfare, transportation, and hotel room expenses as per Canadian Treasury Board Travel Directives) in this joint inspection.

IV. PLANT, PROCESS AND PRODUCT INSPECTION PROCEDURE

Plant, process and product compliance will be determined as follows for tuna processing:

1. Process compliance will be determined in accordance with the criteria outlined in the Handbook of Compliance, Canada - Good Manufacturing Practices, Canned Tuna, Attachment F;

2. Product compliance will be determined in accordance with:

a) Canned Tuna Standard, Attachment E;

b) the National Sampling and Tolerance Plan for Visual Examination of Canned Fish Products for Serious Defects, Attachment B;

c) Canadian Guidelines for Chemical Contaminants in Canned Tuna, Attachment C;

d) Packaging, Labelling and Marking Requirements, Attachment D.

V. PERIOD OF AGREEMENT

This Annex to the Memorandum of Understanding with the Philipinne Department of Health will become effective upon signature by all parties to this agreement and will continue indefinitely. This Annex may be reviewed or revised by mutual consent or terminated upon written notice.

Either party may, upon written notice, review the policies and procedures in effect in the facilities or installations used to monitor, inspect or produce products covered by this Annex.

VI.

In witness thereof, the agencies have executed this Annex to the Memorandum of Understanding to cover the shipment of canned tuna products to Canada from the Philippines.

Signed at Manila this 24^th of April , 1990.

For the Department of Fisheries and Oceans of the Government of Canada

signed by A. Simard
________________________

Canadian Ambassador

signed by F. Pouliot
________________________

Senior Assistant Deputy Minister
Department of Fisheries and Oceans

For the Department of Health, Bureau of Food and Drugs of the Philippines

signed by Philippine Gov't.
_____________________________________________

Secretary of Trade and Industry

signed by C. Gonzales
__________________________

Director,
Bureau of Food and Drugs

President, Tuna Canners Association of the Philippines

Witness

MEMORANDUM OF UNDERSTANDING REGARDING THE INSPECTION OF CANNED TUNA

BETWEEN

THE BUREAU OF FOOD AND DRUGS OF THE PHILIPPINES

AND

THE DEPARTMENT OF FISHERIES AND OCEANS OF CANADA

Annex A, Attachment A

Preferred Status Canned Tuna Processors
(in alphabetical order)

- Mar Fishing Company, Inc., Manila

- Permex Producer & Exporter Corp., Manila

ADMINISTRATIVE PROCEDURES TO IMPLEMENT THE MOU FOR CANNED TUNA PRODUCTS

APPLICATION FOR "PREFERRED-STATUS" PROCESSOR

1. The Canadian Department of Fisheries and Oceans (DFO) will provide the Bureau of Food and Drugs (BFAD) a list of those Philippine tuna producers whose products have a minimum compliance of 90% by weight with Canadian Regulations, Standards and Guidelines. This compliance will be based on DFO's import Inspection records of a minimum of the last ten (10) inspected shipments.

2. The Philippine Bureau of Food and Drugs (BFAD) will provide to the Canadian Department of Fisheries and Oceans a list of those processors who have made application for "Preferred Status." The application must include a copy of the Quality Control Program in force in the plant.

3. DFO will arrange a technical mission to be sent to the Philippines. A joint DFO-BFAD evaluation will be carried out of each processor making application to confirm the processor's compliance with the conditions set out below:

a) Adherence to the document "Good Manufacturing Practices - Canned Tuna Handbook of Compliance". Where the GMP document does not cover certain situations, the "Handbook of Compliance, Fish Inspection Regulations, Schedules I & II", will be applied.

b) The presence of a DFO-approved Quality Control Program in the processing plant. The Quality Control Program is to be submitted to the DFO-BFAD team for review, and will be evaluated in practice.

c) A minimum "B" rating as determined by the DFO Plant Rating System for construction, equipment, and operation requirements.

Processors who meet these basic conditions will be eligible for "Preferred Status".

MONITORING FOR COMPLIANCE TO CONDITIONS OF MOU

1. All products exported to Canada by "Preferred-Status" processors will be subject to reduced monitoring by DFO. Each shipment must be accompanied by a statement indicating that the product is intended for the Canadian market.

This requirement is necessary as it is recognised that not all production from a "Preferred-Status" processor would be meeting the Canadian standards. In order to properly evaluate all shipments from "Preferred-Status" processors, those lots which are imported into Canada without the statement will be inspected and recorded as if they have been produced by a non-preferred-status processor. This procedure is intended to protect the "Preferred-Status" processor from being unfairly assessed due to an importer's misunderstanding of this MOU program.

2. Reduced monitoring will consist of the examination of every tenth shipment (10% of the shipments sampled on a random basis) shipped to Canada by a "Preferred-Status" processor. Determination of the "tenth shipment" will be done on a national basis from the tuna data base maintained by the Inspection Services Directorate. "Tenth shipments" will not normally be detained pending evaluation results.

3. Product compliance will be determined in accordance with the provisions set out in the MOU, specifically:

a) the Canned Tuna Standard, dated October 1, 1987,

b) The "National Sampling and Tolerance Plan for Visual Examination of Canned Fish Products for Serious Defects",

c) "Canadian Guidelines for Chemical Contaminants in Canned Tuna",

d) "Packaging, Labelling & Marking Requirements".

The Department of Fisheries and Oceans reserves the right to make any changes it sees fit, to the documents referred to above.

4. A product which is found, during a monitoring sample examination, to not comply with Canadian Regulations, Standards or Guidelines will be placed on the Mandatory Inspection List. All subsequent imports of that product from that producer will be inspected upon entry into Canada until the required four consecutive shipments pass the evaluation(s) for which the product was originally placed on the M.I.L.

5. The Bureau of Food and Drugs (BFAD) will periodically monitor processors on "Preferred Status" and will inform DFO of any infractions to the GMP and of the actions taken to correct such infractions.

REMOVAL AND RE-INSTATEMENT OF "PREFERRED STATUS"

1. Placement of a product on the MIL will not be immediate grounds for removal of that producer from "Preferred-Status Listing".

a) On repeated MIL listings the Canadian DFO will contact the BFAD to request an evaluation of the company quality control plan along with a review of the company records, to determine if that company's processing operation is still under proper control.

b) Upon continued infractions, the Canadian DFO will contact the BFAD in writing to indicate that it is considering the removal of a processor from "Preferred-Status Listing".

c) Removal of a producer from "Preferred-Status Listing" will then be initiated if, after a review of the processor's records, BFAD inspection records and DFO's import inspection records, there is an indication that the company is no longer complying with GMP, or that the acceptability of that company's products has fallen below 90% by weight.

2. Processors who have been removed from "Preferred-status" may reapply.

a) The reapplying company must provide in writing, to the Bureau of Food and Drugs, an explanation of the circumstances leading to the product rejections and/or GMP failure and what actions the company has taken to correct the situation. Based on the documentation provided, the Bureau of Food and Drugs will then make a recommendation to DFO as to whether or not the plant should be reinspected.

b) All expenses (airfare, travel and hotel expenses) for the plant reinspection will be borne by the reapplying company. The company must provide to the Tuna Canners Association of the Philippines sufficient funds to carry out the reinspection. The Bureau of Food and Drugs will notify DFO when sufficient funds have been received. Normally a reinspection will require one week, however if several such reinspections are to be carried out at the same time, an individual company's share of travel expenses may be reduced. DFO will endeavour to complete a reinspection within two months of being notified of the availability of sufficient funding.

c) Final inspection reports and recommendations will be prepared following the team's return to Canada. The final decision to reinstate a company to "Preferred Status" will be made by the Director General, Inspection Services Directorate, Ottawa, Canada.

GENERAL

1. This administrative procedure may be amended on the mutual agreement of the parties involved.

The provisions of these administrative procedures may be reviewed or revised by mutual consent or terminated by either party 60 days after receipt of written notice that changes shall come into effect. The provisions of this MOU and its annex shall apply to all shipments in transit and contracts entered into during the period of the validity of this MOU but not fully completed on the day that the changes come into effect.

ANNEX B TO THE MEMORANDUM OF UNDERSTANDING REGARDING THE INSPECTION OF FROZEN SHRIMPS

I. PURPOSE

The mutual goals of the Bureau of Food and Drugs (BFAD), the Department of Fisheries and Oceans (DFO) and the Association of Shrimp Producers and Exporters of the Philippines are outlined in this Annex to the Memorandum of Understanding:

1. Provide reasonable assurance that frozen shrimp/prawn products from "Preferred-status" producers will not be tainted, decomposed or unwholesome, and will otherwise meet the requirements of Canada.

2. Minimize the need for extensive sampling in Canada of frozen shrimp/prawn products produced by "Preferred-status" processors from the Philippines.

II. DEFINITIONS

For the purposes of this Annex to the memorandum, it is agreed that the following definitions would apply in addition to those included in the MOU.

Frozen Shrimps - means any fish or fish flesh prepared from any of the species of shrimps or prawns prepared in fresh state to raw, blocked frozen or individually quick frozen (IQF); cooked, blocked frozen or IQF; or breaded frozen or IQF, as set out in Attachment B.

Good Manufacturing Practices - with respect to frozen shrimp/prawns, means those processing requirements developed by a CODEX ALIMENTARIUS COMMISSION, Recommended International Standard for Shrimps or Prawns (CAC/RCP 17-1978), and which if applied in the production of frozen shrimp or prawns, should result in products which are safe, wholesome and of good quality.

III. SUBSTANCE OF AGREEMENT

1. Philippine shrimp processors who maintain the conditions set out in the corresponding Section III of the Memorandum of Understanding will be given "Preferred Status" and will be listed in Attachment A of this Annex.

2. Imports of frozen shrimp products from Philippine shrimp processors with "Preferred Status" will be eligible for reduced inspection and monitoring by the Inspection Services Directorate as outlined in the corresponding Section III of the MOU.

3. In accordance with the MOU, those processors who have been removed from "Preferred Status" may re-apply and be subject to a joint DFO/BFAD inspection at their own expense. It will be the responsibility of the Association of Shrimp Producers and Exporters of the Philippines to ensure repayment of DFO expenses (for airfare, transportation and hotel expenses as per Canadian Treasury Board Travel Directives) in this joint inspection.

IV. PLANT, PROCESS AND PRODUCT INSPECTION PROCEDURE

Plant, process and product compliance will be determined as follows for frozen shrimp processing:

1. Process compliance will be determined in accordance with the criteria outlined in the CODEX ALIMENTARIUS COMMISSION; Recommended International Standard for Shrimps or Prawns (CAL/RCP 17-1978) for the production of frozen shrimp.

2. Product compliance will be determined in accordance with:

a) Fresh and Frozen Shrimp Standard, Attachment B;

b) Bacteriological Guidelines for Fish and Fish Products, Attachment F;

c) Packaging, Labelling and Marking Requirements, Attachment D;

d) Chemical Guidelines for Chemical Contaminants in Fish and Fish Products, Attachment C.

V. PERIOD OF AGREEMENT

This Annex to the Memorandum of Understanding with the Philippine Department of Health will become effective upon signature by all parties to this agreement and will continue indefinitely. This Annex may be reviewed or revised by mutual consent or terminated upon written notice.

Either party may, upon written notice, review the policies and procedures in effect in the facilities or installations used to monitor, inspect or produce products covered by this Annex.

VI.

In witness thereof, the agencies have executed this Annex to the Memorandum of Understanding to cover the shipment of frozen shrimp products to Canada from the Philippines.

Signed at Manila this 24^th day of April , 1990

For the Department of Fisheries and Oceans of the Government of Canada

signed by A. Simard
________________________

Canadian Ambassador

signed by F. Pouliot
________________________

Senior Assistant Deputy Minister
Department of Fisheries and Oceans

For the Department of Health, Bureau of Food and Drugs of the Philippines

signed by Philippine Gov't.
_______________________________________________

Secretary of Trade and Industry

signed by C. Gonzales
___________________________

Director,
Bureau of Food and Drugs

President, Shrimp and Prawns Export Association

Witness

MEMORANDUM OF UNDERSTANDING REGARDING THE INSPECTION OF FROZEN SHRIMP

BETWEEN

THE BUREAU OF FOOD AND DRUGS OF THE PHILIPPINES

AND

THE DEPARTMENT OF FISHERIES AND OCEANS OF CANADA

Annex B, Attachment A

Preferred-Status Frozen Shrimp Processors
(in alphabetical order)

- AA Aqua-Agri Corporation, Bacolod

ADMINISTRATIVE PROCEDURES TO IMPLEMENT THE MOU FOR FROZEN SHRIMP PRODUCTS

APPLICATION FOR "PREFERRED-STATUS" PROCESSOR

1. The Canadian Department of Fisheries and Oceans (DFO) will provide the Bureau of Food and Drugs (BFAD) a list of those Philippine shrimp producers whose products have a minimum compliance of 90% by weight with Canadian Regulations, Standards and Guidelines. This compliance will be based on DFO's import Inspection records of a minimum of the last five (5) inspected shipments.

Recognizing that the Canadian Department of Fisheries and Oceans wants to evaluate a plant's proven record of performance along with a producer's interest in trading with Canada, this compliance will be based on DFO's import Inspection records which would establish these considerations.

2. Those shrimp processors who wish to obtain "Preferred Status" must make application in writing to the Association of Shrimp Producers and Exporters, who will in turn forward this application to BFAD.

The Philippine Bureau of Food and Drugs (BFAD) will provide to the Canadian Department of Fisheries and Oceans a list of those processors who have made application for "Preferred Status." The application must include a copy of the Quality Control Program in force in the plant.

3. DFO will arrange a technical mission to be sent to the Philippines. A joint DFO-BFAD evaluation will be carried out of each processor making application to confirm the processor's compliance with the conditions set out below:

a) Adherence to the document by CODEX ALIMENTARIUS COMMISSION "Recommended International Standard for Quick-frozen Shrimps or Prawns". Where this document does not cover certain situations, the "Handbook of Compliance, Fish Inspection Regulations, Schedules I & II", will be applied.

b) The presence of a DFO-approved Quality Control Program in the processing plant. The Quality Control Program is to be submitted to the DFO-BFAD team for review, and will be evaluated in practice.

c) A minimum "B" rating as determined by the DFO Plant Rating System for construction, equipment, and operation requirements.

Processors who meet these basic conditions will be eligible for "Preferred Status".

MONITORING FOR COMPLIANCE TO CONDITIONS OF MOU

1. All products exported to Canada by "Preferred-status" processors will be subject to reduced monitoring by DFO. Each shipment must be accompanied by a statement indicating that the product is intended for the Canadian market.

This requirement is necessary as it is recognised that not all production from a "Preferred-Status" processor would be meeting the Canadian standards. In order to properly evaluate all shipments from "Preferred-Status" processors, those lots which are imported into Canada without the statement will be inspected and recorded as if they have been produced by a non-preferred-status processor. This procedure is intended to protect the "Preferred-Status" processor from being unfairly assessed due to an importer's misunderstanding of this M.O.U. program.

2. Reduced monitoring will consist of the examination of every tenth shipment (10% of shipments sampled on a random basis) shipped to Canada by a "Preferred-Status" processor. Determination of the "tenth shipment" will be done on a national basis from the import data base maintained by the Inspection Services Directorate. "Tenth shipments" will not normally be detained pending evaluation results.

3. Product compliance will be determined in accordance with the provisions set out in the MOU, specifically:

a) Fresh and Frozen Shrimp Standard, dated February 15, 1989,

b) "Packaging, Labelling & Marking Requirements".

c)    Bacteriological Guidelines

The Department of Fisheries and Oceans reserves the right to make any changes it sees fit to the documents referred to above.

4. A product which is found, during a monitoring sample examination, to not comply with Canadian Regulations, Standards or Guidelines will be placed on the Mandatory Inspection List. All subsequent imports of that product from that producer will be inspected upon entry into Canada until the required four consecutive shipments pass the evaluation(s) for which the product was originally placed on the M.I.L.

5. The Bureau of Food and Drugs (BFAD) will periodically monitor processors on "Preferred Status" and will inform DFO of any infractions to the GMP and of the actions taken to correct such infractions.

REMOVAL AND RE-INSTATEMENT FOR "PREFERRED-STATUS" PROCESSORS

1. Placement of a product on the MIL will not be immediate grounds for removal of that producer from "Preferred-Status Listing".

a) On repeated MIL listings the Canadian DFO will contact the BFAD to request an evaluation of the company quality control plan along with a review of the company records, to determine if that company's processing operation is still under proper control.

b) Upon continued infractions, the Canadian DFO will contact the BFAD in writing to indicate that it is considering the removal of a processor from "Preferred-Status Listing".

c) Removal of a producer from "Preferred-Status Listing" will then be initiated if, after a review of the processor's records, BFAD inspection records and DFO's import inspection records, there is an indication that the company is no longer complying with GMP, or that the acceptability of that company's products has fallen below 90% by weight.

2. Processors who have been removed from "Preferred Status" may reapply.

a) The reapplying company must provide in writing, to Bureau of Food and Drugs, an explanation of the circumstances leading to the product rejections and/or GMP failure and what actions the company has taken to correct the situation. Based on the documentation provided, the Bureau of Food and Drugs will then make a recommendation to DFO as to whether or not the plant should be reinspected.

b) All expenses (airfare, travel and hotel expenses) for the plant reinspection will be borne by the reapplying company. The company must provide to the Association of Shrimp Producers and Exporters of the Philippines sufficient funds to carry out the reinspection. The Bureau of Food and Drugs will notify DFO when sufficient funds have been received. Normally a reinspection will require one week, however if several such reinspections are to be carried out at the same time, an individual company's share of travel expenses may be reduced. DFO will endeavour to complete a reinspection within two months of being notified of the availability of sufficient funding.

c) Final inspection reports and recommendations will be prepared following the team's return to Canada. The final decision to reinstate a company to "Preferred Status" will be made by the Director General, Inspection Services Directorate, Ottawa, Canada.

GENERAL

1. This administrative procedure may be amended on the mutual agreement of the parties involved.

The provisions of these administrative procedures may be reviewed or revised by mutual consent or terminated by either party 60 days after receipt of written notice that changes shall come into effect. The provisions of this MOU and its annex shall apply to all shipments in transit and contracts entered into during the period of the validity of this MOU but not fully completed on the day that the changes come into effect.