On 23 March, 2018, the U.S. senate passed the Seafood Import Monitoring Program (SIMP) for shrimp in section 539 of the Consolidated Appropriations Act of 2018. SIMP is an electronic traceability program meant to increase the traceability of imported seafood, managed by the U.S. Customs and the National Oceanic and Atmospheric Administration (NOAA). Although importers and exporters have sought to prevent shrimp from being placed under SIMP, it is now clear that from 31 December, 2018, all shrimp imported into the U.S. will have to comply with SIMP requirements. ShrimpTails speculates about the practical implementations for shrimp importers and exporters. Although it was expected that the biggest problem for suppliers would be to implement traceability documentation systems and acquire the data required under SIMP, these are not the main stress factors.
A first major problem for exporters is that under SIMP the so-called “importer of record” can no longer be a foreign entity, something which was allowed under the old regulations. This importer of record is the entity under scrutiny of the anti-dumping measures. Since the anti-dumping cases posed severe risks to the shrimp importers, they increasingly required their suppliers to become the importer of record instead. Under SIMP, the importer of record must have an international trade permit issued by NOAA; the problem with this is that it can only be given to a company that is registered as a legal entity in the United States. As a result, any supplier to the U.S. market, big or small, must set up a U.S.-based legal entity or their clients (the importers) will have to be the importer of record again – something they just do not want to risk.
A second problem for the shrimp suppliers is to actually meet the SIMP traceability requirements. The importer of record is required to use the U.S. Customs’ automated commercial environment (ACE) within which he needs to submit a catch form for each lot imported into the United States. This form consists of 11 data elements that enable NOAA to trace the shrimp in each lot back to farm level in the country of origin. Ensuring traceability, however, comes with various challenges varying from one country to the next. In some countries of origin, for instance, not every farmer has a formal license number issued by a national authority. However, this information is one of the data elements that are required as per the catch form. In short, exporters need to ensure that the farmers they work with are registered and have a license number. In other countries, the difficulty is that the exported shrimp may originate from multiple countries of origin from which it is first reprocessed and subsequently exported. Clearly, this could also pose a challenge for traceability to farm level.
Nick Leonard, director of responsible sourcing at Rubicon Resources, argues that SIMP also has a good side to it for the U.S. shrimp industry as it encourages traceability in the supply chain. He explains that when seafood companies are not the importer of record, they need to make sure that their suppliers have a trade license issued by the NOAA and are able to comply with SIMP. In the short run, this will require seafood companies to train and audit their suppliers to implement the systems necessary to comply with SIMP. Nick explains that as not all suppliers will be able to comply with SIMP, the way companies buy shrimp may shift. He states that there is a good chance that SIMP will shrink an importer’s supply chain as this importer will likely only want to work with those suppliers that can comply with SIMP regulations. SIMP will be a challenge for U.S. shrimp importers. However, it may also encourage them to become more conscious of traceability in the long run and to make it work by working together.
