Provisional Translation

OTO No. 631 Classification MHLW-(1)
Date of Acceptance February 2, 2001 Ministry/Agency Receiving Complaint Cabinet Office
Responsible Ministries Ministry of Health, Labour and Welfare Related Laws Food Sanitation Law,
Nutrition Improvement Law
Complainant Domestic organization Exporting Countries USA
Subject Nullification of food with health claims system proposal
Description of Complaint 1.Problems related to Process toward Presentation of Report
(1) The Ministry of Health, Labour and Welfare has solicited written opinions on a draft of a report on the "Labeling of Food with Health Claims, etc." But little deliberation had been done to reflect written opinions in the draft, and the draft has been adopted as a final draft for public comments.
(2) While presenting the final draft for public comments, the ministry notified the World Trade Organization of the final draft.

2.Problems in Food with Health Claims System as Proposed in the Report
(1) In order to have products identified as food for specified health uses, data on safety, effectiveness and other matters would be required to be presented. This idea is similar to that of applications for the approval of medicines. Massive research and development investment (an estimated 70 million yen for each case) is required for the presentation of data, and a massive amount of time is required before the presentation.
(2) The standards for food with nutrient function claims are set narrower and lower than those that are actually distributed. Many products may have to be changed in design in order to be labeled as food in the category of food with nutrient function claims.
(3) Vitamins and minerals that are included in food with nutrient function claims account for only 20% of the total market (estimated at 800 billion yen for the whole industry), and herbs, which capture 80% of the total market, are not covered.
(4) The proposal says that herbs should be considered food for specified health uses. Because of the massive data required, however, few companies are expected to apply for identification of herbs as such.
3. For the above reasons, the ministry should nullify the food with health claims system proposal and prepare a new proposal in cooperation with relevant industries.

Details of Measures 1. The ministry replied as follows:
The ministry has no intention to nullify the food with health claims system proposal, and the ministry's thoughts on the reasons for the nullification request are as follows:
(1) Explanation of opinions given by various organizations was presented at a joint meeting of relevant subcommittees of the Food Sanitation Investigation Council on November 20. Opinions given through public comments have just been explained at the Pharmaceutical Affairs and Food Sanitation Council.
(2) The solicitation of public comments on a proposal and the notification of the proposal to the WTO have traditionally been implemented in parallel. This does not mean that the ministry has neglected public comments as noted by the complainant.
(3) Since food for specified health uses may be labeled with health functions, certain effectiveness and safety data are certainly required.
(4) The maximum intake limit for foods with nutrient function claims has been set on the basis that the total of average nutrients that the people take in from ordinary foods and the maximum nutrients that they take in from foods with nutrient function claims does not exceed the maximum allowable level as provided in the sixth revision of nutritional requirements. The maximum allowable levels for quasi-drugs are also taken into account.
(5) Future standardization is not denied for herbs. But since there are a wide variety of herbs including those with relatively modest effects or strong effects as well as those with strong side effects, we believe that they should be treated as foods for specified health uses under the food with health claims system for the immediate future.

2. The ministry forwarded its reply at the 17th OTO Grievance Resolution Committee held on March 26, 2001, as follows:
(1) The food with health claims system is a new system that divides foods with health claims into food for specified health uses and food with nutrient function claims. For foods for specified health uses, the Ministry of Health, Labour and Welfare gives permission for the indication of certain health usage to each case after examination, while for foods with nutrient function claims standards on vitamin, mineral and others are set, and those that conform to standards can be manufactured and sold freely with indication of nutritional functions.
(2) The maximum intake limit for food with nutrient function claims was approved by the Council based on the Japanese nutritional requirement as well as intake by ordinary food.
(3) The Council reached the following consensus: Since herbs are wide-ranging and some of them produce side effects, the establishment of a regulatory standard would not be a familiar process and it would be appropriate to handle herbs on a case-by-case basis.
(4) Although some points have been pointed out regarding this system, the Ministry of Health, Labour and Welfare believes that it has done as much as it can do. The ministry also considers it appropriate to implement the system from April this year and then to hold discussions upon seeing situations.

3. At the 18th meeting of the OTO Grievance Resolution Committee on May 14, 2001, the Chairman summed up as follows:
(1) The ministry has promoted institutional reforms including the abolishment of shape regulations on the basis of the decision by the Office of Market Access as follows: To have those that are ordinarily distributed and sold as dietary supplements overseas exempted from regulations for medicines and to enable them to be handled as food in Japan. The food with health claims system is basically one of the reforms made in accordance with the above idea, and it is hard to find any reason for nullifying the food with health claims system.
(2) However, there is an undeniable possibility that the system cannot have a large effect in relation to the above-mentioned idea, depending on the operation thereof. The ministry is expected to report the operational conditions of the food with health claims system and activities planned in the future to the Grievance Resolution Committee within one year. In doing so, the ministry is expected to make a report including the conditions of consideration of (1) the simplification of application documents for approval of food for specified health uses, (2) the review of the maximum/minimum daily intake limit of food with nutrient function claims, (3) the way of setting regulatory standards for herbs and other matters.

4. At the 19th meeting of the OTO Grievance Resolution Committee on June 7, 2002, the ministry made a report in response to the above mentioned 3 (2).
(1) Regarding food for specified health uses, 110 applications were filed in fiscal 2001and 60 have been permitted/approved as of the end of May 2002. The accumulating total of permitted/approved cases is 298. While examination records are accumulated, the ministry will provide relevant companies with information by organizing things to keep in mind that are often pointed out in the course of deliberation at the Council and will also prepare guidelines for the possible.
(2) As for food with nutrient function claims, the National Institute of Health and Nutrition is now studying the addition of components including herbs. The maximum/minimum limit is also now under consideration in the international society, and the ministry will consider the issue based on such conditions as appropriate.

5. In response to 4, the Committee held a deliberation. The Chairman of the Committee summed up as follows.
(1) The ministry made a report on operational conditions, and we think that many people considered activities insufficient. It is not clear what has proceeded in what way. We request the ministry to prepare supporting materials about what improvement has been aimed at after the introduction of the system and whether the speed of progress has increased and submit the materials to the Secretariat of the OTO.
(2) As for the simplification of application documents for approval of food for specified health uses, the ministry should prepare guidelines that contribute to convenience for applicants as soon as possible and revise the guidelines as appropriate. Moreover, in such a case, the ministry is expected to think of a mechanism in which applicants' opinions can be directly reflected. Basically, application documents for approval should be kept to the minimum necessary, and the remaining part should be left to the market. As a trend in the future, it is probably necessary to consider shifting the approval of food for specified health uses from case-by-case approval to regulatory standards-based approval.
(3) Regarding the maximum/minimum daily intake limit of food with nutrient function claims, considering that the distribution of overseas dietary supplements has been hindered due to the narrow scope of regulatory standards set, it is probably necessary for the ministry to conduct an active review. For example, it is probably necessary to conduct an examination in consideration of consistency with overseas, for example, a flexible review of the maximum limit for dietary supplements which exceeds the current maximum limit if they have not caused any safety problems in the overseas market.
(4) The ministry should continue considering the approval of herbs as the nutritional components of food with nutrient function claims. The ministry is expected to submit the schedule of examination at the National Institute of Health and Nutrition to the Secretariat of the OTO. In doing so, the ministry is requested, for example, to consider whether it is possible to actively set regulatory standards for those that have not caused any problems in the overseas market.
(5) The ministry is requested to show specific results for those that can be handled immediately, including the preparation of guidelines that contribute to convenience for applicants, on the basis of the above discussions. Incidentally, grievances concerning dietary supplements are wide ranging, and there seem to be many other opinions about problems related to the food with health claims system. We consider it necessary to continue holding discussions about dietary supplements at the OTO.

6. The complainant, while willing to continue making arguments about dietary supplements at the OTO, has agreed to close this complaint with the series of deliberations at the OTO Grievance Resolution Committee and the ministry's submission of materials.

Classification of Processing Cc Directions IV
Remarks A written reply was made on February 14, 2001.
Deliberated at the 17th Grievance Resolution Committee on March 26, 2001.
Deliberated at the 18th Grievance Resolution Committee on May 14, 2001.
Deliberated at the 19th Grievance Resolution Committee on June 7, 2002.
Relevant materials submitted on February 5, 2003.

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