"(C) Such person shall be a legally constituted entity permitted to conduct the activities for which it seeks accreditation.

"(D) Such person shall not engage in the design, manufacture, promotion, or sale of articles regulated under this Act. "(E) The operations of such person shall be in accordance with generally accepted professional and ethical business practices, and such person shall agree in writing that at a minimum the person will

"(i) certify that reported information accurately reflects data reviewed, inspection observations made, other matters that relate to or may influence compliance with this Act, and recommendations made during an inspection or at an inspection's closing meeting;

"(ii) limit work to that for which competence and capacity are available;

"(iii) treat information received, records, reports, and recommendations as confidential commercial or financial information or trade secret information, except such information may be made available to the Secretary;

"(iv) promptly respond and attempt to resolve complaints regarding its activities for which it is accredited; and

"(v) protect against the use, in carrying out paragraph (1), of any officer or employee of the accredited person who has a financial conflict of interest regarding any product regulated under this Act, and annually make available to the public disclosures of the extent to which the accredited person, and the officers and employees of the person, have maintained compliance with requirements under this clause relating to financial conflicts of interest.

"(4) The Secretary shall publish on the Internet site of the Publication. Food and Drug Administration a list of persons who are accredited under paragraph (2). Such list shall be updated to ensure that the identity of each accredited person, and the particular activities

for which the person is accredited, is known to the public. The Deadline. updating of such list shall be no later than one month after the accreditation of a person under this subsection or the suspension or withdrawal of accreditation, or the modification of the particular activities for which the person is accredited.

“(5)(A) To ensure that persons accredited under this subsection continue to meet the standards of accreditation, the Secretary shall (i) audit the performance of such persons on a periodic basis through the review of inspection reports and inspections by persons designated by the Secretary to evaluate the compliance status of a device establishment and the performance of accredited persons, and (ii) take such additional measures as the Secretary determines to be appropriate.

"(B) The Secretary may withdraw accreditation of any person accredited under paragraph (2), after providing notice and an opportunity for an informal hearing, when such person is substantially not in compliance with the standards of accreditation, or poses a threat to public health or fails to act in a manner that is consistent with the purposes of this subsection. The Secretary may suspend the accreditation of such person during the pendency of the process under the preceding sentence.

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“(6)(A) Subject to subparagraphs (B) and (C), a device establishment is eligible for inspections by persons accredited under paragraph (2) if the following conditions are met:

"(i) The Secretary classified the results of the most recent inspection of the establishment pursuant to subsection (h) or (i) of section 510 as 'no action indicated' or 'voluntary action indicated'.

"(ii) With respect to each inspection to be conducted by an accredited person

"(I) the owner or operator of the establishment submits to the Secretary a notice requesting clearance to use such a person to conduct the inspection, and the Secretary provides such clearance; and

"(II) such notice identifies the accredited person whom the establishment has selected to conduct the inspection, and the Secretary agrees to the selected accredited person. "(iii) With respect to the devices that are manufactured, prepared, propagated, compounded, or processed by the establishment, at least one of such devices is marketed in the United States, and the following additional conditions are met:

"(I) At least one of such devices is marketed, or is intended to be marketed, in one or more foreign countries, one of which countries certifies, accredits, or otherwise recognizes the person accredited under paragraph (2) and identified under subclause (II) of this clause.

"(II) The owner or operator of the establishment submits to the Secretary a statement that the law of a country in which such a device is marketed, or is intended to be marketed, recognizes an inspection of the establishment by the Secretary, and not later than 30 days after receiving such statement, the Secretary informs the owner or operator of the establishment that the owner or operator may submit a notice requesting clearance under clause (ii). "(iv)(I) In the case of an inspection to be conducted pursuant to 510(h), persons accredited under paragraph (2) did not conduct the two immediately preceding inspections of the establishment, except that the establishment may petition the Secretary for a waiver of such condition. Such a waiver may be granted only if the petition states a commercial reason for the waiver; the Secretary determines that the public health would be served by granting the waiver; and the Secretary has conducted an inspection of the establishment during the four-year period preceding the date on which the notice under clause (ii) is submitted to the Secretary. Such a waiver is deemed to be granted only if the petition states a commercial reason for the waiver; the Secretary has not determined that the public health would be served by granting the waiver; and the owner or operator of the device establishment has requested in writing, not later than 18 months following the most recent inspection of such establishment by a person accredited under paragraph (2), that the Secretary inspect the establishment and the Secretary has not conducted an inspection within 30 months after the most recent inspection. With respect to such a waiver that is granted or deemed to be granted, no additional such waiver may be granted until after the Secretary has conducted an inspection of the establishment.

"(II) In the case of an inspection to be conducted pursuant to 510(i), the Secretary periodically conducts inspections of the establishment.

"(B)(i) The Secretary shall respond to a notice under subpara- Deadline. graph (A) from a device establishment not later than 30 days after the Secretary receives the notice. Through such response, the Secretary shall (I) provide clearance under such subparagraph, and agree to the selection of an accredited person, or (II) make a request under clause (ii). If the Secretary fails to respond to the notice within such 30-day period, the establishment is deemed to have such clearance, and to have the agreement of the Secretary for such selection.

“(ii) The request referred to in clause (i)(II) is—

"(I) a request to the device establishment involved to submit to the Secretary compliance data in accordance with clause (iii); or

"(II) a request to the establishment, or to the accredited person identified in the notice under subparagraph (A), for information concerning the relationship between the establishment and such accredited person, including information about the number of inspections of the establishment, or other establishments owned or operated by the owner or operator of the establishment, that have been conducted by the accredited person.

The Secretary may make both such requests.

"(iii) The compliance data to be submitted by a device establishment under clause (ii) are data describing whether the quality controls of the establishment have been sufficient for ensuring consistent compliance with current good manufacturing practice within the meaning of section 501(h), and data otherwise describing whether the establishment has consistently been in compliance with sections 501 and 502 and other applicable provisions of this Act. Such data shall include complete reports of inspections regarding good manufacturing practice or other quality control audits that, during the preceding two-year period, were conducted at the establishment by persons other than the owner or operator of the establishment, together with all other compliance data the Secretary deems necessary. Data under the preceding sentence shall demonstrate to the Secretary whether the establishment has facilitated consistent compliance by promptly correcting any compliance problems identified in such inspections.

"(iv) Not later than 60 days after receiving compliance data Deadline. under clause (iii) from a device establishment, the Secretary shall provide or deny clearance under subparagraph (A). The Secretary may deny clearance if the Secretary determines that the establishment has failed to demonstrate consistent compliance for purposes of clause (iii). The Secretary shall provide to the establishment a statement of such reasons for such determination. If the Secretary fails to provide such statement to the establishment within such 60-day period, the establishment is deemed to have such clearance.

"(v)(I) A request to an accredited person under clause (ii)(II) may not seek any information that is not required to be maintained by such person in records under subsection (f)(1). Not later than 60 days after receiving the information sought by the request, the Secretary shall agree to, or reject, the selection of such person by the device establishment involved. The Secretary may reject

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the selection if the Secretary provides to the establishment a statement of the reasons for such rejection. Reasons for the rejection may include that the establishment or the accredited person, as the case may be, has failed to fully respond to the request, or that the Secretary has concerns regarding the relationship between the establishment and such accredited person. If within such 60day period the Secretary fails to agree to or reject the selection in accordance with this subclause, the Secretary is deemed to have agreed to the selection.

"(II) If the Secretary rejects the selection of an accredited person by a device establishment, the establishment may make an additional selection of an accredited person by submitting to the Secretary a notice that identifies the additional selection. Clauses (i) and (ii), and subclause (I) of this clause, apply to the selection of an accredited person through a notice under the preceding sentence in the same manner and to the same extent as such provisions apply to a selection of an accredited person through a notice under subparagraph (A).

"(vi) In the case of a device establishment that under clause (iv) is denied clearance under subparagraph (A), or whose selection of an accredited person is rejected under clause (v), the Secretary shall designate a person to review the findings of the Secretary under such clause if, during the 30-day period beginning on the date on which the establishment receives the findings, the establishment requests the review. The review shall commence not later than 30 days after the establishment requests the review, unless the Secretary and the establishment otherwise agree.

"(C)(i) In the case of a device establishment for which the Secretary classified the results of the most recent inspection of the establishment by a person accredited under paragraph (2) as 'official action indicated', the establishment, if otherwise eligible under subparagraph (A), is eligible for further inspections by persons accredited under such paragraph if (I) the Secretary issues a written statement to the owner or operator of the establishment that the violations leading to such classification have been resolved, and (II) the Secretary, either upon the Secretary's own initiative or a petition of the owner or operator of the establishment, notifies the establishment that it has clearance to use an accredited person for the inspections. The Secretary shall respond to such petition within 30 days after the receipt of the petition.

"(ii) If the Secretary denies a petition under clause (i), the device establishment involved may, after the expiration of one year after such denial, again petition the Secretary for a determination of eligibility for inspection by persons accredited by the Secretary under paragraph (2). If the Secretary denies such petition, the Secretary shall provide the establishment with such reasons for such denial within 60 days after the denial. If, as of the expiration of 48 months after the receipt of the first petition, the establishment has not been inspected by the Secretary in accordance with section 510(h), or has not during such period been inspected pursuant to section 510(i), as applicable, the establishment is eligible for further inspections by accredited persons.

"(7)(A) Persons accredited under paragraph (2) to conduct inspections shall record in writing their inspection observations and shall present the observations to the device establishment's designated representative and describe each observation. Additionally, such accredited person shall prepare an inspection report

(including for inspections classified as 'no action indicated') in a form and manner consistent with such reports prepared by employees and officials designated by the Secretary to conduct inspections.

"(B) At a minimum, an inspection report under subparagraph (A) shall identify the persons responsible for good manufacturing practice compliance at the inspected device establishment, the dates of the inspection, the scope of the inspection, and shall describe in detail each observation identified by the accredited person, identify other matters that relate to or may influence compliance with this Act, and describe any recommendations during the inspection or at the inspection's closing meeting.

"(C) An inspection report under subparagraph (A) shall be Deadline. sent to the Secretary and to the designated representative of the inspected device establishment at the same time, but under no circumstances later than three weeks after the last day of the inspection. The report to the Secretary shall be accompanied by all written inspection observations previously provided to the designated representative of the establishment.

"(D) Any statement or representation made by an employee or agent of a device establishment to a person accredited under paragraph (2) to conduct inspections shall be subject to section 1001 of title 18, United States Code.

"(E) If at any time during an inspection by an accredited person the accredited person discovers a condition that could cause or contribute to an unreasonable risk to the public health, the accredited person shall immediately notify the Secretary of the identification of the device establishment subject to inspection and such condition.

"(8) Compensation for an accredited person shall be determined by agreement between the accredited person and the person who engages the services of the accredited person, and shall be paid by the person who engages such services.

"(9) Nothing in this subsection affects the authority of the Secretary to inspect any device establishment pursuant to this Act.

"(10)(A) For fiscal year 2005 and each subsequent fiscal year, no device establishment may be inspected during the fiscal year involved by a person accredited under paragraph (2) if—

"(i) of the amounts appropriated for salaries and expenses of the Food and Drug Administration for the preceding fiscal year (referred to in this subparagraph as the first prior fiscal year'), the amount obligated by the Secretary for inspections of device establishments by the Secretary was less than the adjusted base amount applicable to such first prior fiscal year; and

"(ii) of the amounts appropriated for salaries and expenses of the Food and Drug Administration for the fiscal year preceding the first prior fiscal year (referred to in this subparagraph as the 'second prior fiscal year'), the amount obligated by the Secretary for inspections of device establishments by the Secretary was less than the adjusted base amount applicable to such second prior fiscal year.

"(B)(i) Subject to clause (ii), the Comptroller General of the United States shall determine the amount that was obligated by the Secretary for fiscal year 2002 for compliance activities of the Food and Drug Administration with respect to devices (referred