[Code of Federal Regulations]
[Title 45, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR73a.735-504]

[Page 197-198]
 
                        TITLE 45--PUBLIC WELFARE
 
                           AND HUMAN SERVICES
 
PART 73a--STANDARDS OF CONDUCT: FOOD AND DRUG ADMINISTRATION SUPPLEMENT
--Table of Contents
 
                     Subpart E--Financial Interests
 
Sec. 73a.735-504  Exceptions.

    (a) A control activity employee who can satisfy all of the 
conditions specified in Sec. 73a.735-502(a)(2) may submit a request to 
retain a prohibited financial interest. Any such request must be 
submitted no later than 30 days after the event that results in the 
employee holding the prohibited financial interest. Such requests for 
exception should be forwarded in writing through supervisory channels to 
the Associate Commissioner for Administration for review by the FDA 
Conflict of Interest Review Board and subsequent recommendation to the 
Commissioner. All decisions on requests for exceptions shall be in 
writing and a copy furnished to the employee involved.
    (b) A memorandum of each approved exception shall be filed in the 
Public Records and Documents Center for public inspection. Such public 
disclosure shall be made within 10 days after the Commissioner's 
decision. The following is an example of the format of such memorandum 
(in a hypothetical employee situation):
    (1) Employee: Joe Doe.
    (2) Title: Research Chemist.
    (3) Grade/Salary: GS-14.
    (4) Organization: Bureau of Biologics, Food and Drug Administration, 
Bethesda, Md.
    (5) Date of employee's request for exception: ------.

[[Page 198]]

    (6) Date of Commissioner's approval: ------.
    (7) Basis for exception: Employee owns financial interest in the ABC 
Foods Corporation, and permanent retention is normally prohibited under 
FDA/HHS conflict of interest regulations for such an employee. The 
employee, however, acquired this financial interest prior to his 
reassignment to FDA on ------, which was part of a major Department 
reorganization transferring certain functions from NIH to the FDA (i.e., 
FDA's Bureau of Biologics). At the time of acquisition and immediately 
prior to the reorganization, the employee's financial interest was 
allowable under Department regulations. The employee's official duties 
are fully confined to the matters under the jurisdiction of the Bureau 
of Biologics, and his official duties do not involve any contact with 
the food industry. The Commissioner has determined that an exception is 
warranted under the following criteria:
    (i) Acquisition occurred prior to Department reorganization;
    (ii) Financial interest retention will not give rise to an actual 
conflict of interest situation;
    (iii) There is no direct relationship between the employee's 
official duties and the regulated activities of ABC Foods;
    (iv) The employee occupies a position below that of Bureau or Deputy 
Bureau Director (or equivalent position in the Office of the 
Commissioner); and
    (v) The employee agrees to refrain from engaging in any direct or 
indirect transactions that are designed to increase the value/shares of 
the ``excepted'' ABC Foods interests.

This exception is considered equitable to the employee involved, and 
retention of the ABC Foods interest will not in any way impair the 
interests of the Government or of the public.
    (c) In interpreting the requirement of Sec. 73a.735-502(a)(2)(v), 
events not involving employee discretion (e.g., accepting dividends in 
the form of cash or additional shares) do not constitute transactions 
designed to increase the value/shares of an ``excepted'' financial 
interest. A transaction involving discretion, e.g., exercise of stock 
options, may be made only if proposed to the Associate Commissioner for 
Administration and approved by the Conflict of Interest Review Board as 
an amendment to the original exception. A memorandum recording such 
approval shall be made public in accordance with paragraph (b) of this 
section.
    (d) An employee may temporarily retain a prohibited financial 
interest pending review of a written request for an exception submitted 
in accordance with this section.
    (e) Except as provided in Sec. 73a.735-501(c), no employee may 
participate in an official matter whose outcome will have a direct and 
predictable effect on a financial interest held by him. This prohibition 
applies to official matters handled before and after approval of an 
exception under this section.

Subparts F-I [Reserved]