[Code of Federal Regulations]

[Title 45, Volume 1]

[Revised as of October 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 45CFR73a.735-504]



[Page 203-204]

 

                        TITLE 45--PUBLIC WELFARE

 

                    SUBTITLE A--DEPARTMENT OF HEALTH

                           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: ------.

    (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



[[Page 204]]



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]