USFWS Finalizes Rule Classifying Cephalopods as Shellfish to Cut Trade Compliance Costs. It is progress ?

The U.S. Fish and Wildlife Service (USFWS) has issued a final rule formally including cephalopods such as squid, cuttlefish and octopus within the federal regulatory definition of shellfish. Set to take effect on July 23, the new rule aims to resolve longstanding regulatory ambiguities, eliminate overlapping oversight during import, export and inspection procedures, and lower trade costs for America’s cephalopod industry. The U.S. government estimates this single regulatory adjustment will save small and medium-sized enterprises (SMEs) in the sector at least $2.8 million in annual compliance expenses.Cephalopods Long Trapped in a Regulatory Gray AreaThe revision modifies the definition of shellfish laid out in the U.S. Fish and Wildlife Service Regulations. Previously, federal rules defined shellfish as aquatic invertebrates with external shells. Since squid and cuttlefish only possess internal shells while octopuses have virtually no shell structure, there has been no clear regulatory consensus on whether cephalopods qualify as shellfish under federal law.This definitional ambiguity has subjected cephalopod products to duplicated regulatory scrutiny throughout import declaration, export filing and customs inspections for decades. Many squid shipments were simultaneously categorized as general commercial seafood and subjected to wildlife regulatory oversight. Businesses faced extra administrative filings, additional inspections and associated fees—burdens that do not apply to most conventionally harvested seafood products.U.S. cephalopod processors and traders have lobbied for years to amend the rules, seeking to eliminate redundant oversight and reduce operational overhead.Industry: Rule Cuts Substantial Time and Financial BurdensWayne Reichle, President of Lund’s Fisheries, a major U.S. squid processing and export firm, stated the new rule addresses a crippling administrative burden that has plagued the industry for years. He commended the U.S. government for advancing the reform, noting businesses will see tangible improvements in administrative workloads, time expenditures and operational efficiency moving forward.Industry insiders explained that once the rule enters force, companies will no longer face duplicate filings and redundant inspections stemming from unclear classification of cephalopods, significantly speeding up import and export clearance.For processors specializing in squid, cuttlefish and octopus, the policy shift delivers direct operational cost savings and bolsters the global competitiveness of U.S.-produced cephalopod goods. Estimated $2.8 Million in Compliance Savings for Domestic BusinessesThe Office of Advocacy within the U.S. Small Business Administration (SBA) noted the revised definition delivers clear regulatory certainty to small and medium fisheries operators while removing unnecessary compliance costs. The office’s economic analysis pegs minimum annual savings for affected enterprises at $2.8 million. Everett M. Woodel Jr., Acting Chief Counsel, remarked that USFWS fully incorporated feedback from small fisheries businesses, and the updated definition provides the long-sought regulatory clarity critical to uninterrupted commercial operations. The Office of Advocacy clarified that this classification reform is a core component of the April 2025 Executive Order titled Restoring American Seafood Competitiveness, issued by the Trump administration.In recent years, the federal government has rolled out a series of measures to slash administrative red tape for fisheries operators and strengthen the competitiveness of the domestic seafood sector.Broader Fisheries Regulatory Reforms UnderwayThe cephalopod reclassification forms only one piece of a sweeping overhaul of U.S. fisheries regulation.

Back in April, the SBA submitted formal comments to USFWS endorsing the rule change.Concurrent proposals to further reduce industry costs remain under consideration, including SBA recommendations to open certain marine protected areas to commercial fishing, and requests directing the National Oceanic and Atmospheric Administration (NOAA) to cover the costs of at-sea fisheries observers aboard ocean-going vessels—or eliminate the federal mandate requiring mandatory on-board observers entirely. Janet Fogarty, SBA Regional Representative for New England, said the Trump administration has maintained consistent dialogue with commercial fisheries nationwide through industry conferences and stakeholder outreach to push federal regulators to address industry concerns.Positive Implications for Global Cephalopod TradeThe United States ranks among the world’s largest consumers and importers of squid, cuttlefish and octopus. While the new rule does not alter product entry standards or food safety oversight requirements, it streamlines import, export and inspection workflows for cephalopods and slashes administrative overhead to accelerate customs clearance.For international suppliers that export cephalopods to the U.S. market, standardized regulatory classification reduces institutional trade barriers and improves overall trade facilitation for U.S. inbound seafood shipments.Effective July 23, the final rule puts an end to decades of classification disputes over cephalopods in the U.S., granting importers, exporters and seafood traders a unified, unambiguous regulatory framework for all cephalopod-related commercial activity.