[Federal Register Volume 63, Number 247 (Thursday, December 24, 1998)]
[Rules and Regulations]
[Pages 71346-71367]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33933]
[[Page 71345]]
_______________________________________________________________________
Part II
Department of Agriculture
_______________________________________________________________________
Agricultural Marketing Service
_______________________________________________________________________
7 CFR Part 999
Revised Quality and Handling Requirements and Entry Procedures for
Imported Peanuts for 1999 and Subsequent Import Periods; Final Rule
Federal Register / Vol. 63, No. 247 / Thursday, December 24, 1998 /
Rules and Regulations
[[Page 71346]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 999
[Docket No. FV98-999-1 FR]
Revised Quality and Handling Requirements and Entry Procedures
for Imported Peanuts for 1999 and Subsequent Import Periods
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Agriculture (Department) is adopting, as a
final rule, with several modifications, the provisions of a proposed
rule relaxing certain quality requirements; modifying entry procedures;
revising handling requirements; reducing the reporting burden; and
establishing a new reporting period for peanuts imported into the
United States. Seven comments were received and are addressed in this
final rule. Changes to the quality and handling requirements make the
import requirements consistent, as required by law, with regulations
covering domestically-produced peanuts under Marketing Agreement No.
146 (Agreement). Changes to import procedures and reporting
requirements by the Agricultural Marketing Service (AMS) will improve
efficiency of the importation process, ease the reporting burden, and
provide importers with more time to meet peanut import regulation
requirements. This final rule continues safeguard measures which
prevent non-edible imported peanuts from being used in human
consumption outlets in the United States. This rule will benefit peanut
importers, handlers, and consumers by helping to ensure that all
peanuts in the domestic marketplace comply with the same quality
standards.
EFFECTIVE DATE: January 1, 1999.
FOR FURTHER INFORMATION CONTACT: Tom Tichenor, Marketing Specialist,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, PO Box 96456, room 2525-S, Washington, DC 20090-6456;
telephone: (202) 720-6862, or fax: (202) 720-5698. Small businesses may
request information on compliance with this regulation by contacting:
Jay Guerber at the same address and fax number, telephone: (202) 720-
2491. You may also view the marketing agreements and orders small
business compliance guide at the following website: http://
www.ams.usda.gov/fv/moab.html.
SUPPLEMENTARY INFORMATION: This final rule amends the peanut import
regulation (7 CFR 999.600) issued June 11, 1996, and published in the
Federal Register (61 FR 31306, June 19, 1996), which regulates the
quality of peanuts imported into the United States. Amendments to the
regulation were issued December 31, 1996 (62 FR 1269, January 9, 1997)
and September 19, 1997 (62 FR 50243, September 25, 1997).
The import regulation is effective under subparagraph (f)(2) of
section 108B of the Agricultural Act of 1949 (7 U.S.C. 1445c3) (Act),
as amended November 28, 1990, and August 10, 1993, and section 155 of
the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C.
7271). These statues provide that the Secretary of Agriculture
(Secretary) shall require that all peanuts in the domestic and export
markets fully comply with all quality standards under Marketing
Agreement No. 146 (7 CFR part 998) (Agreement), issued pursuant to the
Agricultural Marketing Agreement Act of 1937 (AMAA), as amended (7
U.S.C. 601-674). The handling requirements in this rule are the same
as, or similar to, those recommended by the Peanut Administrative
Committee (Committee or PAC), the administrative agency that oversees
the Agreement's quality assurance program.
This rule has been determined to be not significant for the
purposes of Executive Order 12866 and therefore has not been reviewed
by the Office of Management and Budget.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the regulations, importers of foreign-produced
peanuts must: Follow certain entry procedures with the U.S. Customs
Service (Customs Service); obtain certification that such peanuts meet
edible quality requirements or are disposed to non-edible peanut
outlets; and report disposition of peanuts to AMS within an established
time period. This rule finalizes several proposed changes to the
current regulation to relax quality requirements, modify entry
procedures, and relax reporting requirements. This rule is not intended
to have retroactive effect. This rule will not preempt any State or
local laws, regulations, or policies, unless they present an
irreconcilable conflict with this rule. There are no administrative
procedures which must be exhausted prior to any judicial challenge to
the provisions of this rule.
The proposed rule was published in the Federal Register of August
31, 1998 (63 FR 46181). Over 350 copies of the proposed rule were
mailed to: (1) Embassies of exporting countries and the National
Institute for Technical Standards (NIST) which forwards such notices to
the World Trade Organization; known exporters, importers, and customs
house brokers; (2) the domestic peanut industry entities including
grower associations, handlers, manufacturers, blanchers, and warehouse
operators; and (3) Customs Service ports and headquarters offices, the
Food and Drug Administration (FDA), Federal-State Inspection Service
(inspection service) offices, and Federal and private aflatoxin
laboratories. The rule was available on the Internet at the Federal
Register website and at the homepage of AMS' Marketing Order
Administration Branch--which offered a direct link for submitting
comments electronically. Finally, AMS issued a press release announcing
the proposed rule on August 27, 1998.
A 30-day comment period was provided for interested parties to
comment on the recommended changes to quality requirements and import
procedures and on regulatory impact of the recommended changes. A 60-
day comment period was provided for interested parties to comment on
proposed changes to the reporting and recordkeeping requirements.
Comments Received
Seven comments were received on the proposed changes to importation
procedures. Six of the commenters represented major sectors of the
domestic peanut industry: the Peanut Administrative Committee, the
three grower associations, a state peanut commission, and a domestic
peanut handler association whose members also import peanuts. One
importer filed a comment. The comments generally supported the proposed
changes to the import regulation, particularly the addition of positive
lot identification requirements and changes to make the import
regulation consistent with Agreement regulations. The comments
recommended changes to, and in a few cases opposed, specific technical
and procedural requirements in the peanut regulation. The comments are
addressed below.
A growers' association representative commented on Recommendation 2
concerning the revised definition of paragraph (a)(16) Conditionally
released. He commented that the proposed definition and the wording in
proposed new paragraph (f)(3) ``may imply that imported peanuts could
be forwarded to buyers, remillers or blanchers without being inspected,
certified or positive lot identified.'' The commenter suggested that
the regulation be modified to require that all lots be
[[Page 71347]]
sampled before conditional release by the Customs Service.
While AMS appreciates the commenter's concerns that imported lots
could be sent to buyers, remillers or blanchers before inspection, AMS
does not believe that sampling before conditional release, in and of
itself, will guarantee that all lots are inspected. The stamp-and-fax
procedure--which occurs before the sampling process--is the procedure
which helps guarantee notification of the inspection service and
assures subsequent sampling and inspection of the peanuts.
Requiring sampling before conditional release by the Customs
Service could result in overflow situations at ports when quotas open.
It also could substantially increase inspection costs for some
importers. For instance, at quota opening, a port facility may not be
able to hold the large number of containers that have been landed at
the port. Experience from 1997 shows that some containers waited for
several days at dockside, exposed to the weather, while various
government clearances were issued. AMS does not want its sampling and
inspection requirements to delay onward movement of peanuts.
Further, importers ship the conditionally released peanuts inland
for inspection, or ship the lots to Customs bonded warehouses that are
closer to inspection offices. Among other things, this lowers
inspection costs. The stamp-and-fax process enables this movement with
the assurance that the inspection service has been notified and will
follow up with an inspection.
The commenter does raise an important point that should be
incorporated into the final rule. The commenter suggested that the
proposed conditional release definition implies that peanuts may be
sent directly to remilling or blanching facilities without first being
inspected and positive lot identified (PLI). However, the Agreement
regulations specify that any lots moved to a remiller or blanching
operation must be accompanied by a valid grade certificate (with PLI).
This requirement was not established in Part 999.600 because AMS did
not contemplate that importers would risk the costs involved in
shipping peanuts to the U.S. unless they were reasonably certain that
the peanuts would meet outgoing quality requirements.
However, it is possible that some imported peanuts may not be of
the highest quality or may deteriorate while in storage--before initial
inspection is conducted. In such cases, the importer may be inclined to
send the stored lot directly to reconditioning before obtaining an
initial inspection, thus, avoiding initial inspection costs. Indeed,
since publication of the proposed rule, two instances of this practice
have come to the attention of AMS.
After review of the comment, AMS concurs with the commenter's
suggestion for two reasons. First, movement of an uninspected lot from
a storage facility directly to a remiller or blancher is movement that
is likely not under Customs Service bond (as was the initial shipment
to the bonded warehouse). Secondly, AMS compliance monitoring and
oversight is more difficult to maintain because there is no valid
paperwork to tie the reconditioned lot directly back to a container or
lot specified on a stamp-and-fax entry. Initial inspection and PLI
establishes needed lot identity, and should be carried out before the
lot is broken down into two or more parts during reconditioning.
Therefore, to assure that imported peanuts are inspected prior to
reconditioning, this final rule removes the phrase ``* * * and, if
necessary, reconditioning.'' from the proposed definition of
Conditionally released in paragraph (a)(16). The definition will now
read ``Conditionally released means released from U.S. Customs Service
custody for further handling, sampling, inspection, chemical analysis,
or storage.'' For further clarification, the following sentence will be
inserted as the new fourth sentence in new paragraph (d)(4) on Positive
Lot Identification: ``All lots forwarded to a reconditioning facility
must be accompanied by valid PLI certification.''
The manager of the Peanut Administrative Committee (Committee--
responsible for daily oversight of the domestic Agreement program)
filed a comment on Recommendation 5 requesting a minor change in the
grade requirements of the revised ``Minimum Grade Requirements'' table
proposed in paragraph (c)(1). He requested the modification to make the
import requirements consistent with domestic industry practice. The
manager acknowledged that when the Committee recommended, for the
domestic program, removing Table 2 and incorporating the last three
categories (Runner, Virginia and Spanish/Valencia ``splits with not
more than 15 percent sound splits'') into Table 1, the Committee
``inadvertently'' failed to recommend modification of the tolerance for
Foreign Material in the three categories which are moved. The foreign
material content in the three moved categories was .10 percent in old
Table 2 but should be relaxed to .20 percent to be consistent with the
foreign material contents of the other peanut categories already listed
in the Minimum Grade Requirements table. The manager commented that the
foreign material content for all categories in the revised table should
be the same, i.e., .20 percent. It is our understanding that this
matter will be reviewed by the Committee and considered at its next
meeting. If recommended and implemented for the domestic program, a
corresponding change would be made in the import regulation. Further,
this change was not proposed for comment in this proposed rulemaking
action.
Two commenters addressed Recommendation 7 that proposed a maximum
size for farmers stock lots. The commenters correctly stated that the
proposed maximum size of 24,000 pounds was based on dryer wagons used
in the domestic industry to move farmers stock peanuts from fields to
buying points. They pointed out that proposed size is, indeed, too
small for semi-trailer trucks used to transport farmers stock peanuts
from Mexico. They suggested that the maximum size should be 50,000
pounds, which is the approximate load capacity of a semi-trailer. One
commenter stated that, when collecting farmers stock samples from the
semi-trailers at incoming inspection, the inspection service uses
different probe patterns specifically for the larger volume trailers.
After review and consultation with the inspection service, AMS
agrees that the 24,000 pound maximum weight is incorrect. AMS concurs
with the recommendation from the two commenters that the maximum size
of farmers stock lots should be 50,000 pounds (22,680 kilograms). This
change is made to the proposed new second sentence added to paragraph
(d)(3)(C)(ii).
Two commenters questioned the accuracy of a statement in the
discussion of Recommendation 8 on positive lot identification. Page
46184 of the preamble reads, in part:
``It shall be noted that under the Agreement and import
programs, a failing lot that is reconditioned must be re-certified
for both grade and aflatoxin content after reconditioning. It does
not matter whether the original lot fails for grade or aflatoxin
analysis: both analyses must be conducted a second time. The
reconditioned lot is considered to be a new lot because the size and
quality is different from the original lot, and the previous lot
identity has been lost.''
The accuracy of this statement has been confirmed. Reconditioned lots
must receive both grade and aflatoxin
[[Page 71348]]
certifications. This is a requirement of the Agreement program. No
regulatory text needs to be changed.
Two commenters requested a modification of the ``source'' documents
proposal added to paragraph (f)(2) in Recommendation 17. The proposal
would have required that ``source'' documents be used to prove
disposition of failing peanuts to non-edible outlets. Source documents
are documents originating from the business entity carrying out the
actual disposition of the peanuts. One commenter stated: ``* * * trying
to obtain documents from entities not associated with the normal
activities of the peanut business will be difficult and in some cases
impossible.'' The commenters pointed out that bills-of-lading filed by
Committee-approved blanchers and remillers are acceptable to the
Committee as sufficient proof of proper non-edible disposition (most
often to oilmills). The commenters also pointed out that the same
standard should be applied to importers under the import regulation.
This change will not alter the volume of reports required under the
information collection burden, but it can ease the difficulty importers
might have had in obtaining the information to be reported.
Committee-approved blanchers and remillers are: American Blanching
in Fitzgerald, GA; Cargill Peanut Products in Dawson, GA; Clint
Williams Co. in Madill, OK; Coastal Cold Storage in Albany and
Donalsonville, GA; Doster Warehouse, Inc. in Rochelle, GA; Peanut
Processors, Inc. in Dublin NC and Sherman, TX; Seabrook Enterprises,
Inc. in Edenton, NC and Sylvester, GA; Tidewater Blanching Corp. in
Suffolk, VA; Tom's Foods, Inc. in Columbus, GA; and Universal Blanchers
in Blakely, GA, Ozark, AL, and Dublin, TX. In addition, any domestic
peanut sheller may be contracted to remill imported peanuts, provided
that sheller agree to comply with import program reporting
requirements, including certification as to the disposition of residual
peanuts from the remilling operation.
After careful review, AMS concurs with the comments filed on this
proposal. Committee-approved blanchers and remillers are the same
entities used by importers. Experience shows that they are the primary,
if not the only, entities filing bills-of-lading on imported peanuts
sent to oilmills. The importer is responsible for assuring the filing
of bills-of-lading by any blancher or remiller used by the importer.
The receiving entity, such as an oilmill or feedlot, would not have to
file proof of crushing or feed use.
Likewise, bills-of-lading filed by the importers and other
entities, such as bonded warehouses, also are acceptable as valid
certification of non-edible disposition. The regulation provides a
safeguard against edible use by requiring that shipments of non-edible
peanuts be positive lot identified and red tagged for non-edible use
only. The bill-of-lading must also show the weight of the non-edible
peanuts, the name and location of the entity receiving the peanuts, and
transfer certificates or inspection certificate numbers which tie the
residuals back to failing lots. When applicable, the volume reported
must reflect residual lots commingled prior to such shipment.
Therefore, the proposed amendment to require source documents is
withdrawn in this final rule.
Two commenters opposed Recommendation 19 which proposed, in new
paragraph (f)(5), a 60-day extension of the reporting period. Both
commenters believe that lengthening the reporting period to 180 days
(Recommendation 18) should be sufficient for importers to meet program
requirements. One commenter suggested that an extension of the
reporting period beyond 180 days would be necessitated by management
decisions that have nothing to do with congestion in shelling and
reconditioning facilities. The commenter's analysis is correct.
However, the extension is not offered only to alleviate congestions
that occur at remilling and blanching facilities. Domestic peanut
handlers are not restricted by reporting deadlines under the Agreement
and non-signer peanut programs. The Act specifies that, to the extent
practicable, peanut importers should be provided similar opportunities
to make appropriate management decisions regarding disposition of
imported peanuts. Extending the deadline an additional 60 days beyond
the revised 180 day reporting period should help importers in this
regard.
The original reporting time period was established at 30 days, with
an extension period of 60 days at the request of the importer. The
initial 30-day period was too short and extensions were necessary for
nearly all peanut lots imported during 1997 and 1998. Even with the new
180 day reporting period established in this rulemaking, AMS believes
that, on occasion, importers will need additional time to dispose of
some lots. AMS is not concerned that the extended reporting period will
jeopardize safeguard procedures. Importers, as well as domestic peanut
handlers, understand that the longer peanuts remain in storage the more
chance there is for deterioration of product and the higher the risk of
failure to ultimately meet quality requirements.
Also, under this rule, AMS would not automatically grant extensions
at the end of the 180-day reporting period. Extensions must be
requested in writing and provide information specific to the lot,
including proof that positive lot identification has been maintained.
AMS will not lose track of imported peanuts held in storage for
extended periods.
One of the commenters suggested that the total 240-day reporting
period is unfair because ``a domestic producer has only 24 hours to
recondition a load of peanuts * * * '' A domestic producer's submission
of farmers stock peanuts at a buying point is not comparable to
importers obtaining final, outgoing inspection on milled peanuts. The
commenter evidently is referring to the period time following
submission raw, farmers stock peanuts for grading at a buying point.
Under recently revised USDA Farm Service Agency (FSA) procedures,
farmers stock peanuts graded as less profitable Segregation 3 peanuts,
subject to certain conditions, may be cleaned by the producer and
resubmitted, as a new farmers stock lot, for Segregation determination.
The Segregation grade determines the support price that FSA will
purchase the peanuts, if so demanded by the producer. The ``24 hour
rule,'' as it is known in the domestic peanut industry, relates to FSA
procedures and may impact prices paid to producers under its peanut
price support program. Finally, domestic handlers are not subject to
some other ``24 hour rule'' when preparing Segregation 1 peanuts for
edible market. That is, the ``24 hour rule'' is not applicable to
imported farmers stock peanuts. AMS believes the 60-day extension
period, as proposed, is reasonable and necessary to maintain conformity
with the Agreement program. The comments on this issue are not adopted.
Two commenters questioned a phrase in the discussion of
Recommendation 20 regarding treatment of peanuts which are landed in
the U.S. in excess of the quota. The new paragraph states that such
peanuts may be either exported, held in bonded storage for the next
quota year, or ``entered as admittable.'' The commenters questioned the
phrase ``entered as admittable.'' This phrase was inserted to cover an
importer's option to pay tariff charges on the peanuts entered in
excess of the quota. The Department believes that the discussion of new
paragraph (f)(6) should be clarified by restating that peanuts which
are landed in the U.S. in excess of the quota may be either
[[Page 71349]]
exported, held in bonded storage for the next quota year, or entered
under tariff charges. Peanuts entered under tariff charges are subject
to the stamp-and-fax procedure and inspection requirements--as are all
peanuts entered for consumption.
The importer commented that incoming inspection of imported farmers
stock peanuts should be sufficient for meeting import quality
requirements. AMS already has established that imported peanuts
intended for edible consumption must be certified as meeting outgoing
quality requirements and contain not more than 15 ppb aflatoxin
content.
The importer suggested that country of origin designation should
not be included on outgoing certificates of lots originating from
imported farmers stock. The inspection service enters the country of
origin on the inspection certificates, so there is no additional burden
on importers. AMS already has established that country of origin
designation enables AMS to carry out its compliance responsibilities.
Customs Service requirements also apply.
The importer commented on farmers stock peanuts imported under bond
as non-quota peanuts for the purposes of shelling and re-export. The
importer complained that the ``shells, foreign material, and oilstock''
from such shelling should not have to be re-exported with the shelled
peanuts. AMS believes the commenter is referring to merchandise that is
entered as Temporary Importation Under Bond, found in Customs Service
regulations 19 CFR 10.31 through 10.40. This, however, is not an AMS
requirement.
Two commenters questioned the last sentence in redesignated
paragraph (f)(8) Early arrival and storage, pursuant to which the
Secretary may require reinspection of a lot at the time the lot is
declared for entry. This requirement was already in the regulation. The
commenters appear to interpret this statement as a requirement that
lots held in storage for more than one month prior to quota opening
must be reinspected at the time of entry declaration. This is not the
case. The intent of paragraph (f)(8) is just the opposite--inspection
certificates on lots held in storage for more than one month prior to
quota opening are good at the time of entry. The sentence questioned by
the commenters simply refers to provisions in the preceding paragraph
that USDA (the Secretary) has the right to require reinspection on any
imported lot at any time during the importation process. In the case of
lots held in storage for long periods before quota opening, AMS thought
it appropriate to remind importers that such lots, with cause, may be
required to be re-inspected.
Finally, no comments were received that addressed the proposed
rule's Regulatory Flexibility Analysis on the impact on small business
or the reduction in the Reporting and Recordkeeping Burden.
Discussion
The peanut import regulation was issued June 11, 1996. At that
time, three duty free peanut quotas for 1996 had been filled and no
peanuts were entered under duty for the remainder of 1996. Therefore,
the peanut import regulation had its first practical application on
January 1, 1997, when the Mexican peanut quota opened, and again on
April 1, 1997, when Argentine and ``other country'' quotas opened. By
international agreements, these three duty free peanut quotas increase
each year, allowing more foreign-produced peanuts duty free access to
U.S. markets. For the 1999 peanut quota year, the Mexican quota will
total approximately 8.7 million pounds (3.95 million kilograms).
Argentina's 1999 peanut quota will total approximately 89 million
pounds (40.4 million kg.) and the quota for all other countries will be
approximately 17.7 million pounds (8 million kg.). The total volume
will be about a 10 percent increase over the combined 1998 peanut
quotas.
The Committee met April 29 and 30, 1997, and recommended
relaxations to the quality and handling requirements of the domestic
peanut program. Those relaxations have been finalized by the Department
of Agriculture (USDA) and made effective for domestically-produced
peanuts. Where applicable, those changes are proposed for imported
peanuts in this rulemaking. The Committee met a second time on May 27,
1998, and unanimously recommended no further changes in the domestic
program's quality requirements or handling procedures. In addition,
after review of the entry and certification process, AMS proposed
additional modifications to the import regulation to increase the
efficiency of the importation procedure and relax reporting
requirements.
Based on the comments received and discussed above, this rulemaking
action finalizes the following modifications to Sec. 999.600.
(1) This action removes a phrase in the definition of Negative
aflatoxin content, in Section 999.600, paragraph (a)(10). The phrase,
``and 25 parts-per-billion (ppb) or less for non-edible quality
peanuts,'' is removed because that action level is no longer used for
non-edible peanuts. This revision makes the requirements under these
regulations consistent with those under the Agreement. Molds such as
Aspergillus flavus (A.flavus) are present naturally in soil. Aflatoxin
is a carcinogen which may develop from A.flavus, which is more likely
to be found on stressed peanut plants and damaged or defective kernels
than on sound, whole kernels.
Also, in paragraph (a)(15), Marketing Agreement No. 146 was
referred to as the Peanut Marketing Agreement No. 146. The word
``peanut'' is not a part of the title of the Agreement and is removed
from the definition to make it technically correct.
(2) This final rule changes the definition of Conditionally
released in Sec. 999.600, paragraph (a)(16), to conform with Customs
Service terminology. The previous definition stated that peanuts were
conditionally released for further handling ``before final release.''
The phrase ``final release'' is not consistent with Customs Service
terminology and should be removed to avoid confusion. This rule defines
conditionally released as ``released from U.S. Customs Service custody
for further handling, sampling, inspection, chemical analysis, and
storage.'' These activities are conducted to meet the requirements of
the import regulation. If inspection and certification are not obtained
prior to application for entry, or if peanuts are not held in Customs
Service bonded storage facilities when inspected, the peanuts shall be
conditionally released for such inspection and needed reconditioning.
Conditional release provides more time for importers to obtain
inspection certifications and to report compliance with the import
regulation.
The definition in the proposed rule included an ending phrase
``and, if necessary, reconditioning.'' Based on comments received and
discussed under the ``Comments'' section, above, this phrase is removed
from the definition.
(3) This rule removes a redundant sentence in paragraph (b)(1) of
Sec. 999.600. The second sentence stated that ``only Segregation 1
peanuts may be used for human consumption.'' This sentence is re-stated
at the end of the paragraph and is more appropriately placed at the end
of the paragraph.
(4) Paragraph (c)(1)(i) of the Outgoing regulation in Sec. 999.600,
currently states that ``no importer shall ship or otherwise dispose''
of imported peanuts unless the peanuts meet certain import
requirements. The introductory sentence is amended by removing the
words ``ship or otherwise.'' This change makes the text consistent with
the
[[Page 71350]]
revised text of corresponding paragraph (a) of Sec. 998.200 of the
Agreement regulations.
This modification has the effect of removing text which allowed
forwarding of very high quality imported peanuts to buyers before
receipt of quality certifications. However, the impact of this
modification is not expected to be significant. Given the quality of
imported peanuts, importers have been reluctant to forward lots to
buyers prior to receipt of both grade and aflatoxin certifications. The
risk of having to have the lot returned for reconditioning is greater
than the benefit of shipping a few days early. The delays are not
excessive as aflatoxin analyses are usually completed within two or
three days, and the results faxed back to importers. Finally, grade and
aflatoxin certifications often are completed before other Federal
agency clearances are received. Therefore, this modification will not
have an impact on the importation process or on peanut importers. This
modification is made in conjunction with Recommendation 6.
(5) To be consistent with a recent change in the Agreement
regulation's ``Other Edible Quality'' table, this final rule relaxes
the tolerance for ``Unshelled and damaged kernels'' (from 1.50 to 2.00
percent) in the ``lots of splits'' categories specified in Table 1,
``Minimum Grade Requirements'' of paragraph (c)(l)(i). The new
requirement now matches the tolerance for ``Unshelled and damaged
kernels'' as specified in the U.S. Grade Standards for Peanuts. Table l
shows the current tolerance for unshelled and damaged kernels as 1.50
percent (the second column under ``Lots of splits''). The tolerance
will be relaxed to allow for 2.00 percent unshelled and damaged kernels
in split lots. The relaxation in tolerance of one half of one percent
will reduce the number of imported peanut lots that need to be
reconditioned to meet outgoing quality requirements. This will save
importers reconditioning costs and storage costs. This relaxation
already has been made effective for domestically-produced peanuts.
(6) This modification removed the text of paragraph (c)(1)(ii) and
the first six grade categories in Table 2--Superior Quality
Requirements. The Committee established Table 2 in the Agreement
regulations several years ago to qualify higher grade peanut lots for
its indemnification program. However, the indemnification coverage has
been greatly reduced by recent Committee actions, and the first six
grade categories are no longer certified under the Agreement. Thus,
those grade categories are removed from the import regulation in this
rulemaking action.
The final three grade categories in Table 2, covering domestically-
produced peanuts with not more than 15 percent sound split kernels,
still have a small domestic marketing niche and have been moved to
Table 1 under the Maximum Limitations category in the Agreement
regulations. To be consistent with that modification, the last three
imported ``with splits'' categories covering Runners, Virginias, and
Spanish and Valencia with ``not more than 15 percent sound splits'' are
moved to the Minimum Grade Requirements table in paragraph (c)(1)(i) of
the import regulation. Also, to be consistent with the other maximum
tolerances in the ``Unshelled peanuts and damaged kernels'' column, and
in the ``Minor defects'' column, the percentage tolerances for the
three transferred categories are increased (relaxed) from 1.25 to 1.50
percent and from 2.00 to 2.50 percent, respectively.
Recommendations 5 and 6 have the effect of relaxing the minimum
quality requirements of the import regulation, and, together, simplify
grade requirements by providing only one set of peanut quality
requirements for human consumption use. While these changes remove a
provision that allows shipment of high quality lots to buyers
immediately after grading, given the nature of peanut quality and
importation processes, the changes are not expected to delay shipments
or negatively affect the handling of imported peanuts.
To effectuate the above three changes, paragraph (c)(1)(i) is
modified by removing the words ``ship or otherwise.'' The text and the
first six grade categories of Table 2 in paragraph (c)(l)(ii) also are
deleted from the regulation, and the last three grade categories are
moved to the table in paragraph (c)(1)(i). Paragraph (c)(1)(iii) is
redesignated as paragraph (c)(l)(ii) and a conforming change is made to
that paragraph by deleting the second sentence which specifies that
samples must be taken from Superior Quality peanut lots prior to
shipment. Finally, because Table 2 is deleted, it is not necessary to
refer to the ``Minimum Grade Requirements'' table as Table 1.
Conforming changes are made in paragraph (c)(1)(i), introductory
paragraph (e), and in paragraph (e)(3).
(7) Paragraph (d)(3)(ii) is changed to specify a maximum lot size
for farmers stock peanuts. The import regulation currently specifies
the maximum lot size for farmers stock, cleaned-inshell and shelled
peanuts as 200,000 pounds (90,720 kilograms). However, the 200,000
pound size limit is applied only to shelled peanuts under the
Agreement, and is based on an understanding between the Committee and
the inspection service, reached some years ago. The maximum lot size
for domestically-produced, farmers stock peanuts is limited to one
conveyance, or two or more conveyances with a combined weight not
exceeding 24,000 pounds (10,886 kilograms). The smaller lot size is
established for farmers stock peanuts because that is the standard size
of wagons used to transport domestically produced farmers stock peanuts
from the field to buying points. Peanuts in this form have not
undergone extensive cleaning and sorting processes and, generally,
contain more foreign material and A.flavus mold than lots of milled
peanuts. Smaller lot sizes help increase the effectiveness of
inspection by reducing sampling variability and increasing the
likelihood that the collected sample is representative of the entire
lot. The 200,000 pound limit for shelled peanuts is the maximum volume
on which random sampling procedures can be systematically and
accurately implemented.
The proposed rule suggested the maximum farmers stock lot size to
be 24,000 pounds. However, two comments requested that the maximum lot
size for farmers stock peanuts be increased to 50,000 pounds. Their
argument is included in the ``Comments'' section above. AMS believes
this change has merit. Therefore, under this final rule, foreign-
produced peanuts imported in farmers stock form will be inspected in
single conveyances or combined conveyances not exceeding a total of
50,000 pounds. Only a small percentage of the peanuts imported during
1997 and 1998 were imported in farmers stock form, and all complied
with this maximum lot size. This inspection practice will help
exporters plan their shipments and will not have a negative impact on
future imports of farmers stock peanuts. For these reasons, the second
sentence of paragraph (d)(3)(ii) is modified to provide a maximum lot
size of 50,000 pounds (22,680 kilos) for farmers stock peanuts.
Paragraph (d)(3)(i)(A) is changed to reflect closing of the
inspection office in Yuma, Arizona. The introductory sentence in
paragraph (d)(3)(i)(B) is changed to more accurately reflect the
sampling service provided by some inspection service offices.
(8) This final rule strengthens the lot identification requirements
for shelled peanuts by adding new paragraph (d)(4) of the import
regulation. The Agreement regulation requires Positive Lot
[[Page 71351]]
Identification (PLI), generally using tags which are sewn on each bag
or super sack of domestically-produced shelled peanuts. The PLI tag is
applied after shelling, at the time of packaging and inspection. The
previous import regulation did not require PLI tags sewn at the time of
first inspection when several hundred thousand pounds of peanuts
arrived at a port-of-entry at one time. Such a requirement would be a
burden on importers because of the large volume and lack of equipment,
space, and time needed to sew tags on individual bags. However, better
lot identification for imported peanuts is needed to insure integrity
of the peanut import program.
Lot identification practices currently applied to imported peanuts
by the Federal-State Inspection Service (inspection service) provide
that lots, or pallets within a lot, be identified by a tag which is
affixed to the lot or pallet. Such identification does not prevent the
individual bags, sacks, or cartons in the lot from being tampered with
or exchanged with other bags, sacks, or cartons. The inspection service
cannot insure integrity of a lot that is only ``lot identified.''
Simple lot identity does not guarantee that peanuts drawn in a second
sample under an appeal process come from the same peanut lot or
containers from which the first sample was drawn.
This rule provides a more reliable PLI to be applied to shelled
peanuts by the inspector at the time of first inspection. This may
include: (1) Wrapping PLI tape around the top layer of bags or boxes in
such a way that no peanuts could be removed or added; (2) shrink
wrapping pallets or multiple bags with a PLI sticker applied to the
wrapped pallets or bags; (3) stamping or stenciling and numbering
individual bags or boxes; (4) affixing a PLI seal to the door of a
shipping container so that it cannot be opened without breaking the
seal; or (5) other methods acceptable to the inspection service that
clearly identify the lot, is securely affixed to the lot, and prevents
peanuts from being removed or added to the lot.
These PLI methods represent substantially less burdensome and less
costly procedures than PLI tags sewn on individual bags. For instance,
stenciling bags with a spray paint is a faster and much less expensive
method of lot identity that represents an acceptable alternative to
sewing tags on individual bags. The inspection service office in
Suffolk, Virginia, used stenciling of imported peanuts in bags during
the 1997 and 1998 quota years. These methods also do not require
special training or equipment and can be carried out by inspection
service personnel throughout the U.S. These methods do not require
substantial extra time or material at the time of first inspection.
Increased costs to the importer will be in the form of a few extra
minutes to wrap pallets or stencil bags, and would vary with the size
and containerization of each lot. These PLI methods may increase
average storage costs when warehouse space for inspection is very
limited or when an unusual amount of movement of lots is required
during lengthy warehouse storage. However, increased costs should not
be significant in comparison to overall costs of importation. Also,
importers benefit from improved lot identity if they request an appeal
inspection on the lot or if the Customs Service demands redelivery of
the lot.
The inspection service currently works with domestic peanut
handlers and storage warehouses to determine the most appropriate PLI
or lot identity method to be used. The same cooperative relationship
should apply to importers. Several factors dictate which PLI method
should be used: (1) Size of the lot; (2) storage space on the wharf or
in the warehouse; (3) required further movement of the lot prior to
receipt of certification; and (4) other needs of the importer, wharf or
warehouse operators, or the Customs Service. Any request for extension
of the reporting period, or appeal inspection, must include the PLI
number or designation of the lot needing additional reporting time.
AMS believes that these increased lot identity practices outweigh
the possible minimal increases in handling or inspection costs
associated with better lot identification. Tighter lot identity
requirements are consistent with practices currently used by the
inspection service to PLI domestically-produced peanuts. PLI also helps
importers maintain the integrity of lots, should questions arise from
the Customs Service after conditional release.
AMS believes that positive lot identification of inspected lots is
essential in maintaining the integrity of imported shelled lots after
first inspection. Lots failing grade and aflatoxin certifications can
be appealed pursuant to current paragraph (d)(5). In the appeal
process, the lot is sampled a second time. Without PLI, there is no
guarantee that peanuts sampled under an appeal inspection are the same
peanuts as those which failed initial inspection. Therefore, a sentence
will be added to current paragraph (d)(5) to provide that peanut lots
which show evidence of tampering or PLI violation, will not be eligible
for an appeal inspection.
These PLI methods will be applied to peanut lots at the first
inspection. If a lot subsequently fails either grade or aflatoxin
analysis, the lot may be sent to a remilling or blanching operation for
reconditioning. In such cases, PLI of the lot from the warehouse to the
reconditioning site and during reconditioning does not have to be
maintained. However, the importer must maintain information which ties
the reconditioned lot to the original lot. This information must be
provided to the inspection service upon inspection after
reconditioning. Thus, inspection surveillance of the lot does not have
to be maintained during reconditioning. This lot identity procedure is
consistent with the handling requirements for domestically-produced
peanuts under the Agreement.
PLI requirements after reconditioning also are updated in this
final rule to make the treatment of reconditioned imported peanuts
consistent with current industry practice for domestically-produced
peanuts. Under Agreement requirements, failing lots that are
reconditioned by remilling or blanching are positive lot identified by
sewing tags on bags and by taping and tagging bulk bins. For shelled
peanuts, the tag is sewn into the closure of the bag. In plastic bags,
the tag is inserted prior to sealing so that the official stamp is
visible. This is the most efficient PLI procedure and is currently
carried out by the remiller or blancher at the end of the remilling and
blanching process. The inspection service certifies the reconditioned
lot based on the PLI tags applied to bags and bins. Bulk shipments and
bulk bins are positive lot identified by sealing the conveyance and, if
in other containers, sealed by means acceptable to the inspection
service. This rule ensures that the same PLI procedures are applied to
imported peanuts which are reconditioned by remilling or blanching.
Costs for these PLI measures are covered in the remilling and blanching
charges, and, thus, will not be expected to increase costs for
importers. Indeed, some blanching operations used this PLI method on
imported peanuts during 1997 and 1998.
These PLI requirements and procedures are established in the import
regulation by adding a new paragraph (d)(4) and redesignating original
paragraphs (d)(4) and (5) as (d)(5) and (6), respectively. Also,
references to lot identity in paragraphs (c), (d), (d)(1) and (g)(6)
are amended to read ``Positive Lot Identification.''
It should be noted that under the Agreement and import programs, a
failing lot that is reconditioned must be
[[Page 71352]]
re-certified for both grade and aflatoxin content after reconditioning.
It does not matter whether the original lot fails for grade or
aflatoxin analysis; both analyses must be conducted a second time. The
reconditioned lot is considered to be a new lot because the size and
quality is different from the original lot, and the previous lot
identity has been lost. This procedure was in effect and properly
carried out for reconditioned imported peanuts in 1997 and 1998.
Comments received indicate some confusion among handlers with the
accuracy of this paragraph. As discussed previously in the Comments
Received section, above, the paragraph does conform with the
requirements of the Agreement, and, in general, FSA limitations can
apply in some cases. A clarification is included in the Comments
Received section, above.
A minor clarification is added to redesignated paragraphs
(d)(5)(ii) and (iii). These paragraphs refer to a ``notice of
sampling'' as the inspection service's grade certification of shelled
peanuts. The inspection service now commonly uses the ``Milled Peanut
Inspection Certificate,'' AMS form FV-184-9A, to certify the grade
quality of shelled peanuts. That form's title is added to paragraphs
(d)(5)(ii) and (iii).
It should also be noted that containers of imported lots of shelled
peanuts may be subdivided prior to inspection. During the 1997 and 1998
quota years, some containers of shelled peanuts, when off-loaded and
made available for inspection, revealed wet or moldy bags. The
importers, suspecting such bags would fail quality requirements,
isolated the wet and moldy bags apart from other bags in the container
to reduce possible contamination of good peanuts. This practice is
acceptable and can be done at a Customs Service bonded warehouse
without inspection service oversight. If the moldy bags are held
separately in a Customs Services bonded warehouse and then re-exported
without leaving Customs Service custody, those moldy bags do not have
to be reported to AMS--except that the difference in the volume
reported on the stamp-and-fax form and the volume inspected must be
reported to the inspection service.
However, if the moldy bags are combined into a separate lot and
identified on an inspection certificate, or moved out of Customs
custody, the bags are subject to import requirements and must be
reported as a separate peanut lot. If such a lot fails quality
requirements, it may be reconditioned, disposed to an non-edible peanut
outlet pursuant to import requirements, or re-exported pursuant to
Customs Service procedures. These dispositions must be reported to AMS.
Four of the seven comments received agreed with implementation of
positive lot identification procedures.
(9) The second to the last sentence in original paragraph
(d)(4)(iii) provides that laboratories shall provide aflatoxin assay
results to the importer. Upon review, USDA determines that this
sentence is duplicative of provisions in original paragraph (d)(4)(v).
Thus, this rule removes the second to last sentence of original
paragraph (d)(4)(iii).
(10) Several changes in the regulatory text are made regarding
reporting of aflatoxin certifications to AMS. Original paragraph
(d)(4)(iv)(A) provides that importers ``should'' contact one of the
laboratories to arrange for chemical analyses of imported peanut lots.
However, because chemical analysis is required under the regulation,
the word ``should'' does not convey the mandatory nature of the
requirement that aflatoxin analysis must be conducted on all imported
peanut lots intended for human consumption. Thus, the first sentence of
redesignated paragraph (d)(5)(iv)(A) is revised to state that importers
``shall'' contact one of the laboratories to arrange for chemical
analyses.
Original paragraph (d)(4)(v) is revised to include the requirement
that importers ``shall cause'' aflatoxin certifications to be reported
to AMS. The last sentence in original paragraph (d)(4)(v)(B) is revised
and moved to redesignated paragraph (d)(5)(v) for more appropriate
placement of the instructions.
(11) The list of aflatoxin testing laboratories shown in original
paragraph (d)(4)(iv)(A) is updated in this rulemaking action. The
laboratory in Ashburn, Georgia formerly operated by AMS is now operated
privately as a PAC-approved laboratory. The USDA laboratory in Dothan,
Alabama is now operated by the Alabama-Federal State Inspection
Service. In addition, three new laboratories in Headland, Goshen, and
Enterprise, Alabama have been certified by AMS and approved by the PAC
as Alabama-Federal State laboratories. The PAC-approved laboratory in
San Antonio, Texas is dropped from the list as that laboratory no
longer certifies the aflatoxin content of peanut lots. The name of the
AMS office that operates USDA laboratories and certifies the private
laboratories has been changed from Science and Technology Division to
Science and Technology Programs.
Since publication of the proposed rule, AMS has been notified of a
location change and two new laboratories. The Pert laboratory in
Sylvester, Georgia has moved to Colquitt, Georgia. A Pert laboratory
has been opened in Blakely, Georgia and a Leek laboratory has been
opened in Headland, Alabama. Contact information for these laboratories
is added to paragraph (d)(4)(iv)(A). In addition, area code numbers
have been updated in this paragraph and in inspection offices in
paragraph (d)(3)(i)(A).
The import regulation refers to private aflatoxin testing
laboratories as ``PAC-approved'' because those laboratories are
approved by the Committee to perform chemical analyses on domestically-
produced peanuts. These PAC-approved laboratories also may be referred
to as ``designated'' laboratories. Whether a laboratory is referred to
as ``PAC-approved'' or ``designated,'' only those laboratories listed
in redesignated paragraph (d)(5)(iv)(A) may conduct aflatoxin content
analysis on imported peanuts.
(12) Another Committee recommendation to modify the Agreement
regulations provides that shelled peanut lots failing quality
requirements because of excessive ``fall through'' may be blanched.
Paragraph (e) of the import regulation prescribes the corresponding
requirement that imported shelled peanuts failing quality requirements
because of excessive damage, minor defects, moisture, or foreign
material may be reconditioned by remilling and/or blanching. This rule
adds peanut lots failing ``fall through'' requirements to those lots
that can be reconditioned by blanching. After blanching, all such lots
must to be sampled and certified as meeting minimum ``fall through''
requirements prior to disposition to edible peanut outlets.
This change is made in paragraph (e) of Sec. 999.600 by adding a
new second sentence to the introductory paragraph providing that
peanuts which fail minimum grade requirements because of excessive
``fall through'' may be blanched. For consistency, the second to last
sentence in introductory paragraph (e) also is revised to include
minimum ``fall through'' requirements as a condition for human
consumption.
(13) A final change to be consistent with Agreement regulations
prescribes that shelled peanut lots meeting the minimum grade
requirements specified in the Minimum Grade Requirements table, but
which fail aflatoxin requirements, may be roasted during the blanching
process. After roasting, the peanuts must be sampled and assayed for
aflatoxin content, and, if meeting
[[Page 71353]]
aflatoxin requirements (15 ppb or less), may be disposed of to human
consumption outlets. The lot does not have to be re-inspected for grade
quality because the lot will have already met grade requirements. This
modification is a relaxation of requirements and is an optional process
for importers who intend to roast imported peanuts. It will save time,
reduce costs, and reduce possibilities for damage or split kernels.
This process was recommended by the Committee for domestic peanuts
because blanched peanuts, after sampling and certification, often are
placed back into the blancher to complete the roasting process. This
adds costs to the roasting process and can cause additional splits or
kernel damage due to the extra handling of the peanuts. Also, roasting
enhances the blanching efforts to eliminate aflatoxin, thus improving
the wholesomeness of the peanuts.
Inspection service oversight of the blanching process is necessary
to maintain positive lot identity. However, the Department believes
that the savings involved in blanching and roasting in one step and
prevention of additional damage and splits due to excessive handling
are benefits that would outweigh the costs of inspection service
oversight. Any residual peanuts, excluding skins and hearts, resulting
from the roasting process, must be red tagged and disposed of to non-
edible peanut outlets, and so reported to AMS. This rule will add a new
paragraph (e)(4) in Sec. 999.600. Original paragraph (e)(4) would be
redesignated as (e)(5).
Paragraph (f) Safeguard procedures of Sec. 999.600 outlines the
steps that importers must follow when entering peanuts into U.S.
commercial markets. The stamp-and-fax process helps assure that AMS
will be notified of all peanut entries. This rule modifies or removes
several requirements of the original safeguard procedures and reporting
requirements to help streamline the entry process, ease reporting
burdens, and provide more time for importers to obtain human
consumption certification. The changes were proposed after AMS' review
of the peanut importation process during the 1997 and 1998 quota
periods. Where applicable, the changes are made with concurrence of the
Customs Service.
(14) Under the ``stamp-and-fax'' procedure, importers notify the
inspection service of pending peanut shipments by faxing or mailing a
copy of the Customs Service entry documentation to the inspection
service office that will sample the imported peanut shipment. The first
sentence of paragraph (f)(1) provides that such documentation must be
sent ``prior to arrival'' of the peanuts at the port-of-entry. However,
experience shows that it may not be possible to send a completed stamp-
and-fax document to the inspection service ``prior to arrival'' of the
shipment at the port-of-entry. While it is in the importer's interest
to give the inspection service advance notice of inspection, it is not
essential that this be done before arrival of the shipment at a port.
Thus, the first sentence of paragraph (f)(1) is changed to read ``Prior
to, or upon, arrival* * *.''
The Customs Service will not release imported peanut lots without
entry documentation stamped by the inspection service. Further, the
inspection service will not sample and inspect peanuts that are not
covered in a stamp-and-fax entry document.
(15) This final rule revises paragraph (f)(1) to change the
information that was originally required on the stamp-and-fax document.
This rule adds the Customs Service entry number(s) for the peanut
shipment(s) covered in a stamp-and-fax document. The entry number is
basic Customs Service entry information and appears on Customs Form
3461 (Entry/Immediate Deliver) which is commonly used as the stamp-and-
fax document. During the 1997 and 1998 quota periods, the inspection
service recorded the entry number on the grade certificates, enabling
AMS to monitor imported lots and communicate with the Customs Service
regarding importers' compliance with program requirements.
Experience of the last two import years shows that different
Customs Service forms may be used in the stamp-and-fax process. In most
cases, Customs Form 3461 has been used. USDA's Animal and Plant Health
Inspection Service (APHIS) Form 368 (Notice of Arrival) also may be
used as a stamp-and-fax document. In these cases, the importer or
customs broker filing the stamp-and-fax document must add the inland
destination and contact number before sending the document to the
inspection service.
The original provision specifies that the destination location,
including city and street address, be included on the stamp-and-fax
form. The street address is not necessary as long as the city and
receiving entity is identified. A telephone contact number also must be
included. Experience shows that the receiving entities are usually cold
storage warehouses.
The previous provision specified that the stamp-and-fax document
include the date and time that the peanut shipment will be inspected at
the inland destination. However, a date and time for inspection is not
always known at the time of entry, and it is not necessary that this
information be included on the stamp-and-fax document. The purpose of
the stamp-and-fax is to assure that the inspection service is aware of
every peanut lot being imported. Arrangements for the time and date of
the inspection often are made by the cold storage warehouse after
arrival of the imported lot at the inland destination.
Therefore, this rule establishes that the information required on
stamp-and-fax documents include: the Customs Service entry number; the
container number or other identification of the lot; the volume
(weight) of peanuts in each lot; and the location, contact name and
number where the lot will be in storage or made available for
inspection. Paragraph (f)(1) is changed accordingly.
(16) The ``stamp-and-fax'' process is further modified by removing
the fifth sentence in paragraph (f)(1) that requires importers to send
a copy of the stamp-and-fax entry document to the Secretary. AMS can
obtain information on peanut entries from the inspection service and
from the Customs Service on data tapes. That information effectively
replaces the need for stamp-and-fax entry documents to be reported by
importers to AMS' headquarters office. The change is made in the fifth
sentence in paragraph (f)(1) by removing the words ``and send a copy of
the document to the Secretary.'' A similar change also is made in the
first sentence in paragraph (f)(2) by removing the words ``entry
document'' from that sentence. This modification does not change the
requirement that importers must file the stamp-and-fax with the
inspection service office as provided in paragraph (f)(1).
Another change regarding the stamp-and-fax reporting is made in
paragraph (f)(1). The last sentence provides that the importer shall
cause a copy of the entry document to accompany the peanut lot and be
presented to the inspection service ``at the inland destination.'' The
intent of this requirement was to help inspection service offices
account for all peanut lots for which those offices have authorized
entry by stamp-and-fax. However, the provision could have been
interpreted as meaning that all peanut lots must be shipped inland for
inspection. This is not the intent of the provision. Peanuts may be
inspected and certified for human consumption while at the port-of-
entry, free trade zone, or bonded warehouse adjacent to the port of
entry. If inspected at the port or free trade zone and certified as
[[Page 71354]]
edible, the lot does not have to be seen again by the inspection
service and may be transported to its intended destination. Uninspected
lots and failing lots which are sent inland for inspection or
reconditioning must be accompanied by Customs Service entry
documentation relevant to the lots, which must be presented to the
inspection service at the time of inland inspection.
The last sentence in paragraph (f)(1), therefore, is modified to
provide that the entry documentation be presented at the time of
sampling--whether that sampling is at the port of entry or at an inland
destination. The last sentence of paragraph (d)(3)(i) also is revised
to conform with this clarification.
(17) The import regulation's reporting requirements are specified
in paragraph (f)(2) of Sec. 999.600. Importers are required to file
with the Secretary entry documents, including all grade and aflatoxin
certifications, showing that imported peanut lots meet quality and
disposition requirements of the regulation. Certifications filed by
importers enable AMS to monitor all imported peanut shipments and
ensure compliance with the regulation's quality and disposition
requirements. The reporting requirements can be burdensome if, as now
happens, large volumes of peanuts are entered simultaneously when a
country's peanut import quota is opened.
The inspection service performs all inspections of imported
peanuts, and AMS has access to all of those grade certificates. In
addition, AMS' Science and Technology Programs' laboratories conduct
chemical analysis of imported peanut lots, and, thus, AMS has access to
aflatoxin certificates issued by those laboratories. Through memoranda
of understanding with these offices, AMS' Marketing Order
Administration Branch (MOAB), which administers the import regulation,
can obtain copies of grade and aflatoxin certificates issued by the
inspection service and the USDA laboratories. Therefore, it is not
necessary that importers file inspection service grade certifications
and AMS laboratory aflatoxin certifications on lots which meet
requirements. Those certifications can be provided to MOAB by the
inspection service and laboratories. Filing of aflatoxin certifications
provided by PAC-approved private laboratories is addressed below.
Experience shows that if importers do not have to file
certifications on peanut lots which meet import requirements, a large
portion of the reporting burden would be removed. Importer would
continue to be required to report failing lots and disposition of those
failing lots. AMS believes such a modification of the reporting
requirements will not reduce the effectiveness of the regulation's
safeguard procedures or AMS' program oversight, because its compliance
efforts focus on failing peanut lots. Therefore, AMS revises paragraph
(f)(2) of Sec. 999.600 to provide that importers file with AMS only
certificates of imported peanut lots failing quality or aflatoxin
requirements.
This rulemaking action updates the kind of information required to
be filed by importers, or others on behalf of importers.
Importers who choose to use PAC-approved laboratories for aflatoxin
certification must either file those certifications themselves or
direct the private laboratory to file the certifications with AMS.
Similarly, it is the responsibility of the importer to either file, or
direct the filing of, documentation covering such non-edible peanut
dispositions. The first sentence of paragraph (f)(2) is revised to
require that importers ``shall file, or cause to have filed''
documentation showing disposition of peanut lots which fail to meet
quality requirements. The phrase ``cause to have filed'' enables
importers to direct the entity to file the documents on behalf of the
importer.
This optional reporting procedure reduces importers' direct
reporting burdens because they do not have to file the certificates
themselves. The cost, if any, of reporting aflatoxin certifications to
AMS is included in the cost of testing. Thus, while importers are
responsible for the reporting charges, the additional reporting costs
should be less than the costs of individual importers filing the
certificates themselves. The certifications do not have to be reported
individually or on a scheduled basis, but do have to be filed by the
reporting deadline relevant to each imported lot. A laboratory may file
certificates from many importers in one mailing.
As noted above, this rulemaking continues importers' responsibility
for reporting, or causing the reporting of, final disposition of all
failing peanut lots. Proper disposition of a failing peanut lot
includes: (1) Edible certification through an appeal inspection; (2)
edible certification after reconditioning; (3) disposition to a non-
edible peanut outlet such as crushing, animal feed, or seed use; (4)
dumping in a landfill or otherwise destroying the peanuts; or (5) re-
exportation to another country.
The proposed rule recommended that paragraph (f)(2) be modified to
require ``source'' documents as proof of non-edible disposition. As
discussed above in the Comments Received section, two commenters
pointed out: (1) The difficulty of obtaining source documents from
entities not directly regulated by the import regulation, and (2) that
the Agreement regulation does not require source documents, but accepts
bills-of-lading from Committee-approved blanchers and remillers as
proof of non-edible disposition. After reviewing the reporting
requirements under the Agreement, AMS believes the comments have merit.
Thus, entities such as remillers, blanchers, and bonded warehouses may
file, on behalf of importers, bills-of-lading certifying that failing
quality peanuts were shipped to a non-edible peanut outlet.
Documentation filed showing disposition to animal feed must include, as
required by paragraph (e)(2)(ii), an aflatoxin certificate showing that
the peanuts do not exceed 300 ppb aflatoxin content. Failing lots and
commingled residuals that are re-exported must be documented with a
completed Customs Service form, specific to the peanuts being shipped,
verifying exportation from the U.S.
Thus, the third sentence of proposed new paragraph (f)(2) is
modified in this final rule to read as follows: ``Proof of non-edible
disposition may include bills-of-lading, transfer certificates, and
other documentation showing shipment from the importer, blancher,
remiller, warehouse, or other entity, to crushing, feed or seed use,
burying, or other non-edible disposition. Such documentation must
include the weight of peanuts being disposed and the name and telephone
number of the disposing entity. Proof of export must include U.S.
Customs Service documentation showing exportation from the United
States.''
Further, some importers have requested appeal analyses on failing
peanut lots. An appeal inspection involves resampling and reinspection
by the inspection service and/or aflatoxin testing laboratory. If the
failing lot is determined to meet requirements upon an appeal analysis,
the importer must file both the initial failing certificate(s) and the
appeal certificate(s) showing the same peanut lot ultimately was
certified as meeting quality requirements on appeal.
Experience with the 1997 and 1998 imports also shows that most
failing lots were reconditioned by blanching. After reconditioning, the
lots are reinspected and, in most cases, certified for edible
consumption. In reporting reconditioning of a failing peanut lot, the
importer must account for pickouts
[[Page 71355]]
and other poor quality kernels that are removed from the lot during the
reconditioning process. For example, if a 40,000 pound container of
peanuts fails grade requirements, the lot may be blanched. If the
resulting lot, weighing 30,000 pounds, is certified as edible, the
importer must file: (1) The first failing grade certificate; (2) the
first passing aflatoxin certificate (``negative'' to aflatoxin); (3)
the second passing grade certificate; (4) the second passing aflatoxin
certificate; and (5) proof of shipment (such as a bill-of-lading) of
the non-edible residuals to an oilmill or to a port facility (with
Customs documentation showing actual exportation).
The volume of residual peanuts may not exactly equal the difference
between the two weights because of ``disappearance'' during the
reconditioning and reinspection process. Such disappearance can include
bag weight, skins, moisture from the blanching, other loss of kernels,
and differences in weighing scales, which, to the extent practical,
must be documented.
Fees charged for disposition of failing peanuts must be borne by
the importer.
AMS has found that grade and aflatoxin certificates are the primary
documentation for monitoring edible and non-edible disposition of
imported peanuts. Tying a disposition back to an original imported
peanut lot is difficult without reference to grade and aflatoxin
certificate numbers. Thus, for compliance purposes, it is necessary
that all reporting of non-edible disposition include the grade and
aflatoxin certificate numbers of the original failing lot(s).
Residuals from the remilling or blanching of several imported
peanut lots belonging to the same importer may be commingled into a
larger, residual lot. Proof of disposition of a commingled residual lot
must include: (1) The name and telephone number of the disposition
outlet; (2) lot numbers from which the residuals were removed; and (3)
the total weight of the disposed residual lot. The report must be
sufficient to account for all of the residual peanuts and identify the
lots from which the residuals were taken. Residuals from imported
peanut lots cannot be commingled with domestically-produced residual
peanuts because of the separate compliance and recordkeeping
responsibilities for domestic peanuts (to the Committee) and imported
peanuts (to AMS). Certification of PLI issued by the inspection service
may be used to verify commingling of multiple residual peanut lots.
During the 1997 and 1998 quotas, some customs brokers, warehouse
operators, and blanchers failed to identify the importer of record when
requesting inspections. If the warehouse or blancher is shown as the
applicant for the inspection and the importer's name withheld, AMS has
difficulty matching up certificates and verifying that the importer has
satisfied reporting requirements. For AMS recordkeeping purposes, the
applicant requesting inspection must provide the name of the importer
to the inspection service. A provision to this effect is added to the
first sentence of paragraph (f)(2).
Because of the extent of these revisions, the first half of
paragraph (f)(2) is revised. Crushing, feed, seed, or burying are added
as examples of non-edible disposition outlets. The address to which
disposition documentation must be filed remains unchanged. Finally,
original paragraph (d)(4)(v)(B), which provided that importers file
aflatoxin certificates ``regardless of the test result'' is removed to
conform with reduced reporting of only failing lots.
(18) Paragraph (f)(3) of the peanut import regulation establishes
the period for importers to obtain inspection and certification of
their imported peanut lots and report disposition to AMS. The original
reporting period was 23 days after Customs Service release of the
peanut lot. However, based on the experience of the 1997 and 1998
import quotas, the 23-day period does not provide enough time for
importers to meet requirements for all lots and report disposition to
AMS. Indeed, the 23-day reporting period was extended for the 1997
reports only in a separate rulemaking (62 FR 50243, September 25,
1997). Therefore, original paragraph (f)(3) and the reporting period is
completely revised.
Because of the high demand for foreign-produced peanuts, the 1997
Argentine and ``other country'' quotas were filled on the day of
opening. Among other things, this caused a flood of imported peanuts
into clearance channels at the same time. For the most part, the
inspection service and aflatoxin labs were able to provide timely
sampling and inspection of imported peanuts. However, some importers
encountered problems obtaining wharfage and storage space in bonded
warehouses and other delays in other clearance processes. Large volume
importers had particular difficulty coordinating the paperwork required
by different Federal government offices, the quality inspections, and
needed reconditioning to meet requirements of the import regulation, 7
CFR 999.600.
Therefore, the period for reporting compliance with the import
regulation is extended in this rulemaking. An extended period helps
alleviate problems encountered with the large numbers of lots entered
under Argentine and ``other country'' quotas on April 1 each year. The
extended period also is helpful for imports of Mexican peanuts, some of
which are farmers stock peanuts needing the extra steps of shelling,
sorting, and sizing before certification for edible use.
The reporting period is established in this rule as 180 days from
the date of release of a lot by the Customs Service. Lengthening the
reporting period is accomplished by providing that all Customs Service
releases of peanuts be designated as ``conditional'' releases. The 180-
day period is established as the conditional release period for Customs
Service purposes.
A peanut lot which is inspected and certified as edible in advance
of a quota's opening day may be conditionally released and subject to
the 180-day conditional release/reporting period. However, importers
are able to dispose of those peanuts after receipt of the required
edible certifications and after conditional release of the lots by the
Customs Service.
Uninspected peanut lots may be conditionally released under bond,
provided that, within 180 days, those peanuts be inspected and reported
to AMS as meeting requirements of the import regulation.
Inspected peanut lots that fail to meet quality requirements may be
conditionally released for reconditioning and reinspection.
Reconditioning and reinspection must be completed and reported to AMS
within the 180-day conditional release period. Disposition of the non-
edible, residual peanuts or pick-outs from reconditioning processes
also must be reported within the 180-day period. Positive lot
identification must be maintained on these peanuts.
If AMS finds that, after the 180-day conditional release period
expires, an uninspected or failing peanut lot has not been reported as
meeting import requirements, AMS will request the Customs Service to
issue a Notice of Redelivery to the importer. Subsequent to that
request, the Customs Service has 30 days to issue, under the terms of
the basic importation bond, a valid demand for redelivery. Upon
receiving the Notice of Redelivery, the importer has 30 days to
redeliver the unreported or failing peanuts to the Customs Service.
Original paragraph (f)(3) provided for a 60-day extension of the
redelivery demand period to enable an importer
[[Page 71356]]
additional time to meet a redelivery demand. That provision is removed
from paragraph (f)(3) and inserted in new paragraph (f)(5). The
preamble in the proposed rule incorrectly stated that extension was
removed, rather than redesignated to another paragraph. A conforming
change is made by removing the second sentence in paragraph (f)(4).
Original paragraph (f)(4) also is revised to restate the redelivery
demand process. The paragraph also continues to include the
consequences of an importer's failure to comply with import regulation,
i.e., assessment of liquidated damages equal to the value of the
peanuts involved, under the terms of the Basic Importation and Entry
Bond. Further, failure to fully comply with quality and handling
requirements or failure to notify the AMS of disposition of uninspected
or failing imported peanuts, as required under this section, may result
in a compliance investigation by AMS. Finally, revised paragraph (f)(4)
includes the proviso that falsification of reports submitted to AMS
also is a violation of Federal law and is punishable by fine or
imprisonment, or both.
(19) AMS believes that the need for extension of the 180-day
conditional release and reporting period is significantly reduced
because of the longer reporting period proposed in this rulemaking.
However, new paragraph (f)(5) provides for extension of the reporting
period, should an importer be unable to dispose of a particular peanut
lot within 180 days. This rule establishes an extension of an
additional 60 days, giving importers a total of 240 days to meet
requirements of the import regulation.
Unusual circumstances could necessitate an extended delay in
disposition of an imported peanut lot. There have been a few instances
over the last two years where failing lots were set aside and not
reconditioned until months after the initial inspections. Disposition
of farmers stock peanuts which require shelling and final outgoing
inspection also may require an extended period of time to complete
shelling and final inspections. In such instances, the importers needed
an extension of the reporting period. Under this proposal, the length
of the extension, up to 60 days, must be specified in the extension
request and be made by the importer in writing by the end of the
conditional release period. The extension request also must specify the
lot's Customs Service entry number, PLI designation, volume or weight,
and current location. Requests for extension are made to AMS at the
address provided in paragraph (f)(2).
(20) This action adds a new paragraph (f)(6) to clarify a
procedural question that arose during the 1997 quota period. Not all
peanut lots that arrive in the U.S. are entered for consumption.
Because of the expected overfill of the Argentine quota, some importers
placed peanuts in bonded storage and did not file consumption entry
documents (including a stamp-and-fax) until after quota allotments were
determined by the Customs Service. The peanuts in excess of quota had
to be either exported to another country, held in bonded storage for
the next year's quota, or entered under tariff charges. Peanuts that
are held in bonded storage and subsequently exported from the U.S.
without a stamp-and-fax communication, need not be reported to the
inspection service or to AMS. However, if a peanut lot is included in a
stamp-and-fax document, but is subsequently exported without being
entered by the Customs Service, the importer must notify the inspection
service of the export decision and provide proof of export. The
inspection service must be able to account for all lots reported on
stamp-and-faxes.
With the addition of new paragraphs (f)(5) and (f)(6), original
paragraphs (f)(5) and (f)(6) are redesignated as paragraphs (f)(7) and
(f)(8), respectively, and references to those paragraphs are changed
accordingly.
In addition, minor additions are made in paragraphs (f)(7) and (8)
to clarify the original provisions of those paragraphs. In paragraph
(f)(7), the words ``and aflatoxin'' are inserted between ``inspection
certificate(s)'' to clarify that the Secretary may reject a current
aflatoxin certificate as well as grade certificate. The word ``may''
also is removed from the sentence to clarify the authority of the
Secretary to require reinspections of suspect peanut lots. In paragraph
(f)(8), the second sentence is changed by adding the words ``the
storage'' before the word location to clarify the requirement that
importers advise AMS of the storage location of peanuts held in bonded
storage for longer than one month prior to quota opening.
(21) A clarification is made to paragraph (g)(1) Additional
requirements. The second sentence stated that all peanuts presented for
entry for human consumption must be certified as meeting import
requirements. The phrase ``presented for entry'' can be misleading in
that, as discussed above, many peanuts presented for entry are not
subsequently imported. This rule changes the sentence by replacing the
phrase ``presented for entry'' with the term ``intended for human
consumption.'' This clarifies the purpose for importation. Also, the
phrase ``prior to such disposition'' is added to the end of the
sentence to further state that all peanuts imported for edible use meet
those requirements prior to movement to the receiver or buyer.
(22) Finally, several minor changes are made to paragraph (g)(6) to
clarify and simplify provisions regarding costs incurred in meeting the
requirements of the import regulation. The changes include
clarification that the inspection service and aflatoxin testing
laboratories bill ``applicants'' making the request for inspection and
chemical analysis, not only the importer, as originally stated.
Applicants include customs brokers, storage warehouses, and other
entities acting of behalf of importers. The list of the types of
chargeable services is modified for clarity and simplicity. PLI
certifications replace ``certifications of lot identification'' to be
in conformance with Recommendation 8, above.
The Department makes these amendments and modifications to the
peanut import regulation, Sec. 999.600 to update and streamline the
provisions of that regulation.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the information collection requirements contained in this
final rule were submitted to the Office of Management and Budget (OMB)
for approval. The information collection requirements in the original
peanut import regulation were approved by OMB on September 3, 1996, and
assigned OMB number 0581-0176.
This paperwork burden analysis applies to only AMS' peanut import
regulation burden in Sec. 999.600, and does not include or supersede
other reporting requirements for imported peanuts that may be
established by APHIS, the Food and Drug Administration (FDA), the
Customs Service, or other agencies.
The original burden statement for the peanut import regulation was
developed and approved before the regulation was put into effect. The
reporting burden is based on importers, or others acting on behalf of
importers, filing copies of documents necessary to show compliance with
program requirements. There are no forms to be completed and filed. The
import program's original reporting and recordkeeping estimates were
not broken down in OMB's 0581-0176 burden statement--making it
difficult to apply comparisons for the individual changes proposed in
this regulation. Also, because the duty free
[[Page 71357]]
quota has increased by approximately 21 percent since the original
burden statement was approved, savings calculated in this rule are
based on 1999 quota volumes.
The proposed rule incorrectly addressed the average time needed to
file the different documents required under the import regulation.
Stamp-and-fax documents are filed separately and, thus, are estimated
to take 5 minutes for each submission. The average reporting time for
filing individual certificates is estimated in this final rule as 3.5
minutes because importers may accumulate relevant documents and submit
them at one time. The response time, therefore, is estimated 3.5
minutes for each response. These estimates are used in the discussions
of the recommended changes immediately below.
The original reporting burden estimated 25 respondents filing 5,000
responses, for a total of 300 burden hours--an average of 12 reporting
hours per importer. The original recordkeeping burden was estimated at
25 respondents and a total of 125 burden recordkeeping hours--an
average of 5 recordkeeping hours per importer.
This final rule revises the original information collection burden
based on: (1) Experience of the 1997 and 1998 peanut quota periods; (2)
a two-year increase in peanut quota volume from 94.8 million to 115.4
million pounds for 1999, as established by trade agreements; (3) an
estimated 2,650 lots entered (based on lot sizes of 40,000 pounds for
most lots and 200,000 pounds for a small number of lots; (4) reduced
information collection requirements; (5) reduced response time from 5
minutes per response to 3.5 minutes; (6) reduced number of respondents
(importers) from 25 to 15; and (7) generally good peanut quality, with
an estimated 10 percent of the lots failing initial quality
requirements.
Reporting burden: The following changes reduce the AMS paperwork
reporting burden on peanut importers.
Recommendation 16: This modification removes from paragraph (f)(1)
the requirement that importers must send copies of each stamp-and-fax
document to AMS headquarters. The intent of the original requirement
was to ensure AMS headquarters has knowledge of all peanut imports for
monitoring and compliance purposes. However, this change requires that
the inspection service and aflatoxin testing laboratories provide
copies of all inspection certificates issued on imported peanuts
(Recommendation 17). In addition, AMS receives periodic database
printouts of all peanut entries from the Customs Service. Together,
these reports are sufficient documentation for AMS headquarters'
purposes. Therefore, it is not necessary that importers send copies of
their stamp-and-fax documents to AMS headquarters.
Savings: The burden of filing stamp-and-fax documents with AMS'
headquarters is completely eliminated by this final rule. The original
burden for reporting stamp-and-fax documents was factored into the
total program burden of 5,000 hours. Based on the 1999 quota of 115.4
million pounds, projected entries of 2,650 lots, and 5 containers
listed on each stamp-and-fax document, approximately 530 stamp-and-fax
documents will be filed. This number of responses will be saved because
AMS headquarters does not have to be notified. At 5 minutes per filing,
the estimated burden for reporting stamp-and-fax documents in 1999 will
total 44 hours.
Recommendation 17: This rule reduces the number of inspection
certificates which importers must report to AMS. Previously, importers
filed copies of both passing and failing grade and aflatoxin
certificates issued on all imported peanut lots. Those certificates are
issued by the inspection service and by AMS and private laboratories.
The certificates can be made available to AMS by those entities, thus
relieving importers of a significant direct reporting burden.
Because AMS' compliance efforts focus on failing lots, this rule
establishes that importers be required to file only certificates
covering failing peanut lots. AMS receives copies of passing
certificates from the inspection service and laboratories as a check on
all lots entered. Approximately 2,650 peanut lots are expected to be
imported under 1999 peanut quotas. For burden-reporting purposes, this
rule estimates that 10 percent of the imported lots will fail one or
both inspections. Thus, approximately 265 lots can be expected to fail
quality requirements and will have to be either reconditioned to meet
requirements, disposed of to non-edible peanut outlets, or re-exported.
The other 90 percent of the lots (2,385 lots) can be expected to meet
quality requirements, and will not have to be reported by the
importers.
Recommendation 17 makes two clarifications. First, the name of the
importer will be entered on filed inspection certificates, which are
completed by the inspection service. Often the business requesting the
inspection is not the importer, but another entity acting on behalf of
the importer. This rule clarifies that in such cases, the importer's
identity should be placed on the certificate. This does not increase
the reporting burden because the name is entered by the inspector, not
the importer. The second proposed recommendation would have required
that ``source'' documents be used when reporting disposition of failing
lots. However, based on comments received and further review by AMS,
the recommendation has been withdrawn. The new, amended provision
specifies the same requirement as the original regulation, i.e., bills-
of-lading and other transport certificates to be submitted by the
importer or contractors of the importer. The provision requires that
contact information of the disposing entity be specified in the
documents filed. An adjustment in the proposed burden is not needed
because the use of source documents would not have increased the volume
of paperwork required to be reported. However, removal of the source
document requirement may ease the difficulty importers might have had
in obtaining ``source'' documents.
Savings: If importers are not required to file certificates on lots
meeting program requirements, the savings in 1999 will be approximately
4,770 responses (2,385 lots, times 2 certificates per lot) and 398
hours saved (4,770 times 5 minutes per response). The new reporting
burden under Recommendation 17 is an estimated 4 responses for each of
the 265 imported lots failing requirements, or 1,060 total responses.
At 3.5 minutes per filing, the total reporting burden for filing
disposition of failing lots only in 1999 is projected to be 62 hours.
The new average will be 70 responses and 4 hours per importer. If this
regulation was not effectuated, the 1999 reporting burden on importers
would have been approximately 5,830 responses filed, and, based on 5
minute reporting time per response, roughly 485 burden hours. Thus,
Recommendation 17 results in an estimated savings of 4,770 responses
and 423 burden hours in 1999.
Recommendation 18: A small portion of the 5,000 hours under the
original reporting burden accounts for importers filing requests for
extension of the reporting period. Recommendation 18 extends the
reporting period from 23 days after entry to 180 days after conditional
release by the Customs Service. The 23-day period proved to be too
short for reporting most imported lots, forcing importers to request
extensions on nearly all lots imported during 1997 and 1998. Extension
of the reporting period to 180 days alleviates the need to file
requests for extension
[[Page 71358]]
for almost all imported peanut lots. In addition, extension of the
reporting period also enables importers to collect certificates as the
lots are certified, and file all certificates on failing lots at one
time, thus saving the burden of reporting lots individually. After
deadline extensions were granted by AMS during the 1997 and 1998 quota
periods, importers filed outstanding reports in groups.
Savings: Extending the reporting period from 23 days to 180 days
means importers do not have to request as many extensions and they are
able to combine the failing lot certificates into fewer reports.
Savings from the reduction in the reporting burden is factored into the
estimate of Recommendation 17.
Recommendations 10, 15, and 20 clarify reporting requirements but
do not change the burden. Recommendation 10 clarifies that importers
may designate other entities (aflatoxin testing laboratories, customs
import brokers, warehouses, blanchers, crushers, etc.) to file
certificates and reports on their behalf. This reporting is done as a
part of the business contract between the importer and the service-
provider at little or no cost to the importer, thus relieving the
importer of the reporting burden. Recommendation 15 clarifies the
information that is needed on stamp-and-fax documents. This change in
information does not increase the time needed to complete the stamp-
and-fax document or the reporting burden. Recommendation 20 clarifies
that if peanuts are not covered in a stamp-and-fax document and are not
inspected--but are subsequently exported--those peanuts should not be
reported.
Total average savings, reporting burden: The modifications in this
final rule represent an annual savings of approximately 5,300 responses
and 467 reporting hours.
The savings is only a few minutes for small importers who import a
few containers of peanuts. A large importer of 8 million pounds of
peanuts--200 lots with 20 lots failing requirements--has the following
reporting burden in 1999 (vs. the original burden estimate in
parentheses): 40 (80) stamp-and-fax notices; 0 (360) certificates on
passing lots; 80 (80) certificates on failing lots; 0 (40) deadline
extensions; total 120 (560) reports filed; 8 (46.6) hours reporting
burden. These are rough estimates for general comparison purposes only.
Recordkeeping burden: In addition to the reporting requirements,
Section 999.600 requires that importers retain copies of certifications
and entry documentation for not less than two years after the calendar
year of acquisition. Customs Service document retention requirements
are five years. While importers no longer file grade and aflatoxin
certificates on passing lots, they must store that information for AMS
and the Customs Service. The original recordkeeping burden totals 125
hours, based on 25 respondents retaining records--an average of 5
recordkeeping hours per importer. The revised recordkeeping burden,
based on the 21 percent increase in the quota volume is 151 hours. With
only 15 record keepers, the average recordkeeping hours per importer is
10 hours.
Cumulative new burden: This rulemaking establishes a new total
annual reporting and recordkeeping burden for OMB number 0581-0176 of
1,590 responses and 257 hours. This compares to the original burden of
5,000 responses and 425 hours. The new burden averages 106 annual
responses and 17 burden hours for each peanut importer. The burden
hours per importer is increased because the estimated number of
importers is sharply reduced from the original estimate.
Comments to this amended Paperwork Reduction Act burden were
requested in the proposed rule (63 FR 46191, August 31, 1998). Comments
were to be submitted to the Desk Officer for Agriculture, Office of
Information and Regulatory Affairs, Office of Management and Budget and
to AMS. The comment period was 60 days, ending October 30, 1998. Two
comments were received on one proposed reporting requirement change
(``source'' documents) and, as previously discussed, that proposed
change has not been made to section 999.600. That one reporting
requirement remains as previously approved. This final rule does not
alter the number of responses or reporting burden hours from those in
the proposed rule. The new reporting and recordkeeping burden for OMB
No. 0581-176 has been submitted to OMB and has been approved under that
number.
Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the AMS has considered the economic impact of this peanut
import regulation on small entities and whether the proposed changes to
the regulation disproportionately or unfairly effect small entities.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened.
An initial regulatory flexibility analysis was prepared and
published with the proposed rule (63 FR 46191, August 31, 1998). A
comment period of 30 days was provided for comments to the proposal and
the initial regulatory flexibility analysis. No comments were received
that made specific reference to the analysis or questioned the impact
of the proposed changes on small business entities. Accordingly, AMS
has prepared the following final regulatory flexibility analysis.
The import regulation is required by law--subparagraph (f)(2) of
Section 108B of the Agricultural Act of 1949, as amended, and the
Federal Agriculture Improvement and Reform Act of 1996. Subparagraph
(f)(2) mandates that the Secretary shall require that ``all peanuts in
the domestic and export marketplace fully comply with quality standards
under Marketing Agreement 146.'' Handling requirements similar to those
established under the Agreement also are established in the import
regulation, to the extent necessary to assure comparability of quality
standards. The import regulation was issued June 11, 1996 (61 FR 31306,
June 19, 1996) with the intent to minimize the regulatory burden on
importers. An amendment was issued December 31, 1996, (62 FR 1269,
January 9, 1997), to conform to changes in the Agreement regulations
and to add necessary storage reporting requirements.
Experience of the 1997 and 1998 peanut quota periods shows that
approximately 15 business entities imported peanuts and were subject to
this import regulation. Importers appeared to cover a broad range of
business entities, including fresh and processed food handlers, and
both large and small commodity brokers who buy agricultural products on
behalf of others. Small agricultural service firms have been defined by
the Small Business Administration (13 CFR 121.601) as those having
annual receipts of less than $5,000,000, and small agricultural
producers are defined as those having annual receipts of less than
$500,000. Less than one third of the importers appear to be small
business entities. The majority of peanut importers are large business
entities under this definition. AMS is not aware of any peanut
producers (farmers) who imported peanuts during these quota years.
The 1997 and 1998 peanut quota years were the first two years that
imported peanuts have been regulated under 7 CFR 999.600. Analysis of
the regulatory impact of the regulation is
[[Page 71359]]
complicated by several factors. Peanuts are imported from at least half
a dozen countries and can be imported in inshell, shelled, or cleaned-
inshell forms. This makes it difficult to compare the costs of
importation with purchase price of the product. The costs of
importation can vary greatly, with significant cost factors being
transportation distance, shipment method, wharf fees, demurrage costs,
storage charges, and the quality of the peanuts imported.
The amendments to the import regulation effectuated by this
rulemaking action were recommended for the following reasons. Five
changes conform with changing Agreement requirements (relaxing
tolerances for unshelled and damaged kernels; removing grade
requirements for certain peanut categories: allowing lots with
excessive fall-through peanuts to be blanched; and allowing failing
lots to be roasted during blanching without requiring grade
reinspection). Seventeen changes recommended by AMS update, clarify,
and reduce the importation procedures and reporting requirements
specified in the regulation. Of the 17 changes, three relax reporting
requirements by removing nearly 90 percent of the documents that must
be filed and extending the reporting period to ease the time pressures
for those documents that must be filed. This final rule improves
oversight of imported peanut lots, increases quality assurance, and
corrects misunderstandings of importation procedures.
All of the changes in this rule are intended to apply uniformly to
both large and small importers. None are intended to, or are expected
to, disproportionately affect small importers. The changes should have
the following regulatory impact on importers.
Recommendation 1 makes two changes in definitions. The first change
removes reference to an out-of-date aflatoxin level for non-edible
peanuts in paragraph (a)(10) defining Negative aflatoxin content. The
level of 25 ppb should have been removed in previous rulemaking. No
imported peanuts have been graded against this old quality level.
Recommendation 1 also removes the word ``Peanuts'' from the title of
Marketing Agreement No. 146 as specified in paragraph (a)(15) defining
PAC-approved laboratories. The term ``Peanuts'' is not a part of the
title of the Agreement.
Recommendation 2 changes the definition of Conditionally released
in paragraph (a)(16) by removing the words ``before final release'' and
adding reference to reconditioning. The ``final release'' term does not
conform with Customs Service terminology. This change does not alter
the intent or meaning of the definition. There is no regulatory impact
on importers.
Also, the phrase ``and, if necessary, reconditioning.'' is removed
from the definition, based on comments received. The effect is to
require that imported lots be inspected and PLI prior to
reconditioning. AMS is aware of only a few instances during 1997 and
1998 (over 4,000 lots imported) when an importer requested
reconditioning before knowing the results of grade and aflatoxin
inspections. While, in these very few instances, this change requires
inspection of peanuts when the importer may not want inspection, it is
a safeguard measure that helps assure positive lot identity for AMS and
Customs Service purposes, and improves AMS monitoring ability. It also
is in the best interest of the importer.
Recommendation 3 removes a redundant sentence in paragraph (b)(1)
relating to use of Segregation 1 peanuts for human consumption only.
This reference appears twice in the same paragraph.
Recommendations 4 and 6 are inter-related and make the import
regulation consistent with changes in handling and quality requirements
to the Agreement. These changes simplify both the import and Agreement
regulations. Recommendation 6 removes Table 2, Superior Quality
Requirements--Peanuts for Human Consumption from paragraph (c)(1)(ii).
Previously, peanut lots meeting the higher quality requirements of
Table 2 could be shipped to buyers prior to receiving aflatoxin
analyses on the lots. Recommendation 4 is a conforming change that has
the effect of requiring importers to receive aflatoxin analyses on all
lots prior to forwarding the peanuts to buyers. While these changes can
represent a tightening of handling requirements, the effect on
importers is minimal. Under limited circumstances, the provisions may
reduce, by a few days, the storage time for such high quality peanuts.
AMS does not have information on the number of imported lots that would
have been affected by the changes had they been in effect for the last
two quota seasons. AMS also does not have financial data on storage
costs and has no information on whether those costs are applied on a
daily or weekly basis. However, in conversations between AMS and
importers and customs brokers during 1997 and 1998, importers did not
indicate that they shipped superior quality lots without waiting for
aflatoxin certification. Also, importers did not contact AMS about the
timeliness of aflatoxin certifications. Given overnight mail and
facsimile services, aflatoxin analyses are routinely reported within
two days. Finally, importers who arranged for arrival, inspection, and
bonded storage prior to quota opening had quality and aflatoxin
certifications ready when the peanuts were released by the Customs
Service. Thus, delays and any regulatory impact due to these changes
are expected to be negligible.
Not all categories of peanuts are removed from Table 2. Three
``with split'' categories of peanuts are moved from Table 2 to Table 1
to retain the small marketing niche in the domestic market for lots
with high percentages of split kernels. This change was made to the
Agreement regulations in 1998 and is included in this regulation to
conform with that change. Any impact on importers will be positive as
it will allow lots with higher split kernel content to continue to be
imported. AMS does not maintain data on the number of peanut lots that
were imported under the ``with splits'' categories. Data on the last
two years imported peanut lots cannot be used to reliably indicate
quality of future shipments or the impact of this relaxation.
Recommendation 5 relaxes tolerances in Table 1 for ``unshelled and
damaged kernels by one half of one percent in split lots. The change is
made to be consistent with a change already made to the Agreement
regulations. It reduces the number of lots that must be reconditioned
to meet edible quality requirements. Reconditioning a lot to remove
excessive damaged kernels can significantly increase costs by adding
additional transportation costs, remilling or blanching charges, and
additional inspection fees. Data on the last two years' imported peanut
lots cannot be used to reliably indicate the impact on future shipments
because the quality of imports varies significantly from year to year
and country to country.
Recommendation 7 sets the maximum limit on the volume of farmers
stock peanuts that may comprise one lot. Paragraph (d)(3)(ii) is
modified. The 24,000 pound volume limit in the proposed rule was based
on the size of dryer wagons used to transport domestic farmers stock
peanuts. The proposed rule's RFA incorrectly stated that the 24,000
pound limit approximates the volume of farmers stock peanuts
transported in semi-trailer trucks. This is not correct. Based on
comments received from an importer, and after review, AMS is amending
the proposal
[[Page 71360]]
by increasing the maximum lot size for imported farmers stock peanuts
to 50,000 pounds. This volume more accurately reflects the weight of
farmers stock peanuts in standard sized semi-trailer trucks. The
inspection service adjusts incoming inspection probe patters when
collecting samples from the larger sized trucks. Only a small
percentage of imported peanuts were in farmers stock form during 1997
and 1998 and all were within this maximum lot size. The impact of
Recommendation 7, as now modified, would be positive for peanut
importers.
Recommendation 8 adds new paragraph (d)(4) to strengthen lot
identification requirements for imported peanuts. In some situations,
the proposed modified positive lot identification procedures could take
additional warehouse personnel and space, as well as inspection service
time. However, warehouse labor is needed to lay out all bags for
sampling, so costs in addition to those normally charged will not be
significant. Additional inspection time will vary from a few minutes to
wrap PLI tape around containers or stacked bags to 30 minutes or more
to reassemble bags on pallets and shrink-wrapping pallets or stenciling
individual bags with spray paint. The PLI requirements may increase
costs for some, but not all, imported lots. Inspection service sampling
and grading costs currently are $43 an hour. Inspections generally take
from one to three hours, including travel time, to and from the
inspection. Any increased costs to importers will be proportionate to
the number of lots inspected and is not expected to unfairly affect
small importers.
The modified PLI methods make the import regulation more consistent
with domestic program PLI requirements, and is consistent with the
intent of the Act. Importers, as well as domestic peanut producers,
handlers and manufacturers benefit from quality assurances and the
integrity of the product--due, in large part, to enforced PLI
procedures. The benefits of quality assurance and product integrity far
outweigh the small increased costs that the modified PLI methods may
entail.
Recommendation 9 removes a redundant sentence in paragraph
(d)(4)(iii) which provided that laboratories provide aflatoxin assay
results to importers. This reference is repeated in paragraph
(d)(4)(v). There is no regulatory impact from this change.
Recommendation 10 makes minor changes in three paragraphs regarding
the mandatory nature of aflatoxin testing and reporting test results.
The regulation clearly states throughout that chemical analysis is
required on imported peanuts. Paragraph (d)(4)(iv)(A) clarifies that
importers ``shall,'' rather than ``should,'' contact a laboratory to
arrange for chemical testing. Also under Recommendation 10, the
clarification that laboratories can be designated by the importer to
report test results to AMS is moved from paragraph (d)(4)(v)(B) to
paragraph (d)(5)(v) for better placement of that instruction. These
changes identify an optional reporting procedure and have no regulatory
impact on importers.
Recommendation 11 amends redesignated paragraph (d)(5)(iv)(A) by
updating the list of aflatoxin testing laboratories certified to
conduct chemical analyses on imported peanuts. There is no regulatory
impact.
Recommendation 12 adds a new sentence to introductory paragraph (e)
to provide a blanching option for shelled peanuts failing quality
requirements because of excessive ``fall through.'' The change is
consistent with an amendment of the Agreement regulations. The change
represents a relaxation in imported requirements by providing more
opportunities for reconditioning certain failing peanut lots.
Reconditioned offers the possibility of increasing the per ton value of
the lot from approximately $150 for non-edible use to over $500 for
edible peanuts. AMS does not have data on the possible positive impact
had this relaxation been in effect under previous quotas. The future
impact will be relative to the quality of imported peanuts--which is
not possible to reliably predict.
Recommendation 13 also relaxes requirements by adding a new
paragraph (e)(4), pursuant to the same change in Agreement regulations.
The modification allows lots meeting grade, but failing aflatoxin
requirements to be blanched until roasted and then reinspected only for
aflatoxin content. The impact of this relaxation can be significant if
the importer has many such failing lots which the buyer wants roasted.
Savings are accrued because the peanuts do not have to be removed from
the blanching process for inspection and then returned to the blanching
process for the remaining portion of the roasting process. The original
grade certificate is recognized and the only additional inspection
charges will be for sampling and aflatoxin analyses. AMS does not have
data on the actual costs that could be saved in this process and cannot
estimate the number of imported peanuts that may be affected by it in
the future.
Recommendations 14, 15, and 16 relax requirements relating to the
stamp-and-fax entry process in paragraph (f)(1). Recommendation 14
removes the terms which specify that the stamp-and-fax document be
filed ``prior to arrival'' at the port-of-entry. Experience shows that
importers may not have all of the needed information until after
arrival of the peanuts. Recommendation 15 amends paragraph (f)(1) by
reducing slightly, the information required on stamp-and-fax documents.
Information on subsequent inspections of the arriving peanuts is not
necessary for the purposes of the stamp-and-fax. One needed piece of
information, the Customs Service entry number applicable to the lot, is
added. In total, these changes reduce the reporting burden by a few
words. The needed information was included on the stamp-and-fax
documents during 1997 and 1998, but was not so specified as part of the
entry information in original paragraph (f)(1). Recommendation 16
removes the requirement in paragraph (f)(1) that a copy of the stamp-
and-fax document be forwarded to AMS headquarters. This reduces one
reporting requirement for importers. These three relaxations make the
entry procedure consistent with the reporting needs of AMS. The
regulatory impact is minimal but does reduce requirements on importers.
Recommendation 17 reduces the number of lots that have to be
reported by requiring that only certificates on failing lots be filed
by importers. If imported peanut quality is the same in 1999 as the
average in 1997 and 1998, roughly 90 percent of the lots should not
have to be reported to AMS headquarters. This should save an estimated
398 reporting hours. The revision is in paragraph (f)(2).
Recommendation 18 extends the reporting period specified in
paragraph (f)(3) from 23 days after entry to 180 days after conditional
release by the Customs Service. The extended reporting period allows
importers more time to make good business decisions regarding imported
lots, particularly failing lots that must be either reconditioned, sold
at substantially lower costs, or re-exported. Also, with an extended
reporting period, importers should not have to request extensions of
reporting periods and could file all failing certifications and
dispositions at one time. This should save the time of filing
individual reports as each lot is certified, disposed of, or re-
exported.
Recommendation 19 provides for up to a 60-day extension of the
proposed 180-day reporting period. There is no time limit on domestic
peanut disposition. However, because of Customs Service required
liquidation of entry documentation, there must be
[[Page 71361]]
some time limit for importers to obtain clearances on failing lots and
report to AMS. A total 240-day reporting period represents a compromise
between the open-ended domestic requirements and Customs Service
liquidation schedules. The impact of this requirement will be minimal,
as continued storage costs or successive reconditioning attempts
eventually reduce profit margins and force business decisions on lots
pending eight months after conditional entry. A new paragraph (f)(5) is
added.
Recommendations 20, 21, and 22 make minor changes that will have no
regulatory impact on importers. Recommendation 20 clarifies that if a
container or shipment is re-exported without conditional entry by the
Custom Service, it does not have to be reported to AMS and inspected.
Such situations were not foreseen in the original import regulation and
are included for clarity in new paragraph (f)(6) in this regulation.
Recommendation 21 makes a minor wording change in paragraph (g)(1)
regarding peanuts that are ``intended'' to be entered but are not
entered. Recommendation 22 clarifies that the entities billed for
inspections are those requesting inspections. Customs house brokers and
storage warehouses often request inspections, and are the entities
billed for services provided. However, costs of the inspections are
borne by the importer. These three recommendations clarify original
provisions and do not change the regulatory aspects of the rule or the
reporting burden already authorized by OMB.
The changes established in this final rule should result in an
overall reduction in the information reporting burden of the peanut
import regulation, currently assigned as OMB number 0581-0176. The most
significant reduction in the reporting burden provides that importers
file copies of grade and aflatoxin certificates only on failing lots,
rather than all lots (Recommendation 17). Using the quality of 1997 and
1998 imported peanuts as a guide, this proposal should reduce that
reporting requirement by as much as 90 percent. The recordkeeping
requirement is increased by an estimated 21 percent because the 1999
duty-free tariff quota is 21 percent higher than the 1997 quota on
which the original recordkeeping burden was based. Thus, this final
rule establishes an annual reporting and recordkeeping burden of 1,590
responses and 257 hours. This is a reduction from the original burden
of 5,000 responses and 425 hours.
Finally, the Department has not identified any relevant Federal
rules that duplicate, overlap, or conflict with this final rule.
Besides meeting AMS import quality requirements, clearance of each
imported peanut lot also must be obtained from the Customs Service,
FDA, and APHIS. Program requirements of those entities do not overlap
the quality requirements of this regulation. AMS has consulted with the
Customs Service to assure that the proposed changes are consistent with
its entry procedures.
Based on available information, the Administrator of the AMS has
determined that this final rule imposes very minimal additional costs
on affected importers, but should save considerable reconditioning,
storage, and reporting expenses. The benefits of maintaining a high
quality product should exceed any additional costs which may be
incurred in meeting these requirements. On balance, the proposed
changes are expected to reduce program costs incurred by importers.
The proposed rule concerning this action was published in Federal
Register (63 FR 46181) on August 31, 1998. Copies of the rule were
mailed to over 350 foreign and domestic peanut entities. A press
release was issued and the proposal was made available through the
Internet. The proposed rule provided for 30-day comment period which
ended September 30, 1998. Seven comments were received and are
addressed above. Several proposed changes have been modified in this
final rule.
After consideration of all relevant material presented, it is found
that finalizing the proposed rule as published in the Federal Register
(63 FR 46181, August 31, 1998), with appropriate modifications, will
tend to effectuate the declared policy of the Act.
It is also found that good cause exists for not postponing the
effective date of this rule until 30 days after publication in the
Federal Reigister because: (1) The changes need to be effective when
the 1999 Mexican peanut import quota opens on January 1, 1999, so that
all peanut importers are treated equally during 1999, as required by
international trade agreements; (2) the rule relaxes requirements
currently in place; (3) all known peanut importers and related industry
sectors were sent copies of the proposed rule and they, as well as all
other interested persons, were given 30 days to file comments on the
recommended changes; and (4) all comments received have been considered
and no changes have been made to increase the requirements proposed.
List of Subjects in 7 CFR Part 999
Dates, Food grades and standards, Hazelnuts, Imports, Nuts,
Peanuts, Prunes, Raisins, Reporting and recordkeeping requirements,
Walnuts.
For reasons set forth in the preamble, 7 CFR part 999 is amended as
follows:
PART 999--SPECIALTY CROPS; IMPORT REGULATIONS
1. The authority citation for 7 CFR part 999 continues to read as
follows:
Authority: 7 U.S.C. 601-674, 7 U.S.C. 1445c-3, and 7 U.S.C.
7271.
2. Section 999.600 is revised to read as follows:
Sec. 999.600 Regulation governing imports of peanuts.
(a) Definitions. (1) Peanuts means the seeds of the legume Arachis
hypogaea and includes both inshell and shelled peanuts produced in
countries other than the United States, other than those marketed in
green form for consumption as boiled peanuts.
(2) Farmers stock peanuts means picked and threshed raw peanuts
which have not been shelled, crushed, cleaned or otherwise changed
(except for removal of foreign material, loose shelled kernels, and
excess moisture) from the form in which customarily marketed by
producers.
(3) Inshell peanuts means peanuts, the kernels or edible portions
of which are contained in the shell.
(4) Incoming inspection means the sampling and inspection of
farmers stock peanuts to determine Segregation quality.
(5) Segregation I peanuts, unless otherwise specified, means
farmers stock peanuts with not more than 2.00 percent damaged kernels
nor more than 1.00 percent concealed damage caused by rancidity, mold,
or decay and which are free from visible Aspergillus flavus mold.
(6) Segregation 2 peanuts, unless otherwise specified, means
farmers stock peanuts with more than 2.00 percent damaged kernels or
more than 1.00 percent concealed damage caused by rancidity, mold, or
decay and which are free from visible Aspergillus flavus mold.
(7) Segregation 3 peanuts, unless otherwise specified, means
farmers stock peanuts with visible Aspergillus flavus mold.
(8) Shelled peanuts means the kernels of peanuts after the shells
are removed.
(9) Outgoing inspection means the sampling and inspection of
either: Shelled peanuts which have been cleaned, sorted, sized, or
otherwise
[[Page 71362]]
prepared for human consumption markets; or, inshell peanuts which have
been cleaned, sorted and otherwise prepared for inshell human
consumption markets.
(10) Negative aflatoxin content means 15 parts-per-billion (ppb) or
less for peanuts which have been certified as meeting edible quality
grade requirements.
(11) Person means an individual, partnership, corporation,
association, or any other business unit.
(12) Secretary means the Secretary of Agriculture of the United
States or any officer or employee of the U.S. Department of Agriculture
(Department or USDA) who is, or who may hereafter be, authorized to act
on behalf of the Secretary.
(13) Inspection service means the Federal or Federal-State
Inspection Service, Fruit and Vegetable Programs, Agricultural
Marketing Service, USDA.
(14) USDA laboratory means laboratories of the Science and
Technology Programs, Agricultural Marketing Service, USDA, that
chemically analyze peanuts for aflatoxin content.
(15) PAC-approved laboratories means laboratories approved by the
Peanut Administrative Committee, pursuant to Marketing Agreement No.
146 (7 CFR part 998), that chemically analyze peanuts for aflatoxin
content.
(16) Conditionally released means released from U.S. Customs
Service custody for further handling, sampling, inspection, chemical
analysis, and storage.
(17) Importation means the arrival of a peanut shipment at a port-
of-entry with the intent to enter the peanuts into channels of commerce
of the United States.
(b) Incoming regulation. (1) Farmers stock peanuts presented for
consumption must undergo incoming inspection. All foreign-produced
farmers stock peanuts for human consumption must be sampled and
inspected at a buying point or other handling facility capable of
performing incoming sampling and inspection. Sampling and inspection
shall be conducted by the inspection service. Only Segregation 1
peanuts certified as meeting the following requirements may be used in
human consumption markets:
(i) Moisture. Except as provided under paragraph (b)(2) of this
section, peanuts may not contain more than 10.49 percent moisture:
Provided, That peanuts of a higher moisture content may be received and
dried to not more than 10.49 percent moisture prior to storage or
milling.
(ii) Foreign material. Peanuts may not contain more than 10.49
percent foreign material, except that peanuts having a higher foreign
material content may be held separately until milled, or moved over a
sand-screen before storage, or shipped directly to a plant for prompt
shelling. The term ``sand-screen'' means any type of farmers stock
cleaner which, when in use, removes sand and dirt.
(iii) Damage. For the purpose of determining damage, other than
concealed damage, on farmers stock peanuts, all percentage
determinations shall be rounded to the nearest whole number.
(2) Seed peanuts. Farmers stock peanuts determined to be
Segregation l quality, and shelled peanuts certified negative to
aflatoxin (15 ppb or less), may be imported for seed purposes.
Residuals from the shelling of Segregation l seed peanuts may be milled
with other imported peanuts of the importer, and such residuals meeting
quality requirements specified in paragraph (c)(1) of this section may
be disposed to human consumption channels. Any portion not meeting such
quality requirements shall be disposed to non-edible peanut channels
pursuant to paragraphs (f) and (g) of this section. All disposition of
seed peanuts and residuals from seed peanuts, whether commingled or
kept separate and apart, shall be reported to the Secretary pursuant to
paragraphs (f)(2) and (f)(3) of this section. The receiving seed outlet
must retain records of the transaction, pursuant to paragraph (g)(7) of
this section.
(3) Oilstock and exportation. Farmers stock peanuts of lower
quality than Segregation 1 (Segregation 2 and 3 peanuts) shall be used
only in non-edible outlets. Segregation 2 and 3 peanuts may be
commingled but shall be kept separate and apart from edible quality
peanut lots. Commingled Segregation 2 and 3 peanuts and Segregation 3
peanuts shall be disposed only to oilstock or exported. Shelled peanuts
and cleaned-inshell peanuts which fail to meet the requirements for
human consumption in paragraphs (c)(1) or (c)(2), respectively, of this
section, may be crushed for oil or exported.
(c) Outgoing regulation. No person shall import peanuts for human
consumption into the United States unless such peanuts are Positive Lot
Identified and certified by the inspection service as meeting the
following requirements:
(1) Shelled peanuts. (i) No importer shall dispose of shelled
peanuts to human consumption markets unless such peanuts are Positive
Lot Identified pursuant to paragraph (d)(4) of this section, certified
as ``negative'' to aflatoxin, pursuant to paragraph (d)(5)(v)(A) of
this section, and meet the requirements specified in the following
table:
BILLING CODE 3410-02-P
[[Page 71363]]
[GRAPHIC] [TIFF OMITTED] TR24DE98.000
BILLING CODE 3410-02-C
[[Page 71364]]
(ii) The term ``fall through,'' as used in this section, shall mean
sound split and broken kernels and whole kernels which pass through
specified screens.
(2) Cleaned-inshell peanuts. Peanuts declared as cleaned-inshell
peanuts may be presented for sampling and outgoing inspection at the
port-of-entry. Alternatively, peanuts may be conditionally released as
cleaned-inshell peanuts but shall not subsequently undergo any
cleaning, sorting, sizing or drying process prior to presentation for
outgoing inspection as cleaned-inshell peanuts. Cleaned-inshell peanuts
which fail outgoing inspection may be reconditioned or redelivered to
the port-of-entry, at the option of the importer. Cleaned-inshell
peanuts determined to be unprepared farmers stock peanuts must be
inspected against incoming quality requirements and determined to be
Segregation l peanuts prior to outgoing inspection for cleaned-inshell
peanuts. Cleaned-inshell peanuts intended for human consumption may not
contain more than:
(i) 1.00 percent kernels with mold present, unless a sample of such
peanuts is drawn by the inspection service and analyzed chemically by a
USDA or PAC-approved laboratory and certified ``negative'' as to
aflatoxin.
(ii) 2.00 percent peanuts with damaged kernels;
(iii) 10.00 percent moisture (carried to the hundredths place); and
(iv) 0.50 percent foreign material.
(d) Sampling and inspection. (l) All sampling and inspection,
quality certification, chemical analysis, and Positive Lot
Identification, required under this section, shall be done by the
inspection service, a USDA laboratory, or a PAC-approved laboratory, as
applicable, in accordance with the procedures specified in this
section. The importer shall make arrangements with the inspection
service for sampling, inspection, Positive Lot Identification and
certification of all peanuts accumulated by the importer. The importer
also shall make arrangements for the appropriate disposition of peanuts
failing edible quality requirements of this section. All costs of
sampling, inspection, certification, identification, and disposition
incurred in meeting the requirements of this section shall be paid by
the importer. Whenever peanuts are offered for inspection, the importer
shall furnish any labor and pay any costs incurred in moving and
opening containers as may be necessary for proper sampling and
inspection.
(2) For farmers stock inspection, the importer shall cause the
inspection service to perform an incoming inspection and to issue a
CFSA-1007, ``Inspection Certificate and Sales Memorandum,'' form
designating the lot as Segregation 1, 2, or 3 quality peanuts. For
shelled and cleaned-inshell peanuts, the importer shall cause the
inspection service to perform an outgoing inspection and issue an FV-
184-9A, ``Milled Peanut Inspection Certificate,'' reporting quality and
size of the shelled or cleaned inshell peanuts, whether the lot meets
or fails to meet quality requirements for human consumption of this
section, and that the lot originated in a country other than the United
States. The importer shall provide to the Secretary copies of all CFSA-
1007 and FV-184-9A forms applicable to each peanut lot conditionally
released to the importer. Such reports shall be submitted as provided
in paragraphs (f)(2) and (f)(3) of this section.
(3) Procedures for sampling and testing peanuts. Sampling and
testing of peanuts for incoming and outgoing inspections of peanuts
presented for consumption into the United States will be conducted as
follows:
(i) Application for sampling. The importer shall request inspection
and certification services from one of the following inspection service
offices convenient to the location where the peanuts are presented for
incoming and/or outgoing inspection. To avoid possible delays, the
importer should make arrangements with the inspection service in
advance of the inspection date. A copy of the Customs Service entry
document specific to the peanuts to be inspected shall be presented to
the inspection official at the time of sampling the lot.
(A) The following offices provide incoming farmers stock
inspection:
Dothan, AL, tel: (334) 792-5185,
Graceville, FL, tel: (904) 263-3204,
Winter Haven, FL, tel: (941) 291-5820, ext 260,
Albany, GA, tel: (912) 432-7505,
Williamston, NC, tel: (252) 792-1672,
Columbia, SC, tel: (803) 253-4597,
Suffolk, VA, tel: (757) 925-2286,
Portales, NM, tel: (505) 356-8393,
Oklahoma City, OK, tel: (405) 521-3864,
Gorman, TX, tel: (817) 734-3006.
(B) The following offices, in addition to the offices listed in
paragraph (d)(3)(i)(A) of this section, provide outgoing sampling for
certification of shelled and cleaned in-shell peanuts:
Eastern U.S.
Mobile, AL, tel: (334) 415-2531,
Jacksonville, FL, tel: (904) 359-6430,
Miami, FL, tel: (305) 870-9542,
Tampa, FL, tel: (813) 272-2470,
Presque Isle, ME, tel: (207) 764-2100,
Baltimore/Washington, tel: (301) 317-4387,
Boston, MA, tel: (617) 389-2480,
Newark, NJ, tel: (201) 645-2636,
New York, NY, tel: (718) 991-7665,
Buffalo, NY, tel: (800) 262-4810,
Philadelphia, PA, tel: (215) 336-0845.
Central U.S.
New Orleans, LA, tel: (504) 589-6741,
Detroit, MI, tel: (313) 226-6059,
St. Paul, MN, tel: (612) 296-8557,
Las Cruces, NM, tel: (505) 646-4929,
Alamo TX tel: (956) 787-4091.
El Paso, TX, tel: (915) 540-7723,
Houston, TX, tel: (713) 923-2557.
Western U.S.
Nogales, AZ, tel: (520) 281-4719,
Los Angeles, CA, tel: (213) 894-2489,
San Francisco, CA, tel: (415) 876-9313,
Honolulu, HI, tel: (808) 973-9566,
Salem, OR, tel: (503) 986-4620,
Seattle, WA, tel: (206) 859-9801.
(C) Questions regarding inspection services or requests for further
assistance may be obtained from: Fresh Products Branch, PO Box 96456,
room 2049-S, Fruit and Vegetable Programs, AMS, USDA, Washington, DC,
20090-6456, telephone (202) 690-0604, fax (202) 720-0393.
(ii) Sampling. Sampling of bulk farmers stock lots shall be
performed at a facility that utilizes a pneumatic sampler or approved
automatic sampling device. The maximum lot size of farmers stock
peanuts shall be one conveyance, or two or more conveyances not
exceeding a combined weight of 50,000 pounds (22,680 kilograms).
Shelled peanut lots and cleaned-inshell lots, in bulk or bags, shall
not exceed 200,000 pounds. For farmers stock, shelled and cleaned-
inshell lots not completely accessible for sampling, the applicant
shall be required to have lots made accessible for sampling pursuant to
inspection service requirements. The importer shall cause appropriate
samples of each lot of edible quality shelled peanuts to be drawn by
the inspection service. The amount of such peanuts drawn shall be large
enough to provide for a grade and size analysis, for a grading check-
sample, and for three 48-pound samples for aflatoxin assay. Because
there is no acceptable method of drawing official samples from bulk
conveyances of shelled peanuts, the importer shall arrange to have bulk
conveyances of shelled peanuts sampled during the unloading process. A
bulk lot sampled in this manner must be Positive Lot Identified by the
inspection service and held in a sealed bin until the associated
inspection and aflatoxin test results have been reported.
(4) Positive Lot Identification (PLI) shall be applied to all
shelled and cleaned-inshell peanut lots during or immediately after
first inspection by the inspection service or under the
[[Page 71365]]
guidance of the inspection service. Positive Lot Identification of a
lot may be accomplished by: Wrapping PLI tape around bags or boxes on
pallets; shrink wrapping pallets or multiple bags and applying a PLI
sticker; stenciling and numbering of individual bags or boxes; affixing
PLI seals on shipping container doors; or by other methods acceptable
to the inspection service that clearly identifies the lot, is securely
affixed to the lot, and prevents peanuts from being removed or added to
the lot. Such positive lot identification methods may be dictated by
the size and containerization of the lot, by warehouse storage or space
requirements, or, by necessary further movement of the lot prior to
receipt of certification. All lots forwarded to a reconditioning
facility must be accompanied by valid PLI certification. Failing lots
that are reconditioned shall be positive lot identified by sewing tags
on bags or affixing a seal and taping bulk bin containers after such
reconditioning or by other means acceptable to the inspection service
that clearly identifies the peanuts in the lot, is securely affixed to
the lot, and which prevents peanuts from being removed or added to the
lot.
(5) Aflatoxin assay. (i) The importer shall cause appropriate
samples of each lot of shelled peanuts intended for edible consumption
to be drawn by the inspection service. The three 48-pound samples shall
be designated by the inspection service as ``Sample 1IMP,'' ``Sample
2IMP,'' and ``Sample 3IMP'' and each sample shall be placed in a
suitable container and lot identified by the inspection service. Sample
1IMP may be prepared for immediate testing or Samples 1IMP, 2IMP and
3IMP may be returned to the importer for testing at a later date, under
Positive Lot Identification procedures.
(ii) The importer shall cause Sample 1IMP to be ground by the
inspection service or a USDA or PAC-approved laboratory in a
subsampling mill. The resultant ground subsample shall be of a size
specified by the inspection service and shall be designated as
``Subsample 1-ABIMP.'' At the importer's option, a second subsample may
also be extracted from Sample 1IMP and designated ``Subsample 1-CDIMP''
which may be sent for aflatoxin assay to a USDA or PAC-approved
laboratory. Both subsamples shall be accompanied by a Milled Peanut
Inspection Certificate or Notice of Sampling signed by the inspector
containing identifying information as to the importer, the lot
identification of the shelled peanut lot, and other information deemed
necessary by the inspection service. Subsamples 1-ABIMP and 1-CDIMP
shall be analyzed only in a USDA or PAC-approved laboratory. The
methods prescribed by the Instruction Manual for Aflatoxin Testing, SD
Instruction-1, August 1994, shall be used to assay the aflatoxin level.
The cost of testing and notification of Subsamples 1-ABIMP and 1-CDIMP
shall be borne by the importer.
(iii) The samples designated as Sample 2IMP and Sample 3IMP shall
be held as aflatoxin check-samples by the inspection service or the
importer until the analyses results from Sample 1IMP are known. Upon
call from the USDA or PAC-approved laboratory, the importer shall cause
Sample 2IMP to be ground by the inspection service in a subsampling
mill. The resultant ground subsample from Sample 2IMP shall be
designated as ``Subsample 2-ABIMP.'' Upon further call from the
laboratory, the importer shall cause Sample 3IMP to be ground by the
inspection service in a subsampling mill. The resultant ground
subsample shall be designated as ``Subsample 3-ABIMP.'' The importer
shall cause Subsamples 2-ABIMP and 3-ABIMP to be sent to and analyzed
only in a USDA or PAC-approved laboratory. Each subsample shall be
accompanied by a Milled Peanut Inspection Certificate or a Notice of
Sampling. All costs involved in the sampling, shipment and assay
analysis of subsamples required by this section shall be borne by the
importer.
(iv)(A) To arrange for chemical analysis, importers shall contact
one of the following USDA or PAC-approved laboratories:
Science and Technology Programs, AMS, 301 West Pearl St., Aulander,
NC 27805, (P.O. Box 279), Tel: (919) 345-1661 Ext. 156, Fax: (919)
345-1991
Science and Technology Programs, AMS, 1211 Schley Ave., Albany, GA
31707, Tel: (912) 430-8490/8491, Fax: (912) 430-8534
Science and Technology Programs, AMS, 610 North Main St., Blakely,
GA 31723, Tel: (912) 723-4570, Fax: (912) 723-3294
Science and Technology Programs, AMS, 107 South Fourth St., Madill,
OK 73446, Tel: (405) 795-5615, Fax: (405) 795-3645
Science and Technology Programs, AMS, 715 North Main St., Dawson, GA
31742, (PO Box 272), Tel: (912) 995-7257, Fax: (912) 995-3268
Science and Technology Programs, AMS, 308 Culloden St., Suffolk, VA
23434,(P.O. Box 1130), Tel: (757) 925-2286, Fax: (757) 925-2285
Federal-State Inspection Service Laboratory, 1557 Reeves St.,
Dothan, AL 36303, (PO Box 1368, zip 36302)), Tel: (334) 792-5185,
Fax: (334) 671-7984
Federal-State Inspection Service Laboratory, 201 Broad St.,
Headland, AL 36345, (PO Box 447, zip 36345-0447), Tel: (334) 693-
2729, Fax: (334) 693-2183
Federal-State Inspection Service Laboratory, 103 Greenville Ave.,
Goshen, AL 36035, (PO Box 204), Tel: (334) 484-3340, Fax: (334) 484-
3340
Federal-State Inspection Service Laboratory, 805 North Main St.,
Enterprise, AL 36330, (PO Box 310926), Tel: (334) 347-6525
ABC Research, 3437 SW 24th Ave., Gainesville, FL 32607, Tel: (904)
372-0436, Fax: (904) 378-6483
J. Leek Associates, Inc., 1200 Wyandotte, Albany, GA 31705, (PO Box
50395, zip 31703), Tel: (912) 889-8293, Fax: (912) 888-1166
J. Leek Associates, Inc., 139 South Lee St., Ashburn, GA 31714, Tel:
(912) 567-3703, Fax: (912) 567-8055
J. Leek Associates, Inc., 402 SE 3rd Street, Anadarko, OK 73005,
Tel: (405) 247-3266, Fax: (405) 247-3270
J. Leek Associates, Inc., PO Box 475, Blakely, GA 31723, Tel: (912)
723-9155, Fax: (912) 723-2980
J. Leek Associates, Inc., 502 West Navarro St., DeLeon, TX 76444,
(PO Box 6), Tel: (817) 893-3653, Fax: (817) 893-3640
J. Leek Associates, Inc., PO Box 333, Headland, AL 36345, Tel: (334)
693-9320, Fax: (334) 693-0491
Pert Laboratory South, 721 East Pine Street, Colquitt, GA 31737, (PO
Box 396), Tel: (912) 758-9293, Fax: (912) 758-8286
Pert Laboratories, 145 Peanut Drive, Edenton, NC 27932, (PO Box
267), Tel: (252) 482-4456, Fax: (252) 482-5370
Southern Cotton Oil Company, 600 E. Nelson Street, Quanah, TX 79252,
(PO Box 180), Tel: (940) 663-5323, Fax: (940) 663-5091
Quanta Lab, 9330 Corporate Drive, Suite 703, Selma, TX 78154-1257,
Tel: (210) 651-5799, Fax: (210) 651-9271
(B) Further information concerning the chemical analyses required
pursuant to this section may be obtained from: Science and Technology
Programs, AMS, USDA, PO Box 96456, room 3507-S, Washington, DC 20090-
6456, Tel (202) 720-5231, or Fax (202) 720-6496.
(v) Reporting aflatoxin assays. A separate aflatoxin assay
certificate, Form CSSD-3 ``Certificate of Analysis for Official
Samples'' or equivalent PAC-approved laboratory form, shall be issued
by the laboratory performing the analysis for each lot. The assay
certificate shall identify the importer, the volume of the peanut lot
assayed, date of the assay, and numerical test result of the assay. The
importer shall file, or cause to be filed, with the Secretary, all USDA
Form CSSD-3, or equivalent chemical assay forms issued on failing
peanuts. The importer shall cause the results of all chemical assays
issued by PAC-approved laboratories to be filed with the Secretary. The
results of the assay shall be reported as follows.
(A) For the current peanut quota year, ``negative'' aflatoxin
content means 15 parts per billion (ppb) or less aflatoxin content for
peanuts which have been
[[Page 71366]]
certified as meeting edible quality grade requirements. Such lots shall
be certified as ``Meets U.S. import requirements for edible peanuts
under Sec. 999.600 with regard to aflatoxin.''
(B) Lots containing more than 15 ppb aflatoxin content shall be
certified as ``Fails to meet U.S. import requirements for edible
peanuts under Section Sec. 999.600 with regard to aflatoxin.'' The
certificate of any non-edible peanut lot also shall specify the
aflatoxin count in ppb.
(6) Appeal inspection. In the event an importer questions the
results of a quality and size inspection, an appeal inspection may be
requested by the importer and performed by the inspection service. A
second sample will be drawn from each container and shall be double the
size of the original sample. The results of the appeal sample shall be
final and the fee for sampling, grading and aflatoxin analysis shall be
charged to the importer. Lots that show evidence of PLI violation or
tampering, as determined by the inspection service, are not eligible
for appeal inspection.
(e) Disposition of peanuts failing edible quality requirements.
Peanuts shelled, sized, and sorted in another country prior to arrival
in the U.S. and shelled peanuts which originated from imported
Segregation 1 peanuts that fail minimum grade requirements specified in
the table in paragraph (c)(1)(i) of this section (excessive damage,
minor defects, moisture, or foreign material) or are positive to
aflatoxin may be reconditioned by remilling and/or blanching. Peanuts
that fail minimum grade requirements because of excessive ``fall
through'' may be blanched. After such reconditioning, peanuts meeting
the minimum grade requirements in the table, including minimum ``fall
through'' requirements, and which are negative to aflatoxin (15 ppb or
less), may be disposed for edible use. Residual peanuts resulting from
milling or reconditioning of such lots shall be disposed of as
prescribed as follows:
(1) Failing peanut lots may be disposed for non-human consumption
uses (such as livestock feed, wild animal feed, rodent bait, seed,
etc.) which are not otherwise regulated by this section; Provided, That
each such lot is Positive Lot Identified and certified as to aflatoxin
content (actual numerical count). On the shipping papers covering the
disposition of each such lot, the importer shall cause the following
statement to be shown: ``The peanuts covered by this bill of lading (or
invoice) are not to be used for human consumption.''
(2) Peanuts, and portions of peanuts which are separated from
edible quality peanuts by screening or sorting or other means during
the milling process (``sheller oilstock residuals''), may be sent to
non-edible peanut markets pursuant to paragraph (e)(1) of this section,
crushed or exported. Such peanuts may be commingled with other milled
residuals. Such peanuts shall be positive lot identified, red tagged in
bulk or bags or other suitable containers.
(i) If such peanuts have not been certified as to aflatoxin
content, as prescribed in paragraph (d) of this section, disposition is
limited to crushing and the importer shall cause the following
statement to be shown on the shipping papers: ``The peanuts covered by
this bill of lading (or invoice, etc.) are limited to crushing only and
may contain aflatoxin.''
(ii) If the peanuts are certified as 301 ppb or more aflatoxin
content, disposition shall be limited to crushing or export.
(3) Shelled peanuts which originated from Segregation 1 peanuts
that fail minimum grade requirements specified in the table in
paragraph (c)(1)(i) of this section, peanuts derived from the milling
for seed of Segregation 2 and 3 farmers stock peanuts, and peanuts
which are positive to aflatoxin, may be remilled or blanched. Residuals
of remilled and/or blanched peanuts which continue to fail minimum
grade requirements in the table shall be disposed pursuant to
paragraphs (e)(1) or (2) of this section.
(4) Shelled peanuts that are certified as meeting minimum grade
requirements specified in the table in paragraph (c)(1)(i) of this
section and which are positive to aflatoxin may be roasted during
blanching. After roasting, such peanuts certified as meeting aflatoxin
requirements (15 ppb or less), and which are positive lot identified,
may be disposed to human consumption outlets without further grade
analysis. The residual peanuts, excluding skins and hearts, resulting
from roasting process, shall be red tagged and disposed of to non-
edible outlets pursuant to paragraphs (e)(1) or (2) of this section.
(5) All certifications, lot identifications, and movement to non-
edible dispositions, sufficient to account for all peanuts in each
consumption entry, shall be reported to the Secretary by the importer
pursuant to paragraphs (f)(2) and (f)(3) of this section.
(f) Safeguard procedures. (l) Prior to, or upon, arrival of a
foreign-produced peanut lot at a port-of-entry, the importer, or
customs broker acting on behalf of the importer, shall mail or send by
facsimile transmission (fax) a copy of the Customs Service entry
documentation for the peanut lot or lots to the inspection service
office that will perform sampling of the peanut shipment. More than one
lot may be entered on one entry document. The documentation shall
include: The Customs Service entry number; the container number(s) or
other identification of the lot(s); the volume of peanuts in each lot
being entered; the inland shipment destination where the lot will be in
storage or made available for inspection; and a contact name or
telephone number at that destination. The inspection office shall sign,
stamp, and return the entry document to the importer. The importer
shall cause a copy of the relevant entry documentation to accompany
each peanut lot and be presented to the inspection service at the time
of sampling.
(2) The importer shall file, of cause to have filed, with the
Secretary, copies of failing grade and aflatoxin certificates and non-
edible disposition documents which identify the importer and the
disposition outlet for failing quality peanuts. Such reports shall be
sufficient to account for all peanuts failing quality requirements of
this section: Provided, That: importers shall cause all certificates of
peanuts meeting aflatoxin requirements issued by PAC-approved
laboratories to be filed with the Secretary. Proof of non-edible
disposition may include bills-of-lading, transfer certificates, and
other documentation showing shipment from the importer, blancher,
remiller, warehouse, or other entity, to crushing, feed or seed use,
burying, or other non-edible disposition. Such documentation must
include the weight of peanuts being disposed and the name and telephone
number of the disposing entity. Proof of re-export must include U.S.
Customs Service documentation showing exportation from the United
States. These documents must be sent to the Marketing Order
Administration Branch, Attn: Report of Imported Peanuts. Facsimile
transmissions and overnight mail may be used to ensure timely receipt
of inspection certificates and other documentation. Fax reports should
be sent to (202) 205-6623. Overnight and express mail deliveries should
be addressed to USDA, AMS, FV, Marketing Order Administration Branch,
1400 Independence Avenue, SW, Room: 2525-S, Washington, DC, 20250,
Attn: Report of Imported Peanuts. Regular mail should be sent to FV,
AMS, USDA, PO Box 96456, Room
[[Page 71367]]
2525-S, Washington, DC 20090-6456, Attn: Report of Imported Peanuts.
(3) All peanuts imported into the United States subject to this
part shall be conditionally released by the U.S. Customs Service for a
period of 180 days following the date of Customs Service release, for
the purpose of determining whether such peanuts meet the quality
requirements for human consumption or non-edible disposition and
reporting such certification or non-edible disposition to the
Secretary.
(4) If the Secretary finds during, or upon termination, of the
conditional release period that a lot of peanuts is not entitled to
admission into the commerce of the United States, the Secretary shall
request the Customs Service, within 30 days after close of the
conditional release period, to demand return of said lot of peanuts to
Customs Service custody. Failure to comply with a redelivery demand
within 30 days of the date of the redelivery demand, may result in the
assessment against the importer of record and surety, jointly and
severally of liquidated damages equal to the value of the peanuts
involved. Failure to fully comply with quality and handling
requirements or failure to notify the Secretary of disposition of all
foreign-produced peanuts, as required under this section, may result in
a compliance investigation by the Secretary. Falsification of reports
submitted to the Secretary is a violation of Federal law punishable by
fine or imprisonment, or both.
(5) An extension of the 180-day conditional release period may be
granted by the Secretary upon request of the importer. Extension shall
not exceed an additional 60 calendar days. Requests for extension shall
be specific to each peanut lot and shall include the lot's Customs
Service entry number, the positive lot identification, weight or
volume, and current storage location. Requests for extension of the
conditional release period shall be made in writing pursuant to
paragraph (f)(2) of this section.
(6) Peanuts for which an import application is filed with the
Customs Service but which are subsequently exported without sampling or
inspection by the inspection service, need not be reported to the
Secretary.
(7) Reinspection. Whenever the Secretary has reason to believe that
peanuts may have been damaged or deteriorated while in storage, the
Secretary may reject the then effective inspection and aflatoxin
certificates and require the importer to have the peanuts reinspected
to establish whether or not such peanuts may be disposed of for human
consumption.
(8) Early arrival and storage. Peanut lots sampled and inspected
upon arrival in the United States, but placed in storage for more than
one month prior to beginning of the quota year for which the peanuts
will be entered, must be reported to AMS at the time of inspection. The
importer shall file copies of the Customs Service documentation showing
the volume of peanuts placed in storage and the storage location,
including any identifying number of the storage warehouse. Such peanuts
should be stored in clean, dry warehouses and under cold storage
conditions consistent with industry standards. Pursuant to paragraph
(f)(7) of this section, the Secretary may require reinspection of the
lot at the time the lot is declared for entry with the Customs Service.
(g) Additional requirements. (1) Nothing contained in this section
shall preclude any importer from milling or reconditioning, prior to
importation, any shipment of peanuts for the purpose of making such
peanuts eligible for importation into the United States. However, all
peanuts intended for human consumption use must be certified as meeting
the quality requirements specified in paragraph (c) of this section,
prior to such disposition.
(2) Conditionally released peanut lots of like quality and
belonging to the same importer may be commingled. Defects in an
inspected lot may not be blended out by commingling with other lots of
higher quality. Commingling also must be consistent with applicable
Customs Service regulations. Commingled lots must be reported and
disposed of pursuant to paragraphs (f)(2) and (f)(3) of this section.
(3) Inspection by the Federal or Federal-State Inspection Service
shall be available and performed in accordance with the rules and
regulations governing certification of fresh fruits, vegetables and
other products (7 CFR part 51). The importer shall make each
conditionally released lot available and accessible for inspection as
provided in this section. Because inspectors may not be stationed in
the immediate vicinity of some ports-of-entry, importers must make
arrangements for sampling, inspection, and certification through one of
the offices and laboratories listed in paragraphs (d)(3) and (d)(5) of
this section, respectively.
(4) Imported peanut lots sampled and inspected at the port-of-
entry, or at other locations, shall meet the quality requirements of
this section in effect on the date of inspection.
(5) A foreign-produced peanut lot entered for consumption or for
warehouse may be transferred or sold to another person: Provided, That
the original importer shall be the importer of record unless the new
owner applies for bond and files Customs Service documents pursuant to
19 CFR 141.20 and 141.113: Provided further, That such peanuts must be
certified and reported to the Secretary pursuant to paragraphs (f)(2)
and (f)(3) of this section.
(6) Payment of the cost of transportation, sampling, inspection,
certification, chemical analysis, and Positive Lot Identification, as
well as remilling and blanching, and further inspection of remilled and
blanched lots, and disposition of failing peanuts, shall be the
responsibility of the importer. Whenever an applicant presents peanuts
for inspection, the applicant shall furnish any labor and pay any costs
incurred in moving, opening containers for sampling, and the shipment
of samples as may be necessary for proper sampling and inspection. The
inspection service shall bill the applicant for fees covering quality
inspections and other certifications as may be necessary to certify
edible quality or non-edible disposition. USDA and PAC-approved
laboratories shall bill the applicant separately for aflatoxin assay
fees. The importer also shall pay Customs Service costs as required by
that agency.
(7) Each person subject to this section shall maintain true and
complete records of activities and transactions specified in this
section. Such records and documentation accumulated during entry shall
be retained for not less than two years after the calendar year of
acquisition, except that Customs Service documents shall be retained as
required by that agency. The Secretary, through duly authorized
representatives, shall have access to any such person's premises during
regular business hours and shall be permitted, at any such time, to
inspect such records and any peanuts held by such person.
(8) The provisions of this section do not supersede any
restrictions or prohibitions on peanuts under the Federal Plant
Quarantine Act of 1912, the Federal Food, Drug and Cosmetic Act, any
other applicable laws, or regulations of other Federal agencies,
including import regulations and procedures of the Customs Service.
Dated: December 16, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-33933 Filed 12-23-98; 8:45 am]
BILLING CODE 3410-02-P
