[Federal Register Volume 61, Number 119 (Wednesday, June 19, 1996)]
[Rules and Regulations]
[Pages 31306-31322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15361]
[[Page 31305]]
_______________________________________________________________________
Part III
Department of Agriculture
_______________________________________________________________________
Agricultural Marketing Service
_______________________________________________________________________
7 CFR Part 999
Specialty Crops; Import Regulations; Peanut Import Regulations; Final
Rule
Federal Register / Vol. 61, No. 119 / Wednesday, June 19, 1996 /
Rules and Regulations
[[Page 31306]]
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 999
[Docket No. FV94-999-2FR]
Specialty Crops; Import Regulations; Peanut Import Regulations
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final rule.
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SUMMARY: This final rule establishes minimum quality, identification,
certification and safeguard requirements for imported farmers stock,
shelled, and cleaned-inshell peanuts. This rule is issued under section
108B(f)(2) of the Agricultural Act of 1949, as amended. The provisions
of paragraph (f)(2) require all peanuts in the domestic market to fully
comply with all quality standards under Peanut Marketing Agreement No.
146 (Agreement). Therefore, this rule establishes the same quality
requirements and handling procedures for imported peanuts as those
which are in effect for domestically produced peanuts. This final rule
addresses comments to the proposed rule submitted by members of the
industry and other interested persons. This action will benefit peanut
handlers, importers and consumers by helping to ensure that all peanuts
in the marketplace comply with the same quality standards.
EFFECTIVE DATE: July 19, 1996.
FOR FURTHER INFORMATION CONTACT: Tom Tichenor or Rick Lower, Marketing
Specialists, Marketing Order Administration Branch, Fruit and Vegetable
Division, AMS, USDA, P.O. Box 96456, room 2523-S, Washington, DC 20090-
6456; tel: (202) 720-6862 or (202) 720-2020 respectively; fax (202)
720-5698.
SUPPLEMENTARY INFORMATION: This final rule is issued under paragraph
(f)(2) of section 108B of the Agricultural Act of 1949 (7 U.S.C. 1445c-
3), as amended November 28, 1990; Pub. Law 101-624, hereinafter
referred to as the Act. Paragraph (f)(2) of section 108B of the Act
provides that the Secretary of Agriculture (Secretary) shall require
that all peanuts in the domestic market fully comply with all quality
standards under Marketing Agreement No. 146 (7 CFR part 998), issued
pursuant to the Agricultural Marketing Agreement Act of 1937, as
amended (7 U.S.C. 601-674).
This rule adds ``Sec. 999.600 governing the importation of
peanuts'' under 7 CFR part 999--Specialty Crops; Import Regulations.
Section 999.600 establishes minimum quality, identification,
certification and safeguard requirements for foreign produced farmers
stock, shelled and cleaned-inshell peanuts presented for importation
into the United States. The quality requirements are the same as those
specified in Sec. 998.100 Incoming quality regulation and Sec. 998.200
Outgoing quality regulation established pursuant to the Agreement.
Whenever the regulations specified in the Agreement are changed, the
regulations in Sec. 999.600 will be changed accordingly. Safeguard
procedures enable the Department to monitor and assure importers'
compliance with the requirements of this regulation.
The intent of paragraph (f)(2) of section 108B of the Act is to
ensure that all peanuts in the domestic marketplace comply with the
same quality standards.
The U.S. Department of Agriculture (Department or USDA) is issuing
this rule in accordance with Executive Order 12866.
This rule has been reviewed under Executive Order 12778, Civil
Justice Reform, and 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.
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the Agricultural Marketing Service (AMS) has considered the
economic impact of this rule on 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. Small agricultural
service firms, which include importers, have been defined by the Small
Business Administration (13 CFR 121.601) as those whose annual receipts
are less than $5 million. This import regulation is based on
regulations established under the Agreement which regulates the quality
of domestically produced peanuts.
Experience shows that peanut importers affected by this regulation
are comprised primarily of signatories to the Agreement and import
brokers. The majority of signatories to the Agreement cannot be
classified as small entities. Import brokers may contract with peanut
handlers who have the equipment and storage facilities needed to carry
out necessary shelling and reconditioning of imported peanuts. While
the Department is aware of at least seven importers who imported
peanuts into the United States (most of whom are small entities), it is
unable to accurately estimate the number or size of importers who may
choose to import peanuts in the future. The Department estimates that
there are as many as 50 domestic peanut handlers with storage and
milling facilities that can be used to prepare peanuts for human
consumption markets.
The quality and handling requirements of this import regulation
apply uniformly to all importers, whether small or large. The peanut
import quota, while limited, is available to all importers, regardless
of size or business orientation. There are no known additional costs
incurred by small importers that are not incurred by large importers.
No significant alternatives which could accomplish the objectives
of this action were identified.
Importers must incur the costs of inspection and aflatoxin
analysis. However, these costs are proportional to the volume of
peanuts imported and the size of each inspected and tested lot. Such
costs are applied to all importers regardless of size and also are
consistent with such costs incurred by handlers of domestically
produced peanuts. Additional costs are incurred if an imported lot must
be reconditioned to meet quality requirements of the import rule.
Losses may occur if an imported failing lot cannot be reconditioned and
must be disposed to a non-edible peanut outlet, destroyed or re-
exported. However, such costs are relative to the quality of each
imported peanut lot, and importers may reduce the likelihood of
incurring reconditioning costs or other losses due to poor quality
peanuts, by importing only high quality peanuts. In this regard, the
business risks for peanut importers are no different than those for
handlers of domestically produced peanuts. Further, it is common
industry practice that buyers (manufacturers) of peanuts require, or
make purchase contingent upon, passing grade and aflatoxin certificates
of each peanut lot purchased. Thus, the costs of inspection and
maintenance of lot identification are a part of normal business
practices for this industry.
While the level of benefits of this action are difficult to
quantify, the stabilizing effects of shipping only high quality and
wholesome peanuts to human consumption outlets impact both small and
large importers positively by helping them maintain and expand markets.
The Department is not aware of any Federal rules which duplicate,
overlap, or conflict with this final rule. Finally, this action is
required by statute.
[[Page 31307]]
Based on available information, the AMS has determined that this
rule would not have a significant impact on a substantial number of
small entities.
In the past, the importation of peanuts has been limited to 1.71
million pounds annually. However, the Schedule of the United States
annexed to the North American Free Trade Agreement (NAFTA), implemented
on January 1, 1994, provided duty free entry for up to approximately
7.43 million pounds of qualifying peanuts from Mexico. For 1996, the
duty-free access for Mexican peanuts increased to approximately 7.88
million pounds. In calendar year 2008, access for Mexican peanuts will
be unlimited. In addition, the United States Schedule to the Uruguay
Round Agreements negotiated under the General Agreement on Tariffs and
Trade (GATT) relaxes the peanut import quota to 74.5 million pounds in
1995, with additional annual increases of approximately 10 million
pounds to reach a ceiling of 125 million pounds by the year 2000 for
all imported peanuts.
Various qualities of peanuts are entered into the United States
from countries such as Argentina, Mexico, Nicaragua, India, and the
People's Republic of China. Foreign produced peanuts are produced under
varying weather conditions and using different cultural practices.
Consistent with the Agreement's regulatory provisions, each lot of
peanuts entered into the U.S. would be required to be officially
sampled and graded by the Federal or Federal-State Inspection Service
(inspection service). Incoming inspection for farmers stock peanuts and
outgoing inspection for edible quality shelled peanuts and cleaned-
inshell peanuts will be required for imported peanuts. A list of
inspection service offices is provided in paragraph (d)(2)(i) of this
regulation.
Some peanuts contain defects or other damage which cause them to be
of low quality or have poor taste which could affect the demand for
peanuts. Producers, handlers and manufacturers in the domestic peanut
industry believe that even an isolated quality problem could adversely
affect consumer confidence, which would be detrimental to the domestic
peanut industry.
The Agreement imposes quality standards for domestically produced
inshell and shelled peanuts. Peanut lots are graded based on the
percentage of unshelled peanuts, percentage of kernels with damage and
minor defects, percentage of loose shelled kernels, percentage of
foreign material, and percentage of moisture content. In addition, an
integral part of these quality standards is the extent of the presence
of Aspergillus flavus mold (the principal cause of aflatoxin, which is
a carcinogen). This mold is more likely to be found on damaged or
defective kernels than on sound, whole, good quality kernels. A
chemical analysis for aflatoxin is required on shelled peanut lots not
meeting superior quality requirements. Shelled lots that exceed certain
superior quality requirements need not be analyzed prior to shipment
for human consumption.
The proposed rule was issued January 23, 1996, and published in the
Federal Register February 1, 1996. A 30-day comment period was provided
and 16 comments were received. Comments were received from a United
States Congressman, as well as persons representing the agricultural
office of a South American embassy, the Peanut Administrative Committee
(PAC), the American Farm Bureau Federation, the Southwestern Peanut
Growers' Association, the Peanut Growers Cooperative Marketing
Association in the Virginia-Carolina area, the American Peanut Shellers
Association, and the American Peanut Product Manufacturers, Inc.
Comments were also received from a peanut product manufacturer, three
peanut brokers, one peanut handler/importer, and a company making
chemical analysis testing kits. Most all commenters agree that imported
peanuts should meet domestic requirements for human consumption.
However, they also were critical of various provisions in the proposed
rule.
Three commenters stated that the regulation should establish
requirements for aflatoxin testing of peanut butter and peanut paste
imported from Canada and Mexico. However, Peanut Marketing Agreement
No. 146, the authorizing statute, and the quality regulations under the
Agreement are only applicable to peanuts and not peanut products. The
Food and Drug Administration (FDA) is responsible for certifying the
aflatoxin level of imported peanut butter and peanut products.
Four commenters recommended that the rule should establish country-
of-origin requirements on imported peanuts to guard against peanuts
produced in one country and transhipped through another country before
importation into the U.S. However, the purpose of this rule is to
establish quality requirements for all imported peanuts, and
establishment of country-of-origin requirements is not necessary. The
United States Customs Service (Customs Service) monitors country-of-
origin on imported peanuts for tariff purposes. In addition, the grade
and aflatoxin certificates will identify the country-of-origin as the
shipping country unless another producing country is identified on
Customs Service documentation.
Five commenters were of the opinion that the regulation is contrary
to the spirit of GATT and NAFTA, which is to promote free and fair
trade. However, both GATT and NAFTA recognize the rights of signatories
to protect themselves from inferior quality imports by allowing the
receiving country to apply to imports the same standards mandated for
its domestically produced, agricultural products. The Department
believes that this rule meets such ``national treatment'' requirements
in that it provides the same grade and handling requirements applied to
peanuts domestically produced throughout the United States.
One commenter indicated that European countries are implementing a
program using the quality test results conducted by suppliers in
origin-producing countries. The commenter questioned why the Department
does not honor origin-testing programs in other countries while United
States peanut suppliers are aggressively supporting origin-testing of
peanuts they ship to Europe. The commenter recommended that imported
peanuts be origin-tested by recognized independent laboratories
overseas. The commenter suggested that a laboratory owned and operated
by a PAC-approved laboratory in the United States be authorized to
perform the grade and aflatoxin inspections in Argentina. The lab is
currently certifying peanut shipments to the United States and Europe,
and those shipments have met minimum aflatoxin requirements over the
past year.
The Agreement's requirements, as reflected in these import
regulations, are supported by an integrated quality assurance system
that includes statistically based sampling, positive lot
identification, and laboratory oversight. Because it would be
difficult, at this time, to ascertain that imported peanuts meet the
same quality requirements as domestic peanuts without the application
of that inspection system, these regulations do not provide for country
of origin inspection and testing.
A number of commenters complained about the increased burden on
importers, and four commenters contended that the regulation is more
burdensome on importers than the domestic regulation is on handlers
under the Agreement. Individually or jointly, they commented that the
proposed regulations would increase importers' burdens by: placing time
constraints on certification or non-edible disposition of each imported
lot;
[[Page 31308]]
requiring bonded storage which may be scarce or not available; adding
costs for demurrage, sampling, and inspection of imported lots; and
adding layers of bureaucracy and regulations. They commented that any
peanut lots requiring more than simple aflatoxin testing could not be
shelled, sorted, sized, remilled, and reported in 23 days.
As stated in the proposed rule, the purpose of these regulations is
to ensure that all peanuts (including imported peanuts) marketed in the
United States comply with quality standards of the Agreement. Quality
standards cannot be guaranteed without handling requirements that
prohibit the commingling of certain peanut lots and ensure lot
identification of imported shipments. Further, in order to ensure
compliance with non-edible disposition requirements, it is necessary to
require that imported peanut lots failing edible quality be certified
as handled and disposed of to appropriate non-edible peanut uses.
In this rule, the Department attempted to establish the least
burdensome and least costly procedures which would assure that imported
peanuts meet the required quality standards. Grade and disposition
requirements are the same as those provided under the Agreement. Lot
identification and storage requirements are similar to those of the
Agreement, but vary slightly because of Customs Service requirements
and because shipments have to be monitored from the place and time of
conditional release rather than from a buying point or shelling
facility.
The initial 30 day reporting period is a Customs Service
requirement that cannot be changed by a USDA regulation. It is applied
by Customs Service to imported merchandise that must meet product
requirements in effect in the United States. Also, as stated in the
proposed rule, the Department needs to establish a shorter reporting
period because a Customs Service port-of-entry office issuing the entry
documentation needs up to 7 days to issue a redelivery demand notice.
Therefore, the Department established a reporting period of 23 days
from the date of entry by the Customs Service.
The intent of a Customs Service redelivery notice is not
necessarily to require immediate return of the shipment to the port-of-
entry. Rather, the redelivery notice serves as a notice to the importer
that the lot must be either: (1) Brought into compliance with program
requirements within the number of days specified on the redelivery
notice, or (2) returned to the port-of-entry. During the redelivery
period, the importer may recondition a failing lot in order to bring
the lot into compliance with regulatory requirements. This option was
not clearly stated in the proposed rule.
The Department has been informed that it may establish a redelivery
period which is longer than the 30 days specified in the proposal.
Therefore, to enable importers more opportunity to meet the
requirements of this regulation, the Department is extending the
redelivery demand period from 30 days to 60 days. Customs Form 4647
(``Notice to Mark and/or Notice to Redeliver'') is issued by the
Customs Service at the request of AMS. A 60 day redelivery period
should be entered by the Customs Service under item 15 on the form.
Thus, an importer has as long as 90 days to move an imported peanut lot
through the peanut handling process. By the end of the redelivery
period, the importer must submit certifications to AMS that the lot
either: (1) Meets requirements for human consumption; (2) is disposed
to one or more non-edible peanut outlets; (3) is destroyed under
supervision of the inspection service and Customs Service; or (4) is
exported out of the U.S. Alternatively, the importer must redeliver the
peanuts to the port-of-entry pursuant to the redelivery notice.
An exception to this rule may be applied to cleaned-inshell peanuts
that are conditionally released for movement to an inland facility for
outgoing inspection. As stated in the proposed rule, such cleaned-
inshell peanut lots must proceed directly to the outgoing inspection
and may not undergo any cleaning, drying or sorting prior to outgoing
inspection. During outgoing inspection, if AMS determines that the
peanut lot sampled and graded is a farmers stock lot which has been
mislabeled or misrepresented as cleaned in-shell peanuts, the lot is
considered as ungraded farmers stock peanuts and must be sent to
incoming inspection or redelivered to the port-of-entry. Such lots, if
determined to be Segregation 1 quality at incoming inspection, can then
be cleaned, dried, sorted and otherwise prepared for outgoing
inspection as cleaned-inshell peanuts.
The importer must notify both the Customs Service and the AMS that
an outstanding lot has been certified as meeting disposition
requirements of these regulations, destroyed or exported. Failure to
meet these requirements or redeliver the peanut lot can result in
liquidated damages up to three times the value of the product.
The Department also wishes to reiterate that the above import
procedure is not the only procedure available to importers. Importers
can avoid the 23-day reporting requirement by holding shelled and
cleaned-inshell shipments under Customs Service custody until the
peanuts are sampled, tested and certified as meeting requirements for
human consumption. This should be possible with containerization of the
shipment that allows for sampling by the inspection service and storage
while under Customs Service custody.
The Customs Service requires (19 CFR part 141.5) that lots so held
must be entered within 5 working days after arrival at the port. Thus,
it is important that the peanut shipment be sampled and the samples
sent for outgoing quality inspection and chemical analysis as soon as
possible after unloading. Using overnight mail services and fax
transmissions, the importer should be able to obtain grade and
aflatoxin content certificates within 2 or 3 days. If certified as
meeting import requirements for human consumption, such peanuts do not
have to be reported to the Department and are not subject to further
handling requirements of this regulation. As stated in the proposed
regulations, shipments moved inland under Customs Service custody and
held in bonded warehouses are not considered as entered by the Customs
Service. Thus, the time under Customs Service custody will not be
counted against the 23-day reporting period.
One commenter questioned how the time frames relate to the stamp-
and-fax procedure and receipt of aflatoxin analyses. For all imported
shipments, it is incumbent on the importer to plan ahead by contacting
the inspection service offices where sampling and grading will take
place and the aflatoxin lab where the analysis will be conducted. The
stamp and fax procedure should take place before arrival of the
shipment. As noted above, the 23-day reporting period begins when the
shipment is released from Customs Service custody, whether at the port-
of-entry or inland after movement and storage under Customs Service
custody. Samples can be taken, inspections performed, and results
reported back to the importer within 2 or 3 days. Extra demurrage
charges at a port-of-entry would be less likely if the importer or
customs broker makes proper preparations prior to the arrival of a
shipment.
The Customs Service suggested that two definitions in paragraph (a)
be changed to be consistent with terminology used by Customs. The
Department has revised definitions for ``importation'' and
``conditionally released'' and has made conforming
[[Page 31309]]
changes throughout this final rule to be consistent with the new
definitions. In the proposed rule, the term ``importation'' was defined
to mean release from custody of the Customs Service. That definition
referred to peanuts after arrival and release by the Customs Service
for inland movement. To make the term consistent with Customs Service
operations, and for the purposes of this peanut import regulation, the
term ``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.
``Conditionally released'' was defined in the proposed rule to mean
peanuts released under bond for consumption or withdrawal from
warehouse for consumption. This definition did not describe the reason
for release. For the purposes of this import regulation, ``conditional
release'' means released from Customs Service custody for further
handling (sampling, inspection, chemical analysis, or storage) before
liquidation (final release after computation of applicable duties) by
the Customs Service of the imported peanut lot.
After receiving information from a Customs Service port-of-entry
officer, the Department has made an additional relaxation that could
reduce the filing burden on importers. The proposed rule stated that
one Customs Service entry document must be filed for each peanut lot
entered. However, one entry document may encompass several lots. Each
lot must be separately identified on the entry document to allow for
appropriate monitoring and clearance. For example, a shipment of
500,000 pounds of shelled peanuts in 10 containers can be entered on
one entry document as 10 lots of one container per lot; 5 lots of two
containers per lot; 3 lots of 200,000 and 200,000 and 100,000 pounds
per lot, or other variations. Subdivision of a large shipment is a
decision for the importer, working cooperatively with the Customs
Service and the inspection service at the port-of- entry. Paragraph (g)
has been changed accordingly.
Two commenters pointed out that the proposed rule did not provide
for changes in lot weight, especially after remilling or cleaning of a
failing lot. The Department acknowledges potential difficulty in
accounting for the total weight of a very large lot which may be
shelled and reconditioned several times. However, the Department
believes that the accepted percentage for the weight of shells in the
shelling process plus the combined weight of resultant sublots and
residuals should account for the total weight of the original lot. The
Customs Service and the inspection service both recognized that inshell
peanuts are 65 percent kernel weight and 35 percent shell weight.
Further, the lot identification procedures of the inspection service
identify the weight of the certified lot. Thus, when an importer
reports disposition of a lot that has been reconditioned, the report
must include inspection and lot identification certificates on all
sublots--both edible and non-edible residuals--resulting from remilling
or blanching.
One commenter offered three recommendations that the Department has
included in this final rule. The commenter correctly stated that, under
the Agreement, in addition to shelling, failing cleaned-inshell lots
may be remilled by running the inshell peanuts through inshell milling
two or more times to remove moldy, damaged, moisture laden peanuts, and
foreign material that prompted the failing certification. However, as
noted above regarding reconditioning of cleaned-inshell peanuts,
reconditioning may not be conducted if the inspection service
determines that the failing peanuts are farmers stock peanuts and not
cleaned-inshell peanuts. Such lots are considered to be mislabeled and,
therefore, subject to redelivery without reconditioning.
The commenter also pointed out that destroying failing peanuts by
burying must be carried out under the supervision of the inspection
service. Finally, he pointed out that under the Agreement, Segregation
2 and 3 farmers stock peanuts which are shelled before exportation,
must first also be fragmented. This requirement is a safeguard against
such peanuts being diverted to human consumption outlets. Therefore
these changes have been made in the final rule.
A commenter pointed out two places in the preamble of the proposed
rule where positive lot identification provisions could be inserted to
ensure positive lot identification of failing peanut lots. The
commenter also suggested that a definition for positive lot
identification be added to the final rule. While the Department agrees
with the need to ensure lot identification on all imported lots, it
also understands the great burden that 'positive' lot identification
could place on importers--particularly for large shiploads of peanuts.
Positive lot identification involves an inspection service seal or tag
that clearly identifies the peanuts covered by the seal or tag--which
is affixed in such a way that the peanut container cannot be tampered
with without destroying the seal or tag. Because of the size of some
imported shipments (up to 200,000 pounds), or because of the multiple
containers or bags used for such lots, it would be impractical to
require that a seal be placed or tag be sewed onto every container or
bag of such large shipments at the port-of-entry. For this reason, a
definition of positive lot identification was not included in the
proposed rule. This does not mean, however, that lot identity is not as
important under the import regulation as it is under the Agreement.
Each imported lot must be lot identified in such a way as to clearly
distinguish the peanuts in the lot, but not necessarily require tags on
individual bags or plastic wrap around an entire lot. Arrangements for
lot identification should be made with the inspection service and
Customs Service officers at the port-of-entry. Such arrangements can be
tailored for the particular circumstances of each imported lot. Lot
identification requirements of this rule should provide no less
assurance of positive lot identity than is provided under the Agreement
for domestically produced peanuts.
The commenter's suggestion that positive lot identification be
placed on failing lots is accepted by the Department. This final rule
makes the identification procedures for failing residual peanuts more
precise by establishing that residual peanuts resulting from the
reconditioning, remilling or blanching of a failing imported lot must
be positive lot identified. At this point in the handling process,
residual peanuts from a milling process are capable of being handled
the same as domestically produced peanuts--and therefore, should be
subject to the same positive lot identity labeling requirements (such
as sewing tags on bags or stamping individual containers of failing
peanuts) that are required for domestically produced failing peanuts.
Clarifying sentences are added to paragraphs (c)(3) and (g)(2)
requiring positive lot identification of residual lots.
Several commenters addressed the proposed provision which states
that superior quality shelled peanuts do not have to be tested for
aflatoxin prior to shipment for human consumption. Two addressed the
dangers of aflatoxin contamination in food products and recommended
that aflatoxin testing be required on all peanut lots imported into the
United States.
Under the Agreement, all domestically produced, shelled peanuts
intended for human consumption use must meet specified minimum quality
requirements found in the Agreement's ``Other Edible Quality'' table
and must
[[Page 31310]]
undergo chemical analysis for aflatoxin content prior to shipment for
human consumption. Other edible quality grade is referred to as minimum
grade in this import regulation. Further, the Agreement provides that
peanuts which meet the higher quality requirements found in the
``Indemnifiable Grades'' table do not need to undergo such chemical
analysis. Indemnifiable grade is referred to as superior grade in this
import regulation.
One commenter referred to paragraph (l)(3) of section 998.300
``Terms and Conditions for Indemnification'' as a requirement for
aflatoxin analysis. However, this section of the Agreement refers to
indemnified lots and has no relevance to imported peanuts as those
peanuts cannot be indemnified under the Agreement.
One commenter, while recognizing that the superior grade peanuts do
not have to be tested for aflatoxin, suggested that uncontrolled
temperature, humidity, and moisture could degrade the condition of a
peanut lot during shipment. Therefore, the commenter recommended that
all imported peanuts, even those that meet ``Superior Quality
Requirements'' upon arrival in the U.S., should be chemically tested
for aflatoxin content. Imported peanut lots which are not properly
packaged or handled during shipment and are degraded or otherwise
damaged as a result, would most likely fail ``Superior Quality
Requirements'' and would be subject to aflatoxin analysis. Therefore,
the recommendation is denied.
One commenter asked whether the regulations in the proposed rule
represented an overlap of responsibility between the Department and FDA
with regards to the methodology used for sampling and testing peanut
shipments and the enforcement of test results. As stated in the
proposed rule, this rule does not supersede laws or requirements of
other Federal government agencies. Thus, this rule does not prevent FDA
from inspecting imported peanut shipments, should it choose to do so.
The Department has initiated a Memorandum of Understanding with FDA to
minimize possible duplication of inspections.
Three commenters recommended that the implementation of the
regulation be delayed. Two suggested that because some members of the
Agreement wish to amend the regulations regarding the handling of
farmers stock peanuts, it would be better to delay implementation of
the import regulation until such a change, if approved by the
Secretary, is implemented. They commented that such delay would avoid
confusion regarding applicable import requirements. One commenter
complained that some peanut shipments are already in transit to the
United States and should not be held to requirements established after
departure of the shipment. Because of concerns such as these, the
Department has decided to make this rule effective 30 days after the
date of publication in the Federal Register. Since the rule was first
proposed on February 1, 1996, importers should have ample time to
prepare for its implementation.
As noted in the proposed rule, whenever the quality requirements
and handling procedures are changed in the Agreement, the same or
equivalent changes will be made in the quality requirements and
handling procedures of this import regulation.
In preparing for implementation of this regulation, the inspection
service has issued instructions to its field offices which will receive
and collect the samples of imported peanut shipments. To reduce the
possibility of split kernels caused in the sampling process, special
instructions have been issued for collecting the samples from bags.
While no comments were received regarding this issue, the Department
wants the industry to be aware that precautions have been taken to
avoid causing defects in lots during the handling. The same procedures
are followed when sampling domestically produced peanuts presented in
bags.
Several minor corrections and clarifications also are made to
correct references to paragraphs in the regulatory text and clarify
procedures presented in the proposed rule. The changes are based on
comments received and on the Department's review of the published
proposed rule.
Customs Service Entry Requirements and USDA Safeguard Procedures
Importer obligations include filing documents notifying the Customs
Service and the Department of different actions taken concerning
foreign produced inshell and shelled peanuts. Customs Service
importation procedures and requirements are set out in title 19 of the
Code of Federal Regulations (19 CFR). The Customs Service regulations
applicable to peanut handling and processing include, but are not
limited to: bond requirements (19 CFR part 113); transfer from port-of-
entry to another Customs Service office location (19 CFR part 112);
entry of merchandise for consumption (19 CFR part 141); warehouse
entry, and withdrawal from warehouse for consumption (19 CFR part 144);
establishment of bonded warehouses (19 CFR parts 19.13 and 19.2); and
manipulation in bonded warehouses (19 CFR part 19.11); transfer of
ownership (19 CFR parts 141.113 and 141.20); failure to recondition (19
CFR part 113.62(e); and redelivery of merchandise 19 CFR part
113.62(d). For purposes of this regulation, the term ``consumption''
means ``use in the United States.'' Customs Service entry procedures
are not superseded by this import regulation.
Foreign produced peanuts may be entered for ``warehouse'' or
entered for ``consumption,'' or may be transported to another Customs
Service port-of-entry to be entered there for warehouse or consumption.
Peanuts transported from one Customs Service port-of-entry to another
Customs Service port-of-entry must be transported by a carrier
designated by the Customs Service under 19 U.S.C. 1551. Peanuts entered
for warehouse are stored in a Customs Service bonded warehouse. Such
peanuts remain in Customs Service custody until they are withdrawn from
warehouse, or entered, for consumption--and are released from Customs
Service custody. Peanuts entered for consumption, or withdrawn from
warehouse for consumption, are released conditionally, pending
certification that the peanuts meet the handling and quality
requirements of this regulation and conform to Customs Service entry
requirements. The Customs Service can demand redelivery of peanuts that
fail these requirements.
The importer, or import broker acting on behalf of the importer, is
required to file with the Customs Service required entry documentation
for each foreign produced peanut shipment to be entered. More than one
lot can be filed on one entry document. Under safeguard procedures
established in this rule, each importer is also required to file
completed entry documentation (Customs Form 3461 or other equivalent
form) with the inspection service office that will perform the sampling
of the lot for inspection to provide that office with advanced notice
of requested inspection. The entry documentation may be filed by mail
or facsimile transmission (fax). The filing should occur prior to
arrival of the shipment at the port-of-entry in order to expedite entry
procedures. The inspection service office will stamp, sign, and date
the entry document and return it to the importer or broker by fax or
mail. The importer/broker will then submit the stamped copy to the
Customs Service. This ``stamp-and-fax'' procedure is similar to a
procedure in place for other imported agricultural commodities under
AMS jurisdiction. Failure to show the Customs Service a copy of the
entry
[[Page 31311]]
documentation stamped by the inspection service will result in a delay
or denial of entry of a peanut lot. The importer/broker must also mail
or fax a completed copy of the document to AMS to initiate the
Department's monitoring process.
The location and telephone numbers of inspection service offices
that perform peanut sampling and/or grade inspections are provided in
paragraph (d)(3) of this rule. Inspection service offices at other
locations may be contacted to sample the imported peanut lot. In such
cases, the collected peanut samples will be shipped to an inspection
service office which has equipment and personnel qualified to perform
grade inspections. Samples of lots meeting minimum grade requirements
will also be sent to an approved laboratory (listed in paragraph
(d)(4)) for aflatoxin analysis. The lot will have to remain in storage
pending grade and aflatoxin certification.
It is the importer's responsibility to provide, in the mailed or
faxed documentation, sufficient information to identify the peanut lot
being entered and to ensure that arrangements are made for sampling and
inspection. The information will include the container identification,
weight of the peanut lot, the city, street address, and building number
(if known) receiving the peanut lot, the requested date and time of
inspection, and a contact name or number at the destination. If the
destination is changed from that listed on the stamp-and-fax document,
it is the importer's responsibility to immediately advise inspection
service offices at both the original destination and the new
destination of such change. Shipments which are not made available
pursuant to the entry document, or are not properly displayed for
sampling purposes, will be reported to the Customs Service.
Falsification of reports submitted to AMS is a violation of Federal
law punishable by fine or imprisonment, or both.
A bond secured by surety or U.S. Treasury obligations is required
to be posted by the importer with the Customs Service to guarantee the
importer's performance. Peanuts can be determined inadmissible because
the importer failed to follow Customs Service importation procedures,
the peanuts failed to meet quality requirements, or because the
handling procedures (including lot identification and certification)
specified in this regulation were not followed.
Redelivery will be demanded for failure to comply with the quality,
handling, and reporting requirements of this import regulation,
including: arrival at the inland destination with a broken Customs
Service or inspection service seal; failure to maintain lot identity;
mislabeling of the peanuts being imported; failure to receive required
inspection; commingling of peanut lots not of like quality or
condition; disposition of non-edible peanuts to an edible peanut outlet
or an improper, non-edible peanut outlet; and failure to fully report
the disposition of foreign produced peanuts. Disposition reports will
include grade, aflatoxin, and identification certifications and bills
of lading, sales receipts, and other documentation showing the peanuts
were disposed to a non-edible peanut outlet, exported, or destroyed.
Following Customs Service regulations, a redelivery demand must be
issued by the Customs Service within 30 days of Customs Service entry
of the peanuts--if the peanuts are not certified as meeting
requirements of this import regulation. Because the Customs Service
requires one week to prepare and issue a redelivery demand notice, this
import rule establishes that importers must report disposition of lots
of peanuts to AMS within 23 calendar days of the date of entry.
Although a 23-day reporting deadline may be considered burdensome by
some, the deadline is necessary because of the Customs Service 30-day
notification requirement.
If an importer has difficulty meeting edible consumption
certification or completing necessary shelling, remilling, or other
reconditioning by the 23rd day after entry, the importer should notify
AMS of such difficulty. If the importer fails to so notify AMS, or
fails to report necessary certification, AMS will request the Customs
Service to issue a redelivery demand for the out-of-compliance lot.
As covered above, after receiving a notice of redelivery, the
importer may continue to try to recondition the failing lot or
redeliver the failing lot to the port-of-entry. The redelivery notice,
in effect, provides an additional 60 days, from the date of issuance,
for the importer to comply with requirements of this import regulation.
The exception to this is for peanuts labeled as cleaned-inshell which
are determined by the inspection service to be unprepared farmers stock
peanuts. Such peanuts must be redelivered immediately and may not be
reconditioned.
If the importer is unable to meet these import requirements by the
end of the 60-day redelivery period, the importer may request an
extension of the period from the Customs Service. The Customs Service
may authorize an appropriate extension for good cause. The importer is
responsible for reporting any such extension to AMS.
When moving a conditionally released lot inland, the importer will
cause a copy of the entry documentation applicable to the peanut lot to
be forwarded with the peanuts to the lot's inland destination. If the
shipment is sealed by Customs Service or the inspection service, the
seal must remain intact and can be broken only by an authorized
official at the destination point.
The identification requirements in this regulation are similar to
the Agreement's lot identification requirements. Lot size is limited to
200,000 pounds to comply with Agreement requirements and sampling
provisions of the inspection service. Boatload shipments exceeding
200,000 pounds must be entered as two or more lots, but may be entered
under one Customs Service entry document. For instance, five containers
averaging 40,000 pounds each (the domestic industry standard) may be
entered as five lots on one entry document. Lot size and identification
arrangements must be made consistent with the port-of-entry inspection
service office requirements and should be established cooperatively
between the inspection service, Customs Service offices and the
importer at the port-of entry. This will facilitate subsequent lot
identification, inspection, and reporting of large imported shipments.
Foreign produced peanuts placed in storage may be commingled only
with like-quality, foreign produced peanuts belonging to the same
importer. Similarly, failing quality peanuts may be commingled with
other such foreign produced peanuts prior to clean-up or non-edible
disposition. Reports certifying disposition of all peanuts in the
commingled lot must be filed within 23 days of Customs Service entry of
the earliest-entered lot commingled, or, if a redelivery notice is
issued on the earliest entered lot, within the 60-day redelivery period
for that lot. The remaining commingled peanuts must be withdrawn,
inspected, properly disposed, and reported before the end of that 60-
day redelivery period. If necessary, the importer may request that
Customs Service extend the redelivery period for the remaining peanuts
in the commingled lot.
The objective of the lot identification requirements is to help
ensure that individual peanut lots are disposed as required and that
defects in poor quality peanut lots are not blended out by commingling
poor quality peanuts with higher quality peanuts. The lot
identification requirements in this
[[Page 31312]]
import regulation are similar to positive lot identification
requirements specified for domestically produced peanuts. Positive lot
identification involves a Federal or Federal-State Inspection Service
seal or tag that clearly identifies the peanuts covered by the seal or
tag, and which is affixed in such a way that the peanut lot cannot be
tampered with, without destroying the seal or tag. Because of the size
of some imported shipments (up to 200,000 pounds) it would be
impractical to have a seal or tag sewed onto every bag or container in
such a lot. Thus, an imported lot may be lot identified in such a way
as to clearly distinguish the peanuts in the lot, but not require tags
on individual bags or plastic wrap around the entire lot. However,
residual sublots resulting from the reconditioning, remilling or
blanching of a failing lot must be positive lot identified, consistent
with the provisions of lot identification provisions of the Agreement.
All USDA required sampling, quality certification, and lot
identification must be conducted by the inspection service. Chemical
analysis must be conducted by a USDA or an approved laboratory. Foreign
produced peanuts stored in bonded warehouses are subject to Customs
Service audits. Importers will reimburse the inspection service,
laboratories, and the Customs Service for services provided and costs
incurred with regard to the entry of the importer's peanuts.
Depending on condition (shelled or cleaned-inshell) and
containerization, foreign produced peanuts may be either: (1) Sampled,
inspected, and held in a Customs Service bonded warehouse at the port-
of-entry until certified by the inspection service as meeting the
edible quality requirements of this rule; or, (2) conditionally
released at the port-of-entry and entered under Customs Service entry
procedures for later inspection and certification.
Under option (1), foreign produced shelled or cleaned-inshell
peanuts which are cleaned, sorted, sized, and otherwise prepared for
edible consumption prior to importation, are sampled at the port-of-
entry. The importer must present such peanuts in containers or bags
that allow appropriate sampling of the lot pursuant to inspection
service requirements. After sampling, such lots are held at the port-
of-entry, under lot identification requirements of the inspection
service, pending results of the inspection and chemical analysis.
Depending on location of the port-of-entry, portions of the samples are
sent to an inspection service inspection facility for grade inspection
and to an aflatoxin laboratory for chemical analysis. If determined to
meet the applicable edible quality requirements in paragraph (c) of
this rule, the shelled or cleaned-inshell peanuts may be entered for
consumption without further inspection. Reports of such entries do not
have to be filed with AMS because the lots cleared all requirements
while under Customs Service custody.
Such shelled or cleaned-inshell peanuts, sampled and held at the
port-of-entry, which fail edible quality requirements may, at the
importer's discretion, be: (1) re exported; (2) entered for
reconditioning, and if satisfactorily remilled or blanched, certified
for edible consumption; or (3) entered for non-edible consumption.
Failing peanuts that are re-exported do not have be reported to AMS
because the peanuts were not entered into the U.S. The importer must
file certifications which report all actions taken on each lot entered
for reconditioning or non-edible consumption. Such certifications must
be reported within 23 days of entry, or, if a redelivery notice is
issued, within the 60-day redelivery period.
Under option (2), shelled and cleaned-inshell peanuts which are
cleaned, sorted, sized, and otherwise prepared for edible consumption
prior to importation, may be entered and transported inland for
subsequent sampling, inspection, and certification. Farmers stock
peanuts also must be shipped inland for sampling and inspection because
specialized, farmers stock sampling facilities are not available at
ports-of-entry. Certifications reporting disposition of these lots must
be filed within 23 days of entry, or, if a redelivery notice is issued
on the lot, within the 60-day redelivery period.
Categories of Peanuts Submitted for Importation
Farmers Stock Peanuts
Such peanuts are required to undergo incoming inspection at a
prearranged buying point prior to arrival at a shelling or storage
destination. All required inspections, shelling, and dispositions of
farmers stock peanuts must be completed and reported within 23 days of
entry, or, if a redelivery notice is issued on the lot, within the 60-
day redelivery period.
Foreign produced farmers stock peanut lots cannot be commingled
with other peanut lots prior to incoming inspection. Incoming
inspection determines the quality of the farmers stock peanuts based on
moisture content, foreign material, damage, loose shelled kernels, and
visible Aspergillus flavus mold. The inspection service will issue USDA
form CFSA-1007, ``Inspection Certificate and Sales Memorandum''
(formerly ASCS-1007) designating the lot as either Segregation 1, 2, or
3 quality.
Only Segregation 1 peanuts can be prepared for human consumption
use. Such peanuts may be shelled or prepared for cleaned-inshell use.
For quality control and reporting purposes, Segregation 1 lots intended
for human consumption outlets may be commingled only with other like
quality peanuts of the same importer. A Segregation 1 lot which is
commingled with Segregation 2 or 3 peanuts must assume the lower
Segregation 2 or 3 quality and must be disposed as non-edible quality
peanuts.
Foreign produced farmer stock peanuts received by importers and
determined at incoming inspection to be Segregation 2 and 3 quality
peanuts must be disposed only as non-edible peanuts. Segregation 3 and
commingled Segregation 2 and 3 farmers stock peanuts may be exported
inshell or exported shelled if fragmented prior to export. Segregation
2 and 3 peanuts also may be destroyed by burying (under inspection
service and Customs Service supervision) or exported (certified by
Customs Service). The importer must report non-edible disposition by
providing a copy of the incoming inspection certificate, bills of
lading and sales receipts, or other official certifications as proof of
disposition to crushing, exportation, other non-edible outlets, or
burying. Segregation 2 and 3 peanuts that are exported must be lot
identified by the inspection service and certified as exported by the
Customs Service. Certification of non-edible disposition or export must
be filed with AMS within 23 days of entry, or, if a redelivery notice
is issued, within the 60-day redelivery period. Customs Service re-
export procedures must be followed.
Foreign produced Segregation 2 and 3 quality peanuts may be shelled
by a custom seed sheller for seed use and, if so disposed, such peanuts
must be dyed or chemically treated so as to be unfit for human or
animal consumption. Domestically produced Segregation 2 and 3 peanuts
shelled for seed need not be dyed or treated but must be produced under
the auspices of a State agency, shelled by a custom seed sheller, and
subject to PAC oversight. Measures such as these are necessary to
ensure that peanuts used for human consumption are safe and wholesome.
Proof of dyeing or chemical treatment of foreign produced peanuts must
be filed with AMS within 23 days of entry, or, if a
[[Page 31313]]
redelivery notice is issued on the lot, within the 60-day redelivery
period.
Foreign produced farmers stock peanuts do not qualify for the
support program administered by the Department's Farm Service Agency,
formerly the Agricultural Stabilization and Conservation Service.
Shelled peanuts: Foreign produced shelled peanuts may: (1)
Originate from foreign produced Segregation 1 farmers stock milled at
facilities in the U.S., or (2) be peanuts produced and milled in
another country which are conditionally released at the port-of-entry
for inland sampling and inspection. Both categories of shelled peanuts
must be sampled and inspected against outgoing quality requirements
specified in paragraph (c) of this regulation.
Domestically produced shelled peanuts intended for edible markets
must originate from farmers stock peanuts which have undergone incoming
inspection and are determined to be of Segregation 1 quality. AMS
cannot determine whether peanuts produced and shelled in a foreign
country originated from Segregation 1 quality peanuts prior to
shelling. However, because outgoing inspection and chemical analysis is
more reliable and precise in determining aflatoxin content in peanut
kernels, this import regulation provides that peanuts shelled prior to
importation are exempt from incoming inspection before delivery for
outgoing inspection. Such shelled peanuts must be sampled and tested
against outgoing quality requirements prior to disposition to edible
outlets.
Two grade levels for shelled peanuts are in effect under the
Agreement and are established in this import regulation. The Agreement
provides that shelled peanut lots meeting the quality requirements
specified in a table entitled ``Other Edible Quality,'' under paragraph
(a) of Sec. 998.200, must be chemically analyzed for aflatoxin content
prior to disposition to edible outlets. The quality requirements
specified in the Other Edible Quality table are duplicated in ``Table
1, Minimum Grade Requirements--Peanuts for Human Consumption'' of this
import regulation. The outgoing quality requirements also include a
parts-per-billion tolerance for aflatoxin, determined by chemical
analysis.
The Department has corrected an entry in Table 1. Minimum Grade
Requirements'' as published in the proposed rule. Under the ``Lots of
splits'' category, the cite for Virginia peanuts should read ``Virginia
(not less than 90% splits).'' The proposed rule incorrectly stated not
more than 90%.
Aflatoxin appears most frequently in damaged, stressed, under-
developed and malformed kernels. Domestic lots with fewer poor quality
kernels are less likely to be contaminated and, thus, do not have to be
chemically tested. The Agreement's ``Indemnifiable Grades'' table in
paragraph (a) of Sec. 998.200, provides for a superior quality level
with more rigorous percentage tolerances than those found in the Other
Edible Quality table. Foreign produced shelled lots meeting the
superior quality standards do not have to be chemically analyzed prior
to their disposition for human consumption. The quality requirements
specified in the ``Indemnifiable Grades'' table are duplicated in
``Table 2 Superior Quality Requirements--Peanuts for Human
Consumption'' of this rule.
Paragraph (c)(4) of Sec. 998.200 provides that peanuts are
considered edible quality if the chemical assay shows the lot contains
15 ppb or less of aflatoxin. Thus, the level of aflatoxin in foreign
produced peanut lots intended for edible peanut markets must not exceed
15 ppb. Consistent with paragraphs (c)(4) and (g)(3) of Sec. 998.200,
non-edible quality peanut lots with 25 ppb or less must be disposed to
certain non-edible peanut outlets. Disposition of non-edible quality
peanut lots with aflatoxin exceeding 25 ppb must be further restricted
to certain other non-edible peanut outlets. The sampling, testing,
certification and identification of foreign produced peanut lots must
be performed in accordance with paragraph (d)(4) of this rule.
Chemical testing is performed by an AMS, Science and Technology
Division laboratory or a laboratory approved by the PAC. The PAC
locally administers the Agreement with Department oversight. A list of
approved laboratories is provided in paragraph (d)(4)(iv) of this
regulation. These are the same laboratories specified in the Agreement
and any changes to the list will be incorporated in this section.
Thus, to obtain approval for human consumption use of a foreign
produced shelled peanut lot, the importer must present to AMS and the
Customs Service two certifications: (1) Quality certification Form FV-
184-9A ``Milled Peanut Inspection Certificate'' and (2) aflatoxin
certification Form CSSD-3 ``Certificate of Analysis for Official
Samples'' issued by USDA laboratories, or equivalent forms issued by a
PAC approved lab. An aflatoxin certificate is not required if the lot
meets the superior grade requirements, but may be required by the
buyer. The certificates are the same as those used to report grade and
chemical analysis results for domestically produced peanuts. The
required certificates must be received by AMS within 23 days of entry,
or, if a redelivery notice is issued, within 60 days of the redelivery
notice.
Cleaned-Inshell Peanuts
Inshell peanuts that have been cleaned, sorted, and prepared in
another country for edible inshell peanut markets in the U.S. may be
presented for importation at the port-of-entry. Such peanuts can be
declared as cleaned-inshell peanuts on the Customs Service entry
document and can either be presented for outgoing inspection at the
port-of-entry, if delivered in bags and presented is such a way as to
be accessible for sampling by the inspection service, or conditionally
released for outgoing inspection at a facility inside the U.S. Because
the Department is unable to determine if foreign produced cleaned-
inshell peanuts come from Segregation 1 peanuts, peanuts declared as
cleaned-inshell on a Customs Service entry document must not undergo
additional cleaning, sorting, sizing, or drying prior to outgoing
inspection at the destination point inside the U.S.
Cleaned-inshell lots that fail outgoing inspection for inshell
peanuts may be reconditioned (remilled) and subsequently sampled and
graded for outgoing inspection. If there is any indication that an
imported farmers stock lot is mislabeled or misrepresented as cleaned-
inshell peanuts when entered, redelivery of the lot will be required
and the lot may not be reconditioned prior to redelivery to the port-
of-entry.
Cleaned-inshell peanut lots destined for edible peanut markets are
required to meet certain minimum quality inshell requirements for
damage, moisture and foreign material. Cleaned-inshell lots containing
more than 1 percent kernels with visible mold have to be chemically
tested and meet minimum aflatoxin requirements. The cleaned-inshell
quality requirements specified in paragraph (c)(2) of this rule are the
same as the quality requirements in paragraph (b) of Sec. 998.200 of
the Agreement.
Foreign produced farmers' stock Segregation 1 peanuts also can be
prepared and presented at outgoing inspection as cleaned-inshell
peanuts. Such peanuts inspected and certified as meeting grade
requirements for edible cleaned-inshell peanuts must be designated as
imported peanuts on inspection service form FV-184-9A. The importer
must file form FV-184-9A with AMS for each lot of foreign produced
cleaned-inshell peanuts
[[Page 31314]]
meeting edible quality requirements for cleaned-inshell peanuts.
Imported peanuts certified as meeting edible requirements can be
used any way desired. Only after shelled and cleaned-inshell peanuts
are certified as meeting applicable requirements can such peanuts be
commingled with imported lots of other importers or domestically
produced peanuts which also have been certified for human consumption.
Disposition of Failing Peanuts
The following peanuts cannot be used for human consumption: (1)
Farmers' stock peanuts that grade either Segregation 2 or Segregation
3; (2) cleaned-inshell and shelled peanuts that fail outgoing quality
and/or aflatoxin requirements and are not reconditioned or reworked
(the removal of defective kernels); and (3) below grade residue from
any shelling, milling or blanching operations.
Cleaned-inshell lots that fail outgoing inspection requirements of
paragraph (c)(2) can be reconditioned by remilling the peanuts, which
can include shelling. If shelled or remilled, the peanuts must meet
outgoing requirements of paragraph (c)(1) for shelled peanuts or (c)(2)
for inshell peanuts.
Failing lots of shelled peanuts, which originated from Segregation
1 peanuts, can be reconditioned following procedures established in
paragraph (f) of this rule. These provisions are the same as those
established under various provisions of the Agreement. Segregation 1
shelled peanuts which fail quality requirements in Table 1 and/or
exceed 15 ppb aflatoxin content can be reconditioned by remilling and/
or blanching and, when subsequently reinspected and certified as
meeting edible quality and aflatoxin requirements, can be disposed to
edible peanut outlets. If not reconditioned, failing Segregation 1 lots
must be disposed to non-edible peanut outlets as unrestricted or
restricted peanuts as described below.
Provisions controlling the disposition of residue peanuts from
inshell remilling and shelled remilling and blanching that continue to
fail edible quality requirements are also provided in this rule. Two
categories of non-edible peanuts are specified under the Agreement--
``unrestricted'' and ``restricted.'' The designation is based on the
amount of aflatoxin detected in the lot. ``Unrestricted'' peanuts are
peanuts which fail one or more quality requirements and, when
chemically assayed, contain more than 15 ppb but 25 ppb or less
aflatoxin. While such peanuts are of non-edible quality, they can be
crushed for oil, exported or used in animal feed, provided that certain
handling and container labeling requirements are followed. Unrestricted
peanuts also can be used for seed (if dyed or treated to prevent edible
use), crushed for oil, exported, or buried. Meal resulting from the
crushing of unrestricted peanuts does not have to be tested a second
time for aflatoxin content. Disposition of meal resulting from the
crushing of peanuts is not regulated under the Agreement or this
regulation.
Peanuts containing more than 25 ppb aflatoxin are designated as
``restricted'' peanuts. Restricted peanut lots may or may not meet
quality requirements of Table 1. At the direction of the importer,
restricted peanut lots must be used either for seed (if dyed or
treated), crushed for oil, destroyed by burying (under supervision of
the inspection service), or exported. Meal resulting from the crushing
of restricted peanuts must be certified as to aflatoxin content and
such certification must accompany the meal into the channels of
commerce.
The importer can dispose of a failing peanut lot directly to a non-
edible peanut outlet or set aside and commingle several failing lots
for eventual disposition to one or more non-edible outlets. Commingled
failing quality peanuts must be held separate and apart from edible
peanuts and identified with red tags indicating non-edible peanuts.
Eventual disposition must be to non-edible peanut outlets consistent
with the failing quality of the peanuts, pursuant to paragraph (e) of
this rule.
If an importer chooses to destroy unrestricted or restricted
peanuts by burying, the peanuts must be lot identified and disposition
must be reported to AMS. The importer must provide inspection service
and Customs Service certification if a lot is buried, or a Customs
Service export declaration if a lot is exported. Customs Service
procedures controlling re-exported merchandise must also be followed by
the importer. Burying and exportation expenses are borne by the
importer.
It is the importer's responsibility to file inspection certificates
and other documentation sufficient to account for disposition of all
failing quality peanuts acquired by the importer. Such proof consists
of copies of bills of lading and sales receipts between the importer
and non-edible peanut outlet receivers. The documentation must contain
identifying information, such as container or lot numbers, that tie the
peanuts reported on the documents to failing quality peanuts on
inspection service or aflatoxin certificates. The name and address of
the non-edible peanut receiver and valid contact information must also
be specified on the documentation.
Disposition of unrestricted and restricted peanut lots must be
reported to AMS within 23 days of filing for entry with the Customs
Service, or, if a redelivery notice is issued, within the 60-day
redelivery period. As noted in above, disposition of unrestricted and
restricted peanut lots may be carried out and reported during the
redelivery demand period.
The inspection service identifies imported peanuts as peanuts of
foreign origin on the inspection certificate to assist in lot
identification. Foreign origin designations also help AMS meet its
monitoring responsibilities.
From time to time, the PAC may recommend to the Secretary that
quality requirements or handling procedures specified in the Agreement
be revised. If such changes are approved by the Secretary and
implemented for the domestic peanut industry in 7 CFR Part 998,
corresponding changes will be made in Sec. 999.600. Changes in
regulations for domestically produced peanuts are generally made
effective July 1. Thus, corresponding changes to the import regulation
will be made effective on that date, or as close to that date as
possible under informal rulemaking, unless otherwise specified in the
regulation. Quality requirements in effect on the date of inspection of
a foreign produced lot will be applied to the inspected lot.
Safeguard Procedures
This rule establishes a procedure to verify importers' compliance
with import requirements. The safeguard procedures provide for
monitoring of peanut lots from importation to final disposition. The
purpose of these procedures are to ensure that foreign produced peanuts
either meet edible requirements or are appropriately disposed to non-
edible peanut outlets, exported or destroyed. The safeguard procedures
are similar to safeguard procedures already in place for other imported
commodities and are consistent with the inspection, identification and
certification requirements applied to domestically produced peanuts
under the Agreement.
The safeguard process includes the ``stamp-and-fax'' entry
procedure, as already described, whereby the importer provides the
Customs Service with an entry document stamped by the inspection
service. The importer also files a copy of the entry document with AMS
and forwards a copy, with the released lot, to the inland destination
[[Page 31315]]
where the lot is to be inspected or warehoused. Edible certification
and non-edible disposition is reported by filing with AMS copies of all
grade certificates, aflatoxin certificates, and proof of non-edible
disposition. Such certifications must be filed within 23 days of filing
for entry, or, if a redelivery notice is issued, within the 60-day
redelivery period.
Failure to report or redeliver peanuts within applicable time
frames could result in liquidated damages against the importer.
Certificates and other supplementary documentation must be sent to
AMS, Marketing Order Administration Branch (MOAB) which oversees the
domestic peanut program and this import program. Facsimile or express
mail deliveries can be used to ensure timely receipt of certificates
and other required documentation. Overnight and express mail deliveries
should be addressed to the USDA, AMS, Marketing Order Administration
Branch, 14th and Independence Avenue, SW., Room 2525, Washington, DC
20250, Attn: Report of Imported Peanuts. The MOAB's fax number is (202)
720-5698, Attn: Report of Imported Peanuts.
For the purposes of checking and verifying reports filed by
importers and disposition outlets, this regulation provides that
importers must allow the Secretary, through duly authorized agents, to
have access to any premises where peanuts may be held and processed.
Authorized agents, at any time during regular business hours, are
permitted to inspect any peanuts held, and any and all records with
respect to the acquisition, holding or disposition of any peanuts which
may be held, or which may have been disposed by that importer.
USDA record retention requirements also are established to require
importers to retain information for at least two years beyond the year
of applicability. Customs Service record retention requirements are
longer.
The handling of each imported lot must be consistent with Customs
Service procedures and reported in accordance with normal Customs
Service requirements. Any Customs Service reporting or recordkeeping
requirements for disposition of imported merchandise or clearance of
bonding requirements are not superseded by this regulation.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C.
Chapter 35) as amended in 1995, the information and collection
requirements that are contained in this rule have been approved by the
Office of Management and Budget (OMB) on a temporary basis and have
been assigned OMB number 0581-0176. A 60-day period was established in
the proposed rule to receive comments on the information collection
requirements. All responses to the request for comments will be
summarized and included in the request for OMB approval. All comments
will become a matter of public record.
In addition to the reporting requirements, this rule establishes
that importers and customs brokers retain copies of all certifications
and entry documentation for not less than two years after the calendar
year of acquisition. This is a commonly accepted records retention
period and within good business practices. The time for maintaining
records by filing each document internally is included in the filing
estimate. The information collected is used only for compliance
purposes by personnel of the Department.
The reporting and recordkeeping requirements established in this
rule will enable the Department to oversee the entry of peanuts and
help ensure that only good quality, wholesome peanuts will be used in
edible peanut outlets in the U.S. Without the quality requirements
specified in the Agreement (7 CFR Part 998), regulations for non-
signatory handlers (7 CFR Part 997), and these regulations, poor
quality peanuts could more easily be entered into edible channels,
causing consumer dissatisfaction and having a negative impact on the
market for peanuts and peanut products. Compliance with these standards
help the peanut industry in its efforts to expand markets.
Although these requirements result in some additional costs for
importers, the benefits from restricting low quality peanuts from
edible markets outweigh any additional inspection, handling,
recordkeeping and reporting costs resulting from the requirements.
These requirements have been carefully reviewed and every effort has
been made to minimize any unnecessary reporting and recordkeeping
costs.
List of Subjects in 7 CFR part 999
Dates, Filberts, Food grades and standards, Imports, Nuts, Peanuts,
Prunes, Raisins, Reporting and recordkeeping requirements, Walnuts.
For the 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 is revised to read as
follows:
Authority: 7 U.S.C. 601-674; and 7 U.S.C. 1445c-3.
2. A new Sec. 999.600 is added to part 999 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 1 peanuts, unless otherwise specified, means
farmers stock peanuts with not more than 2 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 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 and
otherwise 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, and 25 ppb or less for non-edible quality peanuts.
(11) Person means an individual, partnership, corporation,
association, or any other business unit.
[[Page 31316]]
(12) Secretary means the Secretary of Agriculture of the United
States or any officer or employee of the United States 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 Division, Agricultural
Marketing Service, USDA.
(14) USDA laboratory means laboratories of the Science and
Technology Division, 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 Peanut Marketing Agreement
No. 146 (7 CFR Part 998), that chemically analyze peanuts for aflatoxin
content.
(16) Conditionally released means released from Customs Service
custody for further handling (sampling, inspection, chemical analysis,
or storage) before final release.
(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. Only Segregation 1
peanuts may be used for human consumption. 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) Seed
peanuts, 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.
(iv) Loose shelled kernels. Peanuts may not contain more than 14.49
percent loose shelled kernels, except that peanuts having a higher
loose shelled kernel content may be imported if held separately until
milled or shipped directly to a shelling facility for prompt shelling.
All percentage determinations shall be rounded to the nearest whole
number. Kernels which ride screens with the following or larger slot
openings may be separated from loose shelled kernels: Runner--\16/64\ x
\3/4\ inch; Spanish and Valencia--\15/64\ x \3/4\ inch; Virginia--\15/
64\ x 1 inch. If so separated, those loose shelled kernels which ride
the screens may be included with shelled peanuts prepared for
inspection and sale for human consumption: Provided, That no more than
5 percent of such loose shelled kernels are kernels which would fall
through screens with such minimum prescribed openings. Those loose
shelled kernels which do not ride the screens shall be removed from the
farmers' stock peanuts and shall be held separate and apart from other
peanuts and disposed of for non-edible use, pursuant to paragraph (e)
of this section. If the kernels which ride the prescribed screen are
not separated from the kernels which do not ride the prescribed screen,
the entire amount of loose shelled kernels shall be removed from the
farmers stock peanuts and shall be held separate and apart and disposed
of for non-edible use, pursuant to paragraph (e) of this section.
(2) Seed peanuts. Farmers stock peanuts determined to be
Segregation 1 quality, and shelled peanuts certified negative to
aflatoxin (15 ppb or less), may be imported for seed purposes.
Disposition of such peanuts to a seed outlet must be reported to the
Secretary by submitting a copy of the bill of lading or sales contract
which reports the weight of the peanuts so disposed, and the name,
address and telephone number of the receiving seed outlet. Residuals
from the shelling of Segregation 1 seed peanuts shall be held and/or
milled separate and apart from other peanuts, and such residuals
meeting quality requirements specified in paragraph (c)(1) of this
section may be disposed to human consumption channels, and any portion
not meeting such quality requirements shall be disposed to non-edible
peanut channels pursuant to paragraph (e) of this section. Segregation
2 and 3 peanuts may be shelled for seed purposes but must be dyed or
chemically treated so as to be unfit for human or animal consumption.
All disposition of seed peanuts and residuals from seed peanuts shall
be reported to the Secretary pursuant to paragraphs (g)(2) and (g)(3)
of this section. The receiving seed outlet must retain records of the
transaction, pursuant to paragraph (h)(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 as provided herein. 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, exported
inshell, or exported as shelled if fragmented as provided in paragraph
(e)(3) of this section. Shelled peanuts and cleaned-inshell peanuts
which fail to meet the requirements for human consumption in paragraph
(b)(1) may be crushed for oil or exported.
(4) 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 certificate and may require the
importer to have the peanuts reinspected to establish whether or not
such peanuts may be disposed of for human consumption.
(c) Outgoing regulation. No person shall import peanuts for human
consumption into the United States unless such peanuts are lot
identified and certified by the inspection service as meeting the
following requirements:
(1)(i) Shelled peanuts. All shelled peanuts shall at least meet the
requirements specified in Table 1 as follows:
[[Page 31317]]
Table 1.--Minimum Grade Requirements--Peanuts for Human Consumption
[Whole Kernels and Splits]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum limitations
---------------------------------------------------------------------------------------------------------------------------------------------------------
Excluding lots of ``splits''
---------------------------------------------------------------------------------------------------------------------------------------------------------
Unshelled Fall through
Unshelled peanuts, ------------------------------------------------------------------
peanuts and damaged Foreign
Type and grade category damaged kernels and materials Moisture
kernels minor Sound split and Sound whole kernels Total (percent) (percent)
(percent) defects broken kernels
(percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner............................ 1.50 2.50 3.00%; \17/64\ inch 3.00%; \16/64\ x \3/ 4.00%; both screens. .20 9.00
round screen. 4\ inch; slot
screen.
Virginia (except No. 2)........... 1.50 2.50 3.00%; \17/64\ inch; 3.00%; \15/64\ x 1 4.00%; both screens. .20 9.00
round screen. inch; slot screen.
Spanish and Valencia.............. 1.50 2.50 3.00%; \16/64\ inch; 3.00%; \15/64\ x \3/ 4.00%; both screens. .20 9.00
round screen. 4\ inch; slot
screen.
No. 2 Virginia.................... 1.50 3.00 6.00%; \17/64\ inch; 6.00%; \15/64\ x 1 6.00%; both screens. .20 9.00
round screen. inch; slot screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Lots of ``Splits''
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner (not more than 4% sound 1.50 2.50 3.00%; \17/64\ inch; 3.00%; \14/64\ x \3/ 4.00%; both screens. .20 9.00
whole kernels). round screen. 4\ inch; slot
screen.
Virginia (not less than 90% 1.50 2.50 3.00%; \17/64\ inch; 3.00%; \14/64\ x 1 4.00%; both screens. .20 9.00
splits). round screen. inch slot screen.
Spanish and Valencia (not more 1.50 2.50 3.00%; \16/64\ inch; 3.00%; \13/64\ x \3/ 4.00%; both screens. .20 9.00
than 4% sound whole kernels). round screen. 4\ inch; slot
screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(ii) Peanuts meeting the specifications in Table 1 must also be
certified ``negative'' to aflatoxin content, pursuant to paragraph
(d)(4) of this section, prior to shipment to domestic human consumption
markets. Shelled peanuts meeting requirements specified in Table 2 must
be sampled pursuant to paragraph (d)(4) of this section but may be
disposed to human consumption outlets without testing for aflatoxin.
Table 2.-- Superior Quality Requirements--Peanuts for Human Consumption
[Whole Kernels and Splits]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum limitations
---------------------------------------------------------------------------------------------------------------------------------------------------------
Unshelled Fall through
Unshelled peanuts, ------------------------------------------------------------------
peanuts and damaged Foreign
Type and grade category damaged kernels and Sound split and materials Moisture
kernels minor broken kernels Sound whole kernels Total (percent) (percent)
(percent) defects (percent) (percent)
(percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner U.S. No.1 and better....... 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \16/64\ x \3/ 4.00%; both screens. .10 9.00
round screen. 4\ inch, slot
screen.
Virginia U.S. No.1 and better..... 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \15/64\ x 1 4.00%; both screens. .10 9.00
round screen. inch, slot screen.
Spanish and Valencia U.S. No.1 and 1.25 2.00 3.00%; \16/64\ inch, 2.00%; \15/64\ x \3/ 4.00%; both screens. .10 9.00
better. round screen. 4\ inch, slot
screen.
Runner U.S. Splits (not more than 1.25 2.00 2.00%; \17/64\ inch, 3.00%; \14/64\ x \3/ 4.00%; both screens. .20 9.00
4% sound, whole kernels). round screen. 4\ inch, slot
screen.
[[Page 31318]]
Virginia U.S. Splits (not less 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \14/64\ x 1 4.00%; both screens. .20 9.00
than 90% splits and not more than round screen. inch, slot screen.
3.00% sound whole kernels and
portions passing through \20/64\
inch round screen).
Spanish and Valencia U.S. Splits 1.25 2.00 2.00%; \16/64\ inch, 3.00%; \13/64\ x \3/ 4.00%; both screens. .20 9.00
(not more than 4% sound, whole round screen. 4\ inch, slot
kernels). screen.
Runner with splits (not more than 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \16/64\ x \3/ 4.00%; both screens. .10 9.00
15% sound splits). round screen. 4\ inch, slot
screen.
Virginia with splits (not more 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \15/64\ x 1 4.00%; both screens. .10 9.00
than 15% sound splits). round screen. inch, slot screen.
Spanish and Valencia with splits 1.25 2.00 3.00%; \16/64\ inch, 2.00%; \15/64\ x \3/ 4.00%; both screens. .10 9.00
(not more than 15% sound splits). round screen. 4\ inch, slot
screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(2) Cleaned-inshell peanuts. Peanuts declared as cleaned-inshell
peanuts may be presented for sampling and outgoing inspection in bags
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 1 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.
(3) Reconditioned peanuts. Peanuts shelled, sized and sorted in
another country prior to arrival in the U.S. and shelled peanuts which
originated from Segregation 1 peanuts that fail quality requirements of
Table 1 (excessive damage, minor defects, moisture, or foreign
material) or are positive to aflatoxin may be reconditioned by
remilling and/or blanching. After such reconditioning, peanuts meeting
the quality requirements of Table 1 and which are negative to aflatoxin
(15 ppb or less) may be disposed for edible peanut use. Residuals
resulting from such reconditioning of failing lots shall be positive
lot identified, and red-tagged if in sacks, and disposed of pursuant to
paragraphs (g)(2) and (g)(3) of this section.
(d) Sampling and inspection. (1) All sampling and inspection,
quality certification, chemical analysis, and 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 herein. The importer shall
make arrangements with the inspection service for sampling, inspection,
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 an
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 applicable to each peanut lot conditionally released
to the importer. Such reports shall be submitted as provided in
paragraphs (g)(2) and (g)(3) of this section.
(3) Procedures for sampling and testing peanuts. Sampling and
testing of
[[Page 31319]]
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 prior to sampling of the lot.
(A) The following offices provide incoming farmers stock
inspection:
Dothan, AL, tel: (205) 792-5185,
Graceville, FL, tel: (904) 263-3204,
Winter Haven, FL, tel: (813) 291-5820, ext 260,
Albany, GA, tel: (912) 432-7505,
Williamston, NC, tel: (919) 792-1672,
Columbia, SC, tel: (803) 253-4597,
Suffolk, VA, tel: (804) 925-2286,
Portales, NM, tel: (505) 356-8393,
Oklahoma City, OK, tel: (405) 521-3864,
Gorman, TX, tel: (817) 734-3006,
Yuma, AZ, tel: (602) 344-3869.
(B) The following offices, in addition to the offices listed in
paragraph (d)(3)(i) (A) of this section, provide outgoing sampling and/
or inspection services, and certify shelled and cleaned-inshell peanuts
as meeting or failing the quality requirements of this section:
Eastern U.S.
Mobile, AL, tel: (205) 690-6154,
Jacksonville, FL, tel: (904) 359-6430,
Miami, FL, tel: (305) 592-1375,
Tampa, FL, tel: (813) 272-2470,
Presque Isle, ME, tel: (207) 764-2100,
Baltimore/Washington, tel: (301) 344-1860,
Boston, MA, tel: (617) 389-2480,
Newark, NJ, tel: (201) 645-2670,
New York, NY, tel: (212) 718-7665,
Buffalo, NY, tel: (716) 824-1585,
Philadelphia, PA, tel: (215) 336-0845,
Norfolk, VA, tel: (804) 441-6218,
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: (210) 787-4091,
El Paso, TX, tel: (915) 540-7723,
Houston, TX, tel: (713) 923-2557,
Western U.S.
Nogales, AZ, tel: (602) 281-0783,
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, P.O. Box 96456,
room 2049-S, Fruit and Vegetable Division, AMS, USDA, Washington, D.C.
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 size of farmers' stock lots, shelled
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) 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
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 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 notice of sampling. The results of
each assay shall be reported by the laboratory to the importer. All
costs involved in the sampling, shipment and assay analysis of
subsamples required by this section shall be borne by the importer.
(iv)(A) Importers should contact one of the following USDA or PAC-
approved laboratories to arrange for chemical analysis.
Science and Technology Division, AMS/USDA, P.O. Box 279, 301 West
Pearl St., Aulander, NC 27805, Tel: (919) 345-1661 Ext. 156, Fax:
(919) 345-1991
Science and Technology Division, AMS/USDA, 1211 Schley Ave., Albany,
GA 31707, Tel: (912) 430-8490 / 8491, Fax: (912) 430-8534
Science and Technology Division, AMS/USDA, P.O. Box 488, Ashburn, GA
31714, Tel: (912) 567-3703
Science and Technology Division, AMS/USDA, 610 North Main St.,
Blakely, GA 31723, Tel: (912) 723-4570, Fax: (912) 723-3294
Science and Technology Division, AMS/USDA, P.O. Box 1368, Dothan, AL
36301, Tel: (205) 792-5185, Fax: (205) 671-7984
[[Page 31320]]
Science and Technology Division, AMS/USDA, 107 South Fourth St.,
Madill, OK 73446, Tel: (405) 795-5615, Fax: (405) 795-3645
Science and Technology Division, AMS/USDA, P.O. Box 272, 715 N. Main
Street, Dawson, GA 31742, Tel: (912) 995-7257, Fax: (912) 995-3268
Science and Technology Division, AMS/USDA, P.O. Box 1130, 308
Culloden St., Suffolk, VA 23434, Tel: (804) 925-2286, Fax: (804)
925-2285
ABC Research, 3437 SW 24th Avenue, Gainesville, FL 32607-4502, Tel:
(904) 372-0436, Fax: (904) 378-6483
J. Leek Associates, Inc., P.O. Box 50395, 1200 Wyandotte (31705),
Albany, GA 31703-0395, Tel: (912) 889-8293, Fax: (912) 888-1166
J. Leek Associates, Inc., P.O. Box 368, 675 East Pine, Colquitt, GA
31737, Tel: (912) 758-3722, Fax: (912) 758-2538
J. Leek Associates, Inc., P.O. Box 6, 502 West Navarro St., DeLeon,
TX 76444, Tel: (817) 893-3653, Fax: (817) 893-3640
J. Leek Associates, Inc., P.O. Box 548, 42 N. Ellis St., Camilla, GA
31730, Tel: (912) 336-8781, Fax: (912) 336-0146
Pert Laboratories, P.O. Box 267, Peanut Drive, Edenton, NC 27932,
Tel: (919) 482-4456, Fax: (919) 482-5370
Pert Laboratory South, P.O. Box 149, Hwy 82 East, Seabrook Drive,
Sylvester, GA 31791, Tel: (912) 776-7676, Fax: (912) 776-1137
Professional Service Industries, Inc., 3 Burwood Lane, San Antonio,
TX 78216, Tel: (210) 349-5242, Fax: (210) 342-9401
Southern Cotton Oil Company, 600 E. Nelson Street, P.O. Box 180,
Quanah, TX 79252, Tel: (817) 663-5323, Fax: (817) 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
Division, USDA/AMS, P.O. Box 96456, room 3507-S, Washington, DC 20090-
6456, telephone (202) 720-5231, or facsimile (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
results of the assay shall be reported as follows.
(A) Lots containing 15 ppb or less aflatoxin content 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 Sec. 999.600 with regard to aflatoxin.'' The importer
shall file USDA Form CSSD-3, or equivalent form, with the Secretary,
regardless of result.
(5) 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.
(e) Disposition of peanuts failing edible quality requirements. (1)
Peanuts failing grade and/or aflatoxin requirements shall be designated
as non-edible quality ``unrestricted'' peanuts or ``restricted''
peanuts and shall be crushed for oil, exported, or disposed to other
non-edible outlets as specified in this section. For the purposes of
this regulation, the term ``non-edible quality unrestricted peanuts''
means loose shelled kernels, fall through, and pickouts from--and the
entire milled production of--Segregation 1, Segregation 2, and
commingled Segregation 1 and 2 farmers stock peanuts which contain more
than 15 ppb and 25 ppb or less aflatoxin. The term ``non-edible quality
restricted peanuts'' means loose shelled kernels, fall through, and
pickouts from--and the entire milled production of--Segregation 1,
Segregation 2, and commingled Segregation 1 and 2 farmers stock peanuts
which contain in excess of 25 ppb aflatoxin. The term loose shelled
kernels means peanut kernels or portions of kernels completely free of
their hulls, as found in deliveries of farmers stock peanuts or those
which fail to ride the screens prescribed in paragraph (b)(1)(iv) of
this section; the term fall through means sound split and broken
kernels and whole kernels which pass through specified screens; and the
term pickouts means those peanuts removed during the final milling
process at the picking table, by electronic equipment, or otherwise
during the milling process.
(2) Non-edible quality unrestricted peanuts may be disposed to
animal feed: Provided, That such peanuts are certified by the
inspection service as to moisture, foreign material content and treated
with a coloring agent or dyeing solution covering at least 80 percent
of the peanuts, handled and shipped under lot identification
procedures. Except for bulk loads, red tags shall be used and marked
``Animal Feed, Not For Human Consumption.''
(3) Lots of non-edible quality unrestricted peanuts may be
commingled during or after fragmentation and, if certified as meeting
fragmentation requirements by the inspection service, such fragmented
peanuts may be exported. For the purposes of this section, the term
fragmented means that not more than 30 percent of the peanuts shall be
whole kernels that ride the following screens, by type: Spanish--\15/
64\ x \3/4\ inch slot; Runner--\16/64\ x \3/4\ inch slot; and
Virginia--\15/64\ x 1 inch slot. All peanut lots exported must be lot
identified by the inspection service, certified as exported by the
Customs Service, and reported to AMS pursuant to paragraphs (g)(2) and
(g)(3) of this section. Applicable Customs Service procedures for the
export of merchandise must be followed.
(4) Unrestricted fall through may be disposed for use as wild-life
feed and rodent bait, if in labeled containers.
(5) Seed peanuts which are chemically treated causing them to be
unfit for edible or animal feed use shall be exempt from the
requirements of paragraph (c) of this section.
(6) Meal produced from the crushing of unrestricted peanuts shall
be exempt from further aflatoxin testing. Meal produced from the
crushing of restricted peanuts shall be tested and the numerical test
result of the chemical assay shall be shown on a certificate covering
each lot and the certification shall accompany each shipment or
disposition.
(7) Non-edible quality restricted peanuts may be crushed for oil or
exported: Provided, That such peanuts are positive lot identified,
bagged, red tagged, and so certified by the inspection service.
(8) All certifications and proof of non-edible dispositions
sufficient to account for all peanuts in each consumption entry filed
by the importer must be reported to the Secretary by the importer
pursuant to paragraphs (g)(2) and (g)(3) of this section.
(f) Reconditioning of failing peanuts: (1) Importers may remill
and/or blanch shelled peanuts which originated from Segregation 1
peanuts that fail quality requirements of Table 1 or are positive to
aflatoxin. After such reconditioning, peanuts meeting the quality
requirements of Table 1 and which are certified negative to aflatoxin
(15 ppb or less) may be disposed for edible use.
(2) Whole lots of remilled and/or blanched peanuts, and residuals
of such peanuts, which continue to fail quality requirements of Table 1
and contain 25 ppb or less aflatoxin content shall be considered ``non-
edible quality unrestricted'' peanuts and shall be disposed as
``unrestricted'' peanuts
[[Page 31321]]
crushed for oil, exported, or animal feed, pursuant to provisions of
paragraph (e) of the section. Meal produced from unrestricted peanuts
shall be disposed pursuant to paragraph (e)(6) of this section.
(3) Whole lots of remilled and/or blanched peanuts, and residuals
of such peanuts, which continue to fail quality requirements of Table 1
and contain more than 25 ppb aflatoxin content, shall be considered
``non-edible quality restricted'' peanuts and shall be disposed as
``restricted'' peanuts pursuant to paragraph (e)(6) of this section.
Meal produced from restricted peanuts shall be disposed pursuant to
paragraph (e)(6).
(4) All certifications and proof of non-edible dispositions
sufficient to account for all peanuts in each consumption entry filed
by the importer must be reported to the Secretary by the importer
pursuant to paragraphs (g)(2) and (g)(3) of this section.
(g) Safeguard procedures. (1) Prior to 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
identifying lot(s) or container number(s) and volume of the peanuts in
each lot being entered, and the location (including city and street
address), date and time for inspection sampling. The inspection office
shall sign, stamp, and return the entry document to the importer. The
importer shall present the stamped document to the Customs Service at
the port-of-entry and send a copy of the document to the Secretary. The
importer also shall cause a copy of the entry document to accompany the
peanut lot and be presented to the inspection service at the inland
destination of the lot.
(2) The importer shall file with the Secretary copies of the entry
document and grade, aflatoxin, and lot identification certifications
sufficient to account for all peanuts in each lot listed on the entry
document filed by the importer. Positive lot identification of residual
lots, transfer certificates, and other documentation providing proof of
non-edible disposition, such as bills of lading, certificates of
burying, export declarations, and sales receipts which report the
weight of peanuts being disposed and the name, address and telephone
number of the non-edible peanut receiver, 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) 720-5698. Overnight and express mail deliveries
should be addressed to USDA, AMS, Marketing Order Administration
Branch, 14th and Independence Avenue, SW, Room: 2525-S, Washington, DC,
20250, Attn: Report of Imported Peanuts. Regular mail should be sent to
AMS, USDA, P.O. Box 96456, room 2526-S, Washington, DC 20090-6456,
Attn: Report of Imported Peanuts. Telephone inquiries should be made to
(202) 720-6862.
(3) Certificates and other documentation for each peanut lot must
be filed within 23 days of the date of filing for consumption entry,
or, if a redelivery notice is issued on the peanut lot, subsequently
filed prior to conclusion of the redelivery period which will be 60
days, unless otherwise specified by the Customs Service.
(4) The Secretary shall ask the Customs Service to issue a
redelivery demand for foreign produced peanut lots failing to meet
requirements of this section. Extensions in a redelivery period granted
by the Customs Service will be correspondingly extended by the
Secretary, upon request of the importer. Importers unable to account
for the disposition of all peanuts covered in a redelivery order, or
redeliver such peanuts, shall be liable for liquidated damages. 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.
(h) 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 lot
eligible for importation into the United States. However, all peanuts
presented for entry for human consumption use must be certified as
meeting the quality requirements specified in paragraph (c) of this
section.
(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 (e)(2) and (e)(3) respectively 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 herein. 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)(4),
respectively, of this section.
(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 Secs. 141.113 and 141.20: and Provided further, That such
peanuts must be certified and reported to the Secretary pursuant to
paragraphs (g)(2) and (g)(3) of this section.
(6) The cost of transportation, sampling, inspection,
certification, chemical analysis, and identification, as well as
remilling and blanching, and further inspection of remilled and
blanched lots, and disposition of failing peanuts, shall be borne by
the importer. Whenever peanuts are presented for inspection, the
importer shall furnish any labor and pay any costs incurred in moving,
opening containers, and shipment of samples as may be necessary for
proper sampling and inspection. The inspection service shall bill the
importer for fees covering quality and size inspections; time for
sampling; packaging and delivering aflatoxin samples to laboratories;
certifications of lot identification and lot transfer to other
locations, and other inspection certifications as may be necessary to
verify edible quality or non-edible disposition, as specified herein.
The USDA and PAC-approved laboratories shall bill the importer
separately for fees for aflatoxin assay. The importer also shall pay
all required Customs Service costs as required by that agency.
[[Page 31322]]
(7) Each person subject to this section shall maintain true and
complete records of activities and transactions specified in this part.
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: June 11, 1996.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 96-15361 Filed 6-18-96; 8:45 am]
BILLING CODE 3410-02-P
