[Federal Register Volume 63, Number 168 (Monday, August 31, 1998)]
[Proposed Rules]
[Pages 46181-46200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23230]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 999
[Docket No. FV98-999-1 PR]
Revised Quality and Handling Requirements and Entry Procedures
for Imported Peanuts for 1999 and Subsequent Import Periods
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule invites comments on several revisions to
the peanut import regulation effective with the 1999 and subsequent
peanut import quota periods. The proposed changes would: Relax certain
quality requirements; modify entry procedures; revise handling
requirements; reduce the reporting burden; and establish a new
reporting period for peanuts imported into the United States. Changes
to the quality and handling requirements are proposed to make the
import requirements consistent, as required by law, with regulations
covering domestically-produced peanuts under Marketing Agreement No.
146 (Agreement). Changes to import procedures and reporting
requirements are proposed by the Agricultural Marketing Service (AMS)
to improve efficiency of the importation process, ease the reporting
burden, and provide importers with more time to meet peanut import
regulation requirements. This proposal continues safeguard measures
which prevent non-edible imported peanuts from being used in human
consumption outlets in the United States. This action would benefit
peanut importers, handlers, and consumers by helping to ensure that all
peanuts in the domestic marketplace comply with the same quality
standards.
DATES: Comments received by September 30, 1998 will be considered prior
to issuance of a final rule. The comment period for information
collections under the Paperwork Reduction Act of 1995 continues through
October 30, 1998.
ADDRESSES: Interested persons are invited to submit written comments
concerning this proposed rule. Comments must be sent to the Docket
Clerk, Fruit and Vegetable Programs, AMS, USDA, P.O. Box 96456, room
2525-S, Washington, D.C. 20090-6456; fax: (202) 720-5698, or E-mail:
moabdocketclerk@usda.gov. All comments should reference the docket
number and the date and page number of this issue of the Federal
Register. Comments received will be made available for public
inspection in the Office of the Docket Clerk during regular business
hours. Comments concerning the amended information collection under the
Paperwork Reduction Act of 1995 should also be sent to the Desk Officer
for Agriculture, Office of Information and Regulatory Affairs, Office
of Management and Budget, Washington, D.C. 20503.
FOR FURTHER INFORMATION CONTACT: Tom Tichenor, Marketing Specialist,
Marketing Order Administration Branch, Fruit and Vegetable Programs,
AMS, USDA, P.O. Box 96456, room 2525-S, Washington, D.C. 20090-6456;
telephone: (202) 720-6862, or fax: (202) 720-5698. Small businesses may
request information on compliance with this regulation by contacting:
Jay Guerber at the same address and fax number, telephone: (202) 720-
2491.
SUPPLEMENTARY INFORMATION: This proposed rule would amend the peanut
import regulation (7 CFR Part 999.600) issued June 11, 1996, and
published in the Federal Register (61 FR 31306, June 19, 1996), which
regulates the quality of peanuts imported into the United States.
Amendments to the regulation were issued December 31, 1996 (62 FR 1269,
January 9, 1997) and September 19, 1997 (62 FR 50243, September 25,
1997).
The import regulation is effective under subparagraph (f)(2) of
section
[[Page 46182]]
108B of the Agricultural Act of 1949 (7 U.S.C. 1445c3) (Act), as
amended November 28, 1990, and August 10, 1993, and section 155 of the
Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7271).
These statutes provide that the Secretary of Agriculture (Secretary)
shall require that all peanuts in the domestic and export markets fully
comply with all quality standards under Marketing Agreement No. 146 (7
CFR Part 998) (Agreement), issued pursuant to the Agricultural
Marketing Agreement Act of 1937 (AMAA), as amended (7 U.S.C. 601-674).
The handling requirements proposed in this rule are the same as, or
similar to, those recommended by the Peanut Administrative Committee
(Committee or PAC), the administrative agency that oversees the
Agreement's quality assurance program.
This rule has been determined to be not significant for the
purposes of Executive Order 12866 and therefore has not been reviewed
by the Office of Management and Budget.
This rule has been reviewed under Executive Order 12988, Civil
Justice Reform. Under the regulations, importers of foreign-produced
peanuts must: Follow certain entry procedures with the U.S. Customs
Service (Customs Service); obtain certification that such peanuts meet
edible quality requirements or are disposed to non-edible peanut
outlets; and report disposition of peanuts to AMS within an established
time period. This rule proposes several changes to the current
regulation to relax quality requirements, modify entry procedures, and
relax reporting requirements. The rule is not intended to have
retroactive effect. This rule will not preempt any State or local laws,
regulations, or policies, unless they present an irreconcilable
conflict with this rule. There are no administrative procedures which
must be exhausted prior to any judicial challenge to the provisions of
this rule.
Discussion
The peanut import regulation was issued June 11, 1996. At that
time, three duty free peanut quotas for 1996 had been filled and no
peanuts were entered under duty for the remainder of 1996. Therefore,
the peanut import regulation had its first practical application on
January 1, 1997, when the Mexican peanut quota opened, and again on
April 1, 1997, when Argentine and ``other country'' quotas opened. By
international agreements, these three duty free peanut quotas increase
each year, allowing more foreign-produced peanuts duty free access to
U.S. markets. For the 1999 peanut quota year, the Mexican quota will
total approximately 8.7 million pounds (3.95 million kilograms).
Argentina's 1999 peanut quota will total approximately 89 million
pounds (40.4 million kg.) and the quota for all other countries will be
approximately 17.7 million pounds (8 million kg.). The total volume
will be about a 10 percent increase over the combined 1998 peanut
quotas.
The Committee met April 29 and 30, 1997, and recommended
relaxations to the quality and handling requirements of the domestic
peanut program. Those relaxations have been finalized by the Department
of Agriculture (USDA) and made effective for domestically-produced
peanuts. Where applicable, those changes are proposed for imported
peanuts in this rulemaking. The Committee met a second time on May 27,
1998, and unanimously recommended no further changes in the domestic
program's quality requirements or handling procedures. In addition,
after review of the entry and certification process, AMS proposes
additional modifications to the import regulation to increase the
efficiency of the importation procedure and relax reporting
requirements.
Therefore, this rulemaking action proposes the following
modifications to Section 999.600.
(1) AMS proposes removal of a phrase in the definition of Negative
aflatoxin content, in Section 999.600, paragraph (a)(10). The phrase,
``and 25 parts-per-billion (ppb) or less for non-edible quality
peanuts,'' is proposed to be removed because that action level is no
longer used for non-edible peanuts. This proposed revision would make
the requirements under these regulations consistent with those under
the Agreement. Molds such as Aspergillus flavus (A.flavus) are present
naturally in soil. Aflatoxin is a carcinogen which may develop from
A.flavus which is more likely to be found on stressed peanut plants and
damaged or defective kernels than on sound, whole kernels.
Also, in paragraph (a)(15), Marketing Agreement No. 146 is referred
to as the Peanut Marketing Agreement No. 146. The word ``peanut'' is
not a part of the title of the Agreement and would be removed from the
definition to make it technically correct.
(2) AMS proposes to change the definition of Conditionally released
in Section 999.600, paragraph (a)(16), to conform with Customs Service
terminology. The current definition states that peanuts are
conditionally released for further handling ``before final release.''
The phrase ``final release'' is not consistent with Customs Service
terminology and would be removed to avoid confusion. This proposal
would define conditionally released as ``released from U.S. Customs
Service custody for further handling, sampling, inspection, chemical
analysis, storage, and, if necessary, reconditioning.'' These
activities are conducted to meet the requirements of the import
regulation. If inspection and certification are not obtained prior to
application for entry, or if peanuts are not held in Customs Service
bonded storage facilities when inspected, the peanuts would be
conditionally released for such inspection and needed reconditioning.
Conditional release would provide more time for importers to obtain
inspection certifications and to report compliance with the import
regulation.
(3) AMS proposes to remove a redundant sentence in paragraph (b)(1)
of Section 999.600. The second sentence states that ``only Segregation
1 peanuts may be used for human consumption.'' This sentence is re-
stated at the end of the paragraph and is more appropriately placed at
the end of the paragraph.
(4) Paragraph (c)(1)(i) of the Outgoing regulation in Section
999.600, currently states that ``no importer shall ship or otherwise
dispose'' of imported peanuts unless the peanuts meet certain import
requirements. The introductory sentence would be amended by removing
the words ``ship or otherwise.'' This change would make the text
consistent with the revised text of corresponding paragraph (a) of
Section 998.200 of the Agreement regulations.
This modification has the effect of removing text which allows
forwarding of very high quality imported peanuts to buyers before
receipt of quality certifications. However, the impact of this
modification is not expected to be significant. Given the quality of
imported peanuts, importers have been reluctant to forward lots to
buyers prior to receipt of both grade and aflatoxin certifications. The
risk of having to have the lot returned for reconditioning is greater
than the benefit of shipping a few days early. The delays are not
excessive as aflatoxin analyses are usually completed within two or
three days, and the results faxed back to importers. Finally, grade and
aflatoxin certifications often are completed before other Federal
agency clearances are received. Therefore, this modification would not
be expected to have an impact on the importation process or on peanut
importers. This modification is made in conjunction with Recommendation
6.
(5) To be consistent with a recent change in the Agreement
regulation's
[[Page 46183]]
``Other Edible Quality'' table, this rule proposes to relax the
tolerance for ``Unshelled and damaged kernels'' (from 1.50 to 2.00
percent) in the ``lots of splits'' categories specified in Table 1,
``Minimum Grade Requirements'' of paragraph (c)(1)(i). The new
requirement now matches the tolerance for ``Unshelled and damaged
kernels'' as specified in the U.S. Grade Standards for Peanuts. Table 1
shows the current tolerance for unshelled and damaged kernels as 1.50
percent (the second column under ``Lots of splits''). The tolerance
would be relaxed to allow for 2.00 percent unshelled and damaged
kernels in split lots. The relaxation in tolerance of one half of one
percent could reduce the number of imported peanut lots that need to be
reconditioned to meet outgoing quality requirements. This could save
importers reconditioning costs and storage costs. This relaxation
already has been made effective for domestically-produced peanuts.
(6) This modification would remove the text of paragraph (c)(1)(ii)
and the first six grade categories in Table 2--Superior Quality
Requirements. The Committee established Table 2 in the Agreement
regulations several years ago to qualify higher grade peanut lots for
its indemnification program. However, the indemnification coverage has
been greatly reduced by recent Committee actions and the first six
grade categories are no longer certified under the Agreement. Thus,
those grade categories would be removed from the import regulation in
this rulemaking action.
The final three grade categories in Table 2 covering domestically-
produced peanuts with not more than 15 percent sound split kernels
still have a small domestic marketing niche and have been moved to
Table 1 under the Maximum Limitations category in the Agreement
regulations. To be consistent with that modification, the last three
imported ``with splits'' categories covering Runners, Virginias, and
Spanish and Valencia with ``not more than 15 percent sound splits''
would be moved to the Minimum Grade Requirements table in paragraph
(c)(1)(i) of the import regulation. Also, to be consistent with the
other maximum tolerances in the ``Unshelled peanuts and damaged
kernels'' column, and in the ``Minor defects'' column, the percentage
tolerances for the three transferred categories would be increased
(relaxed) from 1.25 to 1.50 percent and from 2.00 to 2.50 percent,
respectively.
Recommendations 5 and 6 have the effect of relaxing the minimum
quality requirements of the import regulation, and, together, simplify
grade requirements by providing only one set of peanut quality
requirements for human consumption use. While these proposed changes
remove a provision that allows shipment of high quality lots to buyers
immediately after grading, given the nature of peanut quality and
importation processes, the proposed changes would not be expected to
delay shipments or negatively affect the handling of imported peanuts.
To effectuate the above three changes, paragraph (c)(1)(i) would be
modified by removing the words ``ship or otherwise.'' The text and the
first six grade categories of Table 2 in paragraph (c)(1)(ii) also
would be deleted from the regulation and the last three grade
categories would be moved to the table in paragraph (c)(1)(i).
Paragraph (c)(1)(iii) would be redesignated as paragraph (c)(1)(ii) and
a conforming change would be made to that paragraph by deleting the
second sentence which specifies that samples must be taken from
Superior Quality peanut lots prior to shipment. Finally, because Table
2 would be deleted, it would not be necessary to refer to the ``Minimum
Grade Requirements'' table as Table 1, and conforming changes would be
made in paragraph (c)(1)(i), introductory paragraph (e), and in
paragraph (e)(3).
(7) Paragraph (d)(3)(ii) would be changed to specify a maximum lot
size for farmers stock peanuts. The import regulation currently
specifies the maximum lot size for farmers stock, cleaned-inshell and
shelled peanuts as 200,000 pounds (90,720 kilograms). However, the
200,000 pound size limit is applied only to shelled peanuts under the
Agreement, and is based on an understanding between the Committee and
the inspection service, reached some years ago. The maximum lot size
for domestically-produced, farmers stock peanuts is limited to one
conveyance, or two or more conveyances with a combined weight not
exceeding 24,000 pounds (10,886 kilograms). The smaller lot size is
established for farmers stock peanuts because farmers stock peanuts
have not undergone extensive cleaning and sorting processes and,
generally, contain more foreign material and A.flavus mold than lots of
milled peanuts. Smaller lot sizes help increase the effectiveness of
sampling variability and assure that the collected sample is
representative of the entire lot. The 200,000 pound limit for shelled
peanuts is the maximum volume on which random sampling procedures can
be systematically and accurately implemented.
Therefore, under this proposal, foreign-produced peanuts imported
in farmers stock form would be inspected in single conveyances or
combined conveyances not exceeding a total of 24,000 pounds. Only a
small percentage of the peanuts imported during 1997 and 1998 were
imported in farmers stock form, and all complied with this maximum lot
size. This inspection practice would help exporters plan their
shipments and should not have a negative impact on future imports of
farmers stock peanuts. For these reasons, the second sentence of
paragraph (d)(3)(ii) would be modified to provide maximum lot size for
farmers stock peanuts.
Paragraph (d)(3)(i)(A) would be changed to reflect closing of the
inspection office in Yuma, Arizona. The introductory sentence in
paragraph (d)(3)(i)(B) would be changed to more accurately reflect the
sampling service provided by some inspection service offices.
(8) AMS proposes strengthening the lot identification requirements
for shelled peanuts by adding new paragraph (d)(4) of the import
regulation. The Agreement regulation requires Positive Lot
Identification (PLI) generally using tags which are sewn on each bag or
super sack of domestically-produced shelled peanuts. The PLI tag is
applied after shelling, at the time of packaging and inspection. The
current import regulation does not require PLI tags sewn at the time of
first inspection when several hundred thousand pounds of peanuts arrive
at a port-of-entry at one time. Such a requirement would be a burden on
importers because of the large volume and lack of equipment, space, and
time needed to sew tags on individual bags. However, better lot
identification for imported peanuts is needed to insure integrity of
the peanut import program.
Lot identification practices currently applied to imported peanuts
by the Federal-State Inspection Service (inspection service) provide
that lots, or pallets within a lot, be identified by a tag which is
affixed to the lot or pallet. Such identification does not prevent the
individual bags, sacks, or cartons in the lot from being tampered with
or exchanged with other bags, sacks, or cartons. The inspection service
cannot insure integrity of a lot that is only ``lot identified.''
Simple lot identity does not guarantee that peanuts drawn in a second
sample under an appeal process come from the same peanut lot or
containers from which the first sample was drawn.
Therefore, AMS proposes a more reliable PLI to be applied to
shelled peanuts by the inspector at the time of first inspection. This
may include: (1)
[[Page 46184]]
Wrapping PLI tape around the top layer of bags or boxes in such a way
that no peanuts could be removed or added; (2) shrink wrapping pallets
or multiple bags with a PLI sticker applied to the wrapped pallets or
bags; (3) stamping or stenciling and numbering individual bags or
boxes; (4) affixing a PLI seal to the door of a shipping container so
that it could not be opened without breaking the seal; or (5) other
methods acceptable to the inspection service that clearly identifies
the lot, is securely affixed to the lot, and prevents peanuts from
being removed or added to the lot.
These PLI methods represent substantially less burdensome and less-
costly procedures than PLI tags sewn on individual bags. For instance,
stenciling bags with a spray paint is a faster and much less expensive
method of lot identity that represents an acceptable alternative to
sewing tags on individual bags. The inspection service office in
Suffolk, Virginia, used stenciling of imported peanuts in bags during
the 1997 and 1998 quota years. These methods also do not require
special training or equipment and can be carried out by inspection
service personnel throughout the U.S. These methods should not require
substantial extra time or material at the time of first inspection.
Increased costs to the importer should be in the form of a few extra
minutes to wrap pallets or stencil bags, and would vary with the size
and containerization of each lot. These PLI methods could increase
average storage costs when warehouse space for inspection is very
limited or when an unusual amount of movement of lots is required
during lengthy warehouse storage. However, increased costs should not
be significant in comparison to overall costs of importation. Also,
importers should benefit from improved lot identity if a lot needs to
have an appeal inspection or if the Customs Service were to demand
redelivery.
The inspection service currently works with domestic peanut
handlers and storage warehouses to determine the most appropriate PLI
or lot identity method to be used. The same cooperative relationship
should apply to importers. Several factors will dictate which PLI
method should be used: (1) Size of the lot; (2) storage space on the
wharf or in the warehouse; (3) required, further movement of the lot
prior to receipt of certification; and (4) other needs of the importer,
wharf or warehouse operators, or the Customs Service. Any request for
extension of the reporting period, or appeal inspection, would include
the PLI number or designation of the lot needing additional reporting
time.
AMS believes that these increased lot identity practices outweigh
the possible minimal increases in handling or inspection costs
associated with better lot identification. Tighter lot-identity
requirements would be consistent with practices currently used by the
inspection service to PLI domestically-produced peanuts. PLI also would
help importers maintain the integrity of lots, should questions arise
from the Customs Service after conditional release.
AMS believes that positive lot identification of inspected lots is
essential in maintaining the integrity of imported shelled lots after
first inspection. Lots failing grade and aflatoxin certifications can
be appealed pursuant to current paragraph (d)(5). In the appeal
process, the lot is sampled a second time. Without PLI, there is no
guarantee that peanuts sampled under an appeal inspection are the same
peanuts as those which failed initial inspection. Therefore, a sentence
would be added to current paragraph (d)(5) to provide that peanut lots
which show evidence of tampering or PLI violation, would not be
eligible for an appeal inspection.
These PLI methods would be applied to peanut lots at the first
inspection. If a lot subsequently fails either grade or aflatoxin
analysis, the lot may be sent to a remilling or blanching operation for
reconditioning. In such cases, PLI of the lot from the warehouse to the
reconditioning site and during reconditioning does not have to be
maintained. However, the importer must maintain information which ties
the reconditioned lot to the original lot. This information must be
provided to the inspection service upon inspection after
reconditioning. Thus, inspection surveillance of the lot does not have
to be maintained during reconditioning. This lot identity procedure is
consistent with the handling requirements for domestically produced
peanuts under the Agreement.
PLI requirements after reconditioning also would be updated in this
proposal to make the treatment of reconditioned imported peanuts
consistent with current industry practice for domestically-produced
peanuts. Under Agreement requirements, failing lots that are
reconditioned by remilling or blanching are positive lot identified by
sewing tags on bags and by taping and tagging bulk bins. For shelled
peanuts, the tag is sewn into the closure of the bag. In plastic bags,
the tag is inserted prior to sealing so that the official stamp is
visible. This is the most efficient PLI procedure and is currently
carried out by the remiller or blancher at the end of the remilling and
blanching process. The inspection service certifies the reconditioned
lot based on the PLI tags applied to bags and bins. Bulk shipments and
bulk bins would be positive lot identified by sealing the conveyance
and, if in other containers, sealed by means acceptable to the
inspection service. This proposal would ensure that the same PLI
procedures are applied to imported peanuts which are reconditioned by
remilling or blanching. Costs for these PLI measures are covered in the
remilling and blanching charges, and, thus, would not be expected to
increase costs for importers. Indeed, some blanching operations used
this PLI method on imported peanuts during 1997 and 1998.
These PLI requirements and procedures would be established in the
import regulation by adding a new paragraph (d)(4) and redesignating
current paragraphs (d)(4) and (5) as (d)(5) and (6), respectively.
Also, references to lot identity in paragraphs (c), (d), (d)(1) and
(g)(6) would be amended to read ``Positive Lot Identification.''
It shall be noted that under the Agreement and import programs, a
failing lot that is reconditioned must be re-certified for both grade
and aflatoxin content after reconditioning. It does not matter whether
the original lot fails for grade or aflatoxin analysis; both analyses
must be conducted a second time. The reconditioned lot is considered to
be a new lot because the size and quality is different from the
original lot, and the previous lot identity has been lost. This
procedure was in effect and properly carried out for reconditioned
imported peanuts in 1997 and 1998.
A minor clarification would be added to redesignated paragraphs
(d)(5)(ii) and (iii). These paragraphs refer to a ``notice of
sampling'' as the inspection service's grade certification of shelled
peanuts. The inspection service now commonly uses the ``Milled Peanut
Inspection Certificate,'' AMS form FV-184-9A, to certify the grade
quality of shelled peanuts. That form's title would be added to
paragraphs (d)(5)(ii) and (iii).
AMS would advise importers that containers of imported lots of
shelled peanuts may be subdivided prior to inspection. During the 1997
and 1998 quota years, some containers of shelled peanuts, when off-
loaded and made available for inspection, revealed wet or moldy bags.
The importers, suspecting such bags would fail quality requirements,
isolated the wet and moldy bags apart from other bags in the container
to reduce possible contamination of good peanuts. This practice is
acceptable and can be done
[[Page 46185]]
at a Customs Service bonded warehouse without inspection service
oversight. If the moldy bags are held separately in a Customs Services
bonded warehouse and then re-exported without leaving Customs Service
custody, those moldy bags do not have to be reported to AMS--except
that the difference in the volume reported on the stamp-and-fax form
and the volume inspected must be reported to the inspection service.
However, if the moldy bags are combined into a separate lot and
identified on an inspection certificate, or moved out of Customs
custody, the bags are subject to import requirements and must be
reported as separate peanut lots. If such a lot fails quality
requirements, it may be reconditioned, disposed to an non-edible peanut
outlet pursuant to import requirements, or re-exported pursuant to
Customs Service procedures. These dispositions must be reported to AMS.
(9) The second to the last sentence in current paragraph
(d)(4)(iii) provides that laboratories shall provide aflatoxin assay
results to the importer. Upon review, USDA determines that this
sentence is redundant with provisions in current paragraph (d)(4)(v).
Thus, this proposal would remove the second to last sentence of current
paragraph (d)(4)(iii).
(10) Several changes in the regulatory text would be made regarding
reporting of aflatoxin certifications to AMS. Current paragraph
(d)(4)(iv)(A) provides that importers ``should'' contact one of the
laboratories to arrange for chemical analyses of imported peanut lots.
However, because chemical analysis is required under the regulation,
the word ``should'' does not convey the mandatory nature of the
requirement that aflatoxin analysis must be conducted on all imported
peanut lots intended for human consumption. Thus, the first sentence of
redesignated paragraph (d)(5)(iv)(A) would be revised to state that
importers ``shall'' contact one of the laboratories to arrange for
chemical analyses.
Current paragraph (d)(4)(v) would be revised to include the
requirement that importers ``shall cause'' aflatoxin certifications to
be reported to AMS. The last sentence in current paragraph (d)(4)(v)(B)
would be revised and moved to redesignated paragraph (d)(5)(v) for more
appropriate placement of the instructions.
(11) The list of aflatoxin testing laboratories shown in current
paragraph (d)(4)(iv)(A) would be updated in this rulemaking action. The
laboratory in Ashburn, Georgia formerly operated by AMS is now operated
privately as a PAC-approved laboratory. The USDA laboratory in Dothan,
Alabama is now operated by the Alabama-Federal State Inspection
Service. In addition, three new laboratories in Headland, Goshen, and
Enterprise, Alabama have been certified by AMS and approved by the PAC
as Alabama-Federal State laboratories. The PAC-approved laboratory in
San Antonio, Texas should be dropped from the list as that laboratory
no longer certifies the aflatoxin content of peanut lots. Finally, the
name of the AMS office that operates USDA laboratories and certifies
the private laboratories has been changed from Science and Technology
Division to Science and Technology Programs.
The import regulation refers to private aflatoxin testing
laboratories as ``PAC-approved'' because those laboratories are
approved by the Committee to perform chemical analyses on domestically-
produced peanuts. These PAC-approved laboratories also may be referred
to as ``designated'' laboratories. Whether a laboratory is referred to
as ``PAC-approved'' or ``designated,'' only those laboratories listed
in redesignated paragraph (d)(5)(iv)(A) may conduct aflatoxin content
analysis on imported peanuts.
(12) Another Committee recommendation to modify the Agreement
regulations would provide that shelled peanut lots failing quality
requirements because of excessive ``fall through'' may be blanched.
Paragraph (e) of the import regulation prescribes the corresponding
requirement that imported shelled peanuts failing quality requirements
because of excessive damage, minor defects, moisture, or foreign
material may be reconditioned by remilling and/or blanching. This
proposed change would add peanut lots failing ``fall through''
requirements to those lots that can be reconditioned by blanching.
After blanching, all such lots would have to be sampled and certified
as meeting minimum ``fall through'' requirements prior to disposition
to edible peanut outlets.
This change would be made in paragraph (e) of Section 999.600 by
adding a new second sentence to the introductory paragraph providing
that peanuts which fail minimum grade requirements because of excessive
``fall through'' may be blanched. For consistency, the second to last
sentence in introductory paragraph (e) also would be revised to include
minimum ``fall through'' requirements as a condition for human
consumption.
(13) A final change to be consistent with Agreement regulations
would prescribe that shelled peanut lots meeting the minimum grade
requirements specified in the Minimum Grade Requirements table, but
which fail aflatoxin requirements, may be roasted during the blanching
process. After roasting, the peanuts would be sampled and assayed for
aflatoxin content, and, if meeting aflatoxin requirements (15 ppb or
less), may be disposed of to human consumption outlets. The lot would
not have to be re-inspected for grade quality because the lot would
have already met grade requirements. This modification is a relaxation
of requirements and would be an optional process for importers who
intend to roast imported peanuts. It could save time, reduce costs, and
reduce possibilities for damage or split kernels.
This process was recommended by the Committee for domestic peanuts
because blanched peanuts, after sampling and certification, often are
placed back into the blancher to complete the roasting process. This
adds costs to the roasting process and can cause additional splits or
kernel damage due to the extra handling of the peanuts. Also, roasting
enhances the blanching efforts to eliminate aflatoxin, thus improving
the wholesomeness of the peanuts.
Inspection service oversight of the blanching process is necessary
to maintain lot identity. However, the Department believes that the
savings involved in blanching and roasting in one step and prevention
of additional damage and splits due to excessive handling are benefits
that would outweigh the costs of inspection service oversight. Any
residual peanuts, excluding skins and hearts, resulting from the
roasting process, must be red tagged and disposed of to non-edible
peanut outlets, and so reported to AMS. This proposal is added as new
paragraph (e)(4) in Section 999.600. Current paragraph (e)(4) would be
redesignated as (e)(5).
Paragraph (f) Safeguard procedures of Section 999.600 outlines the
steps that importers must follow when entering peanuts into U.S.
commercial markets. The stamp-and-fax process helps assure that AMS
will be notified of all peanut entries. This rule would modify or
remove several requirements of the current safeguard procedures and
reporting requirements to help streamline the entry process, ease
reporting burdens, and provide more time for importers to obtain human
consumption certification. The changes are proposed after AMS' review
of the peanut importation process during the 1997 and 1998 quota
periods. Where applicable, the changes are proposed
[[Page 46186]]
with the concurrence of the Customs Service.
(14) Under the ``stamp-and-fax'' procedure, importers notify the
inspection service of pending peanut shipments by faxing or mailing a
copy of the Customs Service entry documentation to the inspection
service office that will sample the imported peanut shipment. The first
sentence of paragraph (f)(1) provides that such documentation must be
sent ``prior to arrival'' of the peanuts at the port-of-entry. However,
experience shows that it may not be possible to send a completed stamp-
and-fax document to the inspection service ``prior to arrival'' of the
shipment at the port-of-entry. While it is in the importer's interest
to give the inspection service advance notice of inspection, it is not
essential that this be done before arrival of the shipment at a port.
Thus, the first sentence of paragraph (f)(1) would be changed to read
``Prior to, or upon, arrival * * *''.
The Customs Service will not release imported peanut lots without
entry documentation stamped by the inspection service. Further, the
inspection service will not sample and inspect peanuts that are not
covered in a stamp-and-faxed entry document.
(15) AMS proposes revising paragraph (f)(1) to change the
information that is currently required on the stamp-and-fax document.
This rule would add the Customs Service entry number(s) for the peanut
shipment(s) covered in a stamp-and-fax document. The entry number is
basic Customs Service entry information and appears on Customs Form
3461 (Entry/Immediate Deliver) which is commonly used as the stamp-and-
fax document. During the 1997 and 1998 quota periods, the inspection
service recorded the entry number on the grade certificates, enabling
AMS to monitor imported lots and communicate with the Customs Service
regarding importers' compliance with program requirements.
Experience of the last two import years shows that different
Customs Service forms may be used in the stamp-and-fax process. In most
cases, Customs Form 3461 has been used. USDA's Animal and Plant Health
Inspection Service (APHIS) Form 368 (Notice of Arrival) also may be
used as a stamp-and-fax document. In these cases, the importer or
customs broker filing the stamp-and-fax document must add the inland
destination and contact number before sending the document to the
inspection service.
The current provision specifies that the destination location,
including city and street address, be included on the stamp-and-fax
form. The street address is not necessary as long as the city and
receiving entity is identified. A telephone contact number also must be
included. Experience shows that the receiving entities are usually cold
storage warehouses.
The current provision specifies that the stamp-and-fax document
include the date and time that the peanut shipment will be inspected at
the inland destination. However, a date and time for inspection is not
always known at the time of entry, and it is not necessary that this
information be included on the stamp-and-fax document. The purpose of
the stamp-and-fax is to assure that the inspection service is aware of
every peanut lot being imported. Arrangements for the time and date of
the inspection often are made by the cold storage warehouse after
arrival of the imported lot at the inland destination.
Therefore, this rule proposes that the information required on the
stamp-and-fax be amended to include: the Customs Service entry number;
the volume (weight) of peanuts being imported; the city, and location
of the entity receiving the peanuts; and a contact name or number at
the destination. Paragraph (f)(1) would be changed accordingly.
(16) The ``stamp and fax'' process would be further modified by
removing the fifth sentence in paragraph (f)(1) that requires importers
to send a copy of the stamp-and-fax entry document to the Secretary.
AMS can obtain information on peanut entries from the inspection
service and from the Customs Service on data tapes. That information
effectively replaces the need for stamp-and-fax entry documents to be
reported by importers to AMS' headquarters office. The change would be
made in the fifth sentence in paragraph (f)(1) by removing the words
``and send a copy of the document to the Secretary.'' A similar change
also would be made in the first sentence in paragraph (f)(2) by
removing the words ``entry document'' from that sentence. This
modification does not change the requirement that importers must file
the stamp and fax with the inspection service office as provided in
paragraph (f)(1).
Another change regarding the stamp-and-fax reporting would be made
in paragraph (f)(1). The last sentence provides that the importer shall
cause a copy of the entry document to accompany the peanut lot and be
presented to the inspection service ``at the inland destination.'' The
intent of this requirement was to help inspection service offices
account for all peanut lots which those offices have authorized entry
by stamp-and-fax. However, the provision, as currently written, could
be interpreted as meaning that all peanut lots must be shipped inland
for inspection. This is not the intent of the provision. Peanuts may be
inspected and certified for human consumption while at the port-of-
entry, free trade zone, or bonded warehouse adjacent to the port of
entry. If inspected at the port or free trade zone and certified as
edible, the lot does not have to be seen again by the inspection
service and may be transported to its intended destination. Uninspected
lots and failing lots which are sent inland for inspection or
reconditioning must be accompanied by Customs Service entry
documentation relevant to the lots, which must be presented to the
inspection service at the time of inland inspection.
The last sentence in paragraph (f)(1) would, therefore, be modified
to provide that the entry documentation be presented at the time of
sampling--whether that sampling is at the port of entry or at an inland
destination. The last sentence of paragraph (d)(3)(i) also would be
revised to conform with this clarification.
(17) The import regulation's reporting requirements are specified
in paragraph (f)(2) of Section 999.600. Currently, importers are
required to file with the Secretary entry documents, including all
grade and aflatoxin certifications, showing that imported peanut lots
meet quality and disposition requirements of the regulation.
Certifications filed by importers enable AMS to monitor all imported
peanut shipments and ensure compliance with the regulation's quality
and disposition requirements. The reporting requirements can be
burdensome if, as now happens, large volumes of peanuts are entered
simultaneously when a country's peanut import quota is opened.
The inspection service performs all inspections of imported
peanuts, and AMS has access to all of those grade certificates. In
addition, AMS' Science and Technology Programs' laboratories conduct
chemical analysis of imported peanut lots, and, thus, AMS has access to
aflatoxin certificates issued by those laboratories. Through memoranda
of understanding with these offices, AMS' Marketing Order
Administration Branch (MOAB), which administers the import regulation,
can obtain copies of grade and aflatoxin certificates issued by the
inspection service and the USDA laboratories. Therefore, it is not
necessary that importers file inspection service grade certifications
and USDA laboratory aflatoxin certifications on lots which meet
requirements. Those certifications can be provided to MOAB
[[Page 46187]]
by the inspection service and laboratories. Filing of aflatoxin
certifications provided by PAC-approved private laboratories is
addressed below.
Experience shows that if importers do not have to file
certifications on peanut lots which meet import requirements, a large
portion of the reporting burden would be removed. Importer would
continue to be required to report failing lots and disposition of those
failing lots. AMS believes such a modification of the reporting
requirements would not reduce the effectiveness of the regulation's
safeguard procedures or AMS' program oversight, because its compliance
efforts focus on failing peanut lots. Therefore, AMS proposes to revise
paragraph (f)(2) of Section 999.600 to provide that importers file with
AMS only certificates of imported peanut lots failing quality or
aflatoxin requirements.
This proposed rulemaking action would update the kind of
information required to be filed by importers, or others on behalf of
importers.
Importers who choose to use PAC laboratories for aflatoxin
certification must either file those certifications themselves or
direct the private laboratory to file the certifications with AMS.
Similarly, it is the responsibility of the importer to either file, or
direct the filing of, documentation covering such non-edible peanut
dispositions. The first sentence of paragraph (f)(2) would be revised
to require that importers ``shall file, or cause to have filed''
documentation showing disposition of peanut lots which fail to meet
quality requirements. The phrase ``cause to have filed'' would enable
importers to direct the entity to file the documents on behalf of the
importer.
This optional reporting procedure could reduce importers' direct
reporting burdens because they would not have to file the certificates
themselves. The cost, if any, of reporting aflatoxin certifications to
AMS could be included in the cost of testing. Thus, while importers
would be responsible for the reporting charges, the additional
reporting costs should be less than the costs of individual importers
filing the certificates themselves. The certifications would not have
to be reported individually or on a scheduled basis, but would have to
be filed by the reporting deadline relevant to each imported lot. A
laboratory could file certificates from many importers in one mailing.
As noted above, this proposed rulemaking would continue importers'
responsibility for reporting, or causing the reporting of, final
disposition of all failing peanut lots. Proper disposition of a failing
peanut lot could include: (1) Appeal inspection and analysis which
results in subsequent certification that the peanut lot meets grade or
aflatoxin requirements; (2) reconditioning through remilling or
blanching of the lot to meet grade or aflatoxin requirements; (3)
disposition to a non-edible peanut outlet such as crushing oilmill,
animal feed, or seed use; (4) dumping in a landfill or otherwise
destroying the peanuts; or (5) re-exportation to another country.
It is the importer's responsibility to insure that the business
entity disposing of non-edible peanuts uses the peanuts in a non-edible
product, and that proof of such use is reported to AMS. The business
entity could be directed to file proof of disposition directly to AMS
or send the report to the importer who would then forward the report to
AMS.
Paragraph (f)(2) would also be modified to clarify the type of
documentation needed to prove such disposition. AMS requires ``source''
documents as proof of disposition. Source documents are documents
originating from the business entity carrying out the actual
disposition of the peanuts. For example: proof of crushing must be
reported by the oilmill performing the crushing; an animal feed
manufacturer must file proof of receipt of non-edible peanuts and
certify in writing to the non-edible use of those peanuts; re-exported
peanuts must be reported on a Customs Service form showing exportation.
These certifications should be on the business letterhead of the
disposing entity as proof that it is a ``source'' document; i.e., a
document prepared by the originator of the disposition action. If such
a report cannot be obtained from the disposing entity, the inspection
service may be contacted to assist in documenting the disposition. For
instance, certification of a landfill dumping may not be provided by
the landfill. In such case, the inspection service may be contacted to
observe and certify such disposition. Peanut growers associations in
the Virginia-Carolina, Southeast, and Southwest also may be contacted,
particularly with regards to certifying disposition to an oilmill for
crushing.
``Source'' documents must include reference to the lot number or
Customs Service entry number for the peanut lot(s) and the volume
(weight) being disposed. For instance, if residual peanuts are crushed
for oil, the importer must file, or direct the crusher to file,
documentation which shows the name of the crusher, the failing lot
number, and the weight of residuals crushed. If crushing is directly
observed by a regional peanut growers association or the inspection
service, documentation can be provided by those entities. The volume
may reflect several residual lots commingled for crushing.
``Source'' documentation of a feed lot disposition would include
certification that the feed company received imported peanuts and has,
or intends to, use those peanuts as animal feed. Such documentation
must include, as required by paragraph (e)(2)(ii) of the import
regulation, an aflatoxin certificate showing that the peanuts did not
exceed 300 ppb aflatoxin content.
Non-edible peanuts sent to a landfill also must be reported. If no
documentation can be obtained from the landfill operator, the
inspection service may be contacted to certify the dumping.
Documentation of re-exported peanuts must include a completed
Customs Service form, specific to the peanuts, verifying exportation
from the U.S.
The current regulation specifies bills-of-lading as documentation
that can be filed in reporting disposition. In reporting dispositions,
many importers have filed bills of lading showing residual peanuts were
transported to a crushing facility. However, neither the importers nor
crushers filed proof of crushing. A bill-of-lading showing shipment to
an oilmill operation is not sufficient to verify that the residuals
were received by the oilmill and crushed. Bills-of-lading and transfer
certificates may be filed in conjunction with other source documents to
help show movement of non-edible peanuts, but cannot be filed as proof
of final non-edible disposition. Therefore, the terms ``bills-of-
lading'' and ``transfer certificates'' would be removed from paragraph
(f)(2) as a document showing proof of disposition.
Further, some importers have requested appeal analyses on failing
peanut lots. An appeal inspection involves resampling and reinspection
by the inspection service and/or aflatoxin testing laboratory. If the
failing lot is determined to meet requirements upon an appeal analysis,
the importer must file both the initial failing certificate(s) and the
appeal certificate(s) showing the same peanut lot ultimately was
certified as meeting quality requirements on appeal.
Experience with the 1997 and 1998 imports also shows that most
failing lots were reconditioned by blanching. After reconditioning, the
lots are reinspected and, in most cases, certified for edible
consumption. In reporting reconditioning of a failing peanut lot, the
importer must account for pickouts
[[Page 46188]]
and other poor quality kernels that are removed from the lot during the
reconditioning process. For example, if a 40,000 pound container of
peanuts fails grade requirements, the lot may be blanched. If the
resulting lot, weighing 30,000 pounds, is certified as edible, the
importer must file: (1) The first failing grade certificate; (2) the
first passing aflatoxin certificate (``negative'' to aflatoxin); (3)
the second passing grade certificate; (4) the second passing aflatoxin
certificate; and (5) proof of disposition of the non-edible residuals.
The volume of residual peanuts may not exactly equal the difference
between the two weights because of ``disappearance'' during the
reconditioning and re-inspection process. Such disappearance can
include bag weight, skins, moisture from the blanching, other loss of
kernels, and differences in weighing scales, which, to the extent
practical, must be documented.
Fees charged for disposition of failing peanuts must be borne by
the importer.
AMS has found that grade and aflatoxin certificates are the primary
documentation for monitoring edible and non-edible disposition of
imported peanuts. Tying a disposition back to an original imported
peanut lot may be difficult without reference to grade and aflatoxin
certificate numbers. Thus, for compliance purposes, it is necessary
that all reporting of non-edible disposition include the grade and
aflatoxin certificate numbers of the original failing lot(s).
Residuals from the remilling or blanching of several imported
peanut lots belonging to the same importer may be commingled into a
larger, residual lot. Proof of disposition of a commingled residual lot
must include: (1) The name and telephone number of the disposition
outlet; (2) lot numbers from which the residuals were removed; and (3)
the total weight of the disposed residual lot. The report must be
sufficient to account for all of the residual peanuts and identify the
lots from which the residuals were taken. Residuals from imported
peanut lots cannot be commingled with domestically-produced residual
peanuts because of the separate compliance and recordkeeping
responsibilities for domestic peanuts (to the Committee) and imported
peanuts (to AMS). Certification of PLI issued by the inspection service
may be used to verify commingling of multiple residual peanut lots.
During the 1997 and 1998 quotas, some customs brokers, warehouse
operators, and blanchers failed to identify the importer of record when
requesting inspections. If the warehouse or blancher is shown as the
applicant for the inspection and the importer's name withheld, AMS has
difficulty matching up certificates and verifying that the importer has
satisfied reporting requirements. For AMS recordkeeping purposes, the
applicant requesting inspection must provide the name of the importer
to the inspection service. A provision to this effect would be added to
the first sentence of paragraph (f)(2).
Because of the extent of these revisions, the first half of
paragraph (f)(2) would be revised. Crushing, feed, seed, or burying
would be added as examples of non-edible disposition outlets. Bills-of-
lading and transfer certificates would be removed as proof of final
disposition. The address to which disposition documentation must be
filed would remain unchanged. Finally, current paragraph (d)(4)(v)(B),
which provides that importers file aflatoxin certificates ``regardless
of the test result'' would be removed to conform with reduced reporting
of only failing lots.
(18) Paragraph (f)(3) of the peanut import regulation establishes
the period for importers to obtain inspection and certification of
their imported peanut lots and report disposition to AMS. The current
reporting period is 23 days after Customs Service release of the peanut
lot. However, based on the experience of the 1997 and 1998 import
quotas, the 23-day period does not provide enough time for importers to
meet requirements for all lots and report disposition to AMS. Indeed,
the 23-day reporting period was extended for the 1997 reports only in a
separate rulemaking (62 FR 50243, September 25, 1997). Therefore,
current paragraph (f)(3) and the reporting period would be completely
revised.
Because of the high demand for foreign-produced peanuts, the 1997
Argentine and ``other country'' quotas were filled on the day of
opening. Among other things, this caused a flood of imported peanuts
into clearance channels at the same time. For the most part, the
inspection service and aflatoxin labs were able to provide timely
sampling and inspection of imported peanuts. However, some importers
encountered problems obtaining wharfage and storage space in bonded
warehouses and other delays in other clearance processes. Large volume
importers had particular difficulty coordinating the paperwork required
by different Federal government offices, and the quality inspections
and needed reconditioning to meet requirements of the import
regulation, 7 CFR Part 999.600.
Therefore, the period for reporting compliance with the import
regulation is proposed to be extended in this rulemaking. An extended
period would help alleviate problems encountered with the large numbers
of lots entered under Argentine and ``other country'' quotas on April 1
each year. The extended period also would be helpful for imports of
Mexican peanuts, some of which are farmers stock peanuts needing the
extra steps of shelling, sorting, and sizing before certification for
edible use.
The reporting period proposed in this rulemaking action would be
180 days from the date of release of a lot by the Customs Service.
Lengthening the reporting period would be accomplished by providing
that all Customs Service releases of peanuts be designated as
``conditional'' releases. The 180-day period would be established as
the conditional release period for Customs Service purposes.
A peanut lot which is inspected and certified as edible in advance
of a quota's opening day would be conditionally released, and would be
subject to the 180-day conditional release/reporting period. However,
importers would be able to dispose of those peanuts after receipt of
the required edible certifications and after conditional release of the
lots by the Customs Service.
Uninspected peanut lots would be conditionally released under bond,
provided that, within 180 days, those peanuts be inspected and reported
to AMS as meeting requirements of the import regulation.
Inspected peanut lots that fail to meet quality requirements would
be conditionally released for reconditioning and re-inspection.
Reconditioning and reinspection must be completed and reported to AMS
within the 180-day conditional release period. Non-edible disposition
of residual peanuts or pick-outs from the reconditioning process also
must be reported within the 180-day period. Positive lot identification
would have to be maintained on these peanuts.
If AMS finds that, after the 180-day conditional release period
expires, an uninspected or failing peanut lot has not been reported as
meeting import requirements, AMS would request the Customs Service to
issue a Notice of Redelivery to the importer. Subsequent to that
request, the Customs Service would have 30 days to issue, under the
terms of the basic importation bond, a valid demand for redelivery.
Upon receiving the Notice of Redelivery, the importer would have 30
days to
[[Page 46189]]
redeliver the unreported or failing peanuts to the Customs Service.
Current paragraph (f)(3) provides for a 60-day extension of the
redelivery demand period to enable an importer additional time to meet
a redelivery demand. This provision would be removed from paragraph
(f)(3) because the Department believes that, with the extended 180-day
conditional release period, an extension of the redelivery demand
period would not be needed. A conforming change would be made by
removing the second sentence in paragraph (f)(4).
Current paragraph (f)(4) also would be revised to restate the
redelivery demand process. The paragraph also would continue to include
the consequences of an importer's failure to comply with import
regulation, i.e., assessment of liquidated damages equal to the value
of the peanuts involved, under the terms of the Basic Importation and
Entry Bond. Further, failure to fully comply with quality and handling
requirements or failure to notify the AMS of disposition of uninspected
or failing imported peanuts, as required under this section, may result
in a compliance investigation by AMS. Finally, revised paragraph (f)(4)
includes the proviso that falsification of reports submitted to AMS
also is a violation of Federal law and is punishable by fine or
imprisonment, or both.
(19) AMS believes that the need for extension of the 180-day
conditional release and reporting period should be significantly
reduced because of the longer reporting period proposed in this
rulemaking. However, new paragraph (f)(5) would provide for extension
of the reporting period, should an importer be unable to dispose of a
particular peanut lot within 180 days. This rule proposes an extension
of an additional 60 days, giving importers a total of 240 days to meet
requirements of the import regulation.
Unusual circumstances could necessitate an extended delay in
disposition of an imported peanut lot. There have been a few instances
over the last two years where failing lots were set aside and not
reconditioned until months after the initial inspections. Disposition
of farmers stock peanuts which require shelling and final outgoing
inspection also may require an extended period of time to complete
shelling and final inspections. In such instances, the importers needed
an extension of the reporting period. Under this proposal, the length
of the extension, up to 60 days, would be specified in the extension
request and would be made by the importer in writing at the end of the
conditional release period. The extension request also would specify
the lot's Customs Service entry number, PLI designation, volume or
weight, and current location. Requests for extension would be made to
AMS at the address provided in paragraph (f)(2).
(20) AMS proposes to add a new paragraph (f)(6) to clarify a
procedural question that arose during the 1997 quota period. Not all
peanut lots that arrive in the U.S. are entered for consumption.
Because of the expected overfill of the Argentine quota, some importers
placed peanuts in bonded storage and did not file consumption entry
documents (including a stamp-and-fax) until after quota allotments were
determined by the Customs Service. The excess peanuts had to be either
exported to another country, held in bonded storage for the next year's
quota, or entered as admittable. Such peanuts that are held in bonded
storage and subsequently exported from the U.S. without import
application or stamp-and-fax communication, need not be reported to
AMS. However, if a peanut lot is included in a stamp-and-fax document,
but is subsequently exported without being entered by the Customs
Service, the importer must notify AMS of the export decision and
provide proof of export. The lot must be so reported even if it is not
sampled and inspected by the inspection service.
With the addition of new paragraphs (f)(5) and (f)(6), current
paragraphs (f)(5) and (f)(6) would be redesignated as paragraphs (f)(7)
and (f)(8), respectively, and references to those paragraphs would be
changed accordingly.
In addition, minor additions would be made in paragraphs (f)(7) and
(8) to clarify the current provisions of those paragraphs. In paragraph
(f)(7), the words ``and aflatoxin'' would be inserted between
``inspection certificate(s)'' to clarify that the Secretary may reject
a current aflatoxin certificate as well as grade certificate. The word
``may'' also would be removed from the sentence to clarify the
authority of the Secretary to require reinspections of suspect peanut
lots. In paragraph (f)(8), the second sentence would be changed by
adding the words ``the storage'' before the word location to clarify
the requirement that importers advise AMS of the storage location of
peanuts held in bonded storage for longer than one month prior to quota
opening.
(21) A clarification would be made to paragraph (g)(1) Additional
requirements. The second sentence currently states that all peanuts
presented for entry for human consumption must be certified as meeting
import requirements. The phrase ``presented for entry'' can be
misleading in that, as discussed above, many peanuts presented for
entry are not subsequently imported. AMS proposes to change the
sentence by replacing the phrase ``presented for entry'' with the term
``intended'' for human consumption. This clarifies the purpose for
importation. Also, the phrase ``prior to such disposition'' would be
added to the end of the sentence to further state that all peanuts
imported for edible use meet those requirements prior to movement to
the receiver or buyer.
(22) Finally, several minor changes would be made to paragraph
(g)(6) to clarify and simplify provisions regarding costs incurred in
meeting the requirements of the import regulation. The changes would
include clarification that the inspection service and aflatoxin testing
laboratories bill ``applicants'' making the request for inspection and
chemical analysis, not only the importer, as currently stated.
Applicants include customs brokers, storage warehouses, or other
entities acting of behalf of importers. The list of the types of
chargeable services would be modified for clarity and simplicity. PLI
certifications would replace ``certifications of lot identification''
to be in conformance with Recommendation 8, above.
The Department proposes these amendments and modifications to the
peanut import regulation, Section 999.600 to update and streamline the
provisions of that regulation.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), the information collection requirements contained in this
proposed rule will be submitted to the Office of Management and Budget
(OMB) for approval. The information collection requirements in the
current peanut import regulation were approved by OMB on September 3,
1996, and assigned OMB number 0581-0176.
This paperwork burden analysis applies to only AMS' peanut import
regulation burden in Section 999.600, and does not include or supersede
other reporting requirements for imported peanuts that may be
established by APHIS, the Food and Drug Administration (FDA), the
Customs Service, or other agencies.
The current burden statement for the peanut import regulation was
developed and approved before the regulation was put into effect. The
reporting burden is based on importers, or others acting on behalf of
importers, filing copies of
[[Page 46190]]
documents necessary to show compliance with program requirements. There
are no forms to be completed and filed. The import program's current
reporting and recordkeeping estimates are not broken down in OMB's
0581-0176 burden statement--making it difficult to apply comparisons
for the individual changes proposed in this regulation. Also, because
the duty free quota has increased by approximately 21 percent since the
current burden statement was approved, savings calculated in this
proposal are based on 1999 quota volumes.
The average reporting time for each response is reduced in this
proposal from 5 minutes to 3.5 minutes. The current burden was
calculated based on importers filing certificates one at a time.
However, experience shows that importers generally file documents in
large groups, thus, saving considerable reporting time. With extended
reporting periods, importers will be able to collect relevant
inspection certificates and other needed documents and file them in
packages. This reduces the response time to an estimated 3.5 minutes
for each response--which is used in this reporting burden.
The current reporting burden estimates 25 respondents filing 5,000
responses, for a total of 300 burden hours--an average of 12 reporting
hours per importer. The current recordkeeping burden is estimated at 25
respondents and a total of 125 burden recordkeeping hours--an average
of 5 recordkeeping hours per importer.
This rule proposes to revise the current information collection
burden based on: (1) Experience of the 1997 and 1998 peanut quota
periods; (2) a two-year increase in peanut quota volume from 94.8
million to 115.4 million pounds for 1999, as established by trade
agreements; (3) an estimated 2,650 lots entered (based on lot sizes of
40,000 pounds for most lots and 200,000 pounds for a small number of
lots; (4) proposed reductions in information collection requirements;
(5) reduced response time from 5 minutes per response to 3.5 minutes;
(6) reduced number of respondents (importers) from 25 to 15; and (7)
generally good peanut quality, with an estimated 10 percent of the lots
failing initial quality requirements.
Reporting burden: The following proposed changes should reduce the
AMS paperwork reporting burden on peanut importers.
Recommendation 16: This recommendation would remove from paragraph
(f)(1) the requirement that importers must send copies of each stamp-
and-fax document to AMS headquarters. The intent of the current
requirement was to ensure AMS headquarters has knowledge of all peanut
imports for monitoring and compliance purposes. However, this rule
proposes that the inspection service and aflatoxin testing laboratories
provide copies of all inspection certificates issued on imported
peanuts (Recommendation 17). In addition, AMS receives periodic
database printouts of all peanut entries from the Customs Service.
Together, these reports should be sufficient documentation for AMS
headquarters' purposes. Therefore, it would not be necessary that
importers send copies of their stamp-and-fax documents to AMS
headquarters.
Savings: The burden of filing stamp-and-fax documents with AMS'
headquarters would be completely eliminated by this proposed rule. The
current burden for reporting stamp-and-fax documents is factored into
the total program burden of 5,000 hours. Based on the 1999 quota of
115.4 million pounds, projected entries of 2,650 lots, and 5 containers
listed on each stamp-and-fax document, approximately 530 stamp-and-fax
documents would be filed. This number of responses would be saved if
AMS headquarters did not have to be notified, as proposed. At 5 minutes
per filing, the new reporting burden for reporting stamp-and-fax would
total 44 hours and the savings would be 44 hours.
Recommendation 17: This recommendation would reduce the number of
inspection certificates which importers must report to AMS. Currently,
importers must file copies of both passing and failing grade and
aflatoxin certificates issued on all imported peanut lots. Those
certificates are issued by the inspection service and by AMS and
private laboratories. The certificates can be made available to AMS by
those entities, thus relieving importers of a significant direct
reporting burden.
Because AMS' compliance efforts focus on failing lots, AMS proposes
that importers continue to be required to file only certificates
covering failing peanut lots. AMS receives copies of passing
certificates from the inspection service and laboratories as a check on
all lots entered. Approximately 2,650 peanut lots are expected to be
imported under 1999 peanut quotas. For burden-reporting purposes, this
rule estimates that 10 percent of the imported lots will fail one or
both inspections. Thus, approximately 265 lots can be expected to fail
quality requirements and will have to be either reconditioned to meet
requirements, disposed of to non-edible peanut outlets, or re-exported.
The other 90 percent of the lots (2,385 lots) can be expected to meet
quality requirements, and would not have to be reported.
Recommendation 17 would make two clarifications. First, the name of
the importer would be entered on filed inspection certificates, which
are completed by the inspection service. Often the business requesting
the inspection is not the importer, but another entity acting on behalf
of the importer. This proposal would clarify that in such cases, the
importer's identity should be placed on the certificate. This would not
increase the reporting burden because the name is entered by the
inspector, not the importer. Secondly, the recommendation clarifies
that ``source'' documents must be used when reporting disposition of
failing lots. This also is not an increase in requirements, but a
clarification to identify the kinds of documentation needed to meet the
reporting requirements of this regulation. The documentation should be
available to importers as part of their normal business practices.
Savings: If importers are not required to file certificates on lots
meeting program requirements, a savings of approximately 4,770
responses would be realized (2,385 lots, times 2 certificates per lot)
and 398 hours saved (4,770 times 5 minutes per response). The new
reporting burden under Recommendation 17 would be 4 responses for each
of the 265 imported lots failing requirements, or 1,060 total
responses. At 3.5 minutes per filing, the total reporting burden for
filing disposition of failing lots only is projected to be 62 hours.
The new average would be 70 responses and 4 hours per importer. If this
proposed regulation does not become effective, the 1,999 reporting
burden on importers would be approximately 5,830 responses filed, and,
based on 5 minute reporting time per response, roughly 485 burden
hours. Thus, Recommendation 17 could result in an estimated savings of
roughly 4,770 responses and 423 burden hours in 1999.
Recommendation 18: A small portion of the 5,000 hours under the
current reporting burden accounts for importers filing requests for
extension of the reporting period. Recommendation 18 would extend the
reporting period from 23 days after entry to 180 days after conditional
release by the Customs Service. The 23-day period proved to be too
short for reporting most imported lots, forcing importers to request
extensions on nearly all lots imported during 1997 and 1998. Extension
of the reporting period to 180 days should
[[Page 46191]]
alleviate the need to file requests for extension for almost all
imported peanut lots. In addition, extension of the reporting period
also should affect an importer's reporting burden because, with more
time to meet requirements, an importer would be able to collect
certificates as the lots are certified, and file all certificates on
failing lots at one time, thus saving the burden of reporting
individual lots. After deadline extensions were granted by AMS during
the 1997 and 1998 quota periods, importers filed outstanding reports in
groups.
Savings: Extending the reporting period from 23 days to 180 days
means importers would likely not have to request extensions and they
would be able to combine the failing lot certificates into fewer
reports. Savings from the proposed reduction in the reporting burden is
factored into the estimate of Recommendation 17.
Recommendations 10, 15, and 20 would clarify reporting requirements
but not change the burden. Recommendation 10 would clarify that
importers may designate other entities (aflatoxin testing laboratories,
customs import brokers, warehouses, blanchers, crushers, etc.) to file
certificates and reports on their behalf. This reporting may be done as
a part of the business contract between the importer and the service-
provider at little or no cost to the importer, thus relieving the
importer of the reporting burden. Recommendation 15 would clarify the
information that is needed on stamp-and-fax documents. This change in
information needed would not increase the time needed to complete the
stamp-and-fax document or the reporting burden. Recommendation 20 would
clarify that if peanuts are not covered in a stamp-and-fax document and
are not inspected--but are subsequently exported--those peanuts should
not be reported.
Total average savings, reporting burden: This proposed rule could
represent an annual savings of approximately 5,300 responses and 467
reporting hours.
The savings may be only a few minutes for small importers who
import a few containers of peanuts. A large importer of 8 million
pounds of peanuts--200 lots with 20 lots failing requirements--could
have the following reporting burden in 1999 (vs. the current burden
estimate in parentheses): 40 stamp-and-fax notices (80 stamp-and-fax
notices); 0 certificates on passing lots (360 certificates on passing
lots); 80 certificates on failing lots (80 certificates on failing
lots); 0 deadline extensions (40 deadline extensions); total 120
reports filed (total 560 reports filed); 8 hours reporting burden (46.6
hours reporting burden). These are rough estimates for general
comparison purposes only.
Recordkeeping burden: In addition to the reporting requirements,
Section 999.600 requires that importers retain copies of certifications
and entry documentation for not less than two years after the calendar
year of acquisition. Customs Service document retention requirements
are five years. While the importers would not file grade and aflatoxin
certificates on passing lots, they must store that information for AMS
and the Customs Service. The current recordkeeping burden totals 125
hours, based on 25 respondents retaining records--an average of 5
recordkeeping hours per importer. The revised recordkeeping burden,
based on the 21 percent increase in the quota volume and 15 record
keepers, would be 151 hours for an average of 10 recordkeeping hours
per importer.
Cumulative new burden: This proposed rule would require a new
annual reporting and total recordkeeping burden for OMB number 0581-
0176 of 1590 responses and 257 hours. This compares to the current
burden of 5,000 responses and 425 hours. The proposed new burden would
average 106 annual responses and 17 burden hours for each peanut
importer. The burden hours per importer is increased because the
estimated number of importers is sharply reduced.
Comments to this amended Paperwork Reduction Act burden should
reference this proposed regulation and the date and page number of this
Federal Register. Comments should be submitted to the Desk Officer for
Agriculture, Office of Information and Regulatory Affairs, Office of
Management and Budget, Washington, D.C., 20503. OMB is required to make
a decision concerning the collection of information contained in this
rule between 30 and 60 days after submission to OMB. Therefore, a
comment to OMB is best assured of having full effect if OMB receives it
within 30 days of publication. This does not affect the deadline for
the public to comment on the rule.
Comments on proposed reduction of the paperwork burden also should
be submitted to the Department in care of the Docket Clerk, Fruit and
Vegetable Programs, AMS, USDA, P.O. Box 96456, room 2523-S, Washington,
DC 20090-6456; fax: (202) 720-5698, or E-mail:
moabdocketclerk@usda.gov. All comments received will also become a
matter of public record.
Regulatory Flexibility Analysis
Pursuant to requirements set forth in the Regulatory Flexibility
Act (RFA), the AMS has considered the economic impact of the import
regulation on small entities and whether these proposed changes to the
regulation would disproportionately or unfairly effect small entities.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to such actions in order that small businesses will
not be unduly or disproportionately burdened. Accordingly, AMS has
prepared the following initial regulatory flexibility analysis.
The import regulation is required by law--subparagraph (f)(2) of
Section 108B of the Agricultural Act of 1949, as amended, and the
Federal Agriculture Improvement and Reform Act of 1996. Subparagraph
(f)(2) mandates that the Secretary shall require that ``all peanuts in
the domestic and export marketplace fully comply with quality standards
under Marketing Agreement 146.'' Handling requirements similar to those
established under the Agreement also are established in the import
regulation, to the extent necessary to assure comparability of quality
standards. The import regulation was issued June 11, 1996 (61 FR 31306,
June 19, 1996) with the intent to minimize the regulatory burden on
importers. An amendment was issued December 31, 1996, (62 FR 1269,
January 9, 1997), to conform to changes in the Agreement regulations
and to add necessary storage reporting requirements.
Experience of the 1997 and 1998 peanut quota periods shows that
approximately 15 business entities imported peanuts and were subject to
this import regulation. Importers appear to cover a broad range of
business entities, including fresh and processed food handlers, and
both large and small commodity brokers who buy agricultural products on
behalf of others. Small agricultural service firms have been defined by
the Small Business Administration (13 CFR 121.601) as those having
annual receipts of less than $5,000,000, and small agricultural
producers are defined as those having annual receipts of less than
$500,000. Less than one third of the importers appear to be small
business entities. The majority of peanut importers are large business
entities under this definition. AMS is not aware of any peanut
producers (farmers) who imported peanuts during these quota years.
The 1997 and 1998 peanut quota years were the first two years that
imported peanuts have been regulated
[[Page 46192]]
under 7 CFR Part 999.600. Analysis of the regulatory impact of the
regulation is complicated by several factors. Peanuts are imported from
at least half a dozen countries and can be imported in inshell,
shelled, or cleaned-inshell forms. This makes it difficult to compare
the costs of importation with purchase price of the product. The costs
of importation can vary greatly, with significant cost factors being
transportation distance, shipment method, wharf fees, demurrage costs,
storage charges, and the quality of the peanuts imported.
The proposed amendments to the import regulation in this rulemaking
action are recommended for the following reasons. Five changes are
proposed to conform with changing Agreement requirements (relaxing the
tolerance for unshelled and damaged kernels; allowing lots with
excessive fall-through peanuts to be blanched; and allowing failing
lots to be roasted during blanching without requiring grade re-
inspection). Seventeen changes are proposed by AMS to update, clarify,
and reduce the importation procedures and reporting requirements
specified in the regulation. Of the 17 changes, three relax reporting
requirements by removing nearly 90 percent of the documents that must
be filed and extending the reporting period to ease the time pressures
for those documents that must be filed. The AMS changes would improve
oversight of imported peanut lots, increase quality assurance, and
correct misunderstandings of importation procedures.
All of these proposed changes are intended to apply uniformly to
both large and small importers. None are intended to, or are expected
to, disproportionately affect small importers. The changes would have
the following regulatory impact on importers.
Recommendation 1 would make two changes in definitions. The first
change would remove reference to an out-of-date aflatoxin level for
non-edible peanuts in paragraph (a)(10) defining Negative aflatoxin
content. The level of 25 ppb should have been removed in previous
rulemaking. No imported peanuts have been graded against this old
quality level. Recommendation 1 also would remove the word ``Peanuts''
from the title of Marketing Agreement No. 146 as specified in paragraph
(a)(15) defining PAC-approved laboratories. The term ``Peanuts'' is not
a part of the title of the Agreement.
Recommendation 2 would change the definition of Conditionally
released in paragraph (a)(16) by removing the words ``before final
release'' and adding reference to reconditioning. The ``final release''
term does not conform with Customs Service terminology. The addition of
the words ``and, if necessary, reconditioning'' helps complete the
definition. These changes do not alter the intent or meaning of the
definition. There would be no regulatory impact on importers.
Recommendation 3 would remove a redundant sentence in paragraph
(b)(1) relating to use of Seg. 1 peanuts for human consumption only.
This reference appears twice in the same paragraph.
Recommendations 4 and 6 are inter related and are proposed to make
the import regulation consistent with changes in handling and quality
requirements to the Agreement. These changes simplify both the import
and Agreement regulations. Recommendation 6 would remove Table 2,
Superior Quality Requirements--Peanuts for Human Consumption from
paragraph (c)(1)(ii). Currently, peanut lots meeting the higher quality
requirements of Table 2 may be shipped to buyers prior to receiving
aflatoxin analyses on the lots. Recommendation 4 is a conforming change
that would have the affect or requiring importers to receive aflatoxin
analyses on all lots prior to forwarding the peanuts to buyers.
While these changes represent a tightening of handling
requirements, the affect on importers is minimal. Under limited
circumstances, the provisions help reduce, by a few days, the storage
time for such high quality peanuts. AMS does not have information on
the number of imported lots that would have been affected by this
proposal had it been in effect for the last two quota seasons. AMS also
does not have financial data on storage costs and whether those costs
are on a daily or weekly basis. However, in conversations between AMS
and importers and customs brokers during 1997 and 1998, importers did
not indicate that they shipped superior quality lots without waiting
for aflatoxin certification. Also, importers did not contact AMS about
the timeliness of aflatoxin certifications. Given today's overnight
mail and facsimile technologies, aflatoxin analyses are routinely
reported within two days. Finally, importers who arranged for arrival,
inspection, and bonded storage prior to quota opening had quality and
aflatoxin certifications ready when the peanuts were released by the
Customs Service. Thus, delays and any regulatory impact due to these
proposed changes would be negligible.
Not all categories of peanuts would be removed from Table 2. Three
``with split'' categories of peanuts would be moved from Table 2 to
Table 1 to retain the small marketing niche in the domestic market for
lots with high percentages of split kernels. This change was made to
the Agreement regulations in 1998 and is proposed in this regulation to
conform with that change. Any impact on importers would be positive as
it would allow lots with high split kernel content to continue to be
imported. AMS does not maintain data on the number of peanut lots that
were imported under these ``with splits'' categories. Data on the last
two years' imported peanut lots cannot be used to reliably indicate
quality of future shipments or the impact of this relaxation.
Recommendation 5 would relax tolerances in Table 1 for ``unshelled
and damaged kernels by one half of one percent in split lots. The
change is made to be consistent with a change already made to the
Agreement regulations. It should reduce the number of lots that must be
reconditioned to meet edible quality requirements. Reconditioning a lot
to remove excessive splits can significantly increase costs by adding
additional transportation costs, remilling or blanching charges, and
additional inspection fees. Data on the last two years' imported peanut
lots cannot be used to reliably indicate the impact on future shipments
because the quality of imports varies significantly from year to year
and country to country.
Recommendation 7 would set a maximum limit on the volume of farmers
stock peanuts that may comprise one lot. Paragraph (d)(3)(ii) would be
modified. The volume, 24,000 pounds (10,886 kg), has been in effect for
domestic peanuts as part of inspection service procedures. The lot size
is the largest for which optimum sampling procedures can be applied and
is the industry standard. Buying points where farmers stock peanuts
must be inspected are set up to handle this maximum lot size. For
logistical and cost reasons, farmers stock peanuts have been imported
only from Mexico--in large semi-trailer truck loads. The 24,000 pound
limit approximates the volume of farmers stock peanuts that are carried
in semi-trailer trucks. It would be unrealistic to transport a lot
larger than 24,000 pounds. Only a small percentage of imported peanuts
were imported in farmers stock form during 1997 and 1998 and all were
within this maximum lot size. Thus, Recommendation 7 can be expected to
have no negative impact on peanut importers.
[[Page 46193]]
Recommendation 8 would add new paragraph (d)(4) to strengthen lot
identification requirements for imported peanuts. In some situations,
the proposed modified positive lot identification procedures could take
additional warehouse personnel and space, as well as inspection service
time. However, warehouse labor is needed to lay out all bags for
sampling, so costs in addition to those normally charged should not be
significant. Additional inspection time could vary from a few minutes
to wrap PLI tape around containers or stacked bags to 30 minutes or
more to reassemble bags on pallets and shrink-wrapping pallets or
stenciling individual bags with spray paint. The PLI requirements could
increase costs for some, but not all, imported lots. Inspection service
sampling and grading costs currently are $43 an hour. Inspections
generally take from one to three hours, including travel time, to
complete. The costs to importers would be proportionate to the number
of lots inspected and is not considered to unfairly affect small
importers.
The amended PLI requirement would make the import regulation more
consistent with domestic program PLI requirements, and is consistent
with the intent of the Act. Importers, as well as domestic peanut
producers, handlers and manufacturers benefit from quality assurances
and the integrity of the product--due, in large part, to enforced PLI
procedures. The benefits of quality assurance and product integrity far
outweigh the small increased costs of modified PLI methods proposed in
this rulemaking.
Recommendation 9 would remove a redundant sentence in paragraph
(d)(4)(iii) which provides that laboratories provide aflatoxin assay
results to importers. This reference is repeated in paragraph
(d)(4)(v). There is no regulatory impact from this change.
Recommendation 10 would make minor changes in three paragraphs
regarding the mandatory nature of aflatoxin testing and reporting test
results. The regulation clearly states throughout that chemical
analysis is required on imported peanuts. Paragraph (d)(4)(iv)(A)
clarifies that importers ``shall,'' rather than ``should,'' contact a
laboratory to arrange for chemical testing. Also under Recommendation
10, the clarification that laboratories can be designated by the
importer to report test results to AMS would be moved from paragraph
(d)(4)(v)(B) to paragraph (d)(5)(v) for better placement of that
instruction. These changes identify an optional reporting procedure and
have no regulatory impact on importers.
Recommendation 11 would amend redesignated paragraph (d)(5)(iv)(A)
by updating the list of aflatoxin testing laboratories certified to
conduct chemical analyses on imported peanuts. There is no regulatory
impact.
Recommendation 12 would add a new sentence to introductory
paragraph (e) to provide a blanching option for shelled peanuts failing
quality requirements because of excessive ``fall through.'' This is a
relaxation in the regulation and is consistent with Agreement
requirements. AMS does not maintain records of the number of lots that
fail ``fall through'' and, thus, cannot estimate the impact of this
relaxation. However, allowing such lots to be reconditioned offers the
possibility of increasing the per ton value of the lot from
approximately $150 for non-edible use to over $500 for edible peanuts.
Recommendation 13 also would relax requirements by adding a new
paragraph (e)(4), pursuant to a change in Agreement regulations. The
change would allow lots meeting grade requirements but failing
aflatoxin requirements to be blanched until roasted and then
reinspected only for aflatoxin content. The impact of this relaxation
can be significant if the importer has many such failing lots which can
be roasted for the buyer. Savings are accrued because the peanuts do
not have to be removed from the blanching process for inspection and
then returned to the blanching process for the remaining portion of the
roasting process. The original grade certificate would be recognized
and the only additional inspection charges would be for sampling and
aflatoxin analyses. AMS does not have data on the actual costs that
could be saved in this process and cannot estimate the number of
imported peanuts that may be affected by it in the future.
Recommendations 14, 15, and 16 would relax requirements relating to
the stamp-and-fax entry process in paragraph (f)(1). Recommendation 14
would remove the terms which specify that the stamp-and-fax document be
filed ``prior to arrival'' at the port-of-entry. Experience shows that
importers may not have all of the needed information until after
arrival of the peanuts. Recommendation 15 would amend paragraph (f)(1)
by reducing, slightly, the information required on stamp-and-fax
documents. Information on subsequent inspection of the arriving peanuts
is not necessary for the purposes of the stamp-and-fax. One needed
piece of information, the Customs Service entry number applicable to
the lot, is not specified. In total, these changes reduce the reporting
burden by a few words. The needed information was included on the
stamp-and-fax documents during 1997 and 1998, but was not so specified
as part of the entry information in paragraph (f)(1). Recommendation 16
would remove the requirement in paragraph (f)(1) that a copy of the
stamp-and-fax document be forwarded to AMS headquarters. This reduces
one reporting requirement for importers. These three relaxations are
proposed to make the entry procedure consistent with the reporting
needs of AMS. The regulatory impact is minimal but does reduce
requirements on importers.
Recommendation 17 would reduce the number of lots that have to be
reported by requiring that only certificates on failing lots be filed
by importers. If imported peanut quality is the same in 1999 as the
average in 1997 and 1998, roughly 90 percent of the lots will meet
quality requirements and will not have to be reported to AMS
headquarters. This would save an estimated 423 reporting hours. The
revision is in paragraph (f)(2).
Recommendation 18 would extend the reporting period specified in
paragraph (f)(3) from 23 days after entry to 180 days after conditional
release by the Customs Service. The extended reporting period allows
importers more time to make good business decisions regarding imported
lots, particularly failing lots that must be either reconditioned or
re-exported. Also, with an extended reporting period, importers should
not have to request extensions of reporting periods and could file all
failing certifications and dispositions at one time after all
certifications and reports are acquired. This could save the time of
filing individual reports as each lot is certified, disposed of, or re-
exported.
Recommendation 19 provides for up to a 60-day extension of the
proposed 180 day reporting period. There is no time limit on domestic
peanut disposition. However, because of Customs Service required
liquidation of entry documentation, there must be some time limit for
importers to obtain clearances on failing lots and report to AMS. A
240-day reporting period represents a compromise between the open-ended
domestic requirements and Customs Service liquidation schedules. The
impact of this requirement should be minimal, as continued storage
costs or successive reconditions would eventually reduce margins and
force business decisions on lots pending eight months after conditional
entry. A new paragraph (f)(5) would be added.
[[Page 46194]]
Recommendations 20, 21, and 22 propose minor changes that would
have no regulatory impact on importers. Recommendation 20 clarifies
that if a container or shipment is re-exported without conditional
entry by the Customs Service, it does not have to be reported to AMS
and inspected. Such situations were not foreseen in the original import
regulation and are included for clarity in new paragraph (f)(6) in this
regulation. Recommendation 21 makes a minor wording change in paragraph
(g)(1) regarding peanuts that are ``intended'' to be entered but are
not entered. Recommendation 22 clarifies that those who are billed for
inspections are those requesting inspections. Customs house brokers and
storage warehouses often request inspections, and are the entities
billed for services provided. However, costs of the inspections are
borne by the importer. These three recommendations clarify current
provisions and do not change the regulatory aspects of the rule or
reporting burden already authorized by OMB.
The relaxation of quality and handling requirements proposed in
this rulemaking also would result in an overall reduction of the
information reporting and recordkeeping burden of the peanut import
regulation, currently assigned as OMB number 0581-0176. The most
significant reduction in the reporting burden would be that importers
must file copies of grade and aflatoxin certificates only on failing
lots, rather than all lots (Recommendation 17) . Using the quality of
1997 and 1998 imported peanuts as a guide, this proposal could reduce
that reporting requirement by as much as 90 percent. The proposed
recordkeeping requirement would be increased by an estimated 21 percent
because the 1999 duty-free tariff quota is 21 percent higher than the
1997 quota on which the current recordkeeping burden is based. Thus,
this proposed rule would establish an annual reporting and
recordkeeping burden of 1,590 responses and 257 hours. This is a
reduction from the current burden of 5,000 responses and 425 hours.
Finally, the Department has not identified any relevant Federal
rules that duplicate, overlap, or conflict with this proposed rule.
Besides meeting AMS import quality requirements, clearance of each
imported peanut lot also must be obtained from the Customs Service,
FDA, and APHIS. Program requirements of those entities do not overlap
the quality requirements of this regulation. AMS has consulted with the
Customs Service to assure that the proposed changes are consistent with
its entry procedures.
Based on available information, the Administrator of the AMS has
determined that this proposed rule could impose very small additional
costs (PLI) on affected importers, but could save considerable
reconditioning, storage, and reporting expenses. The benefits of
maintaining a high quality product should exceed any additional costs
which could be incurred in meeting these requirements. On balance, the
proposed changes would be expected to reduce program costs incurred by
importers.
This proposal provides a 30-day period for interested persons to
comment on the proposed changes in quality and handling requirements,
on import procedures, and on the impacts of this action on small
businesses. The proposed changes should be put into effect by January
1, 1999, when the next (Mexican) peanut quota period opens. Comments on
the proposed reduction in paperwork reporting and recordkeeping burden
must be submitted to both OMB and AMS within 60 days of publication of
this proposal.
Upon publication, this proposal will be distributed to the
Washington, D.C. embassies of peanut exporting countries, all known
peanut exporters and importers, customs house brokers, storage
warehouses, and reconditioning facilities. This proposal also will be
electronically disseminated on the Internet and comments may be
received electronically. Comments should be submitted to the mailing
address, fax number, or E-mail address listed under ADDRESSES at the
beginning of this document. All written comments timely received will
be considered before a final determination is made on the
recommendations proposed herein.
List of Subjects in 7 CFR Part 999
Dates, Food grades and standards, Hazelnuts, Imports, Nuts,
Peanuts, Prunes, Raisins, Reporting and recordkeeping requirements,
Walnuts.
For the reasons set forth in the preamble, 7 CFR Part 999 is
proposed to be amended as follows:
PART 999--SPECIALTY CROPS; IMPORT REGULATIONS
1. The authority citation for 7 CFR part 999 continues to read as
follows:
Authority: 7 U.S.C. 601-674, 7 U.S.C. 1445c-3, and 7 U.S.C.
7271.
2. Section 999.600 is revised to read as follows:
Sec. 999.600 Regulation governing imports of peanuts.
(a) Definitions. (1) Peanuts means the seeds of the legume Arachis
hypogaea and includes both inshell and shelled peanuts produced in
countries other than the United States, other than those marketed in
green form for consumption as boiled peanuts.
(2) Farmers stock peanuts means picked and threshed raw peanuts
which have not been shelled, crushed, cleaned or otherwise changed
(except for removal of foreign material, loose shelled kernels, and
excess moisture) from the form in which customarily marketed by
producers.
(3) Inshell peanuts means peanuts, the kernels or edible portions
of which are contained in the shell.
(4) Incoming inspection means the sampling and inspection of
farmers stock peanuts to determine Segregation quality.
(5) Segregation I peanuts, unless otherwise specified, means
farmers stock peanuts with not more than 2.00 percent damaged kernels
nor more than 1.00 percent concealed damage caused by rancidity, mold,
or decay and which are free from visible Aspergillus flavus mold.
(6) Segregation 2 peanuts, unless otherwise specified, means
farmers stock peanuts with more than 2.00 percent damaged kernels or
more than 1.00 percent concealed damage caused by rancidity, mold, or
decay and which are free from visible Aspergillus flavus mold.
(7) Segregation 3 peanuts, unless otherwise specified, means
farmers stock peanuts with visible Aspergillus flavus mold.
(8) Shelled peanuts means the kernels of peanuts after the shells
are removed.
(9) Outgoing inspection means the sampling and inspection of
either: shelled peanuts which have been cleaned, sorted, sized, or
otherwise prepared for human consumption markets; or, inshell peanuts
which have been cleaned, sorted and otherwise prepared for inshell
human consumption markets.
(10) Negative aflatoxin content means 15 parts-per-billion (ppb) or
less for peanuts which have been certified as meeting edible quality
grade requirements.
(11) Person means an individual, partnership, corporation,
association, or any other business unit.
(12) Secretary means the Secretary of Agriculture of the United
States or any officer or employee of the U.S. Department of Agriculture
(Department or USDA) who is, or who may hereafter
[[Page 46195]]
be, authorized to act on behalf of the Secretary.
(13) Inspection service means the Federal or Federal-State
Inspection Service, Fruit and Vegetable Programs, Agricultural
Marketing Service, USDA.
(14) USDA laboratory means laboratories of the Science and
Technology Programs, Agricultural Marketing Service, USDA, that
chemically analyze peanuts for aflatoxin content.
(15) PAC-approved laboratories means laboratories approved by the
Peanut Administrative Committee, pursuant to Marketing Agreement No.
146 (7 CFR part 998), that chemically analyze peanuts for aflatoxin
content.
(16) Conditionally released means released from U.S. Customs
Service custody for further handling, sampling, inspection, chemical
analysis, storage, and, if necessary, reconditioning.
(17) Importation means the arrival of a peanut shipment at a port-
of-entry with the intent to enter the peanuts into channels of commerce
of the United States.
(b) Incoming regulation. (1) Farmers stock peanuts presented for
consumption must undergo incoming inspection. All foreign-produced
farmers stock peanuts for human consumption must be sampled and
inspected at a buying point or other handling facility capable of
performing incoming sampling and inspection. Sampling and inspection
shall be conducted by the inspection service. Only Segregation 1
peanuts certified as meeting the following requirements may be used in
human consumption markets:
(i) Moisture. Except as provided under paragraph (b)(2) of this
section, peanuts may not contain more than 10.49 percent moisture:
Provided, That peanuts of a higher moisture content may be received and
dried to not more than 10.49 percent moisture prior to storage or
milling.
(ii) Foreign material. Peanuts may not contain more than 10.49
percent foreign material, except that peanuts having a higher foreign
material content may be held separately until milled, or moved over a
sand-screen before storage, or shipped directly to a plant for prompt
shelling. The term ``sand-screen'' means any type of farmers stock
cleaner which, when in use, removes sand and dirt.
(iii) Damage. For the purpose of determining damage, other than
concealed damage, on farmers stock peanuts, all percentage
determinations shall be rounded to the nearest whole number.
(2) Seed peanuts. Farmers stock peanuts determined to be
Segregation l quality, and shelled peanuts certified negative to
aflatoxin (15 ppb or less), may be imported for seed purposes.
Residuals from the shelling of Segregation l seed peanuts may be milled
with other imported peanuts of the importer, and such residuals meeting
quality requirements specified in paragraph (c)(1) of this section may
be disposed to human consumption channels. Any portion not meeting such
quality requirements shall be disposed to non-edible peanut channels
pursuant to paragraphs (f) and (g) of this section. All disposition of
seed peanuts and residuals from seed peanuts, whether commingled or
kept separate and apart, shall be reported to the Secretary pursuant to
paragraphs (f)(2) and (f)(3) of this section. The receiving seed outlet
must retain records of the transaction, pursuant to paragraph (g)(7) of
this section.
(3) Oilstock and exportation. Farmers stock peanuts of lower
quality than Segregation 1 (Segregation 2 and 3 peanuts) shall be used
only in non-edible outlets. Segregation 2 and 3 peanuts may be
commingled but shall be kept separate and apart from edible quality
peanut lots. Commingled Segregation 2 and 3 peanuts and Segregation 3
peanuts shall be disposed only to oilstock or exported. Shelled peanuts
and cleaned-inshell peanuts which fail to meet the requirements for
human consumption in paragraphs (c)(1) or (c)(2), respectively, of this
section, may be crushed for oil or exported.
(c) Outgoing regulation. No person shall import peanuts for human
consumption into the United States unless such peanuts are Positive Lot
Identified and certified by the inspection service as meeting the
following requirements:
(1) Shelled peanuts. (i) No importer shall dispose of shelled
peanuts to human consumption markets unless such peanuts are Positive
Lot Identified pursuant to paragraph (d)(4) of this section, certified
as ``negative'' to aflatoxin, pursuant to paragraph (d)(5)(v)(A) of
this section, and meet the requirements specified in the following
table.
Minimum Grade 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 materials Moisture
kernels minor Sound split and Sound whole kernels Total (percent) (percent) (percent)
(percent) defects broken kernels
(percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Excluding lots of ``splits''
--------------------------------------------------------------------------------------------------------------------------------------------------------
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.
Runner with splits (not more than 1.50 2.50 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 1.50 2.50 3.00% \17/64\ inch 3.00%; \15/64\ inch 4.00; both screens.. .10 9.00
than 15% sound splits). round screen. slot screen.
[[Page 46196]]
Spanish & Valencia with splits 1.50 2.50 3.00%; \16/64\ inch 2.00%; \15/64\ inch 4.00; both screens.. .10 9.00
(not more than 15% sound splits). round screen. slot screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Lots of ``splits''
--------------------------------------------------------------------------------------------------------------------------------------------------------
Runner (not more than 4% sound 2.00 2.50 3.00%; \17/64\ inch 3.00%; \14/64\ x 4.00; both screens.. .20 9.00
whole kernels). round screen. \3/4\ inch slot
screen.
Virginia (not less than 90% 2.00 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 & Valencia (not more than 2.00 2.50 3.00%; \16/64\ inch 3.00%; \13/64\ x 4.00; both screens.. .20 9.00
4% sound whole kernels). round screen. \3/4\ inch slot
screen.
--------------------------------------------------------------------------------------------------------------------------------------------------------
(ii) The term ``fall through,'' as used in this section, shall mean
sound split and broken kernels and whole kernels which pass through
specified screens.
(2) Cleaned-inshell peanuts. Peanuts declared as cleaned-inshell
peanuts may be presented for sampling and outgoing inspection at the
port-of-entry. Alternatively, peanuts may be conditionally released as
cleaned-inshell peanuts but shall not subsequently undergo any
cleaning, sorting, sizing or drying process prior to presentation for
outgoing inspection as cleaned-inshell peanuts. Cleaned-inshell peanuts
which fail outgoing inspection may be reconditioned or redelivered to
the port-of-entry, at the option of the importer. Cleaned-inshell
peanuts determined to be unprepared farmers stock peanuts must be
inspected against incoming quality requirements and determined to be
Segregation l peanuts prior to outgoing inspection for cleaned-inshell
peanuts. Cleaned-inshell peanuts intended for human consumption may not
contain more than:
(i) 1.00 percent kernels with mold present, unless a sample of such
peanuts is drawn by the inspection service and analyzed chemically by a
USDA or PAC-approved laboratory and certified ``negative'' as to
aflatoxin.
(ii) 2.00 percent peanuts with damaged kernels;
(iii) 10.00 percent moisture (carried to the hundredths place); and
(iv) 0.50 percent foreign material.
(d) Sampling and inspection. (1) All sampling and inspection,
quality certification, chemical analysis, and Positive Lot
Identification, required under this section, shall be done by the
inspection service, a USDA laboratory, or a PAC-approved laboratory, as
applicable, in accordance with the procedures specified in this
section. The importer shall make arrangements with the inspection
service for sampling, inspection, Positive Lot Identification and
certification of all peanuts accumulated by the importer. The importer
also shall make arrangements for the appropriate disposition of peanuts
failing edible quality requirements of this section. All costs of
sampling, inspection, certification, identification, and disposition
incurred in meeting the requirements of this section shall be paid by
the importer. Whenever peanuts are offered for inspection, the importer
shall furnish any labor and pay any costs incurred in moving and
opening containers as may be necessary for proper sampling and
inspection.
(2) For farmers stock inspection, the importer shall cause the
inspection service to perform an incoming inspection and to issue a
CFSA-1007, ``Inspection Certificate and Sales Memorandum,'' form
designating the lot as Segregation 1, 2, or 3 quality peanuts. For
shelled and cleaned-inshell peanuts, the importer shall cause the
inspection service to perform an outgoing inspection and issue an FV-
184-9A, ``Milled Peanut Inspection Certificate,'' reporting quality and
size of the shelled or cleaned inshell peanuts, whether the lot meets
or fails to meet quality requirements for human consumption of this
section, and that the lot originated in a country other than the United
States. The importer shall provide to the Secretary copies of all CFSA-
1007 and FV-184-9A forms applicable to each peanut lot conditionally
released to the importer. Such reports shall be submitted as provided
in paragraphs (f)(2) and (f)(3) of this section.
(3) Procedures for sampling and testing peanuts. Sampling and
testing of peanuts for incoming and outgoing inspections of peanuts
presented for consumption into the United States will be conducted as
follows:
(i) Application for sampling. The importer shall request inspection
and certification services from one of the following inspection service
offices convenient to the location where the peanuts are presented for
incoming and/or outgoing inspection. To avoid possible delays, the
importer should make arrangements with the inspection service in
advance of the inspection date. A copy of the Customs Service entry
document specific to the peanuts to be inspected shall be presented to
the inspection official at the time of sampling the lot.
(A) The following offices provide incoming farmers stock
inspection:
Dothan, AL, tel: (334) 792-5185,
Graceville, FL, tel: (904) 263-3204,
Winter Haven, FL, tel: (941) 291-5820, ext 260,
Albany, GA, tel: (912) 432-7505,
Williamston, NC, tel: (919) 792-1672,
Columbia, SC, tel: (803) 253-4597,
Suffolk, VA, tel: (757) 925-2286,
Portales, NM, tel: (505) 356-8393,
Oklahoma City, OK, tel: (405) 521-3864,
Gorman, TX, tel: (817) 734-3006.
[[Page 46197]]
(B) The following offices, in addition to the offices listed in
paragraph (d)(3)(i)(A) of this section, provide outgoing sampling for
certification of shelled and cleaned in-shell peanuts:
Eastern U.S.
Mobile, AL, tel: (334) 415-2531,
Jacksonville, FL, tel: (904) 359-6430,
Miami, FL, tel: (305) 870-9542,
Tampa, FL, tel: (813) 272-2470,
Presque Isle, ME, tel: (207) 764-2100,
Baltimore/Washington, tel: (301) 317-4387,
Boston, MA, tel: (617) 389-2480,
Newark, NJ, tel: (201) 645-2636,
New York, NY, tel: (718) 991-7665,
Buffalo, NY, tel: (800) 262-4810,
Philadelphia, PA, tel: (215) 336-0845.
Central U.S.
New Orleans, LA, tel: (504) 589-6741,
Detroit, MI, tel: (313) 226-6059,
St. Paul, MN, tel: (612) 296-8557,
Las Cruces, NM, tel: (505) 646-4929,
Alamo TX, tel: (956) 787-4091,
El Paso, TX, tel: (915) 540-7723,
Houston, TX, tel: (713) 923-2557.
Western U.S.
Nogales, AZ, tel: (520) 281-4719,
Los Angeles, CA, tel: (213) 894-2489,
San Francisco, CA, tel: (415) 876-9313,
Honolulu, HI, tel: (808) 973-9566,
Salem, OR, tel: (503) 986-4620,
Seattle, WA, tel: (206) 859-9801.
(C) Questions regarding inspection services or requests for further
assistance may be obtained from: Fresh Products Branch, P.O. Box 96456,
room 2049-S, Fruit and Vegetable Programs, 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 maximum lot size of farmers stock
peanuts shall be one conveyance, or two or more conveyances not
exceeding a combined weight of 24,000 pounds. Shelled peanut lots and
cleaned-inshell lots, in bulk or bags, shall not exceed 200,000 pounds.
For farmers stock, shelled and cleaned-inshell lots not completely
accessible for sampling, the applicant shall be required to have lots
made accessible for sampling pursuant to inspection service
requirements. The importer shall cause appropriate samples of each lot
of edible quality shelled peanuts to be drawn by the inspection
service. The amount of such peanuts drawn shall be large enough to
provide for a grade and size analysis, for a grading check-sample, and
for three 48-pound samples for aflatoxin assay. Because there is no
acceptable method of drawing official samples from bulk conveyances of
shelled peanuts, the importer shall arrange to have bulk conveyances of
shelled peanuts sampled during the unloading process. A bulk lot
sampled in this manner must be Positive Lot Identified by the
inspection service and held in a sealed bin until the associated
inspection and aflatoxin test results have been reported.
(4) Positive Lot Identification (PLI) shall be applied to all
shelled and cleaned-inshell peanut lots during or immediately after
first inspection by the inspection service or under the guidance of the
inspection service. Positive Lot Identification of a lot may be
accomplished by: Wrapping PLI tape around bags or boxes on pallets;
shrink wrapping pallets or multiple bags and applying a PLI sticker;
stenciling and numbering of individual bags or boxes; affixing PLI
seals on shipping container doors; or by other methods acceptable to
the inspection service that clearly identifies the lot, is securely
affixed to the lot, and prevents peanuts from being removed or added to
the lot. Such positive lot identification methods may be dictated by
the size and containerization of the lot, by warehouse storage or space
requirements, or, by necessary further movement of the lot prior to
receipt of certification. Failing lots that are reconditioned shall be
positive lot identified by sewing tags on bags or affixing a seal and
taping bulk bin containers after such reconditioning or by other means
acceptable to the inspection service that clearly identifies the
peanuts in the lot, is securely affixed to the lot, and which prevents
peanuts from being removed or added to the lot.
(5) Aflatoxin assay. (i) The importer shall cause appropriate
samples of each lot of shelled peanuts intended for edible consumption
to be drawn by the inspection service. The three 48-pound samples shall
be designated by the inspection service as ``Sample 1IMP,'' ``Sample
2IMP,'' and ``Sample 3IMP'' and each sample shall be placed in a
suitable container and lot identified by the inspection service. Sample
1IMP may be prepared for immediate testing or Samples 1IMP, 2IMP and
3IMP may be returned to the importer for testing at a later date, under
Positive Lot Identification procedures.
(ii) The importer shall cause Sample 1IMP to be ground by the
inspection service or a USDA or PAC-approved laboratory in a
subsampling mill. The resultant ground subsample shall be of a size
specified by the inspection service and shall be designated as
``Subsample 1-ABIMP.'' At the importer's option, a second subsample may
also be extracted from Sample 1IMP and designated ``Subsample 1-CDIMP''
which may be sent for aflatoxin assay to a USDA or PAC-approved
laboratory. Both subsamples shall be accompanied by a Milled Peanut
Inspection Certificate or Notice of Sampling signed by the inspector
containing identifying information as to the importer, the lot
identification of the shelled peanut lot, and other information deemed
necessary by the inspection service. Subsamples 1-ABIMP and 1-CDIMP
shall be analyzed only in a USDA or PAC-approved laboratory. The
methods prescribed by the Instruction Manual for Aflatoxin Testing, SD
Instruction-1, August 1994, shall be used to assay the aflatoxin level.
The cost of testing and notification of Subsamples 1-ABIMP and 1-CDIMP
shall be borne by the importer.
(iii) The samples designated as Sample 2IMP and Sample 3IMP shall
be held as aflatoxin check-samples by the inspection service or the
importer until the analyses results from Sample 1IMP are known. Upon
call from the USDA or PAC-approved laboratory, the importer shall cause
Sample 2IMP to be ground by the inspection service in a subsampling
mill. The resultant ground subsample from Sample 2IMP shall be
designated as ``Subsample 2--ABIMP.'' Upon further call from the
laboratory, the importer shall cause Sample 3IMP to be ground by the
inspection service in a subsampling mill. The resultant ground
subsample shall be designated as ``Subsample 3--ABIMP.'' The importer
shall cause Subsamples 2--ABIMP and 3--ABIMP to be sent to and analyzed
only in a USDA or PAC-approved laboratory. Each subsample shall be
accompanied by a Milled Peanut Inspection Certificate or a Notice of
Sampling. All costs involved in the sampling, shipment and assay
analysis of subsamples required by this section shall be borne by the
importer.
(iv)(A) To arrange for chemical analysis, importers shall contact
one of the following USDA or PAC-approved laboratories:
Science and Technology Programs, AMS, 301 West Pearl St., Aulander,
NC 27805 (P.O. Box 279), Tel: (919) 345-1661 Ext. 156, Fax: (919)
345-1991
Science and Technology Programs, AMS, 1211 Schley Ave., Albany, GA
31707, Tel: (912) 430-8490 / 8491, Fax: (912) 430-8534
Science and Technology Programs, AMS, 610 North Main St., Blakely,
GA 31723, Tel: (912) 723-4570, Fax: (912) 723-3294
Science and Technology Programs, AMS, 107 South Fourth St., Madill,
OK 73446, Tel: (405) 795-5615, Fax: (405) 795-3645
Science and Technology Programs, AMS, 715 North Main St., Dawson, GA
31742 (P.O. Box 272), Tel: (912) 995-7257, Fax: (912) 995-3268
[[Page 46198]]
Science and Technology Programs, AMS, 308 Culloden St., Suffolk, VA
23434 (P.O. Box 1130), Tel: (757) 925-2286, Fax: (757) 925-2285
Federal-State Inspection Service Laboratory, 1557 Reeves St.,
Dothan, AL 36303 (P.O. Box 1368, ZIP 36302), Tel: (334) 792-5185,
Fax: (334) 671-7984
Federal-State Inspection Service Laboratory, 201 Broad St.,
Headland, AL 36345 (P.O. Box 447, ZIP 36345-0447), Tel: (334) 693-
2729, Fax: (334) 693-2183
Federal-State Inspection Service Laboratory, 103 Greenville Ave.,
Goshen, AL 36035 (P.O. Box 204), Tel: (334) 484-3340, Fax: (334)
484-3340
Federal-State Inspection Service Laboratory, 805 North Main St.,
Enterprise, AL 36330 (P.O. Box 310926), Tel: (334) 347-6525
ABC Research, 3437 SW 24th Ave., Gainesville, FL 32607, Tel: (904)
372-0436, Fax: (904) 378-6483
J. Leek Associates, Inc., 200 Wyandotte, Albany, GA 31705 (P.O. Box
50395, ZIP 31703), Tel: (912) 889-8293, Fax: (912) 888-1166
J. Leek Associates, Inc., 139 South Lee St., Ashburn, GA 31714, Tel:
(912) 567-3703, Fax: (912) 567-8055
J. Leek Associates, Inc., 402 S.E. 3rd Street, Anadarko, OK 73005,
Tel: (405) 247-3266, Fax: (405) 247-3270
J. Leek Associates, Inc., 502 West Navarro St., DeLeon, TX 76444
(P.O. Box 6), Tel: (817) 893-3653, Fax: (817) 893-3640
Pert Laboratories, 145 Peanut Drive, Edenton, NC 27932 (P.O. Box
267), Tel: (919) 482-4456, Fax: (919) 482-5370
Pert Laboratory South, Hwy 82 East, Seabrook Drive, Sylvester, GA
31791 (P.O. Box 129), Tel: (912) 776-1256, Fax: (912) 776-1029
Southern Cotton Oil Company, 600 E. Nelson Street, Quanah, TX 79252
(P.O. Box 180), 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
Programs, AMS, USDA, P.O. Box 96456, room 3507-S, Washington, DC 20090-
6456, Tel. (202) 720-5231, or Fax (202) 720-6496.
(v) Reporting aflatoxin assays. A separate aflatoxin assay
certificate, Form CSSD-3 ``Certificate of Analysis for Official
Samples'' or equivalent PAC-approved laboratory form, shall be issued
by the laboratory performing the analysis for each lot. The assay
certificate shall identify the importer, the volume of the peanut lot
assayed, date of the assay, and numerical test result of the assay. The
importer shall file, or cause to be filed, with the Secretary, all USDA
Form CSSD-3, or equivalent chemical assay forms issued on failing
peanuts. The importer shall cause the results of all chemical assays
issued by PAC-approved laboratories to be filed with the Secretary. The
results of the assay shall be reported as follows:
(A) For the current peanut quota year, ``negative'' aflatoxin
content means 15 parts per billion (ppb) or less aflatoxin content for
peanuts which have been certified as meeting edible quality grade
requirements. Such lots shall be certified as ``Meets U.S. import
requirements for edible peanuts under Section 999.600 with regard to
aflatoxin.''
(B) Lots containing more than 15 ppb aflatoxin content shall be
certified as ``Fails to meet U.S. import requirements for edible
peanuts under Section 999.600 with regard to aflatoxin.'' The
certificate of any non-edible peanut lot also shall specify the
aflatoxin count in ppb.
(6) Appeal inspection. In the event an importer questions the
results of a quality and size inspection, an appeal inspection may be
requested by the importer and performed by the inspection service. A
second sample will be drawn from each container and shall be double the
size of the original sample. The results of the appeal sample shall be
final and the fee for sampling, grading and aflatoxin analysis shall be
charged to the importer. Lots that show evidence of PLI violation or
tampering, as determined by the inspection service, are not eligible
for appeal inspection.
(e) Disposition of peanuts failing edible quality requirements.
Peanuts shelled, sized, and sorted in another country prior to arrival
in the U.S. and shelled peanuts which originated from imported
Segregation 1 peanuts that fail minimum grade requirements specified in
the table in paragraph (c)(1)(i) of this section (excessive damage,
minor defects, moisture, or foreign material) or are positive to
aflatoxin may be reconditioned by remilling and/or blanching. Peanuts
that fail minimum grade requirements because of excessive ``fall
through'' may be blanched. After such reconditioning, peanuts meeting
the minimum grade requirements in the table, including minimum ``fall
through'' requirements, and which are negative to aflatoxin (15 ppb or
less), may be disposed for edible use. Residual peanuts resulting from
milling or reconditioning of such lots shall be disposed of as follows:
(1) Failing peanut lots may be disposed for non-human consumption
uses (such as livestock feed, wild animal feed, rodent bait, seed,
etc.) which are not otherwise regulated by this section; Provided, That
each such lot is Positive Lot Identified and certified as to aflatoxin
content (actual numerical count). On the shipping papers covering the
disposition of each such lot, the importer shall cause the following
statement to be shown: ``The peanuts covered by this bill of lading (or
invoice) are not to be used for human consumption.''
(2) Peanuts, and portions of peanuts which are separated from
edible quality peanuts by screening or sorting or other means during
the milling process (``sheller oilstock residuals''), may be sent to
non-edible peanut markets pursuant to paragraph (e)(1) of this section,
crushed or exported. Such peanuts may be commingled with other milled
residuals. Such peanuts shall be positive lot identified, red tagged in
bulk or bags or other suitable containers.
(i) If such peanuts have not been certified as to aflatoxin
content, as prescribed in paragraph (d) of this section, disposition is
limited to crushing and the importer shall cause the following
statement to be shown on the shipping papers: ``The peanuts covered by
this bill of lading (or invoice, etc.) are limited to crushing only and
may contain aflatoxin.''
(ii) If the peanuts are certified as 301 ppb or more aflatoxin
content, disposition shall be limited to crushing or export.
(3) Shelled peanuts which originated from Segregation 1 peanuts
that fail minimum grade requirements specified in the table in
paragraph (c)(1)(i) of this section, peanuts derived from the milling
for seed of Segregation 2 and 3 farmers stock peanuts, and peanuts
which are positive to aflatoxin, may be remilled or blanched. Residuals
of remilled and/or blanched peanuts which continue to fail minimum
grade requirements in the table shall be disposed pursuant to
paragraphs (e)(1) or (2) of this section.
(4) Shelled peanuts that are certified as meeting minimum grade
requirements specified in the table in paragraph (c)(1)(i) of this
section and which are positive to aflatoxin may be roasted during
blanching. After roasting, such peanuts certified as meeting aflatoxin
requirements (15 ppb or less), and which are positive lot identified,
may be disposed to human consumption outlets without further grade
analysis. The residual peanuts, excluding skins and hearts, resulting
from roasting process, shall be red tagged and disposed of to non-
edible outlets pursuant to paragraphs (e)(1) or (2) of this section.
(5) All certifications, lot identifications, and movement to non-
edible dispositions, sufficient to account for all peanuts in each
consumption entry, shall be reported to the Secretary
[[Page 46199]]
by the importer pursuant to paragraphs (f)(2) and (f)(3) of this
section.
(f) Safeguard procedures. (l) Prior to, or upon, arrival of a
foreign-produced peanut lot at a port-of-entry, the importer, or
customs broker acting on behalf of the importer, shall mail or send by
facsimile transmission (fax) a copy of the Customs Service entry
documentation for the peanut lot or lots to the inspection service
office that will perform sampling of the peanut shipment. More than one
lot may be entered on one entry document. The documentation shall
include: the Customs Service entry number; the container number(s) or
other identification of the lot(s); the volume of peanuts in each lot
being entered; the inland shipment destination where the lot will be
made available for inspection; and a contact name or telephone number
at the destination. The inspection office shall sign, stamp, and return
the entry document to the importer. The importer shall cause a copy of
the relevant entry documentation to accompany each peanut lot and be
presented to the inspection service at the time of sampling.
(2) The importer shall file, of cause to have filed, with the
Secretary, copies of failing grade and aflatoxin certificates and non-
edible disposition documents which identify the importer and the
disposition outlet for failing quality peanuts. Such reports shall be
sufficient to account for all peanuts failing quality requirements of
this section: Provided That: importers shall cause all certificates of
peanuts meeting aflatoxin requirements issued by PAC-approved
laboratories to be filed with the Secretary. Proof of non-edible
disposition must include documentation from the disposing entity or
other entity on behalf of the importer, certifying to the crushing,
feed or seed use, burying, or other non-edible disposition. Such
documentation must include the weight of peanuts being disposed and the
name and telephone number of the disposing entity. Proof of export must
include U.S. Customs Service documentation showing exportation from the
United States. These documents must be sent to the Marketing Order
Administration Branch, Attn: Report of Imported Peanuts. Facsimile
transmissions and overnight mail may be used to ensure timely receipt
of inspection certificates and other documentation. Fax reports should
be sent to (202) 205-6623. Overnight and express mail deliveries should
be addressed to USDA, AMS, FV, Marketing Order Administration Branch,
1400 Independence Avenue, SW, Room: 2525-S, Washington, D.C., 20250,
Attn: Report of Imported Peanuts. Regular mail should be sent to FV,
AMS, USDA, P.O. Box 96456, Room 2525-S, Washington, D.C. 20090-6456,
Attn: Report of Imported Peanuts.
(3) All peanuts imported into the United States subject to this
part shall be conditionally released by the U.S. Customs Service for a
period of 180 days following the date of Customs Service release, for
the purpose of determining whether such peanuts meet the quality
requirements for human consumption or non-edible disposition and
reporting such certification or non-edible disposition to the
Secretary.
(4) If the Secretary finds during, or upon termination, of the
conditional release period that a lot of peanuts is not entitled to
admission into the commerce of the United States, the Secretary shall
request the Customs Service, within 30 days after close of the
conditional release period, to demand return of said lot of peanuts to
Customs Service custody. Failure to comply with a redelivery demand
within 30 days of the date of the redelivery demand, may result in the
assessment against the importer of record and surety, jointly and
severally of liquidated damages equal to the value of the peanuts
involved. Failure to fully comply with quality and handling
requirements or failure to notify the Secretary of disposition of all
foreign-produced peanuts, as required under this section, may result in
a compliance investigation by the Secretary. Falsification of reports
submitted to the Secretary is a violation of Federal law punishable by
fine or imprisonment, or both.
(5) An extension of the 180-day conditional release period may be
granted by the Secretary upon request of the importer. Extension shall
not exceed an additional 60 calendar days. Requests for extension shall
be specific to each peanut lot and shall include the lot's Customs
Service entry number, the positive lot identification, weight or
volume, and current storage location. Requests for extension of the
conditional release period shall be made in writing pursuant to
paragraph (f)(2) of this section.
(6) Peanuts for which an import application is filed with the
Customs Service but which are subsequently exported without sampling or
inspection by the inspection service, need not be reported to the
Secretary.
(7) Reinspection. Whenever the Secretary has reason to believe that
peanuts may have been damaged or deteriorated while in storage, the
Secretary may reject the then effective inspection and aflatoxin
certificates and require the importer to have the peanuts reinspected
to establish whether or not such peanuts may be disposed of for human
consumption.
(8) Early arrival and storage. Peanut lots sampled and inspected
upon arrival in the United States, but placed in storage for more than
one month prior to beginning of the quota year for which the peanuts
will be entered, must be reported to AMS at the time of inspection. The
importer shall file copies of the Customs Service documentation showing
the volume of peanuts placed in storage and the storage location,
including any identifying number of the storage warehouse. Such peanuts
should be stored in clean, dry warehouses and under cold storage
conditions consistent with industry standards. Pursuant to paragraph
(f)(7) of this section, the Secretary may require reinspection of the
lot at the time the lot is declared for entry with the Customs Service.
(g) Additional requirements. (1) Nothing contained in this section
shall preclude any importer from milling or reconditioning, prior to
importation, any shipment of peanuts for the purpose of making such
peanuts eligible for importation into the United States. However, all
peanuts intended for human consumption use must be certified as meeting
the quality requirements specified in paragraph (c) of this section,
prior to such disposition.
(2) Conditionally released peanut lots of like quality and
belonging to the same importer may be commingled. Defects in an
inspected lot may not be blended out by commingling with other lots of
higher quality. Commingling also must be consistent with applicable
Customs Service regulations. Commingled lots must be reported and
disposed of pursuant to paragraphs (f)(2) and (f)(3) of this section.
(3) Inspection by the Federal or Federal-State Inspection Service
shall be available and performed in accordance with the rules and
regulations governing certification of fresh fruits, vegetables and
other products (7 CFR part 51). The importer shall make each
conditionally released lot available and accessible for inspection as
provided in this section. Because inspectors may not be stationed in
the immediate vicinity of some ports-of-entry, importers must make
arrangements for sampling, inspection, and certification through one of
the offices and laboratories listed in paragraphs (d)(3) and (d)(5) of
this section, respectively.
(4) Imported peanut lots sampled and inspected at the port-of-
entry, or at other locations, shall meet the quality
[[Page 46200]]
requirements of this section in effect on the date of inspection.
(5) A foreign-produced peanut lot entered for consumption or for
warehouse may be transferred or sold to another person: Provided, That
the original importer shall be the importer of record unless the new
owner applies for bond and files Customs Service documents pursuant to
19 CFR 141.113 and 141.20: Provided further, That such peanuts must be
certified and reported to the Secretary pursuant to paragraphs (f)(2)
and (f)(3) of this section.
(6) Payment of the cost of transportation, sampling, inspection,
certification, chemical analysis, and Positive Lot Identification, as
well as remilling and blanching, and further inspection of remilled and
blanched lots, and disposition of failing peanuts, shall be the
responsibility of the importer. Whenever an applicant presents peanuts
for inspection, the applicant shall furnish any labor and pay any costs
incurred in moving, opening containers for sampling, and the shipment
of samples as may be necessary for proper sampling and inspection. The
inspection service shall bill the applicant for fees covering quality
inspections and other certifications as may be necessary to certify
edible quality or non-edible disposition. USDA and PAC-approved
laboratories shall bill the applicant separately for aflatoxin assay
fees. The importer also shall pay Customs Service costs as required by
that agency.
(7) Each person subject to this section shall maintain true and
complete records of activities and transactions specified in these
regulations. 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: August 24, 1998.
Robert C. Keeney,
Deputy Administrator, Fruit and Vegetable Programs.
[FR Doc. 98-23230 Filed 8-28-98; 8:45 am]
BILLING CODE 3410-02-P
