Specialty Crops; Import Regulations; Peanut Import Regulations

[[Page 3606]]

DEPARTMENT OF AGRICULTURE

7 CFR Part 999

[Docket No. FV94-999-2PR]

Specialty Crops; Import Regulations; Peanut Import Regulations

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would establish minimum quality,

identification, certification and safeguard requirements for imported

farmers stock, shelled, and cleaned-inshell peanuts. The rule is issued

under section 108B(f)(2) of the Agricultural Act of 1949, as amended.

The provisions of paragraph (f)(2) require all peanuts in the domestic

market to fully comply with all quality standards under Peanut

Marketing Agreement No. 146 (Agreement). Thus, this rule would

establish the same quality requirements and handling procedures for

imported peanuts as those in effect for domestically produced peanuts.

This action would benefit peanut handlers, importers and consumers by

helping to ensure that all peanuts in the marketplace comply with the

same quality standards.

DATES: Comments must be received by March 4, 1996. Pursuant to the

Paperwork Reduction Act, comments to the information collection burden

must be received by April 1, 1996.

ADDRESSES: Interested persons are invited to submit written comments

concerning this action. Comments must be sent in triplicate to the

Docket Clerk, Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456,

room 2523-S, Washington, DC 20090-6456; fax 202-720-5698. Comments

should reference the docket number and the date and page number of this

issue of the Federal Register and will be made available for public

inspection in the Office of the Docket Clerk during regular business

hours.

FOR FURTHER INFORMATION CONTACT: Tom Tichenor or Rick Lower, Marketing

Specialists, Marketing Order Administration Branch, Fruit and Vegetable

Division, AMS, USDA, P.O. Box 96456, room 2523-S, Washington, DC 20090-

6456; tel: (202) 720-6862 or (202) 720-2020; fax (202) 720-5698.

SUPPLEMENTARY INFORMATION: This proposed rule is issued under paragraph

(f)(2) of section 108B of the Agricultural Act of 1949 (7 U.S.C. 1445c-

3), as amended November 28, 1990; Pub. L. 101-624, hereinafter referred

to as the Act. Paragraph (f)(2) of section 108B of the Act provides

that the Secretary of Agriculture (Secretary) shall require that all

peanuts in the domestic market fully comply with all quality standards

under Marketing Agreement No. 146 (7 CFR part 998), issued pursuant to

the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C.

601-674).

This proposed rule would add a new Sec. 999.600 governing the

importation of peanuts'' under 7 CFR part 999--Specialty Crops; Import

Regulations. Proposed Sec. 999.600 establishes minimum quality,

identification, certification and safeguard requirements for foreign

produced farmers stock, shelled and cleaned-inshell peanuts presented

for importation into the United States. The quality requirements are

the same as those specified in Sec. 998.100 Incoming quality regulation

and Sec. 998.200 Outgoing quality regulation established pursuant to

the Agreement. Whenever the regulations specified in the Agreement are

changed, the regulations in Sec. 999.600 would be changed accordingly.

Safeguard procedures enable the Department to monitor and assure

importers' compliance with the requirements of this regulation.

The intent of paragraph (f)(2) of section 108B of the Act is to

ensure that all peanuts in the domestic marketplace comply with the

same quality standards.

The U.S. Department of Agriculture (Department or USDA) is issuing

this rule in accordance with Executive Order 12866.

This proposed rule has been reviewed under Executive Order 12778,

Civil Justice Reform, and is not intended to have retroactive effect.

This rule would not preempt any State or local laws, regulations, or

policies, unless they present an irreconcilable conflict with this

rule. There are no administrative procedures which must be exhausted

prior to any judicial challenge to the provisions of this rule.

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Administrator of the Agricultural Marketing Service

(AMS) has considered the economic impact of this proposed rule on small

entities.

The purpose of the RFA is to fit regulatory actions to the scale of

business subject to such actions in order that small businesses will

not be unduly or disproportionately burdened. Small agricultural

service firms, which include importers, have been defined by the Small

Business Administration (13 CFR 121.601) as those whose annual receipts

are less than $5 million. This proposed import regulation is based on

regulations established under the Agreement, which regulates the

quality of domestically produced peanuts. The majority of entities that

are signers of the Agreement cannot be classified as small businesses,

and it is anticipated that peanut importers affected by this regulation

will be comprised primarily of signatories to the Agreement. Although

small business entities may incur additional costs in meeting these

proposed import regulations, the benefits accrued from the assurance of

good quality peanuts should outweigh any additional costs to such

entities. Inspection and testing fees would be uniformly applied to

importers, regardless of size. Finally, this action is required by

statute.

The Department is unable to estimate, at this time, the number or

size of importers, or domestic peanut handlers acting as importers, who

may choose to import peanuts under the relaxed quota. The Department

estimates that there are as many as 50 domestic peanut handlers with

storage and milling facilities that can be used to prepare peanuts for

human consumption markets.

In the past, the importation of peanuts has been limited to 1.71

million pounds annually. However, the Schedule of the United States

annexed to the North American Free Trade Agreement (NAFTA), implemented

on January 1, 1994, provided duty free entry for up to approximately

7.43 million pounds of qualifying peanuts from Mexico. For 1995, the

duty-free access increased to approximately 7.65 million pounds. By

calendar year 2008, access will be unlimited. In addition, the United

States Schedule to the Uruguay Round Agreements negotiated under the

General Agreement on Tariffs and Trade (GATT) relaxes the peanut import

quota to 74.5 million pounds in 1995, with additional annual increases

to 124 million pounds by the year 2000.

Various qualities of peanuts are entered into the United States

from countries such as Argentina, Mexico, Nicaragua, India, and the

People's Republic of China. However, until the People's Republic of

China accedes to the World Trade Organization, no benefits of the

increased access will be available to it. Foreign produced peanuts are

produced under varying weather conditions and using different cultural

practices. Consistent with the Agreement's regulatory provisions, each

lot of peanuts entered into the U.S. would be required to be officially

sampled and graded by the Federal or Federal-State Inspection Service

(inspection service). Incoming inspection for farmers stock peanuts and

outgoing inspection for edible quality shelled peanuts and cleaned-

inshell peanuts would be required for imported peanuts. A list of

inspection service

[[Page 3607]]

offices is provided in paragraph (d)(2)(i) of this regulation.

Some peanuts contain defects or other damage which cause them to be

of low quality or have poor taste which could affect the demand for

peanuts. Producers, handlers and manufacturers in the domestic peanut

industry believe that even an isolated quality problem could adversely

affect consumer confidence, which would be detrimental to the domestic

peanut industry.

The Agreement imposes quality standards for domestically produced

inshell and shelled peanuts. Peanut lots are graded based on the

percentage of unshelled peanuts, percentage of kernels with damage and

minor defects, percentage of loose shelled kernels, percentage of

foreign material, and percentage of moisture content. In addition, an

integral part of these quality standards is the extent of the presence

of Aspergillus flavus mold (the principal cause of aflatoxin, which is

a carcinogen). This mold is more likely to be found on damaged or

defective kernels than on sound, whole, good quality kernels. A

chemical analysis for aflatoxin is required on shelled peanut lots not

meeting superior quality requirements. Shelled lots that exceed certain

superior quality requirements are exempt from the aflatoxin chemical

analysis requirements.

U.S. Customs Service requirements and USDA safeguard procedures:

Importer obligations would include filing documents notifying the U.S.

Customs Service (Customs Service) and the USDA of different actions

taken concerning foreign produced inshell and shelled peanuts. Customs

Service importation procedures and requirements are set out in title 19

of the Code of Federal Regulations (19 CFR). The Customs Service

regulations applicable to peanut handling and processing include, but

are not be limited to: bond requirements (19 CFR part 113); transfer

from port of entry to another Customs Service office location (19 CFR

part 112); entry of merchandise for consumption (19 CFR part 141);

warehouse entry, and withdrawal from warehouse for consumption (19 CFR

part 144); establishment of bonded warehouses (19 CFR parts 19.13 and

19.2); and manipulation in bonded warehouses (19 CFR part 19.11);

transfer of ownership (19 CFR parts 141.113 and 141.20); failure to

recondition (19 CFR part 113.62(e); and redelivery of merchandise 19

CFR part 113.62(d). For Customs Service purposes, the term

``consumption'' means ``use in the United States.'' Customs Service

entry procedures would not be superseded by this import regulation.

When arriving at a port of entry, foreign produced peanuts may be

entered for ``warehouse'' or entered for ``consumption,'' or may be

transported to another Customs Service port of entry to be entered

there for warehouse or consumption. Peanuts transported from one

Customs Service port of entry to another Customs Service port of entry

must be transported by a carrier designated by the Customs Service

under 19 U.S.C. 1551. Peanuts entered for warehouse are stored in a

Customs Service bonded warehouse. Such peanuts remain in Customs

Service custody until they are withdrawn from warehouse, entered for

consumption, or released from Customs Service custody. Peanuts entered

for consumption, and peanuts withdrawn from warehouse for consumption,

are released from Customs Service custody for edible or non-edible use.

Release of peanuts, in both cases, would be a conditional release,

pending certification that the peanuts conform to Customs Service entry

requirements and meet the handling and quality requirements of this

proposed regulation. The Customs Service can demand redelivery of

peanuts that are subsequently determined to be inadmissible.

The importer, or import broker acting on behalf of the importer,

would be required to file with the Customs Service required entry

documentation for each foreign produced peanut lot to be entered. Under

USDA safeguard procedures established in this proposed rule, each

importer would also be required to file completed entry documentation

(Customs Service Form 3461 or other equivalent form) with the

inspection service office that would perform the sampling of the lot

for inspection to provide that office with advanced notice of requested

inspection. The entry documentation would be filed by mail or facsimile

transmission (fax). The filing would occur prior to arrival of the

shipment at the port of entry in order to expedite entry procedures.

The inspection service office would stamp, sign, and date the entry

document and return it to the importer or broker by fax or mail. The

importer/broker would then submit the stamped copy to the Customs

Service. This ``stamp-and-fax'' procedure is similar to a procedure in

place for other imported agricultural commodities under AMS

jurisdiction. Failure to file with the Customs Service a copy of the

entry documentation stamped by the inspection service would result in a

delay or denial of entry. The importer/broker would also send a

completed copy of the document to the AMS to initiate USDA's monitoring

process.

The names, addresses and contact numbers of inspection service

offices that perform peanut sampling and/or grade inspections are

provided in paragraph (d)(3) of this proposed rule. Inspection service

offices at other locations may be contacted to sample the imported

peanut lot. In such cases, the collected peanut samples would be

shipped to an inspection service office with equipment and personnel

qualified to a perform grade inspection. Samples of lots meeting

minimum grade requirements would also be sent to an approved laboratory

(listed in paragraph (d)(4) of this rule) for aflatoxin analysis. The

lot would have to remain in storage pending grade and aflatoxin

certification.

It would then be the importer's responsibility to provide, in the

mailed or faxed documentation, sufficient information to identify the

peanut lot being entered and to ensure that arrangements are made for

sampling and inspection. The information would include the container

identification, weight of the peanut lot, the city, street address, and

building number (if known) receiving the peanut lot, the requested date

and time of inspection, and a contact name or number at the

destination. If the destination is changed from that listed on the

stamp-and-fax document, it would be the importer's responsibility to

immediately advise inspection service offices at both the original

destination and the new destination of such change. Shipments which are

not made available pursuant to the entry document, or are not properly

displayed for sampling purposes, would be reported to the Customs

Service.

Falsification of reports submitted to the AMS is a violation of

Federal law punishable by fine or imprisonment, or both.

A bond secured by surety or U.S. Treasury obligations is required

to be posted by the importer with the Customs Service to guarantee the

importer's performance. Peanuts would be determined inadmissible

because the importer failed to follow Customs Service importation

procedures, the peanuts failed to meet quality requirements, or because

the handling procedures (including lot identification and

certification) specified in these proposed regulations were not

followed.

Redelivery could be demanded for failure to comply with the

quality, handling, and reporting requirements of this import

regulation, including: arrival at the inland destination with a broken

Customs Service or inspection service

[[Page 3608]]

seal; failure to maintain lot identity; failure to receive required

inspection; commingling of peanut lots not of like quality or

condition; disposition of non-edible peanuts to an edible peanut outlet

or an improper, non-edible peanut outlet; and failure to fully report

the disposition of foreign produced peanuts. Disposition reports would

include grade, aflatoxin, and identification certifications and bills

of lading, sales receipts, and other documentation showing the peanuts

were disposed to a non-edible peanut outlet, exported, or destroyed.

A redelivery demand must be made by the Customs Service within 30

days of release of the peanuts. Redelivery to the port of entry is

normally required within 30 days after the redelivery demand is issued.

The Customs Service may authorize a longer redelivery period and may

authorize an appropriate extension of the redelivery period for good

cause.

Because the Customs Service requires one week to prepare and issue

a redelivery demand notice, this proposed import rule would establish

that importers must report disposition of lots of peanuts to the AMS

within 23 calendar days of the date of release. Although a 23-day

deadline may be considered burdensome by some, this deadline is

necessary because of the Customs Service 30-day requirement. Thus, the

importer would have 23 days to perform necessary shelling, cleaning,

sorting, sizing or other handling functions necessary to obtain edible

certification or to dispose of the peanuts to a non-edible peanut

outlet. If the AMS did not receive certification of the lot's edible

quality or non-edible disposition by the 23rd calendar day, or if the

importer fails to comply with quality or handling requirements of this

import regulation, the AMS would notify the Customs Service. The

Customs Service would then demand redelivery of the lot. Peanuts

entered for warehouse (and which remain in Customs Service custody in a

bonded warehouse) would not be subject to these time constraints until

they are withdrawn for consumption. If notified by the importer, AMS

would extend a deadline to correspond with an extension granted to the

importer by the Customs Service.

The importer would cause a copy of the entry documentation

applicable to each peanut lot to be forwarded with the peanuts to the

lot's inland destination. If the shipment is sealed by Customs Service

or the inspection service, the seal must remain intact and would be

broken only by an authorized official at the destination point.

The identification requirements in this proposed regulation are

similar to the Agreement's lot identification requirements. Lot size

would be limited to 200,000 pounds to comply with Agreement

requirements and random sampling provisions of the inspection service.

Boatload shipments exceeding 200,000 pounds would be entered under two

or more Customs Service entry documents. For instance, five containers

averaging 40,000 pounds each (the industry standard) would be entered

on one entry document. Lot size and identification arrangements would

be made consistent with the port of entry inspection service office and

would be established cooperatively between the inspection service,

Customs Service offices and the importer at the port of entry. This

would facilitate subsequent lot identification, inspection, and

reporting of large imported shipments.

Foreign produced peanuts placed in storage could be commingled only

with like-quality, foreign produced peanuts belonging to the same

importer. Similarly, failing quality peanuts could be commingled with

other such foreign produced peanuts prior to clean up or non-edible

disposition. However, reports concerning commingled lots would have to

be reported within the 23-day reporting period of the earliest-entered

lot commingled. For example, if two 100,000 pound shipments were

released for consumption entries on consecutive Mondays, and commingled

in storage prior to outgoing inspection, at least 100,000 pounds from

the commingled lot would have to be withdrawn from storage, inspected

and reported as meeting edible or non-edible disposition requirements

of this proposed rule within 23 days of the first lot's consumption

entry date. Further, the remaining commingled peanuts would have to be

withdrawn, inspected, properly disposed and reported within the next

week--before the end of the second lot's 23 day reporting period.

The objective of the lot identification requirements is to help

ensure that individual peanut lots would be disposed as required and

that defects in poor quality peanut lots would not be blended out by

commingling poor quality peanuts with higher quality peanuts. The lot

identification requirements in this proposed import regulation are the

same as those specified for domestically produced peanuts.

All USDA required sampling, quality certification, and lot

identification would be conducted by the inspection service. Chemical

analysis would be conducted by USDA or approved laboratories. Foreign

produced peanuts stored in bonded warehouses are subject to Customs

Service audits. Importers would reimburse the inspection service,

laboratories, and the Customs Service for services provided and costs

incurred with regard to the importation of the importer's peanuts.

Release for importation:

Depending on condition (shelled or inshell) and containerization,

foreign produced peanuts could be either: (1) Sampled, inspected, and

held at the port of entry until certified by the inspection service as

meeting the edible quality requirements of this rule; or (2)

conditionally released at the port of entry and entered under Customs

Service entry procedures for later inspection and certification.

Under option (1), foreign produced shelled or cleaned-inshell

peanuts which are cleaned, sorted, sized, and otherwise prepared for

edible consumption prior to entry, could be sampled and inspected at

the port of entry. The importer would present such peanuts in

containers or bags that would allow appropriate sampling of the lot

pursuant to inspection service requirements. After sampling, such lots

would be held at the port of entry, under lot identification

requirements of the inspection service, pending results of the

inspection and chemical analysis. If determined to meet the applicable

edible quality requirements in paragraph (c) of this proposed rule, the

shelled or cleaned-inshell peanuts could be entered for consumption

without further inspection. Reports of such entries would not have to

be filed with AMS.

Shelled or cleaned-inshell peanuts, sampled and held at the port of

entry, which fail edible quality requirements would, at the importer's

discretion, be: (1) exported; (2) entered for clean up, and if

satisfactorily remilled or blanched, used for edible consumption; or

(3) entered for non-edible consumption. Failing peanuts that are

exported would not have be reported to AMS because the peanuts were not

entered into the U.S. The importer would fully report all actions taken

on each lot entered for clean up or non-edible disposition within 23

days of the lot's consumption entry filing date.

Under option (2), foreign produced shelled or cleaned-inshell

peanuts which are cleaned, sorted, sized, and otherwise prepared for

edible consumption prior to entry, would be conditionally released at

the port of entry and transported inland for sampling, inspection, and

certification. Farmers stock peanuts would have to be shipped inland

for sampling and inspection because specialized sampling

[[Page 3609]]

facilities are not available at ports of entry.

Categories of peanuts submitted for importation:

Farmers stock peanuts. Such peanuts would be required to undergo

incoming inspection at a prearranged buying point prior to arrival at a

shelling or storage destination. All required inspections, shelling,

and dispositions of released farmers stock peanuts would be completed

and reported within the required 23 day reporting deadline.

Foreign produced farmers stock peanut lots could not be commingled

with other peanut lots prior to incoming inspection. Incoming

inspection determines the quality of the farmers stock peanuts based on

moisture content, foreign material, damage, loose shelled kernels, and

visible Aspergillus flavus mold. The inspection service would issue

USDA form CFSA-1007, ``Inspection Certificate and Sales Memorandum''

(formerly ASCS-1007) designating the lot as either Segregation 1, 2, or

3 quality.

Only Segregation 1 peanut lots could be prepared for human

consumption use. Such peanuts would be shelled or prepared for cleaned-

inshell use, and certified for disposition within 23 days of the lot's

release. If Segregation 1 lots imported on successive days were

commingled, each imported lot would still have to comply with the 23-

day reporting period. For quality control and reporting purposes,

Segregation 1 lots intended for human consumption outlet could be

commingled only with other like quality peanuts of the same importer. A

Segregation 1 lot commingled with Segregation 2 or 3 peanuts would

assume the lower Segregation 2 or 3 quality and would be disposed as

non-edible quality peanuts.

Foreign produced farmer stock peanuts received by importers and

determined at incoming inspection to be Segregation 2 and 3 quality

peanuts could be disposed only as non-edible peanuts. Segregation 3 and

commingled Segregation 2 and 3 farmers stock peanuts could be exported

inshell or shelled and fragmented prior to export. Segregation 2 and 3

peanuts could also be destroyed by burying (under inspection service

supervision) or exported (certified by Customs Service). The importer

would report non-edible disposition by providing a copy of the incoming

inspection certificate, bills of lading and sales receipts, or other

official certifications as proof of disposition to crushing or

exportation, or to other non-edible outlets or burying. Exported

peanuts would be lot identified by the inspection service and that

certification would be filed with the Secretary within the 23 day

reporting period and applicable Customs Service re-export procedures

would be followed.

Foreign produced Segregation 2 and 3 quality peanuts could be

shelled by a custom seed sheller for seed use and dyed or chemically

treated so as to be unfit for human or animal consumption. Domestically

produced Segregation 2 and 3 peanuts shelled for seed need not be dyed

or treated but must be produced under the auspices of a State agency,

shelled by a custom seed sheller, and subject to the Peanut

Administrative Committee (PAC) oversight. Measures such as these are

necessary to ensure that peanuts used for human consumption are safe

and wholesome. Proof of dyeing or chemical treatment of foreign

produced peanuts would be filed with the Secretary within the 23 day

reporting period.

Foreign produced farmers stock peanuts do not qualify for the

support program administered by the Farm Service Agency, formerly the

Agricultural Stabilization and Conservation Service (ASCS).

Shelled peanuts: Foreign produced shelled peanuts could: (1)

Originate from foreign produced Segregation 1 farmers stock milled at

facilities in the U.S., or (2) be peanuts produced and milled in

another country which are conditionally released at the port-of-entry

for inland sampling and inspection. Both categories of shelled peanuts

would be sampled and inspected against outgoing quality requirements

specified in paragraph (c) of this regulation.

Domestically produced shelled peanuts intended for edible markets

must originate from farmers stock peanuts which have undergone incoming

inspection and are determined to be of Segregation 1 quality. The AMS

cannot determine whether shelled peanuts produced and milled in a

foreign country originated from Segregation 1 quality peanuts prior to

milling. However, because outgoing inspection is more reliable and

precise in determining aflatoxin content in peanut kernels, this

proposed import regulation provides that peanuts shelled prior to entry

would be exempt from incoming inspection before delivery for outgoing

inspection. Such shelled peanuts would be sampled and tested against

outgoing quality requirements prior to disposition to edible outlets.

Two grade levels for shelled peanuts are in effect under the

Agreement and would be established in this import regulation. The

Agreement provides that shelled peanut lots meeting the quality

requirements specified in a table entitled ``Other Edible Quality,''

under paragraph (a) of Sec. 998.200, must be chemically analyzed for

aflatoxin content prior to disposition to edible outlets. The quality

requirements specified in the Other Edible Quality table are duplicated

in ``Table 1, Minimum Grade Requirements--Peanuts for Human

Consumption'' of this proposed import regulation. The outgoing quality

requirements would also include a parts-per-billion tolerance for

aflatoxin, determined by chemical analysis.

Aflatoxin appears most frequently in damaged, stressed, under-

developed and malformed kernels. Domestic lots with fewer poor quality

kernels are less likely to be contaminated and, thus, do not have to be

chemically tested. The Agreement's ``Indemnifiable Grades'' table in

paragraph (a) of Sec. 998.200, provides for a superior quality level

with more rigorous percentage tolerances than those found in the Other

Edible Quality table. Thus, foreign produced shelled lots meeting the

superior quality standards would be exempt from chemical analysis. The

quality requirements specified in the ``Indemnifiable Grades'' table

are duplicated in ``Table 2 Superior Quality Requirements--Peanuts for

Human Consumption'' of this proposed regulation.

Currently, in paragraph (c)(4) of Sec. 998.200, peanuts are

considered edible quality if the chemical assay shows the lot contains

15 ppb or less of aflatoxin. Thus, the level of aflatoxin in foreign

produced peanut lots intended for edible peanut markets could not

exceed 15 ppb. Consistent with paragraphs (c)(4) and (g)(3) of

Sec. 998.200, non-edible quality peanut lots with 25 ppb or less could

be disposed to certain non-edible peanut outlets. Non-edible quality

peanut lots with aflatoxin exceeding 25 ppb would be further restricted

to certain other non-edible peanut outlets. The sampling, testing,

certification and identification of foreign produced peanuts lots would

be performed in accordance with paragraph (d)(4) of this proposed

regulation.

Chemical testing would be performed by an AMS, Science and

Technology Division laboratory or a laboratory approved by the PAC. The

PAC locally administers the Agreement with Department oversight. A list

of approved laboratories is provided in paragraph (d)(4)(iv) of this

proposed regulation. These are the same laboratories specified in the

Agreement.

Thus, to obtain approval for human consumption use of a foreign

produced shelled peanut lot, the importer would present to the AMS and

the Customs

[[Page 3610]]

Service two certifications: (1) Quality certification Form FV-184-9A

``Milled Peanut Inspection Certificate'' and (2) aflatoxin

certification Form CSSD-3 ``Certificate of Analysis for Official

Samples'' issued by USDA laboratories, or equivalent forms issued by a

PAC approved lab. An aflatoxin certificate would not be required if the

lot meets the superior grade requirements, but could be required by the

buyer. The certificates are the same as those used to report grade and

chemical analysis results for domestically produced peanuts. If the

required certificates were not received by the AMS within 23 days of a

consumption entry, or a withdrawal for consumption entry, the AMS would

request the Customs Service to initiate a redelivery demand for the

lot.

Cleaned-inshell peanuts: Inshell peanuts that have been cleaned,

sorted, and prepared in another country for edible inshell peanut

markets in the U.S. could be presented as a consumption entry at the

port of entry. Such peanuts would be declared as cleaned-inshell

peanuts on the Customs Service entry document and could either be

presented for outgoing inspection at the port of entry, if delivered in

bags, or conditionally entered for outgoing inspection at a facility

inside the U.S. Peanuts declared as cleaned-inshell on a Customs

Service entry document could not undergo additional cleaning, sorting,

sizing, or drying prior to outgoing inspection at the destination point

inside the U.S.

Cleaned-inshell peanut lots destined for edible peanut markets

would be required to meet certain minimum quality requirements for

damage, moisture and foreign material. Cleaned-inshell lots containing

more than 1 percent kernels with visible mold would have to be

chemically tested and meet aflatoxin requirements. The cleaned-inshell

quality requirements specified in paragraph (c)(2) of this proposed

regulation are the same as the quality requirements in paragraph (b) of

Sec. 998.200 of the Agreement.

Foreign produced farmers stock Segregation 1 peanuts also could be

prepared and presented at outgoing inspection as cleaned-inshell

peanuts. Such peanuts inspected and certified as meeting edible

requirements for cleaned-inshell peanuts would be designated as

imported peanuts on inspection service form FV-184-9A. The importer

would file form FV-184-9A with the AMS for each lot of foreign produced

cleaned-inshell peanuts meeting edible quality requirements for

cleaned-inshell peanuts.

Imported peanuts certified as meeting edible requirements could be

used any way desired. Only after shelled and cleaned-inshell peanuts

are certified as meeting applicable requirements could such peanuts be

commingled with imported lots of other importers or domestically

produced peanuts also certified for human consumption.

Disposition of Failing Peanuts

The following peanuts could not be used for human consumption: (1)

Farmers stock peanuts that grade either Segregation 2 or Segregation 3;

(2) cleaned-inshell and shelled peanuts that fail outgoing quality and/

or aflatoxin requirements and were not reconditioned or reworked (the

removal of defective kernels); and (3) below grade residue from any

shelling, milling or blanching operations.

Cleaned-inshell lots that fail outgoing inspection requirements of

paragraph (c)(2) could be reconditioned by remilling the peanuts, which

could include shelling. If shelled, the peanuts would have to meet

outgoing requirements of proposed paragraph (c)(1) for shelled peanuts.

Failing shelled lots, which originated from Segregation 1 peanuts,

could be reconditioned following procedures established in paragraph

(f) of this proposed rule. These provisions are the same as those

established under various provisions of the Agreement. Segregation 1

shelled peanuts failing quality requirements in table 1 and/or

exceeding 15 ppb aflatoxin content could be reconditioned by remilling

and/or blanching and, when subsequently reinspected and certified as

meeting edible quality and aflatoxin requirements, could be disposed to

edible peanut outlets. If not reconditioned, failing Segregation 1 lots

would have to be disposed to non-edible peanut outlets as unrestricted

or restricted peanuts (below).

Provisions controlling the disposition of residue peanuts from

inshell remilling and shelled remilling and blanching that continue to

fail edible quality requirements are also provided in this proposed

rule. Two categories of non-edible peanuts are specified under the

Agreement--``unrestricted'' and ``restricted.'' The designation would

be based on the amount of aflatoxin detected in the lot.

``Unrestricted'' peanuts would be peanuts which fail one or more

quality requirements and, when chemically assayed, contain more than 15

ppb but 25 ppb or less aflatoxin. While such peanuts would not be

edible quality, they could be crushed for oil, exported or used in

animal feed, provided that certain handling and container labeling

requirements were followed. Unrestricted peanuts also could be used for

seed (if dyed or treated to prevent edible use), crushed for oil,

exported, or buried. Meal resulting from the crushing of unrestricted

peanuts would not have to be tested a second time for aflatoxin

content. Disposition of meal resulting from the crushing of peanuts is

not regulated under the Agreement or this proposed regulation.

Peanuts containing more than 25 ppb aflatoxin would be considered

``positive'' to aflatoxin and would be designated as ``restricted''

peanuts. Restricted peanut lots may or may not meet quality

requirements of table 1. At the direction of the importer, restricted

peanut lots would be used either for seed (if dyed or treated), crushed

for oil, destroyed by burying, or exported. Meal resulting from the

crushing of restricted peanuts would be certified as to aflatoxin

content and such certification would accompany the meal into the

channels of commerce.

The importer could dispose of a failing peanut lot directly to a

non-edible peanut outlet or set aside and commingle several failing

lots for eventual disposition to one or more non-edible outlets.

Commingled failing quality peanuts would be held separate and apart

from edible peanuts and identified with red tags indicating non-edible

peanuts. Eventual disposition would be to non-edible peanut outlets

consistent with the failing quality of the peanuts, pursuant to

paragraph (e) of this proposed rule.

If an importer chose to destroy by burying or export unrestricted

or restricted peanuts, the peanuts would be lot identified and proof of

burying or exportation would be provided by the importer to the AMS.

Customs Service procedures controlling re-exported merchandise would

also be followed by the importer. Burying and exportation expenses

would be borne by the importer.

It would be the importer's responsibility to file inspection

certificates and other documentation sufficient to account for

disposition of all failing quality peanuts acquired by the importer.

Such proof could consist of copies of bills of lading and sales

receipts between the importer and non-edible peanut outlet receivers.

The documentation would contain identifying information, such as

container or lot numbers, that tie the peanuts reported on the

documents to failing quality peanuts on inspection service or aflatoxin

certificates. The name and address of the non-edible peanut receiver

and valid contact information would also be specified on the

documentation.

[[Page 3611]]

Disposition of unrestricted and restricted peanut lots would be

reported to the AMS within 23 days of filing for a consumption entry,

or a withdrawal for consumption entry, with the Customs Service.

The inspection service would identify imported peanuts as peanuts

of foreign origin on the inspection certificate to assist in lot

identification (and help prevent unintended commingling with

domestically produced peanuts prior to certification). Foreign origin

designations also would help importers and the AMS meet its monitoring

responsibilities.

From time to time, the PAC may recommend to the Secretary that

quality requirements or handling procedures specified in the Agreement

be revised. If such changes are approved by the Secretary and

implemented for the domestic peanut industry in 7 CFR Part 998,

corresponding changes would be made in Sec. 999.600. Changes in

regulations for domestically produced peanuts are generally made

effective July 1. Thus, corresponding changes to the import regulation

would be made effective on that date, unless otherwise specified in the

regulation. Quality requirements in effect on the date of inspection of

a foreign produced lot would be applied to the inspected lot.

Safeguard procedures: This proposed rule would establish a

procedure to verify importers' compliance with import requirements. The

safeguard procedures would provide for monitoring of peanut lots from

entry to final disposition. The purpose of these procedures would be to

ensure that foreign produced peanuts either meet edible requirements or

are appropriately disposed to non-edible peanut outlets, exported or

destroyed. The proposed safeguard procedures are similar to safeguard

procedures already in place for other imported commodities and are

consistent with the inspection, identification and certification

requirements applied to domestically produced peanuts under the

Agreement.

The safeguard process would include the ``stamp-and-fax'' entry

procedure, described above, whereby the importer provides the Customs

Service with an entry document stamped by the inspection service. The

importer also would file a copy of the entry document with the AMS and

forward a copy, with the released lot, to the inland destination where

the lot would be inspected or warehoused. Edible certification and non-

edible disposition would be reported by filing with the AMS copies of

all grade certificates, aflatoxin certificates, and proof of non-edible

disposition. Such certifications would be filed within 23 days of

filing a consumption entry or a withdrawal from warehouse for

consumption entry.

Receipt of required certificates and other documentation within the

23-day deadline would be essential. Failure of an importer to obtain

edible certification--or arrange for appropriate non-edible

disposition--on all foreign produced peanut acquisitions, and file such

reports with the AMS within 23 days of a consumption declaration, could

result in a redelivery demand by the Customs Service. Failure to

redeliver the violating lot could result in liquidated damages.

Certificates and other supplementary documentation would be sent to

AMS, Marketing Order Administration Branch (MOAB) which oversees the

domestic peanut program and would oversee this proposed import program.

Facsimile or express mail deliveries could be used to ensure timely

receipt of certificates and other required documentation. Overnight and

express mail deliveries would be addressed to the USDA/AMS, Marketing

Order Administration Branch, 14th and Independence Ave. SW, Room 2525,

Washington, DC. 20250, Attn: Report of Imported Peanuts. The MOAB's fax

number is (202) 720-5698, Attn: Report of Imported Peanuts.

For the purposes of checking and verifying reports filed by

importers and disposition outlets, provisions would be included in this

proposed regulation that would allow the Secretary, through duly

authorized agents, to have access to any premises where peanuts may be

held and processed. Authorized agents, at any time during regular

business hours, would be permitted to inspect any peanuts held, and any

and all records with respect to the acquisition, holding or disposition

of any peanuts which may be held, or which may have been disposed by

that importer.

USDA record retention requirements would also be established to

require importers to retain information for at least two years beyond

the year of applicability. Customs Service record retention

requirements are longer.

With regard to Customs Service reporting procedures, it is the

importer's decision when to commence ``consumption'' entry procedures

or when to withdraw merchandise from a warehouse for consumption. The

importer's decision would be implemented in a manner consistent with

Customs Service procedures and reported in accordance with normal

Customs Service requirements. Any Customs Service reporting or

recordkeeping requirements for disposition of imported merchandise or

clearance of bonding requirements would not be superseded by this

regulation.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1980 (44 U.S.C.

Chapter 35), the information and collection requirements that are

contained in this proposed rule have been submitted to the Office of

Management and Budget (OMB) and would be assigned a new OMB number.

Comments should reference this proposed import regulation and the date

and page number of this Federal Register. Comments must be received by

April 1, 1996. Comments should be submitted to the Desk Officer for

Agriculture, Office of Information and Regulatory Affairs, OMB,

Washington, D.C., 20503 and to the USDA in care of the Docket Clerk,

Fruit and Vegetable Division, AMS, USDA, P.O. Box 96456, room 2523-S,

Washington, DC 20090-6456; fax 202-720-5698. A comment to OMB is best

assured of having its full effect if OMB receives the comment within 30

days of publication of the rule. All comments will also become a matter

of public record.

Comments are invited on: (1) Whether the proposed collection of

information is necessary for USDA's oversight of imported peanuts; (2)

the accuracy of the collection burden estimate and the validity of

methodology and assumptions used in estimating the burden on

respondents; (3) ways to enhance the quality, utility, and clarity of

the information requested; and (4) ways to minimize the burden,

including use of automated or electronic technologies.

The reporting and recordkeeping burdens imposed under this proposed

rule are designed to be minimal on importers and customs brokers. No

new forms would be required to be completed by importers or customs

brokers. However, various documentation obtained during the importation

process--incoming and outgoing inspection certificates, lot

identification certificates, aflatoxin laboratory analyses, Custom

Service documentation, bills of lading, etc. would be photocopied and

mailed to the Secretary. The information collected would be used for

compliance purposes only and would be held confidential by the

Department. The information collected would not be compiled for

dissemination in any public report.

Estimate of Burden: Public reporting burden for this proposed

collection of information is estimated to average 5 minutes (0.083

hours) per response.

[[Page 3612]]

Respondents: Importers and customs brokers who import peanuts.

Estimated Number of Respondents: 25.

Estimated Number of Responses per Respondent: 85.

Estimated Total Annual Burden on All Respondents: 177 hours (7.08

hours per respondent).

Without the benefit of prior experience in this subject, and for

the purposes of complying with the Paperwork Reduction Act

requirements, the Department makes several rough estimates as to the

number of importers affected by this regulation, the number of peanut

shipments imported, and the number of documents needed to be filed for

each shipment. As many as 50 peanut handlers are capable of conducting

handling functions on imported peanuts, but evidence from 1995

indicates that only a handful imported peanuts. Thus, the number of

importers is estimated at 25. While the exact amount is not yet

determined, if the 1996 quota is established at 85 million pounds (and

is fully subscribed), approximately 425 entries of 200,000 pound

shipments would be entered. If allocated equally, the number of

shipments per importer would be 17.

It is expected that most shipments would be shelled peanuts needing

as few as three documents filed with the Secretary--the initial Customs

Service entry document (Form 3461, or equivalent form, filed with the

inspection service office and AMS), a grade inspection certificate (FV-

184-9A, ``Milled Peanut Inspection Certificate'') and an aflatoxin

assay certificate (Form CSSD-3 ``Certificate of Analysis for Official

Samples'' or equivalent PAC approved laboratory form). Inshell lots and

shelled lots that fail inspection requirements (expected to be far

fewer in number) would require additional forms for reconditioning or

disposition of non-edible peanuts. This rule estimates that each entry

would require an average of five documents be filed for each imported

shipment of peanuts--resulting in an estimated 85 documents filed for

each importer, and approximately 2,125 filings for the industry. The

time to photocopy and mail a document, and file the document for

recordkeeping purposes, is estimated to total 5 minutes--resulting in

an annual burden of approximately 7 hours per importer, and a total of

177 burden hours for the industry.

In addition to the reporting requirements, this proposed rule would

establish that importers and customs brokers retain copies of

certifications and entry documentation for not less than two years

after the calendar year of acquisition. This is a commonly accepted

records retention period and within good business practices. The time

for maintaining records by filing each document internally is included

in the five minute filing estimate. The information collected would be

used only for compliance purposes by personnel of the USDA.

The reporting and recordkeeping requirements established in this

proposed rule would enable the USDA to oversee the importation of

peanuts and help the U.S. peanut industry provide only good quality,

wholesome peanuts for edible peanut outlets. Without the quality

requirements specified in the Agreement (7 CFR Part 998), regulations

for non-signatory handlers (7 CFR Part 997), and these proposed

regulations, poor quality peanuts could more easily be entered into

edible channels, causing consumer dissatisfaction and having a negative

impact on the market for peanuts and peanut products. Compliance with

these standards would help the peanut industry in its efforts to expand

markets.

Although these proposed requirements could result in small

additional costs for importers, the benefits from the restriction of

low quality peanuts from edible markets could outweigh any additional

inspection, handling, recordkeeping and reporting costs resulting from

the requirements. The proposed requirements have been carefully

reviewed and every effort has been made to minimize any unnecessary

reporting and recordkeeping costs.

Based on available information, the Administrator of the AMS has

determined that this proposed rule could impose some additional costs

on affected importers. However, the benefits of marketing a high

quality product should exceed the additional costs, if any, which could

be incurred in meeting these requirements.

A 30 day comment period is provided to allow interested persons to

respond to this proposal. All written comments received within the

comment period will be considered when finalizing this proposed rule.

List of Subjects in 7 CFR Part 999

Dates, Filberts, Food grades and standards, Imports, Nuts, Peanuts,

Prunes, Raisins, Reporting and recordkeeping requirements, Walnuts.

For the reasons set forth in the preamble, 7 CFR part 999 is

proposed to be amended as follows:

PART 999--SPECIALTY CROPS; IMPORT REGULATIONS

1. The authority citation for 7 CFR part 999 is revised to read as

follows:

Authority: 7 U.S.C. 601-674; and 7 U.S.C. 1445c-3.

2. A new Sec. 999.600 is added to part 999 to read as follows:

Sec. 999.600 Regulation governing imports of peanuts.

(a) Definitions. (1) Peanuts means the seeds of the legume Arachis

hypogaea and includes both inshell and shelled peanuts produced in

countries other than the United States, other than those marketed in

green form for consumption as boiled peanuts.

(2) Farmers stock peanuts means picked and threshed raw peanuts

which have not been shelled, crushed, cleaned or otherwise changed

(except for removal of foreign material, loose shelled kernels, and

excess moisture) from the form in which customarily marketed by

producers.

(3) Inshell peanuts means peanuts, the kernels or edible portions

of which are contained in the shell.

(4) Incoming inspection means the sampling and inspection of

farmers stock peanuts to determine Segregation quality.

(5) Segregation 1 peanuts, unless otherwise specified, means

farmers stock peanuts with not more than 2.49 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.

(6) Segregation 2 peanuts, unless otherwise specified, means

farmers stock peanuts with more than 2.49 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.

(7) Segregation 3 peanuts, unless otherwise specified, means

farmers' stock peanuts with visible Aspergillus flavus mold.

(8) Shelled peanuts means the kernels of peanuts after the shells

are removed.

(9) Outgoing inspection means the sampling and inspection of

either: shelled peanuts which have been cleaned, sorted, sized and

otherwise prepared for human consumption markets; or inshell peanuts

which have been cleaned, sorted and otherwise prepared for inshell

human consumption markets.

(10) Negative aflatoxin content means 15 parts-per-billion (ppb) or

less for peanuts which have been certified as meeting edible quality

grade requirements, and 25 ppb or less for non-edible quality peanuts.

[[Page 3613]]

(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 United States Department of

Agriculture (USDA) who is, or who may hereafter be, authorized to act

on behalf of the Secretary.

(13) Inspection service means the Federal or Federal-State

Inspection Service, Fruit and Vegetable Division, Agricultural

Marketing Service, USDA.

(14) USDA laboratory means laboratories of the Science and

Technology Division, Agricultural Marketing Service, USDA, that

chemically analyze peanuts for aflatoxin content.

(15) PAC approved laboratories means laboratories approved by the

Peanut Administrative Committee, pursuant to Peanut Marketing Agreement

No. 146 (7 CFR Part 998), that chemically analyze peanuts for aflatoxin

content.

(16) Conditionally released means released under bond by the United

States Customs Service (Customs Service) for consumption (use in the

United States) or withdrawal from warehouse for consumption.

(17) Importation means the release from custody of the Customs

Service.

(b) Incoming regulation: (1) Farmers stock peanuts presented for

importation must first undergo incoming inspection. Only Segregation 1

peanuts may be used for human consumption. All foreign produced farmers

stock peanuts for human consumption must be sampled and inspected at a

buying point or other handling facility capable of performing incoming

sampling and inspection. Sampling and inspection shall be conducted by

the inspection service. Only Segregation 1 peanuts certified as meeting

the following requirements may be used in human consumption markets:

(i) Moisture. Except as provided under paragraph (b)(2) Seed

peanuts, of this section, peanuts may not contain more than 10.49

percent moisture: Provided, That peanuts of a higher moisture content

may be received and dried to not more than 10.49 percent moisture prior

to storage or milling.

(ii) Foreign material. Peanuts may not contain more than 10.49

percent foreign material, except that peanuts having a higher foreign

material content may be held separately until milled, or moved over a

sand-screen before storage, or shipped directly to a plant for prompt

shelling. The term sand-screen means any type of farmers stock cleaner

which, when in use, removes sand and dirt.

(iii) Damage. For the purpose of determining damage, other than

concealed damage, on farmers stock peanuts, all percentage

determinations shall be rounded to the nearest whole number.

(iv) Loose shelled kernels. Peanuts may not contain more than 14.49

percent loose shelled kernels, except that peanuts having a higher

loose shelled kernel content may be imported if held separately until

milled or shipped directly to a shelling facility for prompt shelling.

All percentage determinations shall be rounded to the nearest whole

number. Kernels which ride screens with the following or larger slot

openings may be separated from loose shelled kernels: Runner--\16/64\ x

\3/4\ inch; Spanish and Valencia--\15/64\ x \3/4\ inch; Virginia--\15/

64\ x 1 inch. If so separated, those loose shelled kernels which ride

the screens may be included with shelled peanuts prepared for

inspection and sale for human consumption: Provided, That no more than

5 percent of such loose shelled kernels are kernels which would fall

through screens with such minimum prescribed openings. Those loose

shelled kernels which do not ride the screens shall be removed from the

farmers' stock peanuts and shall be held separate and apart from other

peanuts and disposed of for non-edible use, pursuant to paragraph (e)

of this section. If the kernels which ride the prescribed screen are

not separated from the kernels which do not ride the prescribed screen,

the entire amount of loose shelled kernels shall be removed from the

farmers stock peanuts and shall be held separate and apart and disposed

of for non-edible use, pursuant to paragraph (e) of this section.

(2) Seed peanuts. Farmers stock peanuts determined to be

Segregation 1 quality, and shelled peanuts certified negative to

aflatoxin (15 ppb or less), may be imported for seed purposes.

Disposition of such peanuts to a seed outlet must be reported to the

Secretary by submitting a copy of the bill of lading or sales contract

which reports the weight of the peanuts so disposed, and the name,

address and telephone number of the receiving seed outlet. Residuals

from the shelling of Segregation 1 seed peanuts shall be held and/or

milled separate and apart from other peanuts, and such residuals

meeting quality requirements specified in paragraph (c)(1) of this

section may be disposed to human consumption channels, and any portion

not meeting such quality requirements shall be disposed to non-edible

peanut channels pursuant to paragraph (e) of this section. Segregation

2 and 3 peanuts may be shelled for seed purposes but must be dyed or

chemically treated so as to be unfit for human or animal consumption.

All disposition of seed peanuts and residuals from seed peanuts shall

be reported to the Secretary pursuant to paragraphs (f)(2) and (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 as provided herein. Segregation 2 and 3

peanuts may be commingled but shall be kept separate and apart from

edible quality peanut lots. Commingled Segregation 2 and 3 peanuts and

Segregation 3 peanuts shall be disposed only to oilstock, exported

inshell, or shelled and fragmented for export as provided in paragraph

(e) of this section. Shelled peanuts and cleaned-inshell peanuts which

fail to meet the requirements for human consumption in paragraph (b)(1)

may be crushed for oil or exported.

(4) Whenever the Secretary has reason to believe that peanuts may

have been damaged or deteriorated while in storage, the Secretary may

reject the then effective inspection certificate and may require the

importer to have the peanuts reinspected to establish whether or not

such peanuts may be disposed of for human consumption.

(c) Outgoing regulation. No person shall import peanuts for human

consumption into the United States unless such peanuts are lot

identified and certified by the inspection service as meeting the

following requirements:

(1)(i) Shelled peanuts. All shelled peanuts shall at least meet the

requirements specified in Table 1 as follows:

[[Page 3614]]

Table 1.--Minimum Grade Requirements--Peanuts for Human Consumption

[Whole Kernels and Splits]

--------------------------------------------------------------------------------------------------------------------------------------------------------

Maximum limitations

---------------------------------------------------------------------------------------------------------------------------------------------------------

Excluding lots of ``splits''

---------------------------------------------------------------------------------------------------------------------------------------------------------

Unshelled Fall through

Unshelled peanuts, ------------------------------------------------------------------

peanuts and damaged Foreign

Type and grade category damaged kernels and materials Moisture

kernels minor Sound split and Sound whole kernels Total (percent) (percent)

(percent) defects broken kernels

(percent)

--------------------------------------------------------------------------------------------------------------------------------------------------------

Runner............................ 1.50 2.50 3.00%; \17/64\ inch 3.00%; \16/64\ x 4.00%; both screens. .20 9.00

round screen. \3/4\ 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 4.00%; both screens. .20 9.00

round screen. \3/4\ inch; slot

screen.

No. 2 Virginia.................... 1.50 3.00 6.00%; \17/64\ inch; 6.00%; \15/64\ x 1 6.00%; both screens. .20 9.00

round screen. inch; slot screen.

--------------------------------------------------------------------------------------------------------------------------------------------------------

Lots of ``splits''

--------------------------------------------------------------------------------------------------------------------------------------------------------

Runner (not more than 4% sound 1.50 2.50 3.00%; \17/64\ inch; 3.00%; \14/64\ x 4.00%; both screens. .20 9.00

whole kernels). round screen. \3/4\ inch; slot

screen.

Virginia (not more than 90% 1.50 2.50 3.00%; \17/64\ inch; 3.00%; \14/64\ x 1 4.00%; both screens. .20 9.00

splits). round screen. inch; slot screen.

Spanish and Valencia (not more 1.50 2.50 3.00%; \16/64\ inch; 3.00%; \13/64\ x 4.00%; both screens. .20 9.00

than 4% sound whole kernels). round screen. \3/4\ inch; slot

screen.

--------------------------------------------------------------------------------------------------------------------------------------------------------

(ii) Peanuts meeting the specifications in Table 1 must also be

certified ``negative'' to aflatoxin content, pursuant to paragraph

(d)(4), prior to shipment to domestic human consumption markets.

Shelled peanuts meeting requirements specified in Table 2 may be

imported without sampling and testing for aflatoxin.

Table 2.--Superior Quality Requirements--Peanuts for Human Consumption

[Whole Kernels and Splits]

--------------------------------------------------------------------------------------------------------------------------------------------------------

Maximum limitations

---------------------------------------------------------------------------------------------------------------------------------------------------------

Unshelled Fall through

Unshelled peanuts, ------------------------------------------------------------------

peanuts and damaged Foreign

Type and grade category damaged kernels and Sound split and materials Moisture

kernels minor broken kernels Sound whole kernels Total (percent) (percent)

(percent) defects (percent) (percent)

(percent)

--------------------------------------------------------------------------------------------------------------------------------------------------------

Runner U.S. No. 1 and better...... 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \16/64\ x 4.00%; both screens. .10 9.00

round screen. \3/4\ inch, slot

screen.

Virginia U.S. No. 1 and better.... 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \15/64\ x 1 4.00%; both screens. .10 9.00

round screen. inch, slot screen.

Spanish and Valencia U.S. No. 1 1.25 2.00 3.00%; \16/64\ inch, 2.00%; \15/64\ x 4.00%; both screens. .10 9.00

and better. round screen. \3/4\ inch, slot

screen.

Runner U.S. Splits (not more than 1.25 2.00 2.00%; \17/64\ inch, 3.00%; \14/64\ x 4.00%; both screens. .20 9.00

4% sound, whole kernels). round screen. \3/4\ inch, slot

screen.

Virginia U.S. Splits (not less 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \14/64\ x 1 4.00%; both screens. .20 9.00

than 90% splits and not more than round screen. inch, slot screen.

3.00% sound whole kernels and

portions passing through \20/64\

inch round screen).

[[Page 3615]]

Spanish and Valencia U.S. Splits 1.25 2.00 2.00%; \16/64\ inch, 3.00%; \13/64\ x 4.00%; both screens. .20 9.00

(not more than 4% sound, whole round screen. \3/4\ inch, slot

kernels). screen.

Runner with splits (not more than 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \16/64\ x 4.00%; both screens. .10 9.00

15% sound splits). round screen. \3/4\ inch, slot

screen.

Virginia with splits (not more 1.25 2.00 3.00%; \17/64\ inch, 3.00%; \15/64\ x 1 4.00%; both screens. .10 9.00

than 15% sound splits). round screen. inch, slot screen.

Spanish and Valencia with splits 1.25 2.00 3.00%; \16/64\ inch, 2.00%; \15/64\ x 4.00%; both screens. .10 9.00

(not more than 15% sound splits). round screen. \3/4\ inch, slot

screen.

--------------------------------------------------------------------------------------------------------------------------------------------------------

(2) Cleaned-inshell peanuts. Peanuts declared as cleaned-inshell

peanuts may be presented for sampling and inspection in bags at the

port of entry. Alternatively, peanuts may be conditionally released as

cleaned-inshell peanuts but shall not subsequently undergo any

cleaning, sorting, sizing or drying process prior to presentation for

outgoing inspection as cleaned-inshell peanuts. Cleaned-inshell peanuts

intended for human consumption may not contain more than:

(i) 1.00 percent kernels with mold present, unless a sample of such

peanuts is drawn by the inspection service and analyzed chemically by a

USDA or PAC approved laboratory and certified ``negative'' as to

aflatoxin.

(ii) 2.00 percent peanuts with damaged kernels;

(iii) 10.00 percent moisture (carried to the hundredths place); and

(iv) 0.50 percent foreign material.

(3) Reconditioned peanuts. Peanuts shelled, sized and sorted in

another country prior to arrival in the U.S. and shelled peanuts which

originated from Segregation 1 peanuts that fail quality requirements of

Table 1 (excessive damage, minor defects, moisture, or foreign

material) or are positive to aflatoxin may be reconditioned by

remilling and/or blanching. After such reconditioning, peanuts meeting

the quality requirements of Table 1 and which are negative to aflatoxin

(15 ppb or less) may be disposed for edible peanut use.

(d) Sampling and inspection. (1) All sampling and inspection,

quality certification, chemical analysis, and lot identification,

required under this section, shall be done by the inspection service, a

USDA laboratory, or a PAC-approved laboratory, as applicable, in

accordance with the procedures specified herein. The importer shall

make arrangements with the inspection service for sampling, inspection,

identification and certification of all peanuts accumulated by the

importer. The importer also shall make arrangements for the appropriate

disposition of peanuts failing edible quality requirements of this

section. All costs of sampling, inspection, certification,

identification, and disposition incurred in meeting the requirements of

this section shall be paid by the importer. Whenever peanuts are

offered for inspection, the importer shall furnish any labor and pay

any costs incurred in moving and opening containers as may be necessary

for proper sampling and inspection.

(2) For farmers stock inspection, the importer shall cause the

inspection service to perform an incoming inspection and to issue an

CFSA-1007, ``Inspection Certificate and Sales Memorandum'' form

designating the lot as Segregation 1, 2, or 3 quality peanuts. For

shelled and cleaned-inshell peanuts, the importer shall cause the

inspection service to perform an outgoing inspection and issue an FV-

184-9A, ``Milled Peanut Inspection Certificate'' reporting quality and

size of the shelled or cleaned-inshell peanuts, whether the lot meets

or fails to meet quality requirements for human consumption of this

section, and that the lot originated in a country other than the United

States. The importer shall provide to the Secretary copies of all CFSA

1007 and FV-184-9A applicable to each peanut lot conditionally released

to the importer. Such reports shall be submitted as provided in

paragraph (g)(5) of this section.

(3) Procedures for sampling and testing peanuts. Sampling and

testing of peanuts for incoming and outgoing inspections of peanuts

presented for importation into the United States will be conducted as

follows:

(i) Application for sampling. The importer shall request inspection

and certification services from one of the following inspection service

offices convenient to the location where the peanuts are presented for

incoming and/or outgoing inspection. To avoid possible delays, the

importer should make arrangements with the inspection service in

advance of the inspection date. A copy of the Customs Service entry

document specific to the peanuts to be inspected shall be presented to

the inspection official prior to sampling of the lot.

(A) The following offices provide incoming, farmers stock

inspection:

Dothan, AL, tel: (205) 792-5185,

Graceville, FL, tel: (904) 263-3204,

Winter Haven, FL, tel: (813) 291-5820, ext 260,

Albany, GA, tel: (912) 432-7505,

Williamston, NC, tel: (919) 792-1672,

Columbia, SC, tel: (803) 253-4597,

Suffolk, VA, tel: (804) 925-2286,

Portales, NM, tel: (505) 356-8393,

Oklahoma City, OK, tel: (405) 521-3864,

Gorman, TX, tel: (817) 734-3006,

Yuma, AZ, tel: (602) 344-3869.

(B) The following offices, in addition to the offices listed in

paragraph (A), provide outgoing sampling and/or inspection services,

and certify shelled and cleaned-inshell peanuts as meeting

[[Page 3616]]

or failing the quality requirements of this section:

Eastern U.S.

Mobile, AL, tel: (205) 690-6154,

Jacksonville, FL, tel: (904) 359-6430,

Miami, FL, tel: (305) 592-1375,

Tampa, FL, tel: (813) 272-2470,

Presque Isle, ME, tel: (207) 764-2100,

Baltimore/Washington, tel: (301) 344-1860,

Boston, MA, tel: (617) 389-2480,

Newark, NJ, tel: (201) 645-2670,

New York, NY, tel: (212) 718-7665,

Buffalo, NY, tel: (716) 824-1585,

Philadelphia, PA, tel: (215) 336-0845,

Norfolk, VA, tel: (804) 441-6218,

Central U.S.

New Orleans, LA, tel: (504) 589-6741,

Detroit, MI, tel: (313) 226-6059,

St. Paul, MN, tel: (612) 296-8557,

Las Cruces, NM, tel: (505) 646-4929,

Alamo, TX, tel: (210) 787-4091,

El Paso, TX, tel: (915) 540-7723,

Houston, TX, tel: (713) 923-2557,

Western U.S.

Nogales, AZ, tel: (602) 281-0783,

Los Angeles, CA, tel: (213) 894-2489,

San Francisco, CA, tel: (415) 876-9313,

Honolulu, HI, tel: (808) 973-9566,

Salem, OR, tel: (503) 986-4620,

Seattle, WA, tel: (206) 859-9801.

(c) Questions regarding inspection services or requests for further

assistance may be obtained from: Fresh Products Branch, P.O. Box 96456,

room 2049-S, Fruit and Vegetable Division, AMS, USDA, Washington, D.C.

20090-6456, telephone (202) 690-0604, fax (202) 720-0393.

(ii) Sampling. Sampling of bulk farmers stock lots shall be

performed at a facility that utilizes a pneumatic sampler or approved

automatic sampling device. The size of farmers stock lots, shelled

lots, and cleaned-inshell lots, in bulk or bags, shall not exceed

200,000 pounds. For farmers stock, shelled and cleaned-inshell lots not

completely accessible for sampling, the applicant shall be required to

have lots made accessible for sampling pursuant to inspection service

requirements. The importer shall cause appropriate samples of each lot

of edible quality shelled peanuts to be drawn by the inspection

service. The amount of such peanuts drawn shall be large enough to

provide for a grade and size analysis, for a grading check-sample, and

for three 48-pound samples for aflatoxin assay. Because there is no

acceptable method of drawing official samples from bulk conveyances of

shelled peanuts, the importer shall arrange to have bulk conveyances of

shelled peanuts sampled during the unloading process. A bulk lot

sampled in this manner must be positive lot identified by the

inspection service and held in a sealed bin until the associated

inspection and aflatoxin test results have been reported.

(4) Aflatoxin assay. (i) The importer shall cause appropriate

samples of each lot of shelled peanuts intended for edible consumption

to be drawn by the inspection service. The three 48-pound samples shall

be designated by the inspection service as ``Sample 1IMP,'' ``Sample

2IMP,'' and ``Sample 3IMP'' and each sample shall be placed in a

suitable container and lot identified by the inspection service. Sample

1IMP may be prepared for immediate testing or Samples 1IMP, 2IMP, and

3IMP may be returned to the importer for testing at a later date under

lot identification procedures.

(ii) The importer shall cause Sample 1IMP to be ground by the

inspection service or a USDA or PAC-approved laboratory in a

subsampling mill. The resultant ground subsample shall be of a size

specified by the inspection service and shall be designated as

``Subsample 1-ABIMP.'' At the importer's option, a second subsample may

also be extracted from Sample 1IMP and designated ``Subsample 1-CDIMP''

which may be sent for aflatoxin assay to a USDA or PAC-approved

laboratory. Both subsamples shall be accompanied by a notice of

sampling signed by the inspector containing identifying information as

to the importer, the lot identification of the shelled peanut lot, and

other information deemed necessary by the inspection service.

Subsamples 1-ABIMP and 1-CDIMP shall be analyzed only in a USDA or

PAC-approved laboratory. The methods prescribed by the Instruction

Manual for Aflatoxin Testing, SD Instruction-1, August 1994, shall be

used to assay the aflatoxin level. The cost of testing and notification

of Subsamples 1-ABIMP and 1-CDIMP shall be borne by the importer.

(iii) The samples designated as Sample 2IMP and Sample 3IMP shall

be held as aflatoxin check-samples by the inspection service or the

importer until the analyses results from Sample 1IMP are known. Upon

call from the USDA or PAC-approved laboratory, the importer shall cause

Sample 2IMP to be ground by the inspection service in a subsampling

mill. The resultant ground subsample from Sample 2IMP shall be

designated as ``Subsample 2-ABIMP.'' Upon further call from the

laboratory, the importer shall cause Sample 3IMP to be ground by the

inspection service in a subsampling mill. The resultant ground

subsample shall be designated as ``Subsample 3-ABIMP.'' The importer

shall cause Subsamples 2-ABIMP and 3-ABIMP to be sent to and analyzed

only in a USDA or PAC-approved laboratory. Each subsample shall be

accompanied by a notice of sampling. The results of each assay shall be

reported by the laboratory to the importer. All costs involved in the

sampling, shipment and assay analysis of subsamples required by this

section shall be borne by the importer.

(iv)(A) Importers should contact one of the following USDA or PAC-

approved laboratories to arrange for chemical analysis.

Science and Technology Division, AMS/USDA, P.O. Box 279, 301 West Pearl

St., Aulander, NC 27805, Tel: (919) 345-1661 Ext. 156, Fax: (919) 345-

1991

Science and Technology Division, AMS/USDA, 1211 Schley Ave., Albany, GA

31707, Tel: (912) 430-8490/8491, Fax: (912) 430-8534

Science and Technology Division, AMS/USDA, P.O. Box 488, Ashburn, GA

31714, Tel: (912) 567-3703

Science and Technology Division, AMS/USDA, 610 North Main St., Blakely,

GA 31723, Tel: (912) 723-4570, Fax: (912) 723-3294

Science and Technology Division, AMS/USDA, P.O. Box 1368, Dothan, AL

36301, Tel: (205) 792-5185, Fax: (205) 671-7984

Science and Technology Division, AMS/USDA, 107 South Fourth St.,

Madill, OK 73446, Tel: (405) 795-5615, Fax: (405) 795-3645

Science and Technology Division, AMS/USDA, P.O. Box 272, 715 N. Main

Street, Dawson, GA 31742, Tel: (912) 995-7257, Fax: (912) 995-3268

Science and Technology Division, AMS/USDA, P.O. Box 1130, 308 Culloden

St., Suffolk, VA 23434, Tel: (804) 925-2286, Fax: (804) 925-2285

ABC Research, 3437 SW 24th Avenue, Gainesville, FL 32607-4502, Tel:

(904) 372-0436, Fax: (904) 378-6483

J. Leek Associates, Inc., P.O. Box 50395, 1200 Wyandotte (31705),

Albany, GA 31703-0395, Tel: (912) 889-8293, Fax: (912) 888-1166

J. Leek Associates, Inc., P.O. Box 368, 675 East Pine, Colquitt, GA

31737, Tel: (912) 758-3722, Fax: (912) 758-2538

J. Leek Associates, Inc., P.O. Box 6, 502 West Navarro St., DeLeon, TX

76444, Tel: (817) 893-3653, Fax: (817) 893-3640

J. Leek Associates, Inc., P.O. Box 548, 42 N. Ellis St., Camilla, GA

31730, Tel: (912) 336-8781, Fax: (912) 336-0146

[[Page 3617]]

Pert Laboratories, P.O. Box 267, Peanut Drive, Edenton, NC 27932, Tel:

(919) 482-4456, Fax: (919) 482-5370

Pert Laboratory South, P.O. Box 149, Hwy 82 East, Seabrook Drive,

Sylvester, GA 31791, Tel: (912) 776-7676, Fax: (912) 776-1137

Professional Service Industries, Inc., 3 Burwood Lane, San Antonio, TX

78216, Tel: (210) 349-5242, Fax: (210) 342-9401

Southern Cotton Oil Company, 600 E. Nelson Street, P.O. Box 180,

Quanah, TX 79252, Tel: (817) 663-5323, Fax: (817) 663-5091

Quanta Lab, 9330 Corporate Drive, Suite 703, Selma, TX 78154-1257, Tel:

(210) 651-5799, Fax: (210) 651-9271.

(B) Further information concerning the chemical analyses required

pursuant to this section may be obtained from: Science and Technology

Division, USDA/AMS, P.O. Box 96456, room 3507-S, Washington, DC 20090-

6456, telephone (202) 720-5231, or facsimile (202) 720-6496.

(v) Reporting aflatoxin assays. A separate aflatoxin assay

certificate, Form CSSD-3, ``Certificate of Analysis for Official

Samples'', or equivalent PAC-approved laboratory form, shall be issued

by the laboratory performing the analysis for each lot. The assay

certificate shall identify the importer, the volume of the peanut lot

assayed, date of the assay, and numerical test result of the assay. The

results of the assay shall be reported as follows.

(A) Lots containing 15 ppb or less aflatoxin content shall be

certified as ``Meets U.S. import requirements for edible peanuts under

Sec. 999.600 with regard to aflatoxin.''

(B) Lots containing more than 15 ppb aflatoxin content shall be

certified as ``Fails to meet U.S. import requirements for edible

peanuts under Sec. 999.600 with regard to aflatoxin.'' The importer

shall file USDA Form CSSD-3, or equivalent form, with the Secretary,

regardless of result.

(5) Appeal inspection. In the event an importer questions the

results of a quality and size inspection, an appeal inspection may be

requested by the importer and performed by the inspection service. A

second sample will be drawn from each container and shall be double the

size of the original sample. The results of the appeal sample shall be

final and the fee for sampling and analysis shall be charged to the

importer.

(e) Disposition of peanuts failing edible quality requirements. (1)

Peanuts failing grade and/or aflatoxin requirements shall be designated

as non-edible quality ``unrestricted'' peanuts or ``restricted''

peanuts and shall be crushed for oil, exported, or disposed to other

non-edible outlets as specified in this section. For the purposes of

this regulation, the term ``non-edible quality unrestricted peanuts''

means loose shelled kernels, fall through, and pickouts from--and the

entire milled production of--Segregation 1, Segregation 2, and

commingled Segregation 1 and 2 farmers stock peanuts which contain more

than 15 ppb and 25 ppb or less aflatoxin. The term ``non-edible quality

restricted peanuts'' means loose shelled kernels, fall through, and

pickouts from--and the entire milled production of--Segregation 1,

Segregation 2, and commingled Segregation 1 and 2 farmers stock peanuts

which contain in excess of 25 ppb aflatoxin. The term loose shelled

kernels means peanut kernels or portions of kernels completely free of

their hulls, as found in deliveries of farmers stock peanuts or those

which fail to ride the screens prescribed in paragraph (d)(iv) of this

section; the term fall through means sound split and broken kernels and

whole kernels which pass through specified screens; and the term

pickouts means those peanuts removed during the final milling process

at the picking table, by electronic equipment, or otherwise during the

milling process.

(2) Non-edible quality unrestricted peanuts may be disposed to

animal feed: Provided, That such peanuts are certified by the

inspection service as to moisture, foreign material content and treated

with a coloring agent or dyeing solution covering at least 80 percent

of the peanuts, handled and shipped under lot identification

procedures. Except for bulk loads, red tags shall be used and marked

``Animal Feed, Not For Human Consumption.''

(3) Lots of non-edible quality unrestricted peanuts may be

commingled during or after fragmentation and, if certified as meeting

fragmentation requirements by the inspection service, such fragmented

peanuts may be exported. For the purposes of this section, the term

fragmented means that not more than 30 percent of the peanuts shall be

whole kernels that ride the following screens, by type: Spanish--\15/

64\ x \3/4\ inch slot; Runner--\16/64\ x \3/4\ inch slot; and

Virginia--\15/64\ x 1 inch slot. All peanut lots exported must be lot

identified by the inspection service and applicable Customs Service

procedures for the export of merchandise must be followed.

(4) Unrestricted fall through may be disposed for use as wild-life

feed and rodent bait, if in labeled containers.

(5) Seed peanuts which are chemically treated causing them to be

unfit for edible or animal feed use shall be exempt from the

requirements of paragraph (c) of this section.

(6) Meal produced from the crushing of unrestricted peanuts shall

be exempt from further aflatoxin testing. Meal produced from the

crushing of restricted peanuts shall be tested and the numerical test

result of the chemical assay shall be shown on a certificate covering

each lot and the certification shall accompany each shipment or

disposition.

(7) Non-edible quality restricted peanuts may be crushed for oil or

exported: Provided, That such peanuts are lot identified, bagged, red

tagged, and so certified by the inspection service.

(8) Inspection certifications and proof of non-edible dispositions

sufficient to account for all peanuts in each consumption entry filed

by the importer must be reported to the Secretary by the importer

pursuant to paragraphs (f) (2) and (3) of this section.

(f) Reconditioning of failing peanuts: (1) Importers may remill

and/or blanch shelled peanuts which originated from Segregation 1

peanuts that fail quality requirements of Table 1 or are positive to

aflatoxin. After such reconditioning, peanuts meeting the quality

requirements of Table 1 and which are certified negative to aflatoxin

(15 ppb or less) may be disposed for edible use.

(2) Whole lots of remilled and/or blanched peanuts, and residuals

of such peanuts, which continue to fail quality requirements of Table 1

and contain 25 ppb or less aflatoxin content shall be considered ``non-

edible quality unrestricted'' peanuts and shall be disposed as

``unrestricted'' peanuts crushed for oil, exported, or animal feed,

pursuant to provisions of paragraph (e). Meal produced from

unrestricted peanuts shall be disposed pursuant to paragraph (e)(5).

(3) Whole lots of remilled and/or blanched peanuts, and residuals

of such peanuts, which continue to fail quality requirements of Table 1

and contain more than 25 ppb aflatoxin content, shall be considered

``non-edible quality restricted'' peanuts and shall be disposed as

``restricted'' peanuts pursuant to paragraph (e)(6). Meal produced from

restricted peanuts shall be disposed pursuant to paragraph (e)(5).

(4) Inspection certifications and proof of non-edible dispositions

sufficient to account for all peanuts in each consumption entry filed

by the importer must be reported to the Secretary by the

[[Page 3618]]

importer pursuant to paragraphs (f) (2) and (3) of this section.

(g) Safeguard procedures. (1) Prior to arrival of a foreign

produced peanut lot at a port of entry, the importer, or customs broker

acting on behalf of the importer, shall mail or send by facsimile

transmission (fax) a copy of the Customs Service entry documentation

for the peanut lot to the inspection service office that will perform

sampling of the peanut shipment. The documentation shall include

identifying lot or container number(s) and volume of the peanut lot

being entered, and the location (including city and street address),

date and time for inspection sampling. The inspection office shall

sign, stamp, and return the entry document to the importer. The

importer shall present the stamped document to the Customs Service at

the port of entry and send a copy of the document to the Secretary. The

importer also shall cause a copy of the entry document to accompany the

peanut lot and be presented to the inspection service at the inland

destination of the lot.

(2) The importer shall file with the Secretary copies of the entry

document and grade, aflatoxin, and identification certifications

sufficient to account for all peanuts in each entry filed by the

importer. Certificates and other documentation providing proof of non-

edible disposition, such as bills of lading and sales receipts which

report the weight of peanuts being disposed and the name, address and

telephone number of the non-edible peanut receiver, must be sent to the

Marketing Order Administration Branch, Attn: Report of Imported

Peanuts. Facsimile transmissions and overnight mail may be used to

ensure timely receipt of inspection certificates and other

documentation. Fax reports should be sent to (202) 720-5698. Overnight

and express mail deliveries should be addressed to USDA, AMS, Marketing

Order Administration Branch, 14th and Independence Avenue, SW, Room:

2526-S, Washington, DC, 20250. Regular mail should be sent to AMS,

USDA, P.O. Box 96456, room 2526-S, Washington, DC 20090-6456. Telephone

inquiries should be made to (202) 720-6862.

(3) Certificates and other documentation for each peanut lot must

be filed within 23 days of the filing date of the entry for the lot.

Failure of an importer to receive edible certification--or arrange for

appropriate non-edible disposition--on all foreign produced peanuts,

and file such reports with the Secretary within 23 days of an entry

declaration, may result in a request for a redelivery demand by the

Customs Service. Extensions granted by the Customs Service will be

correspondingly extended by the Secretary, upon request of the

importer.

(4) The Secretary shall ask the Customs Service to demand

redelivery of foreign produced peanut lots failing to meet requirements

of this section. Importers unable to redeliver or account for all

peanuts covered in a redelivery order shall be liable for liquidated

damages. Failure to fully comply with quality and handling requirements

or failure to notify the Secretary of disposition of all foreign

produced peanuts, as required under this section, may result in a

compliance investigation by the Secretary. Falsification of reports

submitted to the Secretary is a violation of Federal law punishable by

fine or imprisonment, or both.

(h) Additional requirements: (1) Nothing contained in this section

shall be deemed to preclude any importer from milling or reconditioning

prior to entry any shipment of peanuts for the purpose of making such

lot eligible for importation. However, all peanuts presented for

importation into the United States for human consumption use must be

certified as meeting the quality requirements specified in paragraph

(c) of this section.

(2) Conditionally released peanut lots of like quality and

belonging to the same importer may be commingled. Defects in an

inspected shelled lot may not be blended out by commingling with other

shelled lots of higher quality. Such commingling must be consistent

with applicable Customs Service regulations. Commingled lots must be

reported and disposed of pursuant to paragraphs (f)(2) and (f)(3)

respectively of this section.

(3) Inspection by the Federal or Federal-State Inspection Service

shall be available and performed in accordance with the rules and

regulations governing certification of fresh fruits, vegetables and

other products (7 CFR part 51). The importer shall make each

conditionally released lot available and accessible for inspection as

provided herein. Because inspectors may not be stationed in the

immediate vicinity of some ports-of-entry, importers must make

arrangements for inspection and certification through one of the

offices listed in this section.

(4) Imported peanut lots sampled and inspected at the port of

entry, or at other locations, shall meet the quality requirements of

this section in effect on the date of inspection.

(5) A foreign produced peanut lot, released by the Customs Service

for consumption, 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: and Provided further,

That such peanuts must be certified and reported to the Secretary

pursuant to paragraphs (f)(2) and (3) of this section.

(6) The cost of transportation, sampling, inspection,

certification, chemical analysis, and identification, as well as

remilling and blanching, and further inspection of remilled and

blanched lots, and disposition of failing peanuts, shall be borne by

the importer. Whenever peanuts are presented for inspection, the

importer shall furnish any labor and pay any costs incurred in moving,

opening containers, and shipment of samples as may be necessary for

proper sampling and inspection. The inspection service shall bill the

importer for fees covering quality and size inspections; time for

sampling; packaging and delivering aflatoxin samples to laboratories;

certifications of lot identification and lot transfer to other

locations, and other inspection certifications as may be necessary to

verify edible quality or non-edible disposition, as specified herein.

The USDA and PAC-approved laboratories shall bill the importer

separately for fees for aflatoxin assay. The importer also shall pay

all required Customs Service costs as required by that agency.

(7) Each person subject to this section shall maintain true and

complete records of activities and transactions specified in this part.

Such records and documentation accumulated during importation 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: January 23, 1996.

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 96-1667 Filed 1-31-96; 8:45 am]

BILLING CODE 3410-02-P