Specialty Crops; Import Regulations; Extension of Reporting Period for Peanuts Imported Under 1997 Import Quotas

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 999

[Docket No. FV97-999-1 IFR]

Specialty Crops; Import Regulations; Extension of Reporting

Period for Peanuts Imported Under 1997 Import Quotas

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Interim final rule with request for comments.

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SUMMARY: This rule removes the 23-day reporting requirement and

establishes a new date for importers to report disposition of peanuts

imported under 1997 peanut import quotas. This rule also establishes a

120-day reporting period for any peanuts imported after the 1997 import

quotas are filled. The 23-day reporting period established in the

import regulation is impractical given the volume of peanuts imported

under January 1 and April 1 peanut import quotas. This is an

administrative change for the 1997 peanut quota periods only. This rule

is deemed necessary by the Agricultural Marketing Service (AMS) to

provide peanut importers with sufficient time to meet the quality and

reporting requirements of the peanut import regulation.

DATES: Effective Setpember 29, 1997. Comments received by October 27,

1997 will be considered prior to issuance of a final rule.

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 2525-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, Senior Marketing

Specialist, Marketing Order Administration Branch, Fruit and Vegetable

Division, AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-

6456; tel: (202) 720-6862; fax (202) 720-5698. Small businesses may

request information on compliance with this regulation by contacting

Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable

Division, AMS, USDA, room 2525-S, P.O. Box

[[Page 50242]]

96456, Washington, DC 20090-6456; telephone (202) 720-2491, Fax: (202)

720-5698.

SUPPLEMENTARY INFORMATION: This interim final rule amends the peanut

import regulation published in the June 19, 1996, issue of the Federal

Register (61 FR 31306, 7 CFR part 999.600), which regulates the quality

of imported peanuts. An amendment to the regulation was issued December

31, 1996 (62 FR 1249, January 9, 1997). The import regulation is

effective under subparagraph (f)(2) of section 108B of the Agricultural

Act of 1949 (7 U.S.C. 1445c-3), 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). Those 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, as

amended (7 U.S.C. 601-674).

This rule has been determined not significant for 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, disposition of imported peanuts

must be reported to AMS within an established time period. This rule

changes that time period and is intended to apply to Mexican peanuts

imported from January 1, 1997, to December 31, 1997, and to Argentine

and ``other country'' peanuts imported from April 1, 1997, to March 31,

1998. 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.

This interim final rule amends, for the 1997 peanut quota year, a

provision in Sec. 999.600 of the regulations governing imported peanuts

(7 CFR part 999--Specialty Crops; Import Regulations). Section 999.600

establishes minimum quality, identification, certification, and

safeguard requirements for foreign produced farmers stock, shelled and

cleaned-inshell peanuts presented for importation into the United

States. The quality requirements are the same as those specified in

Sec. 998.100 Incoming quality regulation and Sec. 998.200 Outgoing

quality regulation of the Agreement.

Discussion

The import regulation was finalized June 19, 1996 (61 FR 31306). 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 with the opening of the Mexican peanut quota on January 1,

1997.

Under the safeguard procedures, importers are required to report to

AMS disposition of all imported peanuts. Paragraph (f)(3) of the

regulations sets a 23 day period for filing certificates of inspection

and aflatoxin testing. Sixty day extensions are possible, but requests

for these must be filed within the 23-day reporting period. The

reporting period and procedures for extension were established with the

expectation that three duty-free quotas would fill gradually during the

quota year. However, this did not occur. The Mexican quota of 8.1

million pounds closed approximately 5 weeks after the January 1, 1997

opening. The Argentine quota of 73.5 million pounds and the ``other

country'' quota of 13.3 million pounds filled immediately at 12:00 noon

on opening day, April 1, 1997. Importers' applications to enter peanuts

under the Argentine and ``other country'' quotas greatly exceeded the

quota volumes for these countries. After pro-rata distribution of those

quotas (based on the total peanut volume in each importer's entry

applications), the Customs Service set April 15 as the entry date for

approximately 86.8 million pounds of peanuts under the two quotas.

Because of the large volume of peanuts simultaneously released on

April 15, 1997, importers have been unable to meet the 23-day reporting

deadline for many of their imported lots. Obstacles to expedient

certification of such large volumes of imported peanuts included: (1)

Logistics of moving containers out of some congested port areas and

into storage; (2) arranging for sampling and inspection, and receiving

certifications; and (3) arranging for and transporting failing lots to

facilities for reconditioning and recertification.

Therefore, this rule establishes a new reporting date of November

1, 1997, for reporting disposition of all peanuts entered under the

1997 import quotas. It also provides for an extension of the reporting

period beyond November 1. Requests for extensions must be made in

writing and include the Customs Service entry number, container and lot

information for the unreported peanut lot(s), and the reason for delay

in meeting the November 1 reporting date. AMS will evaluate each

request on a case-by-case basis.

Peanuts may continue to be imported into the United States after

the import quotas are closed (with payment of tariff charges).

Therefore, this rule also provides that disposition of any peanuts

imported after the 1997 import quotas close must be reported within 120

days after the peanuts are entered by the Customs Service.

As a compliance measure, paragraph (f)(4) provided that the

Secretary would ask the Customs Service to demand redelivery of peanut

lots not reported as meeting the requirements of the import regulation.

Because this rule extends the reporting period beyond the Customs

Service 30-day redelivery demand period, the first three sentences in

paragraph (f)(4) are not applicable for peanuts entered under the three

1997 import quotas. Those sentences are therefore removed in this

rulemaking. The remainder of paragraph (4) regarding failure to comply

with the import regulation and falsification of reports is retained.

To help ensure a practicable and workable peanut import regulation,

the procedures in the regulation will be reviewed after the 1997

entries have been closed out. Thus, paragraphs (f)(3) and (f)(4) may be

further amended, if necessary, prior to opening of the 1998 peanut

import quotas.

These changes do not affect the stamp-and-fax procedure established

in paragraph (f)(1) of the safeguard provisions. That procedure ensures

notification of the Federal or Federal-State Inspection Service of

applications to import peanuts. This rule also does not change the

safeguard requirement that all imported lots must be reported. Pursuant

to paragraph (f)(1), all imported peanuts must be reported to AMS--

including those peanut lots that meet import requirements. Paragraph

(f)(2) provides that the quality and aflatoxin certifications and other

documentation must be sent by regular mail to: Marketing Order

Administration Branch, F&V, AMS, USDA, P.O. Box 96456, Room 2525-S,

Washington, D.C. 20090-6456, ``Attention: Report of Imported Peanuts.''

Overnight or express mail reports may be sent to Marketing Order

Administration Branch, F&V, AMS, USDA , 14th and Independence Avenue,

S.W., Room 2525-S, Washington, D.C. 20250, ``Attention: Report of

Imported Peanuts.''

[[Page 50243]]

Regulatory Flexibility Analysis

Pursuant to requirements set forth in the Regulatory Flexibility

Act (RFA), the Agricultural Marketing Service (AMS) has considered the

economic impact of this interim final rule on small entities.

Accordingly, AMS has prepared this initial regulatory flexibility

analysis relevant to this rulemaking.

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. AMS records for 1997 show

that approximately ten importers of peanuts were large handlers of

domestically grown peanuts and six were importers of general food

commodities, some of whom may be small entities. 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. Although small business entities may be

engaged in the importation of peanuts, the majority of the importers

are large business entities.

This rule extends for the 1997 quota periods only the time period

for importers to meet import requirements for each lot of imported

peanuts and file reports on the disposition of those peanuts. The

reporting requirements are an integral part of the safeguard procedures

specified in the import regulation, which is required by statute. The

requirements are applied uniformly to small as well as large importers.

The previous reporting time period was 23 days. The new reporting

time period ends on November 1, 1997. This change represents an

increase, depending on date of entry of a peanut lot, of up to 280 days

for Mexican peanut imports (entered on January 1) and 175 days for

Argentine and ``other country'' peanuts (all of which were entered on

April 15). The rule also extends the reporting period for all other

peanut entries during the 1997 quota year from 23 days to 120 days. The

additional time to meet requirements should enable importers to more

efficiently manage movement and disposition of their imported peanuts.

It is not possible to estimate cost savings that might result from

any increased efficiency of operations because of this action.

Extension requests, when properly requested, already have been granted

by AMS. The rule will benefit importers of large quantities of peanuts

by relieving the time pressure to have multiple lots certified, and

many lots reconditioned, within a very short time period. The rule also

will benefit small importers who do not have peanut handling resources

and must contract with remillers and blanchers to recondition failing

peanut lots. Records indicate that some importers, including small

importers, are outside the domestic peanut production area, and must

transport failing lots long distances for reconditioning.

Alternative reporting time periods were considered by AMS. For the

purposes of clarity, AMS believes that a single date, applicable to all

1997 entries under the quota is less confusing than 60 or 90 days from

the release date of a peanut lot by the Customs Service. Sixty days are

considered too short, as some peanut lots entered on April 15 are being

inspected for the first time more than two months later. Also,

necessary reconditioning efforts, with appropriate sampling and re-

inspections after each attempt may take longer than 60 days. Extensions

may be requested for individual lots not certified by the end of their

applicable reporting period.

Experience shows that few, if any, peanuts will be imported after

the quotas are filled. However, any such imports would be handled in a

more routine manner and normal pace than when the great volumes are

released simultaneously on quota opening days. Thus, the 120-day

requirement for any peanuts imported after the quotas are filled is

deemed reasonable by AMS.

For these reasons, AMS has determined that this action will be

beneficial to all importers, both large and small.

Paperwork Reduction Act

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

Chapter 35) as amended in 1995, the information requirements contained

in this rule was approved by the Office of Management and Budget (OMB)

on September 3, 1996, and assigned OMB number 0581-0176. This rule does

not establish new reporting or recordkeeping requirements. The current

annual reporting burden for importers is estimated at 12 hours. Those

affected by this rule have already reported entries and requested

extensions of deadlines for reporting peanuts entered under the 1997

import quotas. Further, because no additional 1997 peanut imports are

expected, there should be no need to file additional reports other than

the final report of all entries, which is included in the approved 12

hour reporting burden.

Paragraph (f)(3) of the rule is revised for the 1997 import periods

only. All certificates and other documents reporting the disposition of

passing, as well as failing and reconditioned, peanut lots must be

reported to AMS by November 1, 1997. This reporting date applies to

only AMS' peanut import regulation and does not supersede other

reporting dates for those peanuts that may be established by the

Customs Service or other agencies. For peanuts imported after the

quotas are filled, this rule extends the reporting period from 23 to

120 days, thus, reducing or eliminating the burden of requesting an

extension of the reporting period.

Interested persons are invited to submit information on the

regulatory and informational impacts of this action on small

businesses. This rule also invites comments on an extension in the time

period for reporting dispositions of imported peanuts. Written comments

timely received will be considered prior to finalization of this rule.

Pursuant to 5 U.S.C. 553, it is found and determined upon good

cause that it is impracticable, unnecessary, and contrary to the public

interest to give preliminary notice prior to putting this rule into

effect and that good cause exists for not postponing the effective date

of this rule until 30 days after publication in the Federal Register

because: (1) This rule relaxes the reporting requirements of the import

regulation; (2) some importers of 1997 import quota peanuts have

already been authorized 60-day extensions of the reporting period; and

(3) this rule provides a 30-day comment period and all written comments

timely received will be considered prior to finalization of this rule.

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

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, 7 U.S.C. 1445c-3, and 7 U.S.C.

7271.

2. In Sec. 999.600, paragraphs (f)(3) and (f)(4) are revised to

read as follows:

Sec. 999.600 Regulation governing imports of peanuts.

* * * * *

(f) * * *

(3) Certificates and other documentation showing disposition of

peanuts imported under 1997 import quotas, consistent with the

requirements

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of this section, must be filed by November 1, 1997. Disposition of

peanuts imported in excess of the 1997 peanut import quotas must be

filed within 120 days of the peanuts' entry by the Customs Service.

Extension of these reporting periods must be granted by the AMS on a

case by case basis upon a showing that such extension would be

justified. Requests for extension must be submitted in writing to the

Marketing Order Administration Branch, Fruit and Vegetable Division,

AMS, USDA, P.O. Box 96456, room 2525-S, Washington, DC 20090-6456,

Attn: Peanut Imports or faxing the request to (202) 720-5698. An

extension request must include the Customs Service entry number,

relevant grade and aflatoxin certificates (if any) issued on the

outstanding peanuts, and the reasons for delay in obtaining final

disposition of the peanuts.

(4) 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.

* * * * *

Dated: September 19, 1997.

Robert C. Keeney,

Director, Fruit and Vegetable Division.

[FR Doc. 97-25411 Filed 9-24-97; 8:45 am]

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