Protection of Stratospheric Ozone: Reconsideration of Petition Criteria and Incorporation of Montreal Protocol Decisions

SUMMARY: With this action, EPA is revising the accelerated phaseout

regulation that governs the production, import, export, transformation

and destruction of substances that deplete the ozone layer under the

authority of Sections 602, 604, 605, 606, and 614 of Title VI of the

Clean Air Act Amendments of 1990 (CAA or the Act). Today's amendments

reflect changes in U.S. obligations under the Montreal Protocol on

Substances that Deplete the Ozone Layer (Protocol) due to recent

amendments and decisions by signatory countries to this international

agreement. Additionally, in response to a petition submitted to EPA,

the Agency is removing the requirement in the petition process for

imports of used class I controlled substances that a person must

certify knowledge of tax liability. Other amendments are designed to

ease the burden on affected companies while continuing to ensure

compliance with Title VI of the CAA and meet U.S. obligations under the

Protocol.

DATES: This rule will become effective October 5, 1998 without further

notice unless the Agency receives relevant adverse comment by September

3, 1998. Should the agency receive such comments, it will publish a

timely withdrawal informing the public that this rule will not take

effect. If a public hearing is requested, the comment period will end

30 days after the date of the public hearing, in which case, EPA will

publish a document in the Federal Register announcing the hearing

information and the extended comment period.

ADDRESSES: Comments on this rulemaking should be submitted in duplicate

(two copies) to: Air Docket No. A-92-13, U.S. Environmental Protection

Agency, 401 M Street, SW, Room M-1500, Washington, DC 20460. Inquiries

regarding a public hearing should be directed to the Stratospheric

Ozone Protection Hotline at 1-800-269-1996.

Materials relevant to this rulemaking are contained in Docket No.

A-92-13. The Docket is located in room M-1500, First Floor, Waterside

Mall at the address above. The materials may be inspected from 8 a.m.

until 4 p.m. Monday through Friday. A reasonable fee may be charged by

EPA for copying docket materials.

FOR FURTHER INFORMATION CONTACT: Tom Land, U.S. Environmental

Protection Agency, Stratospheric Protection Division, Office of

Atmospheric Programs, 6205J, 401 M Street, SW., Washington, DC 20460,

202-564-9185.

SUPPLEMENTARY INFORMATION: The EPA is revising the accelerated phaseout

regulation as a direct final rule without prior proposal because the

Agency views these revisions as noncontroversial and anticipates no

relevant adverse comments. The EPA is also publishing a companion

proposed rule to this direct final rule in this issue of the Federal

Register to serve as the proposal should adverse comments be filed on

provisions of the direct final rule. Should the Agency receive relevant

adverse comment on the direct final rule, it will publish a timely

withdrawal informing the public that the rule will not take effect. The

EPA will not institute a second comment period on this rule. Any

parties interested in commenting on these revisions to 40 CFR part 82,

subpart A should do so at this time.

Relevant adverse comment will be addressed in a subsequent final

rulemaking document.

Table of Contents

I. Background

II. Revisions to the Stratospheric Ozone Protection Program

A. Amendments to Sec. 82.3--Definitions

1. Adding a Definition for the Term ``Confer'' that Pertains to

Essential-Use Allowances

2. Adding Destruction Technologies to the List of Those Approved

in the Definition of Destruction

3. Simplifying the Definition of ``Importer''

4. Adding a Definition for the Phrase ``Source Facility'' that

Pertains to the Petition Process for Imports of Used Controlled

Substances

5. Clarifying the Definition of Transhipment

B. Amendments to Sec. 82.4--Prohibitions

1. Licensing System for Imports and Exports of Listed Controlled

Substances--both Newly Manufactured and Previously Used

2. Control of Exported Products that Rely on Class I Controlled

Substances for their Continuing Functioning to Article 5 Parties

3. Prohibit Imports and Exports of HBFCs from or to Non-Parties

to the Protocol

4. Application Process for Exemptions to the HCFC Phaseout for

Specific National Security Uses

5. Simplify Procedure for Apportioning Essential-Use Allowances

and Essential-Use Exemptions through a Notice

6. Prohibit Import of Class I Controlled Substances for

Essential-Uses Except by Companies Allocated Essential-Use

Allowances

C. Amendments to Sec. 82.9--Availability of Production

Allowances in Addition to Baseline Production Allowances

1. Clarification of Increases or Decreases of Article 5

Allowances due to International Transfers

D. Amendments to Sec. 82.12--Transfers

1. Increases or Decreases of Essential-Use Allowances due to

Emergency International Transfers

E. Amendments to Sec. 82.13--Recordkeeping and Reporting

Requirements

1. Removal of Producer Requirement to Report the Quantity of

Used Material Received that Contains Recycled or Reclaimed

Controlled Substances

2. Add to the Producer Recordkeeping and Reporting Requirements

the Need to Maintain and Submit a Certification that a Quantity of

Class I Controlled Substance will be used as a Process Agent.

3. Clarify the Need for Letters that Confer Essential-Use

Allowances and Destruction and Transformation Credits to Producers

and that these Letters be Submitted with Producer's Quarterly

Reports

4. Changes to the Petition Process for Importing Used Class I

Controlled Substances

a. Clarification that a Petition to Import Used Class I

Controlled Substances is Submitted for One Individual Shipment

b. Changing the de minimis Quantity for an Individual Shipment

for which a Person is Required to Submit a Petition to Import Used

Class I Controlled Substances

c. Revised and Expanded Information Requirements for a Petition

to Import Used Class I Controlled Substances

d. Removal of the Information Requirement regarding the Tax for

People Petitioning to Import Used Class I Controlled Substances

e. Clarification of the Timing for EPA Review of a Petition

f. Clarification of Reasons for Disallowing Petitions to Import

Used Class I Controlled Substances

g. Requirement that the Petition and the Non-Objection Letter

from EPA for the Import of Used Class I Controlled Substances

Accompany the Shipment through U.S. Customs Clearance

5. Requirement that Importers of Controlled Substances and Used

Controlled Substances use the Harmonized Commodity Codes in this

Regulation in completing Customs Entry Documents

6. Modify the Requirement for a Sales Contract that Certifies

Exported Controlled Substances will be Transformed or Destroyed

[[Page 41627]]

7. Applying the Recordkeeping and Reporting Requirements to

Material obtained from Importers as well as Producers for a Person

that Transforms or Destroys Class I Controlled Substances

8. Changes to the Recordkeeping and Reporting Requirements for

Entities Allocated Essential-Use Allowances

9. Changes to the Reporting Requirement for Distributors of

Laboratory Supplies under the Global Laboratory Essential Use

Exemption

III. Miscellaneous Additional Changes

IV. Summary of Supporting Analysis

A. Unfunded Mandates Reform Act

B. Regulatory Flexibility

C. Executive Order 12866

D. Applicability of E.O. 13045--Children's Health Protection

E. Paperwork Reduction Act

F. Executive Order 12875

G. Submission to Congress and the General Accounting Office

I. Background

The current regulatory requirements of the Stratospheric Ozone

Protection Program that limit production and consumption of ozone-

depleting substances were promulgated by the Environmental Protection

Agency (EPA or the Agency) in the Federal Register on May 10, 1995 (60

FR 24970) and on December 20, 1994 (59 FR 65478). The regulatory

program was originally published in the Federal Register on August 12,

1988 (53 FR 30566), in response to the 1987 signing of the Montreal

Protocol on Substances that Deplete the Ozone Layer

(Protocol).1 The U.S. was one of the original signatories to

the 1987 Montreal Protocol and the U.S. ratified the Protocol on April

4, 1988. Congress then enacted, and President Bush signed into law, the

Clean Air Act Amendments of 1990 (CAA or the Act) that included Title

VI on Stratospheric Ozone Protection. Today's actions amend the

existing EPA regulations published under Sections 604, 605, 606 and 614

of the CAA governing the production and consumption of ozone-depleting

substances. Today's amendments are designed to ensure the U.S. meets

its obligations under the Protocol and the CAA.

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\1\ Several revisions to the original 1988 rule were issued on

the following dates: February 9, 1989 (54 FR 6376), April 3, 1989

(54 FR 13502), July 5, 1989 (54 FR 28062), July 12, 1989 (54 FR

29337), February 13, 1990 (55 FR 5005), June 15, 1990 (55 FR 24490)

and June 22, 1990 (55 FR 25812) July 30, 1992 (57 FR 33754), and

December 10, 1993 (58 FR 65018).

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EPA derives its authority for today's action from sections 602,

604, 605, 606, and 614 of the CAA. Many of today's changes are made to

reflect adjustments or amendments to the Protocol or decisions taken by

the Parties to the Protocol at their meetings from 1995 through 1997.

EPA is acting in accordance with section 614 of the CAA in amending the

regulations to reflect these changes. Section 614 of the CAA states

that Title VI of the Act ``shall be construed, interpreted, and applied

as a supplement to the terms and conditions of the Montreal Protocol,

as provided in Article 2, paragraph 11 thereof, and shall not be

construed, interpreted, or applied to abrogate the responsibilities of

obligations of the United States to implement fully the provisions of

the Montreal Protocol. In the case of conflict between any provision of

[Title VI of the CAA] and any provision of the Montreal Protocol, the

more stringent provision shall govern.'' Section 606 of the CAA allows

EPA to accelerate the phaseout schedules found in sections 604 and 605

of the Act.

Today's action adjusts the regulatory framework promulgated under

section 606, while retaining the accelerated phaseout dates. The

changes in today's action are made to close loopholes in existing

regulatory language, to ease the burden on the regulated community, to

clarify existing requirements and to lessen EPA's administrative burden

in implementing the Allowance Program (the Program).

The requirements contained in the final rules published in the

Federal Register on May 10, 1995 and December 20, 1994 establish an

Allowance Program. The Program and its history are described in the

notice of proposed rulemaking (NPRM) published in the Federal Register

on November 10, 1994 (59 FR 56276). The control and the phaseout of

production and consumption of ozone-depleting substances as required

under the Protocol and CAA are accomplished through the Allowance

Program.

In developing the Allowance Program, EPA collected information on

the amounts of ozone-depleting substances produced, imported, exported,

transformed and destroyed within the United States for specific

baseline years for specific chemicals. This information was used to

establish the U.S. production and consumption ceilings for these

chemicals. The data were also used to assign company-specific

production and import rights to companies that were in most cases

producing or importing during the specific year of data collection.

These production or import rights are called ``allowances.'' Due to the

complete phaseout of many of the ozone-depleting chemicals, the

quantities of production allowances and consumption allowances granted

to companies for those chemicals were gradually reduced and eventually

eliminated. Production allowances and consumption allowances continue

to exist for only one specific class I controlled ozone-depleting

substance--methyl bromide. All other production or consumption of class

I controlled substances is prohibited under the Protocol and the CAA,

but for a few narrow exemptions.

In the context of the regulatory program, the use of the term

consumption may be misleading. Consumption does not mean the ``use'' of

a controlled substance, but rather is defined as production plus

imports minus export of controlled substances (Article 1 of the

Protocol and Section 601 of the CAA). Class I controlled substances

that were produced or imported through the expenditure of allowances

prior to their phaseout date can continue to be used by industry and

the public after that specific chemical's phaseout under these

regulations, unless otherwise precluded under separate regulations.

The specific names and chemical formulas for the controlled ozone-

depleting substances in the Groups of class I controlled substances are

in Appendix A and Appendix F in Subpart A of 40 CFR part 82. The

specific names and chemical formulas for the class II controlled ozone-

depleting substances are in Appendix B and Appendix F in Subpart A.

Although the regulations phased out the production and consumption

of class I, Group II (halons) on January 1, 1994, and all other class I

controlled substances (except methyl bromide) on January 1, 1996, a

very limited number of exemptions exist, consistent with U.S.

obligations under the Protocol. The regulations allow for the

manufacture of phased-out class I controlled substances, provided the

substances are either transformed, or destroyed. (40 CFR 82.4(b)) They

also allow limited manufacture if the substances are (1) exported to

countries listed under Article 5 of the Protocol, (2) produced for

essential uses as authorized by the Protocol and the regulations, or

(3) produced with destruction or transformation credits. (40 CFR 82.4

(b))

The regulations allow import of phased-out class I controlled

substances provided the sources are either transformed or destroyed.

(40 CFR 82.4(d)) Limited exceptions to the ban on the import of phased-

out class I controlled substances also exist if the substances are: (1)

previously used, (2) imported for essential uses as authorized by the

Protocol and the regulations, or (3) a transhipment or a heel. (40 CFR

82.4(d))

[[Page 41628]]

II. Revisions to the Stratospheric Ozone Protection Program

A. Amendments to Sec. 82.3--Definitions

1. Adding a Definition for the Term ``Confer'' That Pertains to

Essential-Use Allowances

EPA is adding a definition for the term ``confer'' to reflect

wording already in the current regulatory text as published in the

Federal Register on May 10, 1995 (60 FR 24970). Section 82.4(b)

currently includes references to ``conferred unexpended essential-use

allowances'' and ``conferred unexpended destruction and transformation

credits.'' The preamble to the final rule published in the Federal

Register on May 10, 1995 described how the holder of essential-use

allowances could confer those unexpended essential-use allowances to a

producer or importer. (60 FR at 24976.) The preamble to the May 10,

1995 final rule also described how the holder of destruction and

transformation credits could confer the right to produce or import

under the credits to a producer or importer. (60 FR at 24973-24974.)

EPA is adding a definition to Sec. 82.3 that ``confer means to shift

the rights obtained under Sec. 82.4(t) for essential-use allowances

from the holder of the unexpended essential-use allowance to a person

for the production of a specified controlled substance, or to shift the

rights obtained under Sec. 82.9(f) for destruction and transformation

credits from the holder of the unexpended destruction and

transformation credits to a person for the production of a specified

controlled substance.''

2. Adding Destruction Technologies to the List of Those Approved in the

Definition of Destruction

EPA is adding two new approved destruction processes to the list of

technologies currently appearing in the regulation under the definition

of destruction (60 FR 24970, 24987; 40 CFR 82.3). The Parties to the

Montreal Protocol at the Seventh Meeting in 1995 decided to include

radio frequency plasma destruction in the list of approved

technologies. The Protocol's Technology and Economic Assessment Panel

(TEAP) reviewed test results from the technology's operation and

verified that radio frequency plasma destruction meets the suggested

minimum emission standards approved by the Parties (Decision IV/11).

EPA believes that the technical review and recommendation by the TEAP

of radio frequency plasma destruction and the subsequent approval by

the Parties to the Protocol warrants today's inclusion of the

technology in the list of approved destruction processes found under

the definition of destruction in Sec. 82.3 (60 FR 24970).

EPA is also adding, solely for the destruction of foams, the

limited inclusion of municipal solid waste incinerators in the list of

approved technologies in the definition of destruction currently found

in Sec. 82.3 of the regulation (60 FR 24970, 24987). The Parties to the

Montreal Protocol at the Fifth Meeting in 1993 decided to include

municipal solid waste incinerators in the list of approved

technologies, but only for the destruction of foams containing ozone-

depleting substances. The TEAP reviewed the test results from the

operation of municipal solid waste incinerators for the destruction of

foams that contain ozone-depleting substances and verified that the

technology meets the suggested minimum emission standards approved by

the Parties at the Fourth Meeting (Decision IV/11). EPA believes that

the technical review and recommendation by the TEAP of municipal solid

waste incinerators for the destruction of foams that contain ozone-

depleting substances and the subsequent approval by the Parties to the

Protocol warrants today's inclusion of the technology in the list of

approved destruction technologies found under the definition of

destruction in Sec. 82.3 (60 FR 24970, 24987).

3. Simplifying the Definition of ``Importer''

EPA is simplifying the definition of ``importer'' for enforcement

purposes. Over the past few years, EPA has worked with an inter-agency

taskforce of other Federal Agencies to enforce against the illegal

import of banned class I controlled substances. Members of the inter-

agency taskforce include EPA, the Department of Justice, the U.S.

Customs Service, the Internal Revenue Service, the Department of State,

and other interested agencies. Enforcement personnel from taskforce

agencies have discovered difficulties in working with the definition of

importer listed in the May 10, 1995 final rule (60 FR 24988) in

building cases against illegal importers due to ambiguities about who

ultimately is responsible. Thus, enforcement officials from EPA and

other taskforce agencies suggested that EPA simplify the definition of

the term ``importer'' to eliminate ambiguities and to make it easier to

enforce. EPA is simplifying the definition of ``importer'' to be ``the

importer of record listed on U.S. Customs Service forms for imported

controlled substances, used controlled substances or controlled

products.''

4. Adding a Definition for the Phrase ``Source Facility'' That Pertains

to the Petition Process for Imports of Used Controlled Substances

EPA is adding a definition to Sec. 82.3 for the term ``source

facility.'' The term ``source'' was included in the regulatory text of

Sec. 82.13(g)(2)(iii) regarding petitions to import used class I

controlled substances but was not defined in Sec. 82.3 of the final

rule published in the Federal Register on May 10, 1995 (60 FR 24970).

As explained in the preamble to the May 10, 1995 final rule, the intent

of the petition process is to allow EPA to independently verify whether

a class I controlled substance is, in fact, previously used. EPA

established the petition process because quantities of class I

controlled substances were entering the U.S. mis-identified as ``used''

when they were, in fact, newly produced ozone-depleting chemicals.

Under the Protocol, trade in previously used controlled substances is

permitted even after the phaseout dates. To independently verify that a

quantity of class I controlled substance was previously used, EPA needs

detailed information about the source facility from which the material

was recovered. EPA discovered that companies petitioning to import used

class I controlled substances under the current requirements need

clarification of the term ``source facility'' so that they can submit

complete information to allow independent verification. In distributing

information about the petition process, EPA has clarified that source

facility means the exact location from which a used controlled

substance was recovered from a piece of equipment, including the name

of the company responsible for, or owning the location, a contact

person at the location, the mailing address for that specific location,

as well as a phone number and a fax number for the contact person at

the location. In choosing this definition for the term ``source

facility,'' EPA considered whether it was sufficiently clear for a

person wishing to submit a petition to import used class I controlled

substances as well as for EPA to independently verify that the quantity

of material cited in the petition was, in fact, previously used.

5. Clarifying the Definition of Transhipment

In today's action, EPA would like to clarify the definition of

``transhipment'' of controlled substances and make the distinction

between a transhipment and

[[Page 41629]]

an import that is subsequently re-exported. The first discussion of

transhipment appeared in the proposed rulemaking published in the

Federal Register on March 18, 1993 (58 FR 15014, 15044). The March 18,

1993 proposed rulemaking raised the issue of transhipments pursuant to

Decision IV/14 of the Fourth Meeting of the Parties, which addressed

transhipments of bulk substances from the country of origin, through a

third country, to the country of final destination. Decision IV/14 of

the Parties to the Protocol clarifies that transhipments are not

included in the third country's calculation of consumption. Recall that

consumption means production plus imports minus exports.

The December 10, 1993 final rulemaking defined ``transhipment'' as

``the continuous shipment of a controlled substance from a foreign

state of origin through the United States or its territories to a

second foreign state of final destination.'' (58 FR 65018, 65064). The

clarifying phrase ``as long as the shipment does not enter into United

States jurisdiction'' was added on May 10, 1995 (60 FR 24970, 24983).

Re-packaging a shipment that is passing through the United States

would make it an import and a subsequent export under the provisions of

the Montreal Protocol. Such a shipment would count toward the United

States' calculation of its level of consumption. As an Article 2

country under the Montreal Protocol, the United States is obligated to

have a calculated level of consumption equal to zero for all class I

controlled substances (except those substances in Group VI, like methyl

bromide, which are on a different phaseout schedule). Any re-packaging

of shipments of class I controlled substances moving through the United

States could therefore be a violation of the United States' obligations

under the Protocol. Thus, EPA is adopting a definition of transhipment

that does not permit a shipment to be re-packaged. The current

definition distinguishes between a transhipment and a shipment that is

imported, re-packaged and then exported, by using the phrase,

``continuous shipment.'' A continuous shipment enters and leaves the

United States and is not repackaged or manipulated in any manner before

it exits for its final destination. In the context of U.S. Customs

regulations (19 CFR Sec. 123 and Sec. 19 CFR 19), the term

``manipulation'' has a specific meaning regarding whether a shipment is

to be ``cleaned, sorted, repacked or otherwise changed in condition''

as it travels in transit through United States jurisdiction. In today's

action, EPA is stating that a transhipment as defined under this

Subpart cannot be re-packaged, sorted, or otherwise changed in

condition.

In conjunction with the clarification of the definition of

transhipment proposed in the Federal Register on November 20, 1994 (59

FR 56276), EPA discussed re-packaging of controlled substances during

transhipments. The discussion was prompted by concerns of a company

that brings large quantities of a controlled substance in tank ships

that are unloaded to on-shore tanks in the United States. The

quantities of controlled substance put into these on-shore tanks are

loaded directly onto other ships bound for foreign destinations. EPA

does not consider the unloading of a controlled substance from a tank

ship directly into a large receiving tank for eventual re-loading onto

another tank ship to be re-packaging. When the controlled substance is

directly unloaded from a ship into an on-shore tank and then directly

loaded from that same tank onto a different ship the package for the

controlled substance does not change while it is within the United

States jurisdiction, and therefore is not re-packaged. In contrast,

when a controlled substance is unloaded from a ship onto a dock in the

United States in, for example, a 1-ton ISO tank and the controlled

substance is transferred from the 1-ton ISO tank to either smaller or

larger containers, it is considered to be re-packaged. EPA does not

consider the transfer of controlled substances between ships in U.S.

ports to be re-packaging.

EPA is continuing to exempt transhipments from the limits and

requirements set forth in the prohibitions of Sec. 82.4. Transhipments

do not include imports where any form of re-packaging occurs for a

shipment of controlled substance as it moves through the United States

or its territories before it is exported to a foreign country. In the

final rule published in the Federal Register on May 10, 1995, EPA

decided against broadening the definition of transhipment to allow re-

packaging. EPA believes that re-packaging of controlled substances

coming from a foreign state of origin, moving through the United States

or its territories, bound for a final destination in another foreign

state renders the controlled substance an import for purposes of the

Montreal Protocol. Today's action clarifies the meaning of the

definition of transhipment vis-a-vis re-packaging and corrects the

grammar in the current definition to read, ``transhipment means the

continuous shipment of a controlled substance from a foreign state of

origin through the United States or its territories to a second foreign

state of final destination, as long as the shipment does not enter into

United States jurisdiction. A transhipment, as it moves through the

United States or its territories, cannot be re-packaged, sorted or

otherwise changed in condition.''

B. Amendments to Sec. 82.4--Prohibitions

1. Licensing Imports and Exports of Listed Controlled Substances--Both

Newly Manufactured and Previously Used

EPA believes that current regulatory requirements can be used to

satisfy the United States' obligation to establish a licensing system

for imports and exports of new and used controlled substances, in

accordance with a recent amendment to the Montreal Protocol. At the

Ninth Meeting of the Parties to the Protocol (1997, Montreal), the

Parties agreed to amend Article 4, with the addition of section B.

Paragraph 1 of Article 4B reads: ``Each Party shall, by 1 January 2000

or within three months of the date of entry into force of this Article

for it, whichever is the later, establish and implement a system for

licensing the import and export of new, used, recycled and reclaimed

controlled substances in Annexes A, B, C and E.'' Under paragraph 3 of

Article 4B, each Party is obligated to report to the Ozone Secretariat

``within three months of the date of introducing its licensing

system.''

EPA wishes to address this change to Article 4B to ensure

compliance with the Protocol and the CAA. Section 614(b) of the CAA

states, ``[t]his title as added by the Clean Air Act Amendments of 1990

shall be construed, interpreted, and applied as a supplement to the

terms and conditions of the Montreal Protocol, as provided in Article

2, paragraph 11 thereof, and shall not be construed, interpreted, or

applied to abrogate the responsibilities of obligations of the United

States to implement fully the provisions of the Montreal Protocol.''

Thus, today's discussion of the U.S. licensing system is relevant to

ensuring compliance with both the Protocol and Title VI of the CAA.

Under the current regulatory framework, only companies with one of

several types of licenses are allowed to import or export controlled

substances and used controlled substances not exempted under

Sec. 82.4(d), and (h) of the final rule published in the Federal

Register on May 10, 1995 (60 FR 24970). EPA will consider holders of

all type of

[[Page 41630]]

allowances, credits or non-objection notices to be holders of licenses

in accordance with U.S. obligations under the Protocol. The types of

allowances that will be considered licenses include production and

consumption allowances, Article 5 allowances and essential-use

allowances. The specifics of what EPA will consider as licenses and

other types of imports and exports exempted from licensing are

discussed below. Other systems EPA considered for licensing imports and

exports of controlled substances are also described below.

In implementing various provisions of the Montreal Protocol and

Title VI of the CAA, EPA currently requires certain types of licenses

to import or export class I controlled substances. Imports of class I

controlled substances (except Group VI substances) are currently

banned, but for exemptions and exceptions contained in Sec. 82.4 of the

final rule published in the Federal Register on May 10, 1995. The

exemptions in this rule (40 CFR Part 60 Subpart A) are permitted under

the Protocol and the CAA.

Companies allocated production and consumption allowances in

Secs. 82.5 and 82.6 of the May 10, 1995 final rule for class I, Group

VI controlled substances (i.e., methyl bromide) will be considered

holders of licenses (in the form of allowances) for the import and

export of this specific class I controlled substance. Companies granted

essential-use allowances under the provisions of section 82.4(t) will

also be considered holders of licenses to import a restricted quantity

of the specific class I controlled substance(s) during the specified

control period. Likewise, a person obtaining a non-objection notice in

response to a petition to import used class I controlled substances in

accordance with Sec. 82.4(j) and Sec. 82.13(g)(2) and (3) will be

considered the holder of a shipment-specific import license.

The current regulations, published in the Federal Register on May

10, 1995 (60 FR 24970), have few restrictions on exports. The current

regulations limit the quantity of class I controlled substances a

company can produce for export to Article 5 countries through the

allocation in Sec. 82.9 of Article 5 allowances. Therefore, companies

allocated Article 5 allowances in Sec. 82.9 will be considered to be

holders of licenses to export. In addition, Sec. 82.4(k) of the current

rule (Sec. 82.4(l) of today's amendments) prohibits a person from

exporting a class I, Group I or Group II controlled substance to a

foreign state that is a non-Party to the Protocol. This section also

prohibits the export of class I, Group III, IV, or V substances to a

foreign state not party to the 1990 amendments to the Protocol. In Part

II.B.4 and Part II.B.5 below, EPA is adding a prohibition on exports of

class I, Group VII controlled substances to non-Parties in accordance

with amendments to the Protocol agreed to in Vienna in 1995.

For class II controlled substances (HCFCs), in accordance with the

amendment agreed to by the Parties to the Protocol in 1997, EPA will

consider importers and exporters who submit quarterly reports as

currently required in Sec. 82.13(n) of Subpart A to be the holders of

import and export licenses. EPA is adopting this approach for class II

controlled substances as a temporary measure. The Agency will soon

publish an Advance Notice of Proposed Rulemaking (ANPRM) that will

describe potential control measures for ensuring U.S. consumption of

class II controlled substances remains under the cap established under

Article 2F of the Protocol. The ANPRM will describe options being

considered for establishing an allowance system to control production,

import and export of class II controlled substances. At the time EPA

establishes controls through allowances, to limit U.S. consumption of

class II controlled substances, the allowances will be considered

licenses for imports and exports.

In developing today's rule, EPA considered other licensing systems,

including one that would require a company to request a license prior

to importing class I controlled substances, including those for

exempted purposes, such as transformation, destruction, and heels. In

addition, EPA considered a parallel licensing system for exports that

would require a company to request a license prior to exporting class I

controlled substances for exempted purposes, such as transformation or

destruction. EPA believes that the 1997 amendment to Article 4 of the

Protocol that requires a ``system for licensing the import and export

of new, used, recycled and reclaimed controlled substances'' does not

extend to controlled substances destroyed by approved technologies or

used as feedstocks, since these amounts are not included in the

definitions of production or consumption under the Protocol. EPA's

consideration of other licensing systems included: a shipment-by-

shipment approach, a quarterly approach, a yearly approach, a quantity

specific approach, and a non-quantity specific approach. EPA decided

not to adopt these alternative licensing systems in order to minimize

burden on the regulated community and conserve Agency resources.

EPA's decision to treat existing requirements as a licensing system

in no way relieves a person importing and exporting controlled

substances or used controlled substances from the existing

recordkeeping and reporting requirements in Secs. 82.9 through 82.13.

2. Control of Exported Products That Rely on Class I Controlled

Substances for Their Continuing Functioning to Article 5 Parties

EPA is amending the regulation to control the export of products

that rely on class I controlled substances for their continuing

functioning to Article 5 Parties, in accordance with Decision IX/9

agreed to by the Parties to the Protocol at the 9th Meeting in Montreal

in 1997. Decision IX/9 ``recommend[s] to non-Article 5 Parties to adopt

appropriate measures to control, in cooperation with the importing

Article 5 Parties, the export of used products and equipment, other

than personal effects, whose continuing functioning relies on supply of

substances listed in Annexes A and B of the Montreal Protocol [CFCs,

halons, carbon tetrachloride, and methyl chloroform].''

Decision IX/9 was taken by the Parties to the Protocol in

recognition of the concern expressed by Article 5 Parties that CFC-

technologies, and other technologies relying on class I controlled

substances for their continuing functioning, are decommissioned in

Article 2 Parties and ``dumped'' into their markets. Article 5 Parties

have until 2010 to complete their phaseout of production and

consumption of class I controlled substances (except Group VI

substances). This phaseout date for Article 5 Parties is ten (10) years

after the phaseout date originally established for non-Article 5

Parties at the 1990 Meeting of the Parties (London Amendments). Since

1990, the non-Article 5 Parties have agreed to accelerate their

phaseout date for class I controlled substances (except Group VI

substances).

Due to the existence of alternative technologies, some Article 5

Parties view products that rely on class I controlled substances for

their continuing functioning as being obsolete. Some Article 5 Parties

say exports from industrialized nations of products that rely on class

I controlled substances foster continued dependence on these substances

and retard their transition to non-ODS technologies. EPA supports a

speedy transition away from class I controlled substances in Article 5

Parties and has considered various ways in which the U.S. can support

this transition through

[[Page 41631]]

restrictions and controls on exported products whose continuing

functioning relies on class I controlled substances.

EPA has considered several methods for implementing Decision IX/9

taken by the Parties to the Protocol in 1997 at the Anniversary Meeting

in Montreal. It should be noted that the phrase ``continuing

functioning'' was chosen by the Parties to refer to products that need

to be re-filled with class I controlled substances to continue to serve

their intended purpose; the decision did not capture other products,

such as metered-dose inhalers. In today's action, EPA is adding a

restriction on exports of products whose continuing functioning relies

on class I controlled substances that will be triggered when, and if,

EPA receives a notification from an Article 5 government that the

import of a particular type of product is restricted and the

manufacture of that product with specified ozone-depleting substances

is banned in that Article 5 country. The relevant agency or the

consulate of the Article 5 Party must provide EPA with a copy of the

national law, regulation or other administrative action creating a

restriction on imports of products that rely on class I controlled

substances for their continuing functioning and restricting their

manufacture within the same country. With today's action EPA is adding

a new Sec. 82.4(m) to establish the framework for a ban on the export

of products whose continuing functioning relies on class I controlled

substances. Upon receipt of an official document from the government of

an Article 5 Party, EPA will publish a notice in the Federal Register

triggering the specific ban on all exports from the United States of

products that rely on class I controlled substances for their

continuing functioning to the specific Article 5 Party. The specific

Article 5 Party will be listed in Appendix J to Subpart A.

In addition, EPA is considering the creation of a licensing system

for U.S. exports of products whose continuing functioning relies on

class I controlled substances. A licensing system would be used to

monitor exports of products from the U.S. to Article 5 countries as an

additional control measure that would work in parallel with the ban

described above.

3. Prohibit Imports and Exports of HBFCs From or to Non-Parties To the

Protocol

EPA is amending the existing regulation to prohibit the import or

export of hydrobromofluorocarbons (HBFCs) (class I, Group VII

controlled substances) from or to a foreign state that is not a Party

to the 1992 Copenhagen Amendments to the Montreal Protocol. In today's

action, EPA is adding Sec. 82.4(l)(3) to ban trade in HBFCs with non-

Parties to the Copenhagen Amendments to ensure the United States meets

its obligations under the Protocol. HBFCs are very uncommon substances

and EPA has no record of U.S. trade in these class I controlled

substances. Article 4, paragraph 1 ter of the Protocol bans the import

of HBFCs from any country not a Party to the Copenhagen Amendments.

Article 4, paragraph 2 ter of the Protocol bans exports of HBFCs to any

Party that has not ratified the Copenhagen Amendments.

The current regulation (60 FR 24970; 40 CFR 82.4(k)(1)) prohibits

the import and export of class I, Group I or Group II controlled

substances from or to foreign states not Parties to the Montreal

Protocol (1987). In addition, the current regulation (60 FR 24970; 40

CFR 82.4(k)(2)) prohibits the import and export of class I, Group III,

Group IV, and Group V controlled substances from or to foreign states

not Parties to the London Amendments (1990). These bans on imports from

and exports to non-Parties reflect an agreed strategy by signatory

countries for encouraging ratification of the Montreal Protocol and

each successive package of amendments.

4. Application Process for Exemptions to the HCFC Phaseout for Specific

National Security Uses

In today's action, EPA is creating a very limited exemption to the

U.S. accelerated phaseout dates for class II controlled substances,

known collectively as hydrochlorofluorocarbons (HCFCs). EPA believes

U.S. government national security interests have vital needs for

specific, small quantities of HCFC-141b beyond the phaseout dates

contained in Sec. 82.4(l) and(m) of the final rule published in the

Federal Register on May 10, 1995 (60 FR 24970). EPA is creating an

exemption to the accelerated phaseout of the production and import of

HCFC-141b for national security purposes. EPA believes that the new

Sec. 82.4(u)(3) will not adversely affect compliance with the

provisions of the Clean Air Act Amendments of 1990 or the U.S.

obligations under the Montreal Protocol as amended.

A person seeking an exemption for the production and import of

HCFCs for national security purposes under Sec. 82.4(u)(3) must apply

for the exemption under Sec. 82.9. Today's action includes a

streamlined application and review process under Sec. 82.9(g) for

national security allowances. The application process requires a U.S.

government entity with a national security interest to submit the

following information to EPA: (a) name and address of national security

entity; name of contact person and phone and fax numbers and e-mail

address; (b) quantity (in kilograms) of HCFC-141b needed for the

control period for the national security interest; (c) a description of

the national security interest met by the use of HCFC-141b; (d) a

technical description of the use of HCFC-141b; (e) a technical

description of why alternatives and substitutes are not sufficient or

suitable to eliminate the national security use of HCFC-141b; and (f) a

detailed analysis showing why stockpiled, recovered or recycled

quantities are deemed to be technically and economically infeasible for

use.

EPA will review the application in order to determine whether to

grant national security allowances for the specific quantity of HCFC-

141b for the control period. If more information is needed, EPA will

contact the applicant and specify the needed information. EPA will

retain the right to disallow the national security allowances based on

information received regarding, inter alia, fraud, misrepresentation,

inconsistency with Articles and Decisions under the Montreal Protocol,

inconsistency with the intent of the Clean Air Act Amendments of 1990,

or other reasons related to human health and the environment.

EPA considered other approaches to a national security exemption

for the production and import of HCFCs. EPA considered whether the

exemption should be specific for one, or two, or all of the HCFCs

(e.g., specific exemptions only for 141b, 22, or 142b for national

security purposes.) To date, EPA has received only specific requests

for national security exemptions for 141b. Therefore, EPA believes

there is no need for a broader exemption and accordingly is limiting

the exemption to HCFC-141b.

EPA is also establishing a specific application period ending

December 1, 1999. By limiting the time frame for accepting

applications, EPA is providing a strong incentive for U.S. government

entities with national security interests to review their HCFC-141b

needs and conduct long-term planning. By limiting the time frame for

the review of applications, EPA would also be reducing the Agency's

long-term burden to continually review claims of national security

interest.

EPA considered conducting a one-time period of review of petitions

for national security allowances to be

[[Page 41632]]

finalized by publication of a notice with a list of acceptable and

unacceptable national security exemptions to the class II phaseout

dates. EPA decided not to adopt this approach because the Agency

expects very few applications for national security allowances for

class II controlled substances.

Another option in the implementation of an exemption for the

production and import of HCFCs beyond the accelerated phaseout would be

a limit on the total quantity of any HCFC that one U.S. government

entity could request and obtain in a control period. Finally, EPA could

limit the number of control periods for which a U.S. government entity

with national security interests may apply for an HCFC exemption. EPA

did not adopt these options to limit the quantity of material or the

control periods because the Agency expects the numbers of requests and

the quantities to be very small.

The Agency is creating an exemption process for the continued

production or import of HCFC-141b up to January 1, 2030, for

applications related to national security in cases where stockpiled,

recovered or recycled quantities are deemed to be technically and

economically infeasible for use. Upon request by a Federal Government

Agency, the Administrator may grant authorization for production or

import of a specified quantity, for a specified period of time. Only

agencies of the Federal Government can request production or import

quantities under this exception. Thus, companies and other

organizations that are contractors, grantees or otherwise service

providers for the Federal Government must first secure approval and

endorsement through the Agency which requires products made with or

containing HCFCs. Approval for production or import does not imply or

mandate production; each user must locate a willing supplier and

negotiate supply. It should be noted that under CAA section 605(b)(1),

beginning January 1, 2015, it will be unlawful for any person to

produce any class II substance in excess of baseline production levels.

The Agency believes technically feasible and economically viable

alternatives will be available for all commercial and the vast majority

of non-commercial uses of HCFCs prior to their phaseout dates. However,

there may be specialized uses where stockpiled, recovered, or recycled

quantities are technically inadequate or economically not viable. At

this time, the only foreseeable use of this authorization is for

ballistic insulation foam used for space exploration and possibly

cleaning applications for oxygen generators in the military.

Section 605 of the Clean Air Act contains certain constraints on

use, production, and consumption of HCFCs. This exemption is limited by

these constraints. For example, under CAA section 605(a), effective

January 1, 2015, no person may introduce into interstate commerce or

use any virgin class II substance unless the substance is either used

and entirely consumed (except for trace quantities) in the production

of other chemicals, or the substance is used as a refrigerant in

appliances manufactured prior to January 1, 2020. In addition, CAA

section 605(b)(2) prohibits production of class II substances on or

after January 1, 2030. Finally, EPA will not authorize quantities of

HCFCs under the national security exemption that would cause the United

States to exceed the HCFC consumption cap as agreed under the Montreal

Protocol.

5. Simplify Procedure for Apportioning Essential-Use Allowances

EPA is simplifying the yearly process for apportioning essential-

use allowances to U.S. companies. With today's action, EPA is creating

a mechanism to allocate essential-use allowances for future control

periods beginning in 1999 by a letter from the Agency to each person

nominated by the United States to the Secretariat of the Montreal

Protocol for an essential use exemption. After allocating the

essential-use allowances, EPA will publish a Federal Register notice

containing a summary of the allocations.

In establishing the process for exempting essential uses from the

phaseout, EPA published a proposed rule in the Federal Register on

November 10, 1994 (59 FR 56276) and then published the final rule on

May 10, 1995 (60 FR 24970). These rules discussed the essential-use

exemption process and allocated essential-use allowances for 1996 and

1997. EPA published a rule allocating essential use allowances for 1998

on January 28, 1998 (63 FR 4359). Given the need for quick action in

allocating allowances, EPA is simplifying the process for allocating

essential-use allowances for each control period by issuing allowances

by letter, followed by a notice summarizing the allocations.

Given the extensive review prior to authorization by the Parties to

the Protocol, EPA believes the allocation of essential-use allowances

through rulemaking is unnecessary.

In discussing the essential-use process in the preamble to the

November 10, 1994 proposed rule (59 FR 56276, 56282-56283), EPA

described the steps necessary to submit an application domestically. In

the same passage, EPA discussed the procedure that the U.S. government

follows in nominating uses to the Parties to the Protocol. Before the

U.S. makes a nomination to the Parties for an essential-use exemption,

EPA and other relevant government agencies carefully review

applications in light of the criteria established in Decision IV/25 and

subsequent Decisions of the Parties to the Protocol that govern

essential uses. The U.S. takes great pains to ensure that each

nomination submitted to the Parties reflects a truly essential need for

a phased-out controlled substance. The Parties carefully consider the

review and recommendations of the Montreal Protocol's Technical and

Economic Assessment Panel (TEAP) and its Technical Options Committees

(TOCs) before authorizing the production of controlled substances for

essential uses beyond the phaseout dates. With today's action, EPA is

announcing its intent to allocate the total quantity of essential-use

authorizations for the calendar year that were approved by the Parties.

6. Prohibit Import of Class I Controlled Substances for Essential-Uses

Except by Companies Allocated Essential-Use Allowances

EPA is prohibiting the import of class I controlled substances for

essential uses by any person that is not allocated essential-use

allowances. EPA is making this change to ensure that the import is

actually used for the allocated essential use, to simplify the

recordkeeping and reporting procedures for U.S. companies and to ease

the administrative burden of tracking imports of exempted quantities by

the Federal government. Today's amendment changes the current

regulations regarding the ability to confer essential-use allowances

for imports. The current regulations (60 FR 24970; 40 CFR 82.4(e),

Sec. 82.13(g)(1)(xvi)) allow holders of essential-use allowances to

confer to another U.S. company the rights to import quantities of

phased-out class I controlled substances. With today's action, EPA is

requiring that U.S. entities allocated essential-use allowances be the

actual importers of class I controlled substances. EPA believes that

U.S. companies allocated essential-use allowances can work with customs

brokers to ensure that their company is listed as the importer of

record on U.S. Customs Service entry documents. By eliminating the

option of conferring essential-use allowances to import class I

controlled substances EPA is attempting to simplify the reporting and

[[Page 41633]]

recordkeeping requirements in Sec. 82.13 of the final rule and ease the

U.S. government's task of tracking imports.

In an effort to combat illegal imports of class I controlled

substances, EPA joined forces with many Federal agencies to create an

inter-agency taskforce. As the supply of ozone-depleting substances has

declined, the residual demand has prompted the development of a black

market for phased-out ozone-depleting substances. In 1995, the U.S.

Customs Service began assisting EPA in monitoring imports of ozone-

depleting substances. U.S. Customs Service inspectors now call EPA to

confirm that any import of class I controlled substances is exempted

under one of the special provisions in Sec. 82.4 of the regulation,

such as essential uses. EPA believes that confirming, tracking and

cross-checking imports of class I controlled substances for essential

uses will be easier if the actual holder of the essential-use allowance

is listed as the importer of record or consignee on the U.S. Customs

Service entry document (Customs form 7501). In addition, EPA believes

that recordkeeping and reporting requirements will be simplified for

U.S. companies if the holder of the essential-use allowances is

responsible for submitting the importer's quarterly report.

C. Amendments to Sec. 82.9--Availability of Production Allowances in

Addition to Baseline Production Allowances

1. Clarification of Increases or Decreases of Article 5 Allowances Due

to International Transfers

EPA is clarifying the regulations regarding trades of Article 5

allowances. To address the confusion about the permissibility of trades

of Article 5 allowances and because trades are allowed under the

provisions of the Montreal Protocol, EPA is removing the phrase ``Until

January 1, 1996'' from Sec. 82.9(c) and adding the phrase ``or Article

5 allowances'' in the first sentence after ``production allowances.''

The regulatory text published in the Federal Register on May 10,

1995 is silent regarding trades of Article 5 allowances with other

Parties to the Montreal Protocol. However, at the time of publication,

EPA wrote in the preamble its interpretation of the Montreal Protocol

stating, ``With today's action, EPA permits inter-pollutant and inter-

company transfers of Article 5 allowances as proposed but is not

permitting inter-Party trades. The Agency determined that inter-Party

trades of Article 5 allowances would violate the provision of the

Protocol that specifically allows additional production by each Party

for export to Article 5 countries.'' (60 FR 24980)

EPA subsequently learned that the Parties to the Protocol do in

fact permit inter-Party trades of Article 5 production. The United

Nations Environment Programme (UNEP) document from the 1993 Bangkok

meeting (UNEP/OzL.Pro.5/8) titled, ``Transfer of Production Rights

under Article 2 of the Montreal Protocol'' asks the question in

paragraph 5(a), ``Can a Party transfer to another Party its right to

produce controlled substances to meet the basic domestic needs of the

Parties under Article 5, paragraph 1?'' In the same UNEP document

(UNEP/OzL.Pro.5/8), paragraph 6 responds, ``Concerning the question in

paragraph 5(a) above , it appears that the term ``calculated level of

production' contained in paragraph 5 of Article 2 includes production

to meet the basic domestic needs of the Parties operating under Article

5, paragraph 1. Therefore, a Party can transfer to another Party its

right to produce to meet the basic domestic needs of the Parties

operating under Article 5, paragraph 1.'' Based on the text in the

Montreal Protocol document (UNEP/OzL.Pro.5/8), EPA is clarifying that

inter-Party trades of Article 5 allowances are permissible.

D. Amendments to Sec. 82.12--Transfers

1. Increases or Decreases of Essential-Use Allowances Due to Emergency

International Transfers

EPA is amending the current regulation to allow the transfer of MDI

essential-use authorizations to or from other Parties under limited

situations to reflect Decision IX/20 taken by the Parties at the 1997

Ninth Meeting in Montreal. Decision IX/20 allows the transfer of

essential-use authorizations for CFCs for MDIs between Parties without

prior review at a Meeting of the Parties only in emergency situations

only if specific conditions are met. There is only one precedent for

the transfer of MDI essential-use authorizations between two Parties.

In this one case, New Zealand submitted a request to transfer

previously approved MDI essential-use authorizations to Australia. New

Zealand requested the transfer because of the planned closure of its

MDI production facility and an agreement with Australia that the MDIs

would be manufactured in Australia and shipped to New Zealand. New

Zealand's request was submitted with sufficient time prior to the

Meeting of the Parties for the TEAP to review and make a recommendation

regarding the transfer. The Parties to the Protocol approved the

transfer of New Zealand's essential-use allowances for CFCs for MDIs to

Australia. Today's action reflects the creation of a safety valve for

emergency cases in which a transfer of essential-use authorizations

from one Party to another would need to occur without opportunity for

prior review and approval of a Meeting of the Parties. Today's action

and Decision IX/20 allow an emergency transfer with the Parties to the

Protocol approving the action after-the-fact.

Decision IX/20 taken at the Ninth Meeting of the Parties allows the

transfer of essential-use allowances for CFCs for MDIs between two

countries without prior approval by the Parties only in emergency

situations and under very specific conditions. If any specific

condition is not met, the transfer may not occur. Decision IX/20 states

that: ``in an emergency situation,'' the transfer of essential-use

authorizations may be allowed by the Ozone Secretariat, in consultation

with the Technology and Economic Assessment Panel, if the following

conditions are met: ``(a) the transfer applies only up to the maximum

level that has previously been authorized for the calendar year in

which the next Meeting of the Parties is to be held, (b) both Parties

involved agree to the transfer, (c) the aggregate annual level of

authorizations for all Parties for essential uses of MDIs does not

increase as a result of the transfer, and (d) the transfer or receipt

is reported by each Party involved on the essential-use quantity

accounting format approved by the Eighth Meeting of Parties by

paragraph 9 of decision VIII/9.''

During the discussion of Decision IX/20, the Parties clarified that

the intent of the phrase ``in an emergency situation,'' was to allow a

safety provision for the supply of CFCs for MDIs if there is a

disaster, such as a fire at the only MDI manufacturing facility within

a country. Thus, EPA will approve transfers of essential-use

authorizations only if the emergency situation is the result of a

catastrophic natural event or war. A request to transfer essential-use

allowances due to poor planning or management will not be considered an

emergency situation for purposes of today's amendment. Furthermore, an

emergency situation must also be shown to seriously threaten the

treatment of patients with asthma or chronic obstructive pulmonary

disease (COPD) within one of the countries in the proposed transfer.

With today's action, EPA will not allow the transfer of essential-

use allowances from one U.S. company to

[[Page 41634]]

another company within the United States. EPA believes that information

on the U.S. MDI market indicates domestic essential-use allowances are

distributed in a manner that will allow for continued treatment of

patients with asthma and COPD in the event of an interruption of supply

of CFCs or a problem with manufacturing at one facility or one company.

EPA's analysis indicates a measure of redundancy in the domestic market

to respond to such contingencies.

The procedures for transferring essential-use authorizations prior

to the meeting of the Parties to address an emergency situation require

a company to submit a very detailed description of the emergency and an

analysis demonstrating the serious impact the emergency will have on

patients. A U.S. holder of essential-use allowances for CFCs for MDIs

or a U.S. manufacturer of MDIs identified through prior arrangement

with a foreign manufacturer of MDIs may submit a request for approval

to EPA regarding an emergency situation that requires the transfer of

essential-use authorizations. The information to be submitted in a

request for an emergency transfer of essential-use allowances is listed

in Section 82.12(a)(3). The request must certify the accuracy of the

information submitted and fully document the emergency situation that

was created by a catastrophic natural event or war, including, where

appropriate, submission of photos, reports from local, state or Federal

authorities, or a report from an independent auditor. In a case when

the emergency situation exists in a foreign state the request must

include a letter from the foreign environmental ministry and a letter

from the foreign health ministry verifying the emergency situation and

the serious threat the emergency situation poses for the treatment of

patients with asthma and COPD in that country. Submission of a request

to transfer essential-use authorizations for CFCs for MDIs does not

guarantee EPA's approval of or agreement with the requested transfer.

Rather, EPA will review the information provided and use it to

independently verify that the emergency situation exists and that the

emergency situation seriously threatens the health and treatment of

patients with asthma or COPD.

In reviewing a request for an emergency transfer of essential-use

authorizations for CFCs for MDIs, EPA may consider the following

factors:

(1) Information sufficient to make a determination regarding

whether the situation is an emergency due to a catastrophic natural

event or war; (2) possible serious threats to the treatment of patients

with asthma and COPD; (3) possible creation of economic hardship; (4)

possible effects on trade; (5) potential environmental implications;

and (6) the total amount of unexpended essential-use allowances held by

United States entities.

After a review of these factors in consultation with other agencies

of the U.S. Federal government, a notice will be issued through the

U.S. Department of State, to the UNEP Ozone Secretariat, either

agreeing or disagreeing with the transfer of essential-use

authorizations and specifying the control period to which the transfer

applies. For an approved trade from a Party, EPA will issue a notice

that revises the essential-use allowances held by the person for the

control period in question to equal the unexpended essential-use

allowances held by the person under Subpart A plus the amount of

essential-use authorizations transferred from the Party. For an

approved trade to a Party, EPA will issue a notice that revises the

essential-use allowances held by the person to equal the unexpended

essential-use allowances held by the person under Subpart A minus the

amount of essential-use authorizations transferred to the Party for the

specific control period.

E. Amendments to Sec. 82.13--Recordkeeping and Reporting Requirements

1. Removal of Producer Requirement To Report the Quantity of Used

Material Received That Contains Recycled or Reclaimed Controlled

Substances

EPA is removing the reporting requirement under Sec. 82.13(f)(3)(v)

that asks producers of class I controlled substances to report on ``the

quantity of used material received containing controlled substances

that are recycled or reclaimed.'' Because of the phaseout, EPA believes

most producers either closed their facilities or drastically reduced

their business in class I ozone-depleting substances (except Group VI

substances). Class I controlled substances used as refrigerants are

controlled under authority of Section 608 of the CAA in the regulations

published under 40 CFR Part 82, Subpart F. Reclaimers of refrigerants

are required to be EPA-certified under section 82.164 and required to

report information about their reclamation process annually under

section 82.166. U.S. producers of class I controlled substances are, in

general, not accepting recycled or reclaimed material because class I

controlled substances are being recycled and reclaimed by special

facilities that handle refrigerants or re-process wastes. Today's

action eliminates the reporting requirement in 82.13(f)(3)(v) because

EPA tracks the reclamation of refrigerants under the 608 regulations

and producers are no longer accepting used controlled substances after

the phaseout of class I controlled substances.

2. Add to the Producer Recordkeeping and Reporting Requirements the

Need To Maintain and Submit a Certification That a Quantity of Class I

Controlled Substance Will Be Used as a Process Agent

EPA is adding the requirement that producers of class I controlled

substances maintain a record obtained from purchasers certifying the

purchasers' intent to use the cited quantity as a process agent in

accordance with the current definition of controlled substance in

Section 82.3. EPA is requiring that the purchaser certify that it will

use the total quantity of purchased class I controlled substance as a

process agent in accordance with the definition of controlled substance

in the final rule published in the Federal Register on May 10, 1995 (60

FR 24970). EPA is also requiring that producers submit the

certifications received with their quarterly reports.

EPA is adding today's recordkeeping and reporting requirement for

process agents due to a change in the treatment of process agents under

the Montreal Protocol. Since 1996, the Parties to the Protocol have

agreed to treat process agents in the same manner as feedstocks, that

is, the same as controlled substances that are transformed. In

accordance with Decisions VI/10 and VII/10, since the phaseout of class

I controlled substances, the production of these substances for use as

a process agent has been treated as transformation for purposes of

recordkeeping and reporting under this regulation. At the Ninth Meeting

of the Parties in 1997, the Parties did not extend beyond the 1998

control period the treatment of process agents in a manner similar to

feedstocks.

When the Parties to the Protocol decided not to extend the

treatment of process agents in a manner similar to feedstocks, the

treatment of process agents reverted to an earlier decision by the

Parties. Decision VI/12, taken by the Parties in 1992, clarifies the

definition of controlled substances and states that ``insignificant

quantities of controlled substances originating from inadvertent or

coincidental production during a manufacturing process, from unreacted

feedstock, or from their use as process

[[Page 41635]]

agents which are present in chemical substances as trace impurities, or

that are emitted during production manufacture or handling, shall be

considered not to be covered by the definition of a controlled

substance contained in paragraph 4 of Article 1 of the Montreal

Protocol.'' Decision IV/12 is reflected in the current definition of

controlled substances in Section 82.3 as published in the Federal

Register on May 10, 1995. Thus, the production of controlled substances

for use as a process agent is not included in the definition of

controlled substances in the regulation.

A very small number of manufacturing processes in the U.S. use a

class I controlled substance as a process agent. In almost every case,

the manufacturing process uses carbon tetrachloride to control or

maintain a chemical reaction. Many companies have submitted a

description of their manufacturing process to EPA, asking if their

process would be considered a process agent use of a class I controlled

substance. In such cases, a producer of a class I controlled substance

can rely on the letter from EPA to determine if the purchaser can

purchase the material as a process agent. If a producer of a class I

controlled substance is unsure about whether the manufacturing process

of a potential new purchaser qualifies as a process agent use, the

producer should refer the purchaser to EPA for a determination.

3. Clarify the Need for Letters That Confer Essential-Use Allowances

and Destruction and Transformation Credits to Producers and That These

Letters Be Submitted With Producer's Quarterly Reports

EPA is issuing a clarification of existing requirements. EPA is

clarifying that holders of essential-use allowances that place orders

for class I controlled substances must confer essential-use allowances

to the producer in order to receive the material. EPA is also

clarifying that the letter that confers the essential-use allowances

must certify that the quantity of class I controlled substance is being

purchased solely for the specified essential use and will not be resold

or used in any other manufacturing process. Similarly, laboratory

customers that place orders for class I controlled substances must

certify that the quantity of class I controlled substance is being

purchased solely for laboratory applications and will not be resold or

used in manufacturing. Distributors of laboratory supplies that place

orders for class I controlled substances must certify that the

controlled substances were purchased for sale to laboratory customers

who make the above certifications.

EPA is clarifying that producers must submit to the Agency a copy

of letters that confer any essential-use allowances or destruction and

transformation credits. Under the current reporting requirements found

in Sec. 82.13(f)(3)(xi) and (xii) of the final rule published in the

Federal Register on May 10, 1995 (60 FR 24970), producers must submit

``a list of essential-use allowance holders * * * from whom orders were

placed'' as well as ``the certifications from essential-use allowance

holders.'' Under the current reporting requirements at

Sec. 82.13(f)(3)(iv), producers must submit data on the number of

expended and unexpended essential-use allowances and destruction and

transformation credits conferred to them for each quarter.

In 1996 and 1997, few producers and importers submitted letters

from purchasers conferring essential-use allowances or certifying that

the controlled substances were purchased solely for the specified

essential uses. With today's action, EPA is clarifying that holders of

essential-use allowances must write a letter conferring the essential

use allowances to the producer, and that this letter must certify that

material is purchased solely for the specified essential-use and will

not be resold or used in any other manufacturing process. Laboratory

customers that place orders for class I controlled substances must

certify that the quantity of class I controlled substance is being

purchased solely for laboratory applications and will not be resold or

used in manufacturing. Distributors of laboratory supplies must certify

that the material is purchased solely for sale to laboratory customers

who certify that the substances will only be used for laboratory

applications and will not be resold or used in manufacturing.

As explained in Section II.B.8. above, EPA is prohibiting holders

of essential-use allowances from conferring the right to import, and

instead, requiring them to become the actual importer of phased-out

class I controlled substance. EPA is also requiring that distributors

of laboratory supplies follow the same procedures and, as they have

done since 1996, act as the importer of the quantity of phased-out

class I controlled substance that is exempted under the essential-use

provisions for laboratory and analytical uses.

EPA is clarifying an existing requirement that copies of letters

that confer essential-use allowances and that certify that the material

is purchased solely for the specified essential use be included with

the producer's quarterly reports to EPA.

4. Changes to the Petition Process for Importing Used Class I

Controlled Substances

EPA is changing the petition process for imports of used class I

controlled substances. Today's changes clarify existing requirements.

In addition, some of the amendments are designed to give EPA greater

ability to ensure imports are, in fact, used controlled substances

(i.e., not newly produced substances).

The original reason the Parties to the Protocol agreed to permit

international trade in previously used ozone-depleting substances

beyond the Protocol's control regimes was to ease the transition to

alternatives. In addition, the Parties believed that allowing trade in

quantities of already existing used material would offset the need for

new production globally. EPA believes that, in many cases, the opposite

may be occurring. The diminishing supplies and hence rising prices of

class I controlled substances in the U.S., combined with continued

production of virgin material in Article 5 countries, creates an

opportunity for such large financial gain that, instead of offsetting

new production, it is likely that trade in used controlled substances

is fostering new production. Evidence increasingly indicates that new

production overseas is being clandestinely diverted to the U.S. and

other non-Article 5 countries as exports of ``used'' material. To the

extent that the petition process unwittingly encourages mislabelling or

adulteration of new production overseas, and the submission of false

information, it undermines the Parties' original intention in

permitting trades of used ozone-depleting substances.

Although today's amendments simply tighten the existing

requirements, EPA is also considering a complete ban on imports of used

class I controlled substances. EPA is considering an import ban on used

class I controlled substances because of the enormous burden, both in

logistics and in resources, to independently verify the information in

petitions to guarantee that shipments are, in fact, previously used

controlled substances. Without physically inspecting each site from

which a class I controlled substance is recovered from equipment, EPA

is making decisions based on the documents and information provided by

petitioners. EPA is also considering a ban on imports of specific used

controlled substances instead of a

[[Page 41636]]

comprehensive ban on all used class I controlled substances.

EPA believes that, in some cases, the petition requirements

published in the May 10, 1995 final rule (60 FR 24970; 40 CFR

Sec. 82.13(g)(2)) have been misunderstood. EPA hopes today's

clarifications will reduce the number of times EPA objects to a

petition and then objects to re-submissions of the same petition due to

insufficient information before finally approving the complete petition

package. EPA believes that, in other cases, the petition process has

been abused. EPA is making today's changes in the hopes that the

provisions of the petition process can be adequately tightened to guard

against abuses and guarantee that imported material is truly previously

used.

a. Clarification that a Petition to Import Used Class I Controlled

Substances is Submitted for Each Individual Shipment. EPA would like to

clarify that a petition to import used class I controlled substances

may only be submitted on a shipment by shipment basis. EPA is not

changing the current requirement with this action but clarifying the

existing requirement in Sec. 82.13(g)(2). The information in a petition

and the quantity a person wishes to import into the United States must

be limited to a specific shipment and a single U.S. Customs entry. If

an importer cannot arrange for the entire quantity to be shipped as one

entry through U.S. Customs, the importer is required to submit more

than one petition for the quantity in each individual Customs entry.

b. Changing the de minimis Quantity for an Individual Shipment for

which a Person is Required to Submit a Petition to Import Used Class I

Controlled Substances. EPA is reducing the de minimis amount for an

individual shipment for which a person is required to submit a petition

to import used class I controlled substances. Section 81.13(g)(2) of

the final rule published in the Federal Register on May 10, 1995,

requires a person to submit a petition to import used class I

controlled substances ``for each individual shipment over 150 pounds.''

A de minimis amount of 150 pounds was established in the May 10, 1995

final rule to allow companies to import small samples of material so

they could run laboratory analyses and determine if reclamation would

be physically possible and economically justifiable before importing a

large tank. EPA has since learned that samples of class I controlled

substances are generally taken from large tanks in special cylinders

that generally weigh less than 2 pounds. EPA is therefore setting the

de minimis quantity at five (5) pounds. EPA is setting the de minimis

quantity at five pounds in order to avoid the unnecessary import of

class I controlled substances. EPA believes that a quantity of 150

pounds is much larger than necessary to meet laboratory analysis needs.

A de minimis level of five pounds allows a company to take three

samples from a large ISO-tank for laboratory analysis and send those

samples to a testing facility in the U.S. without being subject to the

petition requirements. In developing today's amendments, EPA also

considered requiring that a person who wishes to import any quantity of

used class I controlled substance, regardless of the size, be required

to submit a petition, thereby eliminating the de minimis level

altogether. EPA decided not to eliminate the de minimis level

altogether in order to minimize burden on the regulated community and

conserve Agency resources.

c. Revised and Expanded Information Requirements for a Petition to

Import Used Class I Controlled Substances. EPA is amending the

regulation to include a more comprehensive and detailed list of

information that will be required for petitions to import used class I

controlled substances. Most of these changes are intended to make the

current regulatory text more explicit regarding the type of information

that EPA needs to independently verify, above all, the previous use of

the controlled substance. Today's action adds a requirement under

Sec. 82.13(g)(2) that contact information for the entire chain of

custody of the used controlled substance be provided in the petition.

For example, EPA is stating that a petition include complete contact

information for: every source facility from which the used controlled

substance was recovered, every company that collected the material from

the equipment, every previous owner of the material, and every company

that will be exporting the used controlled substance.

EPA is also requiring that a petition to import used class I

controlled substances include dated documents indicating the time the

material was put into the equipment. EPA is requiring that the petition

to import used class I controlled substances include the name, make and

model number of the equipment from which the material was removed. The

current text under Sec. 82.13(g)(2)(vi) requires a petition to provide

the ``intended use'' of the controlled substance. Today's amendment

calls for, in addition to the intended use, a copy of a contract for

the purchase of the controlled substance. In light of efforts by

Parties to the Protocol to implement a licensing system for exports as

well as imports, EPA is requiring that the petition provide an export

license from the appropriate government agency in the country of

export.

d. Removal of the Information Requirement regarding the

Certification of Tax Liability for Used Class I Controlled Substances

from the Petition. EPA is removing the requirement in Sec. 82.13(g)(2)

(viii) of the current rule from the list of information to be included

with a petition to import used class I controlled substances. This

provision required an importer to certify that the purchaser of the

used, recycled or reclaimed substance ``is liable for the payment of

the tax.'' See 60 FR 24970 (May 10, 1995). EPA published a stay of this

provision on January 31, 1996 (61 FR 3316), and published an extension

of the stay on June 11, 1996 (61 FR 29485). EPA believes that this

provision failed to establish a clear and comprehensive reference to

Internal Revenue Service (IRS) tax requirements that the Agency could

implement effectively. EPA believes it is more appropriate to defer

interpretation of regulatory requirements regarding excise taxes for

ozone-depleting chemicals to the Internal Revenue Service (IRS), the

Federal agency given authority for these taxes under the Omnibus Budget

Reconciliation Act of 1989, the Omnibus Budget Reconciliation Act of

1990 and the Energy Policy Act of 1992. EPA understands from the IRS

that there is an excise tax on bulk shipments of used class I

controlled substances, used class I controlled substances, products

containing class I controlled substances and products made with but not

containing class I controlled substances. However, EPA requests that

all questions regarding the excise taxes on ozone-depleting chemicals

be directed to the Internal Revenue Service.

e. Timing for EPA Review of a Petition. EPA is clarifying and

amending the current regulatory language in Sec. 82.13(g)(2) and (3)

published in the Federal Register on May 10, 1995, regarding the timing

for EPA's review of petitions to import used class I controlled

substances. First, EPA is extending the current 15 working-day time

limit within which EPA must respond to a petition. Given the large

number of petitions being submitted (182 in 1997), combined with the

fact that EPA will likely require more time to independently verify the

additional information required with today's notice, EPA is extending

the current time limit for the review of a petition from 15 to 40

working days. Second,

[[Page 41637]]

EPA is clarifying that the time for review begins on the working day

after EPA's Stratospheric Protection Division actually receives the

petition.

EPA included a time limit for the review of a petition to import

used class I controlled substances in the May 10, 1995 final rule (61

FR 24970) in an attempt to reduce regulatory burden. In the May 10,

1995 final rule, EPA made approval of a petition automatic if, after 15

working days, the person who submitted the petition had not received a

notification from EPA. Through experience and the unforeseen volume of

incoming petitions, EPA learned that the 15 working-day time limit was

too short a period for EPA to conduct a thorough review and automatic

approvals were occurring of petitions that the Agency would not have

otherwise approved. Today's action is designed to correct the issue of

too short a time period for the review of petitions leading to

automatic approvals of petitions that would not otherwise be approved.

EPA considered many other time frames for the review of petitions

to import used class I controlled substances, including a complete

elimination of any time limit for EPA's review of a petition. EPA

considered time frames for the review of a petition to import used

class I controlled substances from the current 15 working-days to as

long as 180 working-days. EPA also considered whether to include an

automatic approval provision with any of these time limits. EPA decided

that a 40-day time frame with no automatic approval would allow the

Agency to balance the goals of responsiveness to legitimate requests

and thoroughness in identifying abuses of the petition process.

f. Clarification of Reasons for Issuing an Objection Notice to a

Petition to Import Used Class I Controlled Substances. EPA is amending

the list of reasons for which the Agency may disallow a petition to

import used class I controlled substances. Section 82.4(i) of the

regulation published in the Federal Register on May 10, 1995, requires

a person to comply with the petition procedures in Sec. 82.13(g)(2) and

(3). The current regulation in Sec. 82.13(g)(3) states that, ``if the

Administrator determines that the information is insufficient, or there

is reason to disallow the import, the Administrator will issue an

objection notice.'' EPA is adding a more detailed list of the reasons

for disallowing an import of used class I controlled substances.

As explained in the preamble of the May 10, 1995 final rule, EPA

attempts to independently verify the information contained in a

petition to import used class I controlled substances, with special

attention given to confirming the prior use of the material. EPA's

effort to confirm the information in a petition is conducted with

support from other government agencies that are members of the inter-

agency taskforce combating illegal imports of ozone-depleting

substances. Since 1994, EPA has worked with the inter-agency taskforce

members who include the Department of Justice, the Internal Revenue

Service, the Customs Service, the State Department, and the Department

of Defense. In the two years of implementing the petition process, EPA

has received a variety of petitions to import used class I controlled

substances. Many of the petitions provide insufficient information or

provide information that EPA has reason to doubt is sufficient to

confirm that the material is, in fact, previously used. EPA also

learned during two years of reviewing petitions that other agencies

sometimes have important insights regarding the specific information

listed in a petition.

EPA is amending its list of reasons for which the Agency might

issue an objection notice to a petition to import used class I

controlled substances.

The first reason for disallowing a petition is a clarification of

the current regulatory text, which says that the petition must provide

the information required in Sec. 82.13(g)(2) and that insufficient

information or what appears to be insufficient information in response

to these requirements is a basis for disallowing a petition.

The second reason for disallowing a petition is if the Agency

determines that the petition contains, or is believed to contain, false

or misleading information.

EPA may issue objection notices for petitions to import used

controlled substances that are contrary to provisions of the Vienna

Convention on Substances that Deplete the Ozone Layer, the Montreal

Protocol and its amendments and decisions, and the non-compliance

procedures outlined and instituted by the Implementation Committee of

the Montreal Protocol. Section 614(b) of the CAA states that in the

case of conflict between the CAA and the Montreal Protocol, the more

stringent provision shall govern. Thus, EPA may, and will, object to

any petition submitted to EPA that contains information about a

transaction that is recognized to be contrary to the provisions of the

Convention and the Protocol, including its amendments and decisions.

With today's action EPA may disallow a petition if the appropriate

government agency in the exporting country has not agreed to issue an

export license for the individual shipment of used controlled substance

that is cited in the petition.

EPA may disallow petitions due to official statements made by

foreign governments. EPA believes that foreign governments may make

official statements either to the United States or to the Parties to

the Montreal Protocol that would warrant an objection notice to a

petition to import used controlled substances from that country.

Certain countries have stated to the Implementation Committee of the

Montreal Protocol that they are no longer allowing exports of used

controlled substances. If a country states that it is no longer

allowing exports or if it reports that it has not granted any export

licenses EPA will treat this as grounds for issuing an objection notice

for a petition to import from that country.

EPA may also issue an objection notice for a petition when the

Agency receives information indicating that a person listed in the

petition is willing to produce false or misleading information

regarding transactions in ozone-depleting substances. In the past, EPA

has received information from other U.S. government agencies, from

other petitioners, from non-governmental organizations and from foreign

governments that have implicated companies or individuals in activities

designed to mislead government authorities about activities related to

ozone-depleting substances.

Another reason for disallowing a petition is the receipt by the

Administrator of information regarding activities contrary to EPA

regulations by any individual or company listed in a petition.

Activities contrary to EPA regulations, that have been reported to EPA

or discovered by EPA personnel and that are related to ozone-depleting

substances include, but are not limited to, un-certified recovery, un-

certified reclamation, reclamation that does not meet the required

specifications, improper labeling, diverted transhipment, mis-

identification during import, forgery of EPA documents, and fraudulent

claims regarding these activities. EPA may disallow a petition if the

Agency receives information that any person or company listed in the

petition is involved in an activity that is a potential violation of an

EPA regulation.

EPA will not grant petitions to import used class I controlled

substances if it is determined that, for the current control period,

the U.S. demand for the specific controlled substance can be satisfied

from domestic stockpiles and

[[Page 41638]]

from recycling and reclamation programs for existing quantities in

domestic equipment. If such a determination is made, EPA would view

further importation of quantities of that specific used class I

controlled substances to be unwarranted. Furthermore, EPA decided that

conditions established for disbursing monies to specific country

projects by the Executive Committee of the Montreal Protocol's

Multilateral Fund may be a basis for objecting to petitions. EPA

believes no used controlled class I substances should be imported from

countries where reclamation capacity, for that specific controlled

substance, has been or is being installed through assistance of the

Multilateral Fund. The United States contributes approximately one

fourth of all funds going to the Multilateral Fund, the general purpose

of which is to assist countries operating under Article 5(1) of the

Protocol to make the transition away from ozone-depleting substances;

and a transition policy includes the development of reclamation

facilities in order to optimize the use of existing ozone-depleting

substances so as to avoid unnecessary production of virgin materials.

Thus, EPA views the importation of used class I controlled substances

from countries where reclamation capacity has been supported by the

Multilateral Fund to run counter to U.S. interest, and counter to the

aims of a global phaseout strategy.

With today's actions, EPA is clarifying and expanding the list of

reasons for objecting to a petition to give the Agency greater leverage

in its efforts to ensure that trade in previously used material is

consistent with the CAA and is in accordance with U.S. obligations

under the Protocol.

g. Requirement that the Petition and the Non-Objection Letter from

EPA for the Import of Used Class I Controlled Substances Accompany the

Shipment through U.S. Customs Clearance. EPA is adding a requirement

that the petition and the non-objection notice from EPA approving the

import of a used class I controlled substance accompany each shipment

through U.S. Customs. In the preamble to the final rule published in

the Federal Register on May 10, 1995, EPA suggested that the petition

and EPA approval letter accompany the shipment of used class I

controlled substances through U.S. Customs. However, EPA did not make

this a requirement in the regulatory language. Today EPA is adding this

requirement to Sec. 82.13(g) such that all importers of used class I

controlled substances must provide these documents to bring a shipment

into the United States. EPA believes that presenting the petition and

EPA-approval letter with a shipment will facilitate the clearance

through U.S. Customs.

5. Requirement That Importers of Controlled Substances and Used

Controlled Substances Use the Harmonized Commodity Codes Specified in

This Regulation in Completing Customs Entry Documents

EPA is requiring that importers of controlled substances and used

controlled substances file Customs entry documents (Form 7501)

containing the specified Harmonized Tariff Schedule numbers listed in

the new Appendix K to 40 CFR Part 82, Subpart A. Monitoring compliance

with the regulatory requirements under this accelerated phaseout rule

will be facilitated by consistency in the Harmonized Tariff Codes used

on Customs entry forms. The regulations of the U.S. Customs Service

require importers to properly identify the contents of a shipment,

including the use of the proper commodity code number from the

Harmonized Tariff Schedule. EPA cross-checks and monitors imports and

exports of controlled substances and used controlled substances by

reviewing information from the U.S. Customs Service. Both EPA and

Customs believe a consistent list of numbers from the Harmonized Tariff

Schedule will ease tracking, reporting, and compliance monitoring of

the ozone-depleting substance phaseout program.

6. Modify the Requirement for a Sales Contract That Certifies Exported

Controlled Substances Will Be Transformed or Destroyed

The current regulations state that exporters of class I controlled

substances must submit to EPA a sales contract certifying that the

exported controlled substances will be transformed or destroyed. (40

CFR 82.13(h)(8)) EPA is changing the requirement in Sec. 82.13(h)(8) to

a requirement similar to the current requirement for importers in

Sec. 82.13(g)(3)(xii). The new requirement requires exporters to submit

an invoice or sales agreement that includes language similar to the IRS

certificate for transformation or the destruction verification for

exports of class I controlled substances to Article 5 Parties to the

Protocol (developing countries).

7. Applying the Recordkeeping and Reporting Requirements to Material

Obtained From Importers as Well as Producers for a Person Who

Transforms or Destroys Class I Controlled Substances

EPA is extending the recordkeeping and reporting requirement for

persons involved in second-party transformation and second-party

destruction of class I controlled substances, to the quantities they

themselves did not import.

EPA is adding a requirement that persons keep records if they

transform or destroy class I controlled substances that they did not

import. The current regulatory text in Sec. 82.13(i) requires a person

to keep these records only if they did not produce the transformed or

destroyed class I controlled substance.

With today's action, EPA is also adding to Sec. 82.13(m) a

requirement that persons report to EPA the names and quantities of

class I controlled substances they transform or destroy when they

submit an IRS certificate of intent to transform or a destruction

verification to an importer. The current regulatory text in

Sec. 82.13(m) requires persons to report within 45 days of the end of

the control period the quantities of class I controlled substances they

transform or destroy for which they submitted an IRS certificate of

intent to transform or a destruction verification to a producer. EPA is

now making the recordkeeping and reporting requirements apply equally

whether the person who transforms or destroys the substances obtains

them from a producer or an importer.

8. Changes to the Recordkeeping and Reporting Requirements for Entities

Allocated Essential-Use Allowances

EPA is changing the recordkeeping and reporting requirements for

entities allocated essential-use allowances in accordance with a

decision taken by the Parties to the Protocol at the Eighth Meeting in

1996. Decision VIII/9 approved a new reporting format for the

quantities of production and consumption of controlled substances

obtained by Parties under the essential-use authorizations. This

accounting framework, included in annex IV of the document entitled

``Report of the Eighth Meeting of the Parties to the Montreal Protocol

on Substances That Deplete the Ozone Layer'' (UNEP/OzL.Pro.8/12), is

designed to assist the Parties in, among other things, monitoring the

amount of controlled substances acquired through production or through

import under essential-use authorizations.

EPA is adopting the exact format approved by the Parties to the

Protocol

[[Page 41639]]

as an adjustment to the quarterly reporting requirements for each

company allocated essential-use allowances. Under today's action, each

company receiving a letter from EPA that allocates essential-use

allowances for a control period will be required to submit the

information in the Protocol's accounting framework for each quarter.

Much of the information required in the Protocol accounting framework

is currently required under Sec. 82.13(u) of the rule published in the

Federal Register on May 10, 1995.

The Protocol accounting framework for essential uses is designed to

assist the Parties in determining whether quantities of controlled

substances claimed for essential uses are actually being produced or

imported. EPA wishes to ensure that quantities of phased-out controlled

substances that the United States nominates to the Parties as being

essential are fully justified. EPA believes today's requirement that

companies holding essential-use allowances complete the Protocol

accounting framework will ultimately help the United States in making

credible nominations for future years. The accounting framework should

make more apparent the quantity of phased-out controlled substance that

each company obtains by expending its essential-use allowances and the

amount of that material each company then uses in a given year for

accomplishing the specifically designated essential use. To more

accurately track the use of CFCs obtained under the essential-use

exemption, today's requirement requires submission of data on the

number of units of each specific product manufactured in a control

period. A company exhibiting a pattern of holding unexpended essential-

use allowances at the end of control periods, or a company exhibiting a

pattern of holding quantities of controlled substances obtained with

expended essential-use allowances that are not incorporated into the

designated end product during that same control period, may indicate

over-inflated requests for quantities of phased-out controlled

substances. The United States government does not want the appearance

of overinflated requests to jeopardize future approval by the Parties

of requests for essential-use quantities for controlled substances.

The essential-use procedures developed internationally and

domestically are designed to strictly control and limit exceptions to

the production and consumption phaseout of ozone-depleting substances

while at the same time encouraging a transition to a complete phaseout.

EPA believes that, in accordance with the intent of the Decisions taken

by the Parties to the Protocol, each kilogram of a controlled substance

authorized after the phaseout must be justified as being essential. The

U.S. government, and EPA in particular, is committed to working with

U.S. companies to continue to obtain the justified quantities of

phased-out controlled substances for essential uses.

9. Changes to the Reporting Requirement for Distributors of Laboratory

Supplies Under the Global Laboratory Essential-Use Exemption

EPA is making several changes and additions to the current

Sec. 82.13(v) to ease the reporting burden for companies supplying

class I controlled substances under the laboratory essential-use

exemption. EPA will require that companies distributing laboratory

supplies in accordance with the global essential-use exemption in the

current Sec. 82.4(r) (82.4(t) in these amendments), and Appendix G to

Subpart A, maintain as records the certifications from each laboratory

customer for each class I controlled substance ordered in a control

period. EPA will not, however, require that distributors of laboratory

supplies submit the certifications with each quarterly report. Under

today's amendments, distributors of laboratory supplies will continue

to receive certifications from labs that class I controlled substances

are being purchased solely for laboratory and analytical purposes and

are not being used for manufacturing and will not be resold. The

distributor of laboratory supplies will continue to collect the

certifications but will not be required to forward them to EPA. The

distributor of laboratory supplies will continue to report each quarter

the total quantity of each class I controlled substance sold to each

customer under the global essential-use exemption (new Sec. 82.13(x)).

Similarly, the distributor will continue to report each quarter the

quantity of each such substance received from each producer or importer

(new Sec. 82.13(v)). The total quantity reported will reflect the

quantity of each class I controlled substance ordered by all

laboratories during the quarter. Each of the labs ordering a class I

controlled substance will have submitted to the distributor, for the

distributor to maintain in accordance with recordkeeping requirements,

a one-time-per-year certification as in Sec. 82.13(w) of the rule

published in the Federal Register on May 10, 1995 (new Sec. 82.13(y)).

EPA is collecting information on the total quantity of class I

controlled substances produced and imported under the global laboratory

essential-use exemption in order to meet reporting obligations under

the Protocol. In addition, EPA is collecting information on the total

quantity of class I controlled substances sold to labs in order to meet

reporting obligations under the Protocol. EPA believes these

obligations under the Protocol can be met through today's changes while

at the same time reducing the reporting burden for distributors of

laboratory supplies.

With today's action, EPA is permitting companies only distributing

class I controlled substances as reference standards for calibrating

laboratory equipment to request an extension of the reporting

requirement (new Sec. 82.13(z)). EPA is providing that companies

distributing reference standards of class I controlled substances may

write a letter to the Agency requesting to file annual rather than

quarterly reports. The quantities of class I controlled substances

contained in a reference standard for calibrating laboratory analytical

equipment, such as a gas chromatograph, are typically thousandths or

ten thousandths of a kilogram. EPA is creating a process for replacing

the quarterly reporting requirement with an annual reporting

requirement for companies that only sell laboratory reference

standards, because the total quantity of a class I controlled substance

sold by such companies under the global essential-use exemption during

a year will often be less than a kilogram. EPA is creating this process

for lengthening the reporting period for companies that only sell

reference standards of class I controlled substances to ease the

overall reporting burden.

Today's changes are designed to reduce the overall reporting burden

without creating opportunities for abuse of the essential-use exemption

for laboratory and analytical purposes. EPA wishes to note that today's

action does not change the packaging and purity requirements found in

Appendix G for class I controlled substances distributed for laboratory

and analytical purposes under the global essential-use exemption.

III. Miscellaneous Additional Changes

Included with today's revisions are miscellaneous corrections and

minor changes, such as the inclusion of a specific address in the

definition for ``Administrator'' in Sec. 82.3. The rule also includes

corrections in Sec. 82.9(a) regarding Article 5 allowances available to

those producers listed in Sec. 82.5 and in accordance with the Montreal

Protocol. This rule re-publishes an updated Appendix C to Subpart A,

[[Page 41640]]

listing Parties to the Montreal Protocol and its amendments. Also

included are the new Appendix J and Appendix K to Subpart A.

IV. Summary of Supporting Analysis

A. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.

L. 104-4, establishes requirements for Federal agencies to assess the

effects of their regulatory actions on State, local and tribal

governments and the private sector. Under section 202 of the UMRA, EPA

generally must prepare a written statement, including a cost-benefit

analysis, for proposed and final rules with ``Federal mandates'' that

may result in expenditures by State, local and tribal governments, in

the aggregate, or by the private sector, of $100 million or more in any

one year. If a written statement is required under section 202, section

205 of the UMRA generally requires EPA to identify and consider a

reasonable number of regulatory alternatives and adopt the least

costly, most cost-effective or least burdensome alternative that

achieves the objectives of the rule, unless the Agency explains why

this alternative is not selected or the selection of this alternative

is inconsistent with law.

Section 203 of the UMRA requires the Agency to establish a plan for

obtaining input from and informing, educating, and advising any small

governments that may be significantly or uniquely affected by the rule.

Section 204 of the UMRA requires the Agency to develop a process to

allow elected state, local, and tribal government officials to provide

input in the development of any proposal containing a significant

Federal intergovernmental mandate.

EPA has determined that this rule does not contain a Federal

mandate that may result in expenditures of $100 million or more by

State, local and tribal governments, in the aggregate, or by the

private sector, in any one year. Most of the provisions in today's rule

fulfill the obligations of the United States under the international

treaty, The Montreal Protocol on Substances that Deplete the Ozone

Layer, as well as those requirements specifically set forth by Congress

in sections 604, 606 and 614 of the Clean Air Act Amendments of 1990.

The remainder merely serve to clarify existing regulatory text and

therefore impose no new additional enforceable duties on governmental

entities or the private sector. The majority of the amendments do not

create significant additional costs for either the public or the

private sector because they address various implementation issues

without major changes in policy. Viewed as a whole, all of today's

amendments do not create a Federal mandate resulting in costs of $100

million or more in any one year for State, local and tribal

governments, in the aggregate, or for the private sector. Thus, today's

rule is not subject to the requirements of sections 202 and 205 of the

UMRA. EPA has also determined that this rule contains no regulatory

requirements that might significantly or uniquely affect small

governments; therefore, EPA is not required to develop a plan with

regard to small governments under section 203. Finally, because this

proposal does not contain a significant intergovernmental mandate, the

Agency is not required to develop a process to obtain input from

elected state, local, and tribal officials under section 204.

B. Regulatory Flexibility

The Regulatory Flexibility Act (RFA) generally requires an agency

to conduct a regulatory flexibility analysis of any rule subject to

notice and comment rulemaking requirements unless the agency certifies

that the rule will not have a significant economic impact on a

substantial number of small entities. Small entities include small

businesses, small not-for-profit enterprises, and small governmental

jurisdictions.

The Agency performed an initial screening analysis and determined

that this regulation does not have a significant economic impact on a

substantial number of small entities. EPA characterized the regulated

community by identifying the SIC codes of the companies affected by

this rule. The Agency determined that the members of the regulated

community affected by today's rule are generally not small businesses.

Small governments and small not-for-profit organizations are not

subject to the provisions of today's rule. The provisions in the

accelerated phaseout rule and today's action regulate large,

multinational corporations that either produce, import, export,

transform or destroy ozone-depleting chemicals controlled by this rule.

To the extent that today's actions affect entities other than large,

multinational corporations, there are few that are small entities and

the economic impact is negligible. Thus, today's rule will not have a

significant economic impact on a substantial number of small entities.

The rule includes changes to recordkeeping or reporting requirements.

Those changes included in today's rule that increase reporting burden

only apply to large companies (pharmaceutical companies holding

essential-use allowances). In general, for small entities, the changes

in today's action reduce reporting and recordkeeping.

EPA has determined that it is not necessary to prepare a regulatory

flexibility analysis in connection with this final rule. EPA has also

determined that this rule will not have a significant economic impact

on a substantial number of small entities.

C. Executive Order 12866

Under Executive Order 12866 (58 FR 51735, October 4, 1993), the

Agency must determine whether this regulatory action is ``significant''

and therefore subject to OMB review and the requirements of the

Executive Order. The Order defines a ``significant'' regulatory action

as one that is likely to result in a rule that may:

(1) have an annual effect on the economy of $100 million or more,

or adversely affect in a material way the economy, a sector of the

economy, productivity, competition, jobs, the environment, public

health or safety, or State, local, or tribal governments or

communities;

(2) create a serious inconsistency or otherwise interfere with an

action taken or planned by another agency;

(3) materially alter the budgetary impact of entitlements, grants,

user fees, or loan programs or the rights and obligations of recipients

thereof; or

(4) raise novel legal or policy issues arising out of legal

mandates, the President's priorities, or the principles set forth in

the Executive Order.

It has been determined by EPA and OMB that this rule is not a

``significant regulatory action'' within the meaning of the Executive

Order.

D. Applicability of E.O. 13045 Children's Health Protection

This rule is not subject to E.O. 13045, entitled ``Protection of

Children from Environmental Health Risks and Safety Risks'' (62 FR

19885, April 23, 1997), because it does not involve decisions on

environmental health risks or safety risks that may disproportionately

affect children.

E. Paperwork Reduction Act

The revised information collection requirements in these amendments

have been submitted for approval to OMB under the Paperwork Reduction

Act, 44 U.S.C. 3501 et seq. An Information Collection Request (ICR)

document has been prepared by EPA (ICR No. 1432.17) and a copy may be

obtained from Sandy Farmer by mail at OPPE Regulatory Information

Division; U.S. Environmental Protection Agency (2137); 401 M St., SW.,

Washington, DC

[[Page 41641]]

20460, by email at [email protected], or by calling (202)

260-2740. A copy may also be downloaded off the internet at http://

www.epa.gov/icr. The additional information requirements in these

amendments are not effective until OMB approves them.

The information collection under this rule is authorized under

sections 603(b) and 114 of the Clean Air Act Amendments of 1990 (CAA).

This information collection is conducted to meet U.S. obligations under

Article 7, Reporting Requirements, of the Montreal Protocol on

Substances that Deplete the Ozone Layer (Protocol); and to carry out

the requirements of Title VI of the CAA, including sections 603 and

614.

The reporting requirements included in the amendments to the

current rule are designed to:

(1) Ensure compliance with the restrictions on production, import

and export of controlled ozone-depleting substances after the phaseout

of class I substances (except methyl bromide) after January 1, 1996;

(2) Allow exempted production and import for certain essential uses

and the consequent tracking of that production and import;

(3) Address industry and Federal concerns regarding the illegal

import of mislabelled used controlled substances that are claimed to be

undercutting U.S. markets;

(4) Respond to industry comments on the functioning of the program

to streamline reporting and eliminate administrative inefficiencies;

(5) Satisfy U.S. obligations under the international treaty, the

Montreal Protocol on Substances that Deplete the Ozone Layer

(Protocol), to report data under Article 7;

(6) Fulfill statutory obligations under Section 603(b) of Title VI

of the Clean Air Act Amendments of 1990 (CAA) for reporting and

monitoring;

(7) Provide information to report to Congress on the production,

use and consumption of class I and class II controlled substances as

statutorily required in Section 603(d) of Title VI of the CAA.

EPA informs respondents that they may assert claims of business

confidentiality for any of the information they submit. Information

claimed confidential will be treated in accordance with the procedures

for handling information claimed as confidential under 40 CFR Part 2,

Subpart B, and will be disclosed only if EPA determines that the

information is not entitled to confidential treatment. If no claim of

confidentiality is asserted when the information is received by EPA, it

may be made available to the public without further notice to the

respondents (40 CFR 2.203).

The information collection requirements for this action have an

estimated reporting burden averaging 23.3 hours per response. This

estimate includes time for reviewing instructions, searching existing

data sources, gathering and maintaining the data needed and completing

the collection of information.

The estimate includes the time needed to comply with EPA's

reporting requirements, as well as that used for the completion of the

reports under the amended regulations.

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

Number of Responses/ Total Hours per

Collection activity respondents respondent responses response Total hours

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

Producer's Report.............................. 8 4 32 16 512

Importer's Report.............................. 12 4 48 16 768

Notification of Trade.......................... 2 1 2 2 4

Export Report.................................. 10 1 10 80 800

Lab Certification.............................. 1000 1 1000 1 1000

Class II Report................................ 14 4 56 16 896

Transformation & Destruction................... 15 1 15 80 1200

Essential Use Allowance Holders................ 12 4 48 32 1536

Lab Suppliers.................................. 4 4 16 24 384

Lab Suppliers--Reference Standards............. 10 1 10 16 160

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

Total burden hrs......................... ........... ........... ........... ........... 7260

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

Burden means the total time, effort, or financial resources

expended by persons to generate, maintain, retain, or disclose or

provide information to or for a Federal agency. This includes the time

needed to review instructions; develop, acquire, install, and utilize

technology and systems for the purposes of collecting, validating, and

verifying information, processing and maintaining information, and

disclosing and providing information; adjust the existing ways to

comply with any previously applicable instructions and requirements;

train personnel to be able to respond to a collection of information;

search data sources; complete and review the collection of information;

and transmit or otherwise disclose the information.

An Agency may not conduct or sponsor, and a person is not required

to respond to, a collection of information unless it displays a

currently valid OMB control number. The OMB control numbers for EPA's

regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.

Send comments on the Agency's need for this information, the

accuracy of the provided burden estimates, and any suggested methods

for minimizing respondent burden, including through the use of

automated collection techniques to the Director, OPPE Regulatory

Information Division; U.S. Environmental Protection Agency (2137); 401

M St., SW; Washington, DC 20460; and to the Office of Information and

Regulatory Affairs, Office of Management and Budget, 725 17th St., NW,

Washington, DC 20503, marked ``Attention: Desk Officer for EPA.''

Include the ICR number in any correspondence.

F. Executive Order 12875

Today's action does not impose any unfunded mandate upon any State,

local, or tribal government; therefore, Executive Order 12875 does not

apply to this rulemaking.

G. Submission to Congress and the General Accounting Office

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the

Small Business Regulatory Enforcement Fairness Act of 1996, generally

provides that before a rule may take effect, the agency promulgating

the rule must submit a rule report, which includes a copy of the rule,

to each House of the Congress and to the Comptroller General of the

United States. EPA will submit a

[[Page 41642]]

report containing this rule and other required information to the U.S.

Senate, the U.S. House of Representatives, and the Comptroller General

of the United States prior to publication of the rule in the Federal

Register. This rule is not a ``major rule'' as defined by 5 U.S.C.

804(2).

List of Subjects in 40 CFR Part 82

Environmental protection, Administrative practice and procedure,

Air pollution control, Chemicals, Chlorofluorocarbons, Exports,

Hydrochlorofluorocarbons, Imports, Ozone layer, Reporting and

recordkeeping requirements.

Dated: July 17, 1998.

Carol M. Browner,

Administrator.

40 CFR part 82 is amended as follows:

PART 82--PROTECTION OF STRATOSPHERIC OZONE

1. The authority citation for part 82 continues to read as follows:

Authority: 42 U.S.C. 7414, 7601, 7671-7671q.

Subpart A--Production and Consumption Controls

2. Section 82.1 is revised to read as follows:

Sec. 82.1 Purpose and scope.

(a) The purpose of the regulations in this subpart is to implement

the Montreal Protocol on Substances that Deplete the Ozone Layer and

sections 602, 603, 604, 605, 606, 607, 614 and 616 of the Clean Air Act

Amendments of 1990, Public Law 101-549. The Protocol and section 604

impose limits on the production and consumption (defined as production

plus imports minus exports, excluding transhipments and used controlled

substances) of certain ozone-depleting substances, according to

specified schedules. The Protocol also requires each nation that

becomes a Party to the agreement to impose certain restrictions on

trade in ozone-depleting substances with non-Parties.

(b) This subpart applies to any person that produces, transforms,

destroys, imports or exports a controlled substance or imports or

exports a controlled product.

Sec. 82.2 [Removed and reserved]

3. Section 82.2 is removed and reserved.

4. Section 82.3 is amended by adding new definitions in

alphabetical order for the terms ``Confer'', ``Individual Shipment'',

``Montreal Anniversary Amendments'', ``National Security Allowances'',

``Non-Objection Notice'', and ``Source Facility'' and revising

definitions in alphabetical order for ``Administrator'',

``Destruction'', ``Importer'', ``Nations complying with, but not

joining, the Protocol'', ``Transhipment'', and ``Unexpended Essential-

Use Allowances''.

Sec. 82.3 Definitions.

As used in this subpart, the term:

Administrator means the Administrator of the United States

Environmental Protection Agency or his authorized representative. For

purposes of reports and petitions, the Administrator must be written at

the following mailing address: EPA (6205J), Stratospheric Protection

Division, 401 M Street, SW, Washington, DC 20460.

* * * * *

Confer means to shift the essential-use allowances obtained under

Sec. 82.4(u) from the holder of the unexpended essential-use allowance

to a person for the production of a specified controlled substance, or

to shift the destruction and transformation credits obtained under

Sec. 82.9(f) from the holder of the unexpended destruction and

transformation credits to a person for the production of a specified

controlled substance.

* * * * *

Destruction means the expiration of a controlled substance to the

destruction efficiency actually achieved, unless considered completely

destroyed as defined in this section. Such destruction does not result

in a commercially useful end product and uses one of the following

controlled processes approved by the Parties to the Protocol:

(1) Liquid injection incineration;

(2) Reactor cracking;

(3) Gaseous/fume oxidation;

(4) Rotary kiln incineration;

(5) Cement kiln;

(6) Radio frequency plasma; or

(7) Municipal waste incinerators only for the destruction of foams.

* * * * *

Importer means the importer of record listed on U.S. Customs

Service forms for imported controlled substances, used controlled

substances or controlled products.

Individual shipment means the kilograms of a used controlled

substance for which a person may make one (1) U.S. Customs entry, not

to be dis-aggregated, as identified in the non-objection letter from

the Administrator under Sec. 82.13(g).

* * * * *

Montreal Anniversary amendments means the Montreal Protocol, as

amended at the Ninth Meeting of the Parties to the Montreal Protocol in

Montreal in 1997.

National Security allowances means the privileges granted by this

subpart to produce or import class II controlled substances until

January 1, 2015, as determined by the Administrator in accordance with

Sec. 82.9(g).

Nations complying with, but not joining, the Protocol means any

nation listed in Appendix C, Annex 2, to this subpart.

Non-objection notice means the privilege granted by the

Administrator to import a specific individual shipment of used

controlled substance in accordance with Sec. 82.13(g).

* * * * *

Source facility means the exact location from which a used

controlled substance was recovered from a piece of equipment, including

the name of the company responsible for, or owning the location, a

contact person at the location, the mailing address for that specific

location, as well as a phone number and a fax number for the contact

person at the location.

* * * * *

Transhipment means the continuous shipment of a controlled

substance, from a foreign state of origin through the United States or

its territories, to a second foreign state of final destination, as

long as the shipment does not enter into United States jurisdiction. A

transhipment, as it moves through the United States or its territories,

cannot be re-packaged, sorted or otherwise changed in condition.

* * * * *

Unexpended essential-use allowances means essential-use allowances

that have not been used. At any time in any control period a person's

unexpended essential-use allowances are the total of the level of

essential-use allowances the person has authorization under this

subpart to hold at that time for that control period, minus the level

of controlled substances that the person has imported or had produced

in that control period until that time.

* * * * *

5. Section 82.4 is amended by revising paragraphs (d), (e), by

redesignating paragraphs (l) through (s) as (n) through (u) and

redesignating paragraphs (f) through (k) as (g) through (l); by

revising newly designated paragraph, (j), (t), and by adding paragraphs

(f), (m), (l)(4), (t)(3), and (u)(3) to read as follows:

Sec. 82.4 Prohibitions.

* * * * *

(d) Effective January 1, 1996, for any class I, Group I, Group II,

Group III,

[[Page 41643]]

Group IV, Group V, or Group VII controlled substances, no person may

import (except for transhipments or heels), at any time in any control

period, (except for controlled substances that are transformed or

destroyed) in excess of the amount of unexpended essential-use

allowances or exemption as allocated under this section, or the amount

of unexpended destruction and transformation credits obtained under

Sec. 82.9, held by that person under the authority of this subpart at

that time for that control period. Every kilogram of excess importation

(other than transhipments or heels) constitutes a separate violation of

this subpart.

(e) Effective January 1, 1996, no person may place an order by

conferring essential-use allowances for the production of the class I

controlled substance, at any time in any control period, in excess of

the amount of unexpended essential-use allowances, held by that person

under the authority of this subpart at that time for that control

period. Effective January 1, 1996, no person may import a class I

controlled substance with essential-use allowances, at any time in any

control period, in excess of the amount of unexpended essential-use

allowances, held by that person under the authority of this subpart at

that time for that control period. No person may import or place an

order for the production of a class I controlled substance with

essential-use allowances, at any time in any control period, other than

for the class I controlled substance(s) for which they received

essential-use allowances under paragraph (u) of this section. Every

kilogram of excess production ordered in excess of the unexpended

essential-use allowances conferred to the producer constitutes a

separate violation of this subpart. Every kilogram of excess import in

excess of the unexpended essential-use allowances held at that time

constitutes a separate violation of this subpart.

(f) Effective January 1, 1996, no person may place an order by

conferring transformation and destruction credits for the production of

the class I controlled substance, at any time in any control period, in

excess of the amount of transformation and destruction credits, held by

that person under the authority of this subpart at that time for that

control period. Effective January 1, 1996, no person may import class I

controlled substance, at any time in any control period, in excess of

the amount of transformation and destruction credits, held by that

person under the authority of this subpart at that time for that

control period. No person may import or place an order for the

production of a class I controlled substance with transformation and

destruction credits, at any time in any control period, other than for

the class I controlled substance(s) for which they received

transformation and destruction credits as under Sec. 82.9(f). Every

kilogram of excess production ordered in excess of the unexpended

transformation and destruction credits conferred to the producer

constitutes a separate violation of this subpart. Every kilogram of

excess import in excess of the unexpended transformation and

destruction credits held at that time constitutes a separate violation

of this subpart.

* * * * *

(j) Effective January 1, 1995, no person may import, at any time in

any control period, a used class I controlled substance, without having

received a non-objection notice from the Administrator in accordance

with Sec. 82.13(g)(2) and (3). A person issued a non-objection notice

for the import of an individual shipment of used controlled substances

may not transfer or confer the right to import, and may not import any

more than the exact quantity, in kilograms, of the used controlled

substance cited in the non-objection notice. Every kilogram of

importation of used controlled substance in excess of the quantity

cited in the non-objection notice issued by the Administrator in

accordance with Sec. 82.13(g)(2) and (3) constitutes a separate

violation.

* * * * *

(l) * * *

(4) Import or export any quantity of a controlled substance listed

in Class I, Group VII, in Appendix A to this subpart, from or to any

foreign state not Party to the Copenhagen Amendments (as noted in

Appendix C, Annex l, to this subpart), unless that foreign state is

complying with the Copenhagen Amendments (as noted in Appendix C, Annex

2, to this subpart.

(m) Effective October 5, 1998, no person may export a controlled

product to a Party listed in Appendix J of this subpart in any control

period after the control period in which EPA publishes a notice in the

Federal Register listing that Party in Appendix J of this subpart. EPA

will publish a notice in the Federal Register that lists a Party in

Appendix J if the Party formally presents to the U.S. a government

document through its embassy in the United States stating that it has

established a ban on the import of controlled products and a ban on the

manufacture of those same controlled products.

* * * * *

(t) Effective January 1, 1996, essential-use allowances are

apportioned to a person under paragraph (t)(2) of this section for the

exempted production or importation of specified class I controlled

substances solely for the purposes listed in paragraphs (t)(1)(i) and

(ii) of this section. Effective October 5, 1998 production and

importation of class I controlled substances for the purposes listed in

paragraph (t)(1)(iii) of this section are exempted as an essential use

if conducted in accordance with requirements in Sec. 82.13(v) through

(z) and Appendix G to subpart A.

* * * * *

(3) Effective for the 1999 control period and thereafter, EPA will

allocate essential-use allowances for quantities of a specific class I

controlled substance by means of a confidential letter to each person

nominated by the United States to the UNEP Ozone Secretariat of the

Montreal Protocol and approved by the Parties for an essential use

exemption for the control period in question. EPA will thereafter

publish a notice in the Federal Register of the allocations made for

the control period in question.

(u) The following exemptions apply to the production and

consumption restrictions under paragraphs (n), (o), and (p), of this

section:

* * * * *

(3) National security interests--A person may obtain national

security allowances to produce HCFC-141b after January 1, 2003, as an

exemption to paragraph (n) of this section, only for specific purposes

deemed by the Administrator to be national security interests in

accordance with the procedures in Sec. 82.9. A person may obtain

national security allowances to import HCFC-141b after January 1, 2003,

as an exemption to paragraph (o) of this section, only for specific

purposes deemed by the Administrator to be national security interests

in accordance with the procedures in Sec. 82.9. No person may produce

or import a class II controlled substance under this paragraph on or

after January 1, 2030.

6. Section 82.9 is amended by revising the section heading and

paragraphs, (a) and (c), and adding paragraph (g) to read as follows:

Sec. 82.9 Availability of allowances in addition to baseline

production allowances.

(a) Every person apportioned baseline production allowances for

class I controlled substances under Sec. 82.5 (a) through (f) of this

subpart is also granted Article 5 allowances equal to:

(1) 10 percent of their baseline production allowances listed for

class I, Group I, Group III, Group IV, and Group V controlled

substances listed under

[[Page 41644]]

Sec. 82.5 of this subpart for each control period ending before January

1, 1996;

(2) 10 percent of their baseline production allowances for class I,

Group VI controlled substances listed under Sec. 82.5 of this subpart

for each control period ending before January 1, 2001;

(3) 15 percent of their baseline production allowances for class I,

Group II controlled substances listed under Sec. 82.5 of this subpart

for each control period beginning January 1, 1994, until January 1,

2003;

(4) 15 percent of their baseline production allowances for class I,

Group I, Group III, Group IV, and Group V controlled substances listed

under Sec. 82.5 of this subpart for each control period beginning

January 1, 1996, until January 1, 2010; and

(5) 15 percent of their baseline production allowances for class I,

Group VI controlled substances listed under Sec. 82.5 of this subpart

for each control period beginning January 1, 2005, until January 1,

2015.

* * * * *

(c) A company may increase or decrease its production allowances or

its Article 5 allowances by trading with another Party to the Protocol

according to the provision under this paragraph (c). A nation listed in

Appendix C to this subpart (Parties to the Montreal Protocol) must

agree either to transfer to the person for the current control period

some amount of production that the nation is permitted under the

Montreal Protocol or to receive from the person for the current control

period some amount of production that the person is permitted under

this subpart. If the controlled substance is to be returned to the

Party from whom production allowances are received, the request for

production allowances shall also be considered a request for

consumption allowances under Sec. 82.10(c). If the controlled substance

is to be sold in the United States or to another Party (not the Party

from whom the allowances are received), the U.S. company must expend

its consumption allowances allocated under Sec. 82.6 and Sec. 82.7 in

order to produce with the additional production allowances.

(1) For trades from a Party, the person must obtain from the

principal diplomatic representative in that nation's embassy in the

United States a signed document stating that the appropriate authority

within that nation has established or revised production limits for the

nation to equal the lesser of the maximum production that the nation is

allowed under the Protocol minus the amount transferred, the maximum

production that is allowed under the nation's applicable domestic law

minus the amount transferred, or the average of the nation's actual

national production level for the three years prior to the transfer

minus the production transferred. The person must submit to the

Administrator a transfer request that includes a true copy of this

document and that sets forth the following:

(i) The identity and address of the person;

(ii) The identity of the Party;

(iii) The names and telephone numbers of contact persons for the

person and for the Party;

(iv) The chemical type and level of production being transferred;

(v) The control period(s) to which the transfer applies; and

(vi) For increased production intended for export to the Party from

whom the allowances would be received, a signed statement of intent to

export to the Party.

(2) For trades to a Party, a person must submit a transfer request

that sets forth the following:

(i) The identity and address of the person;

(ii) The identity of the Party;

(iii) The names and telephone numbers of contact persons for the

person and for the Party;

(iv) The chemical type and level of allowable production to be

transferred; and

(v) The control period(s) to which the transfer applies.

(3) After receiving a transfer request that meets the requirements

of paragraph (c)(2) of this section, the Administrator may, at his

discretion, consider the following factors in deciding whether to

approve such a transfer:

(i) Possible creation of economic hardship;

(ii) Possible effects on trade;

(iii) Potential environmental implications; and

(iv) The total amount of unexpended production allowances held by

United States entities.

(4) The Administrator will issue the person a notice either

granting or deducting production allowances or Article 5 allowances and

specifying the control period to which the transfer applies, provided

that the request meets the requirement of paragraph (c)(1) of this

section for trades from Parties and paragraphs (c)(2) of this section

for trades to Parties, unless the Administrator has decided to

disapprove the trade under paragraph (c)(3) of this section for trades

to Parties. For a trade from a Party, the Administrator will issue a

notice that revises the allowances held by the person to equal the

unexpended production allowances or Article 5 allowances held by the

person under this subpart plus the level of allowable production

transferred from the Party. For a trade to a Party, the Administrator

will issue a notice that revises the production limit for the person to

equal the lesser of:

(i) The unexpended production allowances or Article 5 allowances

held by the person under this subpart minus the amount transferred; or

(ii) The unexpended production allowances or Article 5 allowances

held by the person under this subpart minus the amount by which the

United States average annual production of the controlled substance

being traded for the three years prior to the transfer is less than the

total allowable production allowable for that substance under this

subpart minus the amount transferred. The change in allowances will be

effective on the date that the notice is issued.

(5) If after one person obtains approval for a trade of allowable

production of a controlled substance to a Party, one or more other

persons obtain approval for trades involving the same controlled

substance and the same control period, the Administrator will issue

notices revising the production limits for each of the other persons

trading that controlled substance in that control period to equal the

lesser of:

(i) The unexpended production allowances or Article 5 allowances

held by the person under this subpart minus the amount transferred; or

(ii) The unexpended production allowances or Article 5 allowances

held by the person under this subpart minus the amount by which the

United States average annual production of the controlled substance

being traded for the three years prior to the transfer is less than the

total allowable production for that substance under this subpart

multiplied by the amount transferred divided by the total amount

transferred by all the other persons trading the same controlled

substance in the same control period minus the amount transferred by

that person.

(iii) The Administrator will also issue a notice revising the

production limit for each person who previously obtained approval of a

trade of that substance in that control period to equal the unexpended

production allowances or unexpended Article 5 allowances held by the

person under this subpart plus the amount by which the United States

average annual production of the controlled substance being traded for

the three years prior to the transfer is

[[Page 41645]]

less than the total allowable production under this subpart multiplied

by the amount transferred by that person divided by the amount

transferred by all of the persons who have traded that controlled

substance in that control period. The change in production allowances

or Article 5 allowances will be effective on the date that the notice

is issued.

* * * * *

(g) Effective October 5, 1998, and until December 31, 1999, an

agency, department, or instrumentality of the United States may

petition the Administrator for national security allowances for HCFC-

141b in accordance with Sec. 82.4(v) and as an exemption to

prohibitions in Secs. 82.4(o) through 82.4(p) by submitting the

following:

(1) Name and address of U.S. government national security entity;

name of contact person and phone and fax numbers and e-mail address;

(2) Quantity (in kilograms) of HCFC-141b needed for the control

period for the national security interest;

(3) A description of the national security interest met by the use

of HCFC-141b;

(4) A technical description of the use of HCFC-141b;

(5) A technical description of why alternatives and substitutes are

not sufficient to eliminate the national security use of HCFC-141b; and

(6) A detailed analysis showing why stockpiled, recovered or

recycled quantities are deemed to be technically and economically

infeasible for use.

(i) Effective October 5, 1998, the Administrator will issue an

agency, department, or instrumentality of the United States national

security allowances for HCFC-141b that the Administrator determines are

necessary to national security interests based on information received

in accordance with paragraph (g) of this section. The Administrator may

decide not to grant national security allowances if: the national

security interest can be met by the use of a substance other than HCFC-

141b; the national security interest can be met by the use of existing

supplies of HCFC-141b; there is evidence of fraud or misrepresentation;

approval of the allowances would be inconsistent with the Montreal

Protocol or Decisions of the Parties; approval of the allowances would

be inconsistent with the Clean Air Act Amendments of 1990; or approval

of the allowances may reasonably be expected to endanger public health

or welfare. The grant of national security allowances will be effective

on the date that the notice specified in paragraph (g)(2) of this

section is issued.

(ii) Effective October 5, 1998, if the Administrator decides not to

grant the request for national security allowances for any of the

reasons stated in paragraph (g)(1) of this section, the Administrator

will issue an objection letter disallowing the request for national

security allowances. Within ten working days after receipt of the

objection letter, the requestor may file a one-time petition of appeal,

with supporting reasons, with the Administrator. The Administrator may

affirm the disallowance or grant an allowance, as she/he finds

appropriate in light of the available evidence. If no appeal is taken

by the tenth day after receipt of the objection letter, the

disallowance will be final on that day.

7. Section 82.12 is amended by adding paragraph (a)(3) to read as

follows:

Sec. 82.12 Transfers.

(a) * * *

(3) A person holding essential-use allowances for class I, Group I

controlled substances for metered-dose inhalers (MDIs) may increase or

decrease their essential-use allowances in an emergency situation by

trading with another Party to the Protocol according to the provisions

under this paragraph (a)(3). A nation listed in Appendix C to this

subpart (Parties to the Montreal Protocol) must agree either to

transfer to the person for a specified control period some amount of

their essential-use authorizations for MDIs that the nation is

permitted under the Montreal Protocol or to receive from the person for

a specified control period some amount of essential-use allowances that

the person is permitted under this subpart.

(i) For trades from a Party or to a Party, the person must submit

to the Administrator a request to revise and transfer essential-use

authorizations that sets forth the following:

(A) The identity and address of the person;

(B) The identity of the Party;

(C) The names, telephone and fax numbers of contact persons for the

person and for the Party;

(D) The chemical type and level of essential-use authorizations

being transferred;

(E) The control period(s) to which the transfer applies;

(F) Documentation and analysis confirming the emergency situation

due to a catastrophic natural event or war regarding the manufacture of

MDIs, (if the situation exists in a foreign state, a signed document

from the principal diplomatic representative in that nation's embassy

in the United States introducing a letter from the authority within

that foreign state responsible for health and a letter from the

authority within that foreign state responsible for environmental

international agreements certifying an emergency situation due to a

catastrophic natural event or war and agreeing to a transfer of

essential-use authorizations);

(G) Documentation and analysis that demonstrates the emergency

situation seriously threatens the treatment of patients with asthma or

Chronic Obstructive Pulmonary Disease (COPD), (if the situation exists

in a foreign state, a signed document from the principal diplomatic

representative in that nation's embassy in the United States

introducing a letter from the authority within that foreign state

responsible for health and a letter from the authority within that

foreign state responsible for environmental international agreements

certifying an emergency situation that seriously threatens the

treatment of patients with asthma or COPD and agreeing to a transfer of

essential-use authorizations); and

(H) A certification of the accuracy of the information submitted.

(ii) After receiving a transfer request that meets the requirements

of paragraph (a)(3) of this section, the Administrator may, at her/his

discretion, consider the following factors in deciding whether to

approve such a transfer:

(A) Information sufficient to make a determination regarding

whether the situation is an emergency due to a catastrophic natural

event or war;

(B) Possible serious threats to the treatment of patients with

asthma and COPD;

(C) Possible creation of economic hardship;

(D) Possible effects on trade;

(E) Potential environmental implications; and

(F) The total amount of unexpended essential-use allowances held by

United States entities.

(iii) The Administrator will issue a notice to the UNEP Ozone

Secretariat, through the U.S. Department of State, agreeing with the

transfer of essential-use authorizations and specifying the control

period to which the transfer applies, provided that the request meets

the requirement of paragraph (a)(3)(i), of this section for trades from

Parties or trades to Parties, unless the Administrator has decided to

disapprove the trade under paragraph (a)(3)(ii) of this section. For an

approved trade from a Party, the Administrator will issue a letter that

revises the

[[Page 41646]]

essential-use allowances held by the person to equal the unexpended

essential-use allowances held by the person under this subpart plus the

amount of essential-use authorizations transferred from the Party for

the specific control period. For an approved trade to a Party, the

Administrator will issue a notice that revises the essential-use

allowances held by the person to equal the unexpended essential-use

allowances held by the person under this subpart minus the amount of

essential-use authorizations transferred to the Party for the specific

control period.

* * * * *

8. Section 82.13 is amended by revising paragraphs (b), (f)(1)(iv),

(f)(2) introductory text, (f)(2) (xiv), and (f)(2)(xvi), by adding

(f)(2)(xvii), by removing paragraph (f)(3)(v) and redesignating

(f)(3)(vi) through (xiii) as (f)(3)(v) through (xii), and revising

newly designated (f)(3)(xi) through (xiii), by revising paragraphs

(g)(1)(vii), (g)(1)(xvi), (g)(2) and the first (g)(3), by adding

paragraph (g)(1)(xvii), by redesignating the second (g)(3) ``Reporting

Requirements--Importers,'' as (g)(4) and revising the newly designated

(g)(4)(iii) and (xiii), by adding paragraphs (g)(4)(xiv) and

(g)(4)(xv), by revising paragraphs (h)(8), (i) introductory text, (m),

(u), (v), and redesignating paragraph (w) as paragraph (y), and adding

paragraphs (w), (x) and (z) to read as follows:

Sec. 82.13 Recordkeeping and reporting requirements.

* * * * *

(b) Reports and records required by this section may be used for

purposes of compliance determinations. These requirements are not

intended as a limitation on the use of other evidence admissible under

the Federal Rules of Evidence. Failure to provide the reports,

petitions and records required by this section, and to certify the

accuracy of the information in the reports, petitions and records

required by this section, will be considered a violation of this

subpart. False statements made in reports, petitions and records will

be considered violations of Section 113 of the Clean Air Act.

* * * * *

(f) * * *

(1) * * *

(iv) The quantity of any fugitive losses accounted for in the

production figures; and

* * * * *

(2) Every producer of a class I or class II controlled substance

during a control period must maintain the following records:

* * * * *

(xiv) Written verifications that essential-use allowances were

conveyed to the producer for the production of specified quantities of

a specific controlled substance that will only be used for the named

essential-use and not resold or used in any other manufacturing

process.

* * * * *

(xvi) Written verifications from a U.S. purchaser that the

controlled substance was exported to an Article 5 country in cases when

Article 5 allowances were expended during production; and

(xvii) Written certifications that the quantities of controlled

substances purchased will be used as a process agent in accordance with

the definition of controlled substance in Sec. 82.3.

* * * * *

(3) * * *

(xi) The certifications from essential-use allowance holders

stating that the controlled substances were purchased solely for

specified essential uses and will not be resold or used in any other

manufacturing process;

(xii) In the case of laboratory essential uses, a certification

from distributors of laboratory supplies that controlled substances

were purchased for sale to laboratory customers who certify that the

substances will only be used for laboratory applications and will not

be resold or used in manufacturing; or, if sales are made directly to

laboratories, certifications from laboratories that the controlled

substances will only be used for laboratory applications and will not

be resold or used in manufacturing; and

(xiii) The certifications from purchasers of controlled substances

that the controlled substance will be used as a process agent in

accordance with the definition of controlled substance in Sec. 82.3.

* * * * *

(g) * * *

(1) * * *

(vii) The commodity code for the controlled substances shipped,

which must be one of those listed in Appendix K to this subpart;

* * * * *

(xvi) Copies of certifications that imported controlled substances

are being purchased for essential laboratory and analytical

applications or being purchased for eventual sale to laboratories that

certify the controlled substances are for essential laboratory

applications.

(xvii) Written certifications that the quantities of controlled

substances purchased will be used as a process agent in accordance with

the definition of controlled substance in Sec. 82.3.

* * * * *

(2) Petitioning--importers of used, recycled or reclaimed

controlled substances. For each individual shipment (not to be

aggregated) over 5 pounds of a used controlled substance as defined in

Sec. 82.3, an importer must submit directly to the Administrator, at

least 40 working days before the shipment is to leave the foreign port

of export, the following information in a petition:

(i) The name and quantity in kilograms of the used controlled

substance to be imported;

(ii) The name and address of the importer, the importer ID number,

the contact person, and the phone and fax numbers;

(iii) Name, address, contact person, phone number and fax number of

all previous source facilities from which the used controlled substance

was recovered;

(iv) A detailed description of the previous use of the controlled

substance at each source facility and dated documents indicating the

date the material was put into the equipment at each source facility

(material must have remained in the equipment at least 24 months prior

to recovery to be considered previously used);

(v) A list of the name, make and model number of the equipment from

which the material was recovered at each source facility;

(vi) Name, address, contact person, phone number and fax number of

the exporter and of all persons to whom the material was transferred or

sold after it was recovered from the source facility;

(vii) The U.S. port of entry for the import, the expected date of

shipment and the vessel transporting the chemical. If at the time of

submitting a petition the importer does not know the U.S. port of

entry, the expected date of shipment and the vessel transporting the

chemical, and the importer receives a non-objection notice for the

individual shipment in the petition, the importer is required to notify

the Administrator of this information prior to the actual U.S. Customs

entry of the individual shipment;

(viii) A description of the intended use of the used controlled

substance, and a copy of the contract for the purchase of the

controlled substance that includes the name, address, contact person,

phone number and fax number of the purchaser;

(ix) The name, address, contact person, phone number and fax number

of the U.S. reclamation facility, where applicable;

[[Page 41647]]

(x) If someone at the source facility recovered the controlled

substance from the equipment, the name and phone and fax numbers of

that person;

(xi) If the imported controlled substance was reclaimed in a

foreign Party, the name, address, contact person, phone number and fax

number of any or all foreign reclamation facility(ies) responsible for

reclaiming the cited shipment;

(xii) An export license from the appropriate government agency in

the country of export and, if recovered in another country, the export

license from the appropriate government agency in that country;

(xiii) If the imported used controlled substance is intended to be

sold as a refrigerant in the U.S., the name and address of the U.S.

reclaimer who will bring the material to the standard required under

section 608 (Sec. 82.152(g)) of the CAA, if not already reclaimed to

those specifications; and

(xiv) A certification of accuracy of the information submitted in

the petition.

(3) Starting on the first working day following receipt by the

Administrator of a petition to import a used class I controlled

substance, the Administrator will initiate a review of the information

submitted under paragraph (g)(2) of this section and take action within

40 working days to issue either an objection-notice or a non-objection

notice for the individual shipment to the person who submitted the

petition to import the used class I controlled substance.

(i) For the reasons listed in this paragraph, the Administrator may

issue an objection notice to a petition:

(A) If the Administrator determines that the information is

insufficient, that is, if the petition lacks or appears to lack any of

the information required under paragraph (g)(2) of this section;

(B) If the Administrator determines that any portion of the

petition contains false or misleading information or has reason to

believe that the petition contains false or misleading information;

(C) If the importer wishes to import a used class I controlled

substance from a country which is, for that particular controlled

substance, out of compliance regarding its phaseout obligations under

the Protocol or the transaction in the petition is contrary to other

provisions in the Vienna Convention or the Montreal Protocol;

(D) If the appropriate government agency in the exporting country

has not agreed to issue an export license for the cited individual

shipment of used controlled substance;

(E) If allowing the import of the used class I controlled substance

would run counter to the spirit of statements made by government

officials in the country of recovery or export regarding controlled

ozone-depleting substances;

(F) If the Administrator has received information indicating that a

person listed in the petition has at any time been willing to produce

false information regarding trade in controlled substances, including

information required by EPA or required by the appropriate government

agency in the exporting country;

(G) If the Administrator has received information indicating that a

person listed in the petition is in violation of a requirement in any

regulation published by the U.S. Environmental Protection Agency;

(H) If the Administrator determines that, for the current control

period, the U.S. demand for the controlled substance cited in the

petition can be satisfied by domestic stockpiles and estimated

recycling and reclamation of quantities contained in domestic

equipment; or

(I) If reclamation capacity is installed or is being installed for

that specific controlled substance in the country of recovery or

country of export and the capacity is funded in full or in part through

the Multilateral Fund.

(ii) Within ten (10) working days after receipt of the objection

notice, the importer may re-petition the Administrator, only if the

Administrator indicated ``insufficient information'' as the basis for

the objection notice. If no appeal is taken by the tenth working day

after the date on the objection notice, the objection shall become

final. Only one appeal of re-petition will be accepted for any petition

received by EPA.

(iii) Any information contained in the re-petition which is

inconsistent with the original petition must be identified and a

description of the reason for the inconsistency must accompany the re-

petition.

(iv) In cases where the Administrator has no reason to object to

the petition based on the criteria listed in paragraph (g)(3)(i) of

this section, the Administrator will issue a non-objection notice.

(v) To pass the approved used class I controlled substances through

U.S. Customs, the petition and the non-objection notice issued by EPA

must accompany the shipment through U.S. Customs.

(vi) If for some reason, following EPA's issuance of a non-

objection notice, new information is brought to EPA's attention which

shows that the non-objection notice was issued based on false

information, then EPA has the right to:

(A) Revoke the non-objection notice;

(B) Pursue all means to ensure that the controlled substance is not

imported into the United States; and

(C) Take appropriate enforcement actions.

(vii) Once the Administrator issues a n

This text is long and has been trimmed here. Open the source document for the complete record.