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

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 999

[Docket No. FV97-999-1 FIR]

Specialty Crops; Import Regulations; Extension of Reporting

Period for Peanuts Imported Under 1997 Import Quotas

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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

SUMMARY: The Department of Agriculture (Department) is adopting, as a

final rule, without change, the provisions of an interim final rule

which removed the 23-day reporting requirement and established a new

date for importers to report disposition of peanuts imported under 1997

peanut import quotas. This rule also finalizes the establishment of a

120-day reporting period for any peanuts imported in excess of the 1997

import quotas. The 23-day report period established in the import

regulation is impractical given the volume of peanuts imported under

January 1 and April 1 peanut import quotas. These changes are for the

1997 peanut quota periods only. This rule is deemed necessary by the

Agricultural Marketing Service (AMS) to provide peanut importers with

sufficient time to meet the quality and reporting requirements of the

peanut import regulation.

EFFECTIVE DATE: April 16, 1998.

FOR FURTHER INFORMATION CONTACT: Tom Tichenor, Senior Marketing

Specialist, Marketing Order Administration Branch, Fruit and Vegetable

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

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

request information on compliance with this regulation by contacting

Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable

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

6456; telephone (202) 720-2491, Fax: (202) 720-5698.

SUPPLEMENTARY INFORMATION: This rule amends the peanut import

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

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

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

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

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

Act of 1949 (7 U.S.C. 1445c-3), as amended November 28, 1990, and

August 10, 1993, and section 155 of the Federal Agriculture Improvement

and Reform Act of 1996 (7 U.S.C.7271). Those statutes provide that the

Secretary of Agriculture (Secretary) shall require that all peanuts in

the domestic and export markets fully comply with all quality standards

under Marketing Agreement No. 146 (7 CFR Part 998) (Agreement), issued

pursuant to the Agricultural Marketing Agreement Act of 1937, as

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

This rule has been determined not significant for purposes of

Executive Order 12866 and, therefore, has not been reviewed by the

Office of Management and Budget.

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. Under the regulations, disposition of imported peanuts

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

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

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

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

1998. This rule will not preempt any State or local laws, regulations,

or policies, unless they present an irreconcilable conflict with this

rule. There are no administrative procedures which must be exhausted

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

This rule amends, for the 1997 peanut quota year, a provision in

Sec. 999.600 of the regulations governing imported peanuts (7 CFR part

999--Specialty Crops; Import Regulations). Section 999.600 establishes

minimum quality, identification, certification, and safeguard

requirements for foreign produced farmers stock, shelled and cleaned-

inshell peanuts presented for importation into the United States. The

quality requirements are the same as those specified in Sec. 998.100

Incoming quality regulation and Sec. 998.200 Outgoing quality

regulation of the Agreement.

The import regulation was finalized June 19, 1996 (61 FR 31306). At

that time, three duty-free peanut quotas for 1996 had been filled and

no peanuts were entered under duty for the remainder of 1996.

Therefore, the peanut import regulation had its first practical

application with the opening of the Mexican peanut quota on January 1,

1997.

Under the safeguard procedures, importers are required to report to

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

regulations sets a 23-day period for filing certificates of inspection

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

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

reporting period and procedures for extension were established with the

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

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

million pounds closed approximately 4 weeks after the January 1, 1997

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

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

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

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

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

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

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

approximately 86.8 million pounds of peanuts under the two quotas.

Because of the large volume of peanuts simultaneously released on

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

deadline for many of their imported lots. Obstacles to expedient

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

Logistics of moving containers out of some congested port areas and

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

certifications;

[[Page 12978]]

and (3) arranging for and transporting failing lots to facilities for

reconditioning and recertification.

Therefore, this rule finalizes establishment of the new reporting

date of November 1, 1997, for reporting disposition of all peanuts

entered under the 1997 import quotas. It also provides for an extension

of the reporting period beyond November 1. Requests for extensions must

be made in writing and include the Customs Service entry number,

container and lot information for the unreported peanut lot(s), and the

reason for delay in meeting the November 1 reporting date. AMS will

evaluate each request on a case-by-case basis.

Peanuts may continue to be imported into the United States after

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

Therefore, this rule also provides that disposition of any peanuts

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

days after the peanuts are entered by the Customs Service.

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

Secretary would ask the Customs Service to demand redelivery of peanut

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

Because this rule extends the reporting period beyond the Customs

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

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

1997 import quotas. Those sentences are therefore removed in this

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

with the import regulation and falsification of reports is retained.

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

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

notification of the Federal or Federal-State Inspection Service of

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

safeguard requirement that all imported lots must be reported. Pursuant

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

including those peanut lots that meet import requirements. Paragraph

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

documentation must be sent by regular mail to: Marketing Order

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

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

Overnight or express mail reports may be sent to Marketing Order

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

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

Imported Peanuts.''

Pursuant to requirements set forth in the Regulatory Flexibility

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

economic impact of this action on small entities. Accordingly, AMS has

prepared this final regulatory flexibility analysis relevant to this

rulemaking.

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

business subject to such actions in order that small businesses will

not be unduly or disproportionately burdened. AMS records for 1997 show

that approximately ten importers of peanuts were large handlers of

domestically grown peanuts and six were importers of general food

commodities, some of whom may be small entities. Small agricultural

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

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

are less than $5 million. Although small business entities may be

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

are large business entities.

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

for importers to meet import requirements for each lot of imported

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

reporting requirements are an integral part of the safeguard procedures

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

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

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

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

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

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

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

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

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

additional time to meet requirements enabled importers to more

efficiently manage movement and disposition of their imported peanuts.

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

any increased efficiency of operations because of this action.

Extension requests, when properly requested, already have been granted

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

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

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

will benefit small importers who do not have peanut handling resources

and must contract with remillers and blanchers to recondition failing

peanut lots. Records indicate that some importers, including small

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

transport failing lots long distances for reconditioning.

Alternative reporting time periods were considered by AMS. For the

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

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

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

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

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

necessary reconditioning efforts, with appropriate sampling and re-

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

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

applicable reporting period.

AMS is not aware of any peanuts imported after the 1997 quotas were

filled. However, any such imports would have been handled in a more

routine manner and normal pace than when the great volumes were

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

requirement for any peanuts imported after the quotas are filled is

deemed reasonable by AMS.

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

beneficial to all importers, both large and small.

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

Chapter 35) as amended in 1995, the information collection requirement

contained in this rule was approved by the Office of Management and

Budget (OMB) on September 3, 1996, and assigned OMB number 0581-0176.

This rule does not establish new reporting or recordkeeping

requirements. The current annual reporting burden for importers is

estimated at 12 hours. Those affected by this rule have already

reported entries and requested extensions of deadlines for reporting

peanuts entered under the 1997 import quotas. Further, because no

additional 1997 peanut imports are expected, there should be no need to

file additional reports other than the final report of all entries,

which is included in the approved 12 hour reporting burden.

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

only. All certificates and other documents reporting the disposition of

passing, as well as failing and reconditioned,

[[Page 12979]]

peanut lots must be reported to AMS by November 1, 1997. This reporting

date applies to only AMS' peanut import regulation and does not

supersede other reporting dates for those peanuts that may be

established by the Customs Service or other agencies. For peanuts

imported after the quotas are filled, this rule extends the reporting

period from 23 to 120 days, thus, reducing or eliminating the burden of

requesting an extension of the reporting period.

An interim final rule concerning this action was issued by the

Department on September 19, 1997, and published in the Federal Register

on September 25, 1997. Copies were mailed by AMS to all known peanut

importers, exporters, customs brokers and appropriate embassies. That

rule provided for a 30-day comment period which ended October 27, 1997.

Three comments were received.

One comment was received from the executive director of the Peanut

Shellers Association of America, which stated that its members handle

approximately 65 percent of the peanuts used in the United States. The

Association supports the interim final rule extending the deadline for

importers to report compliance with the peanut import regulation. The

commenter also stated that some of the Association members request that

AMS collect needed information from its inspection service and chemical

laboratories. This request will be reviewed and considered for futher

rulemaking, if appropriate. It will be addressed in a subsequent

proposed rulemaking for 1998 peanut imports.

A second comment was received from a major peanut importing

company, which also is a handler of domestically produced peanuts. The

commenter supports extension of the reporting period.

The final comment was received from a regional peanut growers

cooperative. The commenter agreed that the single reporting date of

November 1 is better than the original regulation's date of 30 days

after entry of a peanut shipment. The comment, however, disagreed that

extensions should be granted to those importers who were unable to meet

the November 1 deadline. It was necessary to provide for such

extensions in order to allow peanut importers sufficient time to meet

the quality and reporting requirements for 1997 peanut imports. Also,

because of the volume of certifications being filed simultaneously by

approximately 30 importers, AMS needs time to review filed documents

and complete reviews of each importers peanut entries.

Based on the comments received, no changes will be made to the

interim final rule as published.

The action is a relaxation of the reporting time period which

benefits peanut importers who are experiencing difficulty meeting the

established reporting time period requirements.

After consideration of all relevant material presented, including

the necessity by AMS to provide peanut importers sufficient time to

meet the quality and reporting requirements of the peanut import

regulation, it is found that finalizing the interim final rule, without

change, as published in the Federal Register (62 FR 50241, September

25, 1997) will tend to effectuate the declared policy of the Act.

List of Subjects in 7 CFR Part 999

Dates, Food grades and standards, Hazelnuts, Imports, Nuts,

Peanuts, Prunes, Raisins, Reporting and recordkeeping requirements,

Walnuts.

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

amended as follows:

PART 999--SPECIALTY CROPS; IMPORT REGULATIONS

Accordingly, the interim final rule amending 7 CFR Part 999.600

which was published at 62 FR 50241 on September 25, 1997, is adopted as

a final rule without change.

Dated: March 9, 1998.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable Programs.

[FR Doc. 98-6772 Filed 3-16-98; 8:45 am]

BILLING CODE 3410-02-P