19374 Federal Register / Vol. 74, No. 81 / Wednesday, April 29, 2009 / Rules and Regulations 

1To view the interim rule and the comments we 

received, go to http://www.regulations.gov/ 

fdmspublic/component/ 

main?main=DocketDetail&d=APHIS–2006–0143. 

Privacy Act, 5 U.S.C. 552a, and provide 

consultation and guidance regarding 

those policies. 

Thomas J. Vilsack, 

Secretary of Agriculture. 

[FR Doc. E9–9726 Filed 4–28–09; 8:45 am] 

BILLING CODE 3410–01–P 

DEPARTMENT OF AGRICULTURE 

Animal and Plant Health Inspection 

Service 

7 CFR Parts 301 and 305 

[Docket No. APHIS–2006–0143] 

RIN 0579–AC54 

Pale Cyst Nematode; Quarantine and 

Regulations 

AGENCY: Animal and Plant Health 

Inspection Service, USDA. 

ACTION: Final rule. 

SUMMARY: We are adopting as a final 

rule, with two changes, an interim rule 

that amended the regulations by 

quarantining parts of Bingham and 

Bonneville Counties, ID, due to the 

discovery of the potato cyst nematode 

there and establishing restrictions on 

the interstate movement of regulated 

articles from the quarantined area. As 

amended by this document, the rule 

refers to the nematode of concern, 

Globodera pallida, by the common 

name ‘‘pale cyst nematode’’ rather than 

by the name ‘‘potato cyst nematode;’’ 

allows the movement of Phaseolus spp. 

(beans) and Pisum spp. (peas) under the 

same conditions that apply to the 

movement of other crops to which soil 

is often attached; and requires that a 

protocol approved by the Administrator 

as sufficient to support removal of 

infested fields from quarantine, rather 

than a 3-year biosurvey protocol, be 

completed in order to remove an 

infested field from quarantine. We are 

also making minor, nonsubstantive 

changes. These actions will prevent the 

spread of the pale cyst nematode via 

potatoes, soil, and other host material to 

noninfested areas of the United States. 

DATES: Effective Date: April 29, 2009. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Eileen Y. Smith, National Program 

Manager, Emergency and Domestic 

Programs, PPQ, APHIS, 4700 River Road 

Unit 134, Riverdale, MD 20737–1236; 

(301) 734–5235. 

SUPPLEMENTARY INFORMATION: 

Background 

In an interim rule 1 published in the 

Federal Register on September 12, 2007, 

and effective on November 1, 2007 (72 

FR 51975–51988, Docket No. APHIS– 

2006–0143), we quarantined parts of 

Bingham and Bonneville Counties, ID, 

due to the discovery of the potato cyst 

nematode (Globodera pallida) and 

established restrictions on the interstate 

movement of regulated articles from the 

quarantined area. This action was 

necessary to prevent the spread of this 

pest to noninfested areas of the United 

States. 

We solicited comments concerning 

our interim rule for 60 days ending 

November 13, 2007. We received three 

comments by that date. They were from 

a State department of agriculture and 

two private citizens. We have carefully 

considered the comments we received. 

They are discussed below. 

The regulations established by the 

interim rule referred to G. pallida as the 

potato cyst nematode. One commenter 

stated that our use of the term ‘‘potato 

cyst nematode’’ to refer to G. pallida 

was confusing, as the term ‘‘potato cyst 

nematode’’ is used generically to refer to 

many cyst nematodes that infest 

potatoes. The commenter suggested that 

we amend the regulations to instead 

refer to the ‘‘pale potato cyst nematode.’’ 

We agree that the use of the term 

‘‘potato cyst nematode’’ may make the 

species to which we refer unclear. For 

example, in our regulations for the 

importation of nursery stock in 

§ 319.37–5(a), we refer to G. 

rostochiensis (the golden nematode) and 

G. pallida collectively as ‘‘potato cyst 

nematodes.’’ To avoid confusion, this 

final rule amends the regulations 

established by the interim rule to refer 

instead to the ‘‘pale cyst nematode,’’ or 

PCN. 

Section 301.86–2 of the interim rule 

lists certain articles that present a risk 

of spreading PCN if they are moved 

from quarantined areas without 

restriction. These articles are referred to 

as regulated articles and include garden 

and dry beans (Phaseolus spp.) and peas 

(Pisum spp.). 

One commenter asked why Phaseolus 

spp. and Pisum spp. were listed as 

regulated articles, since these articles 

are not hosts of PCN. The commenter 

also noted that we had not included 

provisions for their movement under 

certificate in the regulations and asked 

us to explain why. 

Phaseolus spp. and Pisum spp. are 

listed as regulated articles because these 

articles are often moved with soil 

attached; it is the soil that poses a risk 

of spreading PCN, rather than the 

commodity itself. (Phaseolus spp. and 

Pisum spp. are produced both for 

consumption and as seed; in both cases, 

the risk arises from the potential 

movement of soil with the articles.) The 

risk posed by these articles is thus 

similar to the risk posed by potatoes and 

root crops intended for consumption, 

which are also often moved with soil 

attached. 

The regulations established by the 

interim rule provide conditions under 

which potatoes and root crops intended 

for consumption can be moved 

interstate with a certificate. Paragraph 

(a)(3) of § 301.86–5 states that an 

inspector may issue a certificate for the 

interstate movement of potatoes or root 

crops intended for consumption from 

the quarantined area only if the field in 

which the potatoes or root crops have 

been grown meets the following 

requirements: 

• The field has been surveyed by an 

inspector for PCN at least once in the 

last 3 years and prior to the planting of 

the potatoes or root crops; 

• PCN has not been found in the 

field; and 

• No more than one PCN host crop 

has been grown in the field the last 3 

years. 

We should have allowed Phaseolus 

spp. and Pisum spp. to move interstate 

under the same conditions, as the risk 

posed by these articles is the same as 

the risk posed by potatoes and root 

crops for consumption, and the 

conditions under which potatoes and 

root crops are allowed to be moved will 

also be effective for Phaseolus spp. and 

Pisum spp. Therefore, we are amending 

the regulations established by the 

interim rule to allow Phaseolus spp. and 

Pisum spp. to move under the same 

conditions as potatoes and root crops 

that are moved for consumption. (We 

are also making minor editorial changes 

to § 301.86–5(a)(3) to make it consistent 

with the other provisions in § 301.86–5.) 

Paragraph § 301.86–3(a) of the 

regulations provide that the 

Administrator of the Animal and Plant 

Health Inspection Service (APHIS) will 

publish the description of the 

quarantined area on the Plant Protection 

and Quarantine (PPQ) Web site, http:// 

www.aphis.usda.gov/plant_health/ 

plant_pest_info/potato/pcn.shtml. The 

description of the quarantined area will 

include the date the description was last 

updated and a description of the 

changes that have been made to the 

quarantined area. 


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Federal Register / Vol. 74, No. 81 / Wednesday, April 29, 2009 / Rules and Regulations 19375 

2This update to the quarantined area added fields 

in both Bingham and Bonneville Counties, ID, and 

also added fields in Jefferson County, ID. 

One commenter expressed concerns 

about using a Web site to display the 

map of the quarantined area. This 

commenter stated that the map on the 

PPQ Web site was hard to read. The 

commenter also noted that the Web 

address could change, and asked how 

we would ensure that the address does 

not change for the life of the regulations. 

Finally, the commenter stated that the 

Department of Justice in the 

commenter’s State had advised that 

referring to a mutable document, such 

as a map of a quarantined area on a Web 

site, in a quarantine regulation could be 

more easily subjected to challenge in 

court than a description of the 

quarantined area in the regulations 

themselves. 

On November 1, 2007, the effective 

date of the interim rule, we updated the 

map of the quarantined area and made 

it easier to read.2 We published a notice 

in the Federal Register informing the 

public of the changes to the map since 

the publication of the interim rule on 

June 6, 2008 (73 FR 32284–32285, 

Docket No. APHIS–2008–0014), and we 

have published several notices since 

then informing the public of additional 

changes to the quarantined area. As 

with other regulations that refer to Web 

addresses, we will ensure that, if our 

Web site is revised and the address 

changes, our Web site will redirect users 

who enter the Web address given in the 

regulations to the proper Web address. 

Finally, the regulations set out specific 

conditions for adding infested and 

associated fields to the quarantined area 

and indicate that we will update the 

quarantined area whenever these 

conditions are met, meaning that the 

quarantined area reflects our application 

of standards in the regulations. We have 

determined that publishing the 

quarantined area on the Web and 

updating it based on standards in the 

regulations is an adequate means to 

communicate the quarantined area to 

the regulated public. 

As noted earlier, § 301.86–5(a)(3) of 

the regulations sets out conditions 

under which potatoes and root crops 

intended for consumption may be 

moved under a certificate. One 

commenter suggested that we require 

potatoes and root crops intended for 

consumption and moved under a 

certificate to be grown only in fields that 

are planted with certified potato seed, if 

the fields are planted with potatoes. 

The State of Idaho’s seed certification 

process does not require potato seed to 

be examined for potato cyst nematodes. 

Therefore, such a requirement would 

not decrease the risk posed by the 

movement of potatoes, root crops for 

consumption, beans, or peas, and we are 

not including such a requirement in the 

final rule. A potato seed certification 

standard is being developed that would 

incorporate examination for pale cyst 

nematode; if it is adopted, we may 

revisit this issue. 

It should be noted that the State of 

Idaho already requires that all potato 

seed planted in the State be certified 

potato seed, meaning that only certified 

potato seed is being planted in the 

current quarantined area. 

Paragraph § 301.86–5(b) of the 

regulations provides for the issuance of 

limited permits for the interstate 

movement of regulated articles from the 

quarantined area. Paragraph (b)(2) sets 

out specific conditions for the 

movement of potatoes for consumption 

from the quarantined area for processing 

or packing. Under this paragraph, an 

inspector may issue a limited permit to 

allow the interstate movement of 

potatoes from the quarantined area for 

processing or packing only if: 

• The potatoes are transported in a 

manner that prevents the potatoes and 

soil attached to the potatoes from 

coming into contact with agricultural 

premises outside the quarantined area; 

and 

• The potatoes are processed or 

packed at facilities that handle potatoes, 

waste, and waste water in a manner 

approved by APHIS to prevent the 

spread of PCN. 

One commenter asked us to require 

that receiving States be notified of any 

movement of potatoes from the 

quarantined area under a limited 

permit. The commenter recommended 

that the receiving State be involved in 

reviewing the practices of the 

processing and packing facility that 

would receive such potatoes in order to 

ensure that those processes are adequate 

to prevent the spread of PCN. The 

commenter stated that receiving States 

should have the option of testing soil 

from potatoes moved under a limited 

permit. The commenter also asked 

specifically that no movement of 

potatoes under a limited permit be 

allowed to the commenter’s State, 

Oregon. 

To ensure that potatoes moved from 

the quarantined area under a limited 

permit are handled, processed, or 

utilized in a manner that destroys PCN, 

we require the receiving facility to have 

a compliance agreement. This 

compliance agreement is signed by 

APHIS and the owner or operator of the 

facility; during the approval process for 

a compliance agreement, the State in 

which the facility is located is offered 

the opportunity to provide input and 

raise any applicable concerns. APHIS 

will not approve any compliance 

agreement unless we determine that the 

facility will follow the regulations, 

which provide adequate restrictions to 

prevent the interstate spread of PCN. 

Therefore, it is not necessary to provide 

advance notification to States of 

shipments of potatoes moved under a 

limited permit. 

It should be noted that, thus far in the 

PCN program, all movement of potatoes 

under a limited permit has occurred 

within the State of Idaho, and we do not 

anticipate any movement of potatoes 

under a limited permit from Idaho to 

other States. 

One commenter stated that the 

interim rule had a significant economic 

impact on his business, citing expenses 

associated with washing trucks and 

tarping trucks that move between fields. 

The commenter stated that the 

designation of fields owned by the 

commenter as part of the quarantined 

area meant that the commenter no 

longer has any control over what crops 

can be planted there and that 

investments in planting potato crops in 

the quarantined fields had thus been 

lost. 

The commenter also stated that there 

had been an agreement to sell one of his 

farms to another farmer, but since the 

designation of that field as part of the 

quarantined area, the sale of the farm 

may be lost. The commenter asked that 

compensation be provided to affected 

producers and suggested that APHIS 

rent the fields in the quarantined area 

for a period of time until PCN could be 

eradicated. 

Another commenter asked that APHIS 

allow equipment to move from 

quarantined fields through 

nonquarantined fields and to other 

quarantined fields without washing. 

The regulations and the PCN 

eradication program do not require 

tarping of trucks. However, as 

mentioned earlier, potatoes moved 

under limited permit must be 

transported in a manner that prevents 

the potatoes and soil attached to the 

potatoes from coming into contact with 

agricultural premises outside the 

quarantined area. Potatoes transported 

in trucks normally have soil attached. 

Accordingly, an inspector may require 

steps to be taken to prevent that soil 

from coming into contact with 

agricultural premises outside the 

quarantined area. A common and 

simple means to accomplish this goal is 

tarping trucks. The requirement to 

prevent soil attached to the potatoes 

from coming into contact with 


tjames on PRODPC75 with RULES
19376 Federal Register / Vol. 74, No. 81 / Wednesday, April 29, 2009 / Rules and Regulations 

3Most information in this section is derived from 

the Economic Research Service’s Potato Briefing 

Room, available online at http://www.ers.usda.gov/ 

Briefing/Potatoes/. 

agricultural premises outside the 

quarantined area is necessary to prevent 

the spread of PCN. 

Similarly, washing trucks that have 

been used in the quarantined area is 

often necessary to prevent soil on the 

truck from coming into contact with 

agricultural premises outside the 

quarantined area; without washing, 

such movement could pose a risk of 

spreading PCN to the nonquarantined 

fields. We provide the services of an 

inspector free of charge to monitor 

washing of trucks, if necessary. We are 

working with affected producers to 

ensure that we can accommodate their 

business processes to the extent that our 

resources allow. 

The regulations restrict the interstate 

movement of regulated articles from the 

quarantined area; they do not prescribe 

management practices. The commenter 

refers to management practices that are 

part of the eradication program; if 

producers participate in the eradication 

program, infested fields will eventually 

be able to be removed from quarantine. 

Under the regulations in § 301.86– 

3(d), producers have had the option of 

maintaining their fields under 

quarantine or participating in a 

biosurvey protocol sufficient to declare 

the field free of PCN. Options for 

ensuring that an infested field is free of 

PCN include participating in the APHIS 

eradication program for PCN or not 

planting any host crops in a quarantined 

field for enough time that any PCN that 

are present can no longer survive. The 

latter option requires not planting host 

crops for 30 years, meaning that affected 

producers may judge it to be in their 

best interest to participate in the 

eradication program. 

Federal action is necessary to prevent 

the spread of PCN into noninfested 

areas and thus prevent economic 

impacts on a much greater number of 

producers than are currently affected by 

the PCN quarantine. We have 

determined that it is not appropriate to 

pay compensation to affected producers; 

however, APHIS has assumed the cost 

of implementing the eradication 

program and will continue to do so, 

subject to the availability of funds. 

One commenter stated that we had 

not given advance notice of the addition 

of a field owned by the commenter to 

the quarantined area and that such 

notice should have been given. 

We provided notice of the changes in 

the quarantined area on November 1, 

2007, consistent with § 301.86–3 of the 

regulations. 

We are making one additional change 

to the regulations established by the 

interim rule. Paragraph § 301.86–3(d)(1) 

of the interim rule stated that an 

infested field will be removed from 

quarantine when a 3-year biosurvey 

protocol approved by APHIS has been 

completed and the field has been found 

to be free of PCN. At the time of 

publication of the interim rule, we 

believed that a 3-year biosurvey 

protocol would be sufficient to support 

removal of an infested field from 

quarantine, although we had not yet 

worked out the specific requirements for 

such a procedure. However, with input 

from stakeholders and from an 

independent international science 

panel, we have refined and continue to 

refine the protocol that will be sufficient 

to support removal of an infested field 

from quarantine. We will continue to 

solicit input from affected producers, 

State departments of agriculture, 

researchers, and the general public as 

we develop the protocol, and we will 

update affected producers and other 

interested parties on our progress. To 

ensure that the regulations recognize 

whatever bioassay protocol we 

ultimately determine to be sufficient, we 

are changing the regulations for removal 

of infested fields from quarantine to 

refer more generically to a protocol 

approved by the Administrator as 

sufficient to support removal of infested 

fields from quarantine. 

Paragraph § 301.86–3(d)(2) of the 

interim rule stated that an associated 

field will be removed from quarantine 

when the field has been found to be free 

of PCN according to a survey protocol 

approved by the Administrator as 

sufficient to support removal from 

quarantine. To avoid confusion with the 

requirement for removing infested fields 

from quarantine, we are changing 

paragraph (d)(2) to refer to a protocol 

approved by the Administrator as 

sufficient to support removal of 

associated fields from quarantine. 

Therefore, for the reasons given in the 

interim rule and in this document, we 

are adopting the interim rule as a final 

rule, with the changes discussed in this 

document. 

This final rule also affirms the 

information contained in the interim 

rule concerning Executive Orders 

12866, 12372, and 12988 and the 

Paperwork Reduction Act. 

Further, this action has been 

determined to be not significant for the 

purposes of Executive Order 12866 and, 

therefore, has not been reviewed by the 

Office of Management and Budget. 

Effective Date 

Pursuant to the administrative 

procedure provisions in 5 U.S.C. 553, 

we find good cause for making this rule 

effective less than 30 days after 

publication in the Federal Register. The 

interim rule adopted as final by this rule 

became effective on November 1, 2007. 

This rule amends the testing 

requirements and provisions for 

interstate movement established by the 

interim rule. Immediate action is 

necessary to make these changes in 

order to prevent the artificial spread of 

PCN to noninfested areas of the United 

States. Therefore, the Administrator of 

the Animal and Plant Health Inspection 

Service has determined that this rule 

should be effective upon publication in 

the Federal Register. 

Regulatory Flexibility Act 

This final rule follows an interim rule 

that amended the regulations by 

quarantining part of Bingham and 

Bonneville Counties, ID, because of the 

presence there of PCN and restricting 

the interstate movement of regulated 

articles from the quarantined area. On 

November 1, 2007, the quarantined area 

was updated to add fields in both 

Bingham and Bonneville Counties, ID, 

and to add fields in Jefferson County, 

ID. These are the first detections of PCN 

in the United States. This analysis 

considers the economic effects of the 

regulations on the current quarantined 

area and the benefits of imposing the 

quarantine. 

Expected benefits and costs are 

examined, including expected economic 

impacts for small entities as required by 

the Regulatory Flexibility Act. 

U.S. Production and Exports 3

Potatoes, excluding sweet potatoes, 

are a staple crop grown in a majority of 

U.S. States. They are also the lead 

vegetable crop in the United States. The 

Russet variety, which is planted in the 

spring and harvested in the fall, 

accounts for approximately 75 percent 

of the total U.S. acreage planted to 

potatoes. Ninety percent of all potatoes 

are harvested in the fall, with the 

remaining 10 percent harvested in the 

other three seasons. This 10 percent of 

production accounts for specialty 

varieties that typically command higher 

prices, such as round white, red, yellow, 

and purple potatoes. 

From 2001 to 2006, acreage planted to 

fall potatoes fell by 9 percent while 

production of this variety decreased by 

4 percent throughout the United States. 

The decline in Idaho’s acreage and 

production was sharper, falling by 21 

percent and 18 percent, respectively. 

Yields over the same period increased 

in both the United States and Idaho. Fall 

potatoes are marketed year round from 


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Federal Register / Vol. 74, No. 81 / Wednesday, April 29, 2009 / Rules and Regulations 19377 

4Office of Communications of USDA. Release 

number 0050.06, February 2006. Online news 

release: http://www.usda.gov/wps/portal/!ut/p/_s.7_

0_A/7_0_1OB/.cmd/ad/.ar/sa.retrievecontent/.c/6_

2_1UH/.ce/7_2_5JM/.p/5_2_4TQ/_th/J_2_9D/_s.7_

0_A/7_0_1OB?PC_7_2_5JM_contentid=2006%

2F02%2F0050.xml&PC_7_2_5JM_parentnav=

LATEST_RELEASES&PC_7_2_5JM_navid=NEWS_

RELEASE. Accessed September 2006. 

July (early harvest areas) through June. 

Potatoes can be stored for long periods 

of time. This storage capability allows 

flexibility in marketing; sellers can hold 

their crop until more favorable prices 

prevail on the market. Fresh potatoes 

are mainly sold on the open market, not 

under contract. Processing potatoes, on 

the other hand, are typically contracted. 

TABLE 1—PRODUCTION AND FARM PRICES OF FALL POTATOES IN THE UNITED STATES; IDAHO; AND BINGHAM, 

BONNEVILLE, AND JEFFERSON COUNTIES, ID, 2001–2006 

United States Idaho Bingham 

county b

Bonneville 

county b

Jefferson 

county b

Production Farm price Production Farm price Production 

Table stock Processing Table stock Processing All uses 

1,000 Cwt. $ per Cwt. 1,000 Cwt. $ per Cwt. 1,000 Cwt. 1,000 Cwt. 1,000 Cwt. 

2001 .................. 393,631 10.79 5.05 120,200 (a) (a) 6.15 18,330 8,136 10,047 

2002 .................. 413,581 9.59 5.16 133,385 (a) (a) 5.00 20,000 9,204 13,029 

2003 .................. 410,588 7.32 5.10 123,180 3.85 4.30 4.40 19,598 8,537 10,645 

2004 .................. 410,253 6.76 5.06 131,970 3.40 4.50 4.25 20,740 9,070 9,200 

2005 .................. 382,743 10.36 5.39 118,288 6.90 4.90 5.70 18,080 8,250 9,360 

2006 .................. 398,921 10.27 5.90 128,915 6.55 5.40 5.90 20,200 9,930 9,100 

aPrices by use not available for these years. 

b No data available for prices at the county level. 

Source: U.S. Department of Agriculture, National Agricultural Statistics Service, Potatoes: 2006 Summary, September 2007 and USDA, NASS, 

Idaho Office, County Estimates: Potatoes 2006, September 2007. 

The United States ranks fourth in the 

world in potato production, trailing 

China, Russia, and India. Historically, 

the United States has been a net 

exporter of potatoes in value terms, with 

exports of processed potatoes 

accounting for a large portion of this 

surplus. In 2003 and 2004, an increase 

in imports of processed potato products 

from Canada tipped this balance so that 

the United States ran a trade deficit in 

those years. However, imports of 

Canadian potato products returned to 

historical levels in 2005, and the United 

States regained its status as a net 

exporter. Exports of potatoes are on the 

rise and now account for approximately 

one-third of the value of farm sales. 

Over half of these exports are processed 

products, primarily frozen french fries. 

Japan is the United States’ largest 

importer of frozen fries, followed by 

Mexico and Canada. Canada is the 

largest supplier of U.S. potato imports. 

Although, historically, Japan has been 

the largest importer of U.S. frozen 

potato products, this country banned 

imports of fresh potatoes from the 

United States starting in the 1950s. 

However, in February of 2006, Japan 

opened its market to the importation of 

fresh potatoes from approved facilities 

in 14 States: Arizona, California, 

Colorado, Florida, Idaho, Maine, 

Michigan, Minnesota, New Mexico, 

North Dakota, Texas, Oregon, 

Washington, and Wisconsin (OC 2006).4

The outbreak of PCN in Idaho has led 

to the reimplementation of Japan’s ban 

on fresh potatoes from the United 

States. 

Idaho Production and Exports 

Idaho specializes in production of fall 

potatoes. According to NASS data, there 

were no spring, summer, or winter 

potatoes produced in Idaho from 2001 

to 2006. Over 65 percent of fall potatoes 

are grown in the Western States. Idaho 

and Washington account for 50 percent 

of the U.S. total, where planted acreage 

in Idaho is more than double that in 

Washington. Idaho’s importance to the 

domestic potato industry also makes 

this State influential in the world 

market for potatoes. Idaho exports a 

substantial amount of potatoes on a 

yearly basis. However, the majority of 

these exports is processed rather than 

fresh. This analysis only focuses on the 

fresh market, since this is the portion 

that will be affected by the final rule. 

From 2001 to 2006, the annual value of 

Idaho’s table potato exports averaged 

$3.6 million. Sixty-seven percent of 

Idaho’s fresh exports during this period 

were to Canada. Mexico also imported 

potatoes from Idaho, accounting for 23 

percent of Idaho exports. Japan is a 

substantial importer of U.S. processed 

potato products, but its imports of fresh 

potatoes have been negligible or 

nonexistent. 

Together, Canada and Mexico 

accounted for approximately 90 percent 

of Idaho exports between 2001 and 

2006, although Idaho’s fresh potato sales 

worldwide and the combined share 

exported to Canada and Mexico have 

fluctuated substantially (table 2). 

Mexico has been an expanding market, 

with sales increasing 90-fold over this 6- 

year period, while exports to Canada 

have declined by more than half. In 

2005, Idaho’s potato exports to Mexico 

exceeded its potato exports to Canada 

for the first time. 

TABLE 2—IDAHO EXPORTS OF FRESH POTATOES BY COUNTRY, 2001–2006 

World Canada Mexico Japan 

Exports 

($1,000) 

Exports 

($1,000) 

Percentage 

of total 

Exports 

($1,000) 

Percentage 

of total 

Exports 

($1,000) 

Percentage 

of total 

2001 ......................................................... 3,622 3,209 88.6 34 0.9 43 1.2 

2002 ......................................................... 3,472 3,200 92.2 12 0.3 0 0.0 

2003 ......................................................... 1,988 1,988 100.0 0 0.0 0 0.0 

2004 ......................................................... 1,485 1,096 73.8 338 22.8 0 0.0 

2005 ......................................................... 6,643 1,485 22.4 2,967 44.7 0 0.0 


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5This estimate is based on historical yields from 

Bingham, Bonneville, and Jefferson Counties, ID, 

and the estimated number of acres quarantined 

under the rule. An average of the yields from 2001 

to 2006 excluding the high and low yields from the 

period is multiplied by the number of acres 

quarantined to estimate the level of production in 

each county for the quarantine area. The production 

numbers for the three counties are then summed to 

obtain the upper-bound estimate reported above. 

TABLE 2—IDAHO EXPORTS OF FRESH POTATOES BY COUNTRY, 2001–2006—Continued 

World Canada Mexico Japan 

Exports 

($1,000) 

Exports 

($1,000) 

Percentage 

of total 

Exports 

($1,000) 

Percentage 

of total 

Exports 

($1,000) 

Percentage 

of total 

2006 ......................................................... 4,518 1,190 26.3 3,086 68.3 0 0.0 

Source: Global Trade Information Services, World Trade Atlas: U.S. State Export Edition, April 2007. 

Based upon available data and 

expected effects, we believe that the 

benefits of the rule, in terms of 

curtailing the spread of the pest, will 

outweigh the costs borne by producers 

in the quarantined area. Major importers 

of fresh potatoes from Idaho, including 

Canada and Mexico, have lifted their 

import prohibitions imposed following 

the PCN discoveries and now allow 

imports of fresh potatoes from Idaho 

subject to certain restrictions, including 

that the potatoes do not originate from 

the quarantined area. Since the United 

States exports many more potatoes in 

the processed form, either as frozen 

french fries or potato chips, any loss of 

foreign markets for fresh potatoes is not 

likely to have significant economic 

impacts on the U.S. potato industry. 

Additionally, the domestic market will 

be able to absorb any excess supply of 

fresh potatoes resulting from import 

bans imposed by other countries. 

In the following analysis, we first 

consider potential costs of the rule for 

producers in the quarantined area. 

Possible benefits of the rule, in terms of 

preventing the spread of PCN to other 

States, are then examined. Lastly, we 

address expected impacts for small 

entities. 

Expected Costs of the Rule 

Costs for Producers in the Quarantined 

Area 

As of December 1, 2008, 

approximately 17,376 of the 335,000 

acres planted to potatoes in Idaho were 

included in the current quarantined 

area. However, of these acres, only 1,079 

were infested with PCN. The rest were 

regulated as associated fields. The 

potential economic impacts of 

regulating this area are presented in the 

following paragraphs. 

Given a quarantined area of 

approximately 17,376 acres, an upperbound annual potato production 

quantity of about 563.7 million pounds 

could be affected by the rule.5 This 

amount represents approximately 3 

percent of total potato production in 

Idaho and slightly more than 1 percent 

of total potato production in the United 

States. However, even these small 

percentages overstate the probable 

impact because the 563.7 million pound 

upper-bound quantity assumes all 

regulated acres would be planted to 

potatoes at any given time, whereas 

potatoes are commonly grown in a 2- to 

3-year rotation with grain. Moreover, 

interstate movement of table potatoes 

and other regulated articles from 

quarantined areas will be allowed when 

accompanied by a certificate or limited 

permit, when field surveys are 

completed and cropping restrictions 

have been met, and when PCN has not 

been found. We note that State officials 

expect a significant decline in the 

acreage planted to potatoes in Idaho this 

year, due to the high price of grain and 

possible water shortages. 

Despite the minimal impacts on 

domestic production, some export 

markets initially did close due to the 

PCN outbreak. However, the majority of 

Idaho potato exports are in the form of 

processed products, not fresh potatoes. 

Idaho’s exports of fresh potatoes 

averaged 2 percent of total exports of 

potato and potato products from 2001 to 

2006. As noted, since the Federal Order 

quarantining certain areas of Idaho was 

implemented on August 28, 2006, major 

foreign markets for fresh potatoes from 

Idaho have reopened, including Canada 

and Mexico. Since these two countries 

account for approximately 90 percent of 

Idaho fresh exports, the impact of the 

rule on fresh potato exports is likely to 

be very small. 

Producers whose fields are infested 

and who wish to remove those fields 

from quarantine may choose either not 

to plant any host crop, including 

potatoes, tomatoes, eggplants, peppers, 

or tomatillos, for 30 years or to engage 

in the APHIS eradication program. 

Producers may plant non-host crops on 

the quarantined acreage. According to 

APHIS field personnel, prior to the 

implementation of the Federal Order, 

producers in the three affected counties 

historically planted potatoes in a 2-year 

rotation with grain. If, because of the 

rule, a producer chooses to plant 

alternative crops entirely, it would 

likely be a continuous grain rotation or 

a rotation of grain and hay. In Bingham 

County, the harvested acreage of 

potatoes trails that of wheat and alfalfa 

hay. Producers in this county also grow 

barley. Data for Bonneville County show 

significant wheat and barley acreage, as 

well as acreage devoted to hay 

production. Jefferson County harvests a 

significant acreage of hay, with 

approximately equivalent acreage 

devoted to barley, wheat, and potatoes, 

combined. Based on historical 

production in the three counties (tables 

3, 4, and 5) and farmers’ options, it is 

likely that farmers subject to the 

quarantine will choose to plant non-host 

crops rather than forgo revenue that 

could be generated from the land under 

quarantine. The planting decision will 

be a function of market prices, input 

costs, and possibly Government 

payments for commodities classified as 

program crops. Farmers may choose to 

plant one commodity or multiple 

commodities depending on these 

factors. Given alternative production 

opportunities, the extent to which 

producers in the quarantined area will 

be negatively affected by the rule cannot 

be clearly defined. However, given that 

the crops mentioned above are viable 

substitutes in production for the 

ineligible host crops, producers will 

likely not face substantial impacts due 

to the quarantine regulations. 


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TABLE 3—HARVESTED ACREAGE AND PRODUCTION OF VARIOUS CROPS IN BINGHAM COUNTY, ID, 2001–2006 

Wheat Barley Hay Potatoes 

Harvested Acres 

2001 ................................................................................................................................. 117,500 21,300 54,300 55,200 

2002 ................................................................................................................................. 116,500 22,500 67,000 59,700 

2003 ................................................................................................................................. 109,000 28,700 66,900 60,300 

2004 ................................................................................................................................. 117,500 26,900 64,500 56,000 

2005 ................................................................................................................................. 122,200 24,300 61,600 52,200 

2006 ................................................................................................................................. 114,500 19,100 72,000 55,800 

Production (1,000 Pounds) 

2001 ................................................................................................................................. 660,000 95,184 472,800 1,833,000 

2002 ................................................................................................................................. 682,200 100,224 568,400 2,000,000 

2003 ................................................................................................................................. 680,400 123,360 512,000 1,959,800 

2004 ................................................................................................................................. 795,600 133,440 514,000 2,074,000 

2005 ................................................................................................................................. 807,960 121,152 583,800 1,808,000 

2006 ................................................................................................................................. 736,500 84,960 705,600 2,020,000 

Source: USDA, NASS, Quick Stats Database, U.S. and All States County Data—Crops, January 2008. 

TABLE 4—HARVESTED ACREAGE AND PRODUCTION OF VARIOUS CROPS IN BONNEVILLE COUNTY, ID, 2001–2006 

Wheat Barley Hay Potatoes 

Harvested Acres 

2001 ................................................................................................................................. 57,400 60,100 34,500 28,700 

2002 ................................................................................................................................. 52,600 68,400 34,700 31,200 

2003 ................................................................................................................................. 46,300 71,300 38,800 29,800 

2004 ................................................................................................................................. 51,000 66,500 37,400 29,900 

2005 ................................................................................................................................. 46,500 69,000 35,600 26,600 

2006 ................................................................................................................................. 52,700 59,200 39,000 29,200 

Production (1,000 Pounds) 

2001 ................................................................................................................................. 192,000 235,680 242,000 813,600 

2002 ................................................................................................................................. 178,800 280,320 256,800 920,400 

2003 ................................................................................................................................. 145,200 210,240 248,000 853,700 

2004 ................................................................................................................................. 214,800 315,456 254,800 907,000 

2005 ................................................................................................................................. 183,900 331,392 263,200 825,000 

2006 ................................................................................................................................. 203,100 264,000 311,000 993,000 

Source: USDA, NASS, Quick Stats Database, U.S. and All States County Data—Crops, January 2008. 

TABLE 5—HARVESTED ACREAGE AND PRODUCTION OF VARIOUS CROPS IN JEFFERSON COUNTY, ID, 2001–2006 

Wheat Barley Hay Potatoes 

Harvested Acres 

2001 ................................................................................................................................. 30,900 41,600 91,500 29,600 

2002 ................................................................................................................................. 27,200 42,700 97,500 36,700 

2003 ................................................................................................................................. 22,700 51,900 101,700 32,000 

2004 ................................................................................................................................. 33,300 56,300 98,000 24,200 

2005 ................................................................................................................................. 31,300 56,700 95,300 24,300 

2006 ................................................................................................................................. 32,800 44,600 98,600 23,400 

Production (1,000 Pounds) 

2001 ................................................................................................................................. 152,100 187,776 835,600 1,004,700 

2002 ................................................................................................................................. 143,160 198,960 913,200 1,302,900 

2003 ................................................................................................................................. 123,900 234,576 926,400 1,064,500 

2004 ................................................................................................................................. 195,600 288,672 911,400 920,000 

2005 ................................................................................................................................. 188,880 276,192 910,000 936,000 

2006 ................................................................................................................................. 197,880 207,840 997,000 910,000 

Source: USDA, NASS, Quick Stats Database, U.S. and All States County Data—Crops, January 2008. 

Expected Benefits of the Rule 

Impacts of the rule on the domestic 

market are likely to be small, and the 

benefits of the quarantine in preventing 

the spread of PCN are expected to 

outweigh the costs. Widespread 

dissemination of the pest would likely 

translate into significant economic 

losses for producers and processors. Left 


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6This number represents the total number of 

farms in Idaho, including farms producing potatoes. 

7Source: SBA and 2002 Census of Agriculture. 

unchecked, PCN attacks the roots of the 

potato plant, leaching nutrients from the 

plant itself, which in turn reduces 

yields, leading to significant declines in 

production. Additionally, import bans 

implemented by U.S. trading partners 

would likely be more widespread and 

take longer to remove. Furthermore, 

producers have the option to plant nonhost crops and keep land in production 

rather than allowing it to remain fallow. 

Cost-Benefit Summary 

Benefits of the regulation in terms of 

preventing the spread of PCN are 

expected to outweigh direct costs to 

affected producers. The rule states that 

an infested field will be removed from 

quarantine when a protocol approved by 

the Administrator as sufficient to 

support removal of infested fields from 

quarantine has been completed and the 

field has been found to be free of PCN. 

One means to ensure that a field is free 

of PCN is to avoid planting host crops 

in it for at least 30 years; PCN can 

survive for up to 30 years in a dormant 

state without any host crops on which 

to feed. PPQ is also developing a 

protocol for eradicating PCN in infested 

fields. As noted earlier, PPQ will solicit 

input from affected producers, State 

departments of agriculture, researchers, 

and the general public to develop the 

protocol and provide updates on its 

progress. When the protocol is finalized, 

APHIS will make it available to the 

public and will pay for its 

implementation, subject to the 

availability of funds. Regardless of the 

eradication means used to ensure that a 

field is free from PCN, however, APHIS 

will require the protocol approved by 

the Administrator as sufficient to 

support removal of infested fields from 

quarantine to confirm that freedom. 

Until eradication of PCN in a field is 

achieved, producers can minimize their 

losses resulting from the regulation by 

planting alternative non-host crops. A 

number of non-host crops have been 

identified as viable substitutes for 

potatoes in the quarantined area. 

Final Regulatory Flexibility Analysis 

The Regulatory Flexibility Act 

requires that agencies consider the 

economic impact of rule changes on 

small businesses, organizations, and 

governmental jurisdictions. Section 604 

of the Act requires agencies to prepare 

and make available to the public a final 

regulatory flexibility analysis (FRFA) 

describing any changes made to the rule 

as a result of comments received and the 

steps the agency has taken to minimize 

any significant economic impacts on 

small entities. Section 604(a) of the Act 

specifies the content of a FRFA. In this 

section, we address these FRFA 

requirements. 

Objectives and Need for the Rule 

The objective of the interim rule and 

this final rule is to prevent the spread 

of PCN by quarantining infested or 

associated fields. A widespread 

outbreak of PCN in Idaho could have 

devastating consequences for the U.S. 

potato industry. APHIS believes the 

implementation of the quarantine and 

movement restrictions will prevent the 

pest from spreading to other areas in 

Idaho and the rest of the United States. 

This will benefit a majority of potato 

producers by safeguarding their fields 

from infestation. 

Summary of Significant Issues Raised 

During Comment Period 

One producer affected by the 

quarantine commented that following 

the protocols established in this rule 

would be logistically difficult and 

would impose an economic burden on 

his operation. In addition, the producer 

felt the rule limited his ability to make 

planting decisions and interfered with 

the potential sale of land. 

The issues raised in this comment 

appear to be an isolated incident where 

the rule may have a significant impact 

on one operation. However, the benefits 

of the rule, in terms of preventing the 

spread of PCN to other areas, outweigh 

the costs described by this producer. 

APHIS has not made any changes in this 

final rule based on this comment. 

Description and Estimated Number of 

Small Entities Regulated 

The final rule will have potential 

implications for domestic producers of 

potatoes, as well as potato processing 

firms. Additionally, producers of other 

host crops and non-host crops also 

regulated under the rule may be 

impacted. It is likely that the entities 

affected will be small according to 

Small Business Administration (SBA) 

guidelines. A discussion of these 

impacts follows. 

Affected U.S. potato producers are 

expected to be small entities, based on 

2002 Census of Agriculture data and 

SBA guidelines for entities in the farm 

category Potato Farming, Field, and 

Seed Potato Production (NAICS 

111211). The SBA classifies producers 

in this farm category with total annual 

sales of not more than $750,000 as small 

entities. APHIS does not have 

information on the size distribution of 

the relevant producers, but according to 

2002 Agriculture Census data, there 

were a total of 25,017 farms in Idaho in 

2002.6 Of this number, approximately 

95 percent had annual sales in 2002 of 

less than $500,000, which is well below 

the SBA’s small entity threshold of 

$750,000 for commodity farms.7 This 

indicates that the majority of farms are 

considered small by SBA standards, and 

it is reasonable to assume that most of 

the 121 potato farms located in Bingham 

County, the 47 potato farms located in 

Bonneville County, and the 32 potato 

farms located in Jefferson County that 

may be affected by this rule also qualify 

as small. Potato packing firms classified 

as NAICS 115114 (Postharvest Crop 

Activities (except Cotton Ginning)) are 

considered small if they have not more 

than $6.5 million in total annual sales. 

According to the County Business 

Patterns report for Idaho published by 

the Census Bureau, there were 22 postharvest establishments in Idaho in 2005, 

the latest date for which numbers were 

published. Of these, one was located in 

Bingham County and one was located in 

Bonneville County; there were no 

establishments reported for Jefferson 

County. This document does not report 

the value of total annual sales or the 

distribution of annual sales for firms in 

this category. Thus, it is not known 

what percentage of potato packing firms 

are small. 

In addition to potato farms, producers 

engaged in growing other host crops, 

including tomatoes, eggplants, peppers, 

and tomatillos, and non-host crops that 

may be moved with soil attached, 

including garden and dry beans and 

peas, are subject to regulation and 

expected to be small entities according 

to SBA standards. The crops listed 

above are all classified within NAICS 

111219 (Other Vegetable (except Potato) 

and Melon Farming). Firms with total 

annual sales of less than $750,000 are 

considered small entities. As discussed 

earlier, APHIS does not have data at a 

sufficiently detailed level to determine 

which farms in these categories are 

considered small. However, it is 

reasonable to assume that if 95 percent 

of total Idaho farms are small by SBA 

guidelines, a majority of the farms 

classified under NAICS 111219 can also 

be considered small. Although it is 

assumed that most if not all vegetable 

(except potato) farms in Bingham, 

Bonneville, and Jefferson Counties are 

small, NASS does not report any of 

these types of farms in the affected 

counties, nor is there any production 

data for these crops in any of the 

affected counties. Therefore, there is 

likely to be at most a very small impact 


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8Source: SBA and 2002 Economic Census. 

2Permit and other requirements for the interstate 

movement of pale cyst nematodes are contained in 

part 330 of this chapter. 

as a result of regulations concerning 

other host crops and non-host crops 

moved with soil attached. 

In the case of potato processors, 

establishments classified within NAICS 

311411 (Frozen Fruit, Juice, and 

Vegetable Manufacturing), NAICS 

311423 (Dried and Dehydrated Food 

Manufacturing), NAICS 311919 (Other 

Snack Food Manufacturing), and NAICS 

311991 (Perishable Prepared Food 

Manufacturing) with not more than 500 

employees are considered small entities 

by SBA standards. Data from the 

Economic Census show that in 2002, 

there were a total of 235 frozen fruit, 

juice, and vegetable manufacturing 

establishments, including firms 

manufacturing frozen french fries, in the 

United States. Of these firms, 215, or 92 

percent, employed fewer than 500 

employees and were, therefore, 

considered small entities by SBA 

standards. There were 181 dried and 

dehydrated food manufacturing 

establishments in 2002. Included in this 

category are manufacturers of 

dehydrated potato products. There were 

176 firms with less than 500 employees 

in this category, accounting for 97 

percent of all firms. For other snack 

food manufacturing establishments, 

which includes firms manufacturing 

potato chips, there were 338 

establishments in the United States in 

2002. Of these establishments, 322 (over 

95 percent) had fewer than 500 

employees. Firms manufacturing peeled 

or cut potatoes, included in the 

perishable prepared food manufacturing 

category, numbered 610 in 2002. Of 

these, 603 (99 percent) had no more 

than 500 employees.8 Based on this 

information, it is reasonable to conclude 

that domestic producers and potato 

processors that may be affected by the 

rule are predominantly small entities. 

Based on the data available to APHIS, 

benefits to producers outside the 

regulated area of curtailing the spread of 

the pest will likely outweigh the costs 

borne by affected producers. Major 

importers of fresh potatoes from Idaho, 

including Canada and Mexico, have 

lifted import prohibitions they imposed 

following the PCN discoveries and now 

allow imports of fresh potatoes from 

Idaho subject to certain restrictions, 

including that the potatoes do not 

originate from the quarantined area. 

Since the United States exports many 

more potatoes in the processed form, 

either as frozen french fries or potato 

chips, any loss of fresh markets is not 

likely to have significant economic 

impacts on the U.S. potato industry. 

Additionally, the domestic market 

would likely be able to absorb any 

excess supply of fresh potatoes resulting 

from the import bans imposed by other 

countries. 

Description and Estimate of Compliance 

Requirements 

Inspection services required to 

comply with regulations are provided to 

producers at no cost. Certificates and 

limited permits required to move 

regulated articles out of a quarantined 

area may be obtained without cost from 

an inspector or person operating under 

a compliance agreement. 

Description of Steps Taken To Minimize 

Significant Economic Impacts on Small 

Entities 

APHIS has concluded that there are 

no alternatives to the rule that would 

satisfactorily accomplish the stated 

objectives and minimize any significant 

impacts on small entities. The rule will 

protect potato producers outside the 

regulated area from the crop damage 

and losses that would be incurred if the 

pale cyst nematode were allowed to 

spread. 

List of Subjects in 7 CFR Part 301 

Agricultural commodities, Plant 

diseases and pests, Quarantine, 

Reporting and recordkeeping 

requirements, Transportation. 

■ Accordingly, the interim rule 

amending 7 CFR parts 301 and 305 that 

was published at 72 FR 51975–51988 on 

September 12, 2007, is adopted as a 

final rule with the following changes: 

PART 301—DOMESTIC QUARANTINE 

NOTICES 

■ 1. The authority citation for part 301 

continues to read as follows: 

Authority: 7 U.S.C. 7701–7772 and 7781– 

7786; 7 CFR 2.22, 2.80, and 371.3. 

Section 301.75–15 issued under Sec. 204, 

Title II, Public Law 106–113, 113 Stat. 

1501A–293; sections 301.75–15 and 301.75– 

16 issued under Sec. 203, Title II, Public Law 

106–224, 114 Stat. 400 (7 U.S.C. 1421 note). 

Subpart—Pale Cyst Nematode 

■ 2. The heading of the subpart 

consisting of §§ 301.86 through 301.86– 

9 is revised to read as set forth above. 

■ 3. Section 301.86–1 is amended as 

follows: 

■ a. By removing the definition for 

‘‘potato cyst nematode’’. 

■ b. By adding, in alphabetical order, a 

definition of ‘‘pale cyst nematode’’ to 

read as set forth below. 

■ c. In the definitions of ‘‘associated 

field’’, ‘‘certificate’’, ‘‘infestation 

(infested)’’, and ‘‘infested field’’, by 

removing the word ‘‘potato’’ and adding 

the word ‘‘pale’’ in its place each time 

it occurs. 

§ 301.86–1 Definitions. 

Pale cyst nematode. The pale cyst 

nematode (Globodera pallida), in any 

stage of development. 

■ 4. Section 301.86–2 is amended as 

follows: 

■ a. By revising paragraph (a), including 

footnote 2, to read as set forth below. 

■ b. In paragraphs (b) and (i), by 

removing the word ‘‘potato’’ and adding 

the word ‘‘pale’’ in its place each time 

it occurs. 

§ 301.86–2 Regulated articles. 

(a) Pale cyst nematodes.2

§ 301.86–3 [Amended] 

■ 5. Section 301.86–3 is amended as 

follows: 

■ a. In paragraphs (a), (b)(2), (c), and 

(d)(2), by removing the words ‘‘potato 

cyst’’ and adding the words ‘‘pale cyst’’ 

in their place each time they occur. 

■ b. In paragraph (d)(1), by removing the 

words ‘‘3-year biosurvey protocol 

approved by APHIS’’ and adding the 

words ‘‘protocol approved by the 

Administrator as sufficient to support 

removal of infested fields from 

quarantine’’ in their place; and by 

removing the word ‘‘PCN’’ and adding 

the words ‘‘pale cyst nematode’’ in its 

place. 

■ c. In paragraph (d)(2), by removing the 

word ‘‘survey’’ and by adding the words 

‘‘of associated fields’’ after the word 

‘‘removal’’. 

■ 6. Section 301.86–5 is amended as 

follows: 

■ a. In paragraphs (a)(1), (a)(2), (a)(4), 

(a)(5), and (b), by removing the word 

‘‘potato’’ and adding the word ‘‘pale’’ in 

its place each time it occurs. 

■ b. By revising paragraph (a)(3) to read 

as set forth below. 

§ 301.86–5 Issuance and cancellation of 

certificates and limited permits. 

(a) * * * 

(3) Certification requirements for 

potatoes for consumption, root crops for 

consumption, garden or dry beans, and 

peas. An inspector may issue a 

certificate for the movement of potatoes 

intended for consumption, root crops 

intended for consumption, garden or 

dry beans, or peas from the quarantined 

area only if the field in which the 

potatoes, root crops, garden or dry 

beans, or peas were grown meets the 

following requirements: 

(i) The field has been surveyed by an 

inspector for pale cyst nematode at least 


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19382 Federal Register / Vol. 74, No. 81 / Wednesday, April 29, 2009 / Rules and Regulations 

once in the last 3 years and prior to the 

planting of the potatoes or root crops; 

(ii) Pale cyst nematode has not been 

found in the field; and 

(iii) No more than one pale cyst 

nematode host crop, as listed in 

§ 301.86–2(b), has been grown in the 

field in the last 3 years. 

Done in Washington, DC, this 23rd day of 

April 2009. 

Kevin Shea, 

Acting Administrator, Animal and Plant 

Health Inspection Service. 

[FR Doc. E9–9724 Filed 4–28–09; 8:45 am] 

BILLING CODE 3410–34–P 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Part 748 

[Docket No. 090415662–9687–01] 

RIN 0694–AE61 

Additions and Revisions to the List of 

Approved End-Users and Respective 

Eligible Items for the People’s 

Republic of China (PRC) Under 

Authorization Validated End-User 

(VEU) 

AGENCY: Bureau of Industry and 

Security, Commerce. 

ACTION: Final rule. 

SUMMARY: In this final rule, the Bureau 

of Industry and Security (BIS) amends 

the Export Administration Regulations 

(EAR) to add a name to the list of endusers for the People’s Republic of China 

(PRC) approved to receive exports, 

reexports and transfers of certain items 

under Authorization Validated EndUser (VEU). This rule also amends the 

EAR to add and revise eligible items and 

destinations for existing VEU 

authorizations. Specifically, this rule 

amends the EAR to authorize one 

additional VEU and identify its 

respective eligible items for export and 

reexport to the PRC. This rule also 

amends the authorizations of two preexisting VEUs in the PRC. Finally, this 

rule makes a modification to the listed 

name of an existing VEU in the PRC. In 

a final rule published in the Federal 

Register on June 19, 2007, BIS revised 

and clarified U.S. export control policy 

for the PRC, establishing Authorization 

VEU and identifying the PRC as the 

initial eligible destination. In a final rule 

published in the Federal Register on 

October 19, 2007, BIS published the 

names of the first five validated endusers in the PRC that were approved to 

receive certain specified items under 

Authorization VEU. 

DATES: This rule is effective April 29, 

2009. Although there is no formal 

comment period, public comments on 

this regulation are welcome on a 

continuing basis. 

ADDRESSES: You may submit comments, 

identified by RIN 0694–AE61 

(VEUPRCADE), by any of the following 

methods: 

E-mail: publiccomments@bis.doc.gov. 

Include ‘‘RIN 0694–AE61 

(VEUPRCADE)’’ in the subject line of 

the message. 

Fax: (202) 482–3355. Please alert the 

Regulatory Policy Division, by calling 

(202) 482–2440, if you are faxing 

comments. 

Mail or Hand Delivery/Courier: Sheila 

Quarterman, U.S. Department of 

Commerce, Bureau of Industry and 

Security, Regulatory Policy Division, 

14th Street & Pennsylvania Avenue, 

NW., Room 2705, Washington, DC 

20230, Attn: RIN 0694–AE61 

(VEUPRCADE). 

Send comments regarding the 

collection of information associated 

with this rule, including suggestions for 

reducing the burden to Jasmeet Seehra, 

Office of Management and Budget 

(OMB), by e-mail to 

jseehra@omb.eop.gov or by fax to (202) 

395–7285. Comments on this collection 

of information should be submitted 

separately from comments on the final 

rule (i.e., RIN 0694–AE61 

(VEUPRCADE))—all comments on the 

latter should be submitted by one of the 

three methods outlined above. 

FOR FURTHER INFORMATION CONTACT: 

Karen Nies-Vogel, Chairman, End-User 

Review Committee, Bureau of Industry 

and Security, U.S. Department of 

Commerce, 14th Street & Pennsylvania 

Avenue, NW., Washington, DC 20230; 

by telephone (202) 482–3811, or by email to kniesv@bis.doc.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

Authorization Validated End-User 

(VEU): Additions and Modifications to 

the List of Approved End-Users, Eligible 

Items and Destinations 

Consistent with U.S. Government 

policy to facilitate trade for civilian endusers in the PRC, BIS amended the EAR 

in a final rule on June 19, 2007 (72 FR 

33646) by creating a new authorization 

for ‘‘validated end-users’’ (VEUs) 

located in eligible destinations to which 

eligible items (commodities, software 

and technology, except those controlled 

for missile technology or crime control 

reasons) may be exported, reexported or 

transferred under a general 

authorization instead of a license, in 

conformance with Section 748.15 of the 

EAR. 

Authorization VEU is a mechanism to 

facilitate increased high-technology 

exports to companies in the PRC and 

India that have a record of using such 

items responsibly. VEUs may obtain 

eligible items that are on the Commerce 

Control List without having to wait for 

their suppliers to obtain export licenses 

from BIS. A wide range of items are 

eligible for shipment under 

Authorization VEU. In addition to U.S. 

exporters, Authorization VEU may be 

used by foreign reexporters, and does 

not have an expiration date. 

Additional VEUs in the PRC and Their 

Respective ‘‘Eligible Items (By ECCN)’’ 

and ‘‘Eligible Destinations’’ 

This final rule amends Supplement 

No. 7 to Part 748 of the EAR to identify 

an additional company with eligible 

facilities in the PRC as a VEU and to 

identify the items that may be exported, 

reexported or transferred to it under 

Authorization VEU. This new entry is 

for Aviza Technology China. It lists 

Export Control Classification Numbers 

(ECCNs) 2B230, 3B001.c.1.a and 

3B001.e under ‘‘Eligible Items (By 

ECCN),’’ and includes the following 

facility names and addresses under 

‘‘Eligible Destination:’’ 

Aviza Technology China, Room B–1501, 

No. 188, Tomson Center, Zhang Yang 

Road, Shanghai, China 200122. 

Aviza Technology China, Room 612, 

International Business Center, No. 18, 

Hong Da North Road, Beijing 

Economics and Technology 

Development Area, Beijing, China. 

Beijing Bonded: CIES, Electronics 

Building, A23, Fuxing Road, Beijing, 

China 100036. 

Shanghai Bonded: SLC, Shanghai 

Industrial-Wailianfa International 

Logistics Co., Ltd., Address: 13F 

Waigaoqiao Building, 889 Yang Gao 

Road(N), Pudong, Shanghai, China. 

HMG Logistics (Chengdu) Co., Ltd., 

Floor 1, No. 5 Standard Warehouse, 

EPZ (West Area), Chengdu, China 

611731. 

Modifications to Existing VEU 

Authorizations 

This final rule also amends 

Supplement No. 7 to Part 748 of the 

EAR to implement requests received 

from existing VEUs for modifications in 

their authorizations to include 

additional eligible items and additional 

destinations, and to list a change of 

name for an existing VEU. Specifically, 

this rule makes the following 

amendments to Supplement No. 7 to 

Part 748: 


tjames on PRODPC75 with RULES