[Federal Register Volume 83, Number 11 (Wednesday, January 17, 2018)]
[Proposed Rules]
[Pages 2412-2421]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-00653]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Part 300

[Docket No. 161228999-7867-01]
RIN 0648-BG51


Commerce Trusted Trader Program

AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and 
Atmospheric Administration (NOAA), Commerce.

ACTION: Proposed rule; request for comments.

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SUMMARY: The National Marine Fisheries Service is proposing this 
Commerce Trusted Trader Program (CTTP) as part of an effective seafood 
traceability process to combat Illegal, Unreported, and Unregulated 
(IUU) fishing and seafood fraud. The voluntary CTTP supplements the 
Seafood Import Monitoring Program (SIMP), recently implemented under 
the Magnuson-Stevens Fishery Conservation and Management Act. Qualified 
importers who choose to participate in the CTTP would benefit from 
reduced reporting and recordkeeping requirements, and streamlined entry 
into U.S. commerce for seafood imports subject to the SIMP.

DATES: Written comments must be received by March 19, 2018.

ADDRESSES: Written comments on this action, identified by NOAA-NMFS-
2016-0165, may be submitted by either of the following methods:
    <bullet<ls-thn-eq> Federal eRulemaking Portal: Go to http://www.regulations.gov/#!docketDetail;D=NOAA-NMFS-2016-0165, click the 
``Comment Now!'' icon, complete the required fields, and enter or 
attach your comments.
    <bullet> Mail: Melissa Beaudry, Office of International Affairs and 
Seafood Inspection, NOAA Fisheries, 1315 East-West Highway, Silver 
Spring, MD 20910.

[[Page 2413]]

    Instructions: All comments received are a part of the public record 
and will generally be posted to http://www.regulations.gov without 
change. All personal identifying information (for example, name and 
address) voluntarily submitted by the commenter may be publicly 
accessible. Do not submit confidential business information or 
otherwise sensitive or protected information. NMFS will accept 
anonymous comments. Enter N/A in the required fields if you wish to 
remain anonymous. Attachments to electronic comments will be accepted 
in Microsoft Word, Excel, WordPerfect, or Adobe portable document file 
(PDF) formats only.
    Written comments regarding the burden-hour estimates or other 
aspects of the collection-of-information requirements contained in this 
proposed rule may be submitted to the NOAA Fisheries Office of 
International Affairs and Seafood Inspection (IASI) and by email to: 
<a href="/cdn-cgi/l/email-protection#1f50564d5e404c6a7d72766c6c7670715f70727d317a706f31787069"><span class="__cf_email__" data-cfemail="b8f7f1eaf9e7ebcddad5d1cbcbd1d7d6f8d7d5da96ddd7c896dfd7ce">[email protected]</span></a> or fax to (202) 395-7285.

FOR FURTHER INFORMATION CONTACT: Melissa Beaudry, Office of 
International Affairs and Seafood Inspection, NOAA Fisheries (phone 
(301) 427-8308, or email <a href="/cdn-cgi/l/email-protection#baf7dfd6d3c9c9db94f8dfdbcfdec8c3fad4d5dbdb94ddd5cc"><span class="__cf_email__" data-cfemail="68250d04011b1b09462a0d091d0c1a112806070909460f071e">[email protected]</span></a>).

SUPPLEMENTARY INFORMATION: 

Background

    On March 15, 2015, a multi-agency Presidential task force published 
an Action Plan for combatting IUU fishing and seafood fraud. This 
Action Plan called for the identification of the seafood species most 
``at-risk'' for IUU fishing or subject to significant seafood fraud, 
and the development of a traceability program to track these 
``priority'' species from point of harvest to entry into U.S. commerce, 
with eventual expansion of the program to all seafood species imported 
into the United States. A final rule containing measures to address 
imported fish and fish products as part of this traceability program--
called the SIMP)--became effective on January 9, 2017, with a 
compliance date of January 1, 2018 for most priority species (81 FR 
88975; December 9, 2016).
    The Action Plan also called for the development of a voluntary 
Commerce Trusted Trader Program (CTTP) for importers of species that 
are subject to the SIMP. The CTTP is intended to provide the benefits 
of reduced reporting and recordkeeping requirements and streamlined 
entry of applicable species into the United States for importers who 
are approved as Commerce Trusted Traders (CTTs).
    U.S. Customs and Border Protection (CBP) and the U.S. Food and Drug 
Administration (FDA) are both developing their own voluntary Trusted 
Trader programs designed to reduce costs to both the government and 
industry, and streamline processing of imports. While the CTTP shares 
many features with these programs, it is designed and intended to apply 
only to the SIMP.
    A critical element of the CTTP is the assurance that the entire 
supply chain for species covered by SIMP, from point of harvest to 
entry into U.S. commerce, is legal and documented, and that the entry 
of illegally harvested and misrepresented fishery products into the 
U.S. market is prevented. The program is intended to increase the 
security of the supply chain while reducing the burden of compliance 
for those importers who qualify for CTT status. This proposed rule, if 
adopted, would establish the qualifying criteria and application 
procedures for approval as a CTT. It would also establish requirements 
for a Trusted Trader Compliance Plan, recordkeeping, and third-party 
audits for CTTP participants. Under the proposed rule, a CTT would be 
required to establish a secure supply chain (free of IUU fish or fish 
product and falsely labeled seafood product) and maintain, either 
directly or through a third party, the records necessary to verify the 
legality of all seafood products subject to SIMP that he or she enters 
into U.S. commerce. Compliance with these requirements would replace 
the SIMP requirement to enter harvest event data into the International 
Trade Data System (ITDS) at the time of filing an entry, and would 
provide increased flexibility for complying with SIMP recordkeeping 
requirements.
    The CTT would be expected to produce all traceability documentation 
associated with an entry filing subject to the SIMP within 14 days upon 
request by NMFS to support an audit and to make such documentation 
available for inspection, but would have significantly reduced 
reporting requirements for imports of SIMP species. With the exception 
of any records or documents required by other state or Federal 
programs, such as the Tuna Tracking and Verification Program (TTVP) or 
FDA's Prior Notice of Imported Food the CTT would only be required to 
enter their International Fisheries Trade Permit (IFTP) number and 
species codes into the ITDS at the time of entry filing.

I. Qualifying Criteria and Application for the Commerce Trusted Trader 
Program

    The CTTP, as proposed, is a voluntary program for U.S. importers of 
record who import, or intend to import, species subject to the SIMP (50 
CFR 300.324(a)(2)). This proposed rule provides that certain criteria 
must be met in order for an importer to be approved as a CTT. In 
addition to other requirements specified below, an applicant must be a 
holder of a valid IFTP, which can be obtained via online registration 
through the NMFS National Permitting System at https://fisheriespermits.noaa.gov/npspub/pub_cmn_login/index_live.jsp. IFTP 
regulations are at 50 CFR 300.322. A single IFTP issued to an importer 
of record is valid for imports of all seafood species that require an 
IFTP. Separate permits are not required, for example, if the imported 
species are covered under more than one NMFS import monitoring program 
or the importer trades in more than one covered species. Note, however, 
that for some commodities, permits issued by other agencies may also be 
required (e.g., U.S. Fish & Wildlife Service permits for products of 
species listed under the Convention for International Trade in 
Endangered Species (CITES)).
    In addition to being an IFTP holder, the applicant must submit an 
online application for the CTTP at a website designated by NMFS. 
Incomplete applications will not be reviewed by NMFS. A complete 
application must contain the following:
    (1) The applicant's IFTP number;
    (2) An affirmation that the applicant has no history, during the 
previous five years, of noncompliance (i.e., violations that resulted 
in a finding of liability and assessment of a civil monetary penalty or 
criminal fine) with Federal regulations related to the importation of 
fish or fish products and is currently in compliance with all 
licensing, permitting, and reporting requirements applicable to the 
importation of fish or fish products;
    (3) An affirmation that the applicant is in compliance with other 
state and federal programs, such as the Highly Migratory Species (HMS) 
International Trade Program, Antarctic Marine Living Resources (AMLR) 
Import Export Certification, and the TTVP, as applicable, including 
license and/or registration number(s) applicable to the importation of 
fish or fish products;
    (4) Electronic submission of the applicant's Trusted Trader 
Compliance Plan (see details below); and
    (5) Application fee.
    The amount of the fee is calculated, on at least an annual basis, 
in accordance with the procedures of the NOAA Finance Handbook, 
available from NMFS, for determining the administrative costs of each 
special product or service. The fee may not

[[Page 2414]]

exceed such costs and is specified on each application form. At 
present, the fee is expected to be approximately $30.
    The NMFS Office of International Affairs and Seafood Inspection 
(IASI) will review a CTTP application, as well as the applicant's 
history of compliance with state and federal regulations related to the 
importation of fish or fish products, in determining whether to approve 
the application. If the application is complete and the applicant does 
not have a history of non-compliance with applicable regulations, NMFS 
will approve the application and will issue a letter to the applicant 
that will serve as official documentation of CTT status. If the 
application is incomplete or complete but not approved, NMFS will issue 
a letter to the applicant explaining the reasons why. If NMFS issues 
such a letter, the applicant may respond in writing with additional 
information to address the issues NMFS identified in its letter. After 
reviewing such information, NMFS will issue a letter to the applicant 
indicating if CTT status is approved or explaining the reasons why such 
status continues to not be approved. NMFS' decision is final upon 
issuance of this letter and is not appealable. NMFS looks forward to 
receiving comments on the nature and extent of the application and 
Compliance Plan review.
    While the IFTP must be renewed annually (see 50 CFR 300.322(d)), 
approval under the CTTP remains in effect unless it is revoked (see 
Section IV below).
    For each entry containing species or species groups subject to the 
SIMP, the CTT or designated entry filer must file electronically, at 
the time of entry, the CTT's IFTP number and species to be entered, as 
required under 50 CFR 300.323(a). No further SIMP data needs to be 
provided. NMFS IASI will notify CBP of the decision to grant CTT status 
so that CBP will know that the complete SIMP data set is not required. 
See proposed 50 CFR 300.324(f) for CTT exemptions from SIMP 
requirements.

II. Trusted Trader Compliance Plan

    Under this proposed rule, CTTP applicants must have a written 
Trusted Trader Compliance Plan (Compliance Plan) showing that they have 
a secure and controlled supply chain, including, but not limited to, 
harvest, purchase, landing, shipping, processing, storage, and import 
entry. Importers, regardless of IFTP status, that do not meet these 
requirements will not be approved as CTTs.
    The Compliance Plan must be designed to meet the objective of the 
SIMP in preventing the importation of illegally harvested or 
misrepresented fish and fish products into United States commerce. The 
Compliance Plan may delegate entry filing, recordkeeping and other 
responsibilities to other persons, but such roles must be clearly 
defined in the Compliance Plan, as detailed below. Ultimately, the CTT 
is responsible for adherence to the Compliance Plan and compliance with 
all NOAA import requirements, including all applicable requirements of 
the SIMP and the CTTP, if finalized, and for ensuring the prevention of 
illegally harvested or misrepresented seafood entering U.S. commerce 
through the CTT's import activities.
    The Compliance Plan must, at a minimum, include the following 
components:
    (1) An Internal Control System (see below for requirements);
    (2) Procedures for ensuring that the Compliance Plan and the CTT's 
adherence to it is audited by a certified third party at least annually 
(see below for audit requirements);
    (3) The applicant's written policy and related supporting materials 
on preventing the import of illegally harvested and misrepresented 
seafood, including a description of how the policy is communicated to 
any affected employees, entry filers, representatives, and suppliers or 
other parties in the supply chain, and corrective actions to be taken 
as needed;
    (4) An organizational chart that identifies the persons with 
responsibility for: entry filing; custodianship of recordkeeping 
documents; developing, administering, and implementing the Compliance 
Plan and its component measures; and conducting training to ensure 
effective implementation of the Compliance Plan;
    (5) A signature page completed by the applicant and the individual 
at the highest level of authority in the applicant's organization 
assuming responsibility for implementing the Compliance Plan; and
    (6) Any changes to the Compliance Plan, along with an updated 
signature page and organizational chart must be included in the 
mandatory annual audit report required (see below).

Internal Control System Requirements

    The Internal Control System, which must be documented in the 
Compliance Plan described above, must include traceability monitoring 
procedures for seafood products subject to the SIMP (50 CFR 
300.324(a)(2)). The CTT is responsible for ensuring implementation of 
the Internal Control System, which must include:
    (1) Procedures to verify the legal harvest and landing of fish or 
fish products subject to the SIMP that the CTT enters into U.S. 
commerce. Verification may rely on flag-state or port-state harvest and 
landing records. Certification of legal harvest by the flag-state may 
also be used. In any case, the procedures must be capable of verifying 
the legal harvest and landing of any fish or fish products imported by 
the CTT of species that fall under the SIMP by providing the harvest 
and landing information required by the SIMP regulations at 50 CFR 
300.324(b)(1)-(3). A CTT may establish separate procedures for 
verifying legal harvest and landing from known and trusted fishery 
sources and for verifying legal harvest and landing from new fishery 
sources, and may establish separate measures for each fishery source, 
as appropriate;
    (2) Procedures to enable verification of the full chain of custody 
from point of first landing (or point of aggregation for small-scale 
fisheries) to entry into U.S. commerce (See 50 CFR 300.324(e)). These 
procedures should describe the process(es) that will be followed, and 
documentation that will be used, to verify chain of custody, and 
measures in place to periodically verify the accuracy of that 
documentation;
    (3) Procedures to ensure that chain of custody documentation will 
be provided to NMFS, upon request, within 14 days to support an agency 
audit. Under 50 CFR 300.325(f) of the proposed rule, the Compliance 
Plan must identify who is responsible for maintaining chain of custody 
documentation, the point along the supply chain at which the chain of 
custody documents are stored and how the CTT will ensure access to them 
when necessary. The documentation must be maintained and made available 
for inspection as required under Sec.  300.325(i) of the proposed rule. 
The CTT must be able to access records for no less than two years from 
the date of entry of the product into U.S. commerce, and records must 
be made available for inspection, upon request by NOAA to support an 
agency audit and as necessary for purposes of the annual audit required 
under Sec.  300.325(j);
    (4) Procedures for the CTT (or designee) to perform at least one 
trace-back annually for each species covered by the SIMP imported by 
the CTT. A trace-back is a document review of all industry records that 
follow the product from the point of entry into U.S. commerce backwards 
through all steps of processing, shipping, and storage to

[[Page 2415]]

the point of harvest (or point of first aggregation for small scale 
fisheries);
    (5) Procedures to be taken in response to information that 
illegally harvested or misrepresented fish or fish products have 
entered the supply chain (e.g., notice from NOAA's Office of Law 
Enforcement (OLE) or inclusion of the harvesting vessel in a regional 
fishery management organization's list of vessels that have engaged in 
illegal, unreported and unregulated fishing), measures to ensure that 
such fish or fish products are removed from commerce and further 
shipments are prevented from entering commerce, and procedures for 
promptly informing OLE whether such products are inbound to the United 
States or have entered U.S. commerce;
    (6) Procedures to be taken in response to any supplier in the CTT's 
supply chain for SIMP species being placed on an FDA Import Alert.. 
Import Alerts inform FDA field staff and the public that the Agency has 
enough evidence to allow for Detention Without Physical Examination 
(DWPE) of firms and products that appear to be in violation of FDA laws 
and regulations. These violations could be related to the product, 
manufacturer, shipper and/or other information. More information is 
available online at https://www.fda.gov/ForIndustry/ImportProgram/ActionsEnforcement/ImportAlerts/ucm516428.htmand
    (7) Procedures to regularly review internal controls and update 
procedures in response to changes in the fish or fish products that the 
CTT wants to enter into U.S. commerce, suppliers, or operating 
conditions or non-conformities identified in an audit.
    The CTT must ensure that all information and documentation used for 
internal controls related to the Compliance Plan and Internal Control 
System must remain available for U.S. government audit for no less than 
two years from the date of import entry.
    NMFS seeks comment generally on the required elements of the 
Trusted Trader Compliance Plan, including the Internal Control System. 
NMFS also invites comment on establishing a species-specific CTTP. As 
currently drafted, this proposed rule would allow a CTT to import all 
species subject to SIMP and benefit from reduced reporting requirements 
at the time of import. As an alternative, an applicant for CTT status 
could specify in the CTTP Application and Compliance Plan that it has a 
secure and controlled supply chain for some, but not all, SIMP species 
and request that CTT status be limited to that subset of SMP species. 
Under this species-specific alternative, a CTT would be required to 
comply with all SIMP reporting and recordkeeping requirements for 
imports of SIMP species not specifically included in its Compliance 
Plan. NMFS' analysis of the species-specific CTTP, set out in Section 
1.3.5 of the regulatory impact review (available from NMFS; see 
ADDRESSES), indicates higher compliance costs for CTTs under the 
species-specific CTTP. Since the per entry reporting and recordkeeping 
costs are projected to be greater under SIMP than under CTTP, a CTT who 
chooses to comply with CTTP requirements for only a subset of the 
priority species would be assuming the higher fixed costs of CTTP 
compliance while reducing the economic benefit of that investment that 
accrues to every import entry of a priority species by a CTT through 
the reduction of per entry, incremental costs.
    Additionally, NMFS estimates that its costs for both ITDS/ACE 
programming and effective long-term compliance auditing would be higher 
with a species-specific CTTP. NMFS seeks comment on its assumptions and 
conclusions related to a species-specific CTTP.

III. Procedures for Annual Third-Party Audit

    As noted in Section II, this proposed rule provides that the CTT's 
Compliance Plan must include procedures for a third-party audit. The 
CTT is responsible for ensuring that this third-party audit is 
conducted annually. Paragraphs 300.325(j) and (k) of the proposed rule 
set forth requirements for the audit and auditor certification.

Third-Party Audit Requirements

    At least once annually, the CTT must ensure that an audit is 
conducted by a certified third-party auditor, consistent with the 
requirements of the rule. The purpose of the audit is to evaluate the 
adequacy of the CTT's Compliance Plan in meeting the requirements of 50 
CFR 300.325(f) and the CTT's adherence to that plan. A third-party 
audit should include an opening meeting, during which the auditor will 
discuss audit objectives with the CTT and any personnel supporting the 
audit.
    During each audit, the third party auditor must review the 
Compliance Plan and relevant documents. The CTT must make all records, 
written and electronic, that are pertinent to the Compliance Plan and 
Internal Control System described therein available to the auditor at 
the time of the audit. The auditor will select a minimum of three 
import entries containing SIMP species to serve as the subject of the 
audit. He or she must verify that all processes in the CTT's Compliance 
Plan are being followed and that the Internal Control Plan effectively 
meets the requirements of the CTTP. The auditor must also verify that 
the audited entries can be traced back to legal harvest (or production) 
and landing and that the species contained in the shipment are 
truthfully represented. The auditor must conduct interviews as 
necessary with CTT staff, suppliers, and individuals delegated 
responsibilities under the Compliance Plan and may conduct other 
activities as necessary.
    A CTT must notify NMFS at least 30 days in advance of each third-
party audit. NMFS, at its discretion, may attend a third-party audit as 
an observer or conduct a side-by-side audit. In a side-by-side audit, 
NMFS will review the same documentation as the third party auditor at 
the same time as the third party auditor to evaluate both the 
shipment(s) and performance of the third party auditor. NMFS may also 
conduct an independent audit of a CTT at any time.
    The auditor must have a closing meeting with the CTT or designee to 
review observed weaknesses and any non-conformities with the Compliance 
Plan, and issue a written audit report within 30 calendar days of the 
audit. In the audit report, the auditor must assess the reliability of 
the CTT's Compliance Plan and the CTT's adherence to it, provide 
results of the audit, and identify any non-conformities with the 
Compliance Plan or its implementation. The audit report must include 
the auditor's certifying credentials (see below) and attestations that 
the auditor (i.e., individual auditor(s) and auditing firm): (1) Was 
not involved in developing the CTT's Compliance Plan, and (2) has no 
financial relationship with, or substantial interest in, the CTT 
retaining their services beyond performing the audit and any related 
follow up.
    The CTT is responsible for ensuring that the auditor provides a 
signed and locked electronic copy of the audit report (in .pdf format) 
to the CTT and NMFS IASI no later than 30 days following completion of 
the audit. If the auditor determines that no corrective action is 
needed, the report is considered the final audit report. If the auditor 
determines that corrective action is required to address non-
conformities with the written Compliance Plan or its implementation, 
the report is considered an initial audit report. In that case, within 
60 days following the audit, the CTT must ensure that a signed and 
locked electronic copy of the final audit report (in .pdf format) is 
provided to NMFS

[[Page 2416]]

IASI. The final report must include an explanation, along with relevant 
documentation, of corrective action taken by the CTT and approved by 
the auditor.
    If the CTT fails to provide the audit report to NMFS as required 
above or take acceptable corrective actions as identified in the 
report, NMFS may conduct additional audits at its discretion. NMFS may 
also take additional measures up to and including revocation of CTT 
status, as deemed appropriate by NMFS. CTT third-party audits may be 
combined with other Global Food Safety Initiative (GFSI) or chain of 
custody audits, provided the combined audit is in full compliance with 
the requirements of the CTTP.

Third-Party Auditor Certification and Other Requirements

    Beyond conducting the audit and any related follow up for a CTT, a 
third-party auditor (i.e., individual auditor(s) and auditing firm) 
must not have any other financial relationship with, or substantial 
interest in, the CTT. In addition, an auditor must not have been 
involved in developing the CTT's Compliance Plan. A third-party auditor 
should have some familiarity or experience with the seafood trade to 
ensure accurate and critical review of a CTT's written Compliance Plan 
and the CTT's adherence to it. The third party auditor must be 
certified with respect to, and affirm his or her knowledge of current 
auditing practices and proficiency in conducting process audits, 
identification of non-conformities and review of corrective actions 
taken by the CTT. A third-party must be certified by a competent 
certifying body, as evidenced by one or more of the following:
    (1) Current accreditation or certification by the American 
Institute of Certified Public Accountants (AICPA);
    (2) Current accreditation or certification by the Institute of 
Internal Auditors;
    (3) Current accreditation or certification by the American 
Evaluation Association;
    (4) Current accreditation or certification by a chain of custody 
certifying body;
    (5) Current accreditation or certification by Accreditation 
Services International; or other nationally recognized certifying 
organizations;
    (6) Evidence of current peer-review certification such as Certified 
Quality Auditor (CQA), Certified Internal Auditor (CIA), Certified 
Public Accountant (CPA), and Certified HACCP Auditor (CHA);
    (7) Successful completion of auditor training recognized by the 
International Register of Certified Auditors (IRCA) or Registrar 
Accreditation Board and Quality Society of Australasia (RABQSA), in 
environmental management standards (EMS); quality management standards 
(QMS); or Global Food Safety Initiative (GFSI), and registration with 
IRCA or RABQSA as an EMS or QMS auditor; or
    (8) Other training or certification approved in writing by NMFS.

IV. Revocation of CTT Status

    While the IFTP must be renewed annually (see 50 CFR 300.322(d)), 
approval under the CTTP remains in effect unless revoked under this 
section. If a CTT fails to comply with requirements of the Program as 
detailed above, NMFS may issue a Notification Letter to the CTT that:
    (1) Identifies the alleged failure to comply with Commerce Trusted 
Trader Program regulations and requirements;
    (2) Describes the indications and evidence of the alleged failure;
    (3) Sets a Response Date by which the CTT must submit to NMFS a 
written response to the Notification Letter, including, if applicable, 
a proposed solution; and
    (4) Explains the CTT's options if the CTT believes the Notification 
Letter is in error.
    NMFS will establish a Response Date between 14 and 30 calendar days 
from the date of the Notification Letter. The CTT's response must be 
received in writing by NMFS on or before the Response Date. If the CTT 
fails to respond by the Response Date, CTT status will be revoked. A 
CTT who has submitted a timely response may meet with NMFS within 21 
calendar days of the date of that response to discuss a detailed and 
agreed-upon procedure for resolving the alleged failure to comply with 
the Commerce Trusted Trader Program regulations and requirements.
    If the CTT disagrees with the Notification Letter and believes that 
there is no failure to comply with CTTP regulations and requirements, 
NMFS has incorrectly defined or described the failure, or NMFS is 
otherwise in error, the CTT may submit a written Objection Letter to 
NMFS on or before the Response Date. Within 21 calendar days of the 
date of the Objection Letter, the CTT may meet with NMFS to discuss a 
resolution or redefinition of the issue. If modifications to any part 
of the Notification Letter are required, then NMFS will issue a revised 
Notification Letter to the CTT; however, the Response Date or any other 
timeline in this process would not restart or be modified unless NMFS 
decides to do so.
    The total process from the date of the Notification Letter to the 
date of final resolution should not exceed 90 calendar days, and may 
require a shorter time frame, to be determined by NMFS, depending on 
the seriousness of the alleged failure. In rare circumstances, NMFS, at 
its discretion, may extend the time for resolution of the alleged 
failure. In such a case, NMFS will provide a written notice to the CTT 
informing him or her of the extension and the basis for the extension. 
If the failure to comply with CTTP requirements cannot be resolved 
through this process, NMFS will issue a Revocation Letter to the CTT 
that:
    (1) States that CTT status has been revoked;
    (2) Summarizes the failure to comply with CTTP requirements;
    (3) Summarizes any proposed procedures, or attempts to produce such 
procedures pursuant to sub-paragraph (3) of this section, to resolve 
the failure;
    (4) Explains why resolution was not achieved; and
    (5) Advises the importer that (1) the importer is no longer exempt 
from the requirements of the SIMP, and (2) the importer may not reapply 
for CTT status for a period of one year. NMFS' decision is final upon 
issuance of the Revocation Letter and is not appealable.

V. Prohibitions

    The proposed rule would amend the existing prohibitions section in 
subpart Q to add five new prohibitions. Specifically, the proposed rule 
would prohibit: (1) Making a false statement on an application for the 
CTTP; (2) the falsification of records required to be maintained under 
50 CFR 300.324(d) or (e) or 300.325; (3) failure to make records 
available for inspection, as required under 50 CFR 300.324(d) or (e) or 
300.325(i); (4) a CTT from failing to maintain records containing 
information on the chain of custody and custodian of fish or fish 
products, provide access to such records to support an agency audit, 
and make such records available for inspection as required (see 50 CFR 
300.325(g)(3) and (i)); and (5) a CTT from failing to implement or 
follow the Trusted Trade Compliance Plan they are required to have in 
place as a condition of being granted, and retaining, that status (see 
50 CFR 300.325 (f) and (g)).
    More information and any updates on the proposed CTTP can be found 
on our website at http://www.iuufishing.noaa.gov/.

[[Page 2417]]

Classification

    This proposed rule is published under the authority of the 
Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C. 
1801 et seq. The NMFS Assistant Administrator has determined that this 
proposed action is consistent with the provisions of this and other 
applicable laws, subject to further consideration after public comment.

Executive Order 12866

    This proposed rule has been determined to be significant for the 
purposes of Executive Order 12866. NMFS has prepared a regulatory 
impact review of this action, which is available from NMFS (see 
ADDRESSES). This analysis describes the economic impact this proposed 
action, if adopted, would have on businesses and consumers. NMFS 
invites the public to comment on this proposal and the supporting 
analysis.
    The regulatory action being considered is described in the preamble 
of this proposed rule. For importers subject to the SIMP, this proposed 
rule would create a voluntary program that includes exemptions from 
SIMP reporting and recordkeeping requirements. NMFS anticipates that 
U.S. persons would not have any significant adverse economic effects as 
a result of this action, because it does not pose any new burdens with 
regard to existing reporting and recordkeeping requirements. On the 
contrary, this rule, if adopted, would reduce reporting and 
recordkeeping requirements under the SIMP for importers who are 
approved as CTTs, and result in positive economic benefits for them. 
NMFS seeks comment on whether there could be economic impacts that have 
not been addressed in this proposed rule, or that could be difficult to 
anticipate.

Executive Order 13771

    This proposed rule is expected to be an E.O. 13771 deregulatory 
action. As discussed below, this proposed rule would create cost 
savings of approximately $806,810 industry-wide on an annual basis. 
Further details on the estimated cost savings of this proposed rule can 
be found in the regulatory impact review analysis.

Regulatory Flexibility Act

    An Initial Regulatory Flexibility Analysis (IRFA) was prepared, as 
required by section 603 of the Regulatory Flexibility Act (RFA) and is 
available from NMFS (see ADDRESSES). The IRFA describes the economic 
impact this proposed rule, if adopted, would have on small entities. A 
description of the action, why it is being considered, and the legal 
basis for this action are contained at the beginning of this section in 
the preamble and in the SUMMARY section of the preamble. A summary of 
the analysis follows.
    For this proposed rule, NMFS looked at two alternatives: No action 
and a CTTP, as called for in the March 15, 2015, Presidential task 
force Action Plan (see Background). By not joining the CTTP, importers 
will need to fully comply with the SIMP rule and report information 
pertaining to the harvest of species covered under SIMP via the ITDS 
prior to entry, and maintain those records as well as records 
documenting the supply chain from point of harvest to entry into U.S. 
commerce for a period of no less than two years. For importers who do 
not apply to become a CTT, there would be no change from current SIMP 
requirements and thus no economic impacts. In the SIMP final rule, NMFS 
estimated annual compliance costs of $6,075,000 including permit fees, 
reporting, recordkeeping, and data storage for 2,000 importers who, 
combined, filed 215,000 entries through the International Trade Data 
System (ITDS). There were 216 importers who filed more than 250 entries 
in 2014 (comprising roughly 72% of all entries). NMFS expects these 
high volume importers would benefit financially from the CTTP. NMFS 
seeks public comment on the accuracy of these baseline conditions used 
in the development of this proposed rule.
    In the Final Regulatory Flexibility Analysis for the SIMP rule, 
NMFS concluded that all persons subject to the program requirements 
could be classified as small businesses. Likewise, all importers who 
choose to apply and be approved as CTTs would also be classified as 
small businesses. CTTs would realize the benefits of reduced reporting 
and recordkeeping and streamlined entry into U.S. commerce of their 
fish and fishery products. The increased cost of annual third-party 
auditing required under the CTTP would be offset by the reduction in 
reporting costs at time of entry. Consequently, importers with a higher 
annual volume of entries would accrue greater benefits. In comparing 
entry reporting cost savings to estimates of the costs to contract with 
a third-party auditor, NMFS estimates that importers making more than 
250 entries per year would benefit from becoming a CTT. Considering the 
same baseline as that used for the SIMP analysis (entries of priority 
species seafood products made in 2014), approximately 2000 importers 
would be required to report harvest event data upon entry. NMFS 
estimates that 216 of these importers, who each filed more than 250 
entries in 2014, would benefit from the reduced reporting burden of 
becoming a CTT. Assuming all of these importers would elect to become 
CTTs, cost savings of approximately $806,810 would be realized 
industry-wide on an annual basis.

National Environmental Policy Act

    Under NOAA Administrative Order (NAO 216-6A), the promulgation of 
regulations that are administrative, financial, legal, technical or 
procedural in nature are categorically excluded from the requirement to 
prepare an Environmental Assessment. These proposed regulations to 
implement a Commerce Trusted Trader Program are procedural and 
administrative in nature in that they would modify recordkeeping and 
auditing requirements for ongoing authorized catch and trade 
activities. Fishing activity and trade in seafood products are not 
further restricted relative to any existing laws or regulations, either 
foreign or domestic. Given the procedural and administrative nature of 
this rulemaking, an Environmental Assessment was not prepared.

Paperwork Reduction Act

    This proposed rule contains a collection-of-information requirement 
subject to review and approval by OMB under the Paperwork Reduction Act 
(PRA). This requirement has been submitted to OMB for approval. The 
information collection burden for the requirements proposed under this 
rule (CTTP application; Compliance Plan development or modification; 
third-party audit; and traceability documents recordkeeping) are 
estimated to result in a significant reduction in both time and costs 
for CTTs relative to the burden associated with compliance with the 
reporting and recordkeeping requirements of the SIMP.
    NMFS estimates that approximately 216 International Fisheries Trade 
Permit holders would apply for the CTTP, and that they would need 
approximately 10 minutes to fill out the online application, at an 
hourly rate of $25, for a total of 36 hours and labor costs of $900. 
NMFS considers that most of the 216 entities estimated to apply for CTT 
status will already have some form of internal control plan in place, 
so the development of a Compliance Plan specific to the CTTP will take 
no more than 8 hours. If a Compliance Plan needs to be developed from 
square one, NMFS estimates no more than 24 hours will be required, at 
an hourly rate of $50. Assuming that this rule would

[[Page 2418]]

affect 216 importers, the total one-time burden for application and 
Compliance Plan development and submission amounts to between 1,764 
hours and 5,220 hours, and labor costs of between $87,300 and $260,100.
    Because the CTTP removes the requirement of reporting harvest data 
prior to entry into U.S. commerce, a CTT is expected to realize the 
cost savings of not entering such data. NMFS has calculated the time 
and cost of a CTTP entry filing (header record only) to be 12 minutes 
at $25 per hour, for a cost per entry of $5, versus 36 minutes per SIMP 
filing (header and all harvest vessel and landing records) and a cost 
of $15 per filing. Using available data from 2014, the average number 
of entries for the 216 importers filing 250 or more entries, which is 
the point at which NMFS believes an entity would likely choose to 
become a CTT, is 750. This equates to 162,000 entries. The annual 
burden of contracting with a third-party auditor is estimated to be one 
hour at the hourly rate of $50, for a total of 216 hours and $10,800 
annually. The cost of the actual audit is estimated to be between 
$1,120 and $3,600, with an average cost of $2,190, for a total of 
$473,040. These burdens would be offset by the reduced cost benefit of 
the program, which cuts out 64,800 hours of data entry filing at a cost 
savings of $1,620,000.
    Public comment is sought regarding: whether this proposed 
collection of information is necessary for the proper performance of 
the functions of the agency, including whether the information shall 
have practical utility; the accuracy of the assumptions used in 
calculating the burden estimate; ways to enhance the quality, utility, 
and clarity of the information to be collected; and ways to minimize 
the burden of the collection of information, including through the use 
of automated collection techniques or other forms of information 
technology. Send comments on these or any other aspects of the 
collection of information to the NOAA Fisheries Office of International 
Affairs and Seafood Inspection at the ADDRESSES above, and by email to 
<a href="/cdn-cgi/l/email-protection#c08f8992819f93b5a2ada9b3b3a9afae80afada2eea5afb0eea7afb6"><span class="__cf_email__" data-cfemail="37787e6576686442555a5e44445e585977585a551952584719505841">[email protected]</span></a> or fax to (202) 395-7285.
    Notwithstanding any other provision of the law, no person is 
required to respond to, and no person shall be subject to penalty for 
failure to comply with, a collection of information subject to the 
requirements of the PRA, unless that collection of information displays 
a currently valid OMB control number.

List of Subjects in 50 CFR Part 300

    Exports, Fisheries, Fishing, Fishing vessels, Illegal, unreported 
or unregulated fishing, Foreign relations, Imports, International trade 
permits, Treaties.

    Dated: January 11, 2018.
Samuel D. Rauch, III,
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.

    For the reasons set out in the preamble, 50 CFR part 300, subpart 
Q, is proposed to be amended as follows:

PART 300--INTERNATIONAL FISHERIES REGULATIONS

0
1. The authority citation for 50 CFR part 300 continues to read as 
follows:

    Authority:  16 U.S.C. 951 et seq., 16 U.S.C. 1801 et seq., 16 
U.S.C. 5501 et seq., 16 U.S.C. 2431 et seq., 31 U.S.C. 9701 et seq.

0
2. In Sec.  300.321, add, in alphabetical order, a definition for 
``Commerce Trusted Trader'', ``Commerce Trusted Trader Program'', 
``Internal Control System'', and ``Trusted Trader Compliance Plan'' to 
read as follows:


Sec.  300.321  Definitions.

* * * * *
    Commerce Trusted Trader (CTT) means an importer of record who holds 
a valid International Fisheries Trade Permit (see Sec.  300.322) and 
who has been approved by NMFS under Sec.  300.325.
    Commerce Trusted Trader Program (CTTP) means the voluntary program 
established under Sec.  300.325.
* * * * *
    Internal Control System means the written procedures required under 
Sec.  300.325(g).
* * * * *
    Trusted Trader Compliance Plan or Compliance Plan means the written 
plan required under Sec.  300.325(f).
* * * * *
0
3. In Sec.  300.324, add paragraph (f) to read as follows:


Sec.  300.324  Seafood Traceability Program.

* * * * *
    (f) An importer of record who is approved as a Commerce Trusted 
Trader (CTT) under Sec.  300.325 shall be exempt from the reporting 
requirements of Sec.  300.324(b)(1)-(3) and (c) and may delegate the 
recordkeeping responsibilities under Sec.  300.324(e) to one or more 
third parties as provided in Sec.  300.325(i). However, a CTT is not 
exempt from IFTP requirements under Sec.  300.322 or any other 
applicable requirements and is responsible for compliance with the 
obligations of Sec.  300.324(e). CTTP application procedures and 
requirements are set forth at Sec.  300.325.
0
4. Redesignate Sec.  300.325 as Sec.  300.326 and add a new Sec.  
300.325 to read as follows:


Sec.  300.325  Commerce Trusted Trader Program.

    (a) Establishment. This section establishes a voluntary Commerce 
Trusted Trader Program (CTTP) which provides an exemption from the 
reporting requirements of the Seafood Import Monitoring Program (SIMP) 
(see Sec.  300.324(f)) and alternative recordkeeping options (see 
paragraph (i) of this section). Qualifying criteria, application 
procedures, requirements for Trusted Trader Compliance Plans and 
recordkeeping, and third-party audit requirements for CTTP participants 
are set forth in the following sections.
    (b) Qualifying Criteria. To be approved as a Commerce Trusted 
Trader (CTT), an applicant must be a U.S. importer of record who has 
imported, or who intends to import, products subject to the SIMP and 
must be a holder of a valid International Fisheries Trade Permit (IFTP) 
(see Sec.  300.322).
    (c) Application. The applicant must submit an online application 
for the CTTP at a website designated by NMFS. Incomplete applications 
will not be reviewed by NMFS. A complete application must contain the 
following:
    (1) The applicant's IFTP number;
    (2) Affirmation that the applicant has no history, during the 
previous five years, of noncompliance (i.e., violations that resulted 
in a finding of liability and assessment of a civil monetary fine or 
criminal penalty) with federal regulations related to the importation 
of fish and fish products and is currently in compliance with all 
licensing, permitting, and reporting requirements applicable to the 
importation of fish and fish products;
    (3) Affirmation that the applicant is in compliance with other 
state and federal programs, as applicable, including license and/or 
registration number(s) applicable to the importation of fish and fish 
products;
    (4) Electronic submission of the applicant's Trusted Trader 
Compliance Plan (see paragraph (f) of this section); and
    (5) Application fee.
    (d) Fees. Applicants for the CTTP must electronically pay an 
application fee assessed by NMFS to recover application review costs. 
If an application fee is paid with a commercial instrument that is

[[Page 2419]]

insufficiently funded, the CTTP application will not be processed.
    (e) Review and Approval of Application.
    (1) The NMFS Office of International Affairs and Seafood Inspection 
(IASI) will review a CTTP application, as well as the applicant's 
history of compliance with federal regulations related to the 
importation of fish and fish products, in determining whether to 
approve the application.
    (2) If NMFS IASI approves the application, it will issue a letter 
to the applicant that will serve as official documentation of CTT 
status.
    (3) If the application is incomplete or complete but not approved, 
NMFS will issue a letter to the applicant explaining the reasons why.
    (4) If NMFS issues a letter under paragraph (e)(3), the applicant 
may respond in writing with additional information to address the 
issues NMFS identified in its letter. After reviewing such information, 
NMFS will issue a letter to the applicant indicating if CTT status is 
approved or explaining the reasons why such status continues to not be 
approved. NMFS' decision is final upon issuance of this letter and is 
not appealable. The applicant may reapply no earlier than one year from 
the date of NMFS' final decision.
    (5) While the IFTP must be renewed annually (see Sec.  300.322(d)), 
approval under the CTTP remains in effect unless it is revoked under 
paragraph (l).
    (f) Trusted Trader Compliance Plan. In order to be approved as a 
CTT, the applicant must have a Trusted Trader Compliance Plan 
(Compliance Plan) that is designed to meet the objective of the SIMP in 
preventing the importation of illegally harvested or misrepresented 
fish and fish products into United States commerce. The Compliance Plan 
may delegate entry filing, recordkeeping and other responsibilities to 
other persons, but the CTT remains responsible for ensuring adherence 
to the Compliance Plan and compliance with all NOAA import 
requirements, including all applicable requirements of the SIMP and the 
CTTP. The Compliance Plan must, at a minimum, include the following 
components:
    (1) An Internal Control System (see paragraph (g) of this section 
for requirements);
    (2) Procedures for ensuring that the Compliance Plan and the CTT's 
adherence to it is audited by a certified third party at least annually 
(see paragraph (j) of this section for audit requirements);
    (3) The applicant's written policy and related supporting materials 
on preventing the import of illegally harvested and misrepresented 
seafood, including a description of how the policy is communicated to 
any affected employees, entry filers, representatives, and suppliers or 
other parties in the supply chain, and corrective actions to be taken 
as needed;
    (4) An organizational chart that identifies the persons with 
responsibility for: Entry filing; custodianship of recordkeeping 
documents; developing, administering, and implementing the Compliance 
Plan and its component measures; and conducting training to ensure 
effective implementation of the Compliance Plan;
    (5) A signature page completed by the applicant and the individual 
at the highest level of authority in the applicant's organization 
assuming responsibility for implementing the Compliance Plan. This 
signature page and the organizational chart must be updated each year 
at the time of the annual audit in order for a CTT's status to remain 
current; and
    (6) Any changes to the Compliance Plan, along with an updated 
signature page and organizational chart must be included in the annual 
audit report required under paragraph (j) of this section.
    (g) Internal Control System Requirements. The Internal Control 
System, which must be documented in the Compliance Plan under paragraph 
(f) of this section, must include traceability monitoring procedures 
for seafood products subject to the SIMP (Sec.  300.324). The CTT is 
responsible for ensuring implementation of the internal control system, 
which must include:
    (1) Procedures to verify the legal harvest and landing of fish or 
fish products subject to the SIMP that the CTT enters into U.S. 
commerce. Such procedures may rely on flag-state and/or port-state 
harvest and landing records or flag-state certification of legal 
harvest. A CTT may establish separate verification procedures for each 
fishery source, as appropriate (e.g., known and trusted vs. new 
sources);
    (2) Procedures to enable verification of the full chain of custody 
from point of first landing (or point of aggregation for small-scale 
fisheries) to entry into U.S. commerce (See paragraph (i) of this 
section). These procedures should describe the process(es) that will be 
followed, and documentation that will be used, to verify chain of 
custody, and measures in place to periodically verify the accuracy of 
that documentation;
    (3) Procedures to ensure that chain of custody documentation will 
be provided to NMFS, upon request, within 14 days to support an agency 
audit. The Compliance Plan under paragraph (f) of this section must 
identify who is responsible for maintaining chain of custody 
documentation, the point along the supply chain at which the chain of 
custody documents are stored and how the CTT will ensure access to them 
when necessary. The documentation must be maintained and made available 
for inspection as required under paragraph (i) of this section;
    (4) Procedures for the CTT (or designee) to perform at least one 
trace-back annually for each species covered by the SIMP that is 
imported by the CTT. A trace-back is a document review of all records 
that follow the product from the point of entry into U.S. commerce 
backwards through the supply chain (e.g., through all steps of 
processing, shipping, purchase, and storage) to the point of harvest 
(or point of first aggregation for small scale fisheries);
    (5) Procedures to be taken in response to information that 
illegally harvested or misrepresented fish or fish products have 
entered the supply chain (e.g., notice from NOAA's Office of Law 
Enforcement (OLE) or inclusion of the harvesting vessel in a regional 
fishery management organization's list of vessels that have engaged in 
illegal, unreported and unregulated fishing), measures to ensure that 
such fish and fish products are removed from commerce and further 
shipments are prevented from entering commerce, and procedures for 
promptly informing OLE whether such products are inbound to the United 
States or have entered U.S. commerce;
    (6) Procedures to be taken in response to a supplier being placed 
on an FDA Import Alert List. FDA Import Alerts inform FDA field staff 
and the public that the Agency has enough evidence to allow for 
Detention Without Physical Examination (DWPE) of products that appear 
to be in violation of the Federal Food, Drug, and Cosmetic Act (FD&C 
Act) or FDA regulations. These violations could be related to the 
product, manufacturer, shipper and/or other information. More 
information is available online at https://www.fda.gov/ForIndustry/ImportProgram/ActionsEnforcement/ImportAlerts/ucm516428.htm; and
    (7) Procedures to regularly review and update internal control 
procedures in response to changes in the fish or fish products that the 
CTT wants to enter into U.S. commerce, suppliers, or operating 
conditions, or non-conformities identified in an audit.
    (h) Entry filing requirements. NMFS will alert U. S. Customs and 
Border Protection when it approves a CTT

[[Page 2420]]

under paragraph (e) of this section. For each entry containing species 
or species groups subject to the SIMP, at the time of entry, the CTT or 
designated entry filer must file electronically, as required under 
Sec.  300.323(a), the CTT's IFTP number and species to be entered. No 
further information needs to be provided. See Sec.  300.324(f) for 
exemptions from SIMP requirements.
    (i) Recordkeeping requirements. As specified in Sec.  300.324(e), 
records containing information on the chain of custody and custodian of 
fish or fish products (e.g., trans-shipper, processor, storage facility 
or distributor) must be maintained. However, CTTs have the option of 
delegating the recordkeeping requirements to one or more third parties. 
The records must be maintained either by the CTT, or at designated 
points within the supply chain to which the CTT has unrestricted 
access, or with any third-party that the CTT designates in its 
Compliance Plan. Regardless of which option it chooses, the CTT is 
responsible for ensuring that the required chain of custody 
documentation for all species and species groups subject to SIMP is 
maintained for a period of two years from the date of entry of product 
into U.S. commerce, providing such documentation to NMFS in accordance 
with paragraph (g)(3) of this section, and making it available for 
inspection as required under Sec.  300.324(e).
    (j) Third-party Audit Requirements. At least once annually, the CTT 
must ensure that an audit is conducted by a certified third-party 
auditor, consistent with the requirements of this paragraph and 
paragraph (k) of this section. The purpose of the audit is to evaluate 
the adequacy of the CTT's Compliance Plan in meeting the requirements 
of paragraphs (f) and (g) of this section and the CTT's adherence to 
that plan. The audit must include:
    (1) Review of the Compliance Plan and relevant documents; full 
trace back to point(s) of harvest of at least three shipments of 
products falling under the SIMP, selected by the third-party auditor; 
interviews as necessary with CTT staff, suppliers, and individuals 
delegated responsibilities under the Compliance Plan; and other 
activities as necessary;
    (2) A closing meeting between the auditor and the CTT or designee 
to review observed weaknesses and any non-conformities with the 
Compliance Plan; and
    (3) Issuance of audit reports.
    (i) Notification and NMFS Audit. The CTT shall notify NMFS at least 
30 days in advance of each third-party audit. NMFS, at its discretion, 
may attend a third-party audit as an observer or conduct a side-by-side 
audit. NMFS may conduct an independent audit of a CTT at any time.
    (ii) Audit Reports. In an audit report, a third-party auditor must 
assess the reliability of the CTT's Compliance Plan and the CTT's 
adherence to it, provide results of the audit, and identify any non-
conformities with the Compliance Plan or its implementation. The audit 
report must include the auditor's certifying credentials (see paragraph 
(k) of this section) and attestations that the auditor (i.e., 
individual auditor(s) and auditing firm): (1) Was not involved in 
developing the CTT's Compliance Plan, and (2) has no financial 
relationship with, or substantial interest in, the CTT retaining their 
services beyond performing the audit and any related follow up.
    (iii) Follow Up on Audit Reports. The CTT is responsible for 
ensuring that the auditor provides a signed and locked electronic copy 
(in .pdf format) of the audit report to the CTT and IASI no later than 
30 days following completion of the audit. If the auditor determines 
that no corrective action is needed, the report is considered the final 
audit report. If the auditor determines that corrective action is 
required to address non-conformities with the Compliance Plan or its 
implementation, the report is considered an initial audit report. In 
that case, within 60 days following the audit, the CTT must ensure that 
a signed and locked electronic copy of the final audit report (in .pdf 
format) is provided to NMFS IASI. The final report must include an 
explanation, along with relevant documentation, of corrective action 
taken by the CTT and approved by the auditor.
    (iv) If the CTT fails to provide the audit report as required above 
or take acceptable corrective actions, NMFS may conduct additional 
audits at its discretion. NMFS may also take additional measures up to 
and including revocation of CTT status as deemed appropriate by NMFS.
    (k) Third-Party Auditor Certification and Other Requirements.
    (1) Beyond conducting the audit and any related follow up for a 
CTT, a third-party auditor (i.e., individual auditor(s) and auditing 
firm) must not have any other financial relationship with, or 
substantial interest in, the CTT. In addition, an auditor must not have 
been involved in developing the CTT's Compliance Plan. A third-party 
auditor should have some familiarity or experience with the seafood 
trade to ensure an accurate and critical review of a CTT's Compliance 
Plan and the CTT's adherence to it. The third party auditor must be 
certified in and affirm his or her knowledge of current auditing 
practices and proficiency in conducting process audits, identification 
of non-conformities and review of corrective actions taken by the CTT.
    (2) A third-party auditor must be certified by a competent 
certifying body, as evidenced by one or more of the following:
    (i) Current accreditation or certification by the American 
Institute of Certified Public Accountants (AICPA);
    (ii) Current accreditation or certification by the Institute of 
Internal Auditors;
    (iii) Current accreditation or certification by the American 
Evaluation Association;
    (iv) Current accreditation or certification by a chain of custody 
certifying body;
    (v) Current accreditation or certification by Accreditation 
Services International, or other nationally recognized certifying 
organizations;
    (vi) Evidence of current peer-review certification such as 
Certified Quality Auditor (CQA), Certified Internal Auditor (CIA), 
Certified Public Accountant (CPA), and Certified HACCP Auditor (CHA);
    (vii) Successful completion of auditor training recognized by the 
International Register of Certified Auditors (IRCA) or Registrar 
Accreditation Board and Quality Society of Australasia (RABQSA), in 
environmental management standards (EMS); quality management standards 
(QMS); or Global Food Safety Initiative (GFSI), and registration with 
IRCA or RABQSA as an EMS or QMS auditor; and
    (viii) Other training or certification as approved in writing by 
NMFS.
    (l) Revocation of CTT status.
    (1) If a CTT fails to comply with requirements under this section, 
NMFS may issue a Notification Letter to the CTT that:
    (i) Identifies the alleged failure to comply with CTTP regulations 
and requirements;
    (ii) Describes the indications and evidence of the alleged failure;
    (iii) Sets a Response Date by which the CTT must submit to NMFS a 
written response to the Notification Letter, including, if applicable, 
a proposed solution; and
    (iv) Explains the CTT's options if the CTT believes the 
Notification Letter is in error.
    (2) NMFS will establish a Response Date between 14 and 30 calendar 
days from the date of the Notification Letter. The CTT's response must 
be received in writing by NMFS on or before the

[[Page 2421]]

Response Date. If the CTT fails to respond by the Response Date, CTT 
status will be revoked. At its discretion and for good cause, NMFS may 
extend the Response Date to a maximum of 60 calendar days from the date 
of the Notification Letter.
    (3) A CTT who has submitted a timely response may meet with NMFS 
within 21 calendar days of the date of that response to discuss a 
detailed and agreed-upon procedure for resolving the alleged failure to 
comply with the CTTP regulations and requirements. The meeting may be 
in person or via conference call or webcast.
    (4) If the CTT disagrees with the Notification Letter and believes 
that there is no failure to comply with CTTP regulations and 
requirements, NMFS has incorrectly defined or described the failure, or 
NMFS is otherwise in error, the CTT may submit a written Objection 
Letter to NMFS on or before the Response Date. Within 21 calendar days 
of the date of the Objection Letter, the CTT may meet with NMFS to 
discuss a resolution or redefinition of the issue. The meeting may be 
in person, or via conference call or webcast. If modifications to any 
part of the Notification Letter are required, then NMFS will issue a 
revised Notification Letter to the CTT; however, the Response Date or 
any other timeline in this process would not restart or be modified 
unless NMFS decides to do so, at its discretion.
    (5) The total process from the date of the Notification Letter to 
the date of final resolution should not exceed 90 calendar days, and 
may require a shorter time frame, to be determined by NMFS, depending 
on the seriousness of the alleged failure. In rare circumstances, NMFS, 
at its discretion, may extend the time for resolution of the alleged 
failure. In such a case, NMFS will provide a written notice to the CTT 
informing him or her of the extension and the basis for the extension.
    (6) If the failure to comply with CTTP requirements cannot be 
resolved through this process, NMFS will issue a Revocation Letter to 
the CTT that:
    (i) States that CTT status has been revoked;
    (ii) Summarizes the failure to comply with CTTP requirements;
    (iii) Summarizes any proposed procedures, or attempts to produce 
such procedures pursuant to sub-paragraph (3) of this paragraph to 
resolve the failure;
    (iv) Explains why resolution was not achieved; and
    (v) Advises the importer that:
    (A) The importer is no longer exempt from the requirements of the 
SIMP; and
    (B) The importer may not reapply for CTT status for a period of one 
year.
    (7) NMFS' decision is final upon issuance of the Revocation Letter 
and is not appealable.
0
5. In newly redesignated Sec.  300.326, add paragraphs (d), (e), (f), 
(g), and (h) to read as follows:


Sec.  300.326  Prohibitions.

* * * * *
    (d) Make a false statement on an application for the CTTP.
    (e) Falsify records required to be maintained under Sec.  
300.324(d) or (e) or Sec.  300.325(i).
    (f) Fail to make records available for inspection as required under 
Sec.  300.324(d) or (e) or Sec.  300.325(i).
    (g) As a CTT, fail to maintain and provide access to records as 
required under Sec.  300.325(i) or to produce records as required under 
Sec.  300.325(g)(3).
    (h) As a CTT, fail to implement or follow the procedures in the 
Trusted Trader Compliance Plan submitted to NMFS in a CTT application 
or as part of an annual audit report.

[FR Doc. 2018-00653 Filed 1-16-18; 8:45 am]
 BILLING CODE 3510-22-P


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