[Federal Register Volume 60, Number 90 (Wednesday, May 10, 1995)]
[Proposed Rules]
[Pages 25010-25012]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10615]




Federal Register  /  Vol. 60, No. 90  /  Wednesday, May 10, 1995  /  
Proposed Rules 
[[Page 25010]] 

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[FRL-5199-2]


Protection of Stratospheric Ozone: Amendment to Transshipment 
Provision in Final Rule Accelerating the Phaseout of Ozone-Depleting 
Substances

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: EPA is proposing stricter requirements for transshipments of 
substances that deplete stratospheric ozone from foreign countries 
through the United States to foreign destinations. The proposed 
amendment would require a person to petition the Environmental 
Protection Agency (EPA) prior to the export of a controlled ozone-
depleting substance to the United States for transshipment. EPA is 
proposing the amendment due to new information that the current 
regulation is being abused to illegally introduce controlled substances 
into U.S. commerce. The proposed amendment, at the request of industry, 
will protect the economic interests of legitimate businesses by 
deterring the illegal diversion of transshipments of controlled 
substances into U.S. commerce.

DATES: Written comments on this proposal must be received by June 9, 
1995, at the address below. A public hearing, if requested, will be 
held in Washington, D.C. If such a hearing is requested, it will be 
held on May 25, 1995, and the comment period would then be extended to 
June 26, 1995. Anyone who wishes to request a hearing should call Tom 
Land at 202/233-9185 by May 17, 1995. Interested persons may contact 
the Stratospheric Ozone Protection Hotline at 1-800-296-1996 to see if 
a hearing will be held and to obtain the date and location of any 
hearing. Any hearing will be strictly limited to the subject matter of 
this proposal, the scope of which is discussed below.

ADDRESSES: Comments on this proposal must be submitted to the Air 
Docket Office, Public Docket No. A-92-13, Room M-1500, Environmental 
Protection Agency, 401 M St., SW, Washington, DC 20406. Additional 
comments and materials supporting this rulemaking are contained in 
Docket No. A-92-13. The Docket may be inspected from 8 a.m. until 5:30 
p.m., Monday through Friday, at the address above. A reasonable fee may 
be charged for copying Docket materials.

FOR FURTHER INFORMATION CONTACT: Tom Land, Environmental Protection 
Agency, Office of Atmospheric Programs, Stratospheric Protection 
Division, (6205-J), 401 M St., SW, Washington, DC 20460, (202) 233-
9185. The Stratospheric Ozone Protection Hotline at 1-(800)-296-1996 
can also be contacted for further information of a copy of this rule.

SUPPLEMENTARY INFORMATION:

I. Background

    Under the current regulatory requirements, published in the Federal 
Register on December 10, 1993, a person who transships a controlled 
substance from one foreign country through the United States to another 
foreign destination does not need allowances. The Environmental 
Protection Agency (EPA) implements a program of allowances to limit and 
monitor the production, import and export of controlled substances in 
the United States.
    In the proposed rulemaking published in the Federal Register on 
November 10, 1994 (59 FR 56275), EPA proposed clarifications to the 
definition of transshipment. In response to that proposal several 
companies suggested EPA create a permitting process for transshipments 
to combat the known use of transshipment as a means of illegally 
importing controlled substances. Since that time, EPA has confirmed 
that transshipments are a large and common loophole for the illegal 
entry of controlled substances into U.S. commerce. EPA and U.S. Customs 
criminal investigators have identified transshipment as one of the most 
likely schemes for the illegal import of controlled substances into the 
United States. As recently as January 1995, three men were arrested for 
conspiracy to divert material into U.S. interstate commerce that they 
alleged was being transshipped. Legitimate U.S. companies that are 
worldwide leaders in the transition to alternatives are being adversely 
affected by illegal imports, and have requested such a change to 
discourage this activity.

II. Amendment to the Transhipment Requirements

    To eliminate the use of transhipments as a loophole for the illegal 
import of controlled substances, EPA is proposing that a person must 
petition the Agency to tranship class I substances. The proposed 
petition process for transhipments would parallel the petition process 
created to combat the illegal imports of used, recycled and reclaimed 
controlled substances.
    The proposed petition process for transhipments would require a 
person to submit a petition to EPA to tranship each shipment through 
the United States at least 15 working days prior to the date the ship 
is to leave the foreign country prior to arriving in the U.S. to 
tranship. The petition must include the following information:
    <bullet> The name and quantity of the controlled substance to be 
transhipped,
    <bullet> The name and address of the importer, the importer I.D. 
number, the contact person, and the phone and fax numbers,
    <bullet> Name and address of the exporter and/or foreign owner of 
the material,
    <bullet> The U.S. port of entry for the import, the expected date 
of shipment and the vessel transporting the chemical,
    <bullet> The intended foreign destination of the transhipped 
material, the anticipated date of export from the U.S., U.S. port of 
export, and, when practical, the anticipated vessel that will transport 
the chemical.
    As with petitions to import used controlled substances, EPA will 
have 15 working days to review the petition to tranship. If during the 
15 working days, EPA decides to object to the petition or to request 
additional information, the person submitting the petition will be 
notified. If EPA needs additional information, the importer may re-
submit the petition with the requested information. If EPA does not 
object to the particular petition within the 15 working days, the 
person may proceed with the transhipment and assume it is permitted. 
EPA will then notify the U.S. Customs Service of the anticipated 
arrival of the shipments that will be transhipped to another foreign 
destination.
    EPA believes that a shipment-by-shipment petition process for 
transhipments will most effectively counter illegal imports and restore 
market-based incentives for the transition to alternatives to 
controlled ozone-depleting substances. Shipments to the United States 
considered Transportation and Export (T&E) are not subject to the 
proposed petition requirements.

III. Summary of Supporting Analysis

A. Executive Order 12866

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether this regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. [[Page 25011]] The Order defines ``significant'' 
regulatory action as one that is likely to lead to a rule that may:
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely and materially affect a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local, or tribal governments or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlement, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It has been determined by OMB and EPA that this amendment to the 
final rule is not a ``significant regulatory action'' under the terms 
of Executive Order 12866 and is therefore not subject to OMB review 
under the Executive Order.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601-602, requires that 
Federal agencies examine the impacts of their regulations on small 
entities. Under 5 U.S.C. 604(a), whenever an agency is required to 
publish a general notice of proposed rulemaking, it must prepare and 
make available for public comment an initial regulatory flexibility 
analysis (RFA). Such an analysis is not required if the head of an 
agency certifies that a rule will not have a significant economic 
impact on a substantial number of small entities, pursuant to 5 U.S.C. 
605(b).
    The Agency originally published an RFA to accompany the August 12, 
1998 final rule (53 FR 30566) that placed the initial limits on the 
production and consumption of CFCs and halons. The RFA was also updated 
as Appendix G of the Regulatory Impact Analysis for the regulations 
implementing the phaseout schedule of section 604 of the Clean Air Act 
Amendments of 1990. The Addendum to the Regulatory Impact Analysis was 
further updated in 1993 to examine the impact of the acceleration of 
the phaseout and the phaseout of HCFCs on small businesses. The 
analysis in the Addendum indicated that the actions were not expected 
to have a substantial impact on small entities.
    EPA believes that any impact that today's proposed amendment will 
have on the regulated community will serve only to provide relief from 
otherwise applicable regulations, and will therefore limit the negative 
economic impact associated with the regulations previously promulgated 
under Section 604 and 606. Although almost all businesses participants 
in the phaseout program for ozone-depleting substances are large 
businesses, today's proposed amendment reduces reporting or 
recordkeeping burdens that might possibly impact small businesses. 
Therefore, the proposed amendment is expected to have minimal if any 
impact on small entities.
    Under section 605 of the Regulatory Flexibility Act, 5 U.S.C. 605, 
I certify that the regulation promulgated in this notice of proposed 
rulemaking will not have any additional negative economic impacts on 
any small entities.

C. Paperwork Reduction Act

    The information collection requirements in this proposed rule have 
been approved by the Office of Management and Budget (OMB) under the 
Paperwork Reduction Act, 44 U.S.C. 3501 et. seq. and assigned control 
number, OMB 2060-0170. An Information Collection Request document has 
been prepared by EPA (ICR No. 1432.15) and a copy may be obtained from 
Sandy Farmer, Information Policy Branch, U.S. EPA, 401 M St. SW. 
(2136), Washington, DC 20460 or by calling (202)-260-2740.
    The information collection requirements for this final rule has an 
estimated reporting burden averaging 23.3 hours per response. This 
estimate includes time for reviewing instructions, searching existing 
data sources, gathering and maintaining the data needed and completing 
the collection of information.
    Send comments regarding the burden estimate of any other aspect of 
this collection of information, including suggestions for reducing this 
burden to Chief, Information Policy Branch, U.S. EPA, 401 M St., SW., 
(2136), Washington, DC 20460; and to the Office of Information and 
Regulatory Affairs, Office of Management and Budget, Washington, DC 
20503, marked ``Attention: Desk Officer for EPA.'' The final rule will 
respond to any OMB or public comments on the information collection 
requirements contained in this proposal.

D. Enhancing the Intergovernmental Partnership Under Executive Order 
12875

    In compliance with Executive Order 12875 we have involved state, 
local, and tribal governments in the development of this rule to the 
extent they are affected by these requirements. EPA is conducting an 
outreach program to facilitate the transition for state, local and 
tribal governments to ozone-friendly alternatives.

E. Unfunded Mandate Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
EPA to prepare a budgetary impact statement before promulgating a rule 
that includes a Federal mandate that may result in expenditure by 
state, local and tribal governments, in aggregate, or by the private 
sector, of $100 million or more in any one year. Section 203 requires 
the Agency to establish a plan for obtaining input from and informing 
any small governments that may be significantly or uniquely affected by 
the rule. Section 250 requires that regulatory alternatives be 
considered before promulgating a rule for which a budgetary impact 
statement is prepared. The Agency must select the least costly, most 
cost-effective, or least burdensome alternative that achieves the 
rule's objectives, unless there is an explanation why this alternative 
is not selected or this alternative is inconsistent with law.
    The net effect of all the amendments to the accelerated phaseout 
rule is a reduction in regulatory burden for regulated entities. This 
proposed amendment is designed to confront illegal activities which are 
costing legitimate U.S. businesses and the government millions of 
dollars in lost revenue. Because this proposed amendment to the rule is 
estimated to result in the expenditure of less than $100 million in any 
one year by state, local, and tribal governments, or the private 
section, the Agency has neither prepared a budgetary impact statement 
nor addressed the selection of the least costly, most cost-effective, 
or least burdensome alternative. Because small government will not be 
significantly or uniquely affected by this rule, the Agency is not 
required to develop a plan with regard to small governments.

List of Subjects in 40 CFR Part 82

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Chemicals, Chlorofluorocarbons, Exports, 
Hydrochlorofluorocarbons, Imports, Ozone layer, Reporting and 
recordkeeping requirements, Stratospheric ozone layer.

    Dated: April 19, 1995.
Carol Browner,
Administrator.

    Part 82 is proposed to be amended as follows: [[Page 25012]] 

PART 82--PROTECTION OF STRATOSPHERIC OZONE

    1. The authority citation for part 82 continues to read as follows:

    Authority: 42 U.S.C. 7414, 7671-671q.

Subpart A--Production and Consumption Controls

    2. Section 82.4 is amended by adding paragraph (g), to read as 
follows:


Sec. 82.4  Prohibitions.

* * * * *
    (g) Effective January 1, 1995, no person may import, at any time in 
any control period, a used class I controlled substance, or tranship a 
controlled substance through the United States, without petitioning the 
Administrator as under Sec. 82.13(g)(2) for authorization.
* * * * *
    3. Section 82.13 is amended by adding paragraph (g)(2) to read as 
follows:


Sec. 82.13  Record-keeping and reporting requirements.

* * * * *
    (g) * * *
    (1) * * *
    (2) Petitioning--Importers of Used Controlled Substances and 
Transhipments. For each shipment of a used controlled substance 
(contaminated, recycled or reclaimed material), or each transhipment of 
a class I controlled substance, an importer must submit to the 
Administrator, at least 15 working days before the shipment is to leave 
the port of export, the following information in a petition:
    (i) The name and quantity of the used controlled substance to be 
imported (including material that has been recycled or reclaimed) or of 
the controlled substance to be transhipped;
    (ii) The name and address of the importer, the importer ID number, 
the contact person, and the phone and fax numbers;
    (iii) Name and address of the source(s) of the used controlled 
substance, including a description of the previous use(s), when 
possible;
    (iv) Name and address of the exporter and/or foreign owner of the 
material,
    (v) The U.S. port of entry for the import, the expected date of 
arrival of the shipment and the vessel transporting the chemical;
    (vi) The intended use of the used controlled substance;
    (vii) The intended foreign destination of the transhipped material, 
the anticipated date of export from the U.S., U.S. port of export, and, 
when practical, the anticipated vessel that will transport the 
chemical.
* * * * *
[FR Doc. 95-10615 Filed 5-9-95; 8:45 am]
BILLING CODE 6560-50-M