Federal Register / Vol. 61, No. 22 / Thursday, February 1, 1996 / Proposed Rules 3605

to be plainly marked with the lot stamp

number, would create a problem in the

near future due to industry changes in

container packaging configurations and

pallet sizes. This relaxation would allow

the industry flexibility for future pallet

size and container configurations.

Many products, outside the produce

industry, are received by retailers on 48-

by 40-inch pallets. The kiwifruit

industry almost exclusively used the

‘‘LA Lug’’ container which fits on the

35- × 42-inch or 53- by 42-inch pallets

until recent years. The ‘‘LA Lug’’

configuration does not create a center

tier when stacked on these pallets.

When kiwifruit shippers use 35- by 42-

inch or 53- by 42-inch pallets, receivers

must unload the pallets and restack the

fruit on metric pallets, causing more

damage to the fruit and more labor costs

to the receiver. Because of retail buying

patterns and the retail demand for

operational consistency in pallet usage,

the produce industry has been moving

away from using the 35- by 42-inch or

53 × 42 inch pallets and has been

moving towards using a standard

grocery-industry metric pallet

measuring 48- by 40-inches. The

committee anticipates that the retail

usage of the metric pallet will continue

to increase because: (1) Retailer and

handler trucking and transportation

costs for produce stacked on metric

pallets are less than for produce stacked

on 35- by 42-inch and 53- by 42-inch

pallets, (2) retailer labor and disposal

costs are less when metric pallets are

utilized, and (3) receiving areas are

steadily being remodeled to handle

metric pallets. In the 1995/1996 season,

approximately one percent of the

industry’s 9.3 million trays equivalents

were packed in ‘‘shoe’’ box containers.

The ‘‘shoe’’ box container (12 × 20

inches) is one of two new containers

which is stacked in eight columns on a

48- by 40-inches metric pallet, and is

configured in a manner which leaves

one side of each container exposed. The

other container that fits on the metric

pallet is the ‘‘mum’’ box container. The

‘‘mum’’ box container (13.3 × 16 inches)

is stacked nine columns on a pallet with

the center column inaccessible to lot

stamp numbering after the containers

are placed on the pallet during block

inspection. In block inspection, the

inspection occurs after the pallets have

been packed, strapped, and been placed

in storage. In-line inspection is

performed during the packing process,

prior to palletization and storage.

The industry’s usage of block and inline inspection methods is fairly evenly

split with approximately 50 percent of

the handlers using in-line inspection

and 50 percent using block inspection.

The majority of block inspections are

conducted in the northern part of

California while in-line inspections are

conducted primarily in the southern

part of California.

The committee’s recommendation to

relax the container marking requirement

would not significantly lower the

number of containers being inspected or

bearing the lot stamp number. Of the 81

containers stacked on a metric pallet

during block inspection, nine containers

(the center tier—approximately 11

percent of the pallet) would not be lot

stamp numbered. The center tiers of all

pallets would be randomly inspected by

the Federal or Federal-State Inspection

Service for all marketing order

requirements. When the industry

utilizes in-line inspection, both the

‘‘shoe’’ and ‘‘mum’’ containers are

accessible to lot stamp number marking

and inspection, as they are being

stacked on the pallet.

There is unanimous support in the

industry to reduce the lot stamp number

container marking requirement.

Several other alternatives were

suggested during the public meeting.

One alternative discussed by the

committee was to require all containers

to continue to be lot stamp numbered.

Maintaining the requirement for lot

stamp numbers to be placed on all

containers would increase handler labor

costs, slow handler operations, increase

handler restrapping costs, as well as

increase inspection costs. It was the

consensus of the committee that such a

requirement would be cost prohibitive

as each block-inspected pallet would

have to be manually pulled apart to

enable the lot stamp number to be

placed on the nine-column center tier

containers.

Another alternative suggested was to

eliminate the block-inspection method

and require all handlers to use the inline inspection method. During in-line

inspection, containers would be

stamped with the lot stamp number

prior to being stacked on the pallet. This

would have a serious financial impact

on the industry, especially among small

growers and handlers, due to a large

increase in inspection costs. This

suggestion was unacceptable to the

industry as it would be cost prohibitive

and could force small growers and

handlers out of business.

Another alternative examined was to

establish regulations prohibiting the use

of any containers that would create an

inaccessible center when stacked on

pallets. This alternative was not

acceptable as it would not allow the

industry to make necessary container

changes to meet changing retailer needs

and would be an excessive restriction.

This proposed rule, which would

relax the lot stamp number requirement,

would impact all handlers in the same

manner and was viewed by the

committee as the least restrictive and

best solution. Relaxing the lot stamp

number requirement would solve the

problems caused by changes in pallet

sizes and container configurations as

well as spare the industry future

financial hardship. It would allow the

industry flexibility for future pallet size

and container configurations.

Based on the above, the Administrator

of the AMS has determined that this

action would not have a significant

economic impact on a substantial

number of small entities.

A 30-day comment period is provided

to allow interested persons to respond

to this proposal. All written comments

timely received will be considered

before a final determination is made on

this matter.

List of Subjects in 7 CFR Part 920

Kiwifruit, Marketing agreements.

For the reasons set forth in the

preamble, it is proposed that 7 CFR Part

920 be amended as follows:

PART 920—KIWIFRUIT GROWN IN

CALIFORNIA

1. The authority citation for 7 CFR

Part 920 continues to read as follows:

Authority: 7 U.S.C. 601–674.

2. In § 920.303, paragraph (d) is

revised to read as follows:

§ 920.303 Container marking regulations.

* * * * *

(d) All exposed or outside containers

of kiwifruit, but not less than 75 percent

of the total containers on a pallet, shall

be plainly marked with the lot stamp

number corresponding to the lot

inspection conducted by an authorized

inspector; except for individual

consumer packages and containers that

are being directly loaded into a vehicle

for export shipment under the

supervision of the Federal or FederalState Inspection Service.

* * * * *

Dated: January 24, 1996.

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 96–2064 Filed 1–31–96; 8:45 am]

BILLING CODE 3410–02–P
3606 Federal Register / Vol. 61, No. 22 / Thursday, February 1, 1996 / Proposed Rules

7 CFR Part 999

[Docket No. FV94–999–2PR]

Specialty Crops; Import Regulations;

Peanut Import Regulations

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Proposed rule.

SUMMARY: This proposed rule would

establish minimum quality,

identification, certification and

safeguard requirements for imported

farmers stock, shelled, and cleanedinshell peanuts. The rule is issued

under section 108B(f)(2) of the

Agricultural Act of 1949, as amended.

The provisions of paragraph (f)(2)

require all peanuts in the domestic

market to fully comply with all quality

standards under Peanut Marketing

Agreement No. 146 (Agreement). Thus,

this rule would establish the same

quality requirements and handling

procedures for imported peanuts as

those in effect for domestically

produced peanuts. This action would

benefit peanut handlers, importers and

consumers by helping to ensure that all

peanuts in the marketplace comply with

the same quality standards.

DATES: Comments must be received by

March 4, 1996. Pursuant to the

Paperwork Reduction Act, comments to

the information collection burden must

be received by April 1, 1996.

ADDRESSES: Interested persons are

invited to submit written comments

concerning this action. Comments must

be sent in triplicate to the Docket Clerk,

Fruit and Vegetable Division, AMS,

USDA, P.O. Box 96456, room 2523–S,

Washington, DC 20090–6456; fax 202–

720–5698. Comments should reference

the docket number and the date and

page number of this issue of the Federal

Register and will be made available for

public inspection in the Office of the

Docket Clerk during regular business

hours.

FOR FURTHER INFORMATION CONTACT: Tom

Tichenor or Rick Lower, Marketing

Specialists, Marketing Order

Administration Branch, Fruit and

Vegetable Division, AMS, USDA, P.O.

Box 96456, room 2523–S, Washington,

DC 20090–6456; tel: (202) 720–6862 or

(202) 720–2020; fax (202) 720–5698.

SUPPLEMENTARY INFORMATION: This

proposed rule is issued under paragraph

(f)(2) of section 108B of the Agricultural

Act of 1949 (7 U.S.C. 1445c–3), as

amended November 28, 1990; Pub. L.

101–624, hereinafter referred to as the

Act. Paragraph (f)(2) of section 108B of

the Act provides that the Secretary of

Agriculture (Secretary) shall require that

all peanuts in the domestic market fully

comply with all quality standards under

Marketing Agreement No. 146 (7 CFR

part 998), issued pursuant to the

Agricultural Marketing Agreement Act

of 1937, as amended (7 U.S.C. 601–674).

This proposed rule would add a new

§ 999.600 governing the importation of

peanuts’’ under 7 CFR part 999—

Specialty Crops; Import Regulations.

Proposed § 999.600 establishes

minimum quality, identification,

certification and safeguard requirements

for foreign produced farmers stock,

shelled and cleaned-inshell peanuts

presented for importation into the

United States. The quality requirements

are the same as those specified in

§ 998.100 Incoming quality regulation

and § 998.200 Outgoing quality

regulation established pursuant to the

Agreement. Whenever the regulations

specified in the Agreement are changed,

the regulations in § 999.600 would be

changed accordingly. Safeguard

procedures enable the Department to

monitor and assure importers’

compliance with the requirements of

this regulation.

The intent of paragraph (f)(2) of

section 108B of the Act is to ensure that

all peanuts in the domestic marketplace

comply with the same quality standards.

The U.S. Department of Agriculture

(Department or USDA) is issuing this

rule in accordance with Executive Order

12866.

This proposed rule has been reviewed

under Executive Order 12778, Civil

Justice Reform, and is not intended to

have retroactive effect. This rule would

not preempt any State or local laws,

regulations, or policies, unless they

present an irreconcilable conflict with

this rule. There are no administrative

procedures which must be exhausted

prior to any judicial challenge to the

provisions of this rule.

Pursuant to requirements set forth in

the Regulatory Flexibility Act (RFA), the

Administrator of the Agricultural

Marketing Service (AMS) has

considered the economic impact of this

proposed rule on small entities.

The purpose of the RFA is to fit

regulatory actions to the scale of

business subject to such actions in order

that small businesses will not be unduly

or disproportionately burdened. Small

agricultural service firms, which

include importers, have been defined by

the Small Business Administration (13

CFR 121.601) as those whose annual

receipts are less than $5 million. This

proposed import regulation is based on

regulations established under the

Agreement, which regulates the quality

of domestically produced peanuts. The

majority of entities that are signers of

the Agreement cannot be classified as

small businesses, and it is anticipated

that peanut importers affected by this

regulation will be comprised primarily

of signatories to the Agreement.

Although small business entities may

incur additional costs in meeting these

proposed import regulations, the

benefits accrued from the assurance of

good quality peanuts should outweigh

any additional costs to such entities.

Inspection and testing fees would be

uniformly applied to importers,

regardless of size. Finally, this action is

required by statute.

The Department is unable to estimate,

at this time, the number or size of

importers, or domestic peanut handlers

acting as importers, who may choose to

import peanuts under the relaxed quota.

The Department estimates that there are

as many as 50 domestic peanut handlers

with storage and milling facilities that

can be used to prepare peanuts for

human consumption markets.

In the past, the importation of peanuts

has been limited to 1.71 million pounds

annually. However, the Schedule of the

United States annexed to the North

American Free Trade Agreement

(NAFTA), implemented on January 1,

1994, provided duty free entry for up to

approximately 7.43 million pounds of

qualifying peanuts from Mexico. For

1995, the duty-free access increased to

approximately 7.65 million pounds. By

calendar year 2008, access will be

unlimited. In addition, the United States

Schedule to the Uruguay Round

Agreements negotiated under the

General Agreement on Tariffs and Trade

(GATT) relaxes the peanut import quota

to 74.5 million pounds in 1995, with

additional annual increases to 124

million pounds by the year 2000.

Various qualities of peanuts are

entered into the United States from

countries such as Argentina, Mexico,

Nicaragua, India, and the People’s

Republic of China. However, until the

People’s Republic of China accedes to

the World Trade Organization, no

benefits of the increased access will be

available to it. Foreign produced

peanuts are produced under varying

weather conditions and using different

cultural practices. Consistent with the

Agreement’s regulatory provisions, each

lot of peanuts entered into the U.S.

would be required to be officially

sampled and graded by the Federal or

Federal-State Inspection Service

(inspection service). Incoming

inspection for farmers stock peanuts and

outgoing inspection for edible quality

shelled peanuts and cleaned-inshell

peanuts would be required for imported

peanuts. A list of inspection service
Federal Register / Vol. 61, No. 22 / Thursday, February 1, 1996 / Proposed Rules 3607

offices is provided in paragraph (d)(2)(i)

of this regulation.

Some peanuts contain defects or other

damage which cause them to be of low

quality or have poor taste which could

affect the demand for peanuts.

Producers, handlers and manufacturers

in the domestic peanut industry believe

that even an isolated quality problem

could adversely affect consumer

confidence, which would be detrimental

to the domestic peanut industry.

The Agreement imposes quality

standards for domestically produced

inshell and shelled peanuts. Peanut lots

are graded based on the percentage of

unshelled peanuts, percentage of

kernels with damage and minor defects,

percentage of loose shelled kernels,

percentage of foreign material, and

percentage of moisture content. In

addition, an integral part of these

quality standards is the extent of the

presence of Aspergillus flavus mold (the

principal cause of aflatoxin, which is a

carcinogen). This mold is more likely to

be found on damaged or defective

kernels than on sound, whole, good

quality kernels. A chemical analysis for

aflatoxin is required on shelled peanut

lots not meeting superior quality

requirements. Shelled lots that exceed

certain superior quality requirements

are exempt from the aflatoxin chemical

analysis requirements.

U.S. Customs Service requirements

and USDA safeguard procedures:

Importer obligations would include

filing documents notifying the U.S.

Customs Service (Customs Service) and

the USDA of different actions taken

concerning foreign produced inshell

and shelled peanuts. Customs Service

importation procedures and

requirements are set out in title 19 of the

Code of Federal Regulations (19 CFR).

The Customs Service regulations

applicable to peanut handling and

processing include, but are not be

limited to: bond requirements (19 CFR

part 113); transfer from port of entry to

another Customs Service office location

(19 CFR part 112); entry of merchandise

for consumption (19 CFR part 141);

warehouse entry, and withdrawal from

warehouse for consumption (19 CFR

part 144); establishment of bonded

warehouses (19 CFR parts 19.13 and

19.2); and manipulation in bonded

warehouses (19 CFR part 19.11); transfer

of ownership (19 CFR parts 141.113 and

141.20); failure to recondition (19 CFR

part 113.62(e); and redelivery of

merchandise 19 CFR part 113.62(d). For

Customs Service purposes, the term

‘‘consumption’’ means ‘‘use in the

United States.’’ Customs Service entry

procedures would not be superseded by

this import regulation.

When arriving at a port of entry,

foreign produced peanuts may be

entered for ‘‘warehouse’’ or entered for

‘‘consumption,’’ or may be transported

to another Customs Service port of entry

to be entered there for warehouse or

consumption. Peanuts transported from

one Customs Service port of entry to

another Customs Service port of entry

must be transported by a carrier

designated by the Customs Service

under 19 U.S.C. 1551. Peanuts entered

for warehouse are stored in a Customs

Service bonded warehouse. Such

peanuts remain in Customs Service

custody until they are withdrawn from

warehouse, entered for consumption, or

released from Customs Service custody.

Peanuts entered for consumption, and

peanuts withdrawn from warehouse for

consumption, are released from

Customs Service custody for edible or

non-edible use. Release of peanuts, in

both cases, would be a conditional

release, pending certification that the

peanuts conform to Customs Service

entry requirements and meet the

handling and quality requirements of

this proposed regulation. The Customs

Service can demand redelivery of

peanuts that are subsequently

determined to be inadmissible.

The importer, or import broker acting

on behalf of the importer, would be

required to file with the Customs

Service required entry documentation

for each foreign produced peanut lot to

be entered. Under USDA safeguard

procedures established in this proposed

rule, each importer would also be

required to file completed entry

documentation (Customs Service Form

3461 or other equivalent form) with the

inspection service office that would

perform the sampling of the lot for

inspection to provide that office with

advanced notice of requested

inspection. The entry documentation

would be filed by mail or facsimile

transmission (fax). The filing would

occur prior to arrival of the shipment at

the port of entry in order to expedite

entry procedures. The inspection

service office would stamp, sign, and

date the entry document and return it to

the importer or broker by fax or mail.

The importer/broker would then submit

the stamped copy to the Customs

Service. This ‘‘stamp-and-fax’’

procedure is similar to a procedure in

place for other imported agricultural

commodities under AMS jurisdiction.

Failure to file with the Customs Service

a copy of the entry documentation

stamped by the inspection service

would result in a delay or denial of

entry. The importer/broker would also

send a completed copy of the document

to the AMS to initiate USDA’s

monitoring process.

The names, addresses and contact

numbers of inspection service offices

that perform peanut sampling and/or

grade inspections are provided in

paragraph (d)(3) of this proposed rule.

Inspection service offices at other

locations may be contacted to sample

the imported peanut lot. In such cases,

the collected peanut samples would be

shipped to an inspection service office

with equipment and personnel qualified

to a perform grade inspection. Samples

of lots meeting minimum grade

requirements would also be sent to an

approved laboratory (listed in paragraph

(d)(4) of this rule) for aflatoxin analysis.

The lot would have to remain in storage

pending grade and aflatoxin

certification.

It would then be the importer’s

responsibility to provide, in the mailed

or faxed documentation, sufficient

information to identify the peanut lot

being entered and to ensure that

arrangements are made for sampling and

inspection. The information would

include the container identification,

weight of the peanut lot, the city, street

address, and building number (if

known) receiving the peanut lot, the

requested date and time of inspection,

and a contact name or number at the

destination. If the destination is

changed from that listed on the stampand-fax document, it would be the

importer’s responsibility to immediately

advise inspection service offices at both

the original destination and the new

destination of such change. Shipments

which are not made available pursuant

to the entry document, or are not

properly displayed for sampling

purposes, would be reported to the

Customs Service.

Falsification of reports submitted to

the AMS is a violation of Federal law

punishable by fine or imprisonment, or

both.

A bond secured by surety or U.S.

Treasury obligations is required to be

posted by the importer with the

Customs Service to guarantee the

importer’s performance. Peanuts would

be determined inadmissible because the

importer failed to follow Customs

Service importation procedures, the

peanuts failed to meet quality

requirements, or because the handling

procedures (including lot identification

and certification) specified in these

proposed regulations were not followed.

Redelivery could be demanded for

failure to comply with the quality,

handling, and reporting requirements of

this import regulation, including: arrival

at the inland destination with a broken

Customs Service or inspection service
3608 Federal Register / Vol. 61, No. 22 / Thursday, February 1, 1996 / Proposed Rules

seal; failure to maintain lot identity;

failure to receive required inspection;

commingling of peanut lots not of like

quality or condition; disposition of nonedible peanuts to an edible peanut

outlet or an improper, non-edible

peanut outlet; and failure to fully report

the disposition of foreign produced

peanuts. Disposition reports would

include grade, aflatoxin, and

identification certifications and bills of

lading, sales receipts, and other

documentation showing the peanuts

were disposed to a non-edible peanut

outlet, exported, or destroyed.

A redelivery demand must be made

by the Customs Service within 30 days

of release of the peanuts. Redelivery to

the port of entry is normally required

within 30 days after the redelivery

demand is issued. The Customs Service

may authorize a longer redelivery

period and may authorize an

appropriate extension of the redelivery

period for good cause.

Because the Customs Service requires

one week to prepare and issue a

redelivery demand notice, this proposed

import rule would establish that

importers must report disposition of lots

of peanuts to the AMS within 23

calendar days of the date of release.

Although a 23-day deadline may be

considered burdensome by some, this

deadline is necessary because of the

Customs Service 30-day requirement.

Thus, the importer would have 23 days

to perform necessary shelling, cleaning,

sorting, sizing or other handling

functions necessary to obtain edible

certification or to dispose of the peanuts

to a non-edible peanut outlet. If the

AMS did not receive certification of the

lot’s edible quality or non-edible

disposition by the 23rd calendar day, or

if the importer fails to comply with

quality or handling requirements of this

import regulation, the AMS would

notify the Customs Service. The

Customs Service would then demand

redelivery of the lot. Peanuts entered for

warehouse (and which remain in

Customs Service custody in a bonded

warehouse) would not be subject to

these time constraints until they are

withdrawn for consumption. If notified

by the importer, AMS would extend a

deadline to correspond with an

extension granted to the importer by the

Customs Service.

The importer would cause a copy of

the entry documentation applicable to

each peanut lot to be forwarded with the

peanuts to the lot’s inland destination.

If the shipment is sealed by Customs

Service or the inspection service, the

seal must remain intact and would be

broken only by an authorized official at

the destination point.

The identification requirements in

this proposed regulation are similar to

the Agreement’s lot identification

requirements. Lot size would be limited

to 200,000 pounds to comply with

Agreement requirements and random

sampling provisions of the inspection

service. Boatload shipments exceeding

200,000 pounds would be entered under

two or more Customs Service entry

documents. For instance, five containers

averaging 40,000 pounds each (the

industry standard) would be entered on

one entry document. Lot size and

identification arrangements would be

made consistent with the port of entry

inspection service office and would be

established cooperatively between the

inspection service, Customs Service

offices and the importer at the port of

entry. This would facilitate subsequent

lot identification, inspection, and

reporting of large imported shipments.

Foreign produced peanuts placed in

storage could be commingled only with

like-quality, foreign produced peanuts

belonging to the same importer.

Similarly, failing quality peanuts could

be commingled with other such foreign

produced peanuts prior to clean up or

non-edible disposition. However,

reports concerning commingled lots

would have to be reported within the

23-day reporting period of the earliestentered lot commingled. For example, if

two 100,000 pound shipments were

released for consumption entries on

consecutive Mondays, and commingled

in storage prior to outgoing inspection,

at least 100,000 pounds from the

commingled lot would have to be

withdrawn from storage, inspected and

reported as meeting edible or non-edible

disposition requirements of this

proposed rule within 23 days of the first

lot’s consumption entry date. Further,

the remaining commingled peanuts

would have to be withdrawn, inspected,

properly disposed and reported within

the next week—before the end of the

second lot’s 23 day reporting period.

The objective of the lot identification

requirements is to help ensure that

individual peanut lots would be

disposed as required and that defects in

poor quality peanut lots would not be

blended out by commingling poor

quality peanuts with higher quality

peanuts. The lot identification

requirements in this proposed import

regulation are the same as those

specified for domestically produced

peanuts.

All USDA required sampling, quality

certification, and lot identification

would be conducted by the inspection

service. Chemical analysis would be

conducted by USDA or approved

laboratories. Foreign produced peanuts

stored in bonded warehouses are subject

to Customs Service audits. Importers

would reimburse the inspection service,

laboratories, and the Customs Service

for services provided and costs incurred

with regard to the importation of the

importer’s peanuts.

Release for importation:

Depending on condition (shelled or

inshell) and containerization, foreign

produced peanuts could be either: (1)

Sampled, inspected, and held at the port

of entry until certified by the inspection

service as meeting the edible quality

requirements of this rule; or (2)

conditionally released at the port of

entry and entered under Customs

Service entry procedures for later

inspection and certification.

Under option (1), foreign produced

shelled or cleaned-inshell peanuts

which are cleaned, sorted, sized, and

otherwise prepared for edible

consumption prior to entry, could be

sampled and inspected at the port of

entry. The importer would present such

peanuts in containers or bags that would

allow appropriate sampling of the lot

pursuant to inspection service

requirements. After sampling, such lots

would be held at the port of entry,

under lot identification requirements of

the inspection service, pending results

of the inspection and chemical analysis.

If determined to meet the applicable

edible quality requirements in

paragraph (c) of this proposed rule, the

shelled or cleaned-inshell peanuts could

be entered for consumption without

further inspection. Reports of such

entries would not have to be filed with

AMS.

Shelled or cleaned-inshell peanuts,

sampled and held at the port of entry,

which fail edible quality requirements

would, at the importer’s discretion, be:

(1) exported; (2) entered for clean up,

and if satisfactorily remilled or

blanched, used for edible consumption;

or (3) entered for non-edible

consumption. Failing peanuts that are

exported would not have be reported to

AMS because the peanuts were not

entered into the U.S. The importer

would fully report all actions taken on

each lot entered for clean up or nonedible disposition within 23 days of the

lot’s consumption entry filing date.

Under option (2), foreign produced

shelled or cleaned-inshell peanuts

which are cleaned, sorted, sized, and

otherwise prepared for edible

consumption prior to entry, would be

conditionally released at the port of

entry and transported inland for

sampling, inspection, and certification.

Farmers stock peanuts would have to be

shipped inland for sampling and

inspection because specialized sampling
Federal Register / Vol. 61, No. 22 / Thursday, February 1, 1996 / Proposed Rules 3609

facilities are not available at ports of

entry.

Categories of peanuts submitted for

importation:

Farmers stock peanuts. Such peanuts

would be required to undergo incoming

inspection at a prearranged buying point

prior to arrival at a shelling or storage

destination. All required inspections,

shelling, and dispositions of released

farmers stock peanuts would be

completed and reported within the

required 23 day reporting deadline.

Foreign produced farmers stock

peanut lots could not be commingled

with other peanut lots prior to incoming

inspection. Incoming inspection

determines the quality of the farmers

stock peanuts based on moisture

content, foreign material, damage, loose

shelled kernels, and visible Aspergillus

flavus mold. The inspection service

would issue USDA form CFSA–1007,

‘‘Inspection Certificate and Sales

Memorandum’’ (formerly ASCS–1007)

designating the lot as either Segregation

1, 2, or 3 quality.

Only Segregation 1 peanut lots could

be prepared for human consumption

use. Such peanuts would be shelled or

prepared for cleaned-inshell use, and

certified for disposition within 23 days

of the lot’s release. If Segregation 1 lots

imported on successive days were

commingled, each imported lot would

still have to comply with the 23-day

reporting period. For quality control and

reporting purposes, Segregation 1 lots

intended for human consumption outlet

could be commingled only with other

like quality peanuts of the same

importer. A Segregation 1 lot

commingled with Segregation 2 or 3

peanuts would assume the lower

Segregation 2 or 3 quality and would be

disposed as non-edible quality peanuts.

Foreign produced farmer stock

peanuts received by importers and

determined at incoming inspection to be

Segregation 2 and 3 quality peanuts

could be disposed only as non-edible

peanuts. Segregation 3 and commingled

Segregation 2 and 3 farmers stock

peanuts could be exported inshell or

shelled and fragmented prior to export.

Segregation 2 and 3 peanuts could also

be destroyed by burying (under

inspection service supervision) or

exported (certified by Customs Service).

The importer would report non-edible

disposition by providing a copy of the

incoming inspection certificate, bills of

lading and sales receipts, or other

official certifications as proof of

disposition to crushing or exportation,

or to other non-edible outlets or

burying. Exported peanuts would be lot

identified by the inspection service and

that certification would be filed with the

Secretary within the 23 day reporting

period and applicable Customs Service

re-export procedures would be

followed.

Foreign produced Segregation 2 and 3

quality peanuts could be shelled by a

custom seed sheller for seed use and

dyed or chemically treated so as to be

unfit for human or animal consumption.

Domestically produced Segregation 2

and 3 peanuts shelled for seed need not

be dyed or treated but must be produced

under the auspices of a State agency,

shelled by a custom seed sheller, and

subject to the Peanut Administrative

Committee (PAC) oversight. Measures

such as these are necessary to ensure

that peanuts used for human

consumption are safe and wholesome.

Proof of dyeing or chemical treatment of

foreign produced peanuts would be

filed with the Secretary within the 23

day reporting period.

Foreign produced farmers stock

peanuts do not qualify for the support

program administered by the Farm

Service Agency, formerly the

Agricultural Stabilization and

Conservation Service (ASCS).

Shelled peanuts: Foreign produced

shelled peanuts could: (1) Originate

from foreign produced Segregation 1

farmers stock milled at facilities in the

U.S., or (2) be peanuts produced and

milled in another country which are

conditionally released at the port-ofentry for inland sampling and

inspection. Both categories of shelled

peanuts would be sampled and

inspected against outgoing quality

requirements specified in paragraph (c)

of this regulation.

Domestically produced shelled

peanuts intended for edible markets

must originate from farmers stock

peanuts which have undergone

incoming inspection and are determined

to be of Segregation 1 quality. The AMS

cannot determine whether shelled

peanuts produced and milled in a

foreign country originated from

Segregation 1 quality peanuts prior to

milling. However, because outgoing

inspection is more reliable and precise

in determining aflatoxin content in

peanut kernels, this proposed import

regulation provides that peanuts shelled

prior to entry would be exempt from

incoming inspection before delivery for

outgoing inspection. Such shelled

peanuts would be sampled and tested

against outgoing quality requirements

prior to disposition to edible outlets.

Two grade levels for shelled peanuts

are in effect under the Agreement and

would be established in this import

regulation. The Agreement provides that

shelled peanut lots meeting the quality

requirements specified in a table

entitled ‘‘Other Edible Quality,’’ under

paragraph (a) of § 998.200, must be

chemically analyzed for aflatoxin

content prior to disposition to edible

outlets. The quality requirements

specified in the Other Edible Quality

table are duplicated in ‘‘Table 1,

Minimum Grade Requirements—

Peanuts for Human Consumption’’ of

this proposed import regulation. The

outgoing quality requirements would

also include a parts-per-billion tolerance

for aflatoxin, determined by chemical

analysis.

Aflatoxin appears most frequently in

damaged, stressed, under-developed

and malformed kernels. Domestic lots

with fewer poor quality kernels are less

likely to be contaminated and, thus, do

not have to be chemically tested. The

Agreement’s ‘‘Indemnifiable Grades’’

table in paragraph (a) of § 998.200,

provides for a superior quality level

with more rigorous percentage

tolerances than those found in the Other

Edible Quality table. Thus, foreign

produced shelled lots meeting the

superior quality standards would be

exempt from chemical analysis. The

quality requirements specified in the

‘‘Indemnifiable Grades’’ table are

duplicated in ‘‘Table 2 Superior Quality

Requirements—Peanuts for Human

Consumption’’ of this proposed

regulation.

Currently, in paragraph (c)(4) of

§ 998.200, peanuts are considered edible

quality if the chemical assay shows the

lot contains 15 ppb or less of aflatoxin.

Thus, the level of aflatoxin in foreign

produced peanut lots intended for

edible peanut markets could not exceed

15 ppb. Consistent with paragraphs

(c)(4) and (g)(3) of § 998.200, non-edible

quality peanut lots with 25 ppb or less

could be disposed to certain non-edible

peanut outlets. Non-edible quality

peanut lots with aflatoxin exceeding 25

ppb would be further restricted to

certain other non-edible peanut outlets.

The sampling, testing, certification and

identification of foreign produced

peanuts lots would be performed in

accordance with paragraph (d)(4) of this

proposed regulation.

Chemical testing would be performed

by an AMS, Science and Technology

Division laboratory or a laboratory

approved by the PAC. The PAC locally

administers the Agreement with

Department oversight. A list of

approved laboratories is provided in

paragraph (d)(4)(iv) of this proposed

regulation. These are the same

laboratories specified in the Agreement.

Thus, to obtain approval for human

consumption use of a foreign produced

shelled peanut lot, the importer would

present to the AMS and the Customs
3610 Federal Register / Vol. 61, No. 22 / Thursday, February 1, 1996 / Proposed Rules

Service two certifications: (1) Quality

certification Form FV–184–9A ‘‘Milled

Peanut Inspection Certificate’’ and (2)

aflatoxin certification Form CSSD–3

‘‘Certificate of Analysis for Official

Samples’’ issued by USDA laboratories,

or equivalent forms issued by a PAC

approved lab. An aflatoxin certificate

would not be required if the lot meets

the superior grade requirements, but

could be required by the buyer. The

certificates are the same as those used

to report grade and chemical analysis

results for domestically produced

peanuts. If the required certificates were

not received by the AMS within 23 days

of a consumption entry, or a withdrawal

for consumption entry, the AMS would

request the Customs Service to initiate

a redelivery demand for the lot.

Cleaned-inshell peanuts: Inshell

peanuts that have been cleaned, sorted,

and prepared in another country for

edible inshell peanut markets in the

U.S. could be presented as a

consumption entry at the port of entry.

Such peanuts would be declared as

cleaned-inshell peanuts on the Customs

Service entry document and could

either be presented for outgoing

inspection at the port of entry, if

delivered in bags, or conditionally

entered for outgoing inspection at a

facility inside the U.S. Peanuts declared

as cleaned-inshell on a Customs Service

entry document could not undergo

additional cleaning, sorting, sizing, or

drying prior to outgoing inspection at

the destination point inside the U.S.

Cleaned-inshell peanut lots destined

for edible peanut markets would be

required to meet certain minimum

quality requirements for damage,

moisture and foreign material. Cleanedinshell lots containing more than 1

percent kernels with visible mold would

have to be chemically tested and meet

aflatoxin requirements. The cleanedinshell quality requirements specified in

paragraph (c)(2) of this proposed

regulation are the same as the quality

requirements in paragraph (b) of

§ 998.200 of the Agreement.

Foreign produced farmers stock

Segregation 1 peanuts also could be

prepared and presented at outgoing

inspection as cleaned-inshell peanuts.

Such peanuts inspected and certified as

meeting edible requirements for

cleaned-inshell peanuts would be

designated as imported peanuts on

inspection service form FV–184–9A.

The importer would file form FV–184–

9A with the AMS for each lot of foreign

produced cleaned-inshell peanuts

meeting edible quality requirements for

cleaned-inshell peanuts.

Imported peanuts certified as meeting

edible requirements could be used any

way desired. Only after shelled and

cleaned-inshell peanuts are certified as

meeting applicable requirements could

such peanuts be commingled with

imported lots of other importers or

domestically produced peanuts also

certified for human consumption.

Disposition of Failing Peanuts

The following peanuts could not be

used for human consumption: (1)

Farmers stock peanuts that grade either

Segregation 2 or Segregation 3; (2)

cleaned-inshell and shelled peanuts that

fail outgoing quality and/or aflatoxin

requirements and were not

reconditioned or reworked (the removal

of defective kernels); and (3) below

grade residue from any shelling, milling

or blanching operations.

Cleaned-inshell lots that fail outgoing

inspection requirements of paragraph

(c)(2) could be reconditioned by

remilling the peanuts, which could

include shelling. If shelled, the peanuts

would have to meet outgoing

requirements of proposed paragraph

(c)(1) for shelled peanuts.

Failing shelled lots, which originated

from Segregation 1 peanuts, could be

reconditioned following procedures

established in paragraph (f) of this

proposed rule. These provisions are the

same as those established under various

provisions of the Agreement.

Segregation 1 shelled peanuts failing

quality requirements in table 1 and/or

exceeding 15 ppb aflatoxin content

could be reconditioned by remilling

and/or blanching and, when

subsequently reinspected and certified

as meeting edible quality and aflatoxin

requirements, could be disposed to

edible peanut outlets. If not

reconditioned, failing Segregation 1 lots

would have to be disposed to non-edible

peanut outlets as unrestricted or

restricted peanuts (below).

Provisions controlling the disposition

of residue peanuts from inshell

remilling and shelled remilling and

blanching that continue to fail edible

quality requirements are also provided

in this proposed rule. Two categories of

non-edible peanuts are specified under

the Agreement—‘‘unrestricted’’ and

‘‘restricted.’’ The designation would be

based on the amount of aflatoxin

detected in the lot. ‘‘Unrestricted’’

peanuts would be peanuts which fail

one or more quality requirements and,

when chemically assayed, contain more

than 15 ppb but 25 ppb or less aflatoxin.

While such peanuts would not be edible

quality, they could be crushed for oil,

exported or used in animal feed,

provided that certain handling and

container labeling requirements were

followed. Unrestricted peanuts also

could be used for seed (if dyed or

treated to prevent edible use), crushed

for oil, exported, or buried. Meal

resulting from the crushing of

unrestricted peanuts would not have to

be tested a second time for aflatoxin

content. Disposition of meal resulting

from the crushing of peanuts is not

regulated under the Agreement or this

proposed regulation.

Peanuts containing more than 25 ppb

aflatoxin would be considered

‘‘positive’’ to aflatoxin and would be

designated as ‘‘restricted’’ peanuts.

Restricted peanut lots may or may not

meet quality requirements of table 1. At

the direction of the importer, restricted

peanut lots would be used either for

seed (if dyed or treated), crushed for oil,

destroyed by burying, or exported. Meal

resulting from the crushing of restricted

peanuts would be certified as to

aflatoxin content and such certification

would accompany the meal into the

channels of commerce.

The importer could dispose of a

failing peanut lot directly to a nonedible peanut outlet or set aside and

commingle several failing lots for

eventual disposition to one or more

non-edible outlets. Commingled failing

quality peanuts would be held separate

and apart from edible peanuts and

identified with red tags indicating nonedible peanuts. Eventual disposition

would be to non-edible peanut outlets

consistent with the failing quality of the

peanuts, pursuant to paragraph (e) of

this proposed rule.

If an importer chose to destroy by

burying or export unrestricted or

restricted peanuts, the peanuts would be

lot identified and proof of burying or

exportation would be provided by the

importer to the AMS. Customs Service

procedures controlling re-exported

merchandise would also be followed by

the importer. Burying and exportation

expenses would be borne by the

importer.

It would be the importer’s

responsibility to file inspection

certificates and other documentation

sufficient to account for disposition of

all failing quality peanuts acquired by

the importer. Such proof could consist

of copies of bills of lading and sales

receipts between the importer and nonedible peanut outlet receivers. The

documentation would contain

identifying information, such as

container or lot numbers, that tie the

peanuts reported on the documents to

failing quality peanuts on inspection

service or aflatoxin certificates. The

name and address of the non-edible

peanut receiver and valid contact

information would also be specified on

the documentation.
Federal Register / Vol. 61, No. 22 / Thursday, February 1, 1996 / Proposed Rules 3611

Disposition of unrestricted and

restricted peanut lots would be reported

to the AMS within 23 days of filing for

a consumption entry, or a withdrawal

for consumption entry, with the

Customs Service.

The inspection service would identify

imported peanuts as peanuts of foreign

origin on the inspection certificate to

assist in lot identification (and help

prevent unintended commingling with

domestically produced peanuts prior to

certification). Foreign origin

designations also would help importers

and the AMS meet its monitoring

responsibilities.

From time to time, the PAC may

recommend to the Secretary that quality

requirements or handling procedures

specified in the Agreement be revised.

If such changes are approved by the

Secretary and implemented for the

domestic peanut industry in 7 CFR Part

998, corresponding changes would be

made in § 999.600. Changes in

regulations for domestically produced

peanuts are generally made effective

July 1. Thus, corresponding changes to

the import regulation would be made

effective on that date, unless otherwise

specified in the regulation. Quality

requirements in effect on the date of

inspection of a foreign produced lot

would be applied to the inspected lot.

Safeguard procedures: This proposed

rule would establish a procedure to

verify importers’ compliance with

import requirements. The safeguard

procedures would provide for

monitoring of peanut lots from entry to

final disposition. The purpose of these

procedures would be to ensure that

foreign produced peanuts either meet

edible requirements or are appropriately

disposed to non-edible peanut outlets,

exported or destroyed. The proposed

safeguard procedures are similar to

safeguard procedures already in place

for other imported commodities and are

consistent with the inspection,

identification and certification

requirements applied to domestically

produced peanuts under the Agreement.

The safeguard process would include

the ‘‘stamp-and-fax’’ entry procedure,

described above, whereby the importer

provides the Customs Service with an

entry document stamped by the

inspection service. The importer also

would file a copy of the entry document

with the AMS and forward a copy, with

the released lot, to the inland

destination where the lot would be

inspected or warehoused. Edible

certification and non-edible disposition

would be reported by filing with the

AMS copies of all grade certificates,

aflatoxin certificates, and proof of nonedible disposition. Such certifications

would be filed within 23 days of filing

a consumption entry or a withdrawal

from warehouse for consumption entry.

Receipt of required certificates and

other documentation within the 23-day

deadline would be essential. Failure of

an importer to obtain edible

certification—or arrange for appropriate

non-edible disposition—on all foreign

produced peanut acquisitions, and file

such reports with the AMS within 23

days of a consumption declaration,

could result in a redelivery demand by

the Customs Service. Failure to

redeliver the violating lot could result in

liquidated damages.

Certificates and other supplementary

documentation would be sent to AMS,

Marketing Order Administration Branch

(MOAB) which oversees the domestic

peanut program and would oversee this

proposed import program. Facsimile or

express mail deliveries could be used to

ensure timely receipt of certificates and

other required documentation.

Overnight and express mail deliveries

would be addressed to the USDA/AMS,

Marketing Order Administration

Branch, 14th and Independence Ave.

SW, Room 2525, Washington, DC.

20250, Attn: Report of Imported

Peanuts. The MOAB’s fax number is

(202) 720–5698, Attn: Report of

Imported Peanuts.

For the purposes of checking and

verifying reports filed by importers and

disposition outlets, provisions would be

included in this proposed regulation

that would allow the Secretary, through

duly authorized agents, to have access

to any premises where peanuts may be

held and processed. Authorized agents,

at any time during regular business

hours, would be permitted to inspect

any peanuts held, and any and all

records with respect to the acquisition,

holding or disposition of any peanuts

which may be held, or which may have

been disposed by that importer.

USDA record retention requirements

would also be established to require

importers to retain information for at

least two years beyond the year of

applicability. Customs Service record

retention requirements are longer.

With regard to Customs Service

reporting procedures, it is the importer’s

decision when to commence

‘‘consumption’’ entry procedures or

when to withdraw merchandise from a

warehouse for consumption. The

importer’s decision would be

implemented in a manner consistent

with Customs Service procedures and

reported in accordance with normal

Customs Service requirements. Any

Customs Service reporting or

recordkeeping requirements for

disposition of imported merchandise or

clearance of bonding requirements

would not be superseded by this

regulation.

Paperwork Reduction Act

In accordance with the Paperwork

Reduction Act of 1980 (44 U.S.C.

Chapter 35), the information and

collection requirements that are

contained in this proposed rule have

been submitted to the Office of

Management and Budget (OMB) and

would be assigned a new OMB number.

Comments should reference this

proposed import regulation and the date

and page number of this Federal

Register. Comments must be received by

April 1, 1996. Comments should be

submitted to the Desk Officer for

Agriculture, Office of Information and

Regulatory Affairs, OMB, Washington,

D.C., 20503 and to the USDA in care of

the Docket Clerk, Fruit and Vegetable

Division, AMS, USDA, P.O. Box 96456,

room 2523–S, Washington, DC 20090–

6456; fax 202–720–5698. A comment to

OMB is best assured of having its full

effect if OMB receives the comment

within 30 days of publication of the

rule. All comments will also become a

matter of public record.

Comments are invited on: (1) Whether

the proposed collection of information

is necessary for USDA’s oversight of

imported peanuts; (2) the accuracy of

the collection burden estimate and the

validity of methodology and

assumptions used in estimating the

burden on respondents; (3) ways to

enhance the quality, utility, and clarity

of the information requested; and (4)

ways to minimize the burden, including

use of automated or electronic

technologies.

The reporting and recordkeeping

burdens imposed under this proposed

rule are designed to be minimal on

importers and customs brokers. No new

forms would be required to be

completed by importers or customs

brokers. However, various

documentation obtained during the

importation process—incoming and

outgoing inspection certificates, lot

identification certificates, aflatoxin

laboratory analyses, Custom Service

documentation, bills of lading, etc.

would be photocopied and mailed to the

Secretary. The information collected

would be used for compliance purposes

only and would be held confidential by

the Department. The information

collected would not be compiled for

dissemination in any public report.

Estimate of Burden: Public reporting

burden for this proposed collection of

information is estimated to average 5

minutes (0.083 hours) per response.
3612 Federal Register / Vol. 61, No. 22 / Thursday, February 1, 1996 / Proposed Rules

Respondents: Importers and customs

brokers who import peanuts.

Estimated Number of Respondents:

25.

Estimated Number of Responses per

Respondent: 85.

Estimated Total Annual Burden on

All Respondents: 177 hours (7.08 hours

per respondent).

Without the benefit of prior

experience in this subject, and for the

purposes of complying with the

Paperwork Reduction Act requirements,

the Department makes several rough

estimates as to the number of importers

affected by this regulation, the number

of peanut shipments imported, and the

number of documents needed to be filed

for each shipment. As many as 50

peanut handlers are capable of

conducting handling functions on

imported peanuts, but evidence from

1995 indicates that only a handful

imported peanuts. Thus, the number of

importers is estimated at 25. While the

exact amount is not yet determined, if

the 1996 quota is established at 85

million pounds (and is fully

subscribed), approximately 425 entries

of 200,000 pound shipments would be

entered. If allocated equally, the number

of shipments per importer would be 17.

It is expected that most shipments

would be shelled peanuts needing as

few as three documents filed with the

Secretary—the initial Customs Service

entry document (Form 3461, or

equivalent form, filed with the

inspection service office and AMS), a

grade inspection certificate (FV–184–

9A, ‘‘Milled Peanut Inspection

Certificate’’) and an aflatoxin assay

certificate (Form CSSD–3 ‘‘Certificate of

Analysis for Official Samples’’ or

equivalent PAC approved laboratory

form). Inshell lots and shelled lots that

fail inspection requirements (expected

to be far fewer in number) would

require additional forms for

reconditioning or disposition of nonedible peanuts. This rule estimates that

each entry would require an average of

five documents be filed for each

imported shipment of peanuts—

resulting in an estimated 85 documents

filed for each importer, and

approximately 2,125 filings for the

industry. The time to photocopy and

mail a document, and file the document

for recordkeeping purposes, is estimated

to total 5 minutes—resulting in an

annual burden of approximately 7 hours

per importer, and a total of 177 burden

hours for the industry.

In addition to the reporting

requirements, this proposed rule would

establish that importers and customs

brokers retain copies of certifications

and entry documentation for not less

than two years after the calendar year of

acquisition. This is a commonly

accepted records retention period and

within good business practices. The

time for maintaining records by filing

each document internally is included in

the five minute filing estimate. The

information collected would be used

only for compliance purposes by

personnel of the USDA.

The reporting and recordkeeping

requirements established in this

proposed rule would enable the USDA

to oversee the importation of peanuts

and help the U.S. peanut industry

provide only good quality, wholesome

peanuts for edible peanut outlets.

Without the quality requirements

specified in the Agreement (7 CFR Part

998), regulations for non-signatory

handlers (7 CFR Part 997), and these

proposed regulations, poor quality

peanuts could more easily be entered

into edible channels, causing consumer

dissatisfaction and having a negative

impact on the market for peanuts and

peanut products. Compliance with these

standards would help the peanut

industry in its efforts to expand markets.

Although these proposed

requirements could result in small

additional costs for importers, the

benefits from the restriction of low

quality peanuts from edible markets

could outweigh any additional

inspection, handling, recordkeeping and

reporting costs resulting from the

requirements. The proposed

requirements have been carefully

reviewed and every effort has been

made to minimize any unnecessary

reporting and recordkeeping costs.

Based on available information, the

Administrator of the AMS has

determined that this proposed rule

could impose some additional costs on

affected importers. However, the

benefits of marketing a high quality

product should exceed the additional

costs, if any, which could be incurred in

meeting these requirements.

A 30 day comment period is provided

to allow interested persons to respond

to this proposal. All written comments

received within the comment period

will be considered when finalizing this

proposed rule.

List of Subjects in 7 CFR Part 999

Dates, Filberts, Food grades and

standards, Imports, Nuts, Peanuts,

Prunes, Raisins, Reporting and

recordkeeping requirements, Walnuts.

For the reasons set forth in the

preamble, 7 CFR part 999 is proposed to

be amended as follows:

PART 999—SPECIALTY CROPS;

IMPORT REGULATIONS

1. The authority citation for 7 CFR

part 999 is revised to read as follows:

Authority: 7 U.S.C. 601–674; and 7 U.S.C.

1445c-3.

2. A new § 999.600 is added to part

999 to read as follows:

§ 999.600 Regulation governing imports of

peanuts.

(a) Definitions. (1) Peanuts means the

seeds of the legume Arachis hypogaea

and includes both inshell and shelled

peanuts produced in countries other

than the United States, other than those

marketed in green form for consumption

as boiled peanuts.

(2) Farmers stock peanuts means

picked and threshed raw peanuts which

have not been shelled, crushed, cleaned

or otherwise changed (except for

removal of foreign material, loose

shelled kernels, and excess moisture)

from the form in which customarily

marketed by producers.

(3) Inshell peanuts means peanuts, the

kernels or edible portions of which are

contained in the shell.

(4) Incoming inspection means the

sampling and inspection of farmers

stock peanuts to determine Segregation

quality.

(5) Segregation 1 peanuts, unless

otherwise specified, means farmers

stock peanuts with not more than 2.49

percent damaged kernels nor more than

1.00 percent concealed damage caused

by rancidity, mold, or decay and which

are free from visible Aspergillus flavus.

(6) Segregation 2 peanuts, unless

otherwise specified, means farmers

stock peanuts with more than 2.49

percent damaged kernels or more than

1.00 percent concealed damage caused

by rancidity, mold, or decay and which

are free from visible Aspergillus flavus.

(7) Segregation 3 peanuts, unless

otherwise specified, means farmers’

stock peanuts with visible Aspergillus

flavus mold.

(8) Shelled peanuts means the kernels

of peanuts after the shells are removed.

(9) Outgoing inspection means the

sampling and inspection of either:

shelled peanuts which have been

cleaned, sorted, sized and otherwise

prepared for human consumption

markets; or inshell peanuts which have

been cleaned, sorted and otherwise

prepared for inshell human

consumption markets.

(10) Negative aflatoxin content means

15 parts-per-billion (ppb) or less for

peanuts which have been certified as

meeting edible quality grade

requirements, and 25 ppb or less for

non-edible quality peanuts.
Federal Register / Vol. 61, No. 22 / Thursday, February 1, 1996 / Proposed Rules 3613

(11) Person means an individual,

partnership, corporation, association, or

any other business unit.

(12) Secretary means the Secretary of

Agriculture of the United States or any

officer or employee of the United States

Department of Agriculture (USDA) who

is, or who may hereafter be, authorized

to act on behalf of the Secretary.

(13) Inspection service means the

Federal or Federal-State Inspection

Service, Fruit and Vegetable Division,

Agricultural Marketing Service, USDA.

(14) USDA laboratory means

laboratories of the Science and

Technology Division, Agricultural

Marketing Service, USDA, that

chemically analyze peanuts for aflatoxin

content.

(15) PAC approved laboratories means

laboratories approved by the Peanut

Administrative Committee, pursuant to

Peanut Marketing Agreement No. 146 (7

CFR Part 998), that chemically analyze

peanuts for aflatoxin content.

(16) Conditionally released means

released under bond by the United

States Customs Service (Customs

Service) for consumption (use in the

United States) or withdrawal from

warehouse for consumption.

(17) Importation means the release

from custody of the Customs Service.

(b) Incoming regulation: (1) Farmers

stock peanuts presented for importation

must first undergo incoming inspection.

Only Segregation 1 peanuts may be used

for human consumption. All foreign

produced farmers stock peanuts for

human consumption must be sampled

and inspected at a buying point or other

handling facility capable of performing

incoming sampling and inspection.

Sampling and inspection shall be

conducted by the inspection service.

Only Segregation 1 peanuts certified as

meeting the following requirements may

be used in human consumption

markets:

(i) Moisture. Except as provided under

paragraph (b)(2) Seed peanuts, of this

section, peanuts may not contain more

than 10.49 percent moisture: Provided,

That peanuts of a higher moisture

content may be received and dried to

not more than 10.49 percent moisture

prior to storage or milling.

(ii) Foreign material. Peanuts may not

contain more than 10.49 percent foreign

material, except that peanuts having a

higher foreign material content may be

held separately until milled, or moved

over a sand-screen before storage, or

shipped directly to a plant for prompt

shelling. The term sand-screen means

any type of farmers stock cleaner which,

when in use, removes sand and dirt.

(iii) Damage. For the purpose of

determining damage, other than

concealed damage, on farmers stock

peanuts, all percentage determinations

shall be rounded to the nearest whole

number.

(iv) Loose shelled kernels. Peanuts

may not contain more than 14.49

percent loose shelled kernels, except

that peanuts having a higher loose

shelled kernel content may be imported

if held separately until milled or

shipped directly to a shelling facility for

prompt shelling. All percentage

determinations shall be rounded to the

nearest whole number. Kernels which

ride screens with the following or larger

slot openings may be separated from

loose shelled kernels: Runner—16⁄64 x 3⁄4

inch; Spanish and Valencia—15⁄64 x 3⁄4

inch; Virginia—15⁄64 x 1 inch. If so

separated, those loose shelled kernels

which ride the screens may be included

with shelled peanuts prepared for

inspection and sale for human

consumption: Provided, That no more

than 5 percent of such loose shelled

kernels are kernels which would fall

through screens with such minimum

prescribed openings. Those loose

shelled kernels which do not ride the

screens shall be removed from the

farmers’ stock peanuts and shall be held

separate and apart from other peanuts

and disposed of for non-edible use,

pursuant to paragraph (e) of this section.

If the kernels which ride the prescribed

screen are not separated from the

kernels which do not ride the prescribed

screen, the entire amount of loose

shelled kernels shall be removed from

the farmers stock peanuts and shall be

held separate and apart and disposed of

for non-edible use, pursuant to

paragraph (e) of this section.

(2) Seed peanuts. Farmers stock

peanuts determined to be Segregation 1

quality, and shelled peanuts certified

negative to aflatoxin (15 ppb or less),

may be imported for seed purposes.

Disposition of such peanuts to a seed

outlet must be reported to the Secretary

by submitting a copy of the bill of lading

or sales contract which reports the

weight of the peanuts so disposed, and

the name, address and telephone

number of the receiving seed outlet.

Residuals from the shelling of

Segregation 1 seed peanuts shall be held

and/or milled separate and apart from

other peanuts, and such residuals

meeting quality requirements specified

in paragraph (c)(1) of this section may

be disposed to human consumption

channels, and any portion not meeting

such quality requirements shall be

disposed to non-edible peanut channels

pursuant to paragraph (e) of this section.

Segregation 2 and 3 peanuts may be

shelled for seed purposes but must be

dyed or chemically treated so as to be

unfit for human or animal consumption.

All disposition of seed peanuts and

residuals from seed peanuts shall be

reported to the Secretary pursuant to

paragraphs (f)(2) and (3) of this section.

The receiving seed outlet must retain

records of the transaction, pursuant to

paragraph (g)(7) of this section.

(3) Oilstock and exportation. Farmers

stock peanuts of lower quality than

Segregation 1 (Segregation 2 and 3

peanuts) shall be used only in nonedible outlets as provided herein.

Segregation 2 and 3 peanuts may be

commingled but shall be kept separate

and apart from edible quality peanut

lots. Commingled Segregation 2 and 3

peanuts and Segregation 3 peanuts shall

be disposed only to oilstock, exported

inshell, or shelled and fragmented for

export as provided in paragraph (e) of

this section. Shelled peanuts and

cleaned-inshell peanuts which fail to

meet the requirements for human

consumption in paragraph (b)(1) may be

crushed for oil or exported.

(4) Whenever the Secretary has reason

to believe that peanuts may have been

damaged or deteriorated while in

storage, the Secretary may reject the

then effective inspection certificate and

may require the importer to have the

peanuts reinspected to establish

whether or not such peanuts may be

disposed of for human consumption.

(c) Outgoing regulation. No person

shall import peanuts for human

consumption into the United States

unless such peanuts are lot identified

and certified by the inspection service

as meeting the following requirements:

(1)(i) Shelled peanuts. All shelled

peanuts shall at least meet the

requirements specified in Table 1 as

follows:
3614 Federal Register / Vol. 61, No. 22 / Thursday, February 1, 1996 / Proposed Rules

TABLE 1.—MINIMUM GRADE REQUIREMENTS—PEANUTS FOR HUMAN CONSUMPTION

[Whole Kernels and Splits]

Maximum limitations

Excluding lots of ‘‘splits’’

Type and grade category

Unshelled

peanuts and

damaged

kernels

(percent)

Unshelled

peanuts,

damaged

kernels and

minor defects

(percent)

Fall through Foreign materials (percent)

Moisture

(percent)

Sound split and

broken kernels

Sound whole

kernels Total

Runner .............................. 1.50 2.50 3.00%; 17⁄64 inch

round screen.

3.00%; 16⁄64 × 3⁄4

inch; slot

screen.

4.00%; both

screens.

.20 9.00

Virginia (except No. 2) ...... 1.50 2.50 3.00%; 17⁄64

inch; round

screen.

3.00%; 15⁄64 × 1

inch; slot

screen.

4.00%; both

screens.

.20 9.00

Spanish and Valencia ....... 1.50 2.50 3.00%; 16⁄64

inch; round

screen.

3.00%; 15⁄64 × 3⁄4

inch; slot

screen.

4.00%; both

screens.

.20 9.00

No. 2 Virginia .................... 1.50 3.00 6.00%; 17⁄64

inch; round

screen.

6.00%; 15⁄64 × 1

inch; slot

screen.

6.00%; both

screens.

.20 9.00

Lots of ‘‘splits’’

Runner (not more than 4%

sound whole kernels).

1.50 2.50 3.00%; 17⁄64

inch; round

screen.

3.00%; 14⁄64 × 3⁄4

inch; slot

screen.

4.00%; both

screens.

.20 9.00

Virginia (not more than

90% splits).

1.50 2.50 3.00%; 17⁄64

inch; round

screen.

3.00%; 14⁄64 × 1

inch; slot

screen.

4.00%; both

screens.

.20 9.00

Spanish and Valencia (not

more than 4% sound

whole kernels).

1.50 2.50 3.00%; 16⁄64

inch; round

screen.

3.00%; 13⁄64 × 3⁄4

inch; slot

screen.

4.00%; both

screens.

.20 9.00

(ii) Peanuts meeting the specifications in Table 1 must also be certified ‘‘negative’’ to aflatoxin content, pursuant

to paragraph (d)(4), prior to shipment to domestic human consumption markets. Shelled peanuts meeting requirements

specified in Table 2 may be imported without sampling and testing for aflatoxin.

TABLE 2.—SUPERIOR QUALITY REQUIREMENTS—PEANUTS FOR HUMAN CONSUMPTION

[Whole Kernels and Splits]

Maximum limitations

Type and grade category

Unshelled

peanuts and

damaged

kernels

(percent)

Unshelled

peanuts,

damaged

kernels and

minor defects

(percent)

Fall through

Foreign materials

(percent)

Moisture

(percent) Sound split and

broken kernels

(percent)

Sound whole

kernels

(percent)

Total

Runner U.S. No. 1 and

better.

1.25 2.00 3.00%; 17⁄64

inch, round

screen.

3.00%; 16⁄64 × 3⁄4

inch, slot

screen.

4.00%; both

screens.

.10 9.00

Virginia U.S. No. 1 and

better.

1.25 2.00 3.00%; 17⁄64

inch, round

screen.

3.00%; 15⁄64 × 1

inch, slot

screen.

4.00%; both

screens.

.10 9.00

Spanish and Valencia U.S.

No. 1 and better.

1.25 2.00 3.00%; 16⁄64

inch, round

screen.

2.00%; 15⁄64 × 3⁄4

inch, slot

screen.

4.00%; both

screens.

.10 9.00

Runner U.S. Splits (not

more than 4% sound,

whole kernels).

1.25 2.00 2.00%; 17⁄64

inch, round

screen.

3.00%; 14⁄64 × 3⁄4

inch, slot

screen.

4.00%; both

screens.

.20 9.00

Virginia U.S. Splits (not

less than 90% splits and

not more than 3.00%

sound whole kernels

and portions passing

through 20⁄64 inch round

screen).

1.25 2.00 3.00%; 17⁄64

inch, round

screen.

3.00%; 14⁄64 × 1

inch, slot

screen.

4.00%; both

screens.

.20 9.00
Federal Register / Vol. 61, No. 22 / Thursday, February 1, 1996 / Proposed Rules 3615

TABLE 2.—SUPERIOR QUALITY REQUIREMENTS—PEANUTS FOR HUMAN CONSUMPTION—Continued

[Whole Kernels and Splits]

Maximum limitations

Type and grade category

Unshelled

peanuts and

damaged

kernels

(percent)

Unshelled

peanuts,

damaged

kernels and

minor defects

(percent)

Fall through

Foreign materials

(percent)

Moisture

(percent) Sound split and

broken kernels

(percent)

Sound whole

kernels

(percent)

Total

Spanish and Valencia U.S.

Splits (not more than 4%

sound, whole kernels).

1.25 2.00 2.00%; 16⁄64

inch, round

screen.

3.00%; 13⁄64 × 3⁄4

inch, slot

screen.

4.00%; both

screens.

.20 9.00

Runner with splits (not

more than 15% sound

splits).

1.25 2.00 3.00%; 17⁄64

inch, round

screen.

3.00%; 16⁄64 × 3⁄4

inch, slot

screen.

4.00%; both

screens.

.10 9.00

Virginia with splits (not

more than 15% sound

splits).

1.25 2.00 3.00%; 17⁄64

inch, round

screen.

3.00%; 15⁄64 × 1

inch, slot

screen.

4.00%; both

screens.

.10 9.00

Spanish and Valencia with

splits (not more than

15% sound splits).

1.25 2.00 3.00%; 16⁄64

inch, round

screen.

2.00%; 15⁄64 × 3⁄4

inch, slot

screen.

4.00%; both

screens.

.10 9.00

(2) Cleaned-inshell peanuts. Peanuts

declared as cleaned-inshell peanuts may

be presented for sampling and

inspection in bags at the port of entry.

Alternatively, peanuts may be

conditionally released as cleanedinshell peanuts but shall not

subsequently undergo any cleaning,

sorting, sizing or drying process prior to

presentation for outgoing inspection as

cleaned-inshell peanuts. Cleanedinshell peanuts intended for human

consumption may not contain more

than:

(i) 1.00 percent kernels with mold

present, unless a sample of such

peanuts is drawn by the inspection

service and analyzed chemically by a

USDA or PAC approved laboratory and

certified ‘‘negative’’ as to aflatoxin.

(ii) 2.00 percent peanuts with

damaged kernels;

(iii) 10.00 percent moisture (carried to

the hundredths place); and

(iv) 0.50 percent foreign material.

(3) Reconditioned peanuts. Peanuts

shelled, sized and sorted in another

country prior to arrival in the U.S. and

shelled peanuts which originated from

Segregation 1 peanuts that fail quality

requirements of Table 1 (excessive

damage, minor defects, moisture, or

foreign material) or are positive to

aflatoxin may be reconditioned by

remilling and/or blanching. After such

reconditioning, peanuts meeting the

quality requirements of Table 1 and

which are negative to aflatoxin (15 ppb

or less) may be disposed for edible

peanut use.

(d) Sampling and inspection. (1) All

sampling and inspection, quality

certification, chemical analysis, and lot

identification, required under this

section, shall be done by the inspection

service, a USDA laboratory, or a PACapproved laboratory, as applicable, in

accordance with the procedures

specified herein. The importer shall

make arrangements with the inspection

service for sampling, inspection,

identification and certification of all

peanuts accumulated by the importer.

The importer also shall make

arrangements for the appropriate

disposition of peanuts failing edible

quality requirements of this section. All

costs of sampling, inspection,

certification, identification, and

disposition incurred in meeting the

requirements of this section shall be

paid by the importer. Whenever peanuts

are offered for inspection, the importer

shall furnish any labor and pay any

costs incurred in moving and opening

containers as may be necessary for

proper sampling and inspection.

(2) For farmers stock inspection, the

importer shall cause the inspection

service to perform an incoming

inspection and to issue an CFSA–1007,

‘‘Inspection Certificate and Sales

Memorandum’’ form designating the lot

as Segregation 1, 2, or 3 quality peanuts.

For shelled and cleaned-inshell peanuts,

the importer shall cause the inspection

service to perform an outgoing

inspection and issue an FV–184–9A,

‘‘Milled Peanut Inspection Certificate’’

reporting quality and size of the shelled

or cleaned-inshell peanuts, whether the

lot meets or fails to meet quality

requirements for human consumption of

this section, and that the lot originated

in a country other than the United

States. The importer shall provide to the

Secretary copies of all CFSA 1007 and

FV–184–9A applicable to each peanut

lot conditionally released to the

importer. Such reports shall be

submitted as provided in paragraph

(g)(5) of this section.

(3) Procedures for sampling and

testing peanuts. Sampling and testing of

peanuts for incoming and outgoing

inspections of peanuts presented for

importation into the United States will

be conducted as follows:

(i) Application for sampling. The

importer shall request inspection and

certification services from one of the

following inspection service offices

convenient to the location where the

peanuts are presented for incoming and/

or outgoing inspection. To avoid

possible delays, the importer should

make arrangements with the inspection

service in advance of the inspection

date. A copy of the Customs Service

entry document specific to the peanuts

to be inspected shall be presented to the

inspection official prior to sampling of

the lot.

(A) The following offices provide

incoming, farmers stock inspection:

Dothan, AL, tel: (205) 792–5185,

Graceville, FL, tel: (904) 263–3204,

Winter Haven, FL, tel: (813) 291–5820,

ext 260,

Albany, GA, tel: (912) 432–7505,

Williamston, NC, tel: (919) 792–1672,

Columbia, SC, tel: (803) 253–4597,

Suffolk, VA, tel: (804) 925–2286,

Portales, NM, tel: (505) 356–8393,

Oklahoma City, OK, tel: (405) 521–3864,

Gorman, TX, tel: (817) 734–3006,

Yuma, AZ, tel: (602) 344–3869.

(B) The following offices, in addition

to the offices listed in paragraph (A),

provide outgoing sampling and/or

inspection services, and certify shelled

and cleaned-inshell peanuts as meeting
3616 Federal Register / Vol. 61, No. 22 / Thursday, February 1, 1996 / Proposed Rules

or failing the quality requirements of

this section:

Eastern U.S.

Mobile, AL, tel: (205) 690–6154,

Jacksonville, FL, tel: (904) 359–6430,

Miami, FL, tel: (305) 592–1375,

Tampa, FL, tel: (813) 272–2470,

Presque Isle, ME, tel: (207) 764–2100,

Baltimore/Washington, tel: (301) 344–

1860,

Boston, MA, tel: (617) 389–2480,

Newark, NJ, tel: (201) 645–2670,

New York, NY, tel: (212) 718–7665,

Buffalo, NY, tel: (716) 824–1585,

Philadelphia, PA, tel: (215) 336–0845,

Norfolk, VA, tel: (804) 441–6218,

Central U.S.

New Orleans, LA, tel: (504) 589–6741,

Detroit, MI, tel: (313) 226–6059,

St. Paul, MN, tel: (612) 296–8557,

Las Cruces, NM, tel: (505) 646–4929,

Alamo, TX, tel: (210) 787–4091,

El Paso, TX, tel: (915) 540–7723,

Houston, TX, tel: (713) 923–2557,

Western U.S.

Nogales, AZ, tel: (602) 281–0783,

Los Angeles, CA, tel: (213) 894–2489,

San Francisco, CA, tel: (415) 876–9313,

Honolulu, HI, tel: (808) 973–9566,

Salem, OR, tel: (503) 986–4620,

Seattle, WA, tel: (206) 859–9801.

(c) Questions regarding inspection

services or requests for further

assistance may be obtained from: Fresh

Products Branch, P.O. Box 96456, room

2049–S, Fruit and Vegetable Division,

AMS, USDA, Washington, D.C. 20090–

6456, telephone (202) 690–0604, fax

(202) 720–0393.

(ii) Sampling. Sampling of bulk

farmers stock lots shall be performed at

a facility that utilizes a pneumatic

sampler or approved automatic

sampling device. The size of farmers

stock lots, shelled lots, and cleanedinshell lots, in bulk or bags, shall not

exceed 200,000 pounds. For farmers

stock, shelled and cleaned-inshell lots

not completely accessible for sampling,

the applicant shall be required to have

lots made accessible for sampling

pursuant to inspection service

requirements. The importer shall cause

appropriate samples of each lot of edible

quality shelled peanuts to be drawn by

the inspection service. The amount of

such peanuts drawn shall be large

enough to provide for a grade and size

analysis, for a grading check-sample,

and for three 48-pound samples for

aflatoxin assay. Because there is no

acceptable method of drawing official

samples from bulk conveyances of

shelled peanuts, the importer shall

arrange to have bulk conveyances of

shelled peanuts sampled during the

unloading process. A bulk lot sampled

in this manner must be positive lot

identified by the inspection service and

held in a sealed bin until the associated

inspection and aflatoxin test results

have been reported.

(4) Aflatoxin assay. (i) The importer

shall cause appropriate samples of each

lot of shelled peanuts intended for

edible consumption to be drawn by the

inspection service. The three 48-pound

samples shall be designated by the

inspection service as ‘‘Sample 1IMP,’’

‘‘Sample 2IMP,’’ and ‘‘Sample 3IMP’’

and each sample shall be placed in a

suitable container and lot identified by

the inspection service. Sample 1IMP

may be prepared for immediate testing

or Samples 1IMP, 2IMP, and 3IMP may

be returned to the importer for testing at

a later date under lot identification

procedures.

(ii) The importer shall cause Sample

1IMP to be ground by the inspection

service or a USDA or PAC-approved

laboratory in a subsampling mill. The

resultant ground subsample shall be of

a size specified by the inspection

service and shall be designated as

‘‘Subsample 1–ABIMP.’’ At the

importer’s option, a second subsample

may also be extracted from Sample

1IMP and designated ‘‘Subsample 1–

CDIMP’’ which may be sent for aflatoxin

assay to a USDA or PAC-approved

laboratory. Both subsamples shall be

accompanied by a notice of sampling

signed by the inspector containing

identifying information as to the

importer, the lot identification of the

shelled peanut lot, and other

information deemed necessary by the

inspection service.

Subsamples 1–ABIMP and 1–CDIMP

shall be analyzed only in a USDA or

PAC-approved laboratory. The methods

prescribed by the Instruction Manual for

Aflatoxin Testing, SD Instruction-1,

August 1994, shall be used to assay the

aflatoxin level. The cost of testing and

notification of Subsamples 1–ABIMP

and 1–CDIMP shall be borne by the

importer.

(iii) The samples designated as

Sample 2IMP and Sample 3IMP shall be

held as aflatoxin check-samples by the

inspection service or the importer until

the analyses results from Sample 1IMP

are known. Upon call from the USDA or

PAC-approved laboratory, the importer

shall cause Sample 2IMP to be ground

by the inspection service in a

subsampling mill. The resultant ground

subsample from Sample 2IMP shall be

designated as ‘‘Subsample 2–ABIMP.’’

Upon further call from the laboratory,

the importer shall cause Sample 3IMP to

be ground by the inspection service in

a subsampling mill. The resultant

ground subsample shall be designated

as ‘‘Subsample 3–ABIMP.’’ The

importer shall cause Subsamples 2–

ABIMP and 3–ABIMP to be sent to and

analyzed only in a USDA or PACapproved laboratory. Each subsample

shall be accompanied by a notice of

sampling. The results of each assay shall

be reported by the laboratory to the

importer. All costs involved in the

sampling, shipment and assay analysis

of subsamples required by this section

shall be borne by the importer.

(iv)(A) Importers should contact one

of the following USDA or PAC-approved

laboratories to arrange for chemical

analysis.

Science and Technology Division, AMS/

USDA, P.O. Box 279, 301 West Pearl

St., Aulander, NC 27805, Tel: (919)

345–1661 Ext. 156, Fax: (919) 345–

1991

Science and Technology Division, AMS/

USDA, 1211 Schley Ave., Albany, GA

31707, Tel: (912) 430–8490/8491, Fax:

(912) 430–8534

Science and Technology Division, AMS/

USDA, P.O. Box 488, Ashburn, GA

31714, Tel: (912) 567–3703

Science and Technology Division, AMS/

USDA, 610 North Main St., Blakely,

GA 31723, Tel: (912) 723–4570, Fax:

(912) 723–3294

Science and Technology Division, AMS/

USDA, P.O. Box 1368, Dothan, AL

36301, Tel: (205) 792–5185, Fax: (205)

671–7984

Science and Technology Division, AMS/

USDA, 107 South Fourth St., Madill,

OK 73446, Tel: (405) 795–5615, Fax:

(405) 795–3645

Science and Technology Division, AMS/

USDA, P.O. Box 272, 715 N. Main

Street, Dawson, GA 31742, Tel: (912)

995–7257, Fax: (912) 995–3268

Science and Technology Division, AMS/

USDA, P.O. Box 1130, 308 Culloden

St., Suffolk, VA 23434, Tel: (804) 925–

2286, Fax: (804) 925–2285

ABC Research, 3437 SW 24th Avenue,

Gainesville, FL 32607–4502, Tel:

(904) 372–0436, Fax: (904) 378–6483

J. Leek Associates, Inc., P.O. Box 50395,

1200 Wyandotte (31705), Albany, GA

31703–0395, Tel: (912) 889–8293,

Fax: (912) 888–1166

J. Leek Associates, Inc., P.O. Box 368,

675 East Pine, Colquitt, GA 31737,

Tel: (912) 758–3722, Fax: (912) 758–

2538

J. Leek Associates, Inc., P.O. Box 6, 502

West Navarro St., DeLeon, TX 76444,

Tel: (817) 893–3653, Fax: (817) 893–

3640

J. Leek Associates, Inc., P.O. Box 548, 42

N. Ellis St., Camilla, GA 31730, Tel:

(912) 336–8781, Fax: (912) 336–0146
Federal Register / Vol. 61, No. 22 / Thursday, February 1, 1996 / Proposed Rules 3617

Pert Laboratories, P.O. Box 267, Peanut

Drive, Edenton, NC 27932, Tel: (919)

482–4456, Fax: (919) 482–5370

Pert Laboratory South, P.O. Box 149,

Hwy 82 East, Seabrook Drive,

Sylvester, GA 31791, Tel: (912) 776–

7676, Fax: (912) 776–1137

Professional Service Industries, Inc., 3

Burwood Lane, San Antonio, TX

78216, Tel: (210) 349–5242, Fax: (210)

342–9401

Southern Cotton Oil Company, 600 E.

Nelson Street, P.O. Box 180, Quanah,

TX 79252, Tel: (817) 663–5323, Fax:

(817) 663–5091

Quanta Lab, 9330 Corporate Drive, Suite

703, Selma, TX 78154–1257, Tel:

(210) 651–5799, Fax: (210) 651–9271.

(B) Further information concerning

the chemical analyses required pursuant

to this section may be obtained from:

Science and Technology Division,

USDA/AMS, P.O. Box 96456, room

3507–S, Washington, DC 20090–6456,

telephone (202) 720–5231, or facsimile

(202) 720–6496.

(v) Reporting aflatoxin assays. A

separate aflatoxin assay certificate, Form

CSSD–3, ‘‘Certificate of Analysis for

Official Samples’’, or equivalent PACapproved laboratory form, shall be

issued by the laboratory performing the

analysis for each lot. The assay

certificate shall identify the importer,

the volume of the peanut lot assayed,

date of the assay, and numerical test

result of the assay. The results of the

assay shall be reported as follows.

(A) Lots containing 15 ppb or less

aflatoxin content shall be certified as

‘‘Meets U.S. import requirements for

edible peanuts under § 999.600 with

regard to aflatoxin.’’

(B) Lots containing more than 15 ppb

aflatoxin content shall be certified as

‘‘Fails to meet U.S. import requirements

for edible peanuts under § 999.600 with

regard to aflatoxin.’’ The importer shall

file USDA Form CSSD–3, or equivalent

form, with the Secretary, regardless of

result.

(5) Appeal inspection. In the event an

importer questions the results of a

quality and size inspection, an appeal

inspection may be requested by the

importer and performed by the

inspection service. A second sample

will be drawn from each container and

shall be double the size of the original

sample. The results of the appeal

sample shall be final and the fee for

sampling and analysis shall be charged

to the importer.

(e) Disposition of peanuts failing

edible quality requirements. (1) Peanuts

failing grade and/or aflatoxin

requirements shall be designated as

non-edible quality ‘‘unrestricted’’

peanuts or ‘‘restricted’’ peanuts and

shall be crushed for oil, exported, or

disposed to other non-edible outlets as

specified in this section. For the

purposes of this regulation, the term

‘‘non-edible quality unrestricted

peanuts’’ means loose shelled kernels,

fall through, and pickouts from—and

the entire milled production of—

Segregation 1, Segregation 2, and

commingled Segregation 1 and 2

farmers stock peanuts which contain

more than 15 ppb and 25 ppb or less

aflatoxin. The term ‘‘non-edible quality

restricted peanuts’’ means loose shelled

kernels, fall through, and pickouts

from—and the entire milled production

of—Segregation 1, Segregation 2, and

commingled Segregation 1 and 2

farmers stock peanuts which contain in

excess of 25 ppb aflatoxin. The term

loose shelled kernels means peanut

kernels or portions of kernels

completely free of their hulls, as found

in deliveries of farmers stock peanuts or

those which fail to ride the screens

prescribed in paragraph (d)(iv) of this

section; the term fall through means

sound split and broken kernels and

whole kernels which pass through

specified screens; and the term pickouts

means those peanuts removed during

the final milling process at the picking

table, by electronic equipment, or

otherwise during the milling process.

(2) Non-edible quality unrestricted

peanuts may be disposed to animal feed:

Provided, That such peanuts are

certified by the inspection service as to

moisture, foreign material content and

treated with a coloring agent or dyeing

solution covering at least 80 percent of

the peanuts, handled and shipped under

lot identification procedures. Except for

bulk loads, red tags shall be used and

marked ‘‘Animal Feed, Not For Human

Consumption.’’

(3) Lots of non-edible quality

unrestricted peanuts may be

commingled during or after

fragmentation and, if certified as

meeting fragmentation requirements by

the inspection service, such fragmented

peanuts may be exported. For the

purposes of this section, the term

fragmented means that not more than 30

percent of the peanuts shall be whole

kernels that ride the following screens,

by type: Spanish—15⁄64×3⁄4 inch slot;

Runner—16⁄64×3⁄4 inch slot; and

Virginia—15⁄64×1 inch slot. All peanut

lots exported must be lot identified by

the inspection service and applicable

Customs Service procedures for the

export of merchandise must be

followed.

(4) Unrestricted fall through may be

disposed for use as wild-life feed and

rodent bait, if in labeled containers.

(5) Seed peanuts which are

chemically treated causing them to be

unfit for edible or animal feed use shall

be exempt from the requirements of

paragraph (c) of this section.

(6) Meal produced from the crushing

of unrestricted peanuts shall be exempt

from further aflatoxin testing. Meal

produced from the crushing of restricted

peanuts shall be tested and the

numerical test result of the chemical

assay shall be shown on a certificate

covering each lot and the certification

shall accompany each shipment or

disposition.

(7) Non-edible quality restricted

peanuts may be crushed for oil or

exported: Provided, That such peanuts

are lot identified, bagged, red tagged,

and so certified by the inspection

service.

(8) Inspection certifications and proof

of non-edible dispositions sufficient to

account for all peanuts in each

consumption entry filed by the importer

must be reported to the Secretary by the

importer pursuant to paragraphs (f) (2)

and (3) of this section.

(f) Reconditioning of failing peanuts:

(1) Importers may remill and/or blanch

shelled peanuts which originated from

Segregation 1 peanuts that fail quality

requirements of Table 1 or are positive

to aflatoxin. After such reconditioning,

peanuts meeting the quality

requirements of Table 1 and which are

certified negative to aflatoxin (15 ppb or

less) may be disposed for edible use.

(2) Whole lots of remilled and/or

blanched peanuts, and residuals of such

peanuts, which continue to fail quality

requirements of Table 1 and contain 25

ppb or less aflatoxin content shall be

considered ‘‘non-edible quality

unrestricted’’ peanuts and shall be

disposed as ‘‘unrestricted’’ peanuts

crushed for oil, exported, or animal

feed, pursuant to provisions of

paragraph (e). Meal produced from

unrestricted peanuts shall be disposed

pursuant to paragraph (e)(5).

(3) Whole lots of remilled and/or

blanched peanuts, and residuals of such

peanuts, which continue to fail quality

requirements of Table 1 and contain

more than 25 ppb aflatoxin content,

shall be considered ‘‘non-edible quality

restricted’’ peanuts and shall be

disposed as ‘‘restricted’’ peanuts

pursuant to paragraph (e)(6). Meal

produced from restricted peanuts shall

be disposed pursuant to paragraph

(e)(5).

(4) Inspection certifications and proof

of non-edible dispositions sufficient to

account for all peanuts in each

consumption entry filed by the importer

must be reported to the Secretary by the
3618 Federal Register / Vol. 61, No. 22 / Thursday, February 1, 1996 / Proposed Rules

importer pursuant to paragraphs (f) (2)

and (3) of this section.

(g) Safeguard procedures. (1) Prior to

arrival of a foreign produced peanut lot

at a port of entry, the importer, or

customs broker acting on behalf of the

importer, shall mail or send by facsimile

transmission (fax) a copy of the Customs

Service entry documentation for the

peanut lot to the inspection service

office that will perform sampling of the

peanut shipment. The documentation

shall include identifying lot or container

number(s) and volume of the peanut lot

being entered, and the location

(including city and street address), date

and time for inspection sampling. The

inspection office shall sign, stamp, and

return the entry document to the

importer. The importer shall present the

stamped document to the Customs

Service at the port of entry and send a

copy of the document to the Secretary.

The importer also shall cause a copy of

the entry document to accompany the

peanut lot and be presented to the

inspection service at the inland

destination of the lot.

(2) The importer shall file with the

Secretary copies of the entry document

and grade, aflatoxin, and identification

certifications sufficient to account for all

peanuts in each entry filed by the

importer. Certificates and other

documentation providing proof of nonedible disposition, such as bills of

lading and sales receipts which report

the weight of peanuts being disposed

and the name, address and telephone

number of the non-edible peanut

receiver, must be sent to the Marketing

Order Administration Branch, Attn:

Report of Imported Peanuts. Facsimile

transmissions and overnight mail may

be used to ensure timely receipt of

inspection certificates and other

documentation. Fax reports should be

sent to (202) 720–5698. Overnight and

express mail deliveries should be

addressed to USDA, AMS, Marketing

Order Administration Branch, 14th and

Independence Avenue, SW, Room:

2526–S, Washington, DC, 20250.

Regular mail should be sent to AMS,

USDA, P.O. Box 96456, room 2526–S,

Washington, DC 20090–6456.

Telephone inquiries should be made to

(202) 720–6862.

(3) Certificates and other

documentation for each peanut lot must

be filed within 23 days of the filing date

of the entry for the lot. Failure of an

importer to receive edible certification—

or arrange for appropriate non-edible

disposition—on all foreign produced

peanuts, and file such reports with the

Secretary within 23 days of an entry

declaration, may result in a request for

a redelivery demand by the Customs

Service. Extensions granted by the

Customs Service will be

correspondingly extended by the

Secretary, upon request of the importer.

(4) The Secretary shall ask the

Customs Service to demand redelivery

of foreign produced peanut lots failing

to meet requirements of this section.

Importers unable to redeliver or account

for all peanuts covered in a redelivery

order shall be liable for liquidated

damages. Failure to fully comply with

quality and handling requirements or

failure to notify the Secretary of

disposition of all foreign produced

peanuts, as required under this section,

may result in a compliance investigation

by the Secretary. Falsification of reports

submitted to the Secretary is a violation

of Federal law punishable by fine or

imprisonment, or both.

(h) Additional requirements: (1)

Nothing contained in this section shall

be deemed to preclude any importer

from milling or reconditioning prior to

entry any shipment of peanuts for the

purpose of making such lot eligible for

importation. However, all peanuts

presented for importation into the

United States for human consumption

use must be certified as meeting the

quality requirements specified in

paragraph (c) of this section.

(2) Conditionally released peanut lots

of like quality and belonging to the same

importer may be commingled. Defects in

an inspected shelled lot may not be

blended out by commingling with other

shelled lots of higher quality. Such

commingling must be consistent with

applicable Customs Service regulations.

Commingled lots must be reported and

disposed of pursuant to paragraphs (f)(2)

and (f)(3) respectively of this section.

(3) Inspection by the Federal or

Federal-State Inspection Service shall be

available and performed in accordance

with the rules and regulations governing

certification of fresh fruits, vegetables

and other products (7 CFR part 51). The

importer shall make each conditionally

released lot available and accessible for

inspection as provided herein. Because

inspectors may not be stationed in the

immediate vicinity of some ports-ofentry, importers must make

arrangements for inspection and

certification through one of the offices

listed in this section.

(4) Imported peanut lots sampled and

inspected at the port of entry, or at other

locations, shall meet the quality

requirements of this section in effect on

the date of inspection.

(5) A foreign produced peanut lot,

released by the Customs Service for

consumption, may be transferred or sold

to another person: Provided, That the

original importer shall be the importer

of record unless the new owner applies

for bond and files Customs Service

documents pursuant to 19 CFR 141.113

and 141.20: and Provided further, That

such peanuts must be certified and

reported to the Secretary pursuant to

paragraphs (f)(2) and (3) of this section.

(6) The cost of transportation,

sampling, inspection, certification,

chemical analysis, and identification, as

well as remilling and blanching, and

further inspection of remilled and

blanched lots, and disposition of failing

peanuts, shall be borne by the importer.

Whenever peanuts are presented for

inspection, the importer shall furnish

any labor and pay any costs incurred in

moving, opening containers, and

shipment of samples as may be

necessary for proper sampling and

inspection. The inspection service shall

bill the importer for fees covering

quality and size inspections; time for

sampling; packaging and delivering

aflatoxin samples to laboratories;

certifications of lot identification and lot

transfer to other locations, and other

inspection certifications as may be

necessary to verify edible quality or

non-edible disposition, as specified

herein. The USDA and PAC-approved

laboratories shall bill the importer

separately for fees for aflatoxin assay.

The importer also shall pay all required

Customs Service costs as required by

that agency.

(7) Each person subject to this section

shall maintain true and complete

records of activities and transactions

specified in this part. Such records and

documentation accumulated during

importation shall be retained for not less

than two years after the calendar year of

acquisition, except that Customs Service

documents shall be retained as required

by that agency. The Secretary, through

duly authorized representatives, shall

have access to any such person’s

premises during regular business hours

and shall be permitted, at any such

time, to inspect such records and any

peanuts held by such person.

(8) The provisions of this section do

not supersede any restrictions or

prohibitions on peanuts under the

Federal Plant Quarantine Act of 1912,

the Federal Food, Drug and Cosmetic

Act, any other applicable laws, or

regulations of other Federal agencies,

including import regulations and

procedures of the Customs Service.

Dated: January 23, 1996.

Sharon Bomer Lauritsen,

Deputy Director, Fruit and Vegetable Division.

[FR Doc. 96–1667 Filed 1–31–96; 8:45 am]

BILLING CODE 3410–02–P