[Federal Register Volume 61, Number 59 (Tuesday, March 26, 1996)]
[Rules and Regulations]
[Pages 13051-13061]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7192]



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DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Parts 944, 980 and 999

[Docket Nos. FV93-944-3FIR, FV93-980-1FIR and FV93-999-1FIR]


Exemptions From Import Regulations for Specified Fruit, Vegetable 
and Specialty Crop Commodities

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Final rule.

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SUMMARY: This rule finalizes, with modifications, two interim final 
rules which exempt imported fresh fruit, vegetable and specialty crop 
commodities from grade, size, quality, and maturity requirements if 
those commodities are to be used in certain specified outlets. The 
exemptions correspond to exemptions in effect for the same commodities 
regulated under Federal marketing orders. This rule also finalizes, 
with modifications, safeguard procedures which were added to import 
regulations to assure that imported fresh commodities are utilized only 
in such specified exempt outlets. This rule also deletes import 
requirements for Tokay grapes. This rule is implemented in accordance 
with section 8e of the Agricultural Marketing Agreement Act of 1937 to 
make the import regulations more consistent with applicable domestic 
marketing order exemptions and with the North American Free Trade 
Agreement (NAFTA). Exempt uses include, but are not limited to, 
processing, livestock feed, and donation to charity.

EFFECTIVE DATE: May 28, 1996.

FOR FURTHER INFORMATION CONTACT: Barbara Schulke or Bill Addington, 
telephone (202) 720-4607 and (202) 720-2412 respectively, Marketing 
Order Administration Branch, Fruit and Vegetable Division, AMS, USDA, 
P.O. Box 96456, room 2523-S, Washington, DC 20090-6456, Fax (202) 720-
5698.

SUPPLEMENTARY INFORMATION: This rule is issued under section 8e of the 
Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-
674) (Act), which provides that whenever certain specified commodities, 
including avocados, grapefruit, kiwifruit, limes, olives, oranges, 
table grapes, potatoes, onions, tomatoes, dates

[[Page 13052]]
and walnuts, are regulated under a Federal marketing order, imports of 
those commodities must meet the same or comparable grade, size, 
quality, and maturity requirements as those in effect for the 
domestically produced commodities.
    The Act further provides that when two or more marketing orders for 
the same commodity produced in different areas are in effect, the 
imported commodity must meet the same grade, size, quality, and 
maturity requirements as the commodity produced in the area with which 
the imported commodity is in most direct competition.
    Some marketing orders provide exemptions for commodities sold at 
roadside stands, shipped directly to consumers, or exported. However, 
such exemptions are not issued for commodities offered for importation 
because such outlets are not applicable to import regulations.
    The Department of Agriculture (Department) is issuing this rule in 
conformance with Executive Order 12866.
    Pursuant to the requirements set forth in the Regulatory 
Flexibility Act (RFA), the Administrator of the Agricultural Marketing 
Service (AMS) has considered the economic impact of this action 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. Marketing orders issued 
pursuant to the Act, and rules issued thereunder, are unique in that 
they are brought about through group action of essentially small 
entities acting on their own behalf. Thus, both statutes have small 
entity orientation and compatibility. Import regulations issued under 
the Act are based on those established under Federal marketing orders.
    The following are updated estimates of the number of importers who 
may be affected by this final rule: avocados--147, grapefruit--96, 
kiwifruit--110, limes--147, olives--15, oranges--96, table grapes--80, 
potatoes--74, onions--148, tomatoes--142, dates--164, and walnuts--6. 
Small agricultural service firms, which include importers and 
processors of these commodities, have been defined by the Small 
Business Administration (13 CFR 121.601) as those having annual 
receipts of less than $5 million. The majority of these importers may 
be classified as small entities.
    This final rule has been reviewed under Executive Order 12778, 
Civil Justice Reform. This rule 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.
    In accordance with section 8e, imported commodities destined for 
processing must be given the same or comparable treatment as that 
afforded domestic commodities destined for processing. The Federal 
marketing orders covering avocados, grapefruit, kiwifruit, limes, 
olives, oranges, table grapes, potatoes, onions and tomatoes provide 
exemptions from established quality and size requirements if the 
commodity is to be used in certain processing outlets. This final rule 
provides similar exemptions for imported products destined for 
processing.
    Marketing Order No. 926 regulating Tokay Grapes Grown in San 
Joaquin County, California, has been terminated by the Department at 
the request of the order's Industry Committee. Thus, the import 
requirements for Tokay grapes established under section 8e of the Act 
are also terminated. This final rule removes all references to Tokay 
grapes that appeared in the interim final rule (58 FR 69182).
    This rule finalizes exemptions for imported commodities to be 
utilized in other exempt outlets. These exemptions are consistent with 
section 8e of the Act which requires imported commodities to meet the 
same or comparable requirements established under the domestic 
marketing orders for the commodities. This rule finalizes, with 
modifications, amendments to the following 7 CFR sections:

944.28  Avocado import grade regulation,
944.31  Avocado import maturity regulation,
944.106  Grapefruit import regulation,
944.209  Lime import regulation,
944.312  Orange import regulation,
944.401  Olive regulation,
944.503  Table grape import regulation,
944.550  Kiwifruit import regulation,
980.1  Import regulations; Irish potatoes,
980.117  Import regulations; onions,
980.212  Import regulations; tomatoes,
999.1  Regulation governing the importation of dates, and
999.100  Regulation governing imports of walnuts.

    Safeguard provisions, added by the interim final rules as 
Secs. 944.350, 980.501, and 999.500, are modified in this final rule to 
provide that imported commodities not meeting grade, size, quality, and 
maturity requirements can be utilized in specified exempt outlets.
    The two interim final rules were issued on December 23, 1993, and 
published in the Federal Register (58 FR 69182 and 69186, December 30, 
1993) with an effective date of January 1, 1994. The two rules amended 
7 CFR parts 944, 980 and 999 and provided a two-month comment period 
which ended February 28, 1994. A minor correction to part 944 was 
issued on January 31, 1994 (59 FR 4245). At the request of industry 
members, the Department reopened the comment period for one additional 
month (59 FR 11529, March 11, 1994) for both interim final rules. The 
reopened comment period closed April 11, 1994.
    Thirty five comments were received. Thirty four comments opposed 
various aspects of the two interim final rules and one comment favored 
the interim final rules. The primary concern of most commenters was the 
use of exemptions by processors. Thirty comments were from members of, 
or on behalf of, the potato, onion and tomato industries in the United 
States. The one favorable comment was received from the Canadian 
Produce Marketing Association.
    Several commenters questioned the Department's commitment to the 
safeguard program. They claimed that there is no plan to monitor exempt 
shipments and that the AMS lacks personnel to enforce compliance of the 
program.
    The AMS is responsible for administering Federal fruit, vegetable, 
and specialty crop marketing order programs and the corresponding 
import regulations. A number of different resources are being utilized 
to implement and monitor the safeguard program, including the Fruit and 
Vegetable Division's (Division) Marketing Order Administration Branch 
(MOAB) (which monitors exempt entries), the inspection services of 
Fresh Products Branch and Processed Products Branch and the AMS 
Compliance Staff. The Department's Animal and Plant Health Inspection 
Service (APHIS), and the U.S. Customs Service (Customs Service) also 
must review and clear all agricultural shipments prior to entry into 
the United States. This rule does not supersede the Federal Plant 
Quarantine Act of 1912, the Federal Food, Drug, and Cosmetic Act, or 
any other applicable laws or food and sanitary regulations of city, 
county, state or Federal agencies.
    Every attempt is made to keep importers, known processors, and 
other exempt receivers aware of these rules and the safeguard 
procedures. The interim final rules, exemption forms and updated import 
summary sheets for the affected commodities have been sent to all known 
importers and processors.

[[Page 13053]]
Additional exemption forms are sent immediately upon request.
    A compliance plan has been developed utilizing follow-up telephone 
calls and spot compliance checks of exempt outlets. Division personnel 
currently make telephone calls to importers and customs brokers who 
initiate the FV-6 ``Importer's Exempt Commodity Form'' (FV-6 or FV-6 
forms) and calls to exempt receivers who must certify receipt and 
disposition of the exempt shipments. The FV-6 was established under the 
interim final rule as an integral part of the safeguard reporting 
procedures. This final rule modifies the FV-6 (below).
    Experience over the last year indicates that the notification 
process outlined in the interim final rules (58 FR pages 69182 and 
69186, December 30, 1993) should be modified to ensure that the 
Department is aware of all shipments entered as exempt under 8e 
provisions. Under a Memorandum of Understanding between the AMS and the 
Customs Service, AMS will be provided import data on all entries of 8e 
commodities. The MOAB has worked with the fresh and processed products 
inspection offices and the Customs Service to coordinate efforts for an 
effective 8e compliance program. In addition, MOAB maintains an 
extensive and comprehensive list of importers, customs brokers and 
receivers for mailing and field audits. Division representatives attend 
regional and national importers and customs brokers meetings to educate 
importers and Customs Service officials on the requirements of the Act. 
MOAB enters and reconciles data from the FV-6 forms, Customs Service 
data, and the inspection service offices, and the PIERS report (Port, 
Import/Export Reporting Service) to identify lots which enter ports 
under the exemption rule.
    Some commenters asked what penalties would be applied to those who 
violate the safeguard procedures. The compliance plan provides for on-
the-spot inspections and checks of processors and other exempt outlet 
receivers to gather evidence of violations. Pursuant to section 8e of 
the Act, the Department can bring legal action against those who 
violate import regulations. Penalties may be assessed under section 
608a(5). Upon conviction, penalties as prescribed in 608c(14)(A) also 
may be imposed. Section (14)(A) provides for fines from $50 to $5,000 
per violation, per day, for those convicted of violating regulations, 
including import regulations. In addition, section 608c(14)(B) provides 
for administrative adjudication to issue civil penalties of up to 
$1,000 per day, per violation, against importers and exempt receivers 
who violate the import regulations, including safeguard procedures.
    Further, using Customs Service regulatory authorities (19 CFR part 
113), the AMS can also request the Customs Service to demand redelivery 
of a lot imported as exempt under section 8e if certification of exempt 
use has not been received by the AMS. Failure to redeliver the lot is 
punishable by a penalty of three times the value of the shipment. The 
AMS is developing a computerized data base to identify exempt shipments 
for which the reporting process has not been completed within specified 
time frames. This rule does not supersede or replace Customs Service 
entry procedures.
    A few commenters, evidently referring to the $1,000 fine cited on 
the exemption form, stated that $1,000 is not a sufficient deterrent to 
prevent some from violating the safeguard procedures. However, the 
$1,000 fine is for making false statements on the form. False 
representation to any Federal agency on any matter within its 
jurisdiction, knowing it to be false, is a criminal offense and a 
violation of 18 U.S.C. 1001 which provides for a fine or imprisonment 
or both.
    The Department is fully committed to enforcing the import 
regulations.
    Most of the commenters questioned whether the safeguard procedures 
would prevent substandard product from entering fresh marketing 
channels. With modifications implemented in this final rule, the 
Department believes that the enhanced safeguard procedures represent 
practicable, aggressive, and effective procedures for monitoring exempt 
shipments. In addition, the management staffs of many marketing orders 
follow similar procedures in monitoring and enforcing special purpose 
shipment provisions relating to their respective commodities.
    A few commenters suggested that the marketing order committees 
should be allowed to assist the Department with enforcement activities. 
The Department is responsible for enforcing import regulations and 
cannot delegate that compliance activity to committee managers. 
However, the Department encourages managers to notify the AMS of 
suspected violations of safeguard procedures or improper dispositions.
    A few commenters contended that the reporting deadlines (15 days at 
the port of entry and 15 days after receipt by the exempt receiver) are 
too long for the Department to effectively monitor the disposition of 
lots. They stated that during the 15-day reporting period an exempt lot 
could easily be disposed of in fresh market channels and there would be 
no proof of such illegal activity. The Department agrees that a more 
timely notification of the release of exempt lots into the United 
States will enhance the Department's ability to enforce the safeguard 
procedures and ensure compliance with the import regulations. The time 
period should be short enough to enable the Department, when conducting 
on-site inspection of receivers' facilities, to determine ultimate 
disposition of exempt lots. The Department believes that a two-day 
reporting period will be sufficient for mailing reports of entry and 
exempt disposition. Thus, this final rule establishes that original 
copies of FV-6 forms must be submitted by importers, customs brokers, 
and exempt receivers, and such copies must be postmarked no later than 
two days after importation or receipt of the commodity shipment being 
reported. FV-6 forms must be mailed to the Marketing Order 
Administration Branch, USDA, AMS, P.O. Box 96456, room 2523-S, 
Washington, D.C. 20090-6456 (telephone (202) 720-4607. FV-6 forms 
submitted by fax must be followed by a mailed, original copy of the FV-
6. Fax transmissions may be sent to the MOAB at (202) 720-5698.
    One commenter suggested that the Act should be changed to allow for 
regulation of processors. Amendment of the Act would require 
Congressional action. In any event, the Food and Drug Administration of 
the Department of Health and Human Services is responsible for 
regulating the wholesomeness of processed peanut products.
    One commenter claimed that the Department has reversed its long-
standing position that section 8e requirements cannot be applied to 
pack and container requirements. However, section 8e of the Act states 
that imported commodities must meet the grade, size, quality and 
maturity requirements established under respective marketing orders. 
Because section 8e does not authorize pack and container requirements, 
those requirements cannot be applied to imported commodities. The 
Department has not changed its position on this issue.
    Some commenters claimed that the exemptions for processing make it 
easier for imported culls to be used in local processing markets than 
domestic culls and that this would have a negative impact on 
economically depressed production areas that utilize domestically 
produced culls in processing. However, the objective of this rule is 
that section 8e import

[[Page 13054]]
regulations and the exemption provisions of domestic marketing orders 
be the same or comparable. An importer who properly files FV-6 forms 
when using imported culls in processing outlets does not violate the 
import regulation.
    A few commenters stated that import barriers still exist in some 
countries and that the import exemption rule gives unfair advantage to 
foreign producers. However, the efficacy of this rule in the United 
States is not dependent on the absence of trade barriers in other 
countries. The exemption form may be used for exempt commodities 
imported from any country. The interim final rules were issued to be 
consistent with section 8e of the Act, and thus, may be applied to the 
specified commodities imported from any country.
    One commenter, referring to Section A of Annex 703.2 of the NAFTA, 
stated that the Department ``went beyond the specific requirements of 
the NAFTA by applying the rule to Canada.'' The Department did not 
intend to imply that Section A of Annex 703.2 applies to Mexico, Canada 
and other countries. Implementation of the NAFTA caused the Department 
to review all 8e provisions applicable to fruits and vegetables. After 
such review it became apparent that the regulations concerning the 8e 
commodities covered in this regulation needed to be amended to be 
consistent with marketing order regulations and requirements, as well 
as the NAFTA. Therefore, pursuant to Section 8e of the Act and the 
provisions of the NAFTA, the Department amended its regulations 
relating to these commodities.
    One commenter suggested that new food technologies now tend to blur 
the distinction between fresh and ``fresh processed'' activities. To 
assist the importer or customs broker, specific processes that qualify 
for exemption are added to the regulatory text (e.g. canning, freezing, 
dehydrating, etc.) as appropriate for individual commodities. The 
listing of qualified processes for each commodity should assist 
importers and customs brokers in determining whether the process 
designated on the exemption form is considered to be an exempt process. 
The entries may be updated by future rulemaking, as necessary.
    Several commenters suggested that the Department establish a ``pre-
approved processor'' list for each commodity covered in parts 944, 980 
and 999. According to the comments, a pre-approved processor list would 
contain the names of processor companies that have certified to the 
respective marketing order committee and to the Department that the 
processor agrees to dispose of exempt shipments only in approved 
processing operations. Commenters suggested that such lists be used to 
approve or reject exempt shipments at the port of entry, depending on 
whether the processor is on the approved list. Commenters suggested 
that the approval be granted either by the Customs Service, the 
respective marketing order committee manager, or the Department. 
However, the Customs Service cannot be expected to maintain a list of 
approved processors and to refer to it every time an exempt shipment is 
presented for importation. Oversight of import regulations cannot be 
delegated to marketing order managers. In response to comments, 
however, MOAB has obtained approved-processor lists for some commodity 
committees and is referring to the lists as part of MOAB's compliance 
procedures when reviewing FV-6 forms.
    Some commenters cited phytosanitary concerns in opposing the import 
exemptions. The commenters believe that exempt shipments would enter 
the United States and not be subject to APHIS regulations or 
inspection. However, exempt shipments, including culls removed from 
reconditioned fresh shipments, continue to be subject to APHIS 
inspection and certification.
    Several commenters complained that the rulemaking procedure used by 
the Department to issue the two interim final rules was abbreviated and 
did not provide for adequate industry input. The interim final rules 
were issued under informal rulemaking procedures used by the Department 
to implement regulations, and there was good cause not to postpone the 
effective date of the rule. More than three months were provided for 
comment on the two interim final rules. The lengthy comment period 
allowed interested persons time to comment on the interim final rules 
and also provided the Department with more opportunity to monitor and 
evaluate the safeguard procedures in operation.
    Finally, customs brokers complained that they have no control over 
the ultimate disposition of exempt lots and, thus, should not be 
expected to certify as to the ultimate disposition of the lot. However, 
certification by either the importer or customs broker is needed to 
provide some validity to the safeguard procedure. Importers and customs 
brokers are responsible for seeking out and representing clients who 
will act in accordance with law. If a customs broker cannot, in good 
faith, certify as to the eventual exempt usage, then that person should 
not act as the agent of the importer.
    On the basis of comments received, review of ongoing safeguard 
procedures, and review of the exemption form, the Department clarifies 
and modifies some requirements and procedures specified on the FV-6 
form. These clarifications and modifications are intended to eliminate 
confusion when completing the exemption form, improve the functioning 
of the safeguard process, and improve the compliance capability of the 
Department.
    This final rule establishes that the FV-6, Importer's Exempt 
Commodity Form will be sequentially numbered. Sequentially numbered 
forms will enable the Department to better monitor use of the form by 
importers and brokers and enhance compliance efforts by the Department. 
The new forms will be mailed to all known importers, customs brokers 
and inspection service offices serving major ports of entry. Use of the 
new forms must begin no later than 60 days after publication of this 
final rule in the Federal Register. During unforeseen or emergency 
situations, a special, sequentially numbered FV-6 form can be faxed to 
an importer or customs broker for one-time use. Additional copies of 
the new FV-6 form and single use copies are available on request by 
calling (202) 720-6585 or sending a fax to (202) 720-5698.
    Under initial instructions, the white copy (#1) was to be retained 
by the Customs Service office at the port of entry upon entry. Under 
this final rule, the importer or customs broker must present the FV-6 
to the Customs Service at the port of entry with Section I completed. 
The importer or customs broker then retains the white Copy 1 of the FV-
6 as a record of the exempt entry. Further distribution of the form 
remains unchanged--the yellow Copy 2 is forwarded to the AMS and the 
pink Copy 3 is forwarded to the exempt outlet receiver with the exempt 
shipment.
    The FV-6 is used when an entire lot (in bags or bulk) is imported 
exempt from quality requirements and shipped directly to an exempt 
outlet. An importer or customs broker usually arranges or facilitates 
the business transaction between a foreign producer (seller) and the 
domestic processor or other exempt entity. In these instances, the 
importer or customs broker is responsible for initiating the FV-6 form 
and the exempt user is the buyer.
    An 8e commodity imported for fresh market use must be inspected and 
certified as meeting fresh market quality requirements. Prior to 
issuance of the two interim final rules in this

[[Page 13055]]
rulemaking procedure, if an imported 8e commodity shipment failed to 
meet applicable quality requirements, the importer had three options: 
(1) Export; (2) destroy the lot under inspection supervision; or (3) 
recondition the lot and return or destroy the culls. This rule provides 
another option for the importer. The FV-6 may be used to ship a failing 
lot, or the culls from a reconditioned lot, to an exempt outlet.
    The ``Date and Place of Inspection'' entry (Item 2 on the FV-6 
form) is to be completed only when a lot imported for fresh market use 
is inspected and all or a portion of the lot is subsequently sent to an 
exempt outlet. Item 2 would include the fresh inspection certificate 
number of the inspection performed on the lot. Some importers and 
customs brokers have not completed item 2 with this information or 
provided a copy of the inspection certificate when using the FV-6 form 
to import a lot failing fresh market quality requirements. In addition 
to filing an FV-6 form, the importer should also file a copy of the 
inspection certificate applicable to the exempt lot.
    One FV-6 may be used for multiple deliveries to the same exempt 
outlet, if the deliveries are made at the same time. In such instances, 
item 4, ``Vehicle Identification,'' on the FV-6 must contain the 
license tag numbers or other identification for each vehicle delivering 
the exempt shipments. Also, item 7, ``Total Quantity Imported,'' must 
show the total weight of all loads delivered from the imported lot to 
the exempt outlet. The receiver who signs Section II of the exemption 
form for the exempt outlet certifies as to the receipt of all loads 
listed on the FV-6, the total volume received, and that the disposition 
is consistent with exempt usage.
    If a shipment is entered as exempt and shipped to two or more 
exempt outlets, an FV-6 must be completed for each exempt shipment and 
outlet. Each receiver who signs section II of the exemption form for an 
exempt outlet is certifying receipt of the shipment at that exempt 
outlet. In such cases, the combined volume of exempt shipments to each 
outlet must equal the total volume reported on the exemption form.
    The quality of product shipped exempt is a business decision 
between the exporter, importer and processor or other exempt receiver. 
If an importer or processor receives exempt product below needed 
quality specifications, the importer or processor could discontinue use 
of the exemption form and require that further shipments be inspected 
against applicable import grade, size, quality, or maturity 
requirements.
    An exempt receiver may reject a shipment, send it to an alternate 
exempt outlet, destroy it, return it to the importer, or export it. It 
is the responsibility of the importer to notify the MOAB of any such 
action and final disposition of the shipment. In such cases, a second 
exemption form must be completed in full and filed with the MOAB. The 
second FV-6 should be initiated by the exempt receiver and certified by 
a representative of the alternate exempt outlet or disposition outlet. 
If the shipment is exported, a copy of the Customs Service export 
document should be included with the second FV-6.
    Under ``Total Quantity Imported'' (currently item 7), the importer 
or customs broker must enter, in pounds, the quantity of product being 
imported as exempt. Other terms of measurement common in some countries 
or commodity industries, such as kilograms, basket, container, or bulk, 
must be converted to pounds. This will provide the receiving exempt 
outlet with a common, measurable term on which to determine that all of 
the product has been delivered. The conversion to pounds will also 
assist the Department in its compliance efforts. The weight entered 
should be only the quantity imported as exempt. In instances where the 
exempt commodity is the culled sublot of a larger fresh market lot, the 
weight entered should be only the weight of the exempt sublot.
    Under ``Intended Use'' (currently item 9) the importer or customs 
broker should enter the type of processing use or other exempt use for 
which the exempt product is intended. The type of processing should be 
entered on the line after the word ``Type'' in item 9. This change is 
made at the request of commenters and is a modification from the 
interim final rules which did not require designation of the type of 
processing or other exempt use. This modification of the form will help 
the Department monitor exempt shipments.
    The Customs Service Entry Number (currently item 10a) and the 
Harmonized Tariff Code Number (currently item 10b) must be entered on 
each exemption form. These data enable the Department to obtain a 
baseline of exempt shipments released by the Customs Service and, thus, 
are essential to the Department's monitoring and compliance 
responsibilities.
    After consideration of comments received and evaluation of 
safeguard procedures, the Department finalizes the two interim final 
rules and makes minor modifications and additions to individual 
commodity import regulations for consistency and clarity. Discussions 
regarding fruit crop import regulations under 7 CFR part 944 follow.

Avocados

    The avocado import grade regulation (7 CFR 944.28) is based on 
those in effect for avocados grown in Florida under Marketing Order No. 
915 throughout the year. Under Marketing Order No. 915 any person may 
handle avocados without regard to established grade, size, quality, or 
maturity requirements provided that such avocados are handled for (1) 
consumption by charitable institutions; (2) distribution by relief 
agencies; (3) commercial processing into products; (4) seed; or (5) 
individual shipments of up to 55 pounds. Prior to issuance of the 
interim final rule, the only exemption allowed under the avocado import 
regulation was for individual shipments of up to 55 pounds. This rule 
finalizes the addition of charitable institutions, distribution by 
relief agencies, seed, and commercial processing into products to the 
list of exemptions allowed under the avocado import regulation. 
Commercial processing includes canning, freezing, dehydrating, drying, 
the addition of chemical substances, or fermentation.
    The Department suspended Sec. 944.31 Avocado import maturity 
regulation on May 15, 1991 (56 FR 23009). The suspension was in place 
at the time of issuance of the import exemption interim final rule (58 
FR 69182, December 23, 1993). Subsequently, the Department issued a 
proposed rule on April 4, 1994 (59 FR 15661) to lift the suspension. 
Because the avocado import maturity regulation was not in effect when 
the exemption interim final rule was issued, exemptions under 
Sec. 944.31 were not included in the exemption interim final rule. 
However, a final rule removing the temporary suspension of avocado 
import maturity regulation was issued on June 16, 1994 (59 FR 30866). 
Because the exemptions for imported avocados under Sec. 944.31 maturity 
regulations also apply to Sec. 944.28 grade regulations, this rule 
finalizes the addition of charitable institutions, distribution by 
relief agencies, seed, and commercial processing into products to the 
list of exemptions allowed under the avocado import maturity 
regulation.

Grapefruit

    The grapefruit import regulation (7 CFR 944.106) is based on those 
in effect for grapefruit grown in Florida under Marketing Order No. 905 
throughout the year. Under Marketing Order No. 905, any person may 
handle grapefruit without regard to established grade, size, quality, 
or maturity requirements

[[Page 13056]]
provided that such grapefruit are handled for (1) consumption by 
charitable institutions; (2) distribution by relief agencies; (3) 
commercial processing into canned or frozen products or into a beverage 
base; (4) animal feed; or (5) individual shipments of up to 15 standard 
packed cartons (12 bushels). Prior to issuance of the interim final 
rule, the only exemption allowed under the grapefruit import regulation 
was that for individual shipments of up to 15 standard packed cartons 
(12 bushels). This rule finalizes the addition of charitable 
institutions, distribution by relief agencies, commercial processing 
into canned or frozen products or into a beverage base, and animal feed 
to the list of exemptions allowed under the grapefruit import 
regulation.

Limes

    The lime import regulation (7 CFR 944.209) is based on those in 
effect for limes grown in Florida under Marketing Order No. 911 
throughout the year. Under Marketing Order No. 911 any person may 
handle limes without regard to established grade, size, quality, or 
maturity requirements provided that such limes are handled for (1) 
consumption by charitable institutions; (2) distribution by relief 
agencies; (3) commercial processing into products; or (4) individual 
shipments of up to 55 pounds. Prior to issuance of the interim final 
rule, the only exemption allowed under the lime import regulation was 
that for individual shipments of up to 250 pounds. This rule finalizes 
the addition of charitable institutions, distribution by relief 
agencies, and commercial processing into products to the list of 
exemptions allowed under the lime import regulation. Commercial 
processing includes canning, freezing, dehydrating, drying, the 
addition of chemical substances, or fermentation. Limes imported for 
conversion into juice without further processing or preservative 
treatment are deemed fresh limes and may not be imported exempt from 
inspection requirements.

Oranges

    The orange import regulation (7 CFR 944.312) is based on those in 
effect for oranges grown in Texas under Marketing Order No. 906 
throughout the year. Under Marketing Order No. 906 any person may 
handle oranges without regard to established grade, size, quality, or 
maturity requirements provided that such oranges are handled for (1) 
consumption by charitable institutions; (2) distribution by relief 
agencies; (3) commercial processing into products; or (4) individual 
shipments of up to 400 pounds. Prior to issuance of the interim final 
rule, the only exemption allowed under the orange import regulation was 
that for individual shipments of up to ten \7/10\ bushels (400 pounds). 
In addition, Marketing Order No. 906 requires handlers to certify to 
the order's committee that receiving processors have no facilities, 
equipment, or outlet to repack or sell fruit in fresh form 
(Sec. 906.123(b)(7)). This final rule adds a corresponding proviso to 
the orange import regulation that oranges, imported as exempt under 
this regulation, cannot be shipped to processors who have facilities, 
equipment, or outlets to repack or sell fruit in fresh form. This rule 
finalizes the addition of charitable institutions, distribution by 
relief agencies, and commercial processing into products to the list of 
exemptions allowed under the orange import regulation.
    The minimum grade requirement for oranges under the orange import 
regulation (7 CFR 944.312) was suspended effective October 24, 1991 (56 
FR 55983) but was not addressed in the interim final rule because the 
minimum grade requirement was not directly affected by the exemptions. 
That minimum grade requirement was reinstated on May 12, 1994 (59 FR 
25791), at the same U.S. No. 2 grade that was effective for imported 
oranges prior to suspension in 1991. The reinstatement rule also 
amended the definition of the term ``oranges'' and changed the minimum 
quantity exemption from ``ten 7/10 bushels,'' which is the equivalent 
of 420 pounds, to 400 pounds. This final rule reflects the changes 
established in the reinstatement action.

Olives

    The olive import regulation (7 CFR 944.401) is based on those in 
effect for olives grown in California under Marketing Order No. 932 
throughout the year. Under Marketing Order No. 932 any person may 
handle olives without regard to established grade, size, quality, or 
maturity requirements provided that such olives are handled for 
processing into oil or donated to charitable institutions. Although 
there is no minimum quantity exemption for olives regulated under 
Marketing Order No. 932, an exemption is allowed under the olive import 
regulation for individual shipments up to 100 pounds. This rule 
finalizes the addition of processing into oil and donations to 
charitable institutions to the list of exemptions allowed under the 
olive import regulation.
    This rule also replaces the original text in paragraph (c) of 
Sec. 944.401 concerning procedures for importing olives and the 
Department offices contacted prior to importation. The interim final 
rule published December 30, 1993 (58 FR 69186) inadvertently omitted 
the procedures and offices specified in the latter portion of paragraph 
(c). This rule replaces, without change, the procedures to be followed 
and updates the office addresses and numbers to be contacted prior to 
importation.

Table Grapes

    The table grape import regulation (7 CFR 944.506) is based on those 
in effect for table grapes grown in southeastern California under 
Marketing Order No. 925 from April 20 through August 15. Under 
Marketing Order No. 925 any person may handle table grapes without 
regard to established grade, size, quality, or maturity requirements 
provided that such table grapes are handled for processing into 
products. Currently, no imported shipments of table grapes are exempt 
from the import regulations. This rule finalizes the addition of 
processing into products as an exemption allowed under the table grape 
import regulation.

Kiwifruit

    The kiwifruit import regulation (7 CFR 944.550) is based on those 
in effect for kiwifruit grown in California under Marketing Order No. 
920 throughout the year. Under Marketing Order No. 920 any person may 
handle kiwifruit without regard to established grade, size, quality, or 
maturity requirements provided that such kiwifruit is handled for (1) 
Consumption by charitable institutions; (2) distribution by relief 
agencies; (3) commercial processing into products; or (4) individual 
shipments of up to 200 pounds. Prior to issuance of the interim final 
rule, the only exemption allowed under the kiwifruit import regulation 
was that for individual shipments of up to 200 pounds. This rule 
finalizes the addition of charitable institutions, distribution by 
relief agencies, and commercial processing into products to the list of 
exemptions allowed under the kiwifruit import regulation. For the 
purposes of this section, commercial processing into products means 
that the kiwifruit is physically altered in form or chemical 
composition through freezing, canning, dehydrating, pulping, juicing, 
or heating of the product. The act of slicing, dicing, or peeling shall 
not be considered commercial processing into products.
    This rule also makes minor modifications to the section titles of 
some fruit crop import regulations. In the past, the Department issued 
separate, annual import regulations that

[[Page 13057]]
were sequentially numbered. However, the import regulations are now 
issued on a continuing basis and are amended only as necessary. The 
section number for each import regulation remains the same and, thus, 
the numerical designations at the end of the titles are no longer 
needed. Also, to be consistent with Federal Register guidelines, the 
titles are changed by removing the capitalization of some words. These 
changes have no material effect on the import regulations.
    The following vegetable crop import regulations are covered under 7 
CFR part 980.

Potatoes

    The import grade regulation for potatoes (7 CFR 980.1) is based on 
marketing orders in effect for potatoes grown in five different potato 
production areas in Idaho and Oregon (MO 945), Washington (MO 946), 
Oregon-California (MO 947), Colorado (MO 948), and the Southeastern 
United States (MO 953). Under one or more of these orders, any person 
may handle potatoes exempt from established grade, size, quality, and 
maturity requirements, provided that such potatoes are used for (1) 
Processing, (2) livestock feed, (3) charity or relief, (4) certified 
seed, (5) export, or (6) limited quantity shipments ranging from 500 to 
1,000 pounds, depending on the individual order. Processing includes 
canning, freezing, dehydration, chips, shoestrings, starch and flour. 
Processing does not include potatoes that are only peeled, or cooled, 
sliced, diced, or treated to prevent oxidation. The Department has 
determined that fresh use food service product, such as fresh use 
potato salad, is not processing. Potatoes made into canned product, 
such as canned potato salad, would be considered processing and thus, 
can be imported as exempt. Prior to issuance of the interim final rule, 
the potato import regulation provided exemptions only for certified 
seed and minimum quantity shipments of 500 pounds. This rule finalizes 
the addition of year-round exemptions, subject to certain safeguard 
provisions, for potatoes used for: (1) canning, freezing, or other 
processing, (2) livestock feed, and (3) charity or relief. The 
safeguard provisions are specified in Sec. 980.501.

Onions

    The import grade regulation for onions (7 CFR 980.117) is based on 
marketing orders in effect for onions grown in two different onion 
production areas in Idaho and Oregon (MO 958), and Texas (MO 959). 
Under one or both of these orders, any person may handle onions exempt 
from established grade, size, quality, and maturity requirements, 
provided that such onions are used for (1) processing, (2) livestock 
feed, (3) charity and relief, (4) plantings, or (5) limited quantity 
shipments ranging from 110 to 2,000 pounds, depending on the individual 
marketing order. Pearl onions not exceeding a maximum size may be 
imported exempt from all but size requirements. Inspection is required 
to determine that such onions do not exceed maximum size requirements. 
Processing includes canning, freezing, dehydration, extraction (juice) 
and pickling in brine. Processing does not include fresh chop, fresh 
cut, convenience food or other pre-packaged salad operations. Prior to 
issuance of the interim final rule, the onion import regulation 
provided exemptions for processed onions (dehydrated, canned, frozen 
and pickled in brine), green onions, onion sets (plantings), braided 
red onions, and for minimum quantity shipments of 110 pounds. This rule 
finalizes the addition of year-round exemptions, subject to certain 
safeguard provisions, for onions used for livestock feed, charity or 
relief, processing, and pearl onions. Marketing Order 958 exempts pearl 
onions which are smaller sized onions produced using specific cultural 
practices and are not larger than 1\3/4\ inches in diameter. Because of 
the maximum size limitation, pearl onions imported exempt pursuant to 
these regulations must be inspected against the 1\3/4\ inch diameter 
maximum size requirement prior to being released by the Customs 
Service. For clarity and consistency, this finalization also adds the 
size limit of pearl onions to the definition in paragraph (h), and 
other types of exempt onions to the definition for processing in 
paragraph (i). The safeguard provisions are specified in Sec. 980.501.

Tomatoes

    The import grade regulation for tomatoes (7 CFR 980.212) is based 
on the marketing order in effect for tomatoes grown in Florida (MO 
966). Under that order, any person may handle tomatoes exempt from 
established grade, size, and maturity requirements, provided that such 
tomatoes are used for (1) processing, (2) charity, (3) relief, (4) 
export, (5) experimental purposes, (6) pear shaped (elongated), cherry, 
green house or hydroponic tomatoes, or (7) limited quantity shipments 
of 50 pounds per day. Prior to issuance of the interim final rule, the 
tomato import regulation provided exemptions for experimental purposes, 
shipments of 60 pounds, and pear shaped, cherry, hydroponic, and 
greenhouse tomatoes. This rule finalizes the addition of exemptions, 
subject to certain safeguard provisions, for tomatoes used for 
processing (canning and pickling), charity and relief. The safeguard 
provisions are specified in Sec. 980.501.
    The following specialty crop import regulations are covered under 7 
CFR part 999.

Dates

    The import regulation for dates (7 CFR 999.1) is based on the 
marketing order in effect for dates produced or packed in Riverside 
County, California (MO 987). Under that order, any person may handle 
dates exempt from established grade requirements, if such dates are 
donated to ``needy persons, prisoners, or Native Americans on 
reservations.'' Prior to issuance of the interim final rule, the date 
import regulation provided exemptions for: (1) processing (preparing 
and preserving dates into confection, coating to alter color, chopping, 
slicing or other processing which alters the form), (2) denatured dates 
unfit for human consumption, and (3) minimum quantity shipments which 
in the aggregate do not exceed 70 pounds. This rule finalizes the 
addition of exemptions, subject to certain safeguard provisions, for 
dates donated to charity, prisoners, and Native Americans on 
reservations. The safeguard provisions are specified in Sec. 999.500.

Walnuts

    The import grade regulation for walnuts (7 CFR 999.100) is based on 
the marketing order in effect for walnuts grown in California (MO 984). 
Under that order, any person may handle walnuts exempt from established 
grade and size requirements, if such walnuts are: (1) Green (immature), 
(2) used by charitable institutions, relief agencies or government 
agencies for school lunch programs, or diverted for animal feed, or oil 
manufacture, or other noncompetitive outlets. Prior to issuance of the 
interim final rule, the walnut import regulation provided exemptions 
from grade and size requirements for minimum quantity shipments of 60 
pounds shelled or 115 pounds inshell. This rule finalizes the addition 
of exemptions, subject to certain safeguard provisions, for green 
walnuts, and walnuts for charity, relief, school lunch programs, animal 
feed or oil. The safeguard provisions are specified in Sec. 999.500.

Raisins

    Exemptions for raisin imports specified under current import

[[Page 13058]]
regulations for raisins (7 CFR part 999.300) are consistent with 
exemptions under the raisin marketing order and are not affected by 
this final rule.

Filberts

    Exemptions for filbert imports specified under current import 
regulations for filberts (7 CFR part 999.400) are consistent with 
exemptions under the filbert/hazelnut marketing order and are not 
affected by this final rule.

Dried Prunes

    Exemptions for dried prune imports specified under current import 
regulations for prunes (7 CFR part 999.200) are consistent with 
exemptions under the dried prune marketing order and are not affected 
by this final rule.
    The respective marketing order committees have developed methods to 
monitor the marketing of the domestically produced exempt commodities 
from handlers to points of final disposition. Safeguard procedures in 
the form of reporting requirements and committee management oversight 
ensure that domestically produced commodities are used in the intended 
exempt outlets.
    Safeguards in domestic marketing orders include two different 
procedures. A ``certificate of privilege'' is issued by a committee 
upon application by a handler. The handler notifies the appropriate 
marketing order committee of the handler's intent to ship that 
commodity to a processor, livestock feeder, charity, or other exempted 
outlet. A ``special purpose shipment report'' is forwarded by a handler 
to the receiver. The receiver sends the form to the responsible 
committee, providing information about the shipment necessary to 
determine compliance.
    Because of the ease with which imported commodities can enter fresh 
market channels of trade, this rule modifies and finalizes a process to 
monitor exempt, imported commodities from the port of entry to the 
point of final disposition.
    To provide consistency and ease the reporting burden on importers 
that deal in several commodities, this rule finalizes a single set of 
safeguard procedures and a standardized form that can be used for 
imported avocados, grapefruit, limes, oranges, olives, table grapes, 
kiwifruit, potatoes, onions, tomatoes, dates and walnuts. The procedure 
is added in Secs. 944.350, 980.501 and 999.500, and is referenced in 
individual commodity import regulations.
    Exemption forms may be obtained from the Marketing Order 
Administration Branch, USDA, AMS, P.O. Box 96456, room 2523-S, 
Washington, D.C. 20090-6456 (telephone (202)-720-4607, fax (202)-720-
5698).
    The exempt form must be mailed within two days of importation and 
two days of receipt at an exempt outlet. Original copies of the FV-6 
must be submitted. Information required on the Importer's Exempt 
Commodity Form includes: (1) the commodity and the variety (if known) 
being imported, (2) the date and place of inspection if used to enter 
failing product or culls as exempt, (include a copy of the inspection 
certificate), (3) identifying marks or numbers on the containers, (4) 
identifying numbers on the railroad car, truck or other transportation 
vehicle transporting product to the receiver, (5) the name and address 
of the importer, (6) the place and date of entry, (7) the quantity 
imported (in pounds), (8) the name and address of the intended receiver 
(processor, feeder, charity, or other exempt receiver), (9) intended 
use of the exempt commodity, (10) the U.S. Customs Service entry number 
and harmonized tariff code number, and (11) such other information as 
may be necessary to ensure compliance with this regulation.
    The reporting burden on both importers and receiving entities is 
minimal and consistent with safeguard procedures imposed on the 
handling of domestically-produced exempt commodities. 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 rule 
have been previously approved by the Office of Management and Budget 
(OMB) and have been assigned OMB No. 0581-0167.
    This rule finalizes increases in the reporting burden on 
approximately 448 importers of avocados, grapefruit, limes, oranges, 
olives, table grapes, and kiwifruit and 534 importers of potatoes, 
onions, tomatoes, dates and walnuts who complete the exemption form. 
The estimated time for importers to complete the form is 10 minutes. 
The estimated time for receivers to sign the certification is 5 
minutes.
    In accordance with section 8e of the Act, the United States Trade 
Representative has concurred with the issuance of this final rule.
    Based on the above, the Administrator of the AMS has determined 
that this final rule will not have a significant economic impact on a 
substantial number of small entities.
    This final rule reflects the Department's appraisal of the need to 
relax the import requirements, with modification as hereinafter set 
forth, to comply with the terms of NAFTA and to effectuate the declared 
policy of the Act.

List of Subjects

7 CFR Part 944

    Avocados, Food grades and standards, Grapefruit, Grapes, Imports, 
Kiwifruit, Limes, Olives, Oranges

7 CFR Part 980

    Food grades and standards, Imports, Marketing agreements, Onions, 
Potatoes, Tomatoes

7 CFR Part 999

    Dates, Filberts, Food grades and standards, Imports, Nuts, Prunes, 
Raisins, Reporting and recordkeeping requirements, Walnuts.

    Accordingly, the two interim final rules amending 7 CFR parts 944, 
980 and 999 which were published at 58 FR 69182 and 69186 on December 
30, 1993, are adopted as a final rule with the following changes:

PART 944--FRUITS; IMPORT REGULATIONS

    1. The authority citation for 7 CFR part 944 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

    2. In Sec. 944.31, paragraphs (f) and (g) are revised to read as 
follows:


Sec. 944.31  Avocado import maturity regulation.

* * * * *
    (f) Any lot or portion thereof which fails to meet the import 
requirements, and is not being imported for purposes of consumption by 
charitable institutions, distribution by relief agencies, seed, or 
commercial processing into products; prior to or after reconditioning 
may be exported or disposed of under the supervision of the Federal or 
Federal-State Inspection Service with the costs of certifying the 
disposal of such lot borne by the importer.
    (g) The maturity requirements of this section shall not be 
applicable to avocados imported for consumption by charitable 
institutions, distribution by relief agencies, seed, or commercial 
processing into products, but such avocados shall be subject to the 
safeguard provisions contained in Sec. 944.350.


Sec. 944.209  [Amended]

    3. In Sec. 944.209, the last sentence in paragraph (c), the word 
``handled'' is removed and the word ``imported'' is added in its place.

[[Page 13059]]

    4. In Sec. 944.312, paragraphs (c) and (h) are revised to read as 
follows:


Sec. 944.312  Orange import regulation.

* * * * *
    (c) The term importation means release from custody of the United 
States Customs Service. The term processing means the manufacture of 
any orange product which has been converted into sectioned fruit or 
into fresh juice, or preserved by any commercial process, including 
canning, freezing, dehydrating, drying, and the addition of chemical 
substances, or by fermentation.
* * * * *
    (h) The grade, size, quality, and maturity requirements of this 
section shall not be applicable to oranges imported for consumption by 
charitable institutions, distribution by relief agencies, or processing 
into products, but shall be subject to the safeguard provisions 
contained in Sec. 944.350, Provided that: oranges, imported as exempt 
under this regulation, cannot be shipped to processors who have 
facilities, equipment, or outlets to repack or sell fruit in fresh 
form.
* * * * *
    5. Section 944.350 is revised to read as follows:


Sec. 944.350  Safeguard procedures for avocados, grapefruit, kiwifruit, 
limes, olives, oranges, and table grapes exempt from grade, size, 
quality, and maturity requirements.

    (a) Each person who imports:
    (1) Avocados, grapefruit, kiwifruit, limes, olives, and oranges for 
consumption by charitable institutions or distribution by relief 
agencies;
    (2) Avocados, grapefruit, kiwifruit, limes, oranges, and table 
grapes for processing;
    (3) Olives for processing into oil;
    (4) Grapefruit for animal feed; or
    (5) Avocados for seed shall obtain an ``Importer's Exempt Commodity 
Form'' (FV-6 form) from the Marketing Order Administration Branch, 
Fruit and Vegetable Division, AMS, USDA, and shall show the completed 
``Importer's Exempt Commodity Form'' to the U.S. Customs Service 
Regional Director or District Director, as applicable, at the port at 
which the customs entry is filed. One copy shall be mailed to the 
Marketing Order Administration Branch, Fruit and Vegetable Division, 
AMS, USDA with a postmark no later than two days after the date of 
importation and a third copy shall accompany the lot to the exempt 
outlet specified on the form. Any lot offered for inspection and, all 
or a portion thereof, subsequently imported as exempt under this 
provision shall be reported on an ``Importer's Exempt Commodity Form'' 
and such form, accompanied by a copy of the applicable inspection 
certificate, shall be mailed to the Marketing Order Administration 
Branch.
    (b) Each person who receives an exempt commodity for the purposes 
specified in paragraph (a) of this section shall also receive a copy of 
the same numbered Importer's Exempt Commodity Form filed by the 
importer or customs broker and shall certify, by completing and signing 
Section II of the form and mailing the form to the Marketing Order 
Administration Branch within two days of receipt of the exempt lot, 
that such lot has been received and will be utilized in the exempt 
outlet.
    (c) It is the responsibility of the importer to notify the 
Marketing Order Administration Branch of any lot of exempt commodity 
rejected by a receiver, shipped to an alternative exempt receiver, 
exported, or otherwise destroyed. In such cases, a second ``Importer's 
Exempt Commodity Form'' must be filed by the importer providing 
sufficient information to determine ultimate disposition of the exempt 
lot and such disposition shall be so certified by the final receiver.
    (d) All FV-6 forms and other correspondence regarding entry of 8e 
commodities must be mailed to the Marketing Order Administration 
Branch, USDA, AMS, P.O. Box 96456, room 2523-S, Washington, D.C. 20090-
6456, telephone (202)-720-4607. FV-6 forms submitted by fax must be 
followed by a mailed, original copy of the FV-6 form. Fax transmissions 
may be sent to the MOAB at (202) 720-5698.
    6. In Sec. 944.401, paragraph (c) is revised to read as follows:


Sec. 944.401  Olive import regulation.

* * * * *
    (c) The Processed Products Branch, Fruit and Vegetable Division, 
Agricultural Marketing Service, U.S. Department of Agriculture, is 
hereby designated as the governmental inspection service for the 
purpose of certifying the grade and size of processed olives from 
imported bulk lots for use in canned ripe olives and the grade and size 
of imported canned ripe olives. Inspection by said inspection service 
with appropriate evidence thereof in the form of an official inspection 
certificate, issued by the service and applicable to the particular lot 
of olives, is required. With respect to imported bulk olives, 
inspection and certification shall be completed prior to use as 
packaged ripe olives. With respect to canned ripe olives, inspection 
and certification shall be completed prior to importation. Any lot of 
olives which fails to meet the import requirements and is not being 
imported for purposes of contribution to a charitable organization or 
processing into oil may be exported or disposed of under the 
supervision of the Processed Products Branch, Fruit and Vegetable 
Division, AMS, USDA, with the cost of certifying the disposal borne by 
the importer. Such inspection and certification services will be 
available, upon application, in accordance with the applicable 
regulations governing the inspection and certification of Processed 
Fruits and Vegetables, Processed Products Thereof, and Certain Other 
Processed Food Products (part 52 of this title). Application for 
inspection of canned ripe olives shall be made not less than 10 days 
prior to the time when the olives will be imported. Since inspectors 
are not located in the immediate vicinity of some of the small ports of 
entry, importers of canned ripe olives shall make arrangements for 
inspection through the following office at least 10 days prior to the 
time when the olives will be imported: Processed Products Branch, USDA, 
AMS, F&V Division, P.O. Box 96456, Room 0726-S, Washington, DC 20090-
6456, telephone (202) 720-5021, fax (202) 690-1527. Application for 
inspection of processed bulk olives shall be made not less than 3 days 
prior to use in the production of canned ripe olives. Such application 
shall be made through one of the following offices: Regional Director, 
Eastern Regional Office, 800 Roosevelt Road, Building A, suite 380 Glen 
Ellyn, IL 60137, telephone (708) 790-6937/8/9, fax (708) 469-5162; or 
Regional Director, Western Regional Office, 2202 Monterey Street, suite 
102-C, Fresno, CA 93721, telephone (209) 487-5891, fax (209) 487-5900.
* * * * *
    7. In Sec. 944.550, paragraph (d) is revised to read as follows:


Sec. 944.550  Kiwifruit import regulation.

* * * * *
    (d) Any lot or portion thereof which fails to meet the import 
requirements and is not being imported for purposes of consumption by 
charitable institutions, distribution by relief agencies, or commercial 
processing into products may be reconditioned or exported. Any failed 
lot which is not reconditioned or exported shall be disposed of under 
supervision of the Federal or Federal-State Inspection Service with the 
costs of certifying the

[[Page 13060]]
disposal of said lot borne by the importer.
* * * * *

PART 980--VEGETABLES; IMPORT REGULATIONS

    1. The authority citation for 7 CFR part 980 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

    2. In Sec. 980.1, paragraph (i) is revised to read as follows:


Sec. 980.1  Import regulations; Irish potatoes.

* * * * *
    (i) Exemptions. The grade, size, quality and maturity requirements 
of this section shall not be applicable to potatoes imported for 
canning, freezing, other processing, livestock feed, charity, or 
relief, but such potatoes shall be subject to the safeguard provisions 
contained in Sec. 980.501. Processing includes canning, freezing, 
dehydration, chips, shoestrings, starch and flour. Processing does not 
include potatoes that are only peeled, or cooled, sliced, diced, or 
treated to prevent oxidation, or made into fresh potato salad.
    3. In Sec. 980.117, paragraph (i) is revised to read as follows:


Sec. 980.117  Import regulations; onions.

* * * * *
    (i) Exemptions. The grade, size, quality and maturity requirements 
of this section shall not be applicable to onions imported for 
processing, livestock feed, charity, or relief, and pearl onions not 
larger than 1\3/4\ inches in diameter, onion sets (plantings), braided 
red onions, and minimum quantity shipments of 110 pounds, but such 
onions shall be subject to the safeguard provisions in Sec. 980.501. 
Processing includes canning, freezing, dehydration, extraction (juice) 
and pickling in brine. Processing does not include fresh chop, fresh 
cut, convenience food or other pre-packaged salad operations. Pearl 
onions must be inspected for size prior to entry into the United 
States.
    4. In Sec. 980.212, paragraph (i) is revised to read as follows:


Sec. 980.212  Import regulations; tomatoes.

* * * * *
    (i) Exemptions. The grade, size, quality and maturity requirements 
of this section shall not apply to tomatoes for charity, relief, 
canning or pickling, but such tomatoes shall be subject to the 
safeguard provisions contained in Sec. 980.501. Processing includes 
canning and pickling.
    5. Section 980.501 is revised to read as follows:


Sec. 980.501  Safeguard procedures for potatoes, onions, and tomatoes 
exempt from grade, size, quality, and maturity requirements.

    (a) Each person who imports:
    (1) Potatoes, onions or tomatoes for consumption by charitable 
institutions or distribution by relief agencies;
    (2) Potatoes, onions, or tomatoes for processing;
    (3) Potatoes or onions for livestock feed; or
    (4) Pearl onions, shall obtain an ``Importer's Exempt Commodity 
Form'' (FV-6) from the Marketing Order Administration Branch, Fruit and 
Vegetable Division, AMS, USDA, and shall show the completed 
``Importer's Exempt Commodity Form'' to the U.S. Customs Service 
Regional Director or District Director, as applicable, at the port at 
which the customs entry is filed. One copy shall be mailed to the 
Marketing Order Administration Branch, Fruit and Vegetable Division, 
AMS, USDA with a postmark no later than two days after the date of 
importation and a third copy shall accompany the lot to the exempt 
outlet specified on the form. Any lot offered for inspection and, all 
or a portion thereof, subsequently imported as exempt under this 
provision shall be reported on an ``Importer's Exempt Commodity Form'' 
and such form, accompanied by a copy of the applicable inspection 
certificate, shall be mailed to the Marketing Order Administration 
Branch.
    (b) Each person who receives an exempt commodity for the purposes 
specified in paragraph (a) of this section shall also receive a copy of 
the same numbered Importer's Exempt Commodity Form filed by the 
importer or customs broker and shall certify, by completing and signing 
Section II of the form and mailing the form to the Marketing Order 
Administration Branch within two days of receipt of the exempt lot, 
that such lot has been received and will be utilized in the exempt 
outlet.
    (c) It is the responsibility of the importer to notify the 
Marketing Order Administration Branch of any lot of exempt commodity 
rejected by a receiver, shipped to an alternative exempt receiver, 
returned to the country of origin, or otherwise disposed of. In such 
cases, a second ``Importer's Exempt Commodity Form'' must be filed by 
the importer providing sufficient information to determine ultimate 
disposition of the exempt lot and such disposition shall be so 
certified by the final receiver.
    (d) All FV-6 forms and other correspondence regarding entry of 8e 
commodities must be mailed to the Marketing Order Administration 
Branch, USDA, AMS, P.O. Box 96456, room 2523-S, Washington, D.C. 20090-
6456, telephone (202) 720-4607. FV-6 forms submitted by fax must be 
followed by a mailed, original copy of the FV-6. Fax transmissions may 
be sent to the MOAB at (202) 720-5698.

PART 999--SPECIALTY CROPS; IMPORT REGULATIONS

    1. The authority citation for 7 CFR part 999 continues to read as 
follows:

    Authority: 7 U.S.C. 601-674.

    2. Section 999.500 is revised to read as follows:


Sec. 999.500  Safeguard procedures for walnuts and certain dates exempt 
from grade, size, quality, and maturity requirements.

    (a) Each person who imports:
    (1) Dates which are donated to needy persons, prisoners or Native 
Americans on reservations; or
    (2) Walnuts which are: green walnuts (so immature that they cannot 
be used for drying and sale as dried walnuts); walnuts used in non-
competitive outlets such as use by charitable institutions, relief 
agencies, governmental agencies for school lunch programs, and 
diversion to animal feed or oil manufacture shall obtain an 
``Importer's Exempt Commodity Form'' (FV-6) from the Marketing Order 
Administration Branch, Fruit and Vegetable Division, AMS, USDA, and 
shall show the completed ``Importer's Exempt Commodity Form'' to the 
U.S. Customs Service Regional Director or District Director, as 
applicable, at the port at which the customs entry is filed. One copy 
shall be mailed to the Marketing Order Administration Branch, Fruit and 
Vegetable Division, AMS, USDA, with a postmark not later than two days 
after the date of importation and a third copy shall accompany the lot 
to the exempt outlet specified on the form. Any lot offered for 
inspection and, all or a portion thereof, imported as exempt under this 
provision shall be reported on an ``Importer's Exempt Commodity Form'' 
and such form, accompanied by a copy of the applicable inspection 
certificate, shall be mailed to the Marketing Order Administration 
Branch.
    (b) Each person who receives an exempt commodity for the purposes 
specified in paragraph (a) of this section shall also receive a copy of 
the same numbered Importer's Exempt Commodity Form filed by the 
importer or customs broker and shall certify, by completing and signing 
Section II of the form and mailing the form to the

[[Page 13061]]
Marketing Order Administration Branch within two days of receipt of the 
exempt lot, that such lot has been received and will be utilized in the 
exempt outlet.
    (c) It is the responsibility of the importer to notify the 
Marketing Order Administration Branch of any lot of exempt commodity 
rejected by a receiver, shipped to an alternative exempt receiver, 
exported, or otherwise disposed of. In such cases, a second 
``Importer's Exempt Commodity Form'' must be filed by the importer 
providing sufficient information to determine ultimate disposition of 
the exempt lot and such disposition shall be so certified by the final 
receiver.
    (d) All FV-6 forms and other correspondence regarding entry of 8e 
commodities must be mailed to the Marketing Order Administration 
Branch, USDA, AMS, P.O. Box 96456, room 2523-S, Washington, D.C. 20090-
6456, telephone (202) 720-4607. FV-6 forms submitted by fax must be 
followed by a mailed, original copy of the FV-6. Fax transmissions may 
be sent to the MOAB at (202) 720-5698.

    Dated: February 23, 1996.
Sharon Bomer Lauritsen,
Deputy Director, Fruit and Vegetable Division.
[FR Doc. 96-7192 Filed 3-25-96; 8:45 am]
BILLING CODE 3410-02-P