[Federal Register Volume 63, Number 181 (Friday, September 18, 1998)]
[Rules and Regulations]
[Pages 50100-50111]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25058]



[[Page 50099]]

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Part V





Department of Agriculture





_______________________________________________________________________



Animal and Plant Health Inspection Service



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7 CFR Parts 319 and 354



Solid Wood Packing Material From China; Interim Rule

  Federal Register / Vol. 63, No. 181 / Friday, September 18, 1998 / 
Rules and Regulations  

[[Page 50100]]



DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Parts 319 and 354

[Docket No. 98-087-1]
RIN 0579-AB01


Solid Wood Packing Material From China

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Interim rule and request for comments.

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SUMMARY: We are amending the regulations for importing logs, lumber, 
and other unmanufactured wood articles by adding treatment and 
documentation requirements for solid wood packing material imported 
from China. This change means that wooden pallets, crating, dunnage, 
and other wooden packing material imported into the United States from 
China will have to be heat treated, fumigated, or treated with 
preservatives prior to departure from China. This action will affect 
anyone who uses solid wood packing material in connection with 
exporting commodities from China to the United States. This action is 
necessary to control the risk that solid wood packing material from 
China could introduce dangerous plant pests, including forest pests, 
into the United States, a risk demonstrated by many recent incidents 
where exotic pests were detected in solid wood packing material from 
China.

DATES: Interim rule effective December 17, 1998. Consideration will be 
given only to comments received on or before November 17, 1998. We also 
will consider comments made at three public hearings scheduled to be 
held during the public comment period in Washington, DC, on October 16, 
1998, and in Seattle, WA, and Los Angeles, CA, on dates to be 
announced.

ADDRESSES: Please send an original and three copies of your comments to 
Docket No. 98-087-1, Regulatory Analysis and Development, PPD, APHIS, 
suite 3C03, 4700 River Road Unit, 118, Riverdale, MD 20737-1238. Please 
state that your comments refer to Docket No. 98-087-1. Comments 
received may be inspected at USDA, room 1141, South Building, 14th 
Street and Independence Avenue SW., Washington, DC, between 8 a.m. and 
4:30 p.m., Monday through Friday, except holidays. Persons wishing to 
inspect comments are requested to call ahead on (202) 690-2817 to 
facilitate entry into the comment reading room.
    The Washington, DC, public hearing will be held on October 16, 
1998, at the Jefferson Auditorium, U.S. Department of Agriculture, 
South Building, 14th Street and Independence Avenue SW., Washington, 
DC.

FOR FURTHER INFORMATION CONTACT: Mr. Ronald Campbell, Import 
Specialist, Phytosanitary Issues Management Team, PPQ, APHIS, 4700 
River Road, Unit 140, Riverdale, MD 20737-1236, (301) 734-6799.

SUPPLEMENTARY INFORMATION:

Background

    Logs, lumber, and other unmanufactured wood articles imported into 
the United States could pose a significant hazard of introducing plant 
pests detrimental to agriculture and to natural, cultivated, and urban 
forest resources. The regulations in 7 CFR 319.40-1 through 319.40-11 
(referred to below as the regulations) are intended to mitigate the 
plant pest risk presented by the importation of logs, lumber, and other 
unmanufactured wood articles.
    One of the classes of wood articles that is subject to import 
restrictions is solid wood packing material (SWPM). The regulations 
define SWPM in Sec. 319.40-1 as ``Wood packing materials other than 
loose wood packing materials, used or for use with cargo to prevent 
damage, including, but not limited to, dunnage, crating, pallets, 
packing blocks, drums, cases, and skids.'' Most of the wooden pallets, 
crates, dunnage and similar articles used to assist the movement of 
commodities in international commerce meet the definition of SWPM and 
are subject to the regulations. However, it is important to note that 
more and more synthetic or highly processed wood materials are being 
used as packing material, and these articles (e.g., plywood, oriented 
strand board, corrugated paperboard, plastic, resin composites) are not 
subject to the requirements for SWPM.
    The importation of SWPM is regulated because this material presents 
a number of plant pest risks. SWPM is often constructed from raw wood 
just shortly before it is used, often includes bark on some surfaces, 
and is often made from low quality wood that sometimes may be of low 
quality due to pest damage. These factors all mean that SWPM presents a 
high risk of spreading wood pests that exist in the areas where the 
SWPM was constructed. Additionally, the SWPM in transit is in close 
contact with the commodities (including wood products) it is used to 
pack, with an excellent opportunity for pests to move from SWPM to 
commodities. After commodities arrive in the United States, pests from 
the SWPM have many opportunities to escape and become established, 
especially since the SWPM associated with commodities often moves long 
distances throughout the United States, is reused frequently, and is 
often stored outdoors at ports and warehouses when not in use.
    To control these risks, Sec. 319.40-3 of the regulations imposes 
certain requirements on imported SWPM. If the SWPM is not free of bark, 
it must be heat treated, fumigated, or treated with preservatives in 
accordance with the regulations prior to arrival. Even if the SWPM is 
free of bark, the SWPM must be heat treated, fumigated, or treated with 
preservatives in accordance with the regulations prior to arrival if it 
is used to pack regulated wood commodities in transit. However, SWPM 
used to move regulated wood commodities need not be heat treated, 
fumigated, or treated with preservatives if the SWPM meets all the 
importation and entry conditions required for the regulated wood 
commodities the SWPM is used to move.
    The least restrictive requirement for importing SWPM occurs when 
the SWPM is used to move nonregulated articles (articles that are not 
wood, or that are highly processed wood excluded from regulation). When 
SWPM is used to move nonregulated articles, the SWPM must be totally 
free from bark and apparently free from live plant pests. It need not 
be heat treated, fumigated, or treated with preservatives.
    The Animal and Plant Health Inspection Service (APHIS) inspects and 
monitors shipments of imported wood at the port of first arrival to 
ensure that articles are imported in compliance with the regulations. 
Inspectors have documented instances where imported SWPM was not in 
compliance with the regulations. The single largest source of SWPM not 
in compliance with the regulations has been commercial shipments from 
China. (China means the People's Republic of China, including the Hong 
Kong Special Administrative Region.) During the period from August 23, 
1995 (when the regulations went into effect), until March 15, 1998, 
inspectors reported 132 shipments containing SWPM from China that were 
infested with exotic plant pests. In each of these reported instances, 
the shipment was treated, reexported, or destroyed. There were also 
many additional reports of pallets, crating and other SWPM that had 
bark

[[Page 50101]]

on the surface and thus were not in compliance with the regulations.
    These reports indicate that a very large problem exists with SWPM 
imported from China. APHIS inspects a percentage of shipments arriving 
from China if the shipments are not regulated wood products. However, 
virtually all of these shipments have SWPM as packing materials. Some 
of the cargo in which APHIS has found exotic plant pests in the 
accompanying SWPM include cable wire, granite, marble tiles, pipe 
flanges, machinery, and tools.
    APHIS has recently found numerous exotic plant pests associated 
with SWPM imported from China, including extremely destructive wood-
boring insects of the genera Anoplophora, Ceresium, Hesperophanes, and 
Monochamus. Pests of these genera have moved with the SWPM that carries 
them to numerous States, including California, Florida, Illinois, 
Indiana, Michigan, New Jersey, New York, North Carolina, Tennessee, 
Texas, Washington, and Wisconsin. By the end of fiscal year 1998, 
approximately $5 million will have been spent in ongoing efforts to 
eradicate these outbreaks in the States of New York and Illinois. In 
each of the other States listed, the pests were intercepted and 
destroyed before becoming established.
    An infestation of one particularly destructive exotic pest of 
maple, poplar, and other hardwood trees, the Asian longhorned beetle 
(Anoplophora glabripennis), was discovered near a maritime facility in 
Brooklyn, NY, in August 1996. State and Federal authorities have since 
uprooted, chipped, and burned thousands of trees on public and private 
land to control the infestation. An outbreak of the same pest was 
reported in Ravenswood, IL, and surrounding areas in July 1998. Control 
efforts in both areas continue. Even though the Asian longhorned beetle 
was likely established in these areas prior to implementation of our 
current regulations governing SWPM, the Asian longhorned beetle 
continues to be intercepted on shipments associated with SWPM from 
China.
    The damage and losses that would occur if additional plant pests 
associated with SWPM from China should become established and spread in 
the United States would be substantial. For example, many species of 
hardwood trees would be destroyed, severely harming industries that 
depend on the wood and other products of these trees (e.g., maple 
syrup, maple sugar, fruit). Hardwood lumber industries would face 
critical supply shortages and would be forced to try to meet their 
needs with imported hardwoods. Mature ornamental trees would be 
attacked, and domestic supplies of trees for nursery and landscaping 
companies would be reduced or eliminated. Widespread destruction of 
hardwood trees in public and private forest land would occur, causing 
enormous direct losses in tourism and related industries and enormous 
losses that cannot be easily measured to the aesthetics of our 
woodlands.
    APHIS, Plant Protection and Quarantine, recently completed a plant 
pest risk assessment that focuses on four taxa intercepted on SWPM from 
China. The assessment provides scientific references and details on the 
biology of Ceresium spp., Monochamus spp., Hesperophanes spp., and the 
Asian longhorned beetle (Anoplophora glabripennis), as well as 
qualitative characterizations of the biological consequences and 
likelihood of introduction. The assessment is consistent with 
guidelines for conducting plant pest risk analyses provided by the 
International Plant Protection Convention (IPPC) of the United Nations 
Food and Agriculture Organization (FAO) and the North American Plant 
Protection Organization (NAPPO). The assessment concluded that each of 
these taxa constitutes a significant and immediate threat to the United 
States. In addition, APHIS has conducted an environmental assessment of 
the impacts of the interim rule. Copies of both of these documents are 
available from the office identified above under FOR FURTHER 
INFORMATION CONTACT.
    The United States Department of Agriculture has tried to convince 
the national government of China and individual exporters of Chinese 
goods to take steps to control the problems caused by exotic plant 
pests in SWPM from China. The compliance of Chinese shipments with the 
current regulatory requirements for SWPM continues to be very poor, 
with many shipments arriving with bark and obvious signs of live pests 
on SWPM.
    To control this serious problem, APHIS is initiating additional 
treatment and certification requirements for SWPM from China. These 
imports represent the largest identifiable source of the introductions 
discussed above. Additionally, APHIS will continue to evaluate the 
problem of SWPM imports in general. We are currently preparing an 
advance notice of proposed rulemaking to seek information and develop 
regulatory options on the general problem of imported SWPM from all 
countries and the particular problem of how to respond to the scheduled 
discontinued use, both domestically and overseas, of methyl bromide 
fumigation for imported wood products, in accordance with the Clean Air 
Act's and Montreal Protocol's phase-out schedules. Because there are 
multiple risks to U.S. resources from exotic wood-boring insects 
associated with SWPM of other origins, and because of the potential for 
adverse environmental effects from the use of methyl bromide and other 
pesticides as a result of this rule, APHIS considers this interim rule 
to be the first step towards better exclusion of pest risks from SWPM. 
APHIS will initiate an interagency review in order to develop an 
advance notice of proposed rulemaking that will identify various 
options for amending existing regulations for importing SWPM from all 
foreign countries to further improve exclusion procedures and protect 
forest resources, while at the same time minimizing the further use of 
methyl bromide in order to protect the stratospheric ozone layer. APHIS 
intends to implement this interim rule until APHIS has completed the 
rulemaking process described above for improved measures for mitigating 
the pest risk of SWPM from all sources. During the period this interim 
rule is in effect, APHIS will work with China to obtain information on 
actions China has taken to comply with the interim rule, including the 
use of methyl bromide and other pesticides. If the amount of methyl 
bromide used in China is greater than expected, or if the interim rule 
remains in effect longer than 2 years, additional environmental 
analysis may be necessary. We will consider comments received on the 
advance notice of proposed rulemaking, as well as on this interim rule, 
in developing any proposed or final rule changing the requirements for 
importing SWPM.

Hong Kong Special Administrative Region

    This interim rule is intended to address the problem of serious 
plant pests, such as Asian longhorned beetle, being introduced into the 
United States on SWPM imported from the mainland of China. Due to the 
close and unique economic connections between the Hong Kong Special 
Administrative Region and the mainland of China, and the fact that 
about half of the mainland's exports to the United States come through 
Hong Kong, it is necessary to include the Hong Kong Special 
Administrative Region in this interim rule in some form to effectively 
address the problem. This interim rule is intended to require 
certification of all SWPM originating on the mainland of China as 
having been treated. In view of

[[Page 50102]]

the separate customs territory status and separate quarantine and 
inspection regime maintained by the Hong Kong Special Administrative 
Region with regard to the mainland of China, and in view of the fact 
that a large amount of goods not originating on the mainland of China 
or in the Hong Kong Special Administrative Region pass through the Hong 
Kong Special Administrative Region on the way to the United States, we 
are considering changes to the interim rule in order to avoid 
unnecessary effect on Hong Kong's trade with the United States and 
other parts of the world while preventing further introductions of 
serious plant pests from Hong Kong or the mainland of China.

New Regulatory Requirements for SWPM From China

    We are amending the regulations to require that SWPM imported into 
the United States from China be heat treated, fumigated, or treated 
with preservatives prior to departure from China. We will also require 
that each shipment from China that contains SWPM must be accompanied by 
a certificate, issued by the national government of China, stating that 
the SWPM was heat treated, fumigated, or treated with preservatives 
prior to departure from China. Shipments from China that do not employ 
SWPM must be accompanied by an exporter statement stating that the 
shipment contains no SWPM. An exporter statement is not a government-
issued document but rather is a written declaration by the exporter, 
such as an exporter statement on or attached to the commercial invoice, 
and as an attachment to the bill of lading, stating the nature of the 
shipment and that it does not contain any SWPM. A definition of 
exporter statement is added to the definitions in Sec. 319.40-1.
    Because the certificate requirement may slow clearance of shipments 
at U.S. ports while inspectors match certificates with the associated 
SWPM, we are also providing exporters of SWPM from China with the 
option of having each article of SWPM that has been treated, marked at 
the treatment facility with a stamp or weatherproof label that reads 
``CHINA TREATED.'' This marking, while not required, may help to 
expedite release of shipments at the port of first arrival. This type 
of marking, however, is not a substitute for the required certificate.
    Heat treatment, fumigation, or treatment with preservatives may be 
performed in accordance with the treatment schedules authorized for 
SWPM in the regulations or in the PPQ Treatment Manual, which is 
incorporated by reference at 7 CFR 300.1 of this chapter. It is 
anticipated that most treatments conducted to meet the regulatory 
requirements will employ methyl bromide fumigation, although some other 
fumigants such as phosphene, or a number of preservatives, may be 
employed. Preservatives in common use include arsenic, copper sulfate, 
creosote, and copper-8-quinolinate.
    We are not establishing a time limit for treatment of SWPM; i.e., 
SWPM will not be required to be treated within a certain number of days 
prior to embarking for the United States. Such a requirement would make 
it far more difficult for exporters to schedule treatment of SWPM and 
conduct treatments in large, cost-effective batches. A time limit on 
treatment of SWPM would likely encourage a higher level of 
noncompliance by exporters, which would result in an increased risk 
level. However, to guard against reinfestation during the entire 
interval between treatment and export, the SWPM must be stored, 
handled, or safeguarded in a manner which excludes any infestation of 
it by plant pests.
    If a shipment containing SWPM from China arrives at a port in the 
United States and the SWPM is found to contain plant pests, or the SWPM 
has not been heat treated, fumigated, or treated with preservatives, or 
there is no accompanying certificate documenting such treatment, an 
APHIS inspector may deny entry to the entire lot or shipment (cargo and 
SWPM). Alternatively, the inspector will allow the importer to separate 
the cargo from the SWPM, at a location and within a time period 
specified by the inspector, and destroy or reexport the SWPM, if the 
inspector determines that this can be done without risk of spreading 
plant pests. This may only be done in cases where there is a secure 
facility for separation of the cargo, available means to destroy the 
SWPM (incineration, or chipping and incineration, are the authorized 
methods), and available APHIS inspectors to supervise the process. The 
importer will be responsible for all expenses associated with this 
process.

Alternatives Considered

    APHIS considered several alternatives in an effort to achieve the 
necessary control over the pest problems associated with SWPM from 
China while imposing the minimum necessary adverse impacts on persons 
who will be affected by this rule. We attempted to set requirements 
that allowed exporters and importers to mitigate the risks associated 
with SWPM from China in a variety of ways--by using alternative non-
regulated packing material, or by using one of several treatment 
options for the packing material, or by purchasing pre-treated packing 
material that is available from many sources--that would allow them to 
make sound business decisions on the best way their particular 
enterprise could comply with our regulatory requirements.
    The major alternatives we considered for this rule were: (1) 
Prohibiting the entry of SWPM from China; (2) requiring treatment and 
certification abroad of SWPM from China; (3) treatment either abroad or 
in the United States; and (4) taking no action (continuing the existing 
permitting process for SWPM).
    The first alternative we considered to this rule was a total ban on 
importing SWPM from China. In terms of managing pest risks, a total ban 
on SWPM from China was the most effective, enforceable, and simple 
alternative. It was also consistent with APHIS' actions in the past, 
where we implemented import bans on a product from a country when the 
association of plant pests with the product was well established and it 
was not practical to enforce treatment for the pests. In this case, the 
association of dangerous exotic plant pests with SWPM from China is 
well established, and, while treatments for those plant pests are 
available, constant enforcement may not be practical. A huge volume of 
cargo with SWPM arrives daily in the United States from China. Checking 
at ports to confirm that arriving SWPM has been treated, and has 
certificates issued by the national government of China confirming 
treatment, will require substantial additional APHIS resources at 
ports. Additional resources will also be needed to deal with shipments 
that arrive without certification or with untreated SWPM.
    Although a ban on SWPM from China would be the most effective and 
practical means of controlling the pest risk, it would have an adverse 
impact on trade with China and on those sectors of the U.S. economy 
that rely on Chinese imports. These effects are discussed below under 
``Executive Order 12866 and Regulatory Flexibility Act.'' A ban would 
affect a large fraction of the more than one million shipments imported 
into the United States from China each year, valued at over $72 billion 
in 1997. The primary effects of a ban would be to delay delivery of 
shipments while exporters arrange to use alternative materials other 
than SWPM, and to increase the cost of each shipment for which more 
expensive packing materials are substituted for SWPM.

[[Page 50103]]

    The second alternative APHIS considered was to allow SWPM from 
China to enter the United States if treated prior to departure from 
China and accompanied by certification of treatment. APHIS believes 
that effective implementation of this option will minimize trade 
disruption and other adverse impacts while managing pest risks. The 
costs associated with this alternative are also discussed below under 
``Executive Order 12866 and Regulatory Flexibility Act,'' and include 
primarily costs of treating SWPM.
    The third alternative APHIS considered was to inspect SWPM from 
China at the port of arrival in the United States, and to order 
treatment if necessary after arrival in the United States. Under this 
alternative, exporters could also have treated their SWPM prior to 
departure from China if they expected treatment would be necessary. 
This alternative could have allowed some shipments to be cleared by 
inspection upon arrival, with no need for treatment. Although this 
option would provide less of a trade disruption than the previous 
alternatives, we believe that it would increase pest risks to an 
unacceptable level. This alternative probably would not induce most 
exporters to treat SWPM from China prior to departure and would, 
instead, result in a vastly increased demand for treatment, especially 
methyl bromide fumigation, at ports of arrival in the United States. 
Treatment upon arrival would be very labor intensive, would also have 
adverse consequences on the efficiency of port operations, would have 
severe budget implications for APHIS, and would not be consistent with 
our policy for regulating SWPM from all other parts of the world, which 
is, essentially, that the SWPM must be rendered safe prior to arrival. 
The option of treating the SWPM in the United States carries with it 
the risk that pests associated with untreated SWPM arriving from China 
could escape prior to treatment and become established in the United 
States. It should also be noted that many articles in commerce have 
components (e.g., soft rubber) that can be damaged by methyl bromide 
fumigation, and that it makes more sense to treat SWPM used with these 
articles separately, before they are packed for export.
    For the reasons discussed above, this interim rule does not allow 
treatment of SWPM from China after arrival in the United States. 
However, if SWPM arrives untreated or without certification, this rule 
provides that an inspector will allow the importer to separate the 
cargo from the SWPM and destroy or reexport the SWPM, if the inspector 
determines this can be done without risk of spreading plant pests. This 
alternative to denying entry to the entire shipment will only be an 
option where there is a secure facility for separation of the cargo, 
available means to destroy the SWPM (incineration, or chipping and 
incineration, are the authorized methods), and available APHIS 
inspectors to supervise the process.
    The final alternative we considered was to take no action, rely on 
the existing import requirements, and allow the United States and China 
to continue to work on a bilateral basis to develop cooperative 
solutions to mitigate the risks associated with importing SWPM from 
China. This alternative could include efforts to encourage importers 
and exporters in both countries to develop strategies to reduce risk. 
However, efforts to date in this area resulted in little cooperation 
from China, and it does not appear likely this alternative would solve 
the immediate risk facing the United States.
    APHIS has decided to implement the requirements of this rule 
instead, allowing SWPM from China to enter the United States if treated 
prior to departure from China and accompanied by certification of 
treatment. We believe it is possible to reassign the necessary 
resources to U.S. ports to implement the requirements imposed by this 
rule. However, we will closely monitor the effectiveness of these 
procedures in reducing pest introductions, and, if they do not succeed, 
we will take further action to ensure that the importation of SWPM does 
not endanger our forest and agricultural resources.

Effects of This Rule on Federal Agency Operations and Resource 
Requirements

    Both APHIS and the United States Customs Service will need to make 
substantial adjustments to their activities to implement this interim 
rule. These two agencies already work in cooperation at U.S. ports to 
clear shipments from China for entry. This rule will require new 
documentation that will have to be examined as appropriate at the time 
of entry, and will require selective additional inspections by both 
APHIS and U.S. Customs Service inspectors to verify that shipments 
comply with the regulations. Additionally, the exporter statement 
required for shipments from China not containing SWPM is a type of 
document that has not been programmed to be included in the Automated 
Broker Interface (ABI) of Customs Automated Commercial System (ACS).
    APHIS expects to reassign inspectors from other areas to the ports 
that receive the bulk of imports from China to perform the additional 
inspections and other procedures required by this rule (e.g., checking 
whether cargo accompanied by an exporter statement truly contains no 
SWPM, supervising destruction or reexport of SWPM when it is required). 
It will probably be necessary to hire additional staff as well. The 
cost of reassigning this staff, hiring any additional staff, training 
them in the new procedures, and related costs is roughly estimated at 
$2.7 million per year for APHIS. The U.S. Customs Service will also 
incur additional costs for its role in implementing these regulations, 
although no estimate of that cost is currently available.

New User Fee for Services Provided to Facilitate Entry of SWPM

    We will charge a new hourly user fee for providing APHIS services--
primarily additional inspection services, and supervising separation of 
SWPM from cargo--to facilitate the entry of SWPM when the services 
exceed the normal inspection and paperwork activities for which user 
fees are currently established in 7 CFR 354.3. The new user fee will 
cover situations where APHIS must inspect a shipment that lacks the 
exporter statement or certificate required by new Sec. 319.40-5(g) or 
(h), or where these documents are incomplete. The inspections will be 
necessary to determine whether the cargo contains SWPM, and if so, 
whether the cargo must be reexported or whether it can be safely 
separated from its SWPM. We expect the new user fee will primarily 
apply to situations under new Sec. 319.40-5(g)(3). Under new 
Sec. 319.40-5(g)(3), when an inspector determines that a shipment 
imported from China contains SWPM that was not heat treated, fumigated, 
or treated with preservatives, or that was not accompanied by a 
certificate documenting such treatment, the inspector may, in lieu of 
refusing entry, allow the importer to separate the cargo and destroy or 
reexport the SWPM under supervision of an APHIS inspector.
    These services exceed those normally provided for arriving 
international shipments. Normal services usually include reviewing 
paperwork to determine whether cargo contains prohibited or restricted 
articles, checking for any required permits or certificates, and 
occasional inspection to verify the status of cargo documented in the 
paperwork. These normal services are paid for by user fees established 
in

[[Page 50104]]

7 CFR 354.3, currently $454.50 for each arriving vessel of 100 tons or 
more and $59.75 for each arriving commercial aircraft. We will charge 
hourly user fees for cases where inspectors must perform additional 
duties related to clearing shipments from China, as it would be 
difficult to establish a flat fee. This is because costs could vary 
widely from one customer to another, based on the nature and size of 
the shipment; consequently, a flat fee would be very inequitable to 
some importers and exporters.
    We are amending 7 CFR part 354--``Overtime Services Relating To 
Imports and Exports; and User Fees,'' to establish this new fee. The 
hourly user fee rate will be $56.00, or $14 per quarter hour, with a 
$14 minimum. If the services must be conducted on a Sunday or holiday 
or at any other time outside the normal tour of duty of the employee, 
then the premium user fee rate as listed below applies, as well as the 
2-hour minimum charge and a commuted traveltime period required by 
Sec. 354.1(a)(2). If the services requested are performed on a Sunday, 
the hourly user fee rate will be $74.00, or $18.50 per quarter hour, 
with a $18.50 minimum. If the services requested are performed on a day 
other than Sunday outside the normal tour of duty of the employee 
providing the service, the hourly user fee rate will be $65.00, or 
$16.25 per quarter hour, with a $16.25 minimum.
    This hourly rate user fee has been calculated to cover the full 
direct labor cost of providing that service. Direct labor costs are the 
costs of employee time spent specifically to provide the service. For 
fees charged in accordance with this rule, costs have been calculated 
based on the direct labor costs of APHIS inspectors at the ports of 
arrival (estimated at the salary cost for a GS-9 step 5 inspector plus 
a benefits cost of 31 percent of salary), direct materials costs, 
administrative support, Agency overhead, and Departmental charges.

Immediate Action

    The Administrator of the Animal and Plant Health Inspection Service 
has determined that there is good cause for publishing this interim 
rule without prior opportunity for public comment. Immediate action is 
necessary to prevent further introduction and spread of exotic pests 
associated with SWPM from China.
    Although this rule does not take effect until 90 days after the 
date of publication, it is necessary to set the effective date now, 
rather than accept comments on a proposal and give notice of a final 
action and effective date later. Importers, exporters, national 
governments and others will need the full 90 days to prepare for the 
significant changes in operations that will become necessary on the 
effective date of this rule. Because prior notice and other public 
procedures with respect to this action are impracticable and contrary 
to the public interest under these conditions, we find good cause under 
5 U.S.C. 553 to make this rule effective 90 days after the date of 
publication in the Federal Register.
    If APHIS decides, based on comments received on this interim rule, 
to publish a final rule that significantly changes the regulatory 
requirements in this interim rule in such a way that persons affected 
by the final rule need time to change their business procedures, we 
will set an appropriate effective date for the final rule to allow time 
for implementation of such changes.
    We will consider comments that are received within 60 days of 
publication of this rule in the Federal Register. After the comment 
period closes, we will publish another document in the Federal 
Register. The document will include a discussion of any comments we 
receive and any amendments we are making to the rule as a result of the 
comments.

Public Hearings

    APHIS will host three public hearings to provide interested persons 
a full opportunity to present their views regarding this interim rule. 
One public hearing will be held on October 16, 1998, at the Jefferson 
Auditorium, U.S. Department of Agriculture, South Building, 14th Street 
and Independence Avenue SW., Washington, DC. The other hearings are 
tentatively scheduled to be held in Seattle, WA, and Los Angeles, CA, 
during the public comment period. Specific dates and locations for 
these hearings will be announced in a separate Federal Register notice.
    A representative of APHIS will preside at the public hearings. Any 
interested person may appear and be heard in person, by attorney, or by 
other representative. Persons who wish to speak at the public hearings 
will be asked to sign in, listing their names and organizations.
    The public hearings will begin at 9:00 a.m. local time and are 
scheduled to end at 5:00 p.m. local time. However, the hearings may be 
terminated at any time after they begin if all persons desiring to 
speak have been heard. We ask that anyone who reads a statement provide 
two copies to the presiding officer at the hearing. If the number of 
speakers at the hearing warrants, the presiding officer may limit the 
time for each presentation so that everyone wishing to speak has the 
opportunity.
    The purpose of the hearings is to give interested persons an 
opportunity for oral presentations of data, views, and arguments. 
Questions about the content of the interim rule may be part of the 
commenters' oral presentations. Neither the presiding officer nor any 
other representative of APHIS will respond to comments at the hearings. 
However, they will be able to answer questions to clarify or explain 
provisions of the interim rule.

Executive Order 12866 and Regulatory Flexibility Act

    This interim rule has been reviewed under Executive Order 12866. 
The rule has been determined to be economically significant for the 
purposes of Executive Order 12866 and, therefore, has been reviewed by 
the Office of Management and Budget.
    This action requires treatment and certification for all SWPM 
imported from China. The emergency situation under which we are issuing 
this rule makes compliance with section 603 and timely compliance with 
section 604 of the Regulatory Flexibility Act (5 U.S.C. 603 and 604) 
impracticable.
    This rule may have a significant economic impact on a substantial 
number of small entities. If we determine this is so, then we will 
discuss the issues raised by section 604 of the Regulatory Flexibility 
Act in our Final Regulatory Flexibility Act Analysis.
    Our preliminary cost-benefit analysis is presented below.

Section I--Purpose and Need for Regulation

    The free trade of goods in international commerce potentially 
brings with it negative externalities due to the unintended 
introduction of exotic plant pests and pathogens. Such actions result 
in costs to various sectors of society (for example, alterations to 
forest ecosystem diversity and productivity). The private cost of 
importing commodities does not reflect full social costs since 
importers responsible for pest introductions are not charged for their 
contribution to the damages caused by exotic pests on domestic forest 
resources. The market left to itself would engage in undesirable 
commercial practices (in this case, the use of unprocessed SWPM) that 
could lead to detrimental effects on agricultural and natural resources 
of the United States. Because costs to the U.S. economy as a whole 
could be

[[Page 50105]]

substantial, Federal intervention is required. The increasing number of 
interceptions requires that emergency measures be used to prevent 
further dissemination of pests throughout the United States.
    This analysis presents preliminary estimates of the benefits and 
costs of implementing the interim rule to require the treatment and 
certification of SWPM from China before it is allowed into the United 
States. In assessing the regulatory alternatives available to the 
agency, three other options were also considered: (1) Prohibiting the 
entry of SWPM from China; (2) requiring treatment and certification 
abroad of SWPM from China; (3) treatment either abroad or in the United 
States; (4) taking no action (continuing the existing permitting 
process for SWPM).
    To provide a context of the pest risk situation, a discussion of 
the forest and agricultural resources at risk in the United States is 
outlined in section II. A background discussion of U.S. trade with 
China, including magnitude and composition of trade, is presented in 
section III. The potential impacts of the regulatory options are 
presented in section IV. Given the emergency nature of the rule, 
quantifiable estimates of benefits and costs are presented to the 
extent possible.

Section II--Forest and Agricultural Resources at Risk

    While there are many quarantine pests associated with SWPM, the 
initial pest risk assessment (PRA) conducted in support of this interim 
rule addresses a subset of frequently intercepted insect borers, in the 
beetle family Cerambycidae, that have escaped detection at ports of 
entry and been introduced into the United States. These intercepted 
quarantine pests are of the genera Anoplophora, Ceresium, 
Hesperophanes, and Monochamus.
    Species of Anoplophora, Ceresium and Hesperophanes are known to 
infest hardwoods (broad-leaved and deciduous trees). Host trees listed 
in the scientific literature and observed in outbreaks in the United 
States include: maple (Acer), horse chestnut (Aesculus), apple (Malus), 
poplar (Populus), plum (Prunus), pear (Pyrus), locust (Robinia), elm 
(Ulmus), chinaberry (melia), mulberry (Morus), willow (Salix), and 
citrus (Citrus). Monochamus sp. primarily attacks softwood or 
coniferous trees such as evergreen. While it is difficult to predict 
with accuracy the actual damage if these species of wood-boring insects 
were to become established in the U.S., these pests have the potential 
of causing extensive losses to domestic forest and agricultural 
resources. The following types of economic effects could be expected if 
these wood-boring pests were to become widespread in the United States:
Effects on the Timber Industry
    A significant share of the value of forest resources is derived 
from their contribution to the timber and wood manufacturing 
industries. In 1986, timber was the most important agricultural crop in 
the United States in terms of dollar value of production, surpassing 
corn, soybean and hay in value of production. The estimated value of 
timber harvest in 1986 was $7.7 billion (in 1996 dollars), with 84 
percent derived from softwood timber and the remaining 16 percent from 
hardwood species.1
---------------------------------------------------------------------------

    \1\ Source: ``An Analysis of the Timber Situation in the United 
States: 1989-2040''. A Technical Document Supporting the 1989 USDA 
Forest Service RPA Assessment. Forest Service, U.S. Department of 
Agriculture, December 1990.
---------------------------------------------------------------------------

    Value estimates in this section are adjusted to 1996 dollars 
utilizing the Gross Domestic Product implicit price deflator. When the 
value added from harvesting the timber and moving it to local points of 
delivery is included, the value of the 1986 timber output in the United 
States was approximately $17.1 billion. Total U.S. shipments of wood 
manufactured products were valued at $252 billion, with $113 billion 
being value added. Industry shipments in the Northeast region alone, 
where current outbreaks are located, were valued at $46 
billion.2
---------------------------------------------------------------------------

    \2\ Value added is a net measure of an industry's contribution 
to the economy because the value of materials received from other 
firms and used in the manufacturing process is subtracted from the 
value of the products shipped.
---------------------------------------------------------------------------

Effects on the Maple Syrup Industry
    Sugar maple trees are a preferred host for at least one of the 
pests of concern, the Asian longhorned beetle. The maple syrup industry 
relies on healthy maple trees, especially sugar maple, for its 
production. Maple syrup is produced in 10 states, with Vermont, New 
York, Wisconsin, and Maine producing 72 percent of the total output. 
Over 1.5 million gallons of maple syrup were produced in 1991, with a 
total value of $53 million (in 1996 dollars).3
---------------------------------------------------------------------------

    \3\ Data obtained from Louis C. Wyman Forest Services 
Laboratory, USDA Forest Service, Durham, New Hampshire.
---------------------------------------------------------------------------

Effects on the Commercial Fruit Industry
    The commercial fruit industry is also at risk of pest infestation, 
as pear, apple, plum and citrus trees are susceptible hosts. A rough 
approximation of the value of replacing these fruit trees can be 
obtained from utilizing estimates on the cost of establishing an 
orchard, which includes expenses associated with planting and cultural 
practices and irrigation. It is estimated that the cost of replacing 
host fruit trees would amount to $5.2 billion for pear, apple and plum 
orchards alone, and $10.4 billion for citrus, for a total cost of $15.6 
billion.4
---------------------------------------------------------------------------

    \4\ Based on 1997 bearing acreages of 69,000 acres of pears, 
453,220 acres of apples, and 89,600 acres of plums; and cost of 
establishing an orchard, over four years, of $9,400 per acre for 
pear and apple, and $3,600 per acre for plum. Bearing acreage of 
citrus was estimated at 1.15 million acres in 1996-97; average cost 
of establishing an orchard in Florida, over four years estimated at 
$10,912 per acre and $5,100 per acre in other states except Florida. 
Source: Economic Research Service, U.S. Department of Agriculture.
---------------------------------------------------------------------------

    In addition, fruits of host trees would also be affected by a 
widespread pest infestation. The average 1995-1997 value of utilized 
production of these four types of fruits was estimated at $4.7 billion, 
with over 50 percent of the value derived from citrus.5
---------------------------------------------------------------------------

    \5\ Source: National Agricultural Statistics Service, USDA. 
Citrus includes the following varieties: orange, grapefruit, lemon, 
lime, tangerine, K-early, tangelos and tangerine. Citrus data are 
based on 1996-1997 crop year.
---------------------------------------------------------------------------

Effects on the Nursery Industry
    Another economically significant industry that relies on healthy 
hardwood trees and is therefore potentially at risk of beetle 
infestation is the nursery industry. In 1993, sales of plants (trees 
and shrubs) by nurseries and greenhouses in the United States totaled 
an estimated $3.3 billion, of which $226 million was derived from sales 
in seven northeastern States. During the year ending September 30, 
1993, 103.9 million landscape trees were sold in the United States, 
including 5.7 million in seven northeastern states. Approximately one-
half of all landscape trees sold in the United States are hardwood 
trees.6
---------------------------------------------------------------------------

    \6\ The seven northeastern states are Maine, New Hampshire, 
Vermont, Connecticut, Massachusetts, Rhode Island, and New Jersey. 
Nursery and greenhouse data, including information on landscape 
trees sold, were furnished by the American Association of 
Nurseryman.
---------------------------------------------------------------------------

Effects on Tourism
    The tourism industry is tied heavily to leaf color changes in the 
autumn months, and the maple tree is noted for producing some of the 
most vivid colors. Between mid-September and late October, the hardwood 
forests of New England draw 1 million tourists and generate $1 billion 
in revenue. It is estimated that up to one fourth of the tourism 
revenue generated annually in

[[Page 50106]]

New England is due to the fall foliage displays.7
---------------------------------------------------------------------------

    \7\ Revenue and tourist count data obtained from New York Times 
article, ``The Rise of Fall,'' (Sept. 19, 1993) and from Boston 
Globe article, ``A Beetle Bores in Brooklyn,'' (Sept. 21, 1996).
---------------------------------------------------------------------------

Other Non-market Effects on Urban Trees
    Pest species of the Anoplophora genera prefer healthy maple and 
horsechestnut trees, which are favorite street trees in many urban 
areas. Urban backyard trees directly affect the value of real estate 
assets. Besides the aesthetic value of urban trees, benefits of the 70 
million acres of urban forests are multifold, and include cleaning the 
air of pollutants, microclimate effects, dimunition of storm water 
runoff, reduction in street noise, and enhancement of local wildlife 
populations.8 Most of these benefits are non-market in 
nature and are not readily measurable. While several approaches exist 
in order to obtain measures of these non-market values, time 
constraints do not permit the estimation of these values.
---------------------------------------------------------------------------

    \8\ Source: Nowak, D.J. and John Dwyer. ``Understanding the 
Benefits and Costs of Urban Forest Ecosystems'', in Urban and 
Community Forestry in the Northeast. Plenum Publishing Co., New 
York. In press, 28 pp.
---------------------------------------------------------------------------

    In sum, the establishment of wood-boring insects of the genera 
Anoplophora, Ceresium, Hesperophanes, and Monochamus could cause 
significant economic damages to forest and agricultural resources in 
the United States. If left unchecked, these pests have the potential to 
create losses in excess of $41 billion to forest products, commercial 
fruit, maple syrup, nursery, and tourist industries.9
---------------------------------------------------------------------------

    \9\ This estimate includes the $17.1 billion figure for the 
value of timber harvests. This estimate does not include the 
potentially significant non-market values of urban trees, or value-
added losses that may occur if manufacturers of finished wood 
products are unable to obtain substitute supplies for domestic 
hardwoods unavailable due to pest damage.
---------------------------------------------------------------------------

Section III--Effects of This Rule on U.S. Trade With China

    In 1997, China's total exports of agricultural and nonagricultural 
products to the United States were valued at $72.8 billion (including 
$10.3 billion from Hong Kong), or 8.4 percent share of total U.S. 
imports. This represented a 18.8 percent increase in value of Chinese 
imports from 1996. China ranks behind Canada, Japan and Mexico as the 
fourth largest source of imports for the United States.10
---------------------------------------------------------------------------

    \10\ Trade data are obtained from the Bureau of the Census, U.S. 
Department of Commerce.
---------------------------------------------------------------------------

    U.S. exports to China were valued at $27.9 billion in 1997 
(including $15.1 billion to Hong Kong), or 4.1 percent of the total 
value of exports. China is the fifth largest export market for U.S. 
commodities.
    There are 79 maritime ports of entry where APHIS conducts 
inspections on imported commodities.11 The port in Long 
Beach, CA, is estimated to receive roughly 50 percent of Chinese 
imports. Other ports receiving a relatively large share of Chinese 
cargo include Seattle, WA, and Charleston, SC. The three combined ports 
are estimated to receive about 75 percent of the total imports from 
China.
---------------------------------------------------------------------------

    \11\ Data obtained from PPQ, APHIS. Some ports of entry are 
combined sea and air ports.
---------------------------------------------------------------------------

    The majority of imports from China are non-bulk commodities and are 
thus likely to arrive with SWPM. In 1997, the U.S. Customs Service 
estimated that there were 1.141 million shipments from China. Trade 
data from the U.S. Department of Commerce shows 100 listings of 2-digit 
codes of commodities imported from China. The composition of the 10 
largest imports from China, with values in excess of $1 billion, are:

Electrical machinery
Sports equipment and toys
Footwear
Machinery
Woven apparel
Furniture and bedding
Leather articles
Plastics
Optical and medical instruments
Knit apparel

    Electrical machinery, sports equipment, machinery, furniture, and 
optical and medical instruments are commodities that are likely to be 
imported with SWPM. APHIS estimates that between 50 to 95 percent of 
shipments of electrical machinery, sports equipment, and machinery 
contain some type of SWPM, while 30 percent or less of furniture and 
optical/medical instruments are packaged with SWPM.12 In 
general, clothing articles, textiles, and food and agricultural items 
are not likely to be shipped with SWPM.
---------------------------------------------------------------------------

    \12\ Information obtained from survey of APHIS inspectors at 
three ports: Long Beach, California; Seattle, Washington, and 
Charleston, South Carolina.
---------------------------------------------------------------------------

    As the composition of trade in recent years shifted from textiles 
and light manufactured products and more towards machinery, sports 
equipment and metal products, so too has the import of SWPM increased 
in shipments of these products. Since 1985, there has been a steady 
increase in the number of insect interceptions on wood products from 
China at U.S. ports, likely reflecting the growing volume of Chinese 
imports (Table 1). At U.S. ports of entry from 1985 through 1996, APHIS 
intercepted and destroyed insects on various wood products on nearly 
5,900 occasions. Most of these interceptions were associated with 
crating (49 percent), dunnage (36 percent), and pallets (6 
percent).13
---------------------------------------------------------------------------

    \13\ Source: Haack, R.A., et al. ``New York's Battle with the 
Asian Long-horned Beetle'', Journal of Forestry, Vol. 95, No. 12, 
December 1997.

    Table 1.--Growth of U.S. Imports and Insect Interceptions on Wood   
                           Products From China                          
------------------------------------------------------------------------
                                                 Percent                
                                                 of total               
                                                   U.S.      Percent of 
                                                 imports    total insect
                                                   from    interceptions
                                                  China                 
------------------------------------------------------------------------
1985..........................................        1.1          1.2  
1986..........................................        1.3          1.2  
1987..........................................        1.6          0.7  
1988..........................................        1.9          1.5  
1989..........................................        2.5          0.6  
1990..........................................        3.1          1.2  
1991..........................................        3.9          0.6  
1992..........................................        4.8          4.4  
1993..........................................        5.4          7.3  
1994..........................................        5.8          8.3  
1995..........................................        6.1         11.2  
1996..........................................        6.4        21.2   
------------------------------------------------------------------------
Source: Haack, R.A. et al. ``New York's Battle with the Asian Long-     
  horned Beetle.'' Journal of Forestry, Vol. 95, No. 12, December 1997. 

Section IV--Analysis of Impacts of Regulatory Options

1. No Action
    This alternative would mean that APHIS would not change its 
existing regulations.14
---------------------------------------------------------------------------

    \14\ Under this option, APHIS would not revise its existing 
regulations, but presumably the Agency would initiate bilateral 
negotiations with China in order to minimize pest risk.
---------------------------------------------------------------------------

    The benefit to this option is that the impact on trade from China, 
valued at $72.8 billion in imports and $27.9 billion in exports in 
1997, would be unaffected. The welfare of U.S. consumers of Chinese 
products and U.S. exporters to China would be unchanged.
    This option would require increased inspection staff at ports of 
entry and inland destinations solely to target inspections of high risk 
cargo from China. Based on the volume of shipments, it is estimated 
that an additional $9.5 million per year would be needed for APHIS 
staff to perform inspection of Chinese cargo.15

[[Page 50107]]

Increasing the inspection level alone, however, has a limited effect on 
reducing the pest risk, since wood-boring insects are difficult to 
detect by visual inspection. Also, wooden crates are often made of 
unprocessed, poor quality wood, often with bark left attached inside 
crate walls, which would further impede visual inspection. It is highly 
likely, therefore, that outbreaks would still occur even with increased 
inspection. Individual outbreaks are costly; current eradication 
efforts of Asian longhorned beetle outbreaks in New York and Chicago 
are estimated to cost the State and federal governments at least $5 
million by the end of FY 1998. Moreover, if these targeted pests were 
to become established, losses to the forest and agricultural industries 
could amount to $41 billion. Given the pervasive evidence on pest risk 
directly associated with imports from China and the potential 
significant economic losses if the pest were to become established, 
this option is deemed unacceptable.
---------------------------------------------------------------------------

    \15\ This cost is composed of salary and benefits of 140 APHIS 
inspectors (estimated at a salary cost for GS9 step 5 plus a 
benefits cost of 31% of salary); cost for travel, vehicles, and 
other miscellaneous expenses (furniture, uniforms, cell phones, 
etc.) Data obtained from Financial Management and Analysis Staff, 
PPQ, APHIS.
---------------------------------------------------------------------------

2. Treatment and Certification Abroad (Interim Rule)
    This alternative involves the implementation of phytosanitary 
measures beyond the existing permit requirements for SWPM from China. 
Through an interim rule, with a 90-day phase-in period, APHIS will 
require that all SWPM associated with cargo from China be accompanied 
by official certification from the Chinese Government stating that the 
SWPM was heat treated, fumigated, or treated with preservatives prior 
to departure from China. Uncertified SWPM associated with Chinese cargo 
will be prohibited entry and reexported or, under certain 
circumstances, destroyed in the United States. Certified SWPM found 
infested will be prohibited entry.
    One of the benefits of this option is that the risk of pest 
introduction will be greatly reduced. The loss of forest and 
agricultural resources that could be avoided by adopting this 
alternative is estimated at $41 billion. Additionally, the increase in 
the number of inspectors required under this option would be less than 
30 percent of that required under option 1. This option will ultimately 
encourage the use of treated SWPM or alternatives to SWPM in the long 
run.
    An approximation of the maximum potential cost of this option is 
the value of Chinese imports that is potentially affected by the 
interim rule. The actual cost of the interim rule will be the cost of 
treating SWPM or switching to other substitutes. This cost cannot be 
estimated at this time without data on the costs of treatment in China, 
the costs of alternative packing materials in China, and the 
availability of alternative markets (in countries that do not require 
treatment of SWPM) for goods China currently ships to the United 
States. It is estimated that, in 1997, approximately 24 to 31 percent 
of imports from China, with corresponding values of $17 billion to $23 
billion, arrived with some type of SWPM.16 However, roughly 
30 percent of Chinese imports that arrive with SWPM are voluntarily 
fumigated before arrival. Thus, the value of imports from China 
potentially affected by this interim rule is estimated to range between 
$12 billion and $16 billion, or 17 to 22 percent of the total value of 
imports from China. These estimates, however, represent a maximum cost 
that would occur only if all these imports were lost to U.S. markets, a 
situation that is realistically unlikely to occur. As mentioned above, 
we do not have data to estimate the actual lower cost associated with 
treating and certifying the SWPM, the cost of switching to substitutes 
for SWPM, and how those costs would be passed on to U.S. consumers.
---------------------------------------------------------------------------

    \16\ These estimates are based on surveys of APHIS inspectors at 
three main ports of entry of Chinese imports: Long Beach, CA; 
Seattle, WA; and Charleston, SC. Roughly 75 percent of imports from 
China are shipped through these ports.
---------------------------------------------------------------------------

    The cost to APHIS of implementing this option (verification that 
shipments comply with the regulations) is estimated at $2.7 million 
annually.17 However, importers will be charged user fees in 
order to cover most of the additional costs of inspecting and 
supervising activities under this rule. These new user fees are 
expected to equal about 15 percent of the fees currently collected for 
vessel (ship) clearance, and would increase total agricultural 
quarantine inspection fee collections by 2.3 percent.18 It 
is anticipated that the U.S. Customs Service may incur additional costs 
as well in processing certificates and exporter statements.
---------------------------------------------------------------------------

    \17\ This cost is composed of salary, benefits and miscellaneous 
expenses of 40 APHIS inspectors.
    \18\ In 1997, total AQI user fee collections for the clearance 
of air passengers, aircrafts, trucks, vessels, and rail cars 
amounted to $116.6 million, of which $18.3 million was for the 
inspection of vessels. Data obtained from User Fee Branch, 
Management and Budget Division, APHIS.
---------------------------------------------------------------------------

3. Allow Treatment in the United States.
    This alternative would favor treatment of SWPM from China prior to 
departure from China, but if untreated SWPM arrived at a U.S. port, the 
SWPM would be allowed treatment in the United States, reexported, or 
destroyed. This alternative would provide a benefit to Chinese 
importers in the flexibility afforded them.
    It is anticipated, however, that this option would not induce most 
exporters to treat SWPM prior to departure from China, and would 
instead result in a vastly increased demand for treatment, especially 
methyl bromide fumigation, at ports of arrival. There are not currently 
enough fumigation facilities at U.S. ports to provide the treatments 
that would be required under this alternative. The effect on trade 
would be the same as in Option 2 (require certification without 
allowing treatment in the United States), in that the same volume of 
trade would still be disrupted (up to about $16 billion), but with 
added costs to APHIS for supervising fumigation at ports of entry. It 
is estimated that the cost of additional APHIS inspectors would be $6.8 
million annually in order to implement this option.19 As in 
option 2, most of the additional costs of inspection would likely be 
borne by importers in the form of user fees.
---------------------------------------------------------------------------

    \19\ This cost is composed of salary, benefits and miscellaneous 
expenses of 100 APHIS inspectors.
---------------------------------------------------------------------------

    Additionally, the potential for pest dissemination in the United 
States is higher than under option 2 as importers would routinely be 
allowed to separate cargo before destroying infested SWPM. This 
alternative is not consistent with our policy for regulating SWPM from 
all other parts of the world, which is essentially that the SWPM must 
be rendered safe prior to arrival.
4. Prohibit SWPM from China
    The most restrictive alternative would be for APHIS to prohibit 
entry into the United States of all SWPM from China. No options for 
treatment or certification would be available. SWPM arriving at U.S. 
ports would be refused entry, or would be seized and destroyed.
    Under this option, pest introductions from SWPM from China would 
theoretically be eliminated. The benefits to this option would be the 
avoidance of potential damages to forest and agricultural resources 
estimated at $41 billion. The need for treatments would be eliminated, 
and the need for inspections would be greatly reduced.
    The cost of this option would be a disruption of trade with China, 
with an estimated $23 billion worth of imports that are now shipped 
with SWPM potentially affected. It is unclear whether any retaliatory 
actions would be taken against the $27.9 billion U.S. export market to 
China.
    While this option would be the most effective means of controlling 
the pest

[[Page 50108]]

risk, APHIS believes that the requirements in this interim rule, Option 
2, would strike the appropriate balance under current conditions 
between the need to manage the immediate pest risk with the need to 
minimize trade disruptions. The agency continues to evaluate the 
problem of SWPM imports in general and is seeking information to 
develop longer-term solutions to the problem.

Summary and Conclusions

    Pests of the genera Anoplophora, Ceresium, Hesperophanes, and 
Monochamus, including the Asian longhorned beetle, are destructive 
wood-boring insects that can seriously damage and eventually kill 
healthy trees. The Asian longhorned beetle was first discovered in the 
United States in 1996 and subsequent discoveries have been made in 
numerous inland distribution warehouses. There is evidence that SWPM 
from China is the source of the pest infestations. If left unchecked, 
these pests have the potential to cause economic losses of $41 billion, 
affecting the forest products, commercial fruit, maple syrup, nursery, 
and tourist industries in the United States.
    The interim rule would require that SWPM from China be treated or 
fumigated prior to departure from China. Other options to minimize pest 
risk were considered, but the interim rule is consistent with APHIS' 
policy on the need to treat materials prior to entry and render them 
safe on arrival. We believe that, under current conditions, this 
interim rule strikes an appropriate balance between the need to manage 
the immediate pest risk and the need to minimize trade disruptions.
    Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 
104-121, 5 U.S.C. Secs. 801-808).
    This rule has been designated by the Administrator, Office of 
Information and Regulatory Affairs, Office of Management and Budget, as 
a major rule under the Small Business Regulatory Enforcement Fairness 
Act of 1996 (Act).

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule: (1) Preempts all State and local laws and 
regulations that are inconsistent with this rule; (2) has no 
retroactive effect; and (3) does not require administrative proceedings 
before parties may file suit in court challenging this rule.

National Environmental Policy Act and Environmental Effects Abroad 
of Major Federal Actions

    An environmental assessment and finding of no significant impact 
have been prepared for this rule. The assessment provides a basis for 
the conclusion that the fumigation, heat treatment, and treatment with 
preservatives of SWPM imported from China will present a negligible 
risk of introducing or disseminating plant pests and will not have a 
significant impact on the quality of the human environment. Based on 
the finding of no significant impact, the Administrator of the Animal 
and Plant Health Inspection Service has determined that an 
environmental impact statement need not be prepared.
    The environmental assessment and finding of no significant impact 
were prepared in accordance with: (1) The National Environmental Policy 
Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.), (2) Regulations of the 
Council on Environmental Quality for implementing the procedural 
provisions of NEPA (40 CFR parts 1500-1508), (3) USDA regulations 
implementing NEPA (7 CFR part 1b),(4) APHIS' NEPA Implementing 
Procedures (7 CFR part 372), and (5) Executive Order 12114 of January 
4, 1979, ``Environmental Effects Abroad of Major Federal Actions'' (44 
FR 1957-1962).
    Executive Order 12114 ``* * * represents the United States 
Government's exclusive and complete determination of the procedural and 
other actions to be taken by Federal agencies to further the purpose of 
the NEPA with respect to the environment outside the United States, its 
territories, and possessions'' (section 1-1). This environmental 
assessment has been designed to satisfy the provisions of the Executive 
Order and NEPA and its implementing regulations, to the extent 
applicable.
    In the environmental assessment prepared to aid development of this 
rule, APHIS considered carefully four alternatives in detail: (1) 
Taking no action (continuing the existing permitting process for SWPM); 
(2) requiring treatment and certification abroad (the preferred 
action); (3) treatment abroad or in the United States; and (4) 
prohibiting entry of SWPM. The potential environmental effects of each 
alternative are considered below.
    The no action alternative does not provide the necessary degree of 
protection from deep wood boring pest species in Chinese imports. The 
frequency of interception of infested commodities with SWPM from China 
makes it likely that continued enforcement of the current regulations 
would not exclude wood borers and other plant pests.
    Ultimately, it would be expected that those plant pests present in 
the SWPM from China would be introduced into the United States. Their 
movement from the site of introduction would be expected to result in 
increasingly greater damage to forest ecosystem commensurate with the 
spread. The response to this increased damage would be expected to 
include greater uncoordinated applications of pesticides to control 
pest damage and more destruction of forest, shade, and ornamental 
trees. The potential environmental consequences of this alternative are 
anticipated to be greater than the other alternatives. This approach 
would enhance the likelihood of pest introduction and the potential for 
damage to forest ecosystems from pest introductions.
    Treatment and certification abroad (the preferred alternative) 
would involve the implementation of additional phytosanitary measures 
not included in the existing permit requirements for SWPM from China. 
Most treatments would be expected to occur in China, although exporters 
in China might purchase some SWPM treated elsewhere. Alternative 
packing materials, such as plastic, metal, and loose wood packing 
materials, could be used in lieu of treatment to qualify the shipment 
for certification. The potential environmental consequences of this 
alternative relate primarily to treatment chemicals and are anticipated 
to be less than the no action alternative, but greater than the 
prohibition alternative.
    Heat treatments must be performed only at a facility in China 
approved by APHIS or an inspector authorized by the Administrator and 
the national government of the People's Republic of China. The 
operation of the facility must comply with the standards set by APHIS 
to ensure proper treatment and elimination of pest risk. Approved heat 
treatment and proper handling of the regulated articles eliminates pest 
risk and has minimal environmental consequences.
    The environmental effects of fumigation of SWPM under the preferred 
alternative are as follows. Most fumigations of wood products have 
historically involved treatments with methyl bromide due to 
convenience, cost, availability, ease of handling, timely completion of 
treatment, and good efficacy. In addition, formulations of sulfuryl 
fluoride and phosphene have been used, but their applications have been 
more

[[Page 50109]]

limited. Sulfuryl fluoride has been difficult to handle effectively and 
safely. Phosphene works well for small enclosed areas, but is less 
efficient for larger treatments. The required length of treatment for 
good penetration and efficacy of these compounds is generally greater 
than for methyl bromide.
    Approved fumigation and proper handling of the regulated articles 
eliminates pest risk and poses no direct risks to personnel involved in 
the treatment or nontarget species. There are, however, potential 
effects on the ozone layer from using methyl bromide, and these are 
discussed in detail in the environmental consequences section of the 
environmental assessment.
    To evaluate the potential for environmental impacts from pest 
introductions under the preferred (``treatment abroad'') alternative, 
this assessment considers data from recent voluntary fumigation 
treatments by some shippers in China. APHIS port inspectors reviewed 
their records of shipments from China that had been fumigated prior to 
arrival (which comprised some 30 percent of Chinese shipments to that 
port). Inspectors found live, quarantine pests in 1 percent of those 
shipments that were reported to have been fumigated. Although not all 
shipments were inspected and inspections do not always reveal 
infestations, extrapolation of these rates of compliance for shipments 
to all regulated loads would be expected to result in an overall 
effective treatment rate of 96-97 percent. It is anticipated that some 
forest pests present in the SWPM from China could still be introduced 
into the United States, but the frequency of introduction and the 
number of pests would be expected to be much less than under the 
current regulations (no action alternative).
    Preservative treatments authorized by the United States 
Environmental Protection Agency (EPA) are also allowed under the 
preferred alternative. The major chemicals used for this purpose are 
creosote, chlorpyrifos, and oxine-copper applied to the surface of the 
wood. Proper adherence to label instructions is required to prevent 
adverse health effects to the applicators and those individuals 
involved in the shipping and handling processes. Compliance with the 
label ensures that environmental consequences are minimal to human 
health and nontarget species.
    This alternative could result in a substantial increase in the need 
for treatments, including fumigation with chemicals such as methyl 
bromide and phosphene, at ports and other locations in China. It is 
difficult to quantify the increase in treatments or in pesticides that 
may be used because the interim rule does provide for the use of 
nonchemical alternatives. Potential increase in the use of methyl 
bromide is of concern because it is a chemical that is associated with 
ozone depletion and resulting excessive ultraviolet radiation.
    Methyl bromide is one of several man-made substances that react 
chemically with ozone in the atmosphere to deplete the stratospheric 
ozone layer that protects the earth's surface from excessive 
ultraviolet radiation. Methyl bromide is considered a Class I ozone 
depleting substance under the Clean Air Act and the Montreal Protocol. 
Thus, the use of methyl bromide in fumigations required by this interim 
rule could have a substantial effect on stratospheric ozone depletion.
    APHIS estimates that, if China were to comply with the interim rule 
by fumigating SWPM shipments with methyl bromide, China could use 
between 1,040 to 12,565 metric tons of methyl bromide annually. The 
pest risk assessment and environmental assessment presuppose that China 
could comply with the treatment requirements of the interim rule 
through an increase in its use of methyl bromide. However, it is likely 
that China would employ a variety of approved strategies to comply with 
the interim rule, including use of nonregulated packing materials, heat 
treatments, and other fumigants such as phosphene.
    APHIS is concerned that any increase in methyl bromide use as a 
result of this interim rule does not cause long-lasting damage to the 
ozone layer. APHIS also emphasizes that this is an interim measure that 
will remain in effect for only as long as it takes to develop a more 
effective solution to the problem--a pest problem that could, if not 
addressed, result in substantial environmental damage to the forests 
and ecosystems of the United States. As discussed previously in this 
interim rule, APHIS will be reviewing regulations pertaining to SWPM 
from all foreign countries with the intent of developing effective and 
long-lasting pest control measures that are environmentally acceptable.
    The potential environmental consequences of the next alternative 
(allowing treatment to occur in the United States, or abroad) are 
anticipated to be comparable to the previously described ``treatment 
abroad'' alternative in terms of direct effects of treatment chemicals. 
However, the overall environmental effects of the ``treatment in the 
United States'' alternative are expected to be greater due to the 
elevated risk of introduction of pest species into the United States. 
The treatments for this alternative would be similar to those for the 
preferred action, but the location of heat treatment or fumigation 
could be at ports in the United States, and treatment by preservatives 
in the United States would not be an option. Shippers could also elect 
to re-export their cargo or have it destroyed at the United States port 
rather than undergo treatment, but it is expected that most shippers 
would prefer the treatment costs over the costs of re-export or 
destruction of cargo. The effects of each treatment would be expected 
to be similar to those for the preferred action and pose comparable 
risks.
    Alternative packing techniques and use of material other than SWPM 
are an option under all alternatives. Structural substitutes for SWPM, 
such as plastic, metal, and loose wood packing materials, could be 
used. Tight placement of shipments in a manner that eliminates the need 
for packing materials could have some applications. This option enables 
the shipper to transport commodities to the United States without the 
treatments needed for SWPM. The cost, applicability to particular 
cargoes, and availability of these other packing materials is expected 
to determine the feasibility for different shipments. Use of these 
packing materials eliminates pest risk and has minimal environmental 
consequences. The need of shippers to manufacture or obtain substitute 
packing materials could result in some environmental effects, dependent 
upon the potential effects of the manufacturing process.
    The final and most stringent alternative would be for APHIS to 
prohibit entry into the United States of all SWPM from China. There 
would be no options for treatment and certification. SWPM arriving at 
U.S. ports would be reexported, or would be seized and destroyed. This 
alternative makes introductions of pests in SWPM much less likely, but 
inaccurate documentation and limited capacity for monitoring of 
compliance with these regulations are still possible. This would be 
expected to eliminate most of the need for treatments and decrease the 
need for inspections. The potential environmental consequences of this 
alternative are anticipated to be less than the other alternatives. 
Inspectors would have to check some containers to ensure shipper 
compliance, but this could be done by a brief look in the container to 
verify that no SWPM is present. Such inspections are less burdensome 
than thorough pest inspections when SWPM is present. The

[[Page 50110]]

direct environmental consequences of prohibition are minimal, but the 
methods of destruction of seized cargo with SWPM could include 
incineration and other processes that affect environmental quality.
    Copies of the environmental assessment and finding of no 
significant impact are available for public inspection at USDA, room 
1141, South Building, 14th Street and Independence Avenue SW., 
Washington, DC, between 8 a.m. and 4:30 p.m., Monday through Friday, 
except holidays. Persons wishing to inspect copies are requested to 
call ahead on (202) 690-2817 to facilitate entry into the reading room. 
In addition, copies may be obtained by writing to the individual listed 
under FOR FURTHER INFORMATION CONTACT.

Paperwork Reduction Act

    In accordance with section 3507(j) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the information collection and 
recordkeeping requirements included in this interim rule have been 
submitted for expedited approval to the Office of Management and Budget 
(OMB). Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with, a collection of information subject to the 
requirements of the Paperwork Reduction Act unless that collection of 
information displays a currently valid OMB control number. When OMB 
completes its review of the information collection requirements 
contained in this rule, we will publish a notice in the Federal 
Register of OMB's decision. If OMB approves the information collection, 
the notice will include the OMB control number.
    Please send written comments to the Office of Information and 
Regulatory Affairs, OMB, Attention: Desk Officer for APHIS, Washington, 
DC 20503. Please state that your comments refer to Docket No. 98-087-1. 
Please send a copy of your comments to: (1) Docket No. 98-087-1, 
Regulatory Analysis and Development, PPD, APHIS, suite 3C03, 4700 River 
Road Unit 118, Riverdale, MD 20737-1238, and (2) Clearance Officer, 
OCIO, USDA, room 404-W, 14th Street and Independence Avenue SW., 
Washington, DC 20250. A comment to OMB is best assured of having its 
full effect if OMB receives it within 30 days of publication of this 
interim rule.
    The paperwork associated with this interim rule will include the 
completion of foreign government certificates and exporter statements. 
There will also be requests for inspections. We are soliciting comments 
from the public (as well as affected agencies) concerning our 
information collection and recordkeeping requirements. We need this 
outside input to help us:
    (1) Evaluate whether the information collection is necessary for 
the proper performance of our agency's functions, including whether the 
information will have practical utility;
    (2) Evaluate the accuracy of our estimate of the burden of the 
information collection, including the validity of the methodology and 
assumptions used;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the information collection on those who 
are to respond (such as through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology, e.g., permitting electronic 
submission of responses).
    Estimate of burden: Public reporting burden for this collection of 
information is estimated to average 0.087 hours per response.
    Estimated number of respondents: 29,000.
    Estimated number of responses per respondent: 29.31.
    Estimated total annual burden on respondents: 73,950 hours.
    Copies of this information collection can be obtained from: 
Clearance Officer, OCIO, USDA, Room 404-W, 14th Street and Independence 
Ave., SW, Washington, DC 20250.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. 
L. 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, tribal 
governments, and the private sector. Under section 202 of the UMRA, 
APHIS generally must prepare a written statement, including a cost-
benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures by State, local, or tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. When such a statement is needed for a 
rule, section 205 of the UMRA generally requires APHIS to identify and 
consider a reasonable number of regulatory alternatives and adopt the 
least costly, more cost-effective, or least burdensome alternative that 
achieves the objectives of the rule.
    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) that may result in expenditures by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more in any one year. Thus, this 
rule is not subject to the requirements of sections 202 and 205 of the 
UMRA.

List of Subjects

7 CFR Part 319

    Bees, Coffee, Cotton, Fruits, Honey, Imports, Incorporation by 
reference, Nursery Stock, Plant diseases and pests, Quarantine, 
Reporting and recordkeeping requirements, Rice, Vegetables.

7 CFR Part 354

    Exports, Government employees, Imports, Plant diseases and pests, 
Quarantine, Reporting and recordkeeping requirements, Travel and 
transportation expenses.
    Accordingly, we are amending 7 CFR parts 319 and 354 as follows:

PART 319--FOREIGN QUARANTINE NOTICES

    1. The authority citation for part 319 continues to read as 
follows:

    Authority: 7 U.S.C. 150dd, 150ee, 150ff, 151-167, 450, 2803, and 
2809; 21 U.S.C. 136 and 136a; 7 CFR 2.22, 2.80, and 371.2(c).

    2. In Sec. 319.40-1, a new definition is added in alphabetical 
order to read as follows:


Sec. 319.40-1  Definitions

* * * * *
    Exporter statement. A written declaration by the exporter, 
accompanying a shipment at the time of importation, declaring the 
nature of the shipment and that the shipment contains no solid wood 
packing material.
* * * * *


Sec. 319.40-3  [Amended]

    3. In Sec. 319.40-3, paragraphs (b)(1), (b)(2), and (b)(3), the 
first sentence of the introductory text in each paragraph is amended by 
adding the phrase``, except that solid wood packing material from China 
must be imported in accordance with Sec. 319.40-5(g)'' immediately 
before the period at the end of the sentence.
    4. In Sec. 319.40-5, new paragraphs (g) and (h) are added to read 
as follows:


Sec. 319.40-5  Importation and entry requirements for specified 
articles.

* * * * *
    (g) Solid wood packing material from China. Solid wood packing 
material

[[Page 50111]]

from China may be imported only in accordance with this paragraph.
    (1) Prior to departure from China, the solid wood packing material 
must be heat treated, fumigated, or treated with preservatives, using a 
treatment schedule contained in Sec. 319.40-7 or in the Plant 
Protection and Quarantine Treatment Manual, which is incorporated by 
reference at Sec. 300.1 of this chapter. During the entire interval 
between treatment and export the solid wood packing material must be 
stored, handled, or safeguarded in a manner which excludes any 
infestation of the solid wood packing material by plant pests.
    (2) At the time of arrival at the port of first arrival, the solid 
wood packing material must be accompanied by a certificate signed by an 
official of a Chinese government agency authorized by the national 
government of China stating that the solid wood packing material, prior 
to departure from China, has been heat treated, fumigated, or treated 
with preservatives using a treatment schedule contained in Sec. 319.40-
7 or in the Plant Protection and Quarantine Treatment Manual. Exporters 
may, at their option in order to expedite release of their shipment at 
the port of first arrival, arrange to have each article of solid wood 
packing material that has been treated marked at the treatment facility 
with a stamp or weatherproof label that reads CHINA TREATED. This type 
of marking, however, is not a substitute for the required certificate.
    (3) If an inspector determines that a shipment imported from China 
contains plant pests, or contains solid wood packing material that was 
not heat treated, fumigated, or treated with preservatives, or that was 
not accompanied by a certificate documenting heat treatment, 
fumigation, or preservative treatment, the inspector may refuse entry 
into the United States of the entire shipment (cargo and solid wood 
packing material). If the inspector determines that the cargo may be 
separated from the solid wood packing material and that the solid wood 
packing material may be destroyed or reexported without risk of 
spreading plant pests, the inspector may allow the importer to separate 
the cargo from the solid wood packing material at a location and within 
a time period specified by the inspector and destroy or reexport the 
solid wood packing material under supervision of an inspector. The 
means used to destroy solid wood packing material under this section 
must be incineration, or chipping followed by incineration. The 
importer shall be responsible for all costs associated with inspection, 
separation, and destruction or reexportation of solid wood packing 
material, including costs of the services of an inspector to monitor 
such activities, in accordance with Sec. 354.3(j) of this chapter.
    (h) Cargo from China that does not contain solid wood packing 
material. All commercial shipments imported from China that do not 
contain any solid wood packing material must include an exporter 
statement on or attached to the commercial invoice and as an attachment 
to the bill of lading stating that the shipment contains no solid wood 
packing material. Any shipment that is not accompanied by such an 
exporter statement shall be subject to inspection for solid wood 
packing material, and if such inspection is ordered by an inspector, 
the shipment will not be granted entry into the United States prior to 
completion of the inspection; the importer shall be responsible for all 
costs associated with inspection, separation, and destruction or 
reexportation of any solid wood packing material, including costs of 
the services of an inspector to monitor such activities in accordance 
with Sec. 354.3(j) of this chapter.


Sec. 319.40-10  [Amended]

    5. In Sec. 319.40-10, footnote 5 is revised to read as follows:

    \5\ Provisions relating to costs for other services of an 
inspector, including services related to extra inspection and 
separation of cargo from packing material for shipments that arrive 
without a complete certificate or exporter statement as required, 
are contained in part 354 of this chapter.

PART 354--OVERTIME SERVICES RELATING TO IMPORTS AND EXPORTS; AND 
USER FEES

    6. The authority citation for part 354 continues to read as 
follows:

    Authority: 7 U.S.C. 2260; 21 U.S.C. 136 and 136a; 49 U.S.C. 
1741; 7 CFR 2.22, 2.80, and 371.2(c).

    7. In Sec. 354.3, a new paragraph (j) is added to read as follows:


Sec. 354.3  User fees for certain international services.

* * * * *
    (j) The person for whom the service is provided and the person 
requesting the service are jointly and severally liable for payment of 
user fees for any import or entry services listed below, of $56.00 per 
hour, or $14.00 per quarter hour, with a minimum fee of $14.00, for 
each employee required to perform the following services. If the 
services must be conducted on a Sunday or holiday or at any other time 
outside the normal tour of duty of the employee, then the premium user 
fee rate as listed below applies, as well as the 2-hour minimum charge 
and a commuted traveltime period required by Sec. 354.1(a)(2). If the 
services requested are performed on a Sunday, the hourly user fee rate 
will be $74.00, or $18.50 per quarter hour, with a $18.50 minimum. If 
the services requested are performed on a day other than Sunday outside 
the normal tour of duty of the employee providing the service, the 
hourly user fee rate will be $65.00, or $16.25 per quarter hour, with a 
$16.25 minimum:
    (1) Conducting inspections, on vessels or in storage areas, of 
solid wood packing material or cargo when a shipment arrives without a 
certificate or exporter statement required under Sec. 319.40-5(g) or 
Sec. 319.40-5(h) of this chapter, or with an incomplete certificate or 
exporter statement; and
    (2) Supervising the separation of cargo from solid wood packing 
material denied entry under this subpart and the destruction or 
reexportation of the solid wood packing material.

    Done in Washington, DC, this 15th day of September 1998.
Craig A. Reed,
Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 98-25058 Filed 9-15-98; 2:53 pm]
BILLING CODE 3410-34-P