[Federal Register Volume 64, Number 5 (Friday, January 8, 1999)]
[Rules and Regulations]
[Pages 1098-1106]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-396]


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DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Part 353

[Docket No. 95-071-2]
RIN 0579-AA75


Export Certification; Accreditation of Non-Government Facilities

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: We are amending the export certification regulations to 
provide for the establishment of a program under which non-government 
facilities may become accredited to perform specific laboratory testing 
or phytosanitary inspection services that may serve as the basis for 
the issuance of a Federal phytosanitary certificate, export certificate 
for processed plant products, or phytosanitary certificate for 
reexport. Prior to this rule, only tests conducted by public 
laboratories or inspections carried out by Federal, State, or county 
inspectors or by agents could be used as the basis for the issuance of 
Federal certificates. The accreditation criteria for particular 
laboratory testing and phytosanitary inspection services will be 
developed by the Animal and Plant Health Inspection Service in 
cooperation with other interested government, industry, academic, or 
research entities. The accreditation program will provide a mechanism 
for qualified non-government facilities to become accredited to perform 
testing or inspection services that may be used as supporting 
documentation for the issuance of certificates for certain plants or 
plant products.

EFFECTIVE DATE: February 8, 1999.

FOR FURTHER INFORMATION CONTACT: Mr. Narcy G. Klag, Accreditation 
Program Manager, Phytosanitary Issues Management, PPQ, APHIS, 4700 
River Road Unit 140, Riverdale, MD 20737-1236; (301) 734-8469.

SUPPLEMENTARY INFORMATION:

Background

    The export certification regulations in 7 CFR part 353 (referred to 
below as the regulations) set forth the procedures for obtaining 
certification for plants and plant products offered for export or 
reexport. Under the regulations, tests conducted by public laboratories 
or inspections carried out by Federal, State, or county inspectors or 
by agents may be used as the basis for the issuance of Federal 
certificates. Export certification is not required by the regulations; 
rather, it is provided by the Animal and Plant Health Inspection 
Service (APHIS) as a service to exporters who are shipping plants or 
plant products to countries that require phytosanitary certification as 
a condition of entry. After assessing the condition of the plants or 
plant products intended for export, relative to the receiving country's 
regulations, an inspector will issue an internationally recognized 
phytosanitary certificate (PPQ Form 577), a phytosanitary certificate 
for reexport (PPQ Form 579), or an export certificate for processed 
plant products (PPQ Form 578), if warranted. The regulations also 
provide for an industry-based certification, under certain conditions, 
of certain low-risk plant products such as kiln-dried lumber offered 
for export.
    On November 25, 1997, we published in the Federal Register (62 FR 
62699-62707, Docket No. 95-071-1) a proposal to amend the regulations 
to provide for the establishment of a program under which non-
government facilities could become accredited to perform specific 
laboratory testing or phytosanitary inspection services that could 
serve as the basis for the issuance of a Federal phytosanitary 
certificate, export certificate for processed plant products, or 
phytosanitary certificate for reexport.
    We solicited comments concerning our proposed rule for 60 days 
ending January 26, 1998. We received 34 comments by that date. The 
comments were from processors and distributors of agricultural 
commodities, State and county agricultural agencies, a seed trade 
association, seed companies, crop improvement associations, a 
university laboratory, private testing and certification services, an 
association of State agricultural officials, laboratory accreditation 
organizations, a foreign plant health agency, and an association of 
seed certifying officials. Although all of the commenters supported the 
concept of an accreditation program, all but six of them had specific 
concerns, questions, or suggestions regarding the proposed 
accreditation program. The comments are addressed below.

[[Page 1099]]

Role of Accredited Facilities

    Several commenters referred to accredited facilities as ``private 
certifiers'' or as having responsibility for the issuance of 
phytosanitary certificates. We wish to make it clear that accredited 
facilities will not be ``certifiers,'' nor will accredited facilities 
issue phytosanitary certificates. Rather, an accredited facility would 
perform specific tests or inspections that would serve as the basis for 
phytosanitary certification; phytosanitary certificates will continue 
to be issued by Federal, State, or county-level inspectors, as provided 
by the regulations.

Handling of Samples

    Two commenters raised the issue of the handling of samples 
submitted for testing or inspection. The commenters were concerned that 
the proposed rule did not address issues such as who would collect and 
prepare samples for testing or inspection and how the integrity of 
samples would be maintained during movement and while at the accredited 
facility. One of the commenters stated that APHIS should specify how 
all samples are to be collected and handled, while the second commenter 
suggested that a sample handling accreditation program be made part of 
the regulations.
    We agree with the commenters that the proper handling of samples is 
important to any laboratory testing or inspection program. Because the 
procedures and requirements for the collection and handling of samples 
will likely vary to some extent from plant to plant or product to 
product, we believe that sample collection and handling should be 
addressed in each set of specific accreditation standards as they are 
prepared, rather than in a general way in the regulations. Further, 
because the sample handling requirements will be part of each set of 
specific accreditation standards, we do not believe that it is 
necessary to establish a separate sample handling accreditation 
program.

Conflict of Interest

    Two commenters suggested that APHIS or State agencies should act as 
an intermediary between accredited laboratories and their customers, 
serving as the conduit for contracting and payment for services and the 
submission of samples for testing. Two other commenters stated that 
APHIS must ensure that laboratory analyses are not performed by anyone 
having an interest in the product to avoid conflicts of interest. These 
four commenters sought to separate the entity performing an inspection 
or test from the entity for whom the work is performed in order to 
prevent any influence or bias. One of them noted that the current 
regulations in Sec. 353.6(a)(3) prohibit agents from performing 
inspections of any plants or plant products in which they or a family 
member are directly or indirectly financially interested, and stated 
that the same conflict of interest rules should apply to accredited 
facilities. Two different commenters foresaw the possibility that an 
accredited facility might be a division or affiliate of a company that 
would use its testing or inspection services and asked how APHIS would 
deal with the potential conflicts of interest inherent in a facility 
testing or inspecting its own plants or plant products.
    The issue in all of the comments summarized in the previous 
paragraph appears to be whether or not an accredited facility that is 
connected in some way to a commercial entity for which it is performing 
a service will be able to conduct unbiased tests or inspections and 
accurately report the results of those tests or inspections. The 
commenters appear to be worried that an accredited facility might 
tailor test protocols or alter results in order to get the ``right'' 
answer that will please the commercial entity with which the facility 
is associated.
    We acknowledge that it is possible that an accredited facility 
could attempt to provide inaccurate information to an inspector in 
order to secure a phytosanitary certificate. However, given the 
investment of time, money, and other resources that becoming accredited 
would require, we do not believe that an accredited facility would risk 
having its accreditation withdrawn by falsely certifying that a 
specific test or inspection had been conducted and its results 
faithfully reported.
    Falsified test or inspection results can be detected by inspectors 
conducting post-accreditation reviews or audits of facilities or 
through random checks by certifying officials of plants or plant 
products for which a phytosanitary certificate is sought. Under 
Sec. 353.8(b)(4), facilities must agree to be periodically assessed and 
evaluated by means of proficiency testing or check samples in order to 
retain accreditation. Further, the tests or inspections that accredited 
facilities will perform are for pests or diseases that are likely to 
manifest themselves at some point. Presumably, an importing country is 
asking for a phytosanitary certificate because a certain pest or 
disease that may be present in the United States does not exist or is 
not widely prevalent in that importing country; if the pest or disease 
is detected in the importing country following the receipt of a 
shipment certified on the basis of falsified test results, it is likely 
that the pest or disease will be traced to that shipment. If it can be 
confirmed that the exporting company, through its accredited facility, 
used false test results to obtain a phytosanitary certificate, several 
consequences are possible: The facility's accreditation could be 
withdrawn, the facility or its parent company could be subject to civil 
or even criminal penalties in the United States or the importing 
country, and the parent company would likely lose the trust--and the 
business--of its customers. We believe that the likelihood of detection 
and the consequences associated with falsifying results will serve as a 
deterrent in those cases where such deterrence is necessary.

Composition of Assessment Teams

    One commenter asked if competitors of a facility seeking 
accreditation would be involved in a facility's pre-accreditation 
assessment. The commenter stated that such participation would be 
inappropriate because the assessment team members must be completely 
impartial and assess the facility on the standards established by the 
rule without any appearance of bias. Another commenter asked if State 
plant regulatory agencies would be involved in the pre-accreditation 
assessment process and post-accreditation activities.
    We do not anticipate that we will seek the participation of 
operators or employees of commercial laboratories or inspection 
services in the pre-accreditation assessment process. We do expect that 
there will be instances when we will seek the formal assistance of our 
cooperators in State plant regulatory agencies in the pre-accreditation 
assessment process or in post-accreditation facility visits and 
reviews. In addition, we would welcome the participation of our State 
cooperators in any accreditation activities being conducted in their 
respective States.

Post-Accreditation Supervision

    One commenter stated that his organization could support the 
concept of accreditation only if APHIS maintained continuous, day-to-
day oversight of the program through the appointment of an 
accreditation manager who would administer the application procedures 
and audits, arrange for proficiency testing, develop and provide 
training for seed health tests and field inspection procedures, issue 
accreditation credentials, maintain accreditation records, and 
establish

[[Page 1100]]

standard tests for laboratory and field inspection procedures.
    The need for program management such as that described by the 
commenter was recognized by APHIS at the time the proposed rule was 
being prepared, so there are already plans to appoint an accreditation 
manager within APHIS' Plant Protection and Quarantine program to 
perform the tasks identified by the commenter.
    Another commenter questioned whether APHIS had sufficient staff to 
implement and adequately monitor the accreditation program. The 
commenter stated that there are universities and State departments of 
agriculture that could serve as accreditors to more efficiently perform 
the actual accreditation work for APHIS; APHIS' role could be purely 
administrative, with the bulk of operational work being accomplished by 
the State-level accreditors.
    As noted above, an accreditation manager will be appointed in APHIS 
to oversee the program's operation. We anticipate that the 
accreditation manager will work closely with the export certification 
program's traditional cooperators at the State and county level, 
relying on them for advice and assistance with regard to accreditation 
activities in their geographic area or within their realm of expertise. 
As with other aspects of the program, the extent to which State 
cooperators will become involved in accreditation-related activities 
will depend largely on demand for accreditation and the number of 
facilities that become accredited.
    One commenter had several questions regarding post-accreditation 
supervision of facilities: What will be the frequency of post-
accreditation audits or inspections? Will State plant regulatory 
agencies be able to request an audit or inspection if an irregularity 
is noted or a complaint is received? Will State plant regulatory 
agencies be notified of the results of those audits or inspections?
    The frequency of post-accreditation audits and inspections will be 
determined, at least in part, by the type of service a facility becomes 
accredited to perform. The performance of field inspections and even 
some types of laboratory testing will be subject to seasonal changes 
and other variables, so it would be difficult to prescribe a universal 
audit schedule as part of this final rule. Thus, the frequency of post-
accreditation audits and inspections for a particular area of 
accreditation will be determined at the same time the specific 
standards for accreditation in that area are developed.
    We would encourage State plant regulatory agencies, as well as 
other entities that have dealings with an accredited facility, to 
report any observed deficiencies or irregularities in an accredited 
facility to the APHIS accreditation manager or to an inspector. APHIS 
will review all reports received and, as appropriate, will perform an 
inspection or audit in order to resolve any issues that arise regarding 
accredited facilities. As cooperators in APHIS' phytosanitary export 
certification program, State plant regulatory agencies will be kept 
informed of developments in the program, including those related to 
accredited facilities.
    One other commenter was concerned that the quality of inspection 
could suffer under an accreditation plan. Although he offered no 
specific examples, the commenter stated that in some situations where 
self-inspection has been performed, quality problems such as 
overlooking specific infestations or diseases have manifested 
themselves. If the quality of inspection is reduced or is unacceptable 
to an importing country, the commenter concluded, the U.S. 
phytosanitary inspection system as a whole may come under scrutiny.
    We agree with the commenter's assertion that the quality of 
inspection must be maintained to ensure the continued confidence of our 
trading partners. We believe that the accreditation program provided 
for by this final rule, with its focus on standards and required levels 
of performance, will preserve--and even enhance--the quality and 
credibility of the U.S. phytosanitary certification program.

Issuance of Certificates

    One commenter asked if accredited facilities would apply to APHIS 
or to State cooperators for export certificates and, if application for 
a certificate was made to a State cooperator, whether the State 
cooperator would be required to issue a certificate.
    The regulations in Sec. 353.7 state that phytosanitary certificates 
are signed and issued by inspectors; an inspector, as defined in 
Sec. 353.1, could be either an APHIS employee or a State or county 
plant regulatory official designated by the Secretary of Agriculture to 
inspect and certify to shippers and other interested parties as to the 
phytosanitary condition of plant products. Any shipment offered for 
certification that meets the requirements of the importing country and 
is in compliance with the regulations is expected to be certified; to 
do otherwise would be a disservice to--and likely challenged by--those 
individuals seeking a certificate.
    On a similar note, a commenter from a county agricultural agency 
stated that she was concerned about the possibility of placing the 
county in a position of greater liability if she had to issue a 
phytosanitary certificate based on laboratory analysis or field 
inspections completed by a private company rather than a public agency.
    No liability should attach to a certifying official as long as the 
certification is made in accordance with the regulations. The 
certifying statement on the phytosanitary certificate states that 
``This is to certify that the plants or plant products described below 
have been inspected according to appropriate procedures and are 
considered free from quarantine pests * * *'' Using test or inspection 
results provided by an accredited facility is an appropriate and 
defensible procedure.

Costs of Accreditation

    Several commenters were opposed to the provisions of the proposed 
rule that would require the operator of a facility seeking 
accreditation to enter into a trust fund agreement with APHIS prior to 
accreditation. Several commenters stated that private entities need to 
know in advance what the costs associated with the accreditation 
process will be in order to be able to accurately calculate all costs 
and benefits of the system. The commenters further stated that the 
failure to accurately calculate all costs of accreditation, at all 
levels of administration, could lead to an accreditation system that is 
not viable, cost effective, or competitive in delivering phytosanitary 
certification services. The commenters suggested that the trust fund 
requirement apply only to entities that have not completed the 
necessary cost analyses for implementing an accreditation scheme for 
their constituents, or for entities that have not established a cash 
reserve to cover the startup and long-term administration costs of 
accreditation.
    Given the tenor of those comments, it appears that the purpose and 
scope of the trust fund agreement may not have been fully explained in 
the proposed rule. We do not intend for the trust fund to be a single 
pool of money funded by a particular industry segment from which APHIS 
will draw to fund its activities in a certain area of accreditation. 
Associations representing certain industry sectors may certainly play a 
role in helping to develop accreditation standards that will be applied 
to facilities within their industry, but when it comes to the actual 
accreditation of facilities, those

[[Page 1101]]

facilities will individually enter into trust fund agreements with 
APHIS to cover the costs of their accreditation.
    Under a trust fund agreement, APHIS will, in advance, provide the 
facility's operator with an estimate of the costs it expects to incur 
through its involvement in the pre-accreditation assessment process. As 
particular standards are developed, we will be better able to forecast 
that cost and the costs of the maintenance of the facility's 
accreditation. The operator of the facility would then deposit a 
certified or cashier's check with APHIS for the amount of the estimated 
costs, and the pre-accreditation assessment process would begin. If the 
deposit is not sufficient to meet all costs incurred by APHIS, the 
facility operator, under the terms of the trust fund agreement, would 
deposit another certified or cashier's check with APHIS for the amount 
of the remaining costs before APHIS' services would be completed. After 
a final audit at the conclusion of the pre-accreditation assessment, 
any overpayment of funds would be returned to the operator of the 
facility or held on account until needed for future activities related 
to the maintenance of the facility's accreditation.
    Because this is a new program, we cannot say with certainty what 
all the costs will be and whether this trust fund agreement process 
will be the best way of handling the recovery of the costs of our 
participation in the accreditation process. Trust fund agreements have 
been used successfully in other APHIS programs, and we believe that 
they will be useful in this accreditation program. However, if the 
agreement process proves unwieldy or unworkable, we will propose to 
amend the regulations to modify the way in which APHIS recovers its 
costs.

Costs of Services

    One commenter was concerned that APHIS' intention to recover all 
costs associated with its administration of the accreditation program 
would result in fees that would be so high that they would render the 
program infeasible.
    As explained in the proposed rule, the administrative expenses that 
we expect to incur and recover will be for items such as laboratory 
fees for evaluating check test results and all salaries, travel 
expenses, and other incidental expenses incurred by APHIS in performing 
the pre-accreditation assessment. As long as we could determine that it 
would be feasible and practical to establish an accreditation program 
in a particular area to begin with, we do not expect that costs related 
to those activities would be prohibitive. To make that consideration 
clear, we have amended Sec. 353.8(b)(1) in this final rule to provide 
that APHIS will make a determination regarding the practicality of 
establishing an accreditation program in a particular area before 
beginning the process of developing the standards that would be 
applicable to accreditation in that area. Further, participation in the 
accreditation program will be voluntary, and an estimate of costs will 
be provided to each applicant before APHIS begins any accreditation-
related activities, so there will be ample opportunity for the 
applicant to consider whether accreditation will be desirable from a 
cost perspective.
    One commenter stated that the services of accredited facilities 
could become very expensive for industry if private entities providing 
services charged enough to cover their expenses. The commenter 
concluded that because some State agencies charge less than what is 
actually necessary to cover their expenses, the fees charged by private 
facilities will likely exceed the fees charged by government 
facilities. Although it is possible that an accredited entity could 
charge a higher fee than a public agency, a customer may still choose 
to use the accredited entity's services if the customer receives an 
added benefit such as faster reporting of results. However, if an 
accredited entity charges fees that are perceived to be too high by 
prospective customers, it is likely that those customers would take 
their business elsewhere, i.e., to a government facility or other 
accredited facility. Private entities providing inspection or testing 
services will be subject to the same market forces as any other entity 
providing services and will have to maintain a competitive fee schedule 
to remain in business.

Standards for Field Inspection

    One commenter agreed that the four major accreditation assessment 
areas (physical plant, equipment, methods of testing or inspection, and 
personnel) were appropriate, but stated that quality control is more 
problematic regarding the accreditation of field inspectors. The 
commenter noted that an accreditor cannot place a diseased or infested 
plant in a field as part of a pre-accreditation assessment to see if it 
is detected and reported. The commenter concluded by stating that 
special attention must be given to the need for credible assessment 
mechanisms when standards are set for accrediting private entities to 
perform field inspections.
    We acknowledge that assessing proficiency in the area of field 
inspection may prove to be more of a challenge than assessing 
proficiency in the somewhat more easily quantifiable area of laboratory 
testing. The development of specific standards for accreditation to 
conduct field inspections (as well as all other specific standards) 
will be a collaborative process, as APHIS will seek the input, 
cooperation, and comments of industry, academic, government, or other 
personnel with expertise or interest in the areas that will be 
assessed. We are confident that this collaborative process will result 
in field inspection accreditation standards that will provide an 
accurate assessment of an individual or entity seeking accreditation in 
that area.

Withdrawal or Denial of Accreditation

    One commenter was concerned that the 10 days that would be provided 
for the operator of a facility to appeal a denial or withdrawal of 
accreditation would not allow enough time to develop an adequate 
appeal. The commenter stated that 30 days should be provided to file an 
appeal, and that the Administrator's decision regarding an appeal 
should also be made within 30 days, rather than the proposed ``as 
promptly as circumstances permit.''
    We do not believe that it is necessary to extend the time for a 
person to submit an appeal. To appeal a denial, the operator must 
provide the reasons why he or she believes that accreditation was 
wrongfully denied; to appeal a withdrawal, the operator must provide 
all of the facts and reasons upon which he or she relies to show that 
the reasons for the proposed withdrawal are incorrect or do not support 
the withdrawal. Because APHIS will inform the operator of all of the 
reasons on which it based its denial or withdrawal of accreditation, 
and the appeal is, in essence, the operator's specific response to each 
of those stated reasons, we believe that 10 days is a sufficient amount 
of time for an operator to prepare an appeal. Although the 
Administrator will, in most cases, be able to respond to an appeal in 
less than the 30-day limit suggested by the commenter, we have retained 
``as promptly as circumstances permit'' as the time frame for the 
Administrator's decision so as not to limit our ability to investigate 
or review the circumstances surrounding a withdrawal or denial in light 
of the information provided in the appeal.
    Two other commenters were concerned about the length of time that 
could potentially pass before the withdrawal of a facility's 
accreditation became effective due to the proposed provisions for the 
operator to appeal the withdrawal. Both commenters stated

[[Page 1102]]

that allowing an accredited entity to continue to perform phytosanitary 
work while an appeal was filed and heard could result in the issuance 
of additional invalid phytosanitary certificates. One of those 
commenters further stated that the proposed provision for immediate 
withdrawal to protect ``public health, interest, or safety'' 
constituted a high legal standard that might be easily and often 
challenged.
    As noted by one of the commenters, the regulations will provide for 
the withdrawal of a facility's accreditation to become effective 
immediately when the Administrator determines that an immediate 
withdrawal action is necessary to protect the public health, interest, 
or safety. The withdrawal will be effective upon oral or written 
notification, whichever is earlier, to the operator of the facility and 
will continue in effect pending the completion of the proceeding, and 
any judicial review of the proceeding, unless otherwise ordered by the 
Administrator. Because a credible phytosanitary export certification 
program, which greatly facilitates U.S. export trade in plants and 
plant products, is clearly in the public interest, we believe that we 
can justify the immediate withdrawal of a facility's accreditation when 
circumstances warrant.

Accreditation of Government Facilities

    Several commenters discussed the apparent disparity between the 
requirements for government and non-government facilities, each making 
an argument for a different degree of uniformity between the public and 
private facilities. One commenter stated that APHIS should provide 
government facilities with copies of the standards and procedures and 
minimum recordkeeping guidelines, and should provide training in the 
standards at no charge to the government facility as part of the 
cooperative agreement between APHIS and the States. A second commenter 
stated that APHIS should require all entities, both government and non-
government, to conduct their diagnostic tests or field inspections in 
accordance with the standards and procedures. A third commenter 
suggested that government facilities should be able to become 
accredited if they choose to do so, while a fourth commenter stated 
that accreditation should be required for both government and non-
government facilities. Another commenter stated that the draft North 
American Plant Protection Organization (NAPPO) accreditation standards 
mentioned in the proposed rule clearly state that all personnel 
carrying out the same phytosanitary certification inspection functions, 
be they government or non-government personnel, must meet the same 
standards, so government facilities should be required to be 
accredited. All of these commenters cited the need for standard testing 
and inspection protocols and warned that failure to provide for 
coordination in that area could result in discrepancies in the U.S. 
phytosanitary certification system and a subsequent erosion in the 
confidence of importing countries with regard to that system.
    The accreditation provided for by the final rule is, in essence, 
the means by which APHIS can approve a non-government facility to 
perform, in an official capacity, the same tests or inspections that 
Federal and State laboratories and personnel currently perform in 
support of the phytosanitary export certification program. As such, 
there is no reason to require facilities operated by a State or other 
governmental entity to become accredited. That being said, we do agree 
with those commenters who have pointed out the need for standardization 
and uniformity in phytosanitary testing and inspection. When developing 
specific standards for a particular area of accreditation, we will 
solicit and encourage the participation of all interested parties in 
the public and private sectors and academia, and we expect the 
resulting standards will reflect the best available science, processes, 
and methods. Once completed, those standards will be used not only to 
evaluate facilities seeking accreditation, but will be distributed to 
Federal and State facilities performing phytosanitary certification 
work to ensure that they are using the best available science, 
processes, and methods.

Promulgation of Standards

    Several commenters were concerned that the specific standards for 
accreditation would be subject to notice and comment rulemaking after 
they had been developed and before they could be applied to the 
accreditation of non-government facilities. These commenters stated 
that having to publish standards in the Federal Register would result 
in delays that would have a negative effect on the entire accreditation 
program. Most of these commenters stated that APHIS must make a clear 
distinction between those standards that would require publication in 
the Federal Register and those that would not, suggesting that basic, 
generally applicable standards might be promulgated through rulemaking, 
while items with more limited applicability, such as the protocols for 
a specific test, could be made available as part of the guidelines that 
apply to a specific area of accreditation.
    We recognize the commenters' concerns and agree that the 
development and promulgation of specific standards must be accomplished 
in a manner that will allow the program to grow and adapt to new 
technologies without undue process-driven delays. At the same time, 
however, we must balance that desire for responsiveness and flexibility 
with the need for program standards that are enforceable and that have 
been developed with the necessary level of public participation. 
Because this final rule only makes specific accreditation programs 
possible and does not itself contain any specific standards, it is 
difficult to conclusively define what will and will not be included 
when standards are published. As an example, an accreditation standard 
might call for a particular test to be performed; while the type and 
purpose of the test will be published with the criteria for 
interpreting test results and other aspects of the standard, the 
detailed instructions and protocols for conducting the actual test 
itself would not necessarily have to be published. Our goal is to 
develop and promulgate standards in a manner that will allow the 
process to be responsive and flexible while ensuring that the standards 
themselves are fair and enforceable.

Use of Subcontractors

    Four of the commenters were concerned about the provisions of the 
proposed rule that would allow the use of subcontractors by accredited 
facilities. One comment, from a foreign agricultural agency, stated 
that his agency viewed the use of subcontractors as a further 
delegation by APHIS of its phytosanitary certification duties. The 
commenter closed by saying that APHIS must negotiate such delegations 
with its foreign counterparts before proceeding with allowing the use 
of contractors. The second commenter noted that although the proposed 
rule would provide for a review of a subcontractor's qualifications, 
there are no limits placed on the services the subcontractor could 
provide. The commenter was concerned that an accredited facility might 
use a subcontractor to, for example, entirely conduct a test that the 
facility had been accredited to conduct. The commenter also pointed out 
that the proposed rule did not prohibit a subcontractor to itself use a 
subcontractor. The third commenter was concerned that an

[[Page 1103]]

accredited facility that was facing the withdrawal of its accreditation 
might attempt to shift the blame for their shortcomings to a 
subcontractor and simply fire one subcontractor and hire another in an 
effort to retain accreditation. The fourth commenter stated that 
allowing the use of subcontractors by accredited facilities would make 
it very difficult to maintain program credibility and would allow for 
too much extended liability.
    We believe that all four of the commenters have made valid points 
that bring into question the advisability of allowing accredited 
facilities to use subcontractors. Therefore, in this final rule, we 
have eliminated the reference to the use of subcontractors that had 
been in Sec. 353.8(b)(3)(iv) of the proposed rule.

Use of International Standards

    Two of the commenters recommended that APHIS utilize private sector 
accreditation services for government and non-government laboratories. 
These commenters stated that accrediting laboratories in accordance 
with the International Standards Organization's (ISO's) internationally 
recognized ISO Guide 25 would be a more reasonable and less burdensome 
approach to accreditation and would be more easily recognized 
internationally. One commenter noted that other Federal agencies accept 
third-party laboratory accreditation in areas such as environmental 
lead and asbestos or electromagnetic compatibility testing. 
Additionally, that commenter stated, Public Law 104-113 mandates the 
utilization of private sector laboratory accreditation services.
    As explained above in the response to a previous comment, the 
accreditation program provided by this final rule is a way for APHIS to 
approve a non-government facility to perform tests or inspections in 
support of the phytosanitary export certification program. The program 
is not intended as, nor has it been presented as, a full-blown 
laboratory evaluation and accreditation program such as those provided 
under the auspices of the ISO. The underlying principles of ISO 
certification, such as quality documentation and accountability, 
certainly will be applied when specific standards are developed, but we 
do not believe that it is necessary for a non-government facility to 
receive ISO 25 certification before it can perform testing or 
inspection services under the phytosanitary export certification 
program.

Qualifications

    One commenter asked what the minimum qualifications for the 
accreditation of these private phytosanitary services would be, and how 
and when the standards would be established. Two other commenters 
stated that the minimum qualifications for accredited inspectors must 
be established and should be at least equal to the minimum 
qualifications required of county, State, or Federal inspectors.
    Specific qualifications for personnel involved in any particular 
area of accreditation are not within the scope of this final rule. As 
discussed in the proposed rule, personnel standards are one of the 
areas in which non-government facilities will be assessed and will, 
therefore, be one of the areas for which specific standards will be 
developed. Generally speaking, the qualifications of employees of non-
government facilities will be similar to those of government laboratory 
personnel and inspectors. The draft NAPPO standard for accreditation 
mentioned in the proposed rule states that accredited personnel should 
not be held to standards that are higher than those for government 
personnel, a concept with which we agree.

Availability of Information

    Two of the commenters wanted to know if the information generated 
by accredited facilities in the course of their inspection or testing 
activities would be available for review by APHIS or its State 
cooperators. One of the commenters stated such data must be available 
for review to ensure the validity of the testing process. The other 
commenter stated that because State plant regulatory agencies are 
cooperators with APHIS in both pest detection and export commodity 
certification, it is essential that States have access to such 
information in order to maintain the credibility of their own 
activities in those areas.
    As standards are developed for specific areas of accreditation, we 
will ensure that recordkeeping is addressed in a manner appropriate to 
each area of accreditation. In general, we expect to require that 
records related to a facility's area of accreditation be made available 
to APHIS during the pre-accreditation assessment and during subsequent 
post-accreditation reviews or audits. Similarly, the specific standards 
will include, as appropriate, provisions for each accredited facility 
to report pests and diseases to APHIS or the State plant health agency 
for further action.

Notification of Changes

    Two commenters noted that the proposed regulations call for a 
facility to notify APHIS ``as soon as circumstances permit'' when there 
is a change in key management personnel or facility staff, or when 
there is a change involving the location, ownership, physical plant, 
equipment, or relevant conditions at the plant. Both commenters stated 
that ``as soon as circumstances permit'' was too vague a time frame 
given the potential importance of such changes. One of those commenters 
suggested that a facility should be required to notify APHIS within 48 
hours of such changes, while the other recommended that notice be given 
to APHIS within 10 days. We agree with the commenters that a more 
concrete time frame for notification is desirable given the potential 
impact of such changes, so we have amended paragraphs (b)(4)(v) and 
(b)(4)(vi) of Sec. 353.8 to require the operator of a facility to 
notify APHIS as soon as possible, but no more than 10 days following 
its occurrence, of any change in the elements set forth in those 
paragraphs.
    Therefore, based on the rationale set forth in the proposed rule 
and in this document, we are adopting the provisions of the proposal as 
a final rule with the changes discussed in this document.

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been reviewed under Executive Order 12866. The rule 
has been determined to be significant for the purposes of Executive 
Order 12866 and, therefore, has been reviewed by the Office of 
Management and Budget.
    This rule amends the export certification regulations to provide 
for the establishment of a program under which non-government 
facilities may become accredited to perform specific laboratory testing 
or phytosanitary inspection services that could serve as the basis for 
the issuance of Federal phytosanitary certificates, phytosanitary 
certificates for reexport, or export certificates for processed plant 
products. The accreditation criteria for particular laboratory testing 
and phytosanitary inspection services will be developed by APHIS in 
cooperation with other interested individuals or government, industry, 
academic, or research entities. As specific accreditation criteria are 
developed, the accreditation program will provide a mechanism for 
qualified non-government facilities to become accredited to perform 
testing or inspection services that may be used as supporting 
documentation for the

[[Page 1104]]

issuance of certificates for certain plants or plant products.
    The regulations in this rule are intended only to provide a 
framework upon which accreditation programs for specific functions may 
be established, so they will not, in and of themselves, entail any 
costs to APHIS or any non-government facility. However, any specific 
accreditation program that is established under these regulations will 
entail costs to both the entities being accredited and the accrediting 
body, i.e., APHIS. Because the accreditation program is expected to be 
self-supporting, the costs to APHIS will be recouped through 
accreditation fees. The fees charged by APHIS in connection with the 
initial accreditation of a non-government facility and the maintenance 
of that accreditation will, therefore, have to be adequate to recover 
the costs incurred by the government in the course of APHIS' 
accreditation activities. We expect that the costs that will be 
reimbursed will be largely attributable to the cost of transportation 
for the assessors to travel to the site of the facility, lodging for 
the assessors, their salary and per diem, any laboratory fees charged 
for evaluating check test results, and administrative expenses. Costs 
for specific accreditation programs will vary depending on the range of 
activities for which a facility seeks accreditation, the number of 
assessors needed to adequately conduct a pre-accreditation assessment, 
the type and number of any proficiency tests that will have to be 
conducted, and the frequency with which post-accreditation evaluation 
activities such as check tests and site visits will have to be 
conducted.
    The regulations stipulate that APHIS will provide an estimate of 
its anticipated fees to the operator of the facility prior to 
undertaking any activities that will result in fees being charged to a 
facility. Participation in any accreditation program developed under 
these regulations will be voluntary. At this time, we estimate that 15 
individual non-government facilities are likely to seek and maintain 
accreditation annually on about 82 accredited procedures, as long as 
the costs of participating in an accreditation program are lower than 
the benefits they receive from the program. As a result, this program 
will have to meet the test of the marketplace.
    The domestic seed industry, through the American Seed Trade 
Association, has indicated its interest in establishing an 
accreditation program for seed health testing and field inspection of 
seed, so we have used the domestic seed industry to illustrate the 
potential benefits that may result from the establishment of specific 
accreditation programs.
    The seed industry is expected to benefit from the establishment of 
an accreditation program because domestic seed exporters routinely 
require the services of inspectors and agents in order to obtain the 
phytosanitary certification required by most, if not all, importing 
countries; benefits can be realized in terms of more timely 
certifications, which in turn can lead to reduced costs as well as 
increased U.S. exports.
    The value of seed exported from the United States to other 
countries continues to grow rapidly, from $665 million in 1994-95 (July 
to June), to $705 million in 1995-96, to more than $800 million 
projected for 1996-97. There has been a concomitant rise in demand for 
laboratory testing and phytosanitary inspection services to meet other 
countries' import requirements. The ability of Federal, State, and 
county testing and inspection services to meet this growing demand will 
be increasingly strained. Already there are instances in which the 
accreditation of non-government facilities would have prevented the 
loss of export sales.
    For example, some seed export opportunities have been forfeited 
because the results of pre-harvest field inspections are usually not 
known until after harvest. It is common for seed from several fields to 
be blended before shipment. If the sample from one field is 
subsequently reported to contain an actionable pest, then none of the 
blended seed--which may have been harvested from as many as eight or 
nine fields--could be exported. In one case in which this occurred, the 
affected seed company lost foreign sales worth $250,000. Such losses 
are much less likely to occur if there is more timely reporting of pre-
harvest inspections; accredited non-government inspection facilities 
may be able to make such timely reports. In general, non-government 
testing and inspection services are expected to be completed with 
minimal delay, leading to greater marketing flexibility and lower risk 
of lost sales.
    Additional benefits, of even greater potential significance, can be 
gained through the standardization of testing and inspection protocols 
that will result from the establishment of accreditation standards, 
particularly when internationally recognized standards are used. Major 
seed trading partners of the United States, such as Canada, France, and 
The Netherlands, have national seed health organizations that address 
seed health issues in part by employing laboratory accreditation 
protocols. The standards that will underlie the accreditation of non-
government facilities in the United States can help reduce the 
differences among international phytosanitary regulations, thereby 
expediting U.S. seed exports.
    Accreditation of non-government facilities, by promoting more 
streamlined exports based on internationally recognized standards, can 
also be expected to benefit exports outside of the seed industry. As a 
self-supporting system, private firms that expect benefits in excess of 
costs of accreditation are likely to participate. In addition to the 
net benefits received by these firms directly, society as a whole will 
benefit from enhanced trade.
    Under these circumstances, the Administrator of the Animal and 
Plant Health Inspection Service has determined that this action will 
not have a significant economic impact on a substantial number of small 
entities.

Executive Order 12372

    This program/activity is listed in the Catalog of Federal Domestic 
Assistance under No. 10.025 and is subject to Executive Order 12372, 
which requires intergovernmental consultation with State and local 
officials. (See 7 CFR part 3015, subpart V.)

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.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501 et seq.), the information collection or recordkeeping requirements 
included in this rule have been approved by the Office of Management 
and Budget (OMB) under OMB control number 0579-0130.

Regulatory Reform

    This action is part of the President's Regulatory Reform 
Initiative, which, among other things, directs agencies to remove 
obsolete and unnecessary regulations and to find less burdensome ways 
to achieve regulatory goals.

List of Subjects in 7 CFR Part 353

    Exports, Plant diseases and pests, Reporting and recordkeeping 
requirements.


[[Page 1105]]


    Accordingly, we are amending 7 CFR part 353 as follows:

PART 353--EXPORT CERTIFICATION

    1. The authority citation for part 353 continues to read as 
follows:

    Authority: 7 U.S.C. 147a; 21 U.S.C. 136 and 136a; 44 U.S.C. 35; 
7 CFR 2.22, 2.80, and 371.2(c).

    2. In Sec. 353.1, a definition of non-government facility is added, 
in alphabetical order, to read as follows:


Sec. 353.1  Definitions.

* * * * *
    Non-government facility. A laboratory, research facility, 
inspection service, or other entity that is maintained, at least in 
part, for the purpose of providing laboratory testing or phytosanitary 
inspection services and that is not operated by the Federal Government 
or by the government of a State or a subdivision of a State.
* * * * *
    3. In Sec. 353.7, paragraphs (a)(4), (b)(4), and (c)(4) are each 
amended by adding a new sentence at the end of each paragraph to read 
as follows:


Sec. 353.7  Certificates.

    (a) * * *
    (4) * * * The Administrator may also authorize inspectors to issue 
a certificate on the basis of a laboratory test or an inspection 
performed by a non-government facility accredited in accordance with 
Sec. 353.8.
* * * * *
    (b) * * *
    (4) * * * The Administrator may also authorize inspectors to issue 
a certificate on the basis of a laboratory test or an inspection 
performed by a non-government facility accredited in accordance with 
Sec. 353.8.
* * * * *
    (c) * * *
    (4) * * * The Administrator may also authorize inspectors to issue 
a certificate on the basis of a laboratory test or an inspection 
performed by a non-government facility accredited in accordance with 
Sec. 353.8.
* * * * *
    4. A new Sec. 353.8 is added to read as follows:


Sec. 353.8  Accreditation of non-government facilities.

    (a) The Administrator may accredit a non-government facility to 
perform specific laboratory testing or phytosanitary inspection 
services if the Administrator determines that the non-government 
facility meets the criteria of paragraph (b) of this 
section.1
---------------------------------------------------------------------------

    \1\ A list of accredited non-government facilities may be 
obtained by writing to Phytosanitary Issues Management, PPQ, APHIS, 
4700 River Road, Unit 140, Riverdale, MD 20737-1236.
---------------------------------------------------------------------------

    (1) A non-government facility's compliance with the criteria of 
paragraph (b) of this section shall be determined through an assessment 
of the facility and its fitness to conduct the laboratory testing or 
phytosanitary inspection services for which it seeks to be accredited. 
If, after evaluating the results of the assessment, the Administrator 
determines that the facility meets the accreditation criteria, the 
facility's application for accreditation will be approved.
    (2) The Administrator may deny accreditation to, or withdraw the 
accreditation of, any non-government facility to conduct laboratory 
testing or phytosanitary inspection services upon a determination that 
the facility does not meet the criteria for accreditation or 
maintenance of accreditation under paragraph (b) of this section and 
has failed to take the remedial action recommended to correct 
identified deficiencies.
    (i) In the case of a denial, the operator of the facility will be 
informed of the reasons for the denial and may appeal the decision in 
writing to the Administrator within 10 days after receiving 
notification of the denial. The appeal must include all of the facts 
and reasons upon which the person relies to show that the facility was 
wrongfully denied accreditation. The Administrator will grant or deny 
the appeal in writing as promptly as circumstances permit, stating the 
reason for his or her decision. If there is a conflict as to any 
material fact, a hearing will be held to resolve the conflict. Rules of 
practice concerning the hearing will be adopted by the Administrator.
    (ii) In the case of withdrawal, before such action is taken, the 
operator of the facility will be informed of the reasons for the 
proposed withdrawal. The operator of the facility may appeal the 
proposed withdrawal in writing to the Administrator within 10 days 
after being informed of the reasons for the proposed withdrawal. The 
appeal must include all of the facts and reasons upon which the person 
relies to show that the reasons for the proposed withdrawal are 
incorrect or do not support the withdrawal of the accreditation of the 
facility. The Administrator will grant or deny the appeal in writing as 
promptly as circumstances permit, stating the reason for his or her 
decision. If there is a conflict as to any material fact, a hearing 
will be held to resolve the conflict. Rules of practice concerning the 
hearing will be adopted by the Administrator. However, withdrawal shall 
become effective pending final determination in the proceeding when the 
Administrator determines that such action is necessary to protect the 
public health, interest, or safety. Such withdrawal will be effective 
upon oral or written notification, whichever is earlier, to the 
operator of the facility. In the event of oral notification, written 
confirmation will be given as promptly as circumstances allow. This 
withdrawal will continue in effect pending the completion of the 
proceeding, and any judicial review thereof, unless otherwise ordered 
by the Administrator.
    (3) The Administrator will withdraw the accreditation of a non-
government facility if the operator of the facility informs APHIS in 
writing that the facility wishes to terminate its accredited status.
    (4) A non-government facility whose accreditation has been denied 
or withdrawn may reapply for accreditation using the application 
procedures in paragraph (b) of this section. If the facility's 
accreditation was denied or withdrawn under the provisions of paragraph 
(a)(2) of this section, the facility operator must include with the 
application written documentation specifying what actions have been 
taken to correct the conditions that led to the denial or withdrawal of 
accreditation.
    (5) All information gathered during the course of a non-government 
facility's assessment and during the term of its accreditation will be 
treated by APHIS with the appropriate level of confidentiality, as set 
forth in the U.S. Department of Agriculture's administrative 
regulations in Sec. 1.11 of this title.
    (b) Criteria for accreditation of non-government facilities. (1) 
Specific standards for accreditation in a particular area of laboratory 
testing or phytosanitary inspection are set forth in this part and may 
be obtained by writing to APHIS. If specific standards for 
accreditation in a particular area of laboratory testing or 
phytosanitary inspection have not been promulgated by APHIS, and the 
Administrator determines that accreditation in that area is practical, 
APHIS will develop appropriate standards applicable to accreditation in 
the area for which the non-government facility is seeking accreditation 
and publish a notice of proposed rulemaking in the Federal Register to 
inform the public and other interested persons of the opportunity to

[[Page 1106]]

comment on and participate in the development of those standards.
    (2) The operator of a non-government facility seeking accreditation 
to conduct laboratory testing or phytosanitary inspection shall submit 
an application to the Administrator. The application must be completed 
and signed by the operator of the facility or his or her authorized 
representative and must contain the following:
    (i) Legal name and full address of the facility;
    (ii) Name, address, and telephone and fax number of the operator of 
the facility or his or her authorized representative;
    (iii) A description of the facility, including its physical plant, 
primary function, scope of operation, and, if applicable, its 
relationship to a larger corporate entity; and
    (iv) A description of the specific laboratory testing or 
phytosanitary inspection services for which the facility is seeking 
accreditation.
    (3) Upon receipt of the application, APHIS will review the 
application to identify the scope of the assessment that will be 
required to adequately review the facility's fitness to conduct the 
laboratory testing or phytosanitary inspection services for which it is 
seeking accreditation. Before the assessment of the facility begins, 
the applicant's representative must agree, in writing, to fulfill the 
accreditation procedure, especially to receive the assessment team, to 
supply any information needed for the evaluation of the facility, and 
to enter into a trust fund agreement as provided by paragraph (c) of 
this section to pay the fees charged to the applicant facility 
regardless of the result of the assessment and to pay the charges of 
subsequent maintenance of the accreditation of the facility. Once the 
agreement has been signed, APHIS will assemble an assessment team and 
commence the assessment as soon as circumstances permit. The assessment 
team will measure the facility's fitness to conduct the laboratory 
testing or phytosanitary inspection services for which it is seeking 
accreditation against the specific standards identified by the 
Administrator for those services by reviewing the facility in the 
following areas:
    (i) Physical plant. The facility's physical plant (e.g., laboratory 
space, office space, greenhouses, vehicles, etc.) must meet the 
criteria identified in the accreditation standards as necessary to 
properly conduct the laboratory testing or phytosanitary inspection 
services for which it seeks accreditation.
    (ii) Equipment. The facility's personnel must possess or have 
unrestricted access to the equipment (e.g., microscopes, computers, 
scales, triers, etc.) identified in the accreditation standards as 
necessary to properly conduct the laboratory testing or phytosanitary 
inspection services for which it seeks accreditation. The calibration 
and monitoring of that equipment must be documented and conform to 
prescribed standards.
    (iii) Methods of testing or inspection. The facility must have a 
quality manual or equivalent documentation that describes the system in 
place at the facility for the conduct of the laboratory testing or 
phytosanitary inspection services for which the facility seeks 
accreditation. The manual must be available to, and in use by, the 
facility personnel who perform the services. The methods and procedures 
followed by the facility to conduct the laboratory testing or 
phytosanitary inspection services for which it seeks accreditation must 
be commensurate with those identified in the accreditation standards 
and must be consistent with or equivalent to recognized international 
standards for such testing or inspection.
    (iv) Personnel. The management and facility personnel accountable 
for the laboratory testing or phytosanitary inspection services for 
which the facility is seeking accreditation must be identified and must 
possess the training, education, or experience identified in the 
accreditation standards as necessary to properly conduct the testing or 
inspection services for which the facility seeks accreditation, and 
that training, education, or experience must be documented.
    (4) To retain accreditation, the facility must agree to:
    (i) Observe the specific standards applicable to its area of 
accreditation;
    (ii) Be assessed and evaluated on a periodic basis by means of 
proficiency testing or check samples;
    (iii) Demonstrate on request that it is able to perform the tests 
or inspection services representative of those for which it is 
accredited;
    (iv) Resolve all identified deficiencies;
    (v) Notify APHIS as soon as possible, but no more than 10 days 
following its occurrence, of any change in key management personnel or 
facility staff accountable for the laboratory testing or phytosanitary 
inspection services for which the facility is accredited; and
    (vi) Report to APHIS as soon as possible, but no more than 10 days 
following its occurrence, any change involving the location, ownership, 
physical plant, equipment, or other conditions that existed at the 
facility at the time accreditation was granted.
    (c) Fees and trust fund agreement. The fees charged by APHIS in 
connection with the initial accreditation of a non-government facility 
and the maintenance of that accreditation shall be adequate to recover 
the costs incurred by the government in the course of APHIS' 
accreditation activities. To cover those costs, the operator of the 
facility seeking accreditation must enter into a trust fund agreement 
with APHIS under which the operator of the facility will pay in advance 
all estimated costs that APHIS expects to incur through its involvement 
in the pre-accreditation assessment process and the maintenance of the 
facility's accreditation. Those costs shall include administrative 
expenses incurred in those activities, such as laboratory fees for 
evaluating check test results, and all salaries (including overtime and 
the Federal share of employee benefits), travel expenses (including per 
diem expenses), and other incidental expenses incurred by the APHIS in 
performing those activities. The operator of the facility must deposit 
a certified or cashier's check with APHIS for the amount of the costs, 
as estimated by APHIS. If the deposit is not sufficient to meet all 
costs incurred by APHIS, the operator of the facility must deposit 
another certified or cashier's check with APHIS for the amount of the 
remaining costs, as determined by APHIS, before APHIS' services will be 
completed. After a final audit at the conclusion of the pre-
accreditation assessment, any overpayment of funds will be returned to 
the operator of the facility or held on account until needed for future 
activities related to the maintenance of the facility's accreditation.

    Done in Washington, DC, this 5th day of January 1999.
Craig A. Reed,
Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 99-396 Filed 1-7-99; 8:45 am]
BILLING CODE 3410-34-P