[Federal Register Volume 64, Number 50 (Tuesday, March 16, 1999)]
[Rules and Regulations]
[Pages 12884-12885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6381]


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DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 782

RIN 0560-AF64


End-Use Certificate Program

AGENCY: Farm Service Agency, USDA.

ACTION: Final rule.

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SUMMARY: This final rule will amend regulations governing the End-Use 
Certificate Program for imported Canadian wheat to allow the Farm 
Service Agency (FSA) to collect additional information regarding 
distinguishing characteristics of imported wheat. This rule also will 
revise the definition of importer to include only the importer of 
record as recognized by the U.S. Customs Service. Lastly, the deadline 
for submission of the End-Use Certificate will be revised from 15 work 
days to 10 work days after the date of entry. These changes are 
necessary to facilitate a cooperative effort between FSA and the U.S. 
Customs Service to make End-Use Certificates a part of the official 
entry summary package. These changes will also help ensure that 
Canadian wheat will not benefit from U.S. export programs. This rule 
takes into consideration the comments received on a January 13, 1999 
proposed rule (64 FR 2152).

EFFECTIVE DATE: March 16, 1999.

FOR FURTHER INFORMATION CONTACT: Timothy R. Murray, Chief, Inventory 
Management Branch, U.S. Department of Agriculture, Farm Service Agency, 
STOP 0553, 1400 Independence Avenue, SW, Washington, DC 20250-0553; 
telephone (202) 720-6125; FAX (202) 690-0014; E-mail 
Tim__M[email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule is issued in conformance with Executive Order 12866 and 
has been determined not significant and therefore has not been reviewed 
by the Office of Management and Budget under Executive Order 12866.

Executive Order 12778

    This rule has been reviewed in accordance with Executive Order 
12778. The provisions of this final rule do not preempt State laws, are 
not retroactive, and do not involve administrative appeals.

Paperwork Reduction Act

    The amendments to 7 CFR part 782 set forth in this proposed rule 
involve a change in the existing information collection requirements 
which were previously cleared by OMB under the provisions of 44 U.S.C. 
35. In accordance with Sec. 3507(j) of the Paperwork Reduction Act of 
1995 (44 U.S.C. 3501 et seq.), the information collection and 
recordkeeping requirements were included in the proposed rule and a 
request for emergency approval was submitted to the Office of 
Management and Budget (OMB). OMB has assigned control number 0560-0151 
to the information collection and recordkeeping requirements. A regular 
submission of the information collection will be forwarded to OMB at 
the end of the comment period.

Regulatory Flexibility Act

    On January 26, 1995, FSA published a final rule that established 
program requirements for the End-Use Certificate Program. A copy of 
this Regulatory Flexibility Analysis is available upon request from 
Timothy Murray, Warehouse and Inventory Division, FSA, STOP 0553, 1400 
Independence Avenue, Washington, DC 20250-0553; telephone (202) 690-
4321.
    Because these changes will not have an adverse impact on a 
substantial number of small businesses, a Regulatory Flexibility 
Assessment is not required.

Environmental Evaluation

    It has been determined by an environmental evaluation that this 
action will not have a significant impact on the quality of the human 
environment. Therefore, neither an Environmental Assessment nor an 
Environmental Impact Analysis is needed.

Executive Order 12988

    This final rule has been reviewed in accordance with Executive 
Order 12988. The provisions of this rule are not retroactive and do not 
preempt any State laws.

Executive Order 12372

    This program/activity is not subject to the provisions of Executive 
Order 12372, which requires intergovernmental consultation with State 
and local officials. See notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115 (June 24, 1983).

Background

    This final rule amends the regulations at 7 CFR Part 782 with 
respect to the U.S. End-Use Certificate Program. Since February 27, 
1995, the effective date for the implementation of the End-Use 
Certificate Program, several items have been identified that could 
improve the effectiveness and the efficiency of the End-Use Certificate 
Program. To further ensure that Canadian wheat does not benefit from 
U.S. export programs, End-Use Certificates will include distinguishing 
characteristics of grade, protein content, moisture content, dockage 
and date of sale in addition to the class and/or varietal information 
currently collected for each shipment. These additional data are deemed 
necessary because imported wheat may benefit from U.S. export programs 
even if the imported wheat itself is not directly eligible for use 
under such programs. Such benefit may accrue if wheat of the type or 
quality used under U.S. export programs (including humanitarian 
assistance programs) is imported into the United States in anticipation 
of, or as a result of use of a similar type or quality of U.S. wheat 
under the U.S. program. Indeed, the Department of Agriculture is 
frequently implored not to take action to facilitate sales of U.S. 
wheat out of a concern that such sales will only encourage off-setting 
imports of Canadian wheat. This rule provides for the collection of 
necessary information to monitor for such an occurrence and potentially 
allow appropriate actions to minimize such an occurrence. In addition, 
these additional data will help facilitate effective program audits 
while minimizing the burden on importers of Canadian wheat.
    This rule will also replace the current definition used for 
``Importer'' found at 7 CFR 782.2 with the same definition

[[Page 12885]]

used by the U.S. Customs Service and found at 19 U.S.C. 1484(a).
    The U.S. Customs Service has amended the provisions of their basic 
import bond to allow for the assessment of damages if there is a 
failure to provide the End-Use Certificate in the time period provided 
by FSA.

Public Comments

    A proposed rule was published in the Federal Register (64 FR 2152) 
on January 13, 1999. Comments from interested parties were due on or 
before January 25, 1999. A total of 12 comments were received from 7 
different sectors as follows: 5 Industry Associations; 2 State 
Agriculture Departments; 1 Interested Party; 1 Grain Company; 1 Foreign 
Government; 1 Foreign Wheat Board; 1 U.S. Government Official. Of the 
above comments 4 were against the proposed rule, and 8 were in favor of 
the proposed rule.
    Comments opposing the proposed rule addressed different aspects as 
follows:

1. Reduction to 10 days for submission of Certificate

    Issue: Impracticality in transactions involving multiple parties (1 
Comment).
    Response: Only one of the parties (the importer of record) is 
responsible for the submission.

2. Additional identifying characteristics

    Issue: Sensitivity of proprietary information (2 Comments).
    Response: We agree that this data is proprietary and is therefore 
exempt from disclosure under 5 U.S.C 552(b)(4) as confidential 
commercial or financial information.
    Issue: Changes will exacerbate trade conflicts between U.S. and 
Canada (2 Comments).
    Response: This data will provide valuable insight that should help 
mitigate some of the misinformation and misunderstanding surrounding 
the Canadian Wheat Board's sales into the United States. In response to 
previous requests from the United States for this type of information, 
Canadian officials have encouraged the United States to use its own 
data gathering sources.
    Issue: Domestic Origin regulations are sufficient to cover this 
issue (1 Comment).
    Response: All U.S. export programs authorized under the 
Agricultural Trade Act of 1978, as amended, require that any 
agricultural commodity benefitting from the particular program be 
entirely produced in the United States. Enforcement of this rigorous 
standard requires additional information to facilitate identification 
of the distinguishing characteristics of Canadian wheat. With respect 
to other programs, a vendor or exporter would only have to demonstrate 
access to an amount of U.S. wheat equivalent to that exported in the 
transaction to satisfy the applicable origin requirement. To the extent 
such origin requirements rely on inventory accounting of a fungible, 
commingled mass, collection of information on distinguishing 
characteristics of Canadian wheat will facilitate proper accounting.
    Issue: Most sales are based on destination weights and grades (1 
Comment).
    Response: The contractual terms (i.e. minimum grades and factors) 
should be sufficient for tracking purposes.
    Issue: Date of Sale is too ambiguous to be useful (1 Comment).
    Response: We agree that the date of sale could be an issue of 
interpretation. Consequently, if there is a contract for sale giving 
rise to the particular import, the date of the contract is required. If 
no contract for sale exists, the date of entry will be accepted.
    The opposition comments also pointed out that there is no evidence 
that Canadian wheat is benefitting, either directly or indirectly, from 
any USDA programs. Our response is that with this additional data we 
will be better able to ascertain whether that is true.
    Other comments were received that did not directly address the 
proposed changes. These comments are summarized as follows:
    1. Collect information regarding total damage and vitreous kernel 
content to enhance identification of the imported wheat.
    Response: Total damage is integral to the U.S. grade and standards 
that will be collected. Dark, hard, and vitreous kernel count (DHV) is 
integral in the classing of spring wheat and durum.
    2. Utility grade ``feed wheat'' should be denatured because grade 
factors will not be available.
    Response: Not within the scope of this rulemaking.
    3. Standardize the testing procedures between NAFTA participants. 
e.g. moisture/protein relationships, dockage removal, and Near Infrared 
Reflectance Technology (NIRT) testing for protein.
    Response: Not within the scope of this rulemaking.
    4. Require licensed Inspection Certificates for all imported grain 
(especially Canadian wheat).
    Response: Not within the scope of this rulemaking.

List of Subjects in 7 CFR Part 782

    Administrative practice and procedure, Barley, Reporting and 
Recordkeeping, Wheat.
    Accordingly, the provisions of 7 CFR part 782 are amended as 
follows:

PART 782--END-USE CERTIFICATE PROGRAM

    1. The authority citation for part 782 continues to read as 
follows:

    Authority: 19 U.S.C. 3391(f).

    2. Amend Sec. 782.2 to revise the definition for ``Importer'' to 
read as follows:


Sec. 782.2  Definitions

* * * * *
    Importer means a party qualifying as an Importer of Record pursuant 
to 19 U.S.C. 1484(a).
* * * * *
    3. Amend Sec. 782.12(a) as follows:
    A. Revise the first sentence to read as follows:
    ``Each entity that imports wheat originating in Canada shall, for 
each entry into the U.S., obtain form FSA-750, End-Use Certificate for 
Wheat, from Kansas City Commodity Office, Warehouse Contract Division, 
P.O. Box 419205, Kansas City, MO 64141-6205, and submit the completed 
original form FSA-750 to KCCO within 10 workdays following the date of 
entry or release.''
    B. Redesignate paragraph (a)(6) through (a)(9) as paragraphs (a)(8) 
through (a)(11), and add new paragraphs (a)(6) and (a)(7) to read as 
follows:


Sec. 782.12  FSA, End-Use Certificate for Wheat.

    (a) * * *
    (6) Grade, protein content, moisture content, and dockage level of 
wheat being imported,
    (7) If imported as a result of a contract for sale, the date of 
such contract.
* * * * *
    Signed at Washington, DC, on March 11, 1999.
Keith Kelly,
Administrator, Farm Service Agency.
[FR Doc. 99-6381 Filed 3-15-99; 8:45 am]
BILLING CODE 3410-05-P