[Federal Register Volume 65, Number 77 (Thursday, April 20, 2000)]
[Rules and Regulations]
[Pages 21120-21128]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-9937]


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DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Part 319

[Docket No. 96-031-2]
RIN 0579-AA82


Importation of Wood Chips From Chile

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: We are adopting as a final rule, with changes, a proposed rule 
to allow the importation of Pinus radiata wood chips from Chile if the 
surfaces of the wood chips are treated with a specified pesticide 
mixture. This change to the regulations for importing logs, lumber, and 
other unmanufactured wood articles will provide another alternative for 
persons interested in importing wood chips from Chile while continuing 
to protect against the introduction of dangerous plant pests.

EFFECTIVE DATE: May 22, 2000.

FOR FURTHER INFORMATION CONTACT: Donna L. West, 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 and pathogens 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) 
contain provisions to eliminate any significant plant pest risk 
presented by the importation of logs, lumber, and other unmanufactured 
wood articles.
    On July 28, 1998, the Animal and Plant Health Inspection Service 
(APHIS) published in the Federal Register (63 FR 40193-40200, Docket 
No. 96-031-1) a proposed rule to amend the regulations to allow the 
importation of Pinus radiata wood chips from Chile if the surfaces of 
the wood chips are treated with a specified pesticide mixture.
    We solicited comments concerning our proposed rule for 60 days 
ending September 28, 1998. We received 10 comments by that date. The 
comments were from four environmental groups (with overlapping 
management), three State governments, two corporations, and the 
Government of Chile. Seven of the commenters supported the proposed 
rule, although several stated that there were deficiencies in the rule 
that should be corrected before the rule could win their full support. 
The remaining commenters disagreed with the proposed rule or suggested 
alternatives to it. All of the issues raised by the commenters are 
discussed below.
    Comment--Control of Stain Fungi: Several commenters questioned 
whether the surface pesticide treatment or other requirements of the 
rule would prevent the introduction of stain fungi, particularly of the 
genus Ophiostoma, that may be associated with wood chips from Chile.
    Response: The surface pesticide treatment contained in the rule has 
been proven effective against stain fungi, including stain fungi of the 
genus Ophiostoma. Research demonstrating this effectiveness has been 
published (see, for example, Morrell, Freitag, and Silva, ``Protection 
of Freshly Cut Radiata Pine Chips From Fungal Attack,'' Forest Prod. J. 
48(2):57-59).
    Comment--Heat Treatment Should Be Required: Several commenters 
stated that the position of most experts, State regulators, and members 
of the public is that heat treatment of imported wood articles capable 
of bearing pests is the only safe and acceptable method of importation. 
They stated that fumigation or surface pesticide treatment are not 
economically feasible or effective alternatives.
    Response: ``Safe'' and ``acceptable'' are terms whose meanings vary 
greatly depending on individual values. We are assuming that the 
comments refer to safety and acceptability in terms of the 
effectiveness of systems in preventing the introduction and 
dissemination in the United States of dangerous plant pests. No 
commenter submitted data proving that a heat treatment system is 
``safer'' than the proposed surface pesticide treatment system. The new 
surface pesticide treatment would reduce the risk associated with any 
plant pest introduction to a negligible level.
    Regarding the practicality of heat treating wood chips, heat 
treated wood chips are less useful than wood chips that have undergone 
less destructive treatments. Heat treatment decreases the quality of 
wood chips and renders them useless for many specific manufacturing 
purposes. Regarding the economic feasibility of the proposed surface 
pesticide treatment and fumigation, wood product companies have 
requested that they be able to utilize the surface pesticide 
alternative and, therefore, presumably find it economically feasible. 
Under normal business practices, it is not economically feasible for 
methyl bromide to effectively penetrate wood chips to more than 120 
cubic feet. When penetration is inadequate, the requirements of the 
regulations are not met, and the wood chips cannot be imported under 
the fumigation treatment option. In theory, it is possible to 
effectively penetrate large piles of wood chips by using a specialized 
technique to distribute the fumigant (e.g., a vacuum chamber or 
submerged gas tubes); however, the cost of utilizing such a technique 
is so exorbitant that it becomes economically infeasible. Consequently, 
no one has imported large shipments of wood chips, fumigated as a 
whole, under the fumigation treatment option. Fumigation remains in the 
regulations as a treatment option for wood chips because it is used for 
small shipments. One reason for developing the surface pesticide 
treatment in the proposal was to compensate for the unavailability of 
fumigation as a treatment method for large shipments of wood chips.
    Comment--Pesticide Application Protocol and Quality Control: One 
commenter cited research by Dr. Jeffrey J. Morell of Oregon State 
University that was used to support the treatment in the proposed rule. 
The commenter noted that the only pathogens tracked for efficacy in the 
research were Trichoderma species and that there was no efficacy 
evaluation for insects. The commenter stated that Morell concluded the 
following modifications of the surface pesticide treatment system may 
be needed: An increase in biocide concentration; improved uniformity of 
the spray system; routine assessment of chip treatment quality; and a 
system for regular microbiological assessment of organisms present in 
imported wood chips.

[[Page 21121]]

    Response: Trichoderma species were not the only pathogens tracked 
in the research. Treated and untreated wood chips were placed in 
plastic bags and incubated for 16 weeks. The bag interiors were sprayed 
with suspensions of spores and hyphal fragments of Alternaria 
alternata, Ophiostoma piceae, Phialophora spp., and Aspergillus niger. 
The wood chips were then regularly visually assessed for growth of the 
inoculum or other species. Various Trichoderma species caused the 
highest degree of wood chip discoloration in the tests, but they were 
not the sole organisms tracked.
    The research cited did not evaluate efficacy against insects 
because it was not practical to do so in an experimental protocol 
addressing fungicidal efficacy. The report did note that while insect 
infestation of wood is always a risk, it is sharply reduced in wood 
chip shipments due to the fragmented nature of the wood and the near 
absence of bark. The report also noted that the presence of low levels 
of an insecticide such as chlorpyrifos should provide added insurance 
against incidental oviposition. The proposed treatment included, along 
with fungicides, an insecticide containing 44.9 percent of the active 
ingredient chlorpyrifos phosphorothioate. This, along with the 
regulatory requirement that the wood chips be produced from debarked, 
plantation-grown trees, should reduce the risk of introduction of 
dangerous insects with wood chips imported under the regulations to a 
negligible level.
    The highest concentration of the proposed fungicide tested in the 
research was a 400:1 dilution. The research found that while this 
dilution achieved acceptable results in preventing fungal growth for 4 
weeks after treatment, the growth levels increased during the period 
from 4 weeks to 16 weeks after treatment. The research suggested that 
for long-term protection, dilution levels around 200:1 would be more 
appropriate. When diluted in accordance with the label instructions, as 
proposed, the treatment solution would in fact be stronger than a 200:1 
dilution. Since this standard exceeds that recommended by the 
researcher, we are making no change based on this comment.
    Regarding the comment that the researcher recommended improvement 
to the uniformity of the spray system, the researcher specifically 
recommended improvement of the current spray system to increase the 
uniformity of treatment to at least 70 to 80 percent average coverage 
of the wood chips. The proposed rule actually required that the wood 
chips be sprayed so that all the chips are exposed to the chemical on 
all sides. This standard exceeds that recommended by the researcher; 
therefore, we are making no change based on this comment. We do not 
believe it is necessary to specify detailed engineering standards for 
how chip producers must achieve this degree of coverage (placement and 
number of spray nozzles, conveyer belt speed and configuration, etc.) 
because this would limit the producers' options for developing their 
own cost-effective solutions to the problem.
    As noted by the commenter, the researcher also recommended 
establishment of two quality control and monitoring systems to check 
whether chips are being properly treated and to check whether dangerous 
fungi are present on wood chips imported under this system. 
Specifically, the researcher recommended routine assessment of chip 
treatment quality through dye tests and image analysis of chip samples 
and regular microbiological assessment of organisms present on wood 
chip shipments entering the United States. These activities fall under 
the category of monitoring and enforcement activities that APHIS may 
employ to ensure that regulated parties are complying with the 
regulations. Since these are internal agency activities that do not 
impose any requirement for action by an outside party, it is not 
necessary to include standards for these activities in the regulations. 
However, APHIS will monitor treatments to ensure that wood chips 
imported under the regulations have been properly treated and do not 
present a risk of introducing dangerous plant pests.
    Comment--Time Periods Allowed Between Harvesting of Trees and 
Treatment of Wood Chips; Time Period Allowed Between Arrival in United 
States and Processing of Wood Chips: One commenter objected that the 
proposal would allow wood chips that were treated immediately after a 
tree was felled and chipped to sit for 45 days before export from Chile 
to the United States, and that the research on the treatment showed its 
efficacy declined after 4 weeks. Two commenters objected to allowing 
storage of wood chips from Chile for up to 60 days after arrival at a 
facility operating under a compliance agreement and prior to 
processing. They noted that even the 30-day limit in the current 
regulations allows too much time for potential pests to escape from 
stored wood chips.
    Response: We are making two changes in response to these comments. 
The rule still will require that no more than 45 days may elapse 
between the time the trees used to make the wood chips were felled and 
the time the wood chips are exported; however, the wood chips must be 
treated with the surface pesticide treatment within 24 hours after the 
log is chipped, and they must be retreated with the surface pesticide 
treatment if more than 30 days elapses between the date of the first 
treatment and the date of export. We are also changing the requirement 
for when wood chips imported from Chile under the regulations must be 
processed by reducing the time from 60 days after arrival at the 
processing facility to 45 days. We believe this is a safe time frame, 
given the requirements of the regulations for safeguards during 
movement and storage of the wood chips in the United States.
    Comment--Adequacy of Environmental Assessment: Several commenters 
questioned whether the environmental assessment adequately dealt with 
human health and ecological risks that may be posed by pesticide 
residues on wood chips imported under the regulations. Specific 
concerns were raised about ammonium chloride, carbamate, and 
chloropyrifos residues, including carcinogenic effects and these 
substances' propensity for leaching into groundwater.
    Response: The environmental assessment (EA) was revised in May 
1999, and a finding of no significant impact (FONSI) has been signed. 
The revised EA provides information on the toxicity of the pesticides 
and the protective measures that reduce the potential for human and 
nontarget wildlife exposure to those pesticides. Copies of the EA and 
FONSI are available from the person identified under FOR FURTHER 
INFORMATION CONTACT, and will also be available at the following 
Internet address until at least March 1, 2000: http://www.aphis.usda.gov/ppd/eachips.pdf.
    The main pesticides planned for treating wood chips are a fungicide 
with the active ingredients 64.8 percent didecyl dimethyl ammonium 
chloride (DDAC) and 7.6 percent 3-iodo-2-propynyl butylcarbamate (IPBC) 
and an insecticide with the active ingredient 44.9 percent chlorpyrifos 
phosphorothioate. The U.S. Environmental Protection Agency (EPA) 
approved these pesticides for specific uses on wood articles. The 
current label instructions call for these pesticides, when used as a 
spray treatment, to be diluted before use in the ratios of one gallon 
fungicide to 25-50 gallons of water for the fungicide, and one gallon 
of the insecticide to 50 gallons of water. When mixed together, the 
amounts of fungicide, insecticide, and water must be calculated so that 
each of the

[[Page 21122]]

fungicide and insecticide achieve a dilution within the range specified 
on its respective label. When diluted to a 1:50 ratio, the fungicide-
insecticide mixture contains no more than 1.3 percent DDAC, 0.15 
percent IPBC, and 0.9 percent chlorpyrifos phosphorothioate. The label 
for each pesticide carries exact information with detailed directions, 
including any restrictions for use or special precautions, and 
specifies any special equipment that must be used when applying these 
chemicals. The label also gives special disposal instructions for 
pesticide waste and containers. All pesticides used to treat wood chips 
for export from Chile to the United States are required to be applied 
according to the EPA-approved pesticide label.
    The pesticides do leave residues, which would maintain the pest-
free status of the wood chips while they are in transit to the United 
States. Although the degradation of IPBC and its primary degradation 
products is rapid (half lives of less than a week) (Troy Corporation, 
1999), the caustic nature of the ammonium chloride on the wood chips 
prevents any potential for fungal reinfestation. The ammonium chloride 
in the pesticide is relatively volatile, and residues would mostly 
dissipate before arrival in the United States. The chlorpyrifos 
residues are more persistent and would continue to eliminate insect 
pest risks during transit.
    The physical and toxicological properties of the pesticides 
determine the potential for nontarget hazards. The caustic nature of 
ammonium chloride can be highly irritating to eyes, skin, and the 
respiratory system. Unlike most carbamates, IPBC has not been shown to 
inhibit plasma and red blood cell acetylcholinesterase in vitro at 
concentrations as high as 1 x 10-4 molar (Troy Corporation, 
1999). As a result, the acute toxicity of IPBC is low by all routes of 
exposure. However, IPBC can be an eye and skin irritant. Chronic 
dietary studies of IPBC have not found any evidence of carcinogenicity 
in either rats or mice (Troy Corporation, 1999) and have found adverse 
effects only at high exposures (40 milligram IPBC per kilogram body 
weight per day or greater). IPBC is of slight acute toxicity to birds 
but is highly to very highly toxic to fish and other aquatic organisms. 
Chlorpyrifos phosphorothioate is an organophosphate insecticide that is 
moderately toxic to mammals (Smith, 1987). The toxicity occurs 
primarily through inhibition of acetylcholinesterase activity (Klaassen 
et al., 1986). The studies of chlorpyrifos phosphorothioate have not 
found any evidence of carcinogenic effects. Chlorpyrifos 
phosphorothioate is moderately to severely toxic to birds and very 
highly toxic to fish and other aquatic invertebrates (Smith, 1987; 
Mayer and Ellersieck, 1986).
    The potential for human exposure to pesticides used in treatment of 
the wood chips is minimized by adherence to label requirements for 
proper application and to provisions in the rule regarding handling of 
the wood chips. The required adherence to the pesticide label prevents 
excessive exposure to applicators. The EPA has determined that the 
potential for adverse effects on human health is minimal when 
pesticides are applied according to label instructions. The rapid 
degradation of the pesticides results in steadily decreasing residues 
during transit. A covered conveyor belt moves the wood chips during 
unloading to expedite the process and minimize potential human 
exposure. Workers associated with the unloading activity are required 
to wear protective clothing and safety glasses. The covered conveyor 
belt is designed to prevent wood chips from spilling, falling, or being 
blown from the means of conveyance.
    Although the wood chips may still have some residual pesticide 
residues before processing, the heat treatment and bleaching associated 
with the pulp and paper process would eliminate any remaining residues. 
Therefore, the potential for exposure to pesticide residues is limited 
to the personnel involved in treating the wood chips in Chile and to 
the personnel involved in moving the treated wood chips. The required 
safety precautions, protective clothing, and safety glasses preclude 
unacceptable pesticide exposures.
    Exposure of nontarget species to residues from treated wood chips 
is minimal. The treatment and transport procedures preclude the 
presence of nontarget wildlife. Although wood chips that have been 
unloaded may be stored on a paved surface for up to 45 days, the 
remaining residues would be low. Birds and other terrestrial nontarget 
wildlife are unlikely to bother the wood chips with the frequent human 
activity on the property. The remaining residues (primarily 
chlorpyrifos) strongly adsorb to the organic matter in the wood chips, 
and this adsorption minimizes movement of residues in runoff following 
precipitation. In addition, water runoff is collected from the paved 
pads where the wood chips would be stored and is treated to prevent any 
environmental contamination of surrounding water bodies. This prevents 
any potential exposure to aquatic organisms.
    Comment--Fumigated Wood Chips From Brazil Allowed Importation Into 
Louisiana. One commenter stated that wood chips from Brazil are 
currently being imported through Mobile, AL, into Louisiana subject 
only to fumigation in the ship's hold. The commenter asked whether such 
importation is safe without the surface pesticide treatment in the 
proposed rule and, if so, why the surface pesticide treatment, instead 
of fumigation, would be needed for wood chips from Chile.
    Response: Based on the permit issued for this importation and 
records obtained from the State Plant Health Director in Louisiana, we 
have determined that two shipments of Caribbean pine chips from Brazil 
were imported into Mobile, AL, in 1997, and were then trucked to a 
paper mill in Bogaloosa, LA, where the chips were processed. The wood 
chips were derived from live, healthy, tropical species of plantation-
grown trees grown in tropical areas, and, therefore, were not required 
by APHIS to be fumigated, in accordance with Sec. 319.40-6(c)(1)(i) of 
the regulations. The shipments also met all of the other requirements 
of Sec. 319.40-6(c) (e.g., no other regulated articles in the holds; 
movement to the paper mill under a compliance agreement designed to 
prevent spread of plant pests during and after movement to the mill; 
processed within 30 days after arrival at the mill). The wood chips 
moved in sealed trucks from the port of entry to the destination paper 
mill where they were processed into manufactured goods. This 
importation was therefore in compliance with the regulations. As 
discussed in the proposed rule, the surface pesticide treatment was 
proposed as another alternative for importing wood chips from Chile, 
not a replacement for the current requirements contained in 
Sec. 319.40-6(c) for importing wood chips from all sources. Therefore, 
this importation does not affect the basis for the proposed rule for 
importing wood chips from Chile subject to a surface pesticide spray 
and other requirements.
    Therefore, for the reasons given in the proposed rule and in this 
document, we are adopting the proposed rule as a final rule with the 
changes discussed in this document.

Executive Order 12866

    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.

[[Page 21123]]

    Set forth below are the economic analysis and cost-benefit analysis 
prepared for this rule in accordance with Executive Order 12866, as 
well as the final regulatory flexibility analysis regarding the 
economic effects of this rule on small entities, prepared in accordance 
with 5 U.S.C. 604.

Discussion

    Under the Federal Plant Pest Act (7 U.S.C. 150aa-150jj), the 
Secretary of Agriculture is authorized to promulgate regulations 
requiring inspection of products and articles as a condition of their 
movement into or through the United States and imposing other 
conditions upon such movement, in order to prevent the dissemination of 
plant pests into the United States.
    This rule amends the regulations for importing wood chips to allow 
the importation of Pinus radiata wood chips from Chile if the surfaces 
of the wood chips are treated with a pesticide approved by the 
Administrator for use on wood chips from Chile. Allowing the use of a 
surface pesticide treatment will make it possible to effectively treat 
large shipments of wood chips. Wood chips are used for making pulp used 
in the production of paper. U.S. pulp producers want to import Pinus 
radiata wood chips from Chile because these wood chips produce a high 
quality pulp. However, there is no treatment in the regulations that is 
both practical and effective in treating large shipments of these wood 
chips.
    APHIS regulations in place until now have called for, along with 
other requirements, heat treatment or fumigation of imported wood 
materials. While these safeguards are appropriate for most wood 
materials, they are less useful for wood chips. Heating of wood chips 
is time consuming and decreases the quality of the chips. Fumigation of 
large shipments of wood chips is not economically practicable. 
Therefore, importation of Pinus radiata wood chips from Chile will be 
allowed following their surface treatment with a specified pesticide 
mixture. As discussed below, the efficacy of this treatment is 
demonstrated by 16 trial shipments of surface-treated Pinus radiata 
wood chips from Chile that have arrived without pests since February 
1995.
    Approximately $40 million worth of wood chips is imported into the 
United States each year for use in making pulp for paper production. 
Coniferous wood chip imports by the United States comprise less than 
one percent of domestic production.\1\ About 30 percent of U.S. wood 
chip production takes place in the Pacific Northwest.\2\ Wood chip 
imports to the United States have been mainly to the Pacific Northwest, 
although there have been recent shipments of Caribbean pine from Brazil 
that have entered through the port at Mobile, AL.
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    \1\ Robert Flynn, private wood industry consultant, personal 
communication, drawing in part on information from ``Southern 
Pulpwood Production, 1996,'' by Tony Johnson, USDA Forest Service, 
Southern Research Station, Resource Bulletin SRS-21.
    \2\ Richard Haynes, USDA Forest Service, personal communication.
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    Wood chips are used mainly in the manufacture of pulp that is then 
used to make paper and panel products.\3\ Test shipments of Pinus 
radiata wood chips from Chile during the last 3 years have been so 
utilized, and it is expected that future shipments facilitated by the 
surface pesticide treatment in this rule will also be used to make 
pulp.\4\
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    \3\ Chris Twarok, Department of Commerce, personal 
communication. Landscaping is a secondary use.
    \4\ J.S. Morrell, Department of Forest Products, Oregon State 
University, personal communication.
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    The demand for wood chips used by pulp mills is a derived demand, 
depending on the market for pulp. \5\ While the long-term demand for 
pulp in the United States and internationally is expected to continue 
to expand (with increasing reliance on wood from plantation forests), 
pulp and wood chip prices can be volatile in the short term, causing 
relatively abrupt market changes. The variable demand for wood chips 
during the few years the Chilean test shipments have taken place 
illustrates how rapidly market conditions can change. Coniferous wood 
chip imports in 1995 by the United States nearly tripled those of 1994, 
with imports from Canada rising more than threefold, and test shipments 
from Chile doubling and displacing 1994 imports from Mexico.\6\ The 
increase in demand was reflected in a 60 percent increase in the price 
paid in the United States for Chilean wood chips, from $42 per ton in 
1994, to $67 per ton in 1995.\7\ Comparable U.S. prices for 
domestically produced wood chips in these 2 years were $56 per ton in 
1994 and $72 per ton in 1995.\8\ Since then, prices have receded due to 
the current abundant supply of wood chips.
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    \5\ The pulp fiber industry has traditionally been a softwood 
chip market, but this has been changing in recent years in the 
eastern United States. Pulp mills in the southeastern United States 
are relying increasingly on hardwood chips, where only softwood 
chips were once used. Long-term rising demand for wood chips is also 
reflected in an increasing number of ``chipping'' mills producing 
only wood chips; at least 100 of more than 140 wood chip mills in 
the southeastern United States have been constructed within the past 
decade. (Dennis Haldeman and Doug Sloane, personal communications).
    \6\ U.S. wood chip import and export statistics from Department 
of Commerce, Bureau of the Census.
    \7\ FAS Global Agricultural Trade System, using data from the 
United Nations Statistical Office.
    \8\ Richard Haynes, USDA Forest Service, personal communication. 
Domestic prices based on export prices for the Columbia-Snake 
Customs District, adjusted to ``green'' metric tons. Without 
consideration of transportation costs, these quoted prices may 
overestimate the price realized at a Pacific Northwest pulp mill for 
U.S. chips and underestimate the price realized for Chilean chips. 
Moreover, average yearly prices conceal seasonal variations.
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    Chile's coniferous wood chip exports to the United States, 1994-
1996, and Chile's share of coniferous wood chip imports by the United 
States are as follows: \9\
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    \9\ GAS Global Agricultural Trade System, using data from the 
United Nations Statistical Office.

------------------------------------------------------------------------
                                                              Percent of
                                                Metric tons    imports
------------------------------------------------------------------------
168...........................................         1994        00.05
339,665.......................................         1995        48.29
329,387.......................................         1996        44.06
------------------------------------------------------------------------

    In 1994, 57 percent of coniferous wood chip imports by the United 
States were from Mexico and 43 percent were from Canada. In 1995, pulp 
prices reached record levels, with U.S. coniferous wood chip imports 
more than doubling from the year before, to 703,000 metric tons from 
331,000 metric tons. That year, no coniferous wood chips were imported 
from Mexico, 48 percent of imports came from Chile, 49 percent came 
from Canada, and 3 percent came from Brazil. In 1996, Canada's share of 
U.S. coniferous wood chip imports increased to 56 percent, 44 percent 
came from Chile, and none was received from Brazil.
    Production of Pinus radiata wood chips in the United States is 
essentially nil, due to the relatively small region in which it grows 
well, about 6 miles inland along the coastal fog belt of central 
California (hence its common name, the Monterey pine). There may be 
some production from sawmill residues, but the quantity, if any, is 
negligible. No pulp mills are currently using domestically produced 
Pinus radiata wood chips.\10\
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    \10\ Robert Rummel, American Pulpwood Association, Robert Flynn, 
Robert Flynn and Associates, personal communications.
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    Economic effects on the U.S. wood chip industry of potential 
Chilean imports, therefore, depend on the substitutability of Pinus 
radiata wood chips for other softwood or for hardwood chips. Instances 
in which Pinus radiata and hardwood chips

[[Page 21124]]

might substitute for each other are relatively few. However, Pinus 
radiata wood chips can generally be used in place of other coniferous 
chips such as lodgepole pine and ponderosa pine, although milling 
adjustments may be required--and costs incurred--due to differences in 
resin content.\11\
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    \11\ Chris Twarok, Department of Commerce, personal 
communication.
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    The test shipments of Chilean wood chips were received by pulp 
mills in the Pacific Northwest. This region is expected to continue to 
be the destination of future shipments, given the additional 
transportation costs that would be incurred by pulp mills in the 
eastern and southeastern United States. With sales regionally 
concentrated, little economic effect from this rule is expected outside 
the Pacific Northwest.
    In sum, the test shipments from Chile have shown the value to 
Pacific Northwest pulp mills of Chilean wood chips in supplementing 
domestic and Canadian wood chip supplies when the price of pulp makes 
such shipments economically feasible. Pulp mills able to adjust milling 
processes to utilize Pinus radiata wood chips can benefit by making 
profitable use of Chilean imports when other sources are insufficient 
or more costly. As now described, Chile has the production capacity to 
be a reliable source of Pinus radiata wood chips to the United States.
    Chile's wood chip industry grew significantly during the 1980s, 
with production increasing more than tenfold, from 0.44 million tons in 
1984, to 5.03 million tons in 1990.\12\ Chile's wood chip exports 
during this period rose from none in 1984, to 2.23 million tons (44 
percent of production) in 1990. During the first half of the 1990s, 
both production and export levels fluctuated, but without the dramatic 
increases of the 1980s. Annual production between 1990 and 1995 
averaged about 5.80 million tons, and exports averaged about 3.05 
million tons (about 53 percent of production).
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    \12\ Information on Chile's wood chip production and exports 
taken from Wood Products: International Trade and Foreign Markets, 
FAS Circular Series WP 3-97, August 1997, Table 15.
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    Pinus radiata wood chips comprise a minor share of Chile's wood 
chip exports.\13\ Of the approximately 3 million tons of wood chips 
exported annually between 1990 and 1996, Pinus radiata's share averaged 
12 percent. Between January and August, 1997, 10 percent of Chile's 
wood chip exports were Pinus radiata.
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    \13\ Information on Chile's Pinus radiata wood chip exports from 
APHIS, IS.
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    Japan was, by far, the principal importer of Chilean wood chips 
from 1990 to 1996. (Country destinations by species are not known for 
these years.) From 1990 to 1994, an average of 96 percent of Chile's 
wood chip exports were received by Japan. With the test shipments of 
Pinus radiata to the United States in 1995 and 1996, Japan's share of 
Chile's wood chip exports fell to 87 percent and 83 percent, 
respectively; and the U.S. share for these 2 years was 9 percent and 11 
percent.
    From January to August, 1997, Japan's share of Chile's wood chip 
exports was 89 percent. The United States and Japan each received about 
one-half of Chile's Pinus radiata wood chip exports during this 8-month 
period.
    Chile's development of its forest products sector rests to a large 
degree on the success of Pinus radiata; its share of Chile's wood chip 
exports is expected to increase. By 1996 there were approximately 
1,387,000 hectares planted in Pinus radiata, representing 75 percent of 
plantation plantings and 15 percent of Chile's forest resources 
including native forest.\14\ This pine species matures at 20 to 24 
years in Chile (thinnings are available for use after 15 years), 
compared to 30 years in New Zealand and Australia, and 40 to 60 years 
in North America and Europe. Production and exports are expected to 
peak during the coming decade, when trees on most of the Pinus radiata 
plantations will be ready to be harvested.
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    \14\ ``Forest Products, Annual Report,'' Office of Agricultural 
Affairs, American Embassy, Santiago, AGR Number CI7033, 1997.
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    One set of projections describing the volume of Pinus radiata wood 
chips that could be exported to the United States over the coming 4 
years, assuming favorable prices, is as follows: \15\
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    \15\ Fernando Hartwig, Inversiones Forestales C.C.A., personal 
communication.

                Potential Pinus radiata Wood Chip Exports
                            [in million tons]
------------------------------------------------------------------------
               Year                   From Chile to the United States
------------------------------------------------------------------------
1999.............................  0.60 to 1.00.
2000.............................  1.00 to 1.20.
2001.............................  0.90 to 1.00.
2002.............................  0.85 to 0.90.
------------------------------------------------------------------------

    Realization of these export levels will depend on the demand for 
Pinus radiata wood chips by U.S. pulp mills. As has been described, 
international short-term demand for pulp fibers can be volatile. When 
prices fell between 1995 and 1996, Chile's forestry sector exports 
declined by 24 percent, mainly because of reduced sales to Japan.
    Chile's stock of Pinus radiata available for harvest will enable 
Pacific Northwest importers to take advantage of a ready source as wood 
chip prices rebound. In 1996, all coniferous wood chip imports by the 
United States totaled about 0.75 million tons, of which 0.33 million 
tons were imported from Chile.\16\ Projected export levels shown above 
would increase U.S. wood chip imports above current levels and 
establish Chile as a major foreign supplier. Wood chip prices in the 
United States will determine whether these projections are overly 
optimistic.
---------------------------------------------------------------------------

    \16\ The United States is a net exporter of coniferous and 
nonconiferous wood chips. Compared to coniferous wood chip imports 
of 0.75 million tons in 1996, the United States exporter 1.78 
million tons. Nonconiferous wood chip imports and exports by the 
United States exhibit an even larger difference, with 1996 imports 
totaling about 55,000 tons and exports at 4.29 million tons. 
(Department of Commerce, Bureau of the Census).
---------------------------------------------------------------------------

Summary

    Benefits from allowing Pinus radiata wood chips to be imported from 
Chile include lower priced wood chips for pulp mills in the Pacific 
Northwest and lower priced products to consumers if lower input prices 
are reflected in lower retail prices. Greater choice among species for 
wood chip raw material is another benefit. Costs associated with risks 
of introducing pests are negligible because the procedures required to 
import Chilean wood chips under this rule are designed to keep the risk 
of importing pests to a negligible level. Since imports will be 
concentrated in the Pacific Northwest, economic effects will be felt 
mainly by wood chip producers and purchasers in the region. Wood chip 
producers may bear revenue losses if they are unable to compete with 
lower cost imports or adjust their product mix.
    Test shipments of Pinus radiata wood chips from Chile to the 
Pacific Northwest during recent years have demonstrated the 
effectiveness of phytosanitary safeguards in this rule, as well as the 
economic feasibility of chip imports from Chile for the region's pulp 
mills. Chile's large and expanding forestry plantations are expected to 
provide a reliable source for future wood chip imports when there is 
sufficient demand. At present, the abundant supply of wood chips in the 
Pacific Northwest precludes imports, a market situation that differs 
dramatically from that of 4 years ago when wood chip prices reached an 
all-time high. Pacific Northwest pulp mills depend primarily on 
domestic wood

[[Page 21125]]

chip suppliers but turn to overseas sources when domestic wood chip 
prices are high. Chilean imports can be expected to be competitively 
marketed when the domestic wood chip supply is low, since Pinus radiata 
wood chips can substitute for most other softwood chips. Some domestic 
wood chip producers may be adversely affected by Chilean imports, but 
the effect is not likely to be widespread; most domestic wood chip 
producers who cannot compete may adjust their product mix away from 
wood chips to other mill products.

Regulatory Flexibility Act

    In accordance with 5 U.S.C. 603, we performed an initial regulatory 
flexibility analysis, which was included in the proposed rule and which 
invited submission of comments and data to assist in a comprehensive 
analysis of the effects of this rule on small entities. We received one 
comment addressing the initial regulatory flexibility analysis. This 
comment stressed that the economics of domestic industries that might 
import wood chips are dynamic and change almost monthly; and, 
therefore, any prediction of import volume would be solely a guess. The 
comment also stated that if Chilean wood chips cost more than domestic 
supplies, they will be sought only if domestic supplies diminish below 
the amount required, and that at that point the owners of pulp mills 
(the major user of wood chips) will make a financial decision whether 
to pay higher prices for imported supplies or close mills. The comment 
also suggested that only a few wood chip consuming businesses located 
near seaports will be likely to import wood chips from Chile, but that 
some of these businesses do require the option of importing Chilean 
wood chips to stay in business.
    We largely agree that these points correctly describe the current 
economic situation regarding importation of Chilean wood chips, and 
have taken the comment into account in the final regulatory flexibility 
analysis set out below. However, we note that if for any reason there 
is a significant decrease in domestic wood chip production, or a 
significant increase in their price, many more wood chip consumers, 
regardless of whether they are located near seaports, may decide to 
import wood chips from Chile.
    The Regulatory Flexibility Act requires consideration of the 
potential economic effects of rules on small businesses, organizations, 
and governmental jurisdictions. In this instance, small entities 
directly affected will be U.S. wood chip producers and pulp mills in 
the Pacific Northwest.
    Wood chip production is included in the SIC category for firms 
operating sawmills and planing mills. In most cases, wood chips are a 
byproduct of lumber production. A mill will vary its level of wood chip 
production (compared to other products) based on whether wood chip 
prices are high or low at a particular point in time. In the Pacific 
Northwest, about 150 mills produce wood chips (90 in Oregon and 60 in 
Washington), but more than one may be owned by the same firm.\17\ Data 
on the exact number of firms is not available. Sawmills and planing 
mills that employ 500 people or fewer are designated by the Small 
Business Administration as ``small.'' In 1994, there were 5,241 firms 
operating sawmills and planing mills in the United States, of which 
5,149 (more than 98 percent) were small.\18\ Estimated annual receipts 
of these 5,149 ``small'' firms totaled about $14.88 billion, which was 
62 percent of total annual receipts of about $23.93 billion earned by 
all sawmills and planing mills. In the absence of information on mill 
firm sizes specific to Oregon and Washington, it is assumed that most 
sawmills in the Pacific Northwest are also small entities.
---------------------------------------------------------------------------

    \17\ Richard Haynes, USDA Forest Service, personal 
communication.
    \18\ This is the latest year for which data is available from 
the ``SBA Office of Advocacy, Statistics on Small Business'' Web 
home page.
---------------------------------------------------------------------------

    Adverse economic effects on most ``small'' U.S. wood chip producers 
due to this rule will be minor. The Chilean imports are expected to be 
sold in the Pacific Northwest, thereby affecting a geographical subset 
of all wood chip producers. Adverse economic effects on Pacific 
Northwest wood chip producers will depend on the ability of such 
producers to find lower priced raw materials to produce wood chips or 
otherwise reduce cost, and the extent of their reliance on wood chips 
for their net revenues. Producers of those wood chips that are 
substitutes for Pinus radiata chips will find their net returns reduced 
when import prices are low. As raw materials used for wood chip 
production grow increasingly scarce and expensive in the Pacific 
Northwest, those wood chip producers that compete with lower priced 
imports will face adjustment pressures. However, U.S. wood chip 
producers already feel competition from other international sources.
    It is estimated that less than 5 percent of wood chip producers in 
the Pacific Northwest are ``chipping'' mills devoted solely to wood 
chip production.\19\ However, during periods of high wood chip demand, 
such as 4 years ago, many sawmills may be converted largely to wood 
chip production.
---------------------------------------------------------------------------

    \19\ Richard Haynes, USDA Forest Service, personal 
communication.
---------------------------------------------------------------------------

    Turning to the pulp mills, themselves, there were 37 firms 
operating pulp mills in the United States in 1994. Often more than one 
pulp mill is owned by a single firm. Pulp mill firms employing 750 
people or fewer are designated by the Small Business Administration as 
``small.'' In 1994, between 20 and 25 of the 37 firms were small, that 
is, between 54 and 68 percent of the total number of firms. Estimated 
annual receipts of these 20 to 25 ``small'' firms totaled between about 
$383 million and about $1.12 billion, which represented between 7 
percent and 21 percent of total annual receipts by all pulp mills of 
about $5.30 billion. About 10 percent of U.S. pulp mills are in the 
Pacific Northwest.
    Due to resin-content differences, pulp mills cannot use various 
species of wood chips indiscriminately. Pulp mills designed to process 
wood chips of Pinus radiata or similar species should, therefore, be 
the only ones directly affected by this rule. It is estimated that less 
than one-half of U.S. pulp mills could use Pinus radiata wood 
chips.\20\ Assuming an equal distribution of these pulp mills among all 
pulp mills, size-wise, ``small'' pulp mill firms directly affected 
would then number between 10 and 13, based on 1994 data. These numbers 
are likely to be an overestimation, since not all of the ``small'' 
firms that could utilize Pinus radiata wood chips are necessarily 
located in the Pacific Northwest. Regardless of the number of affected 
``small'' pulp mill firms, having Chile as a source of Pinus radiata 
wood chips should be beneficial to pulp mills and their customers, to 
the extent lower chip prices are reflected in lower product prices.
---------------------------------------------------------------------------

    \20\ Byron Lundi, Georgia-Pacific, personal communication.
---------------------------------------------------------------------------

    Test shipments of Pinus radiata wood chips from Chile have been 
successfully imported by pulp mills in the Pacific Northwest. This rule 
will enable such shipments, using a surface pesticide treatment, to 
continue to take place when economically feasible. Although Pinus 
radiata wood chip production in the United States is negligible, this 
species can substitute for other species as a pulp fiber, given certain 
milling adjustments. Off-shore wood chip sources to supplement domestic 
supply are advantageous to pulp mills, given

[[Page 21126]]

the volatility of pulp prices. Chile's wood products industry has a 
large export component and is expected to be a reliable source when 
pulp prices prompt wood chip exports to the United States. Adverse 
economic effects for wood chip producers in the Pacific Northwest will 
be felt by those producers who are unable to reduce costs to meet 
import competition and who rely heavily on revenues from wood chips.
    No figures are available concerning potential costs of pest 
introductions through importation of Pinus radiata wood chips from 
Chile. A pest risk assessment for the importation of Pinus radiata logs 
from Chile (``Pest Risk Assessment of the Importation of Pinus radiata, 
Nothofagus dombeyi, and Laurelia philippiana Logs from Chile,'' USDA 
Forest Service, Miscellaneous Publication No. 1517, September 1993) 
provides the phytosanitary basis for allowing the wood chips to be 
imported if they are treated as prescribed. The pest risk assessment 
supports our determination that Pinus radiata wood chips may be 
imported from Chile with negligible risk.
    The pest risk assessment reported that in sharp contrast to native 
forests in Chile, that country's Pinus radiata plantations are 
relatively free of major insect and disease problems. Exceptions 
include the recently introduced European pine shoot moth (Rhyaccionia 
buoliana), Hylurgus ligniperda and two other species of European bark 
beetles, several needle disease fungi (Dothistroma pini and 
Lophodermium spp., among others), diplodia shoot blight (Sphaeropsis 
sapinea), and two species of blue stain fungi (Ophiostoma picea and O. 
piliferum). The wood wasp Sirex noctilio (considered to be the most 
important pest on Pinus radiata logs exported from New Zealand) and 
pine wood nematodes (Bursaphelenchus spp.) have yet to be found in 
Chile.
    Among the insect pests of Pinus radiata analyzed in detail in the 
pest risk assessment, only the bark beetle Hylurgus ligniperda was 
considered to have a high pest risk potential. Moderate pest risk 
potentials were assigned to Rhyephenes spp., Ernobius mollis, Urocerus 
gigas gigas, Neotermes chilensis, Porotermes quadricollis, Colobura 
alboplagiata, and Buprestis novemmaculata. Among the pathogens, the 
stain fungi (Ophiostoma spp.) were found to merit a moderate to high 
pest risk potential, whereas the complex of needle diseases 
(Dothistroma pini and other species) and diplodia shoot blight 
(Sphaeropsis sapinea) were rated as moderate risks. Other pathogens 
were considered to be of low risk. One weed of concern (Imperata 
condensata, considered a variety of I. cylindrica or cogongrass) was 
identified.
    Pests potentially affecting untreated Pinus radiata wood chips are 
a subset of those identified in the pest risk assessment, since wood 
chip production will physically remove or destroy most pests that could 
be present in the logs. Treatment with the surface pesticide required 
by this rule should prevent entry into the United States of any harmful 
insects or fungi that might remain.
    The Pacific Northwest's coastal ranges and Cascade Mountains have 
some of the highest quality natural and planted conifer forests in the 
world, producing commodities ranging from pulp and paper, to lumber for 
construction, to ornamentals and Christmas trees. Introduced pests such 
as those described could affect forestry industries directly by causing 
damage or indirectly by curtailing commerce through quarantines.
    Some potential costs of foreign timber pests have been estimated in 
other instances. For example, a pest risk assessment concerning 
Siberian timber imports estimated that the introduction of a single 
pest, larch canker, could cause direct timber losses of $129 million 
annually. The same study estimated that a worst-case scenario involving 
heavy establishment of exotic defoliators in the United States could 
cost $58 billion.\21\
---------------------------------------------------------------------------

    \21\ ``Importation of Logs, Lumber, and Other Unmanufactured 
Wood Articles: Final Supplemental to the Environmental Impact 
Statement, May 1988,'' USDA APHIS.
---------------------------------------------------------------------------

    Concerning consumer and producer effects of allowing Pinus radiata 
wood chips to be imported from Chile, data are insufficient to permit 
confident estimation of welfare changes. Time-series data for the 
estimation of elasticities of supply and demand are not available. 
Circumstantial evidence, however, suggests that pulp producers and pulp 
product consumers benefit from Pinus radiata wood chip imports from 
Chile, when their relative price is low compared to that of other wood 
chip species or sources. The test shipments from Chile resulted in U.S. 
wood chip imports worth $22.8 million and $19.3 million in 1995 and 
1996, respectively. These shipments represented over 48 and 44 percent 
of all U.S. coniferous wood chip imports in those 2 years.\22\
---------------------------------------------------------------------------

    \22\ FAS Global Agricultural Trade System, using data from the 
United Nations Statistical Office.
---------------------------------------------------------------------------

    The continuing reduction in timber sources in the Pacific Northwest 
will encourage more wood imports in the future, and Chile's expanded 
commercial forestry plantings promise a prominent role for that country 
as a wood products exporter. Effects on prices, if any, from imports 
for U.S. wood chip producers should be very small, since coniferous 
wood chip imports are less than one percent of U.S. production.
    Moreover, trade statistics indicate that U.S. coniferous wood chip 
producers are finding overseas markets as profitable as their Chilean 
counterparts. U.S. coniferous wood chip exports in 1995 were valued at 
more than $222 million, and in 1996, at more than $181 million. As is 
true for Chile, the principal overseas coniferous wood chip market for 
the United States is Japan.\23\
---------------------------------------------------------------------------

    \23\ FAS Global Trade System, using data from the United Nations 
Statistical Office.
---------------------------------------------------------------------------

    This rule includes a reporting and recordkeeping requirement that 
wood chips imported from Chile must be accompanied by a certificate 
issued by the Government of Chile, stating that all the applicable 
requirements of the regulations have been met.
    We considered taking no action as an alternative to this rule. The 
no action alternative was rejected because we believe that the 
provisions of this rule will provide more supply alternatives for wood 
chip consumers, and make compliance easier for regulated individuals, 
without increasing the risk of introducing a plant pest into the United 
States.

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

    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 importation of Pinus radiata wood chips from 
Chile under the conditions specified in this rule will not present a 
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

[[Page 21127]]

prepared in accordance with: (1) The National Environmental Policy Act 
of 1969, as amended (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), and (4) APHIS' NEPA Implementing 
Procedures (7 CFR part 372).
    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(d) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the information collection or 
recordkeeping requirements included in this final rule have been 
approved by the Office of Management and Budget (OMB). The assigned OMB 
control number is 0579-0135.

List of Subjects in 7 CFR Part 319

    Bees, Coffee, Cotton, Fruits, Honey, Imports, Logs, Nursery stock, 
Plant diseases and pests, Quarantine, Reporting and recordkeeping 
requirements, Rice, Vegetables.

    Accordingly, we are amending 7 CFR part 319 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 definition of the word fines is added in 
alphabetical order to read as follows:


Sec. 319.40-1  Definitions.

* * * * *
    Fines. Small particles or fragments of wood, slightly larger than 
sawdust, that result from chipping, sawing, or processing wood.
* * * * *

    3. In Sec. 319.40-6, paragraph (c) is revised to read as follows:


Sec. 319.40-6  Universal importation options.

* * * * *
    (c) Wood chips and bark chips. (1) From Chile. Wood chips from 
Chile that are derived from Monterey or Radiata pine (Pinus radiata) 
logs may be imported in accordance with Sec. 319.40-6(c)(2) or in 
accordance with the following requirements:
    (i) The wood chips must be accompanied by a certificate stating 
that the wood chips meet the requirements in paragraphs (c)(1)(i)(A) 
through (c)(1)(i)(C) of this section.
    (A) The wood chips were treated with a surface pesticide treatment 
in accordance with Sec. 319.40-7(e) within 24 hours after the log was 
chipped and were retreated with a surface pesticide treatment in 
accordance with Sec. 319.40-7(e) if more than 30 days elapsed between 
the date of the first treatment and the date of export to the United 
States.
    (B) The wood chips were derived from logs from live, healthy, 
plantation-grown trees that were apparently free of plant pests, plant 
pest damage, and decay organisms, and the logs used to make the wood 
chips were debarked in accordance with Sec. 319.40-7(b) before being 
chipped.
    (C) No more than 45 days elapsed from the time the trees used to 
make the wood chips were felled to the time the wood chips were 
exported.
    (ii) During shipment to the United States, no other regulated 
articles (other than solid wood packing materials) are permitted in the 
holds or sealed containers carrying the wood chips. Wood chips on the 
vessel's deck must be in a sealed container.
    (iii) The wood chips must be consigned to a facility in the United 
States that operates under a compliance agreement in accordance with 
Sec. 319.40-8. The following requirements apply upon arrival of the 
wood chips in the United States:
    (A) Upon arrival in the United States, the wood chips must be 
unloaded by a conveyor that is covered to prevent the chips from being 
blown by the wind and from accidental spillage. The facility receiving 
the wood chips must have a procedure in place to retrieve any chips 
that fall during unloading.
    (B) If the wood chips must be transported after arrival, the chips 
must be covered or safeguarded in a manner that prevents the chips from 
spilling or falling off the means of conveyance or from being blown off 
the means of conveyance by wind.
    (C) The wood chips must be stored at the facility on a paved 
surface and must be kept segregated from other regulated articles from 
the time of discharge from the means of conveyance until the chips are 
processed. The storage area must not be adjacent to wooded areas.
    (D) The wood chips must be processed within 45 days of arrival at 
the facility. Any fines or unusable wood chips must be disposed of by 
burning within 45 days of arrival at the facility.
    (2) From locations other than certain places in Asia. Wood chips 
and bark chips from any place except places in Asia that are east of 
60 deg. east longitude and north of the Tropic of Cancer may be 
imported in accordance with this paragraph.
    (i) The wood chips or bark chips must be accompanied by an importer 
document stating that the wood chips or bark chips were either:
    (A) Derived from live, healthy, tropical species of plantation-
grown trees grown in tropical areas; or
    (B) Fumigated with methyl bromide in accordance with Sec. 319.40-
7(f)(3), heat treated in accordance with Sec. 319.40-7(c), or heat 
treated with moisture reduction in accordance with Sec. 319.40-7(d).
    (ii) During shipment to the United States, no other regulated 
articles (other than solid wood packing materials) are permitted in the 
holds or sealed containers carrying the wood chips or bark chips. Wood 
chips or bark chips on the vessel's deck must be in a sealed container; 
Except that: If the wood chips or bark chips are derived from live, 
healthy, plantation-grown trees in tropical areas, they may be shipped 
on deck if no other regulated articles are present on the vessel and 
the wood chips or bark chips are completely covered by a tarpaulin 
during the entire journey directly to the United States.
    (iii) The wood chips or bark chips must be free from rot at the 
time of importation, unless accompanied by an importer document stating 
that the entire lot was fumigated with methyl bromide in accordance 
with Sec. 319.40-7(f)(3), heat treated in accordance with Sec. 319.40-
7(c), or heat treated with moisture reduction in accordance with 
Sec. 319.40-7(d).
    (iv) Wood chips or bark chips imported in accordance with this 
paragraph must be consigned to a facility operating under a compliance 
agreement in accordance with Sec. 319.40-8. The wood chips or bark 
chips must be burned, heat treated in accordance with Sec. 319.40-7(c), 
heat treated with moisture reduction in accordance with Sec. 319.40-
7(d), or otherwise processed in a manner that will destroy any plant 
pests associated with the wood chips or bark chips within 30 days of 
arrival at the facility. If the wood chips or bark chips are to be used 
for mulching or

[[Page 21128]]

composting, they must first be fumigated in accordance with 
Sec. 319.40-7(f)(3), heat treated in accordance with Sec. 319.40-7(c), 
or heat treated with moisture reduction in accordance with Sec. 319.40-
7(d).
* * * * *

    4. In Sec. 319.40-7, paragraph (e) is revised to read as follows.


Sec. 319.40-7  Treatments and safeguards.

* * * * *
    (e) Surface pesticide treatments. All United States Environmental 
Protection Agency registered surface pesticide treatments are 
authorized for regulated articles imported in accordance with this 
subpart, except that Pinus radiata wood chips from Chile must be 
treated in accordance with Sec. 319.40-7(e)(2). Surface pesticide 
treatments must be conducted in accordance with label directions 
approved by the United States Environmental Protection Agency. Under 
the following circumstances, surface pesticide treatments must also be 
conducted as follows:
    (1) Heat treated logs. When used on heat treated logs, a surface 
pesticide treatment must be first applied within 48 hours following 
heat treatment. The surface pesticide treatment must be repeated at 
least every 30 days during storage of the regulated article, with the 
final treatment occurring no more than 30 days prior to departure of 
the means of conveyance that carries the regulated articles to the 
United States.
    (2) Pinus radiata wood chips from Chile. When used on Pinus radiata 
wood chips from Chile, a surface pesticide consisting of the following 
must be used: A mixture of a fungicide containing 64.8percent of the 
active ingredient didecyl dimethyl ammonium chloride and 7.6 percent of 
the active ingredient 3-iodo-2-propynl butylcarbamate and an 
insecticide containing 44.9percent of the active ingredient 
chlorpyrifos phosphorothioate. The wood chips must be sprayed with the 
pesticide so that all the chips are exposed to the chemical on all 
sides. During the entire interval between treatment and export, the 
wood chips must be stored, handled, or safeguarded in a manner that 
prevents any infestation of the wood chips by plant pests.
* * * * *

    Done in Washington, DC, this 17th day of April 2000.
Bobby R. Acord,
Acting Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 00-9937 Filed 4-19-00; 8:45 am]
BILLING CODE 3410-34-P