[Federal Register Volume 66, Number 137 (Tuesday, July 17, 2001)]
[Rules and Regulations]
[Pages 37114-37117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17840]


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DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

7 CFR Part 353

[Docket No. 99-100-3]


Export Certification; Canadian Solid Wood Packing Materials 
Exported From the United States to China

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Interim rule and request for comments.

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SUMMARY: We are amending the export certification regulations for the 
certification of softwood (coniferous) packing materials used with 
goods exported from the United States to China. Prior to this interim 
rule, the

[[Page 37115]]

packing materials had to be certified as having been heat treated in 
the United States. We are allowing certification of packing materials 
that were heat treated in Canada if that treatment is certified by the 
Canadian Food Inspection Agency to meet requirements established by the 
Government of the People's Republic of China. This change is necessary 
to facilitate the exportation to China of the large volume of United 
States goods that is shipped using Canadian-origin coniferous solid 
wood packing materials. This change will affect persons who use 
coniferous solid wood packing materials to export goods from the United 
States to the People's Republic of China.

DATES: This interim rule is effective July 11, 2001. We invite you to 
comment on this docket. We will consider all comments that we receive 
by September 17, 2001 .

ADDRESSES: Please send four copies of your comment (an original and 
three copies) to: Docket No. 99-100-3, Regulatory Analysis and 
Development, PPD, APHIS, Suite 3C03, 4700 River Road, Unit 118, 
Riverdale, MD 20737-1238.
    Please state that your comment refers to Docket No. 99-100-3.
    You may read any comments that we receive on this docket in our 
reading room. The reading room is located in room 1141 of the USDA 
South Building, 14th Street and Independence Avenue SW., Washington, 
DC. Normal reading room hours are 8 a.m. to 4:30 p.m., Monday through 
Friday, except holidays. To be sure someone is there to help you, 
please call (202) 690-2817 before coming.
    APHIS documents published in the Federal Register, and related 
information, including the names of organizations and individuals who 
have commented on APHIS dockets, are available on the Internet at 
http://www.aphis.usda.gov/ppd/rad/webrepor.html.

FOR FURTHER INFORMATION CONTACT: Mr. Frederick Thomas, Export 
Specialist, PIM, PPQ, APHIS, 4700 River Road Unit 140, Riverdale, MD 
20737-1236; (301) 734-8367.

SUPPLEMENTARY INFORMATION:

Background

    The export certification regulations contained 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. 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 certificate, if warranted.
    In a final rule that was effective and published in the Federal 
Register on August 17, 2000 (65 FR 50128-50131), we amended the 
regulations to create a new certificate of heat treatment and to 
establish procedures for issuing it to exporters who have heat treated 
their coniferous solid wood packing materials (SWPM) in order to ship 
goods to the People's Republic of China. We took this action in 
response to a new requirement imposed by the People's Republic of China 
that SWPM exported from the United States to China be certified as 
having been heat treated. As stated in that final rule, the information 
collection or recordkeeping requirements associated with the new 
certificate have been approved by the Office of Management and Budget 
(OMB) under OMB control number 0579-0147. One of the requirements of 
the final rule was that, to be certified, coniferous SWPM must be heat 
treated in the United States. That requirement was based on our belief 
that it would be extremely difficult for U.S. exporters to document 
that a heat treatment has been properly performed if it has been 
performed in a foreign country.
    Since the final rule was published, we have received numerous 
requests to amend it to provide a means to certify coniferous SWPM that 
originated and was heat treated in Canada, but is later used to export 
U.S. goods to China. A great deal of the coniferous SWPM used in the 
United States is of Canadian origin. According to USDA's Foreign 
Agricultural Service (FAS), about 21 percent of coniferous SWPM used in 
the United States in 1999 was of Canadian origin. In that year--the 
last full year in which U.S. exporters could effectively use Canadian-
origin coniferous SWPM in shipments to China--about 35 million pallets 
were imported from Canada, compared to a total U.S. inventory of about 
168 million reusable pallets. The final rule's requirement that only 
coniferous SWPM treated in the United States may be certified causes 
adverse impacts on large and small U.S. exporters by denying them 
continued access to Canadian origin coniferous SWPM that is readily 
available at attractive prices for use in shipments to China.
    We have examined this problem to determine whether there is a way 
for APHIS to certify that coniferous SWPM from Canada has been properly 
heat treated in accordance with the requirements of the People's 
Republic of China. Before issuing such certificates, APHIS must be 
confident that the required treatment was actually performed, and there 
must be sufficient documentation of the treatment. As discussed in the 
final rule of August 17, 2000, it is not practical for APHIS to 
coordinate or rely on records maintained by a multitude of foreign heat 
treatment facilities. However, the Canadian Food Inspection Agency 
(CFIA) is willing to provide U.S. exporters who use coniferous SWPM 
treated in Canada with a certificate documenting that the SWPM has been 
heat treated. CFIA has developed a heat treatment certification process 
for coniferous SWPM that meets the requirements of both APHIS and 
China. CFIA will issue a certificate only for coniferous SWPM that has 
been heat treated in accordance with the requirements of the People's 
Republic of China--i.e., a treatment process that increases the minimum 
core wood temperature to 56 degrees Celsius for 30 minutes. This CFIA 
certificate would provide the U.S. exporter with the necessary 
``documentation showing that heat treatment was performed on packing 
materials,'' as required by Sec. 353.7(e)(4). With this documentation 
on file, the exporter could apply for the APHIS heat treatment 
certificate required by the People's Republic of China. This Canadian 
heat treatment certification process for coniferous SWPM would enable 
U.S. exporters to use Canadian-origin heat treated SWPM in shipments to 
China.
    To accomplish this change, we are amending the definition of 
certificate of heat treatment in Sec. 353.1 of the regulations. In the 
part of the definition that states that the certificate endorses ``the 
statement of an exporter that the coniferous packing materials 
associated with a shipment for export have been heat treated in the 
United States,'' we are adding the phrase ``or in Canada.'' We are also 
amending Sec. 353.7(e)(4), which deals with the records an exporter 
must keep on file at his office, by adding the following: ``If the 
coniferous solid wood packing materials were heat treated in Canada, 
this documentation must include a certificate issued by the Canadian 
Food Inspection Agency stating that the packing materials have been 
heat treated through a treatment process that increased the minimum 
core wood

[[Page 37116]]

temperature to 56 degrees Celsius for 30 minutes.''

Immediate Action

    The Administrator of the Animal and Plant Health Inspection Service 
has determined that there is good cause for publishing this interim 
rule without prior opportunity for public comment. Immediate action is 
necessary to relieve a restriction that prevents U.S. exporters from 
obtaining certificates that the Government of the People's Republic of 
China requires to accompany shipments of U.S. goods to China that are 
packaged with Canadian-origin SWPM.
    Because prior notice and other public procedures with respect to 
this action are impracticable and contrary to the public interest under 
these conditions, we find good cause under 5 U.S.C. 553 to make this 
action effective less than 30 days after publication. We will consider 
comments that are received within 60 days of publication of this rule 
in the Federal Register. After the comment period closes, we will 
publish another document in the Federal Register. The document will 
include a discussion of any comments we receive and any amendments we 
are making to the rule as a result of the comments.

Executive Order 12866 and Regulatory Flexibility Act

    This rule has been reviewed under Executive Order 12866. The rule 
has been determined to be not significant for the purposes of Executive 
Order 12866 and, therefore, has not been reviewed by the Office of 
Management and Budget.
    Effective January 1, 2000, the People's Republic of China required 
that SWPM exported from the United States to China be certified as 
having been heat treated. To be certified, coniferous SWPM must be heat 
treated in the United States. This rule changes that requirement to 
allow Canadian-origin coniferous SWPM to be heat treated in Canada.\1\
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    \1\ The Canadian Food Inspection Agency has developed a heat 
treatment process that meets the requirements of the People's 
Republic of China and USDA.
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    This rule affects U.S. exporters--primarily manufacturers and 
freight forwarders who act on their behalf--who ship goods to China 
using coniferous SWPM. It is estimated that there are about 125,000 
such shipments per year, spread among approximately 5,000 exporters. A 
wide variety of products are shipped to China using coniferous SWPM, 
such as pharmaceuticals, auto parts, diapers, and fruits and 
vegetables.
    This rule restores U.S. exporters' ability to use Canadian-origin 
coniferous SWPM in shipments to China. At the present time, their 
ability to use that SWPM is effectively precluded, because it is not 
cost effective to heat treat Canadian-origin SWPM in the United States. 
In addition to giving them another, perhaps less costly, source of 
coniferous SWPM for their shipments to China, the rule change enables 
affected exporters to avoid separating their U.S. and Canadian-treated 
coniferous SWPM so as to ensure that only the former is used in 
shipments to China.\2\ The dollar impact of this rule on U.S. exporters 
is unknown, but the rule is likely to benefit exporters, though the 
benefits will not constitute a significant economic impact on a 
substantial number of exporters.
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    \2\ U.S. exporters can use Canadian-origin coniferous SWPM for 
shipments to countries other than the People's Republic of China.
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    U.S. producers of coniferous SWPM could also be affected by this 
change, to the extent that it causes exporters to switch to Canadian 
producers for their supply of SWPM for shipments to China. The number 
of U.S. exporters who would switch to Canadian producers is unknown. 
However, it seems unlikely that allowing the use of Canadian SWPM to be 
resumed for U.S. shipments to China would create significant harm to 
U.S. coniferous SWPM producers. (During the period from September 
through December, 2000--the first 4 full months that the current 
exclusion on Canadian SWPM was in effect--U.S. imports of pallets from 
Canada declined by about 3 million, or 27 percent, from the level for 
same 4-month period in 1999. However, that decline appears to be due 
more to competitive pressures faced by Canada in the U.S. market than 
to the current exclusion itself, as U.S. imports of pallets from all 
countries other than Canada showed an increase of about 4 million 
pallets during the same 4-month period.\3\ In effect, Canadian exports 
of pallets to the United States were supplanted by exports from other 
countries. Since non-Canadian exports to the United States are also 
subject to the current exclusion, the decline in Canadian exports, 
therefore, would seem to be largely unrelated to the rule that became 
effective August 17, 2000.)
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    \3\ Foreign Agricultural Service data.
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    The Regulatory Flexibility Act (RFA) requires that agencies 
consider the economic impact of rule changes on small entities (i.e., 
businesses, organizations, and governmental jurisdictions). This rule 
potentially affects the approximately 5,000 U.S. exporters--primarily 
manufacturers and freight forwarders who act on their behalf--who ship 
goods to China using coniferous SWPM. However, for the reasons 
discussed above, there is no reason to believe that the rule change 
will have a significant economic impact on a substantial number of 
entities, large or small.
    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 interim 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

    This interim rule contains no new information collection or 
recordkeeping requirements under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.).

List of Subjects in 7 CFR Part 353

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


    Accordingly, 7 CFR part 353 is amended as follows:

PART 353--EXPORT CERTIFICATION

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

    Authority: 7 U.S.C. 7711, 7712, 7718, 7751, and 7754; 21 U.S.C. 
136 and 136a; 7 CFR 2.22, 2.80, and 371.3.


Sec. 353.1  [Amended]

    2. In Sec. 353.1, the definition of Certificate of heat treatment 
is amended by adding the phrase ``or in Canada'' immediately after the 
phrase ``in the United States''.

    3. In Sec. 353.7, paragraph (e)(4) is revised to read as follows:


Sec. 353.7  Certificates.

* * * * *
    (e) * * *

[[Page 37117]]

    (4) The exporter or his or her representative must keep on file at 
his or her office a copy of each certificate issued in his or her name 
and documentation showing that heat treatment was performed on packing 
materials in the shipment referred to in the certificate. If the 
coniferous solid wood packing materials were heat treated in Canada, 
this documentation must include a certificate issued by the Canadian 
Food Inspection Agency stating that the packing materials have been 
heat treated through a treatment process that increased the minimum 
core wood temperature to 56 degrees Celsius for 30 minutes. The 
exporter must make these documents available to an inspector upon 
request for a period of 1 year following the date of issuance of the 
certificate.

(Approved by the Office of Management and Budget under control 
numbers 0579-0052 and 0579-0147)

    Done in Washington, DC, this 11th day of July 2001.
Bobby R. Acord,
Acting Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 01-17840 Filed 7-16-01; 8:45 am]
BILLING CODE 3410-34-U