[Federal Register Volume 66, Number 139 (Thursday, July 19, 2001)]
[Rules and Regulations]
[Pages 37752-37769]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17907]



[[Page 37751]]

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Part III





Environmental Protection Agency





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40 CFR Part 82



Protection of Stratospheric Ozone: Process for Exempting Quarantine and 
Preshipment Applications of Methyl Bromide; Final Rule

  Federal Register / Vol. 66, No. 139 / Thursday, July 19, 2001 / Rules 
and Regulations  

[[Page 37752]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 82

[FRL-7014-5]
RIN 2060-A142


Protection of Stratospheric Ozone: Process for Exempting 
Quarantine and Preshipment Applications of Methyl Bromide

AGENCY: Environmental Protection Agency (EPA).

ACTION: Interim final rule.

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SUMMARY: With this rulemaking, EPA is taking interim final action to 
amend the accelerated phaseout regulations that govern the production, 
import, export, transformation and destruction of substances that 
deplete the ozone layer under the authority of Title VI of the Clean 
Air Act Amendments of 1990 (CAA or the Act). Today's amendments 
incorporate an exemption permitted under the Montreal Protocol on 
Substances that Deplete the Ozone Layer (Protocol) and required by 
recent changes in Title VI of the CAA. Specifically, EPA is creating a 
temporary exemption, through December 31, 2002, from the consumption 
and production phaseout for quantities of Class I, Group VI controlled 
substances (methyl bromide) that are used for quarantine and 
preshipment. Following public comment, EPA intends to issue a final 
action to extend this exemption beyond December 31, 2002. EPA is also 
actively pursuing a separate notice and comment rulemaking, with 
stakeholder involvement, to establish methyl bromide exemptions for 
critical uses and emergency uses beyond the phaseout of production and 
import on January 1, 2005.

DATES: This rule is effective July 19, 2001 and the additions to 40 CFR 
Part 82 will remain in effect through December 31, 2002. The provisions 
and requirements established in today's rule apply to the entire 2001 
and 2002 calendar years (control periods). EPA will consider all 
written comments received by October 12, 2001 to determine whether any 
changes are necessary prior to issuing a final action to extend this 
exemption beyond December 31, 2002.

ADDRESSES: Should you have comments that are directly related to this 
rulemaking please submit them in duplicate (two copies) to: Air Docket 
No. A-2000-24, U.S. Environmental Protection Agency, Mail Code 6102, 
1200 Pennsylvania Ave., NW., Washington, DC, 20460. In addition, should 
you have comments that are separately related to a different issue than 
those raised by this rulemaking you may send them directly to U.S. 
Environmental Protection Agency, Global Programs Division (6205J), 1200 
Pennsylvania Ave., NW., Washington, DC 20460.
    Materials relevant to this rulemaking are contained in Docket No. 
A-2000-24. The Docket is located in room M-1500, First Floor, Waterside 
Mall at 401 M Street, SW., Washington, DC 20460. The materials may be 
inspected from 8:30 am until 5:30 pm Monday through Friday. A 
reasonable fee may be charged by EPA for copying docket materials.

FOR FURTHER INFORMATION CONTACT: Tom Land, U.S. Environmental 
Protection Agency, Global Programs Division (6205J), 1200 Pennsylvania 
Ave., NW., Washington, DC, 20460, 202-564-9185.

SUPPLEMENTARY INFORMATION: EPA is taking this action as an interim 
final rule without prior proposal and public comment because EPA finds 
that the good cause exemption from the notice-and-comment rulemaking 
requirement of the Administrative Procedure Act (APA), 5 U.S.C. 551 et 
seq., applies here. Section 307(d) of the Clean Air Act (CAA) states 
that in the case of any rule to which section 307(d) applies, notice of 
proposed rulemaking must be published in the Federal Register 
(CAA307(d)(3)). The promulgation or revision of regulations under title 
VI of the CAA is generally subject to section 307(d). However, section 
307(d) does not apply to any rule referred to in subparagraphs (A) or 
(B) of section 553(b) of the APA. Section 553(b)(B) of the APA, 5 
U.S.C. 553(b)(B), provides that, when an agency for good cause finds 
that notice and comment public procedures are impracticable, 
unnecessary or contrary to the public interest, the agency may issue a 
rule without providing notice and an opportunity for public comment.
    EPA has determined that there is good cause for making today's rule 
an interim final rule without prior proposal and opportunity for 
comment because we view these revisions as protecting commodity trade 
from the adverse impacts of quarantine pest infestations, as well as 
protecting the supply of imported fruits and vegetables available to 
the general public. Without the creation of the exemption by this rule, 
quantities of methyl bromide used for quarantine and preshipment would 
be counted against the production and consumption allowances already 
limited by prior rulemaking (65 FR 70795), which for 2001 constitute 
50% of the baseline. Having to compete for non-exempt methyl bromide, 
without today's exemption, fumigators at U.S. ports might not be able 
to meet U.S. requirements to treat imported commodities (under the U.S. 
Department of Agriculture's (USDA) Animal and Plant Health Inspection 
Service (APHIS) requirements). This could jeopardize the supplies of 
these commodities for U.S. consumers because in the absence of required 
treatments ships would be turned away. Alternatively, the absence of 
today's exemption could increase the risk of an outbreak of a 
quarantine pest within the United States because shipments are 
typically unloaded onto the docks in preparation for fumigation with 
methyl bromide. Unloading containers at the docks could occur prior to 
a realization that methyl bromide is unavailable at the port and 
thereby jeopardize U.S. commodities with a quarantine pest infestation. 
If an infestation of a quarantine pest occurs, the amount of methyl 
bromide used could greatly increase. For example, when the port of 
Houston was infested with the Mediterranean snail, a fumigator who 
typically uses 40,000-50,000 pounds a year, used 21,000 pounds in 7\1/
2\ weeks to treat this outbreak of a quarantine pest. In addition, 
exporters might not be able to ship U.S. commodities overseas because 
they would not be able to meet foreign import requirements without 
today's exemption. Thus, notice and public procedure are impracticable 
and contrary to the public interest. EPA finds that this constitutes 
good cause under 5 U.S.C. 553(b)(B). Nonetheless, EPA is providing 90 
days for submission of public comments following today's action. EPA 
will consider all written comments submitted in the allotted time 
period to determine if any change is warranted prior to taking final 
action that would extend this exemption beyond December 31, 2002. The 
phaseout program operates in control periods that correspond to 
calendar years. EPA believes that the exemption should correspond to 
whole control periods, i.e., entire calendar years. EPA does not 
believe it will be possible to take final action before the end of the 
2001 control period. Because the Agency is providing a 90-day comment 
period and wants to ensure there is sufficient time to carefully review 
comments and consider other approaches, and to simplify the 
administrative implementation for affected entities, today's exemption 
is effective through December 31, 2002.
    Section 553(d) of the APA generally provides that rules may not 
take effect

[[Page 37753]]

earlier than 30 days after they are published in the Federal Register. 
However, APA section 553(d) excepts from this provision any action that 
grants or recognizes an exemption or relieves a restriction. Since 
today's action grants an exemption from the phaseout of production and 
import of methyl bromide, EPA is making this action effective 
immediately to ensure the availability of methyl bromide for quarantine 
and preshipment through December 31, 2002.
    EPA emphasizes that this rule is intended only to address the basic 
implementation of the methyl bromide quarantine and preshipment 
exemptions according to the definitions agreed upon by the Montreal 
Protocol Parties. Any deviations from the Protocol Parties' definitions 
are constrained by the Protocol and the Clean Air Act, and therefore 
are not addressed in today's rulemaking.

Table of Contents

I. What is the Background of the Phaseout Regulations for Ozone-
Depleting Substances?
II. What is Methyl Bromide?
III. What are Examples of Quarantine and Preshipment Uses of Methyl 
Bromide?
IV. What is the Legal Authority for Exempting the Production and 
Import of Methyl Bromide for Use in Quarantine and Preshipment 
Applications?
V. What is the Definition of Quarantine and Preshipment 
Applications?
    A. Are there clarifications of the definitions regarding trade 
within the U.S.?
    B. Are there additional qualifiers associated with the 
definition of preshipment applications?
    C. Are there additional qualifiers associated with the 
definition of quarantine applications?
    D. How do the definitions of quarantine and preshipment 
applications apply to food sanitation?
    E. How do these definitions apply to ``propagative material'?
    F. How do these definitions apply to in-transit applications?
VI. What is the Process for Exempting Methyl Bromide for Use in 
Quarantine and Preshipment Applications?
    A. Are Producer and Importer Quarterly Reports and Recordkeeping 
Changing?
    B. Are Methyl Bromide Applicators Required to Report?
    C. Are Distributors Required to Report?
    D. What about Methyl Bromide Exported for Quarantine and 
Preshipment Applications?
    E. Will there be a FIFRA Pesticide Label Change?
VII. What are Other Considerations on which EPA is Seeking Comment?
    A. What are considerations on which the Agency is seeking 
comment regarding definitions under the International Plant 
Protection Convention (IPPC)?
    B. What are considerations on which the Agency is seeking 
comment regarding prophylactic fumigation of U.S. exports when the 
fumigation is not mandated by import regulations?
    C. What are considerations on which the Agency is seeking 
comment regarding the exclusion of specific quarantine and 
preshipment applications from the exemption at some future time?
    D. What are considerations on which the Agency is seeking 
comment regarding national security fumigations?
VIII. What are the Steps to Conform the U.S. Methyl Bromide Phaseout 
Schedule and Exemptions to the Montreal Protocol and Amended Clean 
Air Act?
IX. Administrative Requirements
X. Congressional Review

    Entities potentially regulated by this action are those associated 
with methyl bromide that is used for quarantine and preshipment 
applications. In addition, this action potentially regulates entities 
importing and exporting methyl bromide. Potentially regulated 
categories and entities include:

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              Category                  Examples of regulated  entities
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Industry............................  Producers, Importers and Exporters
                                       of methyl bromide.
                                      Distributors of methyl bromide
                                       used for quarantine and
                                       preshipment.
                                      Applicators of methyl bromide used
                                       for quarantine and preshipment.
                                      Commodity Owners or Shippers of
                                       Goods that request the quarantine
                                       or preshipment application of
                                       methyl bromide in accordance with
                                       treatments, official controls or
                                       requirements.
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Table is not intended to be exhaustive, but rather provides a guide for 
readers regarding entities likely to be regulated by this action. This 
table lists the types of entities that EPA is now aware could 
potentially be regulated by this action. Other types of entities not 
listed in the table could also be regulated. To determine whether your 
facility, company, business, organization, etc. is regulated by this 
action, you should carefully examine the regulations promulgated at 40 
CFR 82, Subpart A. If you have questions regarding the applicability of 
this action to a particular entity, consult the person listed in the 
preceding FOR FURTHER INFORMATION CONTACT section.

I. What Is the Background of the Phaseout Regulations for Ozone-
Depleting Substances?

    The current regulatory requirements of the Stratospheric Ozone 
Protection Program that limit production and consumption of ozone-
depleting substances were promulgated by the Environmental Protection 
Agency (EPA or the Agency) in the Federal Register on December 20, 1994 
(59 FR 65478), May 10, 1995 (60 FR 24970), August 4, 1998 (63 FR 
41625), and October 5, 1998 (63 FR 53290). The regulatory program was 
originally published in the Federal Register on August 12, 1988 (53 FR 
30566), in response to the 1987 signing of the Montreal Protocol on 
Substances that Deplete the Ozone Layer (Protocol).\1\ The U.S. was one 
of the original signatories to the 1987 Montreal Protocol and the U.S. 
ratified the Protocol on April 21, 1988. Congress then enacted, and 
President Bush signed into law, the Clean Air Act Amendments of 1990 
(CAA or the Act) that included Title VI on Stratospheric Ozone 
Protection.
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    \1\ Several revisions to the original 1988 rule were issued on 
the following dates: February 9, 1989 (54 FR 6376), April 3, 1989 
(54 FR 13502), July 5, 1989 (54 FR 28062), July 12, 1989 (54 FR 
29337), February 13, 1990 (55 FR 5005), June 15, 1990 (55 FR 24490) 
and June 22, 1990 (55 FR 25812) July 30, 1992 (57 FR 33754), 
December 10, 1993 (58 FR 65018).
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    Today's action amends the existing EPA regulations published under 
Title VI of the CAA that govern the production and consumption of 
ozone-depleting substances. Today's action establishes an exemption 
from the methyl bromide production and import reduction and phaseout 
schedule for quantities to be used for quarantine and preshipment 
applications. Today's amendments are intended to implement requirements 
of the Protocol and the CAA, including amendments to Title VI as 
created by Section 764 of the 1999 Omnibus Consolidated and Emergency 
Supplemental Appropriations Act (Pub. L. 105-277, October 21, 1998) 
(Section 604(d)(5) of the Clean Air Act).
    The requirements contained in the final rules published in the 
Federal Register on December 20, 1994 and May 10, 1995 establish an 
Allowance Program. The Allowance Program and its history are described 
in the notice of proposed rulemaking (NPRM) published in the Federal 
Register on November 10, 1994 (59 FR 56276). The control and the 
phaseout of production and consumption of ozone-depleting substances, 
as required under the Protocol and CAA, are accomplished through the 
Allowance Program.
    In developing the Allowance Program, EPA collected information on 
the amounts of ozone-depleting substances produced, imported, exported, 
transformed and destroyed within the United States for specific 
baseline years

[[Page 37754]]

for specific chemicals. This information was used to establish the U.S. 
production and consumption ceilings for these chemicals. The data were 
also used to assign company-specific production and import rights to 
companies that were in most cases producing or importing during the 
specific year of data collection. For methyl bromide, 1991 was the 
baseline year used to establish the ceiling and assign company-specific 
production and import rights. Production or import rights are called 
``allowances.'' Production allowances and consumption allowances 
continue to exist for only one specific class I controlled ozone-
depleting substance--methyl bromide. All other production or 
consumption of class I controlled substances is prohibited under the 
Protocol and the CAA, save for a few narrow exemptions. For methyl 
bromide the remaining schedule for the phaseout of production and 
consumption allowances is as follows: 50 percent reduction of baseline 
beginning January 29, 2001, 70 percent reduction of baseline beginning 
January 1, 2003, and a 100 percent reduction of baseline beginning 
January 1, 2005, with narrow exemptions for critical uses and 
emergencies, as well as for quarantine and preshipment uses.
    In the context of the regulatory program, the use of the term 
consumption may be misleading. Consumption does not mean the ``use'' of 
a controlled substance, but rather is defined as the formula: 
Consumption = production + imports - exports, of controlled substances 
(Article 1 of the Protocol and Section 601 of the CAA). Class I 
controlled substances that were produced or imported through the 
expenditure of allowances prior to their phaseout date can continue to 
be used by industry and the public after that specific chemical's 
phaseout under these regulations, unless otherwise precluded under 
separate regulations.
    The specific names and chemical formulas for the controlled ozone-
depleting substances in Groups of class I controlled substances are in 
Appendix A and Appendix F in Subpart A of 40 CFR Part 82. The specific 
names and chemical formulas for the class II controlled ozone-depleting 
substances are in Appendix B and Appendix F in Subpart A.

II. What Is Methyl Bromide?

    Methyl bromide is used in the United States and throughout the 
world as a fumigant to control a variety of pests in many different 
situations. Methyl bromide is an odorless, colorless, toxic gas. Methyl 
bromide is a broad spectrum pesticide, which is used as a fumigant to 
control a variety of pests, such as insects, weeds, rodents, pathogens, 
and nematodes. Additional characteristics and details about the uses of 
methyl bromide can be found in the proposed rule published in the 
Federal Register on March 18, 1993 (58 FR 15014) and the final rule 
published in the Federal Register on December 10, 1993 (58 FR 65018). 
Information on methyl bromide can be found at the following sites of 
the World Wide Web: www.epa.gov/ozone/mbr/mbrqu.html and www.teap.org 
or by contacting the Stratospheric Ozone Protection Hotline at 1-800-
296-1996.

III. What Are Examples of Quarantine and Preshipment Uses of Methyl 
Bromide?

    An example of a quarantine use of methyl bromide is the fumigation 
of commodities such as rice and spices that are subject to infestation 
by a specific and officially recognized quarantine pest, such as the 
khapra beetle (Trogoderma granarium Everts). The purpose of quarantine 
fumigation is to prevent the introduction of specific quarantine 
pest(s) into a defined geographical area, such as an importing country. 
An example of a preshipment use of methyl bromide is the application to 
wheat because of official phytosanitary requirements at the shipment 
destination. In 1998, the Methyl Bromide Technical Options Committee 
(MBTOC), a sub-group under the independent advisory body of the 
Technical and Economic Assessment Panel (TEAP) to the Montreal 
Protocol, published an assessment that gives further details about uses 
of methyl bromide and possible alternatives and substitutes for 
controlling pests.

IV. What Is the Legal Authority for Exempting Production and 
Consumption of Methyl Bromide for Quarantine and Preshipment 
Applications?

    In Article 2H of the Montreal Protocol, which establishes the 
phaseout schedule for methyl bromide for developed countries, paragraph 
6 states that, ``[t]he calculated levels of consumption and production 
under this Article shall not include the amounts used by the Party for 
quarantine and pre-shipment applications.'' EPA notes that paragraph 6, 
of Article 2H indicates that the exemption is to exclude from the 
U.S.'s calculation of methyl bromide consumption and production the 
amounts used by the U.S. for quarantine and preshipment applications. 
In addition, Article 7 of the Protocol was recently amended regarding 
methyl bromide and now requires each Party to report on, ``the annual 
amount used for quarantine and preshipment applications.'' Beyond the 
critical uses allowed in Article 2H, Paragraph 5, quarantine and 
preshipment uses are the only exemptions explicitly allowed for under 
the Montreal Protocol.
    The recent amendments to Title VI of the Clean Air Act regarding 
methyl bromide include a new provision on ``Sanitation and Food 
Protection,'' which is related to the Protocol exemption for quarantine 
and preshipment. This new Section 604(d)(5) of Title VI of the CAA, on 
Sanitation and Food Protection, was added by Section 764(b) of the 1999 
Omnibus Consolidated and Emergency Supplemental Appropriations Act 
(Public Law 105-277). This new Section 604(d)(5) says, ``To the extent 
consistent with the Montreal Protocol's quarantine and preshipment 
provisions, the Administrator shall exempt the production, importation, 
and consumption of methyl bromide to fumigate commodities entering or 
leaving the United States or any State (or political subdivision 
thereof) for purposes of compliance with Animal and Plant Health 
Inspection Service requirements or with any international, Federal, 
State or local sanitation or food protection standard.'' Prior to 
Congressional passage of Section 604(d)(5), the CAA did not provide 
authority for creating such an exemption to the methyl bromide phaseout 
schedule. Therefore, by today's interim final regulation, EPA is 
implementing the express language provided in Article 2H, paragraph 6, 
of the Protocol under the authority provided by section 604(d)(5) of 
the CAA. EPA is also acting in a manner consistent with, and to fulfill 
the obligations of, section 614(b) of the CAA. Section 614(b) of the 
CAA states that, ``[t]his title as added by the Clean Air Act 
Amendments of 1990 shall be construed, interpreted, and applied as a 
supplement to the terms and conditions of the Montreal Protocol, as 
provided in Article 2, paragraph 11 thereof, and shall not be 
construed, interpreted, or applied to abrogate the responsibilities or 
obligations of the United States to implement fully the provisions of 
the Montreal Protocol. In the case of conflict between any provision of 
this title and any provision of the Montreal Protocol, the more 
stringent provision shall govern.''
    At a July 1999 meeting with the Methyl Bromide Industry Panel, EPA 
received a legal memorandum from their counsel regarding the definition 
of quarantine and preshipment and the recent amendment adding Section

[[Page 37755]]

604(d)(5) to the Clean Air Act. The argument made in the Methyl Bromide 
Industry Panel's legal memorandum is that the introductory phrase (``to 
the extent consistent with the Montreal Protocol's quarantine and pre-
shipment provisions'') in Section 604(d)(5) of the Clean Air Act does 
not require EPA to make its regulations consistent with the 
``preshipment'' and ``quarantine'' definitions in Decision VII/5 and 
Decision XI/12 of the Parties to the Protocol. The issue raised by the 
Methyl Bromide Industry Panel's legal memorandum is whether the 
reference to the ``Montreal Protocol's quarantine and preshipment 
provisions,'' in Section 604(d)(5) refers only to the single provision 
found in Article 2H, paragraph 6 of the Protocol (which provides that 
the ``calculated levels of consumption and production under this 
Article shall not include the amounts used by the Party for quarantine 
and preshipment applications'') or also refers to Decision VI/11, 
Decision VII/5, Decision XI/12, and Decision XI/13 of the Parties. The 
Methyl Bromide Industry Panel's legal memorandum also notes that 
Section 602 of the CAA defines the Montreal Protocol as, The Montreal 
Protocol on Substances that Deplete the Ozone Layer and its amendments 
and adjustments without specific reference to Decisions by the Parties 
to the Protocol.
    The provisions of the Vienna Convention on the Law of Treaties 
(VCLT), 8 International Legal Materials 679 (1969), that concern treaty 
interpretation generally reflect customary international law. Article 
31 of the VCLT sets forth the general rule of treaty interpretation. 
Paragraph 1 of Article 31 provides that a treaty ``shall be interpreted 
in good faith in accordance with the ordinary meaning to be given to 
the terms of the treaty in their context and in the light of its object 
and purpose.'' Paragraph 3 of Article 31 of the VCLT states, ``[t]here 
shall be taken into account, together with any context: * * * (a) any 
subsequent agreement between the parties regarding the interpretation 
of the treaty or the application of its provisions.'' Decisions VI/11, 
VII/5, XI/12 and XI/13 constitute subsequent consensus agreements among 
the Parties to the Montreal Protocol (including the United States) 
regarding the interpretation and application of the quarantine and 
preshipment provision of Article 2H. Therefore, it is appropriate for 
EPA, when determining what is consistent with the ``Montreal Protocol's 
quarantine and preshipment provisions,'' to take into account Decisions 
VI/11, VII/5, XI/12, and XI/13.
    Furthermore, in amending the CAA, Congress specifically cited the 
plural ``quarantine and preshipment provisions.'' If Congress intended 
for this phrase to be limited to the single provision in the Protocol 
referencing quarantine and preshipment in Article 2H, and not the 
subsequent Decisions between the Parties regarding interpretation or 
application of the treaty, Congress would have presumably directed the 
Agency to be consistent with the singular provision.
    Precedents within the current regulations (40 CFR Part 82) 
demonstrate that the United States has routinely considered Decisions 
that clarify and interpret obligations under the Montreal Protocol to 
be authoritative and that such Decisions of the Parties are currently 
implemented through regulations under the CAA. For example, the United 
States' current regulatory definition of a ``controlled substance'' is 
based on a Decision by the Parties (Decision IV/12) that clarifies 
Article 1, paragraph 4 of the Protocol.
    In another example, the current process in the United States for 
implementing the Protocol's essential-use exemption relies on Decisions 
by the Parties for the specific definition of what is an ``essential 
use.'' In the process of preparing the United States' annual 
nomination, the U.S. relies on Decision IV/25 to evaluate applications 
that are submitted by U.S. entities who are requesting an essential-use 
exemption. In addition, the U.S. government considers whether the 
information that will be provided in the national nomination is in 
accordance with Decision VIII/10, as well as whether it is in 
accordance with the conditions to be applied in providing an exemption 
under Decision VI/9, Decision VII/28, and Decision VIII/9. 
Consideration of these Decisions by the U.S. government is important 
because the U.S. nomination is reviewed by the Protocol's TEAP, who 
then makes recommendations to the Parties based on the Decisions. The 
essential-use exemptions nominated by the U.S. government are 
ultimately considered and authorized by the Parties in the context of 
these Decisions. The control measures in Article 2 of the Protocol 
allow for essential-use exemptions (for the production and consumption 
of controlled substances beyond phaseout dates). However, the Parties' 
interpretation of the phrase ``essential use'' and their agreements 
regarding the application of this exemption appear in Decisions.
    Finally, EPA is in the process of developing regulations that would 
implement Decision IX/7 of the Parties by allowing an exemption for 
``emergency methyl bromide use.'' Decision IX/7 reflects an agreement 
among the Parties to the Protocol regarding the interpretation and 
application of the critical-use exemption provided for in Article 2H(5) 
of the Protocol. Decision IX/7 directs the Ozone Secretariat and the 
TEAP to ``evaluate the [emergency] use according to the ``critical 
methyl bromide use'' criteria and present this information to the next 
meeting of the Parties for review * * *''
    The examples above illustrate how U.S. regulations incorporate 
Decisions by the Parties to the Protocol. Other precedents for 
incorporating Decisions by the Protocol Parties into current U.S. 
regulations can be found in 40 CFR Part 82, Subpart A.

V. What Is the Definition of Quarantine and Preshipment 
Applications?

    In today's action, EPA is defining quarantine and preshipment 
applications as agreed by the Parties to the Montreal Protocol. The 
Parties to the Protocol agreed to the following definition of 
``quarantine applications'' in Decision VII/5: ``quarantine 
applications, with respect to methyl bromide, are treatments to prevent 
the introduction, establishment and/or spread of quarantine pests 
(including diseases), or to ensure their official control, where: (i) 
Official control is that performed by, or authorized by, a national 
plant, animal or environmental protection or health authority; (ii) 
quarantine pests are pests of potential importance to the areas 
endangered thereby and not yet present there, or present but not widely 
distributed and being officially controlled.''
    The Parties to the Protocol first agreed to the following 
definition for preshipment applications of methyl bromide in Decisions 
VI/11 and VII/5: ``preshipment applications are those treatments 
applied directly preceding and in relation to export, to meet the 
phytosanitary or sanitary requirements of the importing country or 
existing phytosanitary or sanitary requirements of the exporting 
country.'' At the 11th Meeting of the Parties in December 1999, the 
Parties further clarified the intent of the term preshipment, by 
agreeing to the following definition in Decision XI/12: ``* * * 
preshipment applications are those non-quarantine applications within 
21 days prior to export to meet the official requirements of the 
importing country or existing official requirements of the exporting

[[Page 37756]]

country. Official requirements are those which are performed by, or 
authorized by, a national plant, animal, environmental, health or 
stored product authority.''
    With today's action, EPA is defining quarantine applications and 
preshipment applications, for implementing the exemption to the methyl 
bromide production and consumption phaseout schedule mandated by the 
new section 604(d)(5) of the CAA and in a manner consistent with 
section 614(b) of the CAA, as follows:
    Quarantine applications, with respect to class I, Group VI 
controlled substances, are treatments to prevent the introduction, 
establishment and/or spread of quarantine pests (including diseases), 
or to ensure their official control, where: (i) Official control is 
that performed by, or authorized by, a national plant, animal or 
environmental protection or health authority; (ii) quarantine pests are 
pests of potential importance to the areas endangered thereby and not 
yet present there, or present but not widely distributed and being 
officially controlled.
    Preshipment applications, with respect to class I, Group VI 
controlled substances, are those non-quarantine applications within 21 
days prior to export to meet the official requirements of the importing 
country or existing official requirements of the exporting country. 
Official requirements are those which are performed by, or authorized 
by, a national plant, animal, environmental, health or stored product 
authority.
    As specified in the above definitions, which mirror exactly those 
specified by the Protocol, a quarantine application of methyl bromide 
must be ``performed by, or authorized by, a national plant, animal or 
environmental protection, or health authority.'' In addition, as 
delineated in the above definition, quarantine applications must be 
directed at quarantine pests. Today's definition of preshipment 
applications is limited to applications ``to meet the official 
requirements of the importing country or existing official requirements 
of the exporting country.'' The definition of preshipment applications 
specifies that the phrase ``official requirements'' means ``those which 
are performed by, or authorized by, a national plant, animal, 
environmental, health, or stored product authority.''

A. Are There Clarifications Regarding Trade Within the U.S.?

    The Technical and Economic Assessment Panel (TEAP) provided the 
Parties to the Protocol with analyses and clarifications of the 
definition of ``quarantine applications,'' recommending that Decision 
VII/5 be interpreted to include officially required treatments for 
intra-country trade within the territory of the Party. Therefore, for 
purposes of today's regulation, ``quarantine applications'' include 
inter-state and inter-county treatments required to control quarantine 
pests. This is consistent with the Montreal Protocol and reconciles the 
language with Section 604(d)(5) of the CAA on Sanitation and Food 
Protection, which refers to international, Federal, state and local 
requirements. In recognizing official state, county, tribal, and local 
quarantine requirements, EPA interprets the definition of quarantine 
applications such that intra-country quarantine treatments required by 
state, county, tribal, and local plant, animal, environmental, or 
health government authorities constitute official control.
    In contrast to the definition of quarantine applications, which 
accommodates intra-country trade, the Protocol definition of 
preshipment applications is specific to trade between countries because 
of the phrase ``applications within 21 days prior to export.'' 
Therefore, for purposes of today's regulation, the exemption for 
preshipment applications is limited to the movement of goods from the 
U.S. to another country, and does not include movement of goods within 
the U.S.

B. Are There Additional Qualifiers Associated With the Definition of 
Preshipment Applications?

    In 1998, the TEAP provided interim explanatory notes to assist the 
Parties in the consistent implementation of the exemption for 
preshipment applications, highlighting that preshipment applications 
are ``* * * not intended to cover informal or purely contractual or 
commercial arrangements not required under official regulations.'' 
(April 1998 TEAP Report, page 145). The definition of ``preshipment 
applications'' focuses on applications ``to meet the official 
requirements of the importing country or existing official requirements 
of the exporting country.'' The definition of preshipment applications 
specifies that the phrase ``official requirements'' means ``those which 
are performed by, or authorized by, a national plant, animal, 
environmental, health, or stored product authority.''
    The definition of preshipment applications in Decision XI/12 
contains the phrase ``existing official requirements of the exporting 
country,'' (emphasis added), which implies the need to establish a 
cutoff date when a preshipment requirement is existing. With today's 
action, however, for the interim period through December 31, 2002, EPA 
will interpret the word ``existing'' to mean simply that the 
preshipment requirement must be in existence at the time of the 
specific treatment. It is important to note that the exporting country 
referred to in the phrase is the United States.
    EPA is seeking comments on ways to interpret the term ``existing'' 
in the preshipment applications definition for development of the final 
version of this regulation. Options for interpreting the term 
``existing official requirements'' might be to exempt official 
preshipment requirements of the exporting country that were: (1) In 
effect prior to the date the Parties to the Protocol adopted Decision 
XI/12, which was December 3, 1999, (2) in effect at the time this 
interim final rule is published in the Federal Register, (3) in place 
at the time the final rule on the quarantine and preshipment exemption 
is published in the Federal Register, (4) existing at the time of the 
methyl bromide application (since it would be an ``existing'' 
requirement of the exporting country upon going into effect). EPA seeks 
comments on these possible interpretations of the phrase ``existing 
official requirements of the exporting country.''
    For the interim period through December 31, 2002, EPA will also 
interpret the phrase ``to meet the * * * official requirements of the 
exporting country'' as exempting methyl bromide used to fumigate a 
commodity when it is to meet a United States food sanitation 
requirement and the fumigation occurs within 21 days prior to export 
from the United States. For example, today's action considers methyl 
bromide used to meet food sanitation requirements of the U.S. 
government (such as requirements for food in interstate commerce under 
the Federal Food Drug and Cosmetic Act, as monitored by the Food and 
Drug Administration) to be exempt under the definition of preshipment 
applications for the interim period through December 31, 2002, when the 
methyl bromide is applied within the 21 days prior to export to a 
foreign country. EPA is seeking comments on this interpretation of the 
definition of ``preshipment applications.''
    It should be noted that if an importing country were to establish a 
new official requirement for the preshipment application of methyl 
bromide, nothing in this rule would prevent a U.S. exporter from using 
methyl bromide to meet the new requirement of the importing country.

[[Page 37757]]

C. Are There Additional Qualifiers Associated With the Definition of 
Quarantine Applications?

    With today's action, EPA is establishing that for the interim 
period through December 31, 2002, the exemption for quarantine 
applications will apply when methyl bromide is among a list of 
treatments or official control options for quarantine pests or if 
methyl bromide is required for an emergency U.S. quarantine 
application. Under Section 3, Section 18, and Section 24a of the 
Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), EPA is 
notified of emergency quarantine applications of methyl bromide in 
accordance with specific requirements published under FIFRA. In 
addition, for the interim period (through December 31, 2002), methyl 
bromide will be exempted for quarantine applications on U.S. 
commodities for export when the foreign country simply has a broad 
performance-based quarantine requirement. In other words, today's 
action exempts methyl bromide in situations when the foreign country's 
regulations require a certification that U.S. commodities be exported 
free of quarantine pests. EPA understands that both USDA/APHIS and 
State agencies issue ``phytosanitary certificates'' that accompany U.S. 
commodities exported to foreign countries. These phytosanitary 
certificates are often required by importing foreign countries to 
ensure that U.S. exports are free of quarantine pests. To the extent 
that methyl bromide is used by a U.S. exporter to meet a foreign 
quarantine requirement, then the phytosanitary certificates (PPQ Form 
577, PPQ Form 578, and PPQ Form 579) issued by USDA/APHIS or an 
authorized State agency will be an additional means for EPA to cross-
check quarantine applications of methyl bromide under today's 
exemption. However, EPA is not exempting methyl bromide used for non-
quarantine applications, even if the U.S. exporter must obtain a 
phytosanitary certificate for the export of the commodity. Today's 
exemption applies to the use of methyl bromide to meet a foreign 
quarantine requirement when a phytosanitary certificate is issued for a 
U.S. exported commodity. If PPQ Forms or other types of certificates 
are issued for commodities meeting state or local quarantine 
requirements then methyl bromide used in these cases is considered 
exempt under today's action.
    To assist in development of the final version of this regulation, 
EPA is seeking comments on the variety of ways of interpreting the 
methyl bromide exemption for quarantine applications. One approach 
would be to limit the exemption to cases when regulations list methyl 
bromide as the unique treatment or control for specific quarantine 
pests.
    A second approach would be to apply the exemption in cases when 
methyl bromide is among a list of treatment or control options for 
quarantine pests. Presumably, currently existing quarantine regulations 
that include methyl bromide among a list of treatment or control 
options indicate that other treatments or controls on the list can be 
used to address the quarantine pest(s).
    A third approach would be to apply the exemption in cases when 
methyl bromide is required for an emergency quarantine application.
    A fourth approach would be to apply the exemption to quarantine 
applications when there is a broad performance-based quarantine 
requirement. This would be a situation when the regulations require 
that a commodity be exported/imported free of quarantine pests. The 
Agency understands that many importing countries have quarantine 
regulations which broadly require commodities to be free of quarantine 
pests without specifying the types of treatments or controls. EPA seeks 
comment on these various ways of interpreting the exemption for 
quarantine applications.
    Combinations of the above approaches for applying the exemption for 
quarantine applications, including combinations where the exemption is 
applied differently depending on whether a commodity is being imported 
into, moved within, or exported from the U.S., are possible as 
demonstrated by the conditions established with today's action for the 
interim period through December 31, 2002 (first paragraph in V.C. 
above). Today's action exempts methyl bromide for imports when methyl 
bromide is among a list of treatments or official control options for 
quarantine pests or if methyl bromide is required for an emergency U.S. 
quarantine application, and exempts methyl bromide for exported U.S. 
commodities when the foreign country simply has a broad performance-
based quarantine requirement. Another possible combination of the above 
approaches would be to institute the exemption for treatments of 
commodities being imported into the U.S., or moved within U.S., when 
the quarantine regulations uniquely list methyl bromide as the 
treatment/control option, while at the same time exempting methyl 
bromide for the export of U.S. commodities when the foreign quarantine 
requirement lists methyl bromide among a list of treatment/control 
options. In this latter example for exports, the exemption might apply 
only in cases when a phytosanitary certificate is issued for a U.S. 
commodity to meet the foreign quarantine requirement and methyl bromide 
is among the list of treatment/control options. EPA is seeking comments 
on the approaches above and possible combinations of these as 
demonstrated by the conditions established with today's action for the 
interim period through December 31, 2002.
    The Agency intends to consider prior Decisions by the Parties to 
the Protocol, such as paragraph (c) of Decision VII/5 which states, 
``[i]n applying these definitions, all countries are urged to refrain 
from use of methyl bromide and to use non-ozone-depleting technologies 
wherever possible.'' Further, the Parties to the Protocol agreed in 
Decision XI/13, ``to request the Parties to review their national 
plant, animal, environmental, health and stored product regulations 
with a view to removing the requirement for use of methyl bromide for 
quarantine and preshipment where technically and economically feasible 
alternatives exist.'' The need to have incentives for people to switch 
to non-ozone-depleting methods for controlling quarantine pests will 
also be included in development of the final version of this regulation 
and EPA is seeking comments on this issue.
    EPA is interested in comments addressing the effect of each of 
these potential approaches on methyl bromide use. EPA recognizes that 
the price of methyl bromide will play a key role in determining uses, 
especially where alternatives are available. Basic economic principles 
of supply and demand suggest that the price of methyl bromide is likely 
to increase during the phaseout period as supply is constrained. A 
question remains as to whether this increase will also be seen in the 
price of quantities of methyl bromide exempted for quarantine and 
preshipment applications, or whether the exempted methyl bromide for 
quarantine and preshipment applications will be priced differently than 
non-exempt quantities. We are interested in comments that address the 
merits of relying on a potential price increase for methyl bromide 
exempted for quarantine and preshipment applications--at least over the 
initial phaseout period--as a way of governing its use for these 
purposes.

[[Page 37758]]

D. How Do the Definitions of Quarantine and Preshipment Aplications 
Apply to Food Sanitation?

    With today's action, for the interim period through December 31, 
2002, the exemption of methyl bromide for quarantine applications will 
not apply to preventative treatments to meet food sanitation standards. 
Please note that if the methyl bromide use were to occur within 21 days 
prior to export to another country it would be exempted under the 
definition of ``preshipment applications'' if it was to meet the 
official requirements of the importing country or existing official 
requirements of the exporting country (see discussion in Part V.B. 
above).
    Some U.S. industries have stated that not having methyl bromide for 
the preventative treatment of their commodities against non-quarantine 
pests could jeopardize their ability to bring the commodity to market 
because they would not be able to meet food sanitation standards. EPA 
is aware that alternative treatments may be technically and 
economically available for many industries currently using methyl 
bromide to maintain food sanitation or meet food sanitation standards.
    For those industries facing food sanitation challenges, production 
of methyl bromide will continue until the 2005 phaseout, albeit in 
limited quantities. For the period beyond the 2005 phaseout, these 
industries, as well as others, will be able to apply for a ``critical-
use'' exemption for continued production and/or import of methyl 
bromide. Consistent with the Protocol, Parties can apply for a 
critical-use exemption beyond the 2005 phaseout for specific uses where 
there are no technically and economically feasible alternatives. 
Although the critical-use exemption is not available until after 2005, 
EPA has initiated a separate process with stakeholder input to develop 
a critical-use exemption. In 2002, a separate Federal Register notice 
will be published asking for people to submit specific information to 
substantiate requests for a critical-use exemption. However, at this 
time no decisions have yet been made regarding what uses will be 
exempted as ``critical.''
    EPA understands that certain industries often use methyl bromide as 
a prophylactic treatment for periodic quality control fumigations 
associated with food sanitation. Stored commodities, such as dried 
fruits, nuts, and cocoa beans, as well as grain mills and pasta 
manufacturing facilities are often fumigated periodically with methyl 
bromide to prevent populations of pests, such as insects and rodents, 
from increasing to a point where they would adversely affect food 
quality. Fumigations with methyl bromide of stored commodities, or 
food-processing facilities, as preventative measures to maintain food 
sanitation are directed at controlling populations of pests that are 
generally endemic to the U.S. and are not designed or intended to 
``prevent the introduction, establishment and/or spread of quarantine 
pests.'' Congress directed EPA to create an exemption, ``consistent 
with the Montreal Protocol's quarantine and preshipment provisions.'' 
The quarantine definition from Decision VII/5 of the Protocol stresses 
that exempt applications of methyl bromide are ``to prevent the 
introduction, establishment and/or spread of quarantine pests 
(including diseases).'' This focus on ``quarantine pests'' seems to be 
the core of the definition and establishes the limit on exempted 
quarantine applications.
    The definition of preshipment applications from Decision XI/12 
includes a time constraint of ``21 days prior to export,'' which 
establishes the limit on the exempted preshipment uses. Thus, the 
periodic prophylactic fumigation of a commodity, or, the prophylactic 
fumigation of a food-processing facility which is not to meet 
quarantine requirements and which is outside of the 21 days prior to 
export would not be exempt under the Protocol's definition of 
quarantine applications or preshipment applications.
    The Agency is seeking comments on the prophylactic uses of methyl 
bromide to meet food sanitation standards. The Agency intends to use 
this information to assist in development of the critical-use exemption 
process as discussed above.

E. How Do These Definitions Apply to ``Propagative Material'?

    The use of methyl bromide to fumigate the soil for growing 
propagative material, such as strawberry propagative rhizomes, differs 
from many quarantine applications of methyl bromide. In the specific 
example of quarantine treatment of strawberry propagative material that 
was brought to EPA's attention, Japanese regulations require that the 
underground portions of the imported propagative rhizomes (of the 
strawberry planting stock) be certified to have been grown in soil that 
is free of quarantine pests. To meet this Japanese quarantine 
requirement, and other similar quarantine requirements, U.S. nurseries 
fumigate the soil with methyl bromide to raise strawberry propagative 
material. Methyl bromide is used to fumigate the soil before each 
transplanting (a number of times over 3-5 years) because Japanese 
requirements dictate that soil in which the strawberry propagative 
rhizomes are grown be free of quarantine pests. EPA is unaware of how 
much methyl bromide is used in the growing of strawberry propagative 
material in the U.S. to meet this or other foreign or domestic 
quarantine requirements and seeks comments on this specific quarantine 
application. In addition, the Agency is seeking similar information on 
other types of plants for planting for which methyl bromide is used as 
a pre-plant treatment (soil treatment) to ensure propagative materials 
meet quarantine requirements.
    With today's action, for the interim period through December 31, 
2002, the exemption for quarantine applications applies to methyl 
bromide used for growing propagative material, such as strawberry 
rhizomes, if the methyl bromide is being used to grow propagative 
material to meet official quarantine requirements of the destination to 
which it will be shipped. To ensure that the use of methyl bromide for 
propagative material is consistent with the Protocol's quarantine 
provisions, applicators availing themselves of the exemption during the 
interim period must maintain records of each methyl bromide 
application. These records must certify that the methyl bromide 
treatments are being undertaken to meet quarantine requirements of the 
intended destination country for the specific propagative material.
    Monitoring methyl bromide used for propagative materials will be a 
large challenge. The propagative materials may be grown in close 
proximity to crops that do not qualify for the quarantine and 
preshipment exemption. EPA believes that it may be difficult to ensure 
that farmers growing propagative material in a small nursery in the 
corner of their acreage were meeting the requirements associated with 
the quarantine exemption--that the methyl bromide purchased under the 
exemption for the nursery was only used for the propagative material--
and growers were not using the methyl bromide for fumigation of their 
larger acreage where the actual crop was being grown (i.e., strawberry 
fruit versus propagative material). Monitoring for such an abuse of the 
exempted methyl bromide may be difficult because both uses would be 
soil fumigations on the same farm--in adjoining fields.
    Another difficulty in compliance monitoring may be caused by the 3-
5 year time horizon for growing

[[Page 37759]]

strawberry propagative materials. The growing cycle for strawberry 
propagative materials necessitates soil fumigation with methyl bromide 
several times over a 3-5 year period to protect the specific germplasm 
(genetic material) that is desired by the Japanese, or others, as well 
as to allow the grower to certify that the underground portions of the 
propagative plants are free of quarantine pests. A system is needed to 
document and ensure the validity of claims by farmers that they are 
using exempted methyl bromide over the 3-5 years to grow strawberry 
seedlings for export to meet Japanese or other quarantine requirements. 
However, EPA recognizes that some farmers will legitimately justify 
using exempted methyl bromide to meet Japanese or other quarantine 
requirements for strawberry seedlings, yet due to economic or market 
conditions these farmers will not send the seedlings to Japan or 
another destination that has a relevant quarantine requirement. To 
address this compliance monitoring challenge, the Agency is seeking 
comments on establishing a recordkeeping requirement for quarantine 
applications that involve the use of methyl bromide in soil fumigation 
for the growth of propagative material. EPA is also seeking comments on 
whether the U.S. growers of propagative materials, in general, should 
be required to report periodically on methyl bromide used to meet 
quarantine requirements.
    The use of exempted methyl bromide to grow propagative material 
that the grower planned to ship to a destination with a propagative 
material quarantine requirement, but which the grower ultimately 
shipped to a destination without such a requirement, may raise 
compliance issues for the United States' obligations under the 
Protocol. EPA is seeking comments on the necessity of, and the nature 
of, possible compensatory measures. If methyl bromide is used to grow 
propagative material with the intention of meeting a quarantine 
requirement of a particular importing country or domestic location, but 
in the end is sent instead to a destination without a quarantine 
requirement for the propagative material, the use of the methyl bromide 
is not exempt under the Protocol. Rather, the quantity used would count 
against the United States' cap for domestic methyl bromide consumption 
(currently limited to 50% of baseline for 2001). The U.S. could exceed 
its control obligations under the Protocol if all U.S. production and 
consumption allowances for methyl bromide were expended in a particular 
control period (calendar year) and some methyl bromide in the same 
control period was mistakenly exempted for quarantine applications 
when, in fact, the propagative material was sent to a place without 
quarantine requirements. EPA is seeking comments on several possible 
options for rectifying this potential situation of non-compliance.
    Under the first approach, a person who uses exempted methyl bromide 
to meet a propagative material quarantine requirement, and who 
ultimately changes the material's destination to one without a 
quarantine requirement, would be required to buy an equivalent amount 
of production allowances for any ozone-depleting substance, on an 
ozone-depleting potential (ODP) basis, and retire those allowances. In 
other words, the allowances could not be expended for new production in 
accordance with Subpart A of 40 CFR Part 82. For example, if a person 
used 1,000 kilograms of exempted methyl bromide on strawberry 
propagative material to meet the quarantine requirement of the intended 
destination but delivered the propagative material to a destination 
without a quarantine requirement, that person would be required to 
purchase the ODP equivalent of 1,000 kilograms of methyl bromide 
production allowances to compensate for the United States' exceeding 
the methyl bromide production cap.
    A second approach would be for the person to destroy an amount of 
ozone-depleting substances that is equivalent on an ODP basis. Thus, 
the person would be required to purchase and destroy quantities of 
existing stocks of ozone-depleting substances, rather than being 
required to purchase and retire allowances, as in the first approach.
    A third approach would require the person to purchase, and store, a 
quantity of non-exempt methyl bromide equivalent to the quantity of 
exempt methyl bromide used in the growing of propagative material. This 
stored (banked) quantity of non-exempt methyl bromide would be 
insurance against the need to compensate for the United States' 
specific methyl bromide compliance obligations of zero production after 
the phaseout, or in the case when all production and consumption 
allowances had been expended for the particular control period prior to 
the phaseout. If, in this third option, the propagative material was in 
fact sent to a destination with a quarantine requirement for that 
particular propagative material, the person could then sell or use the 
quantity of non-exempt methyl bromide that was being stored as 
``insurance''. However, if the propagative material was ultimately sent 
to a destination without a quarantine requirement and compensatory 
measures were needed to ensure the United States meets its compliance 
obligations under the Protocol, the person holding the stored quantity 
of non-exempt methyl bromide would be required to pay for its 
destruction. This option addresses issues of the long time horizon 
between methyl bromide use and the shipment of the propagative 
material, as well as the United States' specific methyl bromide 
compliance obligations under the Protocol both before and after the 
phaseout.
    EPA is seeking comments regarding compliance and enforcement issues 
related to soil uses of methyl bromide for propagative material to meet 
quarantine requirements, in general, as well as the specific approaches 
described above. In addition, the Agency is seeking information on 
existing certification programs and recordkeeping requirements 
associated with the pre-plant soil use of methyl bromide for growing 
propagative material to meet quarantine requirements. EPA is seeking 
comments on the possible recordkeeping and reporting aspects of the 
specific approaches described above for rectifying possible non-
compliance. Resolving these compliance monitoring and enforcement 
issues will be important not only to ensure U.S. compliance with 
obligations under the Protocol but also to maintain a level playing 
field for all growers in each particular commodity market.

F. How Do These Definitions Apply to In-Transit Applications?

    With today's action, for the interim period through December 31, 
2002, quantities of methyl bromide used to control quarantine pests on 
commodities in-transit to the U.S. or traveling within the U.S. are 
exempt when the use is to meet a quarantine, official control 
requirement that lists methyl bromide (see discussion in Part V.C. 
above). Quantities of methyl bromide used to control quarantine pests 
on commodities that are in-transit from the U.S. to another country, to 
meet the importing country's quarantine requirements, are also exempt. 
However, for the interim period, the in-transit application of methyl 
bromide after a shipment leaves the United States is not an exempt 
preshipment application because the application would not occur 
``within 21 days prior to export'' from the United States (emphasis 
added). As above, it should

[[Page 37760]]

be noted that for purposes of today's regulation, the word ``export'' 
is interpreted to mean the departure of a commodity from the United 
States or another foreign country.
    EPA is seeking comments on the extent of the practice of fumigating 
commodities for non-quarantine purposes while in-transit.

VI. What Is the Process for Exempting Methyl Bromide for Use in 
Quarantine and Preshipment Applications?

    With this action, EPA is establishing a process to exempt methyl 
bromide used for quarantine and preshipment applications from the 
Allowance Program's control measures that phase out production and 
consumption of methyl bromide (described in Part I. Background above). 
Today's action exempts quantities of methyl bromide used for quarantine 
and preshipment applications from the production and consumption 
reduction steps through December 31, 2002. The final version of this 
rule will address the exemption for quantities of methyl bromide used 
for quarantine and preshipment applications for the period that 
includes the remaining reduction steps and the eventual phaseout of 
production and consumption under the Montreal Protocol and Clean Air 
Act.
    EPA is creating a flexible process for exempting production and 
consumption of methyl bromide for quarantine and preshipment 
applications that is responsive to demands arising when commodities 
need to be protected from infestations by quarantine pests and when 
commodities need to be protected immediately prior to shipment in 
accordance with official requirements. Today's action includes a 
certification and reporting procedure under authority of the Clean Air 
Act (CAA) that exempts production and consumption of methyl bromide for 
quarantine and preshipment applications from the reduction steps 
through December 31, 2002.

A. Are Producer and Importer Quarterly Reports and Recordkeeping 
Changing?

    Producers and importers must distinguish between quantities of 
methyl bromide produced or imported for quarantine and preshipment 
applications and quantities produced or imported for other categories, 
such as transformation, when submitting quarterly reports that are 
otherwise currently required under Sec. 82.13. As with quantities for 
transformation, the quantities of methyl bromide produced or imported 
for quarantine and preshipment applications are exempt, and are not 
counted against a company's production allowances and consumption 
allowances. In other words, the quantity reported specifically for 
quarantine and preshipment applications by the producer or importer 
will not be counted when determining the production allowances and 
consumption allowances expended during the quarter. The production 
allowances and consumption allowances held by each U.S. company at the 
beginning of the year, in accordance with Sec. 82.5, Sec. 82.6 and 
Sec. 82.7, establish the U.S. limit on the amount of production and 
consumption of methyl bromide for all non-exempted uses in accordance 
with obligations under the Montreal Protocol. The relationship between 
each company's baseline production allowances and baseline consumption 
allowances and the reduction steps in these allowances is in accordance 
with the control measures under the Montreal Protocol and the Clean Air 
Act as described in Part I of today's rule and in the direct final rule 
published in the Federal Register on November 28, 2000 (65 FR 70795).
    Methyl bromide produced or imported and specifically designated for 
quarantine and preshipment applications will not be counted as net 
production or net import for the purposes of the Allowance Program. Net 
production or net import represents the number of production allowances 
and consumption allowances expended by a company. Currently, producers 
and importers provide information on the gross quantity of methyl 
bromide produced or imported in a quarter. In the same quarterly 
report, producers and importers indicate the quantity specifically 
designated for transformation and the quantity specifically designated 
for destruction which are exempt from the reduction steps and phaseout. 
These quantities for transformation and for destruction are subtracted 
from the gross quantity in order to calculate a company's net 
production or net import. With today's action, producers and importers 
must also provide information on the quantity of methyl bromide 
designated solely for quarantine and preshipment applications. This 
quantity of methyl bromide solely for quarantine and preshipment 
applications is exempt and producers and importers should also subtract 
it from the gross quantity in order to calculate net production or net 
import. Finally, domestic purchasers (distributors or customers) must 
provide producers and importers with certifications of the quantities 
being purchased that are designated solely for quarantine and 
preshipment applications (discussion of requirements for foreign 
purchasers appears below in Part VI.D). Certifications from 
distributors will attest that the material will be sold only for 
quarantine and preshipment applications, and certifications from 
applicators purchasing directly from a producer or importer will attest 
that the material will be used only for quarantine and preshipment 
applications.
    In developing today's regulation, EPA initially considered a system 
of refunding allowances to producers and importers based on amounts of 
methyl bromide certified as having been purchased solely for quarantine 
and preshipment applications reported to the Agency by distributors. 
However, EPA decided a process of refunding allowances would be time-
consuming and would likely impede the commercial availability of methyl 
bromide. EPA also believes a process of refunding allowances to 
producers and importers based on certification of purchases solely for 
quarantine and preshipment applications would be more burdensome to 
implement for both the industry and the Agency. With this action, EPA 
is simply exempting through December 31, 2002, methyl bromide 
production and import for quarantine and preshipment applications from 
the requirement to expend allowances, as is currently done for methyl 
bromide for transformation or destruction.
    In developing today's action, EPA also considered another option 
for exempting methyl bromide for quarantine and preshipment 
applications. EPA considered a procedure that would allow the Agency to 
follow specific quantities of quarantine or preshipment methyl bromide 
through the chain of commerce (similar to a RCRA hazardous waste 
manifest) but rejected this option as being overly burdensome with 
little additional benefit. The option of a manifest system to track 
quarantine and preshipment quantities through the market would have 
relied on methyl bromide's regulation under the Federal Insecticide, 
Fungicide and Rodenticide Act (FIFRA). As a FIFRA regulated substance, 
cylinders of methyl bromide are marked with unique registration numbers 
and labels that prescribe the use of the substance. Although EPA is not 
tracking cylinders by registration number through the chain of 
commerce, the Agency is still working with industry on a possible 
change to the FIFRA label (see Part VI.E below) which would reflect 
requirements of this rulemaking under CAA authority. If the

[[Page 37761]]

FIFRA label on methyl bromide is changed in the future to create a 
unique product solely for quarantine and preshipment applications, in 
accordance with the provisions of the Protocol and CAA, then EPA 
believes identifying material that is exempt because it is designated 
explicitly for quarantine and preshipment applications will be 
facilitated.

B. Are Methyl Bromide Applicators Required To Report?

    Today's action includes a certification requirement for purchases 
of methyl bromide by applicators. Applicators must submit a 
certification to the seller of the methyl bromide when they want to 
purchase a specific quantity of methyl bromide explicitly for 
quarantine and preshipment applications. The applicator will certify 
that the quantity purchased will be used solely for quarantine and 
preshipment applications. The applicator must send the certification to 
the company selling the methyl bromide before the seller ships the 
cylinders of methyl bromide (i.e., certification before shipment).
    With today's action, for the interim period through December 31, 
2002, the distributor must send a Quarantine and Preshipment 
Certification Form to any person who places an order for a quantity of 
methyl bromide that is explicitly and solely for quarantine and 
preshipment applications as defined in today's action. The applicator, 
upon receiving the form, must check the box indicating that the 
particular quantity being ordered is solely for quarantine and 
preshipment applications as defined on the form (the definition above 
in Part V) and will neither be sold nor used for any other purpose. The 
applicator must sign the form certifying, under penalty of law, that 
the quantity of methyl bromide purchased will be used solely for 
quarantine and preshipment applications in accordance with the 
definitions. The applicator must return the completed and signed form 
to the distributor. The distributor retains the certification form in 
order to compile data that they will submit to EPA on the quantity of 
methyl bromide purchased under the exemption for quarantine and 
preshipment applications. The certification form ensures that 
quantities of methyl bromide produced or imported under the exemption 
for quarantine and preshipment applications are used only in accordance 
with the strict requirements of the exemption. It is important to note 
that the applicator will also be able to purchase non-exempt methyl 
bromide until the phaseout date for methyl bromide.
    Today's interim rule does not require the distributor to send a 
Certification Form for every methyl bromide purchase `` instead, 
distributors are only required to send a Certification Form when an 
applicator wants to purchase a quantity solely for quarantine and 
preshipment applications. However, the distributor of methyl bromide 
may want to send the Certification Form to customers (applicators) for 
every methyl bromide quantity before the actual purchase and shipment 
of the material. Doing so would allow the distributor and the 
applicator to distinctly track the quantities of exempt and non-exempt 
methyl bromide. To assist in developing the final rule, EPA is seeking 
comments on the merits and burdens associated this type of shipment-by-
shipment certification method as compared to the approach outlined in 
today's rule. EPA is also interested in comments addressing the 
implications of a FIFRA label for exempt quantitites of methyl bromide 
(as discussed in Part VI.E. below).
    For quarantine applications, the applicator must collect 
documentation citing the regulatory requirement or other official 
requirement that justifies the use of methyl bromide. Acceptable 
documentation for a quarantine application includes the forms provided 
directly to the applicator by an official from a national plant, 
animal, environmental protection or health authority requesting the 
treatment of commodities to control quarantine pests. In the absence of 
official documentation from a plant, animal, environmental protection 
or health authority, the commodity owner, shipper or their agent must 
provide a letter to the methyl bromide applicator requesting the use of 
methyl bromide that explicitly cites the regulation requiring a 
quarantine treatment or quarantine official control. Likewise, the 
applicator must collect documentation citing the official requirement 
calling for a preshipment application. The commodity owner, shipper or 
their agent must provide a letter to the methyl bromide applicator 
requesting the use of methyl bromide that explicitly cites the official 
requirement for a preshipment application. The letter that the 
commodity owner, shipper or their agent presents to the applicator must 
include the following statement: ``I certify knowledge of the 
requirements associated with the exempted quarantine and preshipment 
applications published in 40 CFR part 82, including the requirement 
that this letter cite the treatments or official controls for 
quarantine applications or the official requirements for preshipment 
requirements.'' Both the commodity owner, shipper or their agent and 
the applicator must maintain this letter for three years in accordance 
with current recordkeeping requirements in 40 CFR part 82, subpart A. 
Neither the applicator nor the commodity owner, shipper or their agent 
are required to submit the letter to EPA. EPA is seeking comments on 
these procedures, for purposes of developing the final rule.

C. Are Distributors Required To Report?

    With today's action, for the interim period through December 31, 
2002, EPA is requiring that a person who distributes methyl bromide to 
applicators (the distributor) compile all the information from 
applicator certifications (as described in Part VI.B, above) on an 
annual basis and submit the summary data to EPA. If certifications were 
signed by applicators at the time the specific quantity of methyl 
bromide was ordered, in accordance with the procedures described above 
in VI.B. but the signature of the certification was before date of 
today's publication, then the distributor can consider those quantities 
exempt and should include them in the annual report to EPA. In other 
words, if certifications were signed contemporaneously with an order 
for a quantity of methyl bromide solely for quarantine and preshipment 
applications, the distributor should include this quantity in their 
annual report to EPA, as long as the certifications were signed within 
the 2001 or 2002 control periods (calendar years).
    In development of the final version of this regulation, EPA is 
seeking comments on whether annual, bi-annual or quarterly reporting of 
this information would be easier to manage for the distributors of 
methyl bromide. Companies responsible for reporting on other ozone-
depleting substances have clearly expressed their preference for 
quarterly reporting because it reduces the burden of an end-of-year 
crunch to compile twelve months of data. Regardless of the reporting 
periodicity, the distributor must compile all certifications received 
during the period to obtain the total quantity that purchasers 
certified to be for quarantine and preshipment applications. The 
collection of information on the quantity of methyl bromide sold and 
certified for quarantine and preshipment applications is needed so that 
the U.S. can respond to a recent amendment to the Protocol. The 
amendment, to which the Parties agreed

[[Page 37762]]

at their Eleventh Meeting in Beijing in 1999, adds a provision to 
Article 7 (Reporting of Data), requiring Parties to submit information 
on the amounts of methyl bromide used for quarantine and preshipment 
applications. Reporting by the distributors will allow a comparison 
between the quantities of methyl bromide sold and certified for 
quarantine and preshipment applications with the amount of methyl 
bromide produced and imported for quarantine and preshipment 
applications, as reported in the producers'/importers' report as 
described in Part VI.A above.

D. What About Reporting of Methyl Bromide Exported for Quarantine and 
Preshipment Applications?

    EPA considered many options for collecting information on the 
quantity of methyl bromide produced in the U.S. and then exported for 
quarantine and preshipment applications. With today's action, producers 
and others that export methyl bromide must report the total quantity of 
methyl bromide explicitly exported to individual foreign countries for 
quarantine and preshipment applications on a quarterly basis. 
Currently, producers and exporters distinguish other exempted 
quantities of methyl bromide explicitly exported for transformation or 
destruction. For each export of methyl bromide for quarantine and 
preshipment applications, as for exports for transformation or 
destruction, the exporter must obtain a certification from the foreign 
person (entity) importing the methyl bromide stating that the material 
will be used only for quarantine and preshipment applications. These 
certifications must be submitted with the quarterly reports. These 
certifications will then be shared with the appropriate foreign 
government officials in the importing country and the compiled data 
will be shared with UNEP advisory bodies to the Protocol. 
Certifications must accompany the reporting on quantities exported for 
quarantine and preshipment applications because of a concern that the 
U.S., as one of the largest worldwide producers of methyl bromide, 
could potentially contribute to the creation of a loophole for non-
exempt uses of methyl bromide around the globe. EPA feels it will be 
important to closely monitor and track production of methyl bromide 
that is exported for quarantine and preshipment applications because 
these uses are exempt from Protocol control measures.
    EPA considered linking periodic reporting on the quantity of methyl 
bromide exported for quarantine and preshipment applications with a 
system for refunding allowances. EPA also considered the option of 
establishing a ceiling on the export of exempted methyl bromide for 
quarantine and preshipment applications according to historical export 
levels. EPA considered this option because the U.S. is one of the 
largest global producers of methyl bromide and EPA is concerned that 
exempted production of methyl bromide for quarantine and preshipment 
exports might become a loophole if those exempted quantities were to be 
used by other Parties for non-quarantine or non-preshipment 
applications. At this time, EPA has no indication that abuse of the 
quarantine and preshipment exemption will occur, but the Agency will 
monitor the situation closely. For development of the final version of 
the rule, EPA is seeking comments on today's recordkeeping and 
reporting requirements and other variations for monitoring quantities 
of methyl bromide produced in the U.S. and exported for quarantine and 
preshipment applications.

E. Will There Be a FIFRA Pesticide Label Change?

    In parallel with today's action, EPA's Office of Pesticide Programs 
is working with the Methyl Bromide Industry Panel to develop a 
registration and label change for methyl bromide products under 
authority of the Federal Insecticide, Fungicide and Rodenticide Act 
(FIFRA). The proposed registration/label change under FIFRA would 
create unique methyl bromide products solely and specifically for 
quarantine and preshipment applications. A registration/label change 
would designate individual cylinders of methyl bromide specifically for 
quarantine and preshipment applications and it would be illegal to use 
the material in these cylinders for other uses. Under an approved 
registration/label change there would be unique registration numbers 
for the new labels that would accompany each cylinder through the chain 
of commerce from producers or importers to the end-user (the 
applicator). As currently required under FIFRA, establishments would 
report total quantities of methyl bromide under this new quarantine and 
preshipment registration/label to EPA's Office of Pesticide Programs on 
an annual basis. Following a change in the FIFRA authorized 
registration/label, as well as today's final action, it will be 
possible for the Agency to reconcile the total quantity of methyl 
bromide certified to be solely for quarantine and preshipment 
applications under procedures described Part VI.B and VI.C above, the 
total quantity of methyl bromide produced or imported for quarantine 
and preshipment applications under today's Part VI.A above, and the 
annual FIFRA establishment reports on methyl bromide, which reference 
specific products by registration number.

VII. What Are Other Considerations and Situations on Which EPA Is 
Seeking Comment?

    EPA is seeking comments on the following paragraphs that describe 
possible variations on the exemption that have not been incorporated 
into today's action and therefore are not effective during the interim 
period (through December 31, 2002). To assist in developing the final 
version of the regulation, EPA is seeking comments regarding the items 
described below. In addition, EPA will consider comments and questions 
regarding aspects of today's action that are effective for the interim 
period. If a person has a question about whether a certain aspect of 
today's interim action applies to their situation, EPA is encouraging 
the submission of written questions accompanied by a detailed 
description of how methyl bromide relates to the person's particular 
enterprise. The Agency will consider questions about whether aspects of 
today's interim action apply in the context of EPA's regular process 
for issuing written determinations.

A. What Are Considerations on Which the Agency Is Seeking Comment 
Regarding Definitions Under the International Plant Protection 
Convention (IPPC)?

    Under the International Standards for Phytosanitary Measures 
(ISPMs) adopted by members of the International Plant Protection 
Convention (IPPC) on April 22, 2001, the definition of ``official 
control'' is different than the definition that was agreed to by the 
Parties to the Montreal Protocol. The IPPC definition of the phrase 
``official control'' is, ``the active enforcement of mandatory 
phytosanitary regulations and the application of mandatory 
phytosanitary procedures with the objective of eradication or 
containment of quarantine pests or the management of regulated non-
quarantine pests.'' The IPPC glossary of phytosanitary terms defines 
``official'' as ``established, authorized or performed by a National 
Plant Protection Organization (NPPO).'' In the United States, the NPPO 
is the USDA Animal and Plant Health Inspection Service (APHIS), Plant 
Protection and Quarantine (PPQ) Program.

[[Page 37763]]

    Further, under the ISPMs adopted by the IPPC, the phrase 
``regulated non-quarantine pests'' is defined as, ``a non-quarantine 
pest whose presence in plants for planting affects the intended use of 
those plants with an economically unacceptable impact and which is 
therefore regulated within the territory of the importing contacting 
party.'' Because the IPPC definition of ``regulated non-quarantine 
pest'' refers to ``plants for planting,'' the phytosanitary measure is 
limited to propagative materials, such as strawberry seedlings. 
Although the IPPC's definition of ``official control'' includes 
regulated non-quarantine pests, it should be noted that the Montreal 
Protocol does not include these regulated non-quarantine pests. In 
1998, the TEAP explicitly laid out the differences between the IPPC's 
and the Montreal Protocol's definitions of ``official control'' for 
consideration by the Parties. The Parties rejected making any changes 
to the Protocol's definition of ``official control'' even when 
presented with the IPPC language. EPA is seeking comments on possible 
changes to EPA's interpretation of the phrase ``official control'' as 
used in today's exemption, for purposes of the final rule.

B. What Are considerations on Which the Agency Is Seeking Comment 
Regarding Prophylactic Fumigation of U.S. Exports When the Fumigation 
Is Not Mandated by Import Regulations?

    U.S. businesses sometimes use methyl bromide against non-quarantine 
pests for a commodity that is being exported because it is known that 
the importing country will treat with methyl bromide at the port of 
entry if the detected level of these non-quarantine pests during port-
of-entry inspection exceeds that country's standards. Some U.S. 
exporters give their commodities a prophylactic treatment in the U.S. 
to prevent a much more damaging treatment in the receiving country that 
could occur if non-quarantine pests were found; possibly reducing the 
quality of the commodity. In cases where an official foreign Party 
requirement is specific to quarantine pests, or there is a general 
performance-based quarantine requirement, the use of methyl bromide 
under the exemption for quarantine applications would be appropriate. 
In addition, fumigation with methyl bromide to meet U.S. government 
non-quarantine pest requirements within 21 days prior to export of the 
commodity would also be exempt under the definition of preshipment 
applications. However, EPA is seeking comments that would clarify the 
scope of the prophylactic use of methyl bromide described in this 
section, where the official foreign Party requirement is not specific 
to quarantine pests.

C. What Are Considerations on Which the Agency Is Seeking Comment 
Regarding the Exclusion of Specific Quarantine and Preshipment 
Applications From the Exemption at Some Future Time?

    The Parties to the Protocol in Decision XI/13 request Parties to 
``review their national plant, animal, environmental, health and stored 
product regulations with a view to removing the requirement for the use 
of methyl bromide for quarantine and preshipment where technically and 
economically feasible alternatives exist.'' The reason for a review 
process would be to limit the production and import of methyl bromide 
to only those cases where no other ``technologically and economically 
feasible alternatives exist.'' Through time, it is likely that the use 
of methyl bromide will be less and less necessary for quarantine and 
preshipment applications. When technically and economically feasible 
alternatives to methyl bromide are available, a process could be 
devised that would allow the U.S. to limit the use of this ozone-
depleting substance while taking into account the need to protect 
international trade. In the years beyond the methyl bromide production 
and consumption phaseout, there will continue to be an exemption for 
quarantine and preshipment applications but there may no longer be 
price pressures for moving away from these quarantine and preshipment 
uses of methyl bromide. Therefore, the Parties to the Protocol 
emphasize the importance of reviewing quarantine and preshipment 
applications and identifying when technically and economically feasible 
alternatives exist, and removing these applications from the exemption.
    One option for implementing a review process would be to establish 
a procedure for excluding specific quarantine and preshipment 
applications from the exemption when EPA determines by notice and 
comment rulemaking that alternatives are in significant international 
use for the specific applications. Such a process would allow U.S. 
users of methyl bromide for quarantine and preshipment applications to 
make the case that although alternative(s) are in significant 
international use, the specific circumstances of their U.S. 
applications are unique (e.g., the alternatives are not feasible or 
commercially available in the U.S.) and continue to warrant the use of 
methyl bromide.
    Other options for implementing a review process include: (1) 
Immediately prior to the 2005 methyl bromide phaseout, reviewing and 
listing all quarantine and preshipment applications that would be 
exempt beyond the phaseout through notice and comment rulemaking asking 
for justifications for continued use, (2) eliminating the exemption for 
quarantine and preshipment applications after the phaseout and asking 
users to apply for critical-use exemptions where no technically or 
economically feasible alternatives exist, and (3) conducting periodic 
reviews (i.e., 3 or 5 years) for listing through notice and comment 
rulemaking the specific quarantine and preshipment applications that 
would be exempt because there were no technically or economically 
feasible alternatives. EPA seeks comments on these and any other 
potential processes for reviewing the exemption for quarantine and 
preshipment applications, where technically and economically feasible 
alternatives exist.
    As an alternative to a formal review process, EPA might rely on 
market prices to guide methyl bromide use. The effectiveness of this 
price mechanism is to some extent dependent on the behavior of methyl 
bromide prices over the phasedown period, and particularly on whether a 
separate market evolves for the pure grade of methyl bromide needed for 
quarantine and preshipment uses. Basic economic supply and demand 
principles suggest that the price of methyl bromide is likely to 
increase during the phaseout period, thereby providing incentives for 
the development and use of alternatives. Following the phaseout period 
after January 1, 2005, we expect the price of methyl bromide exempted 
for quarantine and preshipment applications (and other exemptions that 
may be established in the future) to likely be determined by the cost 
of manufacturing those quantities and not by further decreases in 
supply. We are interested in comments on this view. We are especially 
interested in comments addressing: (1) The likely behavior of the price 
of exempt and non-exempt quantities of methyl bromide during the 
phaseout; (2) the likely behavior of the price of exempt methyl bromide 
after the phaseout, (3) the impact on these prices of establishing a 
FIFRA label explicitly for the methyl bromide exempt for quarantine and 
preshipment applications, (4) the possible impact of

[[Page 37764]]

other Federal actions that would influence pricing of methyl bromide, 
and (5) the value of a price mechanism in assuring that methyl bromide 
is directed toward those uses where there are no alternatives and/or 
where it provides the greatest value.

D. What Are Considerations on Which the Agency Is Seeking Comment 
Regarding National Security Fumigations?

    EPA is seeking comments on the possible need for methyl bromide to 
meet special national security quarantine requirements. The Agency 
understands that it might be necessary to treat military or other U.S. 
government property with methyl bromide for import to eliminate 
possible contamination with biological weapons. EPA is seeking comments 
on whether a national security quarantine situation could arise that 
would require a specific exemption. In considering this question, 
commenters should be aware that prior to the phaseout date some methyl 
bromide will still be produced without use restrictions, and after the 
phaseout date, methyl bromide would be available under the emergency 
use exemption consistent with Decision IX/7 as agreed by the Parties to 
the Protocol.

VIII. What Are the Steps To Conform the U.S. Methyl Bromide 
Phaseout Schedule and Exemptions to the Montreal Protocol and the 
Amended Clean Air Act?

    During stakeholder meetings, and in the proposal and final rules 
that established the 25 percent reduction in methyl bromide baseline 
allowances beginning in 1999 (64 FR 9290, 64 FR 29240), EPA described 
its intention to follow with separate rulemakings that would include 
the additional phaseout steps for methyl bromide and establish 
additional exemptions in accordance with the Protocol and the CAA. The 
rule establishing the remaining reduction and phaseout schedule for 
methyl bromide was published November 28, 2000 (65 FR 70795). The 
reduction and phaseout schedule is listed above at the end of Part I.
    After the phaseout on January 1, 2005, critical-use exemptions are 
permitted under the Montreal Protocol and the Clean Air Act when 
nominated by the United States and approved by the Parties. In 
addition, an emergency use exemption of no more than 20 metric tonnes 
is available after the phaseout on January 1, 2005. EPA, in 
consultation with the U.S. Department of Agriculture, is in the process 
of developing a rulemaking to establish the emergency-use and critical-
use exemptions. In 2001, EPA initiated stakeholder meetings to develop 
rulemaking that will establish the process for an emergency use 
exemption and the process for critical-use exemptions, which will be 
designed to ensure the U.S. meets its obligations under the Montreal 
Protocol consistent with statutory requirements in the Clean Air Act. 
In 2002, a separate Federal Register notice will be published asking 
for people to submit specific information to substantiate requests for 
a critical-use exemption. However, at this time no decisions have yet 
been made regarding what uses will be exempted as ``critical.'' 
Sometime in advance of 2005, EPA will establish a process for an 
emergecny use exemption through notice and comment rulemaking.

IX. Administrative Requirements

A. Unfunded Mandates Reform Act

    Because the agency has made a ``good cause'' finding that this 
action is not subject to notice-and-comment requirements under the 
Administrative Procedure Act or any other statute as explained in the 
Supplementary Information section of this rulemaking, it is not subject 
to section 202 and 205 of the Unfunded Mandates Reform Act of 1995 
(UMRA) (Public Law 104-4).

B. Regulatory Flexibility Act (RFA), as Amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et 
seq.

    Because the agency has made a ``good cause'' finding that this 
action is not subject to notice-and-comment requirements under the 
Administrative Procedure Act or any other statute as explained in the 
SUPPLEMENTARY INFORMATION section of this rulemaking, it is not subject 
to the regulatory flexibility provisions of the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.)

C. Executive Order 12866

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether this regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines a ``significant'' regulatory action 
as one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, OMB has notified 
EPA that it considers this a ``significant regulatory action'' within 
the meaning of the Executive Order. EPA has submitted this action to 
OMB for review. Changes made in response to OMB suggestions or 
recommendations on the original rule submitted to them will be 
documented in the public record.

D. Applicability of E.O. 13045--Children's Health Protection

    Executive Order 13045: ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that: (1) Is determined to be ``economically significant'' 
as defined under E.O. 12866, and (2) concerns an environmental health 
or safety risk that EPA has reason to believe may have a 
disproportionate effect on children. If the regulatory action meets 
both criteria, the Agency must evaluate the environmental health or 
safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    EPA interprets E.O. 13045 as applying only to those regulatory 
actions that are based on health or safety risks, such that the 
analysis required under section 5-501 of the Order has the potential to 
influence the regulation. This is not such a rule, and therefore E.O. 
13045 does not apply.

E. Paperwork Reduction Act

    The Office of Management and Budget (OMB) has approved the 
information collection requirements contained in this rule for six (6) 
months under the provisions of the Paperwork Reduction Act, 44 U.S.C. 
3501 et seq. and the emergency approval provisions of 5 CFR 1320.13. 
The OMB control number is 2060-0170.
    Today's action also serves as the first notice of a request for 
comment on an extension of today's approval. EPA will follow this 
action with a second notice in the Federal Register regarding

[[Page 37765]]

today's information collection. EPA is soliciting comments on specific 
aspects of the information collection as described below. Comments are 
requested on the Agency's need for this information, the accuracy of 
the provided burden estimates, and any suggested methods for minimizing 
respondent burden, including through the use of automated collection 
techniques. Send comments on the ICR to the Director, Collection 
Strategies Division; U.S. Environmental Protection Agency (2822); 1200 
Pennsylvania Ave., NW., Washington, DC 20460; and to the Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
725 17th St., NW., Washington, DC 20503, marked ``Attention: Desk 
Officer for EPA.'' Include the ICR number in any correspondence. 
Comments must be submitted on or before September 17, 2001. Copies of 
material supporting this ICR notice are available free of charge from 
the Stratospheric Ozone Protection Hotline at 1-800-296-1996 between 
the hours of 10 am and 4 pm Eastern Standard Time or may be received 
electronically by sending an e-mail to [email protected]. For further 
information contact, Tom Land, U.S. Environmental Protection Agency, 
Global Programs Division (6205J), 1200 Pennsylvania Ave., NW., 
Washington, DC 20460, telephone (202)-564-9185, or facsimile (202)-565-
2155.
    The EPA would like to solicit comments to: (i) Evaluate whether the 
proposed collection of information is necessary for the proper 
performance of the functions of the agency, including whether the 
information will have practical utility; (ii) evaluate the accuracy of 
the agency's estimate of the burden of the proposed collection of 
information, including the validity of the methodology and assumptions 
used; (iii) enhance the quality, utility, and clarity of the 
information to be collected; and (iv) minimize the burden of the 
collection of information on those who are to respond, including 
through the use of appropriate automated electronic, mechanical, or 
other technological collection techniques or other forms of information 
technology, e.g., permitting electronic submission of responses.
    The Office of Management and Budget (OMB) previously approved the 
information collection requirements contained in the final rule 
promulgated on August 4, 1998, and assigned OMB control number 2060-
0170 (EPA ICR No. 1432.18).
    In relation to the expected benefits of today's exemption from the 
phaseout schedule for methyl bromide, this action is adding additional 
reporting and recordkeeping requirements. This action increases the 
information collection burden under the provisions of the Paperwork 
Reduction Act, 44 U.S.C. 3501 et seq. This action adds reporting by 
distributors of methyl bromide regarding the total quantity sold that 
is certified to be solely for quarantine and preshipment applications. 
This action also requires applicators of methyl bromide to certify that 
specified quantities purchased will be used solely for quarantine and 
preshipment applications. Producers and importers of methyl bromide 
must include additional information in existing quarterly reports. In 
addition, producers that export and third-party exporters must submit 
additional information regarding quantities of methyl bromide exported 
for quarantine and preshipment applications. Today's action also 
includes recordkeeping requirements associated with the reporting 
listed above and an additional recordkeeping requirement for commodity 
owners or shippers who must formally request methyl bromide use citing 
the treatment, official control or official requirement for the 
quarantine and preshipment application.
    The information collection under this action is designed to 
implement the exemption in paragraph 5 under article 2H of the Montreal 
Protocol for quantities of methyl bromide used for quarantine and 
preshipment applications as well as the exemption under 604(d)(5) of 
the CAA. The information collection under this rule is authorized under 
sections 603(b) and 603(d) of the Clean Air Act Amendments of 1990 
(CAA). This information collection is conducted to meet U.S. 
obligations under Article 7, Reporting Requirements, of the Montreal 
Protocol on Substances that Deplete the Ozone Layer (Protocol); and to 
carry out the requirements of Title VI of the CAA, including sections 
603 and 614.
    The reporting requirements included in this rule are intended to:
    (1) Allow exempted production and import for a specific exemption 
and the consequent tracking of that production and import;
    (2) Respond to industry comments on the functioning of the program 
to streamline reporting and eliminate administrative inefficiencies;
    (3) Satisfy U.S. obligations under the international treaty, The 
Montreal Protocol on Substances that Deplete the Ozone Layer 
(Protocol), to report data under Article 7;
    (4) Fulfill statutory obligations under Section 603(b) of Title VI 
of the Clean Air Act Amendments of 1990 (CAA) for reporting and 
monitoring;
    (5) Provide information to report to Congress on the production, 
use and consumption of class I controlled substances as statutorily 
required in Section 603(d) of Title VI of the CAA.
    EPA informs respondents that they may assert claims of business 
confidentiality for any of the information they submit. Information 
claimed confidential will be treated in accordance with the procedures 
for handling information claimed as confidential under 40 CFR Part 2, 
Subpart B, and will be disclosed only to the extent, and by means of 
the procedures, set forth in that subpart. If no claim of 
confidentiality is asserted when the information is received by EPA, it 
may be made available to the public without further notice to the 
respondents (40 CFR 2.203).
    The information collection requirements for this action have an 
estimated reporting burden averaging 1.38 hours per response. This 
estimate includes time for reviewing instructions, searching existing 
data sources, gathering and maintaining the data needed and completing 
the collection of information.
    The estimate includes the time needed to comply with EPA's 
reporting requirements, as well as that used for the completion of the 
reports.

----------------------------------------------------------------------------------------------------------------
                                     No. of        Responses/         Total         Hours per
      Collection activity          respondents     respondent       responses        response       Total hours
----------------------------------------------------------------------------------------------------------------
Producers and Importers Report.               4               4              16              1                16
Exporters Report...............               2               4               8              8                64
Applicator Certification.......              15               6              90              0.5              45
Distributor Report.............              15               1              15             16               240
Commodity Owner, Shipper or                 500              10             500              1               500
 Agent Recordkeeping...........

[[Page 37766]]

 
    Total Burden Hrs...........  ..............  ..............  ..............  ...............             865
                                                                                                 ---------------
----------------------------------------------------------------------------------------------------------------

    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.

F. Executive Order 13132 (Federalism):

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    Under Section 6 of Executive Order 13132, EPA may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, or EPA 
consults with State and local officials early in the process of 
developing the regulation. EPA also may not issue a regulation that has 
federalism implications and that preempts State law, unless the Agency 
consults with State and local officials early in the process of 
developing the regulation.
    This rule does not have federalism implications. It will not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. This rule does not in any way 
restrict States from continuing to operate their plant, animal, 
environmental, health or stored product protection programs associated 
with quarantine and preshipment applications. Thus, the requirements of 
section 6 of the Executive Order do not apply to this rule.

G. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    On January 1, 2001, EO 13084 was superseded by EO 13175. However, 
this rule was developed during the period when EO 13084 was still in 
force, and so tribal considerations were addressed under EO 13084. 
Under Executive Order 13084, EPA may not issue a regulation that is not 
required by statute, that significantly or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments, or EPA consults with those 
governments. If EPA complies by consulting, Executive Order 13084 
requires EPA to provide the Office of Management and Budget, in a 
separately identified section of the preamble to the rule, a 
description of the extent of EPA's prior consultation with 
representatives of affected tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires EPA to develop 
an effective process permitting elected officials and other 
representatives of Indian tribal governments ``to provide meaningful 
and timely input in the development of regulatory policies or matters 
that significantly or uniquely affect their communities.''
    Today's rule does not significantly or uniquely affect the 
communities of Indian tribal governments. The rule does not impose any 
enforceable duties on communities of Indian tribal governments. 
Accordingly, the requirements of section 3(b) of Executive Order 13084 
do not apply to this rule.

H. The National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, Sec. 12(d) (15 U.S.C. 272 
note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards. This 
rulemaking does not involve technical standards. Therefore, EPA did not 
consider the use of any voluntary consensus standards.

I. Executive Order 13211 (Energy Effects)

    This rule is not a ``significant energy action'' as defined in 
Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 
(May 22, 2001)) because it is not likely to have a significant adverse 
effect on the supply, distribution, or use of energy. Further, we have 
concluded that this rule is not likely to have any adverse energy 
effects.

X. Congressional Review

A. Submission to Congress and the Comptroller General

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate,

[[Page 37767]]

the U.S. House of Representatives, and the Comptroller General of the 
United States prior to publication of the rule in the Federal Register. 
A major rule cannot take effect until 60 days after it is published in 
the Federal Register. This rule is not a ``major rule'' as defined by 5 
U.S.C. 804(2). This rule will be effective July 19, 2001.

List of Subjects in 40 CFR Part 82

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Chemicals, Exports, Imports, Methyl Bromide, 
Quarantine, Preshipment, Ozone layer.

    Dated: July 11, 2001.
Christine Todd Whitman,
Administrator.


    For reasons set out in the preamble, title 40 chapter I of the Code 
of Federal Regulations is amended as follows:

PART 82--PROTECTION OF STRATOSPHERIC OZONE

    1. The authority citation for subpart 82 continues to read as 
follows:

    Authority: 42 U.S.C. 7414, 7601, 7671-7671q.

Subpart A--Production and Consumption Controls

    2. Section 82.3 is amended by adding new definitions in 
alphabetical order for the terms, ``Applicator'', ``Commodity owner, 
shipper or their agent'', ``Distributor of methyl bromide'', 
``Preshipment applications'', and ``Quarantine applications''.


Sec. 82.3  Definitions.

    As used in this subpart, the term:
    Applicator means the person who applies methyl bromide.
* * * * *
    Commodity owner, shipper or their agent means the person requesting 
that an applicator use methyl bromide for quarantine or preshipment 
applications.
* * * * *
    Distributor of methyl bromide means the person directly selling a 
class I, Group VI controlled substance to an applicator.
* * * * *
    Preshipment applications, with respect to class I, Group VI 
controlled substances, are those non-quarantine applications applied 
within 21 days prior to export to meet the official requirements of the 
importing country or existing official requirements of the exporting 
country. Official requirements are those which are performed by, or 
authorized by, a national plant, animal, environmental, health or 
stored product authority.
* * * * *
    Quarantine applications, with respect to class I, Group VI 
controlled substances, are treatments to prevent the introduction, 
establishment and/or spread of quarantine pests (including diseases), 
or to ensure their official control, where:
    (1) Official control is that performed by, or authorized by, a 
national plant, animal or environmental protection or health authority;
    (2) Quarantine pests are pests of potential importance to the areas 
endangered thereby and not yet present there, or present but not widely 
distributed and being officially controlled.
* * * * *

    3. Section 82.4 is amended by redesignating paragraph (a) as (a)(1) 
and republishing the text, adding paragraph (a)(2), redesignating 
paragraph (c) as (c)(1) and republishing the text, adding paragraph 
(c)(2), redesignating paragraph (k) as (k)(1) and republishing the 
text, and adding paragraph (k)(2) as follows:


Sec. 82.4  Prohibitions.

    (a)(1) Prior to January 1, 1996, for all Groups of class I 
controlled substances, and prior to January 1, 2005, for class I, Group 
VI controlled substances, no person may produce, at any time in any 
control period, (except that are transformed or destroyed domestically 
or by a person of another Party) in excess of the amount of unexpended 
production allowances or unexpended Article 5 allowances for that 
substance held by that person under the authority of this subpart at 
that time for that control period. Every kilogram of excess production 
constitutes a separate violation of this subpart.
    (2) From January 1, 2001 through December 31, 2002, production of 
class I, Group VI controlled substances is not subject to the 
prohibitions in paragraph (a)(1) of this section if it is solely for 
quarantine or preshipment applications as defined in this Subpart.
* * * * *
    (c)(1) Prior to January 1, 1996, for all Groups of class I 
controlled substances, and prior to January 1, 2005, for class I, Group 
VI controlled substances, no person may produce or (except for 
transhipments, heels or used controlled substances) import, at any time 
in any control period, (except for controlled substances that are 
transformed or destroyed) in excess of the amount of unexpended 
consumption allowances held by that person under the authority of this 
subpart at that time for that control period. Every kilogram of excess 
production or importation (other than transhipments, heels or used 
controlled substances) constitutes a separate violation of this 
subpart.
    (2) From January 1, 2001 through December 31, 2002, production and 
import of class I, Group VI controlled substances is not subject to the 
prohibitions in paragraph (c)(1) of this section if it is solely for 
quarantine or preshipment applications as defined in this Subpart.
* * * * *
    (k)(1) Prior to January 1, 1996, for all Groups of class I 
controlled substances, and prior to January 1, 2005, for class I, Group 
VI controlled substances, a person may not use production allowances to 
produce a quantity of a class I controlled substance unless that person 
holds under the authority of this subpart at the same time consumption 
allowances sufficient to cover that quantity of class I controlled 
substances nor may a person use consumption allowances to produce a 
quantity of class I controlled substances unless the person holds under 
authority of this subpart at the same time production allowances 
sufficient to cover that quantity of class I controlled substances. 
However, prior to January 1, 1996, for all class I controlled 
substances, and prior to January 1, 2005, for class I, Group VI 
controlled substances, only consumption allowances are required to 
import, with the exception of transhipments, heels, used controlled 
substances. Effective January 1, 1996, for all Groups of class I 
controlled substances, except Group VI, only essential-use allowances 
or exemptions are required to import class I controlled substances, 
with the exception of transhipments, heels and used controlled 
substances.
    (2) Notwithstanding paragraph (k)(1) of this section, from January 
1, 2001 through December 31, 2002, for class I, Group VI controlled 
substances, consumption allowances are not required to import 
quantities solely for quarantine or preshipment applications as defined 
in this Subpart.
* * * * *

    4. Section 82.13 is amended by:
    a. Adding paragraphs (f)(2)(xvii) through (f)(2)(xix), and 
(f)(3)(xiii) through (f)(3)(xv),
    b. Adding paragraphs (g)(1)(xvii) through (g)(1)(xix), and 
(g)(4)(xv) through (g)(4)(xvii),
    c. Revising paragraph (h),
    (d). Adding paragraphs (aa), (bb), and (cc).

[[Page 37768]]

    The revisions and additions read as follows:


Sec. 82.13  Recordkeeping and reporting requirements.

* * * * *
    (f) * * *
    (2) * * *
    (xvii) For class I, Group VI controlled substances, dated records 
of the quantity of controlled substances produced for quarantine and 
preshipment applications and quantity sold for quarantine and 
preshipment applications;
    (xviii) Written certifications that quantities of class I, Group VI 
controlled substances produced solely for quarantine and preshipment 
applications were purchased by distributors or applicators to be used 
only for quarantine and preshipment applications in accordance with the 
definitions in this Subpart; and
    (xix) Written verifications from a U.S. purchaser that class I, 
Group VI controlled substances produced solely for quarantine and 
preshipment applications, if exported, will be exported solely for 
quarantine and preshipment applications upon receipt of a certification 
in accordance with the definitions of this Subpart and requirements in 
paragraph (h) of this section.
    (3) * * *
    (xiii) The amount of class I, Group VI controlled substances sold 
or transferred during the quarter to a person other than the producer 
solely for quarantine and preshipment applications;
    (xiv) A list of the quantities of class I, Group VI controlled 
substance produced by the producer and exported by the producer and/or 
by other U.S. companies, to a Party to the Protocol that will be used 
solely for quarantine and preshipment applications and therefore were 
not produced expending production or consumption allowances; and
    (xv) For quarantine and preshipment applications of class I, Group 
VI controlled substances in the United States or by a person of another 
Party, one copy of a certification that the material will be used only 
for quarantine and preshipment applications in accordance with the 
definitions in this Subpart from each recipient of the material and a 
list of additional quantities shipped to that same person for the 
quarter.
* * * * *
    (g) * * *
    (1) * * *
    (xvii) For class I, Group VI controlled substances, dated records 
of the quantity of controlled substances imported for quarantine and 
preshipment applications and quantity sold for quarantine and 
preshipment applications;
    (xviii) Written certifications that quantities of class I, Group VI 
controlled substances imported solely for quarantine and preshipment 
applications were purchased by distributors or applicators to be used 
only for quarantine and preshipment applications in accordance with the 
definitions in this Subpart; and
    (xix) Written verifications from a U.S. purchaser that class I, 
Group VI controlled substances imported solely for quarantine and 
preshipment applications, if exported, will be exported solely for 
quarantine and preshipment applications upon receipt of a certification 
in accordance with the definitions of this Subpart and requirements in 
paragraph (h) of this section.
* * * * *
    (4) * * *
    (xv) The amount of class I, Group VI controlled substance sold or 
transferred during the quarter to a person other than the importer 
solely for quarantine and preshipment applications;
    (xvi) A list of the quantities of class I, Group VI controlled 
substance exported by the importer and or by other U.S. companies, to a 
Party to the Protocol that will be used solely for quarantine and 
preshipment applications and therefore were not imported expending 
consumption allowances; and
    (xvii) For quarantine and preshipment applications of class I, 
Group VI controlled substances in the United States or by a person of 
another Party, one copy of a certification that the material will be 
used only for quarantine and preshipment applications in accordance 
with the definitions in this Subpart from each recipient of the 
material and a list of additional quantities shipped to that same 
person for the quarter.
    (h) Reporting Requirements--Exporters.
    (1) For any exports of class I controlled substances (except Group 
VI) not reported under Sec. 82.10 of this subpart (additional 
consumption allowances), or under paragraph (f)(3) of this section 
(reporting for producers of controlled substances), the exporter who 
exported a class I controlled substance (except Group VI) must submit 
to the Administrator the following information within 45 days after the 
end of the control period in which the unreported exports left the 
United States:
    (i) The names and addresses of the exporter and the recipient of 
the exports;
    (ii) The exporter's Employee Identification Number;
    (iii) The type and quantity of each controlled substance exported 
and what percentage, if any, of the controlled substance is used, 
recycled or reclaimed;
    (iv) The date on which, and the port from which, the controlled 
substances were exported from the United States or its territories;
    (v) The country to which the controlled substances were exported;
    (vi) The amount exported to each Article 5 country;
    (vii) The commodity code of the controlled substance shipped; and
    (viii) The invoice or sales agreement containing language similar 
to the Internal Revenue Service Certificate that the purchaser or 
recipient of imported controlled substances intends to transform those 
substances, or destruction verifications (as in paragraph(k) of this 
section) showing that the purchaser or recipient intends to destroy the 
controlled substances.
    (2) For any exports of class I, Group VI controlled substances not 
reported under Sec. 82.10 of this subpart (additional consumption 
allowances), or under paragraph (f)(3) of this section (reporting for 
producers of controlled substances), the exporter who exported a class 
I, Group VI controlled substance must submit to the Administrator the 
following information within 45 days after the end of each quarter in 
which the unreported exports left the United States:
    (i) The names and addresses of the exporter and the recipient of 
the exports;
    (ii) The exporter's Employee Identification Number;
    (iii) The type and quantity of each controlled substance exported 
and what percentage, if any, of the controlled substance is used, 
recycled or reclaimed;
    (iv) The date on which, and the port from which, the controlled 
substances were exported from the United States or its territories;
    (v) The country to which the controlled substances were exported;
    (vi) The amount exported to each Article 5 country;
    (vii) The commodity code of the controlled substance shipped; and
    (viii) The invoice or sales agreement containing language similar 
to the Internal Revenue Service Certificate that the purchaser or 
recipient of imported controlled substances intends to transform those 
substances, the

[[Page 37769]]

destruction verifications (as in paragraph (k) of this section) showing 
that the purchaser or recipient intends to destroy the controlled 
substances, or the certification that the purchaser or recipient and 
the eventual applicator will only use the material for quarantine and 
preshipment applications in accordance with the definitions in this 
Subpart.
* * * * *
    (aa) Every distributor of methyl bromide (class I, Group VI 
controlled substances) who purchases or receives a quantity produced or 
imported solely for quarantine or preshipment applications under the 
exemptions in this Subpart must comply with recordkeeping and reporting 
requirements specified in this paragraph (aa) of this section.
    (1) Every distributor of methyl bromide must certify to the 
producer or importer that quantities received that were produced or 
imported solely for quarantine and preshipment applications under the 
exemptions in this Subpart will be used only for quarantine 
applications or preshipment applications in accordance with the 
definitions in this Subpart.
    (2) Every distributor of a quantity of methyl bromide that was 
produced or imported solely for quarantine or preshipment applications 
under the exemptions in this Subpart must receive from an applicator a 
certification of the quantity of class I, Group VI controlled 
substances ordered, prior to delivery of the quantity, stating that the 
quantity will be used solely for quarantine or preshipment applications 
in accordance with definitions in this Subpart.
    (3) Every distributor of methyl bromide who receives a 
certification from an applicator that the quantity ordered and 
delivered will be used solely for quarantine and preshipment 
applications in accordance with definitions in this Subpart must 
maintain the certifications as records for 3 years.
    (4) Every distributor of methyl bromide who receives a 
certification from an applicator that the quantity ordered and 
delivered will be used solely for quarantine and preshipment 
applications in accordance with definitions in this Subpart must report 
to the Administrator within 45 days after the end of the control 
period, the total quantity delivered for which certifications were 
received that stated the class I, Group VI controlled substance would 
be used solely for quarantine and preshipment applications in 
accordance with definitions in this Subpart.
    (bb) Every applicator of class I, Group VI controlled substances 
who purchases or receives a quantity produced or imported solely for 
quarantine and preshipment applications under the exemptions in this 
Subpart must comply with recordkeeping and reporting requirements 
specified in this paragraph (bb) of this section.
    (1) Recordkeeping--Applicators. Every applicator of class I, Group 
VI controlled substances produced or imported solely for quarantine and 
preshipment applications under the exemptions of this Subpart must 
maintain, for every application, a document from the commodity owner, 
shipper or their agent requesting the use of class I, Group VI 
controlled substances citing the regulatory requirement that justifies 
its use in accordance with definitions in this Subpart. These documents 
shall be retained for 3 years.
    (2) Reporting--Applicators. Every applicator of class I, Group VI 
controlled substances who purchases or receives a quantity of class I, 
Group VI controlled substance that was produced or imported solely for 
quarantine and preshipment applications under the exemptions in this 
Subpart shall provide the distributor of the methyl bromide, prior to 
shipment of the class I, Group VI controlled substance, with a 
certification that the quantity of controlled substances will be used 
only for quarantine and preshipment applications as defined in this 
Subpart.
    (cc) Every commodity owner, shipper or their agent requesting an 
applicator to use a quantity of class I, Group VI controlled substance 
that was produced or imported solely for quarantine and preshipment 
applications under the exemptions of this Subpart must maintain a 
record for 3 years, for each request, certifying knowledge of the 
requirements associated with the exemption for quarantine and 
preshipment applications in this Subpart and citing the regulatory 
requirement that justifies the use of the class I, Group VI controlled 
substance in accordance with definitions in this Subpart.

[FR Doc. 01-17907 Filed 7-18-01; 8:45 am]
BILLING CODE 6560-50-P