[Federal Register Volume 70, Number 102 (Friday, May 27, 2005)]
[Rules and Regulations]
[Pages 30626-30634]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-10618]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
Bureau of Alcohol, Tobacco, Firearms, and Explosives
27 CFR Part 555
[Docket No. ATF 5F; AG Order No. 2766-2005]
RIN 1140-AA02
Identification Markings Placed on Imported Explosive Materials
and Miscellaneous Amendments (2000R-238P)
AGENCY: Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF),
Department of Justice.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Department of Justice is amending the current regulations
of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) to
require licensed importers to identify by marking all explosive
materials they import for sale or distribution. Licensed manufacturers
currently are required to place identification markings on explosive
materials manufactured in the United States. Similar marking
requirements, however, do not currently exist for imported explosive
materials. Identification markings are needed on explosives to help
ensure that these materials can be effectively traced for criminal
enforcement purposes. Although ATF does not have regulatory oversight
over foreign manufacturers, it does have authority over licensed
importers of explosive materials. This rule will impose identification
requirements on licensed importers of explosive materials that are
substantially similar to the marking requirements imposed on domestic
manufacturers.
In addition, the final rule incorporates into the regulations the
provisions of ATF Ruling 75-35, relating to methods of marking
containers of explosive materials. This final rule also amends the
regulations to remove the requirement that a licensee or permittee file
for an amended license or permit in order to change the class of
explosive materials described in their license or permit from a lower
to a higher classification.
DATES: This rule is effective July 26, 2005.
FOR FURTHER INFORMATION CONTACT: James P. Ficaretta; Enforcement
Programs and Services; Bureau of Alcohol, Tobacco, Firearms, and
Explosives; U.S. Department of Justice; 650 Massachusetts Avenue, NW.,
Washington, DC 20226, telephone (202) 927-8203.
SUPPLEMENTARY INFORMATION:
I. Background
The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) is
responsible for implementing Title XI, Regulation of Explosives (18
United States Code (U.S.C.) Chapter 40), of the Organized Crime Control
Act of 1970. One of the stated purposes of the Act is to reduce the
hazards to persons and property arising from the misuse of explosive
materials. Under section 847 of title 18, U.S.C., the Attorney General
``may prescribe such rules and regulations as he deems reasonably
necessary to carry out the provisions of this chapter.'' Regulations
that implement the provisions of chapter 40 are contained in title 27,
Code of Federal Regulations (CFR), part 555 (``Commerce in
Explosives'').
The term ``explosive materials,'' as defined in 27 CFR 555.11,
means explosives, blasting agents, water gels, and detonators. The term
includes, but is not limited to, all items in the ``List of Explosive
Materials'' provided for in Sec. 555.23. Section 555.202 provides for
three classes of explosive materials: (1) High explosives (e.g.,
dynamite, flash powders, and bulk salutes), (2) low explosives (e.g.,
black powder, safety fuses, igniters, igniter cords, fuse lighters, and
display fireworks (except bulk salutes)), and (3) blasting agents
(e.g., ammonium nitrate-fuel oil and certain water gels).
Section 555.109 requires licensed manufacturers of explosive
materials to legibly identify by marking all explosive materials
manufactured for sale or distribution. The marks required by this
section include the identity of the manufacturer and the location,
date, and shift of manufacture. This section also provides that
licensed manufacturers must place the required marks on each cartridge,
bag, or other immediate container of explosive materials for sale or
distribution, as well as on the outside container, if any, used for
their packaging.
Exceptions to the marking requirements are set forth in Sec.
555.109(b). This section provides that (1) licensed manufacturers of
blasting caps are only required to place the required identification
marks on the containers used for the packaging of blasting caps, (2)
the Director may
[[Page 30627]]
authorize other means of identifying explosive materials upon receipt
of a letter application from the licensed manufacturer showing that
other identification is reasonable and will not hinder the effective
administration of part 555, and (3) the Director may authorize the use
of other means of identification on fireworks instead of the required
markings specified above.
The current regulations do not require the marking of imported
explosive materials.
II. Petition--Institute of Makers of Explosives
The Institute of Makers of Explosives (IME) filed a petition with
ATF, dated March 7, 2000, requesting an amendment of the regulations to
require licensed importers to place the same identification marks on
imported explosive materials that are currently required for explosive
materials manufactured in the United States. As stated in the petition,
IME is the safety association of the commercial explosives industry.
Its mission is to promote safety and the protection of employees,
users, the public and the environment, and to encourage the adoption of
uniform rules and regulations in the manufacture, transportation,
storage, handling, use, and disposal of explosive materials used in
blasting and other operations.
According to the petitioner, commerce in explosives is a global
enterprise and it expects the quantity of imported explosives to
increase over time. For example, the petitioner stated that between
1994 and 1997, imports of high explosives increased 14-fold to account
for approximately 17 percent of all high explosives used annually in
the United States. IME further stated that while unmarked high
explosives may have entered the United States over the years, it was
not until 1999 that the association became aware of significant
quantities of unmarked cast boosters being imported into the country.
IME contended that, by the end of 1999, about two million unmarked
units had been distributed in the United States. The petitioner further
stated that many more thousands of tons of these high explosives were
expected to be imported into the United States in the near future.
Without a change in the regulations, IME was concerned that these
explosives would enter into the commerce of the U.S. without marks of
identification, posing significant safety and security risks to the
public. Although IME informed ATF that many of its member companies
importing explosives into the U.S. mark their imported explosive
materials in an effort to ensure the traceability and accountability of
the materials, it believes that all imported explosive materials should
be appropriately identified. Therefore, it petitioned ATF to amend the
Federal explosives regulations.
By letter dated August 2, 2000, IME amended its petition to narrow
its scope to importers of high explosives and blasting agents. IME
stated that it did not understand that the scope of its initial
petition would apply to importers of low explosives. IME noted that it
has a specific standard recommending that high explosives and blasting
agents be marked with a date/plant/shift code.
III. Advance Notice of Proposed Rulemaking
Based on IME's petition, ATF published in the Federal Register on
November 13, 2000, an advance notice of proposed rulemaking (ANPRM)
requesting information and comments from interested persons on the
desirability and feasibility of marking imported explosive materials
(Notice No. 906, 65 FR 67669). Although ATF solicited comments on
specific questions, it also requested any relevant information on the
subject. The comment period for Notice No. 906 closed on January 12,
2001.
In response to Notice No. 906, ATF received three comments. Two
commenters argued that licensed importers should place the same or
similar identification marks on imported explosive materials that are
currently required for explosive materials manufactured in the United
States.
The petitioner, IME, submitted the third comment. IME reiterated
its position that imported high explosives and blasting agents should
contain the same identification markings prescribed in the regulations
for domestically manufactured explosives. IME also included an
attachment as part of its comment that provided responses to the
questions posed by ATF in the advance notice.
IV. Notice of Proposed Rulemaking
On October 16, 2002, after consideration of the comments received
in response to Notice No. 906, ATF published in the Federal Register a
notice proposing to amend the regulations to require licensed importers
to identify by marking all imported explosive materials (Notice No.
956, 67 FR 63862). ATF stated its belief that the proposed marking
requirements would help ensure that imported explosive materials can be
effectively traced for criminal enforcement purposes. ATF also proposed
to incorporate into the regulations the provisions of ATF Ruling 75-35,
relating to methods of marking containers of explosive materials. In
addition, ATF proposed to amend the regulations to remove the
requirement that a licensee or permittee file for an amended license or
permit in order to change the class of explosive materials described in
their license or permit from a lower to a higher classification. The
specific regulatory proposals in Notice No. 956 are discussed in the
following paragraphs.
A. Amendments to Sec. 555.109
In an effort to protect the public from the misuse of explosive
materials, to more easily identify explosive materials, and to
successfully trace misused explosive materials or explosive materials
used in crimes, ATF proposed to amend Sec. 555.109 to provide that
licensed importers and permittees must identify by marking all
explosive materials they import for sale or distribution, or import for
their own use. The required marks must be legible and in the English
language, using Roman letters and Arabic numerals. The marks must
identify the importer's or permittee's name and address, the location
(city and country) where the explosive materials were manufactured, as
well as the date and shift of manufacture. ATF did not propose to
require the name of the foreign manufacturer on imported explosives as
requested by IME in its comments submitted in response to the advance
notice. Instead, ATF proposed to require placement of the name of the
importer on the explosive materials because ATF does not have
regulatory oversight over foreign manufacturers, particularly with
respect to their recordkeeping practices.
As proposed, the required marks must be placed on each cartridge,
bag, or other immediate container of explosive materials that are
imported, as well as on any outside container used for their packaging.
This is consistent with current requirements for domestically
manufactured explosives. The proposed regulations also provided that
the required marks of identification must be placed on imported
explosive materials within 24 hours of release from Customs custody.
In addition, under the proposed regulations, the exceptions to the
marking requirements currently specified in the regulations would apply
to imported explosive materials as well.
ATF also proposed other amendments to Sec. 555.109. ATF clarified
that licensed manufacturers must place the required marks of
identification on the explosive
[[Page 30628]]
materials at the time of manufacture. ATF also proposed to incorporate
into the regulations the provisions of ATF Ruling 75-35 (1975-ATF C.B.
65). This ruling authorizes any method, or combination of methods, for
affixing the required marks to the immediate container of explosive
materials, or outside containers used for the packaging thereof,
provided the identifying marks are legible, show all the required
information, and are not rendered unreadable by extended periods of
storage. The ruling also provides that where it is desired to utilize a
coding system and omit printed markings on the containers, a letterhead
application displaying the coding to be used and the manner of its
application must be filed by the licensed manufacturer with, and
approved by, the Director prior to the use of the proposed coding.
Finally, the ruling provides that where a manufacturer operates his or
her plant for only one shift during the day, the shift of manufacture
need not be shown. Upon the effective date of a final rule in this
matter, ATF Ruling 75-35 would be declared obsolete.
B. Miscellaneous Proposals--Amendment of Sec. Sec. 555.55 and 555.41
Section 555.55 provides that a licensee or permittee who intends to
change the class of explosive materials described in his or her license
from a lower to a higher classification (e.g., black powder to
dynamite) must file an application on ATF Form 5400.13/ATF Form 5400.16
(Application for License or Permit) with the ATF National Licensing
Center. If the change in class of explosive materials would require a
change in magazines, the amended application must include a description
of the type of construction as prescribed in part 555. Business or
operations with respect to the new class of explosive materials may not
be commenced before issuance of the amended license or amended permit.
Finally, upon receipt of the amended license or amended permit, the
licensee or permittee must submit his or her superseded license or
superseded permit and any copies furnished with the license or permit
to the ATF National Licensing Center.
ATF proposed to remove Sec. 555.55. ATF believes that removing
this section would provide more flexibility to the explosives industry
in terms of the classes of explosive materials involved in their
businesses, while not reducing the requirement to store explosive
materials in accordance with the regulations contained in subpart K.
Section 555.41 provides general licensing and permit requirements
under the Federal explosives laws. Technical amendments were made with
respect to Sec. 555.41 in order to be consistent with the proposed
amendment of Sec. 555.55.
The comment period for Notice No. 956 closed on January 14, 2003.
V. Notice No. 956--Analysis of Comments and Decisions
ATF received two comments in response to Notice No. 956. Trade
associations, the IME (petitioner) and the American Pyrotechnics
Association (APA), each submitted comments. IME stated that it
represents United States manufacturers of high explosives and other
companies that distribute explosives or provide related services. It
also stated that over 2.5 million metric tons of explosives are
consumed annually in the United States of which IME member companies
produce over 95 percent and that the value of its shipments is
estimated in excess of $1 billion annually. In addition, the commenter
stated that part of its mission is ``to encourage the adoption of
uniform rules and regulations in the manufacture, transportation,
storage, handling, use and disposal of explosive materials used in
blasting and other essential operations.'' IME expressed concerns that
the proposed regulations would require different markings for imported
and domestically manufactured explosives. It also requested
clarification of some of ATF's statements in the proposed rule. IME's
concerns and questions are discussed in the following paragraphs.
As stated in its comment, the APA is the principal industry trade
association representing manufacturers, importers, and distributors of
fireworks in the United States. It has over 260 member companies that
are responsible for 90 percent of the fireworks displayed in the United
States. The APA stated that while it shares the same public safety
concerns as the petitioner (IME) for initiating this rulemaking
proceeding, it believes that high explosives and low explosives (e.g.,
fireworks) should be treated differently for the purposes of marking,
recordkeeping, and tracking requirements. The commenter explained that
the commercial explosives industry differs in many ways from the
fireworks industry:
Products manufactured, imported and distributed by the commercial
explosives industry are intended to function by detonation, and
their products are generally stored and shipped in bulk form. * * *
the display fireworks industry deals in fireworks classed as 1.3G
explosives by the Department of Transportation, which have
traditionally been deemed by ATF to be 'low explosives'. These
devices, for the large part, function by deflagration. A typical
fireworks shipment will consist of numerous different sizes and
types of aerial display shells, since there is little demand for a
fireworks display consisting of only one color or effect.
The APA raised several concerns regarding the proposed regulations.
Those concerns will also be addressed in the following paragraphs.
A. Marking Explosives for Manufacturer's/Importer's Own Use
The current regulations at Sec. 555.109(a) provide that ``[e]ach
licensed manufacturer of explosive materials shall legibly identify by
marking all explosive materials he manufactures for sale or
distribution.'' The proposed regulations specified that licensed
manufacturers and licensed importers must identify by marking all
explosive materials they manufacture or import for sale, distribution,
``or their own use.'' The proposed regulations also specified that
permittees must identify by marking all explosive materials they import
for their own use. IME expressed concern that the proposed regulation
``introduces a new requirement for licensees to mark explosives they
will simply use, not distribute or sell.'' The commenter stated that it
views this new requirement as having an effect on three major aspects
of the commercial explosives industry. First, IME stated that
manufacturers and importers make or import explosive raw materials that
may not be sold or distributed, but will be used to make a finished
explosive product. IME supports the marking of these raw materials. In
contrast, the APA argued that markings should not be required until the
product is completed. It stated that many times an individual firework
shell may consist of different pyrotechnic compositions and that it
would be impossible for the manufacturer to document and detail the
identification requirements for each component of an individual shell.
The APA further stated that pyrotechnic compositions are generally made
by the manufacturer and then incorporated into the shell. The APA is
concerned about the marking of component parts, and the recording of
the manufacture and use of said products, prior to assembly into the
final product. The APA believes that these requirements would put an
undue burden on the manufacturer who typically manufactures the
pyrotechnic composition and incorporates it into a final shell the same
day. The commenter suggests that only pyrotechnic compositions that
will be sold by the manufacturer should be marked.
[[Page 30629]]
IME contended that the proposed amendment would also have an effect
on the manufacture of experimental explosives. IME stated that
manufacturers may make experimental explosives that will be used in
tests. It supports marking experimental explosives if they are
transported off the property of the manufacturing site. However, IME
argues that experimental explosives that do not leave the property of
the manufacturing site should not be required to have any markings.
Finally, IME stated that the proposed amendment would require
manufacturers of binary explosives to place markings on the mixture.
Like experimental explosives, IME argued that binary explosives should
only be marked if they are transported off the property of the
manufacturing site. The commenter recommended that the final
regulations provide an exemption from the marking requirements for
experimental and binary explosives that are not transported off the
property of the manufacturing site.
Decision
Regarding the marking of manufactured and imported explosive
materials that are not sold or distributed but will be used to make a
finished explosive product, the Department recognizes the APA's concern
and finds that the commenter has raised valid arguments. The Department
does not believe that it is necessary to require the marking of
pyrotechnic compositions that will be incorporated into a final shell.
Such a requirement is unreasonable and would be unduly burdensome to
the fireworks industry.
With respect to the marking of experimental and binary explosives,
the Department believes that the arguments raised by IME also have
merit. The Department recognizes that experimental and binary
explosives tend to be manufactured or imported in small quantities and
used fairly quickly after manufacture. As such, the Department believes
that the possibility that the explosives may be stolen from the site
prior to use is minimal. As to binary explosives, it is not feasible
and serves no law enforcement purpose to mark explosives manufactured
and used the same day at a blasting site.
Accordingly, based on the concerns expressed in the comments, this
final rule does not adopt the proposal to require licensed
manufacturers, licensed importers, and permittees to identify by
marking all explosives they manufacture or import for their own use.
Since permittees only import explosives for their own use, the
reference to permittees in the final rule has been removed.
B. Name and Address of Importer on Imported Explosives
The proposed regulations provided that imported explosive materials
must be marked with the name and address (city and state) of the
importer. IME objected to this proposal, arguing that such a
requirement ``will eliminate nearly all off-the-shelf purchases of
foreign-made explosives and force all imports to be specially made or
remarked.'' Furthermore, IME contended that in most cases the cost of
manually placing the importer's name and address on off-the-shelf,
foreign-made explosives would be prohibitive. IME did not provide any
cost estimates concerning these costs. On the other hand, IME
acknowledged ATF's need to conduct traces of explosive materials and
that ``a trace may be hampered by not knowing where to start the chain-
of-custody trace.'' The commenter suggested that ATF require importers
to provide identifying information to it on imports that are not marked
with the name and address of the importer. If all imports of commercial
high explosives or blasting agents were reported to ATF along with the
foreign manufacturer's marks of identification, IME estimates that ATF
would receive these reports, ``at most, once a week.'' According to
IME, ATF could file these reports and reference them to find the
importer when needed.
Decision
As noted in the proposed rule, ATF does not have regulatory
oversight over foreign manufacturers, particularly with respect to
their recordkeeping practices. ATF maintains that the identity (name
and address) of the importer is necessary to ensure that explosive
materials can be effectively traced for criminal enforcement purposes.
Not only would this information be invaluable when conducting a trace,
but the name and address of the importer may be key information located
during a post-blast investigation. Such markings may identify the
source of the explosives used at a bomb scene and may provide valuable
leads to solving the crime.
In addition, ATF's experience with tracing imported firearms
indicates that relying upon the records of foreign manufacturers for
tracing a firearm is ineffective. A significant number of countries
either do not require manufacturers of firearms to retain records of
production or require record retention for an insufficient period of
time. Even where such records are retained and are available to a
foreign manufacturer, cooperation of such manufacturers with foreign
law enforcement is often sporadic or nonexistent. Thus, when importer's
markings are missing, illegible, or inaccurate, ATF is frequently
unable to trace a firearm by obtaining assistance from foreign firearms
manufacturers. For this reason, ATF regulations implementing the
marking requirements of the Gun Control Act of 1968 require importers
to mark firearms with their name, city, and State, so that the tracing
process begins with their records, rather than those of a foreign
manufacturer.
ATF believes that reliance upon the markings of a foreign
explosives manufacturer to trace explosives will pose the same problems
as explained above in relation to firearms tracing. Accordingly,
consistent with regulations in 27 CFR 478.92, this rule imposes a
requirement on importers to mark the explosives they import with the
name and address of the importer, the location of the foreign
manufacturer, and the date and shift of manufacture.
Furthermore, an import report as suggested by IME would hinder
ATF's ability to trace misused explosives, particularly in instances
where there are multiple importers importing the same products. By
having the importer's name and address on the misused product, ATF
would not have to go through countless reports to determine the
identity of the importer. Creating a tracing system for imported
explosives by establishing an ATF database of import reports as
suggested by IME would be more burdensome for both the industry and
ATF. Instead of requiring the information to be placed on the
explosives themselves, as is currently required for domestic
explosives, such a system would require the completion of forms that
provide detailed information on imported explosives that must be sent
to ATF and maintained in a newly created ATF database. More
significantly, such a tracing system would be inherently less reliable
inasmuch as a mistake by an importer in entering the required
information on the form would make a trace difficult or in some
instances impossible. Requiring the information to be placed on the
explosives would ensure that accurate information is available on the
source of imported explosives, just as it is today for domestic
explosives, through recovery of marked explosives or recovery of the
marked component of the explosives at a crime scene. ATF believes that
the ability to trace should be just as robust for imported explosives
as it is for domestic explosives.
[[Page 30630]]
The Department recognizes that this requirement will add some
additional costs to imported explosives that are not properly marked
during the manufacturing process. However, IME's comments indicate this
would likely be a very small percentage of the market. ATF's experience
since 1971 indicates that most imported explosives are manufactured
specifically for a particular domestic importer pursuant to a
particular contract, rather than importers buying from a ``spot
market'' of already existing foreign products. ATF has no specific
information concerning the ``spot market'' in foreign explosives
referenced in IME comments. If such a ``spot market'' exists, importers
can require that the explosives from that market be marked properly in
the foreign country prior to shipment in order to reduce the need to
mark the explosives when they arrive in the United States. Explosives
that arrive in the United States unmarked may be marked at a safe
location by the importer after the explosives are released from Customs
custody. In any event, ATF believes that the potential costs incurred,
approximately 1 cent per pound according to IME, for this small
category of imported explosives are outweighed by the law enforcement
need to ensure the adequate ability to trace explosives. Accordingly,
this final rule adopts the amendment as proposed.
C. Location of Manufacturer on Imported Explosives
The proposed regulations provided that imported explosive materials
must be marked with the location (city and country) where the
explosives were manufactured. IME objected to this proposal, arguing
that it is unable to see the value of such a requirement, ``especially
since ATF claims it `has no regulatory oversight over foreign
manufacturers.' ''
Decision
While the Department acknowledges that ATF does not have regulatory
oversight over foreign manufacturers, it does have authority over
licensed importers of explosive materials. The placement of the
identifying marks required by this rule, including the location of the
manufacturer, will enable ATF to better trace misused materials by
narrowing the search through the importer's records and through Customs
documents. It is not uncommon for importers to bring the same product
into the United States from a number of foreign sources. Thus, by
requiring markings that include the name and location of the foreign
manufacturer, ATF will be able to trace explosives more quickly, by
asking the importer to locate records only for that particular product
manufactured by a particular foreign manufacturer. In addition, Customs
entry documents and databases list the country of manufacture. In the
event that ATF uses Customs information to determine when a particular
explosives product entered the United States, the name of the country
of manufacture and name of the manufacturer would greatly assist in
identifying the shipment. As previously described, this information on
the explosives may also provide valuable leads during a post blast
investigation. In addition, this requirement is similar to country of
origin markings required under the Customs laws in 19 U.S.C. 1304.
Accordingly, this final rule requires that imported explosives be
marked with the location (city and country) where the explosive
materials were manufactured, which is consistent with the way
domestically manufactured explosives are marked, and with markings
required for imported firearms under 27 CFR 478.92.
D. Marking Imported Explosives Within 24 Hours of Release From Customs
Custody
The proposed regulations specified that imported explosive
materials must be marked within 24 hours of the date of release from
Customs custody if such explosive materials did not bear the required
markings at the time of their release. IME stated that this requirement
is impractical for several reasons. First, the commenter noted that
most ports of entry do not have locations where the imported explosives
could be safely marked and it will often take more than 24 hours for
the explosives to reach a safe location for marking. Second, IME stated
that even if there were a safe location near the port, most shipments
could not be marked in 24 hours. Finally, and according to IME most
importantly, ``any grace period exposes unmarked explosives to the risk
of theft and degrades the effectiveness of the primary intent of the
marking requirement.'' Because of this last concern, IME suggested that
ATF require imported explosives to be properly marked prior to entry
into the United States, noting that ``[t]his is consistent with the
NPRM's requirement that domestic manufacturers place the markings on
explosives `at the time of manufacture.' '' The commenter further
stated that ``[t]here should be no concessions made to the security of
imported explosives.''
The APA stated that while the fireworks industry generally supports
the proposed importer identification requirement, it does not support
the proposed timetable for compliance. The commenter reiterated its
position regarding the unique circumstances involving the fireworks
industry and requested that additional time be provided for marking
imported explosives released from Customs custody. The APA provided the
following justification for requesting additional time to mark imported
explosives:
Many shipments do not leave the port within 24 hours of customs
clearance, let alone get unloaded or checked for labeling. It would
be impossible to label each case of fireworks on a container within
a 24 hour time period, especially when some companies receive
multiple container loads per shipment. Thus, to require individual
aerial shells (possibly thousands) to be labeled within a 24 hour
time period is not feasible nor in the interest of public safety.
Decision
While the Department shares IME's concern regarding the risk of
theft of imported explosives released from Customs custody without the
proper identification markings, it disagrees with IME's suggestion that
ATF should require imported explosives to be properly marked prior to
the time of importation. The Department believes that such a
requirement would be overly restrictive and unduly burdensome for
importers, particularly small importers. Small importers may not have
the financial means to have a run of explosives manufactured bearing
their name and address. However, based on the comments, the Department
recognizes that the proposed requirement to mark imported explosives
within 24 hours of release from Customs custody may be overly
restrictive and impractical, particularly with respect to importers who
are geographically distant from the point of importation.
Accordingly, this final rule provides that licensed importers must
place the required marks on all explosive materials imported prior to
distribution or shipment for use, and in no event later than 15 days
after the date of release from Customs custody. The Department believes
that this is a sufficient amount of time for imported explosives to be
marked without posing unnecessary and significant safety and security
risks to the public. Furthermore, this is consistent with the marking
requirements for imported firearms under 27 CFR 478.112(d). In the
event additional time is needed to mark the imported explosives, the
importer can request a variance
[[Page 30631]]
pursuant to the provisions of 27 CFR 555.22.
Additionally, the Department points out that 27 CFR 555.214(b)
requires that ``containers of explosive materials are to be stored so
that marks are visible.'' Therefore, all containers of explosive
materials placed in storage must have proper marks of identification on
the immediate outside containers. The marking of individual internal
packages may occur within the 15-day period specified in the
regulations.
E. Director Approved Coding System
As proposed, 27 CFR 555.109(c)(4) reads as follows:
If licensed manufacturers, licensed importers or permittees
importing explosive materials desire to use a coding system and omit
printed markings on the container, they must file with ATF a
letterhead application displaying the coding that they plan to use
and explaining the manner of its application. The Director must
approve the application before the proposed coding can be used.
IME stated that it is not entirely clear under what conditions a
manufacturer or importer must seek the Director's approval for markings
and it suggested that ATF ``clarify exactly what conditions invoke the
need for the Director's approval of coding systems.'' IME stated that
in 1971 its member companies implemented a product identification
system for packaged explosives manufactured in the United States. The
coding system utilizes a series of alpha and numeric characters to
indicate the date, work shift, and location of the manufacturer. It
does not indicate the name of the manufacturer. As an example, IME
stated that a product manufactured on September 30, 1997, during the
first shift at a plant that the manufacturer has assigned the letter
``A'' would be ``30SE97A1.'' IME asked if each licensee or permittee
using the standard IME coding system would need the Director's
approval. IME also asked if a licensee or permittee using a bar code
system would need the Director's approval.
Decision
The current regulations specify that licensed manufacturers must
place certain marks of identification on explosive materials they
manufacture. The required marks of identification include the name of
the manufacturer and the location, date, and shift of manufacture. This
information must be legible, identifiable, and understandable. ATF
Ruling 75-35 provides, in part, that where it is desired to utilize a
coding system and omit printed markings on the container, i.e., stating
the information required by Sec. 555.109, a letterhead application
displaying the coding to be used and manner of its application must be
filed with and approved by the Director. This provision of the ruling
was incorporated into the proposed regulations. In response to IME's
request that ATF clarify when coding systems are permissible, licensees
using IME's coding system or a bar code system must file with ATF a
letterhead application displaying the coding that they plan to use and
explaining the manner of its application. The Director must approve the
application before the proposed coding can be used. Without an
explanation as to the meaning of the coding system, the information
would be meaningless and ATF would be unable to trace products marked
with such a system. In addition, the Department notes that IME's
current coding system fails to provide the name of the manufacturer,
and is not consistent with regulations in 27 CFR 555.109. Without the
name of the manufacturer, or, in the case of imported explosives, the
name of the importer, ATF does not have sufficient information to trace
explosives. If industry members seek and obtain approved variances, ATF
will have information to decode markings, determine the actual
manufacturer or importer, and begin the tracing process. In the event
that IME members or other members of the explosives industry are
utilizing coding systems to mark domestic products, and such members do
not have written approval from ATF to use such markings, the member
should immediately apply for an alternate method or procedure pursuant
to 27 CFR 555.109.
Accordingly, this final rule clarifies that if licensed
manufacturers or licensed importers desire to use a coding system and
omit printed markings on the container that show all the required
information specified in the regulations, they must file with ATF a
letterhead application displaying the coding that they plan to use and
explaining the manner of its application. The Director must approve the
application before the proposed coding can be used.
F. Tracking the Acquisition and Disposition of Explosives by Date/Shift
Code
The APA expressed concern involving the required tracking of
acquisition and disposition of explosive materials by date/shift code.
In general, the APA agrees with the proposed markings for each
individual aerial shell. It expressed concern, however, with tracking
the distribution of shells by the date/shift code. The APA stated that
fireworks package displays often contain shells of numerous sizes,
colors and date/shift codes and that to track shells by date/shift code
would pose an undue and unnecessary recordkeeping burden on industry
members. The APA suggested that records of production and distribution
for display fireworks should only show the number and size of the
aerial shells. The commenter's suggestion is based on its belief that
there is a low occurrence of display fireworks used in criminal
activity and that most likely the criminal would transfer the explosive
material from the shell to another container. Furthermore, the APA
suggested that ATF require all shipping cartons of display fireworks to
be marked with the name of the manufacturer or distributor and the date
that the fireworks were shipped.
Decision
It is the Department's decision that failure to incorporate the
date/shift code in the acquisition and disposition records would hinder
the effectiveness and purpose of placing the markings on each
individual shell. A shell could be traced to the manufacturer or
importer but it would be difficult or impossible to trace the shell any
further if the records only contained type and count information. The
date/shift code is essential in narrowing the records search to the
appropriate time period. Manufacturers and importers manufacture and
import thousands of the same type of product, so that marking with the
date of shipment alone will not narrow the records search to locate a
particular explosive within a reasonable time period. When explosives
are used in a criminal incident, time is of the essence. Undue delay in
identifying the record of acquisition and disposition for a particular
explosive product can interfere in investigating bombings and other
criminal incidents using explosives. Placing a code of sorts in the
shipping carton could offer some assistance, but would not be effective
in instances where the shells are no longer in their shipping cartons.
Accordingly, the Department is not adopting the APA's suggestion.
G. Computerized Systems for Tracking Explosives
Another concern of the APA relates to computerized systems for
tracking explosive materials. The APA stated that it is aware that some
companies are currently using, or looking into the implementation of,
systems that use bar coding to identify and track their products. The
commenter believes that
[[Page 30632]]
this technology will continue to expand in use in the fireworks
industry and that significantly greater control over the tracking of
individual items should become economically feasible within a few
years. In the interim, the APA urged ATF to adopt regulations or
policies that permit new methods of recordkeeping (including the use of
computerized systems) to be implemented by companies without the need
to apply for variances.
Decision
The Department believes that the APA has raised a valid concern
with respect to the use of computerized systems for tracking
explosives. This issue is being addressed in another rulemaking
proceeding (see Notice No. 968, January 29, 2003; 68 FR 4406). Until
this rulemaking is completed, industry members may seek written
authorization from ATF to use computerized recordkeeping systems that
utilize bar coding or other computerized systems to streamline the
process. As stated above, the use of coded marking requirements may
also be approved through the variance process, and can be used in
conjunction with a computerized recordkeeping system. The Department
believes that the use of computerized recordkeeping systems will not
negate the need to maintain the date shift codes in the records.
Miscellaneous Amendments
Section 555.52 provides for limitations on permits and licenses in
respect to business activity or permitted operations and specified
class of explosives materials allowed. A technical amendment is being
made in this final rule with respect to Sec. 555.52 in order to be
consistent with the amendments made in Sec. Sec. 555.55 and 555.41,
which are also being adopted as proposed.
VI. ATF Ruling 75-35
This final rule incorporates the provisions of ATF Ruling 75-35
(1975-ATF C.B. 65), relating to methods of marking containers of
explosive materials. Accordingly, the provisions of ATF Ruling 75-35
become obsolete upon the effective date of this final rule.
How This Document Complies With the Federal Administrative Requirements
for Rulemaking
A. Executive Order 12866
This rule has been drafted and reviewed in accordance with
Executive Order 12866, ``Regulatory Planning and Review,'' section
1(b), Principles of Regulation. The Department of Justice has
determined that this rule is a ``significant regulatory action'' under
Executive Order 12866, section 3(f), Regulatory Planning and Review,
and accordingly this rule has been reviewed by the Office of Management
and Budget. However, this rule will not have an annual effect on the
economy of $100 million, nor will it 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. Accordingly, this rule is not an
``economically significant'' rulemaking as defined by Executive Order
12866.
Further, the Department has assessed both the costs and benefits of
this rule as required by Executive Order 12866, section 1(b)(6), and
has made a reasoned determination that the benefits of this regulation
justify its costs. The Department believes that the costs associated
with compliance with the final regulations are minimal. Comments
received in response to the ANPRM and the notice of proposed rulemaking
indicate that in all likelihood the foreign manufacturer, rather than
the U.S. importer, will place the required marks on explosives that are
imported into the United States.
However, some importers may not have the financial means to have a
run of explosives manufactured bearing their name and address. ATF
estimates that a very small percentage (one percent) of the
approximately 413 Federally licensed importers will need to mark
imported explosives. In general, the IME stated that marking costs are
less than approximately one percent of the product cost, ranging from
$.002/lb. to $.01/lb. ATF estimates that approximately five percent of
imported explosives would need to be marked. To illustrate, according
to the U.S. Census Bureau, approximately 155,240,707 pounds of
explosives were imported into the United States in 2003. Based on IME's
information, the marking costs associated with 7,762,035 pounds of
imported explosives (five percent of 155,240,707 pounds) would range
from approximately $15,524 to $77,620.
B. Executive Order 13132
This regulation 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. Therefore, in accordance with section 6
of Executive Order 13132, the Attorney General has determined that this
regulation does not have sufficient federalism implications to warrant
the preparation of a federalism summary impact statement.
C. Executive Order 12988
This regulation meets the applicable standards set forth in
sections 3(a) and 3(b)(2) of Executive Order 12988.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 605(b)) requires an agency
to conduct a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements unless the agency certifies
that the rule will not have a significant economic impact on a
substantial number of small entities. Small entities include small
businesses, small not-for-profit enterprises, and small governmental
jurisdictions. The Attorney General has reviewed this regulation and,
by approving it, certifies that this rule will not have a significant
economic impact on a substantial number of small entities. Most U.S.
importers should not be significantly affected by the final regulations
because the foreign-manufactured explosives they import will already be
marked in accordance with the provisions of 27 CFR 555.109. ATF
estimates that a very small percentage (one percent) of the
approximately 413 Federally licensed importers will need to mark
imported explosives. In general, the IME stated that marking costs are
less than approximately one percent of the product cost, ranging from
$.002/lb. to $.01/lb. ATF estimates that approximately five percent of
imported explosives would need to be marked. To illustrate, according
to the U.S. Census Bureau, approximately 155,240,707 pounds of
explosives were imported into the United States in 2003. Based on IME's
information, the marking costs associated with 7,762,035 pounds of
imported explosives (five percent of 155,240,707 pounds) would range
from approximately $15,524 to $77,620. Accordingly, a regulatory
flexibility analysis is not required.
E. Small Business Regulatory Enforcement Fairness Act of 1996
This rule is not a major rule as defined by section 251 of the
Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C.
804. This rule will not result in an annual effect on the economy of
$100 million or more; a major increase in costs or prices; or
significant adverse effects on competition, employment, investment,
innovation, or on the ability of United States-based companies to
compete with foreign-based companies in domestic and export markets.
[[Page 30633]]
F. Unfunded Mandates Reform Act of 1995
This rule will not result in the expenditure by State, local, and
tribal governments, in the aggregate, or by the private sector of $100
million or more in any one year, and it will not significantly or
uniquely affect small governments. Therefore, no actions were deemed
necessary under the provisions of the Unfunded Mandates Reform Act of
1995.
G. Paperwork Reduction Act
The collections of information contained in this final regulation
have been reviewed and approved by the Office of Management and Budget
in accordance with the requirements of the Paperwork Reduction Act (44
U.S.C. 3507(d)) under control number 1140-0055. An agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless it displays a valid control number
assigned by the Office of Management and Budget.
The collections of information in this regulation are in 27 CFR
555.109(b)(2). This information is required to properly identify
imported explosive materials. The collections of information are
mandatory. The likely respondents are businesses.
The estimated average annual burden associated with the collections
of information in this final rule is 46 hours.
Comments concerning the accuracy of this burden estimate and
suggestions for reducing this burden should be directed to the Chief,
Document Services Branch, Room 3110, Bureau of Alcohol, Tobacco,
Firearms, and Explosives, 650 Massachusetts Avenue, NW., Washington, DC
20226, and to the Office of Management and Budget, Attention: Desk
Officer for the Department of Justice, Bureau of Alcohol, Tobacco,
Firearms, and Explosives, Office of Information and Regulatory Affairs,
Washington, DC 20503.
Disclosure
Copies of the notice of proposed rulemaking (NPRM), all comments
received in response to the NPRM, and this final rule will be available
for public inspection by appointment during normal business hours at:
ATF Reference Library, Room 6480, 650 Massachusetts Avenue, NW.,
Washington, DC 20226, telephone (202) 927-7890.
Drafting Information
The author of this document is James P. Ficaretta; Enforcement
Programs and Services; Bureau of Alcohol, Tobacco, Firearms, and
Explosives.
List of Subjects in 27 CFR Part 555
Administrative practice and procedure, Authority delegations,
Customs duties and inspection, Explosives, Hazardous materials,
Imports, Penalties, Reporting and recordkeeping requirements, Safety,
Security measures, Seizures and forfeitures, Transportation, and
Warehouses.
Authority and Issuance
0
Accordingly, for the reasons discussed in the preamble, 27 CFR Part 555
is amended as follows:
PART 555--COMMERCE IN EXPLOSIVES
0
1. The authority citation for 27 CFR Part 555 continues to read as
follows:
Authority: 18 U.S.C. 847.
Sec. 555.41 [Amended]
0
2. Section 555.41 is amended by removing ``of the class authorized by
this permit'' at the end of the second sentence in paragraphs (a)(3)
and (b)(3)(ii).
Sec. 555.52 [Amended]
0
3. Section 555.52 is amended by removing the phrase ``and class (as
described in Sec. 555.202)'' in paragraphs (a) and (b).
Sec. 555.55 [Removed]
0
4. Subpart D is amended by removing Sec. 555.55.
0
5. Section 555.108 is amended by adding a new paragraph (e) to read as
follows:
Sec. 555.108 Importation.
* * * * *
(e) For requirements relating to the marking of imported explosive
materials, see Sec. 555.109.
0
6. Subpart F is amended by revising Sec. 555.109 and by adding a
parenthetical text at the end of the section to read as follows:
Sec. 555.109 Identification of explosive materials.
(a) General. Explosive materials, whether manufactured in the
United States or imported, must contain certain marks of
identification.
(b) Required marks. (1) Licensed manufacturers. Licensed
manufacturers who manufacture explosive materials for sale or
distribution must place the following marks of identification on
explosive materials at the time of manufacture:
(i) The name of the manufacturer; and
(ii) The location, date, and shift of manufacture. Where a
manufacturer operates his plant for only one shift during the day, he
does not need to show the shift of manufacture.
(2) Licensed importers. (i) Licensed importers who import explosive
materials for sale or distribution must place the following marks of
identification on the explosive materials they import:
(A) The name and address (city and state) of the importer; and
(B) The location (city and country) where the explosive materials
were manufactured, date, and shift of manufacture. Where the foreign
manufacturer operates his plant for only one shift during the day, he
does not need to show the shift of manufacture.
(ii) Licensed importers must place the required marks on all
explosive materials imported prior to distribution or shipment for use,
and in no event later than 15 days after the date of release from
Customs custody.
(c) General requirements. (1) The required marks prescribed in this
section must be permanent and legible.
(2) The required marks prescribed in this section must be in the
English language, using Roman letters and Arabic numerals.
(3) Licensed manufacturers and licensed importers must place the
required marks on each cartridge, bag, or other immediate container of
explosive materials that they manufacture or import, as well as on any
outside container used for the packaging of such explosive materials.
(4) Licensed manufacturers and licensed importers may use any
method, or combination of methods, to affix the required marks to the
immediate container of explosive materials, or outside containers used
for the packaging thereof, provided the identifying marks are legible,
permanent, show all the required information, and are not rendered
unreadable by extended periods of storage.
(5) If licensed manufacturers or licensed importers desire to use a
coding system and omit printed markings on the container that show all
the required information specified in paragraphs (b)(1) and (2) of this
section, they must file with ATF a letterhead application displaying
the coding that they plan to use and explaining the manner of its
application. The Director must approve the application before the
proposed coding can be used.
(d) Exceptions. (1) Blasting caps. Licensed manufacturers or
licensed importers are only required to place the identification marks
prescribed in this
[[Page 30634]]
section on the containers used for the packaging of blasting caps.
(2) Alternate means of identification. The Director may authorize
other means of identifying explosive materials, including fireworks,
upon receipt of a letter application from the licensed manufacturer or
licensed importer showing that such other identification is reasonable
and will not hinder the effective administration of this part.
(Paragraph (b)(2) approved by the Office of Management and Budget
under control number 1140-0055)
Dated: May 19, 2005.
Alberto R. Gonzales,
Attorney General.
[FR Doc. 05-10618 Filed 5-26-05; 8:45 am]
BILLING CODE 4410-FY-P