Federal Register, Volume 70 Issue 159 (Thursday, August 18, 2005)

[Federal Register Volume 70, Number 159 (Thursday, August 18, 2005)]
[Proposed Rules]
[Pages 48494-48500]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-16422]

========================================================================
Proposed Rules
Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.

========================================================================

Federal Register / Vol. 70, No. 159 / Thursday, August 18, 2005 /
Proposed Rules

[[Page 48494]]

DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

9 CFR Part 94

[Docket No. 05-004-1]
RIN 0579-AB93

Importation of Whole Cuts of Boneless Beef from Japan

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: We are proposing to amend the regulations governing the
importation of meat and other edible animal products by allowing, under
certain conditions, the importation of whole cuts of boneless beef from
Japan. We are proposing this action in response to a request from the
Government of Japan and after conducting an analysis of the risk that
indicates that such beef can be safely imported from Japan under the
conditions described in this proposal.

DATES: We will consider all comments that we receive on or before
September 19, 2005.

ADDRESSES: You may submit comments by any of the following methods:
EDOCKET: Go to http://www.epa.gov/feddocket to submit or
view public comments, access the index listing of the contents of the
official public docket, and access those documents in the public docket
that are available electronically. Once you have entered EDOCKET, click
on the ``View Open APHIS Dockets'' link to locate this document.
Postal Mail/Commercial Delivery: Please send four copies
of your comment (an original and three copies) to Docket No. 05-004-1,
Regulatory Analysis and Development, PPD, APHIS, Station 3C71, 4700
River Road Unit 118, Riverdale, MD 20737-1238. Please state that your
comment refers to Docket No. 05-004-1.
Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the instructions for locating this
docket and submitting comments.
Other Information: All comments submitted in response to this
proposal, as well as analyses for this proposal, are available at the
EDOCKET Web site shown above and our reading room. The reading room is
located in room 1141 of the USDA South Building, 14th Street and
Independence Avenue, SW., Washington, DC. Normal reading room hours are
8 a.m. to 4:30 p.m., Monday through Friday, except holidays. To be sure
someone is there to help you, please call (202) 690-2817 before coming.
You may also view APHIS documents published in the Federal Register and
related information on the Internet at http://www.aphis.usda.gov/ppd/rad/webrepor.html.

FOR FURTHER INFORMATION CONTACT: Dr. Gary Colgrove, Director, National
Center for Import and Export, VS, APHIS, 4700 River Road Unit 38,
Riverdale, MD 20737-1231; (301) 734-4356.

SUPPLEMENTARY INFORMATION:

Background

The Animal and Plant Health Inspection Service (APHIS) of the
United States Department of Agriculture (USDA or the Department)
regulates the importation of animals and animal products into the
United States to guard against the introduction of animal diseases. The
regulations in 9 CFR parts 93, 94, 95, and 96 (referred to below as the
regulations) govern the importation of certain animals, birds, poultry,
meat, other animal products and byproducts, hay, and straw into the
United States in order to prevent the introduction of various animal
diseases, including bovine spongiform encephalopathy (BSE), a chronic
degenerative disease affecting the central nervous system of cattle.
Section 94.18 of the regulations prohibits or restricts the
importation into the United States of meat and certain other edible
products due to BSE. Paragraph (a)(1) of Sec. 94.18 lists regions in
which BSE is known to exist. Paragraph (a)(2) of Sec. 94.18 lists
regions that present an undue risk of introducing BSE into the United
States because their import requirements are less restrictive than
those that would be acceptable for import into the United States and/or
because the regions have inadequate surveillance for BSE. Paragraph
(a)(3) of Sec. 94.18 lists regions that present a minimal risk of
introducing BSE into the United States. Except for certain controlled
transit movements, Sec. 94.18(b) prohibits the importation of meat,
meat products, and most other edible products of ruminants that have
been in any region listed in Sec. 94.18(a)(1) or (a)(2) and restricts
the importation of those commodities from any region listed in Sec.
94.18(a)(3).
In an interim rule published in the Federal Register on October 16,
2001 (66 FR 52483-52484, Docket No. 01-094-1), and effective on
September 10, 2001, we amended the regulations by adding Japan to the
list in Sec. 94.18(a)(1) of regions where BSE exists. That action was
prompted by the confirmation of BSE in a native-born animal in Japan.
The effect of the interim rule was to prohibit the importation of
ruminants that have been in Japan, as well as meat, meat products, and
most other products and byproducts of ruminants that have been in
Japan.
Immediately following the detection of the BSE-infected cow, the
Government of Japan initiated an epidemiological investigation and took
a series of measures to detect and control BSE in Japan, including
measures to ensure that tissues that have the potential to carry
infectious levels of the BSE agent are removed from cattle at
slaughter, a ban on the feeding of mammalian protein to ruminants is in
place, and increase BSE surveillance.
The Government of Japan has requested that APHIS consider allowing
the resumption of trade in beef from Japan to the United States. Prior
to the 2001 ban on the importation of ruminants and ruminant products
from Japan, Japan primarily exported to the United States boneless cuts
of beef from cattle born, raised and slaughtered in Japan. Therefore,
in response to Japan's request, we considered allowing the importation
of whole cuts of boneless beef derived from cattle that were born,
raised, and slaughtered in Japan and analyzed the animal health risks
associated with that product.\1\ For a consideration of the risks to
human

[[Page 48495]]

health, we consulted with the Food Safety and Inspection Service (FSIS)
of USDA, which is the public health agency that is responsible for
ensuring the food safety of this product. The risk analysis is
available on EDOCKET and in the APHIS reading room. (Information on
accessing EDOCKET as well as the location and hours of the APHIS
reading room may be found at the beginning of this document under
ADDRESSES.) You may also request paper copies of the analysis by
calling or writing the person listed under FOR FURTHER INFORMATION
CONTACT. Please refer to Docket No. 05-004-1 when requesting copies of
the risk analysis.
---------------------------------------------------------------------------

\1\ In this proposal, we use the term ``whole cuts of boneless
beef'' to refer to meat derived from the skeletal muscle of a bovine
carcass, excluding all parts of the animal's head and diaphragm.
Meat that has been ground, flaked, shaved, or otherwise processed,
comminuted, or mechanically separated would not be whole cuts of
boneless beef.
---------------------------------------------------------------------------

Under the Animal Health Protection Act (7 U.S.C. 8301 et seq.), the
Secretary of Agriculture may prohibit the importation of any animal or
article if the Secretary determines that the prohibition is necessary
to prevent the introduction into or dissemination within the United
States of any pest or disease of livestock. The Secretary has
determined that it is not necessary to continue to prohibit the
importation of whole cuts of boneless beef derived from cattle that
were born, raised, and slaughtered in Japan, provided that the
conditions described in this proposal are met. This determination is
based on a number of factors, including research on BSE and the risk
analysis prepared for this rulemaking.
In this proposed rule, we will first provide some background on
BSE. Next, we discuss the scientific evidence that provides a basis for
the proposed conditions, then discuss the proposed conditions in
further detail. Finally, we will briefly discuss the proposed
conditions as they relate to international guidelines on BSE.

Bovine Spongiform Encephalopathy

BSE is a progressive and fatal neurological disorder of cattle that
results from an unconventional transmissible agent. BSE belongs to the
family of diseases known as transmissible spongiform encephalopathies
(TSEs). All TSEs affect the central nervous system of infected animals.
However, the distribution of infectivity in the body of the animal and
mode of transmission differ according to the species and TSE agent. In
addition to BSE, TSEs include, among other diseases, scrapie in sheep
and goats, chronic wasting disease (CWD) in deer and elk, and variant
Creutzfeldt-Jakob disease in humans.
The agent that causes BSE has yet to be fully characterized. The
theory that is most accepted in the international scientific community
is that the agent is an abnormal form of a normal protein known as
cellular prion protein. The BSE agent does not evoke a traditional
immune response or inflammatory reaction in host animals. BSE is
confirmed by post-mortem microscopic examination of an animal's brain
tissue or by detection of the abnormal form of the prion protein in an
animal's brain tissues. The pathogenic form of the protein is both less
soluble and more resistant to degradation than the normal form. The BSE
agent is resistant to heat and to normal sterilization processes. BSE
is not a contagious disease; according to internationally accepted
research, the only confirmed, natural route of transmission of BSE in
cattle is the consumption of animal feed containing protein from
ruminants infected with BSE.
BSE was first documented in the United Kingdom in 1986 and has
since been confirmed in native-born cattle in 22 European countries in
addition to the United Kingdom, and in some non-European countries,
including Japan, Israel, Canada, and the United States. Since November
1986, there have been more than 186,000 confirmed cases of BSE in
cattle worldwide. As of July 2005, Japan had reported a total of 20
cases of BSE, including the initial case of BSE in September 2001 and
two cases that are currently under further investigation.\2\
---------------------------------------------------------------------------

\2\ See the risk analysis for further information.
---------------------------------------------------------------------------

In the United States, there have been two confirmed cases of BSE,
one an imported cow and one a native cow. The first case of BSE in the
United States was identified in a dairy cow in Washington State on
December 23, 2003. The epidemiological investigation and DNA test
results confirmed that the infected cow was not indigenous to the
United States, but rather was born and most likely became infected in
Alberta, Canada, before Canada's 1997 implementation of a ban on
feeding most mammalian protein to ruminants, which prevents the use of
most mammalian protein in cattle feed. The second case of BSE in the
United States was confirmed in an approximately 12-year-old beef cow in
Texas on June 29, 2005. This animal was born well before the United
States instituted a mammalian-to-ruminant feed ban in August 1997.
Variant Creutzfeldt-Jakob disease (vCJD), a chronic and fatal
neurodegenerative disease of humans, has been linked since 1996 through
epidemiological, neuropathological, and experimental data to exposure
to the BSE agent, most likely through consumption of cattle products
contaminated with the agent before BSE control measures were in place.
To date, approximately 170 probable and confirmed cases of vCJD have
been identified worldwide. The majority of these cases have either been
identified in the United Kingdom or were linked to exposure that
occurred in the United Kingdom, and all cases have been linked to
exposure in countries with native cases of BSE. Some studies estimate
that more than 1 million cattle may have been infected with BSE
throughout the epidemic in the United Kingdom. This number of infected
cattle could have introduced a significant amount of infectivity into
the human food supply. Yet, the low number of cases of vCJD identified
to date indicates that there is a substantial species barrier that
protects humans from widespread illness due to exposure to the BSE
agent.

Factors Considered in the Development of the Proposed Import Conditions

BSE Infectivity

Examination of naturally-occurring BSE cases and extensive well-
controlled BSE challenge studies have clearly demonstrated that the
primary site for BSE accumulation in cattle is the central nervous
system (brain, spinal cord, trigeminal ganglia, dorsal root ganglia
(DRG), and eye).\3\ Small amounts of BSE infectivity accumulate in the
distal ileum, and only trace amounts have been found in tonsil samples.
Importantly, BSE studies in cattle to date have not detected
infectivity in any other tissues than those listed above. These studies
also have found that the level of infectious agent in these tissues
varies with the age of the animal, with the highest levels of
infectivity detected in the brain and spinal cord at the end stages of
disease.
---------------------------------------------------------------------------

\3\ DRG are clusters of nerve cells attached to the spinal cord
that are contained within the bones of the vertebral column.
Trigeminal ganglia are clusters of nerve cells connected to the
brain that lie close to the exterior of the skull.
---------------------------------------------------------------------------

BSE has a long incubation period. Research demonstrates that the
incubation period for BSE in cattle is linked to the infectious dose
received--i.e., the larger the infectious dose received, the shorter
the incubation period. Cattle typically develop clinical signs after an
average incubation of 4 to 6 years post-infection.
This research on BSE has been used to develop effective, proven
strategies for removal of these tissues from animals of appropriate age
so that these tissues do not enter the food chain. In the United
States, the FSIS regulations contained in 9 CFR 310.22 designate the
brain, spinal cord, vertebral column

[[Page 48496]]

(excluding the vertebrae of the tail, the transverse process of the
thoracic and lumbar vertebrae, and the wings of the sacrum), DRG,
trigeminal ganglia, skull, and eyes of cattle 30 months of age and
older, and the tonsils and the distal ileum of cattle of any age as
SRMs and prohibit their use as human food.\4\
---------------------------------------------------------------------------

\4\ The skull and vertebral column (excluding the vertebrae of
the tail, the transverse processes of the thoracic and lumbar
vertebrae, and the wings of the sacrum) of cattle 30 months of age
and older were designated as SRMs in the FSIS regulations because
they contain high-risk tissues such as the brain and spinal cord.
---------------------------------------------------------------------------

BSE infectivity has never been demonstrated in the muscle tissue of
cattle experimentally or naturally infected with BSE at any stage of
the disease. Studies performed using TSEs other than BSE in non-bovine
animals have detected prions in muscle tissue. However, the
international scientific community largely considers that these studies
cannot be directly extrapolated to BSE in cattle because of the
significant interactions between the host species and the prion strain
involved.
Pathogenesis studies of naturally and experimentally infected
cattle have not detected BSE infectivity in blood. However,
transmission of BSE was demonstrated in sheep that received a
transfusion of a large volume of blood drawn from other sheep that were
experimentally infected with the BSE agent. The United Kingdom's
Department for Environment, Food and Rural Affairs' Spongiform
Encephalopathy Advisory Committee (SEAC) and the European Commission's
Scientific Steering Committee (SSC), which are scientific advisory
committees, evaluated the implication of this finding in relation to
food safety.\5\ The SEAC concluded that the finding did not represent
grounds for recommending any changes to the current control measures
for BSE. The SSC determined that the research results do not support
the hypothesis that bovine blood or muscle meat constitute a risk to
human health.\6\
---------------------------------------------------------------------------

\5\ Spongiform Encephalopathy Advisory Committee, Oct 19, 2000,
Summary of SEAC Committee Meeting 29 September 2000. Available at
http://www.defra.gov.uk/news/seac/seac500.htm.
\6\ European Commission Scientific Steering Committee. ``The
Implications of the Recent Papers on Transmission of BSE by Blood
Transfusion in Sheep (Houston et al, 2000); Hunter et al, 2002),
Adopted by the SSC at its Meeting of 12-13 September.'' Available at
http://europa.eu.int/comm/food/fs/sc/ssc/out280_en.pdf.
---------------------------------------------------------------------------

Based on this information, APHIS concludes that whole cuts of
boneless beef do not present a BSE risk, provided that certain measures
are in place to avoid contamination of the beef with potentially
infectious tissues.

BSE Risk Factors for Whole Cuts of Boneless Beef

The most significant risk management strategy for ensuring the
safety of whole cuts of boneless beef is the prevention of cross-
contamination of the beef with SRMs during stunning and slaughter of
the animal. Control measures that prevent contamination of such beef
involve the establishment of procedures for the removal of SRMs,
prohibitions on air-injection stunning and pithing, and splitting of
carcasses. These potential pathways for contamination and the control
measures that prevent contamination are described in detail in the risk
analysis for this rulemaking.
SRM Removal. Research has demonstrated that SRMs from infected
cattle may contain BSE infectivity. Because infectivity has not been
demonstrated in muscle tissue, the most important mitigation measure
for whole cuts of boneless beef is the careful removal and segregation
of SRMs. Removal of SRMs in a manner that avoids contamination of the
beef with SRMs minimizes the risk of exposure to materials that have
been demonstrated to contain the BSE agent in cattle.
Air-Injection Stunning. Generally speaking, there are two types of
captive bolt stunners used worldwide on livestock at slaughter:
penetrative and non-penetrative. Penetrative captive bolt stun guns
render cattle unconscious, quickly and painlessly, prior to slaughter.
Penetrative captive bolt stun guns have steel bolts, powered by either
compressed air or a blank cartridge, which are driven into the animal's
brain. Captive bolt stun guns built or modified to inject compressed
air into the cranium of cattle have been shown to force pieces of brain
and other CNS tissue into the circulatory system of stunned cattle,
thereby potentially spreading CNS tissue throughout the carcass. These
studies prompted a prohibition on the use of air-injection stunning in
the United States.\7\ Other types of penetrative captive bolt stunners
include pneumatically operated stunners that do not inject air and
standard cartridge-fired captive bolt stunners. In general, studies do
not indicate that these other types of penetrative captive bolt
stunners pose a significant risk of causing CNS tissue to be forced
into the circulatory system of cattle.
---------------------------------------------------------------------------

\7\ See FSIS' interim final rule entitled, ``Prohibition of the
Use of Certain Stunning Devices Used To Immobilize Cattle During
Slaughter'' (Docket No. 01-033IF, 69 FR 1885-1891), published on
January 12, 2004, for further information.
---------------------------------------------------------------------------

Pithing. Pithing involves the insertion of an elongated rod-shaped
instrument into the cranial cavity of a stunned animal to further
lacerate the CNS tissue. This process could cause dissemination of CNS
tissue throughout the body of the animal during slaughter. This
stunning method is banned in the European Union and has never been used
in the United States.
Carcass Splitting. During processing, infectivity could contaminate
muscle tissue in cattle if tissue debris, specifically spinal cord,
accumulates in the carcass splitting saw and is transferred to
subsequent carcasses. This potential means of cross-contamination is
very unlikely, however, provided that the SRMs of the cattle are
effectively removed and cleaning and sanitation procedures that reduce
the likelihood of cross-contamination from splitting saws are in place.
To mitigate these risk factors, we are proposing to require the
conditions discussed below to ensure that whole cuts of boneless beef
exported to the United States from Japan are free of BSE contamination.

Proposed Import Conditions

This proposal would allow the importation of whole cuts of boneless
beef that are derived from cattle born, raised, and slaughtered in
Japan, provided that the following conditions have been met:
The beef is prepared in an establishment that is eligible
to have its products imported into the United States under the Federal
Meat Inspection Act (FMIA) (21 U.S.C. 601 et seq.) and the regulations
in 9 CFR 327.2 and the beef meets all other applicable requirements of
the FMIA and regulations thereunder (9 CFR chapter III), including the
requirements for removal of specified risk materials (SRMs) and the
prohibition on the use of air-injection stunning devices prior to
slaughter on cattle from which the beef is derived.
The beef is derived from cattle that were not subjected to
a pithing process at slaughter.
An authorized veterinary official of the Government of
Japan certifies on an original certificate that the above conditions
have been met.
Following is a further description of and rationale for each of
these proposed conditions.

Establishment Eligibility

This proposal would require that the beef be prepared in an
establishment that is eligible to have its products imported into the
United States under the Federal Meat Inspection Act (FMIA)

[[Page 48497]]

(21 U.S.C. 601 et seq.) and the regulations in 9 CFR 327.2.
As required under the FMIA, FSIS ensures that imported meat in the
U.S. marketplace is safe, wholesome, unadulterated, and properly
labeled by (1) Determining if foreign countries and their
establishments have implemented food safety system and inspection
requirements equivalent to those in the United States and (2)
reinspecting imported meat and poultry products from those countries
through random sampling of shipments. The FSIS regulations in 9 CFR
327.2 provide that countries eligible to export meat to the United
States must have a meat inspection system determined by FSIS to be
equivalent to the U.S. meat inspection system. The FSIS equivalency
determination is based on a review of the foreign country's relevant
laws and regulations and an on-site audit of the foreign country's
inspection system. FSIS has determined that Japan's meat inspection
system is equivalent and that Japan is eligible to export meat and meat
products to the United States.
Once a country is listed as eligible to export meat and meat
products to the United States, it is responsible for certifying
individual exporting establishments to FSIS and for providing annual
recertification documentation. FSIS regularly conducts on-site audits
of the eligible foreign inspection systems to ensure they remain
equivalent to the U.S. system.

Other Applicable Requirements Under the FMIA

This proposal would also require that the beef meet all other
applicable requirements of the FMIA and regulations thereunder (9 CFR
chapter III), including the requirements for removal of SRMs and the
prohibition on the use of air-injection stunning devices prior to
slaughter on cattle from which the beef is derived.
SRM Removal. The FSIS regulations contained in 9 CFR 310.22 provide
that establishments are responsible for ensuring that SRMs are
completely removed from the carcass, segregated from edible products,
and disposed of in an appropriate manner.\8\ Under the FSIS
regulations, an establishment must incorporate such procedures into its
Hazard Analysis and Critical Control Point (HACCP) plan or in its
sanitation standard operating procedures (SOPs) or other prerequisite
program. (HACCP is a process control system designed to identify and
prevent microbial and other hazards in food production.) These
procedures and requirements help to ensure that SRMs are effectively
removed and handled in a manner to avoid contamination of the carcass.
---------------------------------------------------------------------------

\8\ See FSIS' interim final rule entitled, ``Prohibition of the
Use of Specified Risk Materials for Human Food and Requirements for
the Disposition of Non-Ambulatory Disabled Cattle'' (Docket No. 03-
025IF, 69 FR 1862-1874), published on January 12, 2004, for further
information.
---------------------------------------------------------------------------

As mentioned above, one potential pathway for cross-contamination
of muscle tissue of cattle is if potentially infectious tissue debris
accumulates in the carcass splitting saw and is transferred to
subsequent carcasses. FSIS has developed procedures to verify that
cross-contamination of edible tissue with SRMs is reduced to the
maximum extent practical in facilities that slaughter cattle, or
process carcasses or parts of carcasses of cattle.\9\ This includes
verification of sanitization procedures for equipment used to cut
through SRMs.
---------------------------------------------------------------------------

\9\ See FSIS Notice 10-04.
---------------------------------------------------------------------------

Air-injection Stunning. The FSIS regulations in 9 CFR part 313
prohibit the use of captive bolt stunners that deliberately inject
compressed air into the cranium of cattle at the end stage of the
penetration cycle. This requirement addresses the potential risk posed
by the use of air-injection stunning devices, which may force pieces of
brain and other CNS tissue into the circulatory system of stunned
cattle.

Pithing

This proposal would prohibit the use of pithing processes on the
cattle from which the beef is derived. This requirement addresses the
potential risk posed by pithing, which may force pieces of brain and
other CNS tissue into the circulatory system of stunned cattle.

Certification

We conclude that whole cuts of boneless beef derived from cattle
born, raised, and slaughtered in Japan can be safely imported from
Japan into the United States, provided the above-mentioned mitigation
measures are met, as certified to on an original certificate issued by
an authorized veterinary official of the Government of Japan.

International Guidelines on BSE

International guidelines for trade in animal and animal products
are developed by the World Organization for Animal Health (formerly
known as the Office International des Epizooties (OIE)), which is
recognized by the World Trade Organization (WTO) as the international
organization responsible for the development of standards, guidelines,
and recommendations with respect to animal health and zoonoses
(diseases that are transmissible from animals to humans). The OIE
guidelines for trade in terrestrial animals (mammals, birds, and bees)
are detailed in the Terrestrial Animal Health Code (available on the
internet at http://www.oie.int). The guidelines on BSE are contained in
Chapter 2.3.13 of the Code and supplemented by Appendix 3.8.4 of the
Code.
The 2005 OIE guidelines on BSE provide for three possible BSE
classifications for an exporting country, zone, or compartment
(referred to below as a region): Negligible risk, controlled risk, and
undetermined risk.
The OIE guidelines for negligible risk regions apply to those
regions where either (1) there has been no indigenous cases of BSE or
any imported cases of BSE have been completely destroyed, or (2) the
last indigenous case of BSE was reported more than 7 years ago. In
addition, a region may be considered a negligible risk for BSE if it
has demonstrated, through an appropriate level of control and audit,
that meat-and-bone meal and greaves derived from ruminants have not
been fed to ruminants for at least 8 years, among other criteria.
Controlled risk regions, in contrast, include regions where an
indigenous case of BSE was reported within the last 7 years and regions
that cannot demonstrate that a ruminant-to-ruminant feed ban has been
in place for at least 8 years. The OIE guidelines for undetermined risk
regions apply to those regions that do not meet the recommended
criteria for any other category.
The export conditions contained in the OIE guidelines grow
increasingly stringent as the status of a region moves from negligible
risk through controlled risk to undetermined risk. For controlled risk
regions, the OIE guidelines recommend that meat and meat products not
contain SRMs and mechanically separated meat from the skull and
vertebral column from cattle over 30 months of age, and that the meat
and meat products be derived from cattle that received ante-mortem and
post-mortem inspections and that the cattle were not subjected to an
air-injection stunning or pithing process at slaughter, among other
criteria.
The proposed import conditions for whole cuts of boneless beef from
Japan, including the requirements that the beef come from an
establishment eligible to export meat to the United States under the
FMIA and FSIS regulations, are consistent with the criteria for
controlled risk regions. We believe this is appropriate, given that
Japan has reported indigenous cases of BSE within

[[Page 48498]]

the last 7 years and has measures in place to control BSE risks, but
these measures have not been in place long enough for Japan to be
considered a negligible risk region. More details on the BSE situation
in Japan and Japan's actions to protect animal and human health are
contained in the risk analysis.

Executive Order 12866 and Regulatory Flexibility Act

This proposed rule has been reviewed under Executive Order 12866.
The rule has been determined to be significant for the purposes of
Executive Order 12866 and, therefore, has been reviewed by the Office
of Management and Budget.
Under the Animal Health Protection Act of 2002 (7 U.S.C. 8301 et
seq.), the Secretary of Agriculture is authorized to promulgate
regulations that are necessary to prevent the introduction or
dissemination of any pest or disease of livestock into the United
States.
This proposed rule would amend the regulations governing the
importation of meat and other edible animal products by allowing, under
certain conditions, the importation of whole cuts of boneless beef
derived from cattle born, raised, and slaughtered in Japan. We are
proposing this action in response to a request from the Government of
Japan and after conducting an analysis of the risk that indicates that
such beef can be safely imported from Japan under the conditions
described in this proposal.
In accordance with 5 U.S.C. 603, we have performed an initial
regulatory flexibility analysis, which is summarized below, regarding
the impact of this proposed rule on small entities.\10\ This analysis
also serves as our cost-benefit analysis under Executive Order 12866.
Based on the information we have, there is no basis to conclude that
this rule will result in any significant economic impact on a
substantial number of small entities. However, we do not currently have
all of the data necessary for a comprehensive analysis of the effects
of this proposed rule on small entities. Therefore, we are inviting
comments on the potential effects. In particular, we are interested in
determining the number and kinds of small entities that would incur
benefits or costs from the implementation of this proposed rule and the
economic effect of those benefits and costs.
---------------------------------------------------------------------------

\10\ A copy of the full economic analysis is available for
review on EDOCKET or in our reading room. (Information on accessing
EDOCKET as well as the location and hours of the reading room may be
found at the beginning of this document under ADDRESSES.)
---------------------------------------------------------------------------

This proposal would allow the importation of whole cuts of boneless
beef derived from cattle that were born, raised, and slaughtered in
Japan, provided that certain conditions are met. We expect that this
proposal would have little or no economic impact on the majority of
consumers and beef producers in the United States because the volume of
beef imported from Japan is likely to be small and have only a minor
impact on the overall domestic beef market.
In 2001, APHIS placed a ban on the importation of ruminants and
most ruminant products from Japan following the confirmation of one
case of BSE in a native-born animal in that country. Prior to that ban,
U.S. imports of boneless beef from Japan were negligible when compared
to total imports of that commodity. Over the 4-year period, 1997-2000,
for example, the volume of U.S. imports of boneless beef from Japan--
reported to be entirely fresh/chilled, as opposed to frozen--averaged a
little less than 9 metric tons per year. This amount was less than
0.005 percent of average annual U.S. imports of fresh/chilled boneless
beef world-wide for the same period (202,540 metric tons).\11\ The
average annual value of U.S. imports of boneless beef from Japan over
this 4-year period was $808,000, less than 0.2 percent of the 4-year
average annual value of U.S. imports of fresh/chilled boneless beef
from all regions ($600 million). Including frozen boneless beef in the
comparison over the same 4-year period diminishes Japan's annual
average percentage share all the more, to about 0.001 percent of the
quantity and about 0.05 percent of the value of all U.S. boneless beef
imports. This impact would be further reduced if Japan's share of the
U.S. total beef supply (domestic production plus imports minus exports,
disregarding carryover stocks) were considered.
---------------------------------------------------------------------------

\11\ Trade statistics, unless otherwise indicated, are taken
from the World Trade Atlas or the Global Trade Atlas (Global Trade
Information Services), which report data from the Department of
Commerce, U.S. Bureau of the Census. The Harmonized Tariff Schedule
(HTS) 6-digit code for fresh/chilled boneless beef cuts is 020130;
the HTS code for frozen boneless beef is 020230.
---------------------------------------------------------------------------

Based on the unit price of beef imported into the United States
from Japan prior to the 2001 ban on the importation of ruminants and
most ruminant products from Japan, it is assumed that all of the
boneless beef imported from Japan prior to the ban was Wagyu beef. (The
term ``Wagyu,'' which literally translates to Japanese cattle, refers
to purebred Japanese Black or Japanese Brown breeds of cattle. Wagyu
beef is a high-priced specialty meat widely acclaimed for its flavor
and tenderness. ``Kobe beef'' refers to Wagyu beef that is produced in
the Kobe area of Japan.) Japan also produces Holstein breed dairy
cattle, but it is unlikely that Japan would try to compete in the U.S.
import market for lower-grade beef from culled dairy cattle.
Accordingly, we expect only Wagyu beef to be imported under the
proposed rule.
We expect that Japan would continue to be a minor supplier of beef
to the United States if this proposal were adopted. We estimate that
the volume of imports is likely to range between about 8 metric tons
and 15 metric tons per year, a quantity aligned with import levels in
the years immediately prior to the ban. There are three reasons for the
small import volume. First, the demand for Japanese Wagyu beef in the
United States would likely be small, because the beef is expensive. In
October 2004, for example, the average actual selling price of Wagyu
sirloin in Japanese supermarkets was just under $50 per pound.\12\ The
price of Japanese Wagyu beef would be higher in the United States
because of transportation and other costs associated with the
importation of the beef from Japan.
---------------------------------------------------------------------------

\12\ Source: ``Monthly Statistics,'' January 2005, Agricultural
& Livestock Industries Corporation. The selling price was calculated
using an exchange rate of 105 yen per U.S. dollar and it is the
price for Wagyu sirloin from all regions in Japan, including Kobe.
---------------------------------------------------------------------------

Second, Japanese agricultural officials have indicated to APHIS
staff that they would expect the volume of Wagyu exports to the United
States to be approximately 10 metric tons per year. This quantity
aligns with historic import levels, as described above, and would be
well below the annual tariff rate quota for Japan of 200 metric
tons.\13\ Over the 10-year period from 1991 to 2000 U.S. imports of
boneless beef--both fresh/chilled and frozen--from Japan never exceeded
27.0 metric tons in any one year.
---------------------------------------------------------------------------

\13\ Harmonized Tariff Schedule of the United States (2005),
Chapter 2, Meat and Edible Meat Offal.
---------------------------------------------------------------------------

Finally, Japan's boneless beef exports to countries other than the
United States have also been minor. Over the 4-year period 1997-2000,
Japan's exports of boneless beef to the world--both fresh/chilled and
frozen--averaged only 81 metric tons per year, and the largest export
volume in any one of those years was 95 metric tons (in 1999). For
fresh/chilled boneless beef alone, the 4-year annual average was 37
metric tons, with no one year exceeding 47 metric tons.\14\
---------------------------------------------------------------------------

\14\ Foreign Agricultural Service, USDA.
---------------------------------------------------------------------------

Because we expect that Japan would export only Wagyu beef if this
proposal

[[Page 48499]]

were adopted, this action has the potential to affect farmers and
ranchers in the United States who raise Wagyu and Wagyu hybrid cattle
for the high-end domestic beef market. However, the impact, if any, on
these so-called ``Kobe-style'' beef producers is unclear, without an
approximation of the quantity of Kobe-style beef sold in the United
States and information on the extent to which the two products would
directly compete. The number of these producers is unknown, but it is
believed to be very small.

Cost-Benefit Analysis

Given the high price and small quantity of Wagyu beef expected to
be imported, the proposed rule is likely to have little impact for most
U.S. consumers. A relatively small segment of beef consumers would
benefit because they would be allowed, once again, to buy this product
in the United States. Importers, brokers and others in the United
States who would participate in the importation of Wagyu beef from
Japan also stand to benefit, due to the increased business activity.
U.S. beef producers, in general, would not be affected by the
proposed rule; demand is expected to remain low reflecting pre-ban
consumption patterns, with a minor impact on less expensive
domestically produced beef. Any producer impact of the rule would
likely fall upon producers of Kobe-style beef, and then only to the
extent that the commodities would be competing for the same niche
market.
In general, trade of a commodity increases social welfare. To the
extent that consumer choice is broadened and the increased supply of
the imported commodity leads to a price decline, gains in consumer
surplus will outweigh losses in domestic producer surplus.\15\ Although
the rule's impact on the relatively small number of U.S. producers of
Kobe-style beef is uncertain, it is expected to provide benefits to
consumers (domestic importers, wholesalers, retailers, as well as final
consumers) that would exceed any potential losses to domestic
producers. The net welfare effect for the United States of
reestablished Wagyu beef imports from Japan would be positive.
---------------------------------------------------------------------------

\15\ Consumer surplus is the difference between the amount a
consumer is willing to pay for a good and the amount actually paid.
Producer surplus is the amount a seller is paid for the good minus
the seller's cost.
---------------------------------------------------------------------------

Effects on Small Entities

We do not expect that this proposal would have significant economic
impact on a substantial number of small entities. As discussed above,
the proposed rule has the potential to primarily affect farmers and
ranchers in the United States who produce Kobe-style beef. The number
of these producers is unknown, but it is believed to be very small. The
American Wagyu Association, a Wagyu breeder group, lists approximately
75 members in the United States.\16\
---------------------------------------------------------------------------

\16\ Source: American Wagyu Association Web site.
---------------------------------------------------------------------------

The size distribution of Kobe-style beef producers in the United
States is also unknown, but it is reasonable to assume that most are
small, under the U.S. Small Business Administration's (SBA) standards.
This assumption is based on composite data for all beef producers in
the United States. In 2002, there were 664,431 U.S. farms in North
American Industry Classification System (NAICS) 112111, a
classification comprised of establishments primarily engaged in raising
cattle. Of the 664,431 farms, 659,009 (or 99 percent) had annual
receipts that year of less than $500,000.\17\ The SBA's small entity
threshold for farms in NAICS 112111 is annual receipts of $750,000.
---------------------------------------------------------------------------

\17\ 2002 Census of Agriculture, National Agricultural
Statistics Service.
---------------------------------------------------------------------------

Executive Order 12988

This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. If this proposed rule is adopted: (1) All State
and local laws and regulations that are inconsistent with this rule
will be preempted; (2) no retroactive effect will be given to this
rule; and (3) administrative proceedings will not be required before
parties may file suit in court challenging this rule.

National Environmental Policy Act

To provide the public with documentation of APHIS' review and
analysis of any potential environmental impacts associated with the
proposed importation of whole cuts of boneless beef from Japan, we have
prepared an environmental assessment. The environmental assessment was
prepared in accordance with: (1) The National Environmental Policy Act
of 1969 (NEPA), as amended (42 U.S.C. 4321 et seq.), (2) regulations of
the Council on Environmental Quality for implementing the procedural
provisions of NEPA (40 CFR parts 1500-1508), (3) USDA regulations
implementing NEPA (7 CFR part 1b), and (4) APHIS' NEPA Implementing
Procedures (7 CFR part 372).
The environmental assessment may be viewed on the EDOCKET Web site
(see ADDRESSES above for instructions for accessing EDOCKET) or on the
APHIS Web site at http://www.aphis.usda.gov/lpa/issues/bse/bse.html.
You may request paper copies of the environmental assessment by calling
or writing to the person listed under FOR FURTHER INFORMATION CONTACT.
Please refer to the title of the environmental assessment when
requesting copies. The environmental assessment is also available for
review in our reading room (information on the location and hours of
the reading room is provided under the heading ADDRESSES at the
beginning of this notice).

Paperwork Reduction Act

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

Government Paperwork Elimination Act Compliance

The Animal and Plant Health Inspection Service is committed to
compliance with the Government Paperwork Elimination Act (GPEA), which
requires Government agencies in general to provide the public the
option of submitting information or transacting business electronically
to the maximum extent possible. For information pertinent to GPEA
compliance related to this proposed rule, please contact Mrs. Celeste
Sickles, APHIS' Information Collection Coordinator, at (301) 734-7477.

List of Subjects in 9 CFR Part 94

Animal diseases, Imports, Livestock, Meat and meat products, Milk,
Poultry and poultry products, Reporting and recordkeeping requirements.

Accordingly, we propose to amend 9 CFR part 94 as follows:

PART 94--RINDERPEST, FOOT-AND-MOUTH DISEASE, FOWL PEST (FOWL
PLAGUE), EXOTIC NEWCASTLE DISEASE, AFRICAN SWINE FEVER, CLASSICAL
SWINE FEVER, AND BOVINE SPONGIFORM ENCEPHALOPATHY: PROHIBITED AND
RESTRICTED IMPORTATIONS

1. The authority citation for part 94 would continue to read as
follows:

Authority: 7 U.S.C. 450, 7701-7772, and 8301-8317; 21 U.S.C. 136
and 136a; 31 U.S.C. 9701; 7 CFR 2.22, 2.80, and 371.4.
2. In Sec. 94.18, paragraph (b) would be revised to read as
follows:

Sec. 94.18 Restrictions on importation of meat and edible products
from ruminants due to bovine spongiform encephalopathy.

* * * * *

[[Page 48500]]

(b) Except as provided in paragraph (d) of this section or in
Sec. Sec. 94.19 or 94.27, the importation of meat, meat products, and
edible products other than meat (except for gelatin as provided in
paragraph (c) of this section, milk, and milk products) from ruminants
that have been in any of the regions listed in paragraph (a) of this
section is prohibited.
* * * * *
3. A new Sec. 94.27 would be added to read as follows:

Sec. 94.27 Importation of whole cuts of boneless beef from Japan.

Notwithstanding any other provisions of this part, whole cuts of
boneless beef derived from cattle that were born, raised, and
slaughtered in Japan may be imported into the United States under the
following conditions:
(a) The beef is prepared in an establishment that is eligible to
have its products imported into the United States under the Federal
Meat Inspection Act (21 U.S.C. 601 et seq.) and the regulations in 9
CFR 327.2 and the beef meets all other applicable requirements of the
Federal Meat Inspection Act and regulations thereunder (9 CFR chapter
III), including the requirements for removal of SRMs and the
prohibition on the use of air-injection stunning devices prior to
slaughter on cattle from which the beef is derived.
(b) The beef is derived from cattle that were not subjected to a
pithing process at slaughter.
(c) An authorized veterinary official of the Government of Japan
certifies on an original certificate that the above conditions have
been met.

Done in Washington, DC, this 15th day of August 2005.
W. Ron DeHaven,
Acting Under Secretary for Marketing and Regulatory Programs.
[FR Doc. 05-16422 Filed 8-16-05; 9:43 am]
BILLING CODE 3410-34-P