[Federal Register Volume 70, Number 225 (Wednesday, November 23, 2005)]
[Proposed Rules]
[Pages 70746-70749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-23123]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 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.
 
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 

  Federal Register / Vol. 70, No. 225 / Wednesday, November 23, 2005 / 
Proposed Rules  

[[Page 70746]]



DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Part 381

[Docket No. 05-012P]
RIN 0583-AD20


Addition of the People's Republic of China To the List of 
Countries Eligible To Export Processed Poultry and Poultry Products to 
the United States

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Proposed rule.

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

SUMMARY: The Food Safety and Inspection Service (FSIS) is proposing to 
add the People's Republic of China to the list of countries eligible to 
export processed poultry and poultry products to the United States. 
Reviews of the People's Republic of China's laws, regulations, and 
other materials show that its poultry processing system includes 
requirements equivalent to all provisions in the Poultry Products 
Inspection Act (PPIA) and its implementing regulations.
    FSIS is proposing to allow processed poultry products from the 
People's Republic of China to be imported into the United States only 
if they are processed in certified establishments in the People's 
Republic of China from poultry slaughtered in certified slaughter 
establishments in other countries eligible to export poultry to the 
United States. China is not currently eligible to export poultry 
products to the United States that include birds that were slaughtered 
in China's domestic establishments. Under this proposed rule, all 
poultry products exported from the People's Republic of China to the 
United States will be subject to reinspection at the U.S. ports-of-
entry by FSIS inspectors as required by law.

DATES: Comments must be received on or before January 23, 2006.

ADDRESSES: FSIS invites interested persons to submit comments on this 
proposed rule. Comments may be submitted by any of the following 
methods:
     Mail, including floppy disks or CD-ROM's, and hand-or 
courier-delivered items: Send to Docket Clerk, U.S. Department of 
Agriculture, Food Safety and Inspection Service, 300 12th Street, SW., 
Room 102 Cotton Annex, Washington, DC 20250.
     Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions at that site for 
submitting comments. Electronic mail: 
[email protected].
    All submissions received must include the Agency name and docket 
number 05-012P.
    All comments submitted in response to this proposal, as well as 
research and background information used by FSIS in developing this 
document, will be available for public inspection in the FSIS Docket 
Room at the address listed above between 8:30 a.m. and 4:30 p.m., 
Monday through Friday. The comments also will be posted on the Agency's 
Web site at http://www.fsis.usda.gov/regulations_&_policies/2005_Proposed_Rules_Index/index.asp.

FOR FURTHER INFORMATION CONTACT: Ms. Sally White, Director, 
International Equivalence Staff, Office of International Affairs; (202) 
720-6400.

SUPPLEMENTARY INFORMATION:

Background

    FSIS is proposing to amend the Federal poultry products inspection 
regulations to add the People's Republic of China to the list of 
countries eligible to export processed poultry and poultry products to 
the United States.
    Section 17 of the PPIA (21 U.S.C. 466) prohibits importation into 
the United States of slaughtered poultry, or parts or products thereof, 
of any kind unless they are healthful, wholesome, fit for human food, 
not adulterated, and contain no dye, chemical, preservative, or 
ingredient that renders them unhealthful, unwholesome, adulterated, or 
unfit for human food. Under the PPIA and its implementing regulations, 
poultry products imported into the United States must be produced under 
standards equivalent to those of the United States for safety, 
wholesomeness, and labeling accuracy. Section 381.196 of Title 9 of the 
Code of Federal Regulations (CFR) establishes the procedures by which 
foreign countries wanting to export poultry and poultry products to the 
United States may become eligible to do so.
    Section 381.196(a) requires that a foreign country's poultry 
inspection system include standards equivalent to those of the United 
States, and that the legal authority for the system and its 
implementing regulations be determined equivalent to those of the 
United States. Specifically, a country's regulations must impose 
requirements equivalent to those of the United States in the following 
areas: (1) Ante-mortem and post-mortem inspection; (2) official 
controls by the national government over plant construction, 
facilities, and equipment; (3) direct and continuous supervision of 
slaughter activities, where applicable, and product preparation by 
official inspection personnel; (4) separation of establishments 
certified to export from those not certified; (5) maintenance of a 
single standard of inspection and sanitation throughout certified 
establishments; and (6) official controls over condemned product.
    Section 381.196 also requires that a poultry inspection system 
maintained by a foreign country, with respect to establishments 
preparing products in that country for export to the United States, 
ensure that those establishments and their poultry products comply with 
requirements equivalent to the provisions of the PPIA and the poultry 
product inspection regulations. Foreign country authorities must be 
able to ensure that all certifications required under Section 381.196 
of the poultry product inspection regulations (Imported Products) can 
be relied upon before approval to export poultry products to the United 
States may be granted. Besides relying on its initial determination of 
a country's eligibility and performing ongoing reviews to ensure that 
products shipped to the United States are safe, wholesome and properly 
labeled and packaged, FSIS randomly samples imported poultry and 
poultry products for reinspection as they enter the United States.
    In addition to meeting the certification requirements, a foreign 
country's inspection system must be evaluated by FSIS before 
eligibility to export poultry products can be granted. This evaluation 
consists of two processes: a document review and an on-site review. The 
document review is an evaluation of the laws, regulations,

[[Page 70747]]

and other written materials used by the country to operate its 
inspection program. To help the country in organizing its material, 
FSIS gives the country questionnaires asking for detailed information 
about the country's inspection practices and procedures in five risk 
areas. These five risk areas, which are the focus of the evaluation, 
are sanitation, animal disease, slaughter/processing, residues, and 
enforcement. FSIS evaluates the information to verify that the critical 
points in the five risk areas are addressed satisfactorily with respect 
to standards, activities, resources, and enforcement. If the document 
review is satisfactory, an on-site review is scheduled using a multi-
disciplinary team to evaluate all aspects of the country's inspection 
program, including laboratories and individual establishments within 
the country. The process of determining equivalence is described fully 
on the FSIS Web site at http://www.fsis.usda.gov/regulations_&_policies/equivalence_process/index.asp.

Evaluation of the People's Republic of China Inspection System

    In response to a request from the People's Republic of China for 
approval to export processed poultry and poultry products to the United 
States, FSIS conducted a review of the People's Republic of China 
poultry processing inspection system to determine if it was equivalent 
to the U.S. poultry inspection system. First, FSIS compared the 
People's Republic of China's poultry inspection laws and regulations 
with U.S. requirements. The study concluded that the requirements 
contained in the People's Republic of China's poultry inspection laws 
and regulations are equivalent to those mandated by the PPIA and 
implementing regulations. FSIS then conducted an on-site review of the 
People's Republic of China poultry processing inspection system in 
operation. The FSIS review team concluded that the People's Republic of 
China's implementation of poultry processing standards and procedures 
was equivalent to those of the United States. The full report on 
People's Republic of China can be found on the FSIS Web site at http://www.fsis.usda.gov/regulations/foreign_audit_reports/index.asp.
    FSIS is proposing to allow processed poultry products from the 
People's Republic of China to be imported into the United States only 
if they are processed in certified establishments in the People's 
Republic of China from poultry slaughtered in certified slaughter 
establishments in other countries eligible to export poultry to the 
United States. China is not currently eligible to export poultry 
products to the United States that were slaughtered in China's domestic 
establishments, and this rulemaking will not change its eligibility to 
do so.
    If this proposed rule is adopted, all poultry products exported to 
the United States from the People's Republic of China will be subject 
to reinspection at the ports-of-entry for transportation damage, 
labeling, proper certification, general condition, and accurate count. 
Other types of inspection will also be conducted, including examining 
the product for defects and performing laboratory analyses that will 
detect chemical residues on the product or determine whether the 
product is microbiologically contaminated.
    Products that pass reinspection will be stamped with the official 
mark of inspection and allowed to enter U.S. commerce. If they do not 
meet U.S. requirements, they will be ``Refused Entry'' and must be re-
exported, destroyed or converted to animal food.
    Accordingly, FSIS is proposing to amend Sec.  381.196 of the 
Federal poultry products inspection regulations to add the People's 
Republic of China as a country from which processed poultry and poultry 
products may be eligible for import into the United States. As a 
country eligible to export processed poultry products to the United 
States, the government of the People's Republic of China would certify 
to FSIS those establishments wishing to export such products to the 
U.S. and operating according to U.S. requirements. FSIS would retain 
the right to verify that establishments certified by the People's 
Republic of China government are meeting the U.S. requirements. This 
would be done through annual on-site reviews of the establishments 
while they are in operation.
    The Agency notes that the Animal and Plant Health Inspection 
Service of USDA has classified the People's Republic of China as having 
Avian Influenza. Even if a foreign country is listed in FSIS 
regulations as eligible to export poultry products, those poultry 
products must also comply with other U.S. requirements. Before a 
shipment of processed poultry or poultry products may be presented for 
re-inspection at the port-of entry by FSIS, it must have first met the 
requirements of both the U.S. Customs Service and APHIS. APHIS is 
responsible for keeping foreign animal diseases out of the United 
States. Under Title 9, part 94 of its regulations (9 CFR part 94), 
APHIS sets restrictions on the importation of any fresh, frozen, and 
chilled poultry, poultry products, and edible products from countries 
in which certain animal diseases exist. Those products that APHIS has 
restricted from entering the United States because of animal disease 
conditions in the country of origin will be refused entry before 
reaching an FSIS import inspection facility.
    FSIS and APHIS work closely to ensure that poultry and poultry 
products imported into the United States comply with the regulatory 
requirements of both agencies. In 1985, FSIS and APHIS signed a 
memorandum of understanding (MOU) in which both agencies agreed to 
cooperate in meeting their respective needs relative to information 
exchange of disease surveillance, diagnostic testing, investigations, 
tracebacks, and animal and public health emergencies to achieve their 
related objectives of reducing disease of animal and public health 
concern, and of providing a wholesome and economical food supply. The 
MOU is updated periodically to ensure that it addresses areas of 
importance to both agencies. In accord with this MOU, FSIS and APHIS 
established procedures for communication between the two agencies 
regarding the inspection, handling, and disposition of imported poultry 
products. APHIS and FSIS communicate regularly to ensure that the 
products APHIS has restricted from entering the United States because 
of animal disease concerns are not imported into the United States.

Economic Impact Analysis

    There are 25 establishments in the People's Republic of China that 
will be exporting product to the U.S. if this proposal is adopted. The 
establishments will export shelf stable cooked poultry products. U.S. 
imports from these establishments are expected to total less than 
2,500,000 pounds per year.
    U.S. firms export large amounts of poultry and poultry products to 
the People's Republic of China. Table A reflects U.S. exports of 
poultry and poultry products to the People's Republic of China for the 
years 1998-2003.
    Adoption of this proposed rule will open trade between the U.S. and 
the People's Republic of China in poultry products. The impact of this 
proposed rule on U.S. consumers is voluntary in that consumers will not 
be required to purchase poultry products produced and processed in the 
People's Republic of China, although they may choose to do so. Expected 
benefits from this type of proposed rule will accrue primarily to 
consumers in the form of lower prices. The volume of trade stimulated

[[Page 70748]]

by this proposed rule, however, will likely be so small as to have 
little effect on supply and prices. Consumers, apart from any change in 
prices, will benefit from increased choices in the marketplace.
    The costs of this rule will accrue primarily to producers in the 
form of greater competition from the People's Republic of China. Again, 
it must be noted that the volume of trade stimulated by this rule will 
likely be small and have little effect on supply and prices. 
Nonetheless, it is possible that U.S. firms that produce products that 
will compete with the People's Republic of China imports could face 
short-run difficulty. However, in the long run, such firms will likely 
adjust their product mix and be able to compete effectively.
    The most significant effects of this proposed rule will likely come 
through efficiency gains. Products will only be imported from the 
People's Republic of China if the People's Republic of China 
establishment can produce the products more efficiently than their U.S. 
counterparts. Then, U.S. firms will have the incentive to specialize in 
the production of products in which they are relatively more efficient. 
In the long run, this improved efficiency will make U.S. producers more 
competitive both domestically and internationally.

             Table A.--U.S. Exports of Poultry Products to the People's Republic of China, 1998-2003
                                           [Data shown in metric tons]
----------------------------------------------------------------------------------------------------------------
                   Product                       1998        1999       2000        2001       2002       2003
----------------------------------------------------------------------------------------------------------------
Poultry Meats...............................     41493      61948.9     64787.2    62413.8    86871.4   136494.9
Chickens, Fr/Froz...........................     39007.7    58762.5     61181.2    48786.6    70670.3   129617.8
Poultry, Misc...............................     18391.9    15603.1     16204.1    19110.2    13962.8    47911.3
Poultry Meats, Prep.........................        46.6     1518.1      1860.9     8562.6     8831.4     3796.6
Turkeys, Fr/Froz............................      2437.5     1624.7      1624       4764.1     6986.2     2236.6
Other Poultry Fr/Frz........................         1.2       43.6       121.2      300.4      383.5      843.9
----------------------------------------------------------------------------------------------------------------

Effect on Small Entities

    The Administrator, FSIS, has made an initial determination that 
this proposed rule will not have a significant impact on a substantial 
number of small entities, as defined by the Regulatory Flexibility Act 
(5 U.S.C. 601). This proposed rule would add the People's Republic of 
China to the list of countries eligible to export Poultry products into 
the United States. Once the People's Republic of China begins to export 
poultry products into the United States, the volume of cooked poultry 
products available in the U.S. market will likely increase by 
approximately 2,500,000 pounds per year. However, this small volume of 
trade is unlikely to impact the supply and prices of these products. 
Therefore, the proposed action should have no significant impact on 
small entities that produce these types of products domestically.

Paperwork Requirements

    No new paperwork requirements are associated with this proposed 
rule. Foreign countries wanting to export poultry products to the 
United States are required to provide information to FSIS certifying 
that its inspection system provides standards equivalent to those of 
the United States and that the legal authority for the system and its 
implementing regulations are equivalent to those of the United States 
before they may start exporting such product to the United States. FSIS 
collects this information one time only. FSIS gave the People's 
Republic of China questionnaires asking for detailed information about 
the country's inspection practices and procedures to assist the country 
in organizing its materials. This information collection was approved 
under OMB number 0583-0094. The proposed rule contains no 
other paperwork requirements.

Executive Order 12866 and Regulatory Flexibility Act

    This proposed rule has been reviewed under Executive Order 12866. 
It has been determined to be not significant for purposes of E.O. 12866 
and therefore has not been reviewed by the Office of Management and 
Budget (OMB).

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.

Additional Public Notification

    Public awareness of all segments of rulemaking and policy 
development is important. Consequently, in an effort to ensure that 
this proposed rule comes to the attention of the public--including 
minorities, women, and persons with disabilities--FSIS will announce it 
on-line through the FSIS Web page located at http://www.fsis.usda.gov.
    The Regulations.gov Web site is the central online rulemaking 
portal of the United States government. It is being offered as a public 
service to increase participation in the Federal government's 
regulatory activities. FSIS participates in Regulations.gov and will 
accept comments on documents published on the site. The site allows 
visitors to search by keyword or Department or Agency for rulemakings 
that allow for public comment. Each entry provides a quick link to a 
comment form so that visitors can type in their comments and submit 
them to FSIS. The Web site is located at http://www.regulations.gov.
    FSIS also will make copies of this Federal Register publication 
available through the FSIS Constituent Update, which is used to provide 
information regarding FSIS policies, procedures, regulations, Federal 
Register notices, FSIS public meetings, recalls, and other types of 
information that could affect or would be of interest to our 
constituents and stakeholders. The update is communicated via Listserv, 
a free e-mail subscription service consisting of industry, trade, and 
farm groups, consumer interest groups, allied health professionals, 
scientific professionals, and other individuals who have requested to 
be included. The update also is available on the FSIS Web page. Through 
Listserv and the Web page, FSIS is able to provide information to a 
broader and more diverse audience.
    In addition, FSIS offers an electronic mail subscription service 
that provides an automatic and customized notification when popular 
pages are updated, included Federal Register publications and related 
documents. This service is available at http://www.fsis.usda.gov/news_and_events/email_subscription/ and allows FSIS customers to sign up 
for subscription

[[Page 70749]]

options in eight categories. Options range from recalls to export 
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or delete subscriptions themselves and have the option to password 
protect their accounts.

List of Subjects 9 CFR Part 381

    Imported Poultry Products.

    For the reasons set out in the preamble, 9 CFR part 381 is proposed 
to be amended as follows:

PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS

    1. The authority citation for part 381 continues to read as 
follows:

    Authority: 7 U.S.C. 138f, 450; 21 U.S.C. 451-470; 7 CFR 2.18, 
2.53.


Sec.  381.196  [Amended]

    2. Section 381.196 would be amended by adding ``People's Republic 
of China 2'' in alphabetical order to the list of countries 
in paragraph (b).

    Done at Washington, DC on: November 17, 2005.
Barbara J. Masters,
Administrator.
[FR Doc. 05-23123 Filed 11-22-05; 8:45 am]
BILLING CODE 3410-DM-P